Who's Stealing From Whom?
Indie record labels and the internet
Casey Boland

Damn. This Cannibal Ox song won’t download. I try to reconnect — the progress bar stays dead. I managed to snag the Jeff Buckley song and the Boards of Canada, but the sound quality is muddy, like both songs were recorded in a tin box at the bottom of a swamp. I sit back and revel in this, my first foray into the world of downloading MP3s. I do not realize at the time that what I am actually doing is file sharing. To me, it’s just downloading free music.

Despite the storm of criticism raining down upon file sharing, few people have chosen to stop. If anything, they’ve battened down the hatches and prepared for the (admittedly uphill) legal battles. One organization in particular that vehemently espouses (in quite lofty language) the merits of free file sharing is the Electronic Frontier Foundation. They have met legal challenges with a stable of lawyers and a web site filled to the brim with advice and anecdotes. As the site proclaims, the EFF is “defending freedom in the digital world.”

The EFF is a non-profit group consisting of “passionate people … working to protect your digital rights.” Reading their mission statement can be a heady experience: “Just as patriots fought for liberty and freedom, we fight measures that threaten basic human rights. Only the dominion we defend is the vast wealth of digital information, innovation and technology that resides online.” Above all, the EFF conveys the libertarian, almost anarchist spirit of serious file sharers (and it should be noted that all forms of entertainment media exist on the Internet — from CDs to DVDs to computer applications). They proclaim: “Imagine a world where technology can empower us all to share knowledge, ideas, thoughts, humor, music, words and art with friends, strangers and future generations.” The enemy? “Governments and corporate interests are trying to prevent us from communicating freely through new technologies.”

Even before its foolhardy attacks on file sharing folks, the music industry aroused contempt and scorn. How could it be otherwise for an industry that pays its CEOs more than its multi-million album selling clients? And then one must consider the bland selection this industry regularly submits to the music buying public. Though some major artists saw sizable profits in 2002 (Eminem for one), most needed to tighten their belts and pinch their purses. This could also be due in no small part to the mega-mergers that have left only five major music corporations to stalk the mainstream music landscape (AOL Time Warner, Universal, BMG, EMI and Sony). They boast about 75 percent of worldwide music sales. Major labels fall under the auspices of giant media empires, whose sole purpose is not necessarily releasing quality music. As Charles C. Mann put it in Wired Magazine, “All five major labels are either losing money or barely in the black, and the industry’s decline is turning into a plunge.”

While the major label music industry appears to waver on its last legs, independent music thrives. Labels such as Dischord (Fugazi), Righteous Babe (Ani DiFranco), Kill Rock Stars (Sleater-Kinney) and Saddle Creek (Bright Eyes, Cursive) have persisted and persevered. Though not much statistical information is available on the matter, it is clear from the press showered upon their releases that the indies enjoy ever-increasing popularity. Rare is a new issue of Spin or Rolling Stone that does not feature coverage of artists writing and performing comfortably in the world of independent music.

Clearly then, independent labels are not just a minor threat anymore. As always, they serve as fertile ground for music which is often too daring to appear on the roster of a major. From content to business strategy, the indies pose a potent alternative to the bloated behemoths that are corporate-owned music label empires.

But the question we need to answer is whether file sharing harms independent labels? Though it is far from clear whether file sharing negatively impacts major labels, there is no lack of controversy on the issue, yet not much has been said on the effects to indies. Let us hypothetically say that file sharing hinders record sales for major labels. Does it then follow that independent labels also feel the pinch?

Most agree that it is almost impossible to discern any truly quantifiable impact, but most also believe that major labels suffer more than independent ones. Dirk Hemsath, of Lumberjack Distribution, who distributes the releases for scores of independent labels, states, “I believe that one of the main reasons majors are in the shitter right now (among a hundred other reasons) is because albums at the top end of the sales spectrum … have a much larger potential for people to just go and download the couple of singles they like.” Similar to other independents, Dirk feels much of what separates an indie from a major is the devotion of the audience to their bands and labels. He says, “At that level, people don’t care about owning the record. I also believe in many cases, kids on our level understand that it is important to support bands by buying the album.”

Darren Walters, co-owner of Jade Tree Records concurs. “It’s obviously much more harmful for major corporations who churn out shit on a regular basis and whose fan bases may realize the songs are disposable and may then in turn, decide ‘Why should I purchase this record when I can get it for free!’” He concedes that, “I’m much more apt to try and find a major label song for free than an indie one.”

Jeff of Ninja Tune Records echoes similar sentiments of indie loyalty. He says, “I think we suffer less as an indie. I think people are far more willing to spend money on our releases knowing that we’re putting out consistently interesting stuff and that money is being used to advance this.” But he sees possible negative ramifications for indies as well. “There’s a trickle-down effect where that’s really damaging the budgets at record stores and it’s affecting my ability to get large ship outs on our titles.” He continues, “I also think it’s devaluing the concept of people paying for music and there are people that now think it’s their constitutional right to be able to download music for free. That gets a bit annoying as, let’s face it, no matter what way you paint it, or whether you think it’s a good or a bad idea, it is, at the end of the day, by dictionary definition, stealing.”

“To say it’s all negative would be a farce, but so too would it be to say that it’s all positive,” claims Andy Low, owner and operator of Robotic Empire Records. He argues that given the smaller stature of independent labels, they suffer in regards to sales. A major label, with a pressing of an album in the hundreds of thousands to millions, can absorb minimal sales lost to downloaded albums (minimal sales numbering in the hundreds to thousands). An indie might be thoroughly hammered by such a loss. Low explains, “It seems logical that the indie labels are hit harder by those who download the album instead of buying it, considering indies usually sell their albums in the thousands or tens of thousands if they’re somewhat large, whereas majors are selling their albums in the hundred thousands, usually with much higher profit margins.” He concludes, “The ratio of people who download full major label albums instead of buying them vs. the indies, I’d imagine it’s higher, but they still probably have less to lose.”

A delineation can be made between downloading a song or two and an entire album. Most labels, indie or major, would likely not object to people downloading a song or two. But an entire album? Low states, “It definitely hits home when I search on Kazaa a week after a CD I’ve released has come out, only to see it already on there in its entirety.” Most proponents of file sharing contend that if a user really wants the album, they will purchase it — even if they already downloaded it. Low, sounding the optimistic view of any label owner, says, “All you can really do is hope that most of the people out there will actually try to pursue the music for its packaging and lyrics instead of just burning CD-Rs of it for themselves and their friends.”

It should be noted that MP3s do not necessarily possess the same quality of the original album recording. In my own feeble attempt to download music, some songs sounded fine and others were nearly inaudible due to inferior quality. Brent Eyestone of Magic Bullet Records and guitarist for Forensics explains, “You know as well as I do that as musicians, we spend quite a bit of effort and time and money and heart in going into special studios and working with certain engineers, etc., in order to craft something that sounds how we want it, or as close as possible. We leave the studio with something intended for CDs and vinyl and feel comfortable in these formats to render our music properly … What happens is that once somebody tries to convert AIFF-format audio files into MP3, there is a loss of brilliance and tone that, while most people never notice it, drives me crazy.”

The packaging of albums is also another factor. “At our level, most kids want to own the actual album and have the insert and credits,” Dirk states. Brent agrees that, “All of the bands and artists involved put so much work into the recordings and then I encourage/facilitate the insane packaging that in some ways gives more incentive to pick up a physical copy versus just getting a burn.”

Yet many people feel that if someone wants the album, they’ll buy it. Andy Low comments, “If I’m really into a band I’ll buy their album because I want to read the lyrics and see the artwork, but if I just want to jam the tunes a few times, I may just get [download] the whole album and delete it a few weeks later.” But he clarifies, “It’d be foolish to think everyone was like this though, because I know just how easy it is to download full albums instead of buying them.”

Considering the importance placed on sound quality and packaging, it still comes as no shock that budgets for independent releases are dwarfed by their major label counterparts. But while major labels inflate prices to rake in the most profit possible, independent labels take in less profit to maximize the quality of the end product and keep prices as low as possible.

Dirk sees a major flaw of the major labels in how they price their releases. “Ultimately, I think it comes down to pricing physical product in a reasonable manner,” he explains. “I still think that if the industry prices albums fairly that people will still want the finished album. I think the majors are killing themselves by introducing every developing artist at $6.99 or whatever and then, if it takes off, eventually raising the prices to $16.98. If the pricing were fair all the way through the process, like starting developing artists at like $10.98 and going up to maybe $12.98 for more established artists, people would probably buy more records.” Brent adds, “My records are more representative of production costs (i.e. cheap) than the major labels and the major indies, so I give people credit for respecting and supporting that when given the choice because the truth is that certain Magic Bullet releases are killing their counterparts in a lot of retail situations, which is driving the majors crazy because they can’t seem to figure out why.”

Indeed, independent records are almost always cheaper at the store than their major label peers. Compare the price of the new Black Eyes CD on Dischord Records with the cost of the latest Bjork CD ($11.99 for the former, $18.99 for the latter) as sold at Tower Records. When the numbers come under scrutiny, it makes more sense why kids aren’t buying major label CDs as much as they are buying DVDs or video games. That doesn’t solve the mystery of whether file sharing is to blame for the drop in CD sales and whether it has any discernible affect on independent releases, but it does offer other possibilities to explain why sales are sagging among the majors and booming among the indies.

What both ends of the spectrum are realizing is that MP3s and file sharing are a powerful promotional tool. Sure, sales may be lost in the process. Nevertheless, it is undeniable that people who download songs, perhaps even albums, can and do purchase albums based on this previewing.

Independent labels recognize file sharing as a tool to boost sales and expose listeners to new artists. When asked whether they objected to people sharing their bands’ songs, Johan of Reflections Records replied, “We don’t really have a problem with it. We even see it as some sort of ‘promotional’ tool. It’s easy to check out bands.” Darren concurs, “If a person gets a hold of a Jade Tree band’s song and decides to go and buy the record, then that is a positive thing. If they get the record for free and share it with a ton of other people that may, in turn, mean more potential fans who might come out to shows.”

In regard to bands on his label, Brent explains, “In the case of Textbook Traitors, the newest band of the label, MP3s and file sharing made a huge impact on record sales and the ‘arrival’ of the band itself. Prior to working with the label, they were unknown … but then I announced their involvement with the label, put a link to their site (where the MP3s were) and it’s been a whirlwind of activity since.” He concluded, “At the very least, MP3s definitely have the potential to expedite the inevitable quite drastically.”

Or consider a musician’s standpoint. Josh Jakubowski explains that he began exposing people to his music (Superstitions of the Sky) via the Internet. “I wanted to get the songs out there so people could hear them, so I recorded the songs, downloaded infamous file sharing crusader Napster and put the files in my shared folder so that other users could download them from my hard drive,” he says. “I used to get emails and people IMing me telling me they liked the song. Before I knew it, I had a following without having a release out so for me it worked in my favor and I didn’t care that I wasn’t selling records. I was just stoked people could hear my band and they were into it.”

Although independent labels see the benefits of file sharing as promotional assistance, some still believe money is lost and some form of reimbursement to the artist is necessary. This isn’t so out of line with what the music industry argues in general. The bottom line is the bottom line. Artists deserve compensation for their craft. Few consumers of music product will argue with that. The debate centers around the status of shared music on the Internet. Is it copyright infringement?

When queried about the issue of regulation, most indie labels contacted for this article feel government regulations are unnecessary. Chalk this up to the DIY anti-authoritarian classic punk stance. But most felt something needed to be done to prevent pervasive downloading of entire albums, such as a fee for downloads. “I think it [file sharing] will be naturally regulated as better systems come into play. As it stands right now, file sharing is the world’s biggest, most unorganized record store in the world,” Jeff from Ninja Tune says. “I think any serious music fan would be happy to pay a fee for something that was easier to use and was better laid out.”

“Copyrights need to be protected,” Dirk says. “I don’t think it [file sharing] can ever be or should ever be prohibited, but it has to be regulated, otherwise the owners will never get paid. It isn’t fair for songwriters and copyright owners not to get paid for their property. Songs aren’t something created and available to the public domain, it is someone’s work.” Darren of Jade Tree agrees, “If there is regulation, it certainly would not hurt to have some sort of fee that might ‘reimburse’ bands or labels for the privilege of people being able to share those songs.”

Whether file sharing will continue to be criminalized and whether it affects album sales, one thing remains clear: it will not stop. Some consider file sharing a new advance in technology, just like VCRs and tape recorders. Both were fought ferociously when they popped up in the 70s and 80s. When CDs were introduced, the music industry pronounced that they would bankrupt the music business. The fears have clearly not panned out. The music business, independent or otherwise, will need to face the changes in a constantly changing technology-driven world.