Planet Lex: The Northwestern Pritzker School of Law Podcast

The Evolution of Copyright in Music

New technology has greatly lowered the barrier of entry into the music industry for new artists looking to release recordings and distribute their music. How have these emergent technologies affected copyright law and, subsequently, the salaries of working musicians?

In this episode of Planet Lex, host Dan Rodriguez talks with Northwestern Pritzker School of Law Professor of Law Searle Research Fellow Peter DiCola about music copyright law and how new technology has affected the industry. Peter speaks briefly about his professional history and opens the interview with an explanation of copyright law. He then analyzes how early technology, like the piano roll and the phonograph, challenged notions of whether and how composers should get paid and provides examples of how these questions are still relevant today. Peter then discusses the formation of the American Society of Composers, Authors and Publishers and provides insight into how the Copyright Royalty Board determines the price satellite radio and webcasting services should pay for the use of sound recordings. He evaluates the differences in how Congress established licenses for webcasting vs. on-demand internet radio and compares the varying restrictions for each. Peter closes the interview with a discussion of songwriter income reduction and whether the societal devaluation of music even permits these artists to work in the industry full time today.

Peter DiCola is a Searle Research Fellow professor of law at Northwestern Pritzker School of Law. In his work, DiCola uses empirical methods and applied economic models to study intellectual property law, media regulation, and their intersection. He received his JD and his PhD in economics from the University of Michigan. His research has centered on the music industry and related industries. In graduate school, he worked with the non-profit Future of Music Coalition on many research projects and he continues to serve on its board of directors. His current work focuses on copyright law’s regime for digital sampling and deregulation in the radio industry.

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Planet Lex: The Northwestern Pritzker School of Law Podcast

The Evolution of Copyright in Music

07/15/2016

Intro: Welcome to Planet Lex; the Podcast of Northwestern Pritzker School of Law, with your host Dean Daniel B. Rodriguez, bringing it to you from Chicago, Illinois. Take it away, Dan.

Daniel B. Rodriguez: Hello and welcome to Northwestern Law’s Planet Lex podcasting from the Northwestern Pritzker School of Law, Chicago, Illinois. My name is Dan Rodriguez, the Dean of the law school and Harold Washington Professor and your host.

This podcast is devoted to conversations about the law; law in society, law in technology, in the future of legal education and legal practice; in other words, a bunch of interesting stuff about the law. And where better to have these conversations that here at Northwestern Pritzker School of Law; home to an incredible community of people doing really interesting work.

So my guest today is my colleague, Professor Peter DiCola; his research focuses on copyright law and the digital age in the music industry. He is the author among other works of a book ‘Creative License: The Law and Culture of Digital Sampling’. So welcome Peter and thank you for joining me.

Professor Peter DiCola: Oh, thanks for having me on, Dan.

Daniel B. Rodriguez: So we are in law in the words business, but Peter you’re in the words and music business, so let’s start up by telling us a little bit about your work.

Professor Peter DiCola: Sure. I’m interested in the music industry, as just a place to learn about how law affects creativity and affects how people make a living in different avenues in the music industry. And so, I have written about how musicians make money, colleagues did a survey asking over 5000 musicians sort of how they make money. I’ve written about how webcasting and streaming other forms of online music managed to comply or not comply with copyright law as the case may be. And I have written, as you said, about digital sampling, so what happens when a musician wants to use a piece of another piece of music in a new piece of music that they are creating.

Daniel B. Rodriguez: So we’re here to talk about a lot of cool stuff, and let me begin by saying, those of you who write in the copyright world seem to have all the cool titles in terms of articles maybe they’re making a dry subject really interesting. So I was trying to think of a title for the written version of our conversation, I was thinking maybe something like out damn Spotify for those listeners who maybe slept through their Shakespeare classes, but I am glad you enjoy it or how to stop worrying and love and then just fill in the blanks.

But I finally settled on this and this is, believe it out, a segue way into my question. How about this, from Puccini to piano rolls to Pandora, the evolution of copyright in music? So that’s the easy part. The hard part is now, maybe in a minute or so, could you summarize sort of what the law is and the copyright law and where we’ve gotten to the place we are in and then we are going to talk about.

Professor Peter DiCola: Sure. Well the big pictures — I like that last title about piano rolls and Pandora –

Daniel B. Rodriguez: You have to pay me a couple of bucks if you are going to use it.

Professor Peter DiCola: Not really actually because titles aren’t copyrightable, but the way we want to start is to think about the beginning of when technology really started to change the music industry, so that starts with the piano roll and around the same time the phonograph.

Daniel B. Rodriguez: Can you tell us, I mean, it was few years before I was born, just a few, like you remind the listeners what that was?

Professor Peter DiCola: Yeah, more than a 100 years ago. So around the turn from the 19th to the 20th Century, and the shift comes — music had been distributed up to that point through sheet music and the publishers of printed sheet music controlled the industry, along comes the piano roll, a machine that’s able to reproduce songs mechanically along with the phonograph that’s able to play recordings of other people performing just like the player piano, but obviously in a different way; both of those technologies challenged copyright law to come up with a way to decide first of all whether the composers would get paid and then exactly how they would get paid.

And so my view of this, I like to take the sort of historical long view and say that copyright is still answering the same kind of question over and over again with every new technology. And so the same question came up with Pandora when it presented then new technology in the 1990s of webcasting. Congress also had to face this issue, they made a different decision about who would get paid and how, but it’s really the same sort of general question.

Daniel B. Rodriguez: Let me ask a little bit of a nerdy question, I guess we are going to get to a high level nerdiness when we talk about music technology and this is about sort of the relationship between public and private ordering or to be a little less opaque, why wasn’t this issue of protecting the rights of the industry and certainly the musicians settled through contract and through private ordering, didn’t they have power all these wonderful musicians to organize and protect their rights through a scheme of licensing and contracts? Why do we need Congress to go get involved?

Professor Peter DiCola: Yeah, that’s a great question. The answer is partly that the property rights weren’t clear and so when we started it’s just not clear how far a copyright extends. In music, we’re used to copyright in sheet music, we weren’t used to copyright in a tin role or an acetate recording.

And so the question was just whether the copyright owners even had any rights over that to contract and so then — that makes it hard when the counterparty is saying, well, I don’t see why I have to pay you anything, your property rights don’t extend that far and many of the courts agreed at the time around the beginning of the 20th Century, and so, that’s part of the answer.

(00:05:08)

The other answer is that the composers formed what looked a lot like a trust and banded together, they didn’t want to license any of the player piano companies, then they hit on the bright idea, let’s license one of them, we will all get together and license just one, that one piano roll company will be able to charge monopoly prices, and so our licensing fees will be propped up as a percentage of a monopoly —

Daniel B. Rodriguez: And the antitrust laws they just didn’t think about or they closed their eyes and hoped to —

Professor Peter DiCola: Well, no, I mean, the antitrust was relatively new, we are talking about, this is our 1905, 1906, and so there are still arguments about what counts as a trust and what doesn’t and President Roosevelt actually got involved, we then called the composers of trust and then the Supreme Court when they finally ruled on the issue of whether mechanical recordings infringed copyright under the then existing law, the Supreme Court said that it did not. And so, the composers lost everything at that point, but in the background they had been negotiating at Congress for a new revised copyright act.

And so what Congress offered them then in the wake of that Supreme Court decision giving them nothing was this compulsory license that exists now. So instead of private ordering, we get public ordering. Congress says, sure, you can get paid but we are not going to let you determine the price, because when you tried to determine the price, you formed a trust.

Daniel B. Rodriguez: Before we leave private ordering and all together, tell us a little bit about the origins of ASCAP in the development of the, I guess, American Society of Composers and then I run out on the last two.

Professor Peter DiCola: Yeah, right. Oh, I am going to mess it up too. I think it’s usually the American Society of Composers —

Daniel B. Rodriguez: What would you say, ASCAP — we’ll have the listeners look it up from the comfortable lookout.

Professor Peter DiCola: Yeah, I was getting wrong. The ASCAP forms in the wake of that first license for phonographs and piano rolls. Victor Herbert hears from his European counterparts that they’re getting paid for performances of music in Europe, whether live performances in restaurants or concert halls, but eventually on the radio as well, and so ASCAP forms to try to collect royalties on that. And of course, they run into antitrust problems throughout their existence, and so that’s part of the story of trying to figure out even as they negotiate with these new technology companies like the new radio firms, the DOJ is investigating them for two decades basically in the 20s and 30s —

Daniel B. Rodriguez: Let me ask you a question about ASCAP, tell me whether this is just an urban legion or not. Now ASCAP, another organization emerges, BMI at some point in time. So I read somewhere that ASCAP in their interest in overseeing their catalog and all of that, almost missed out entirely on rock ‘n’ roll that Buddy Holly and Chuck Berry and even the Beatles were not really signed up to ASCAP?

Professor Peter DiCola: Yeah, right, like a lot of — sort of exclusive clubs, there were certain genres that were in and certain genres that were out, certain ethnicities that were in and certain ethnicities that were out of ASCAP, and so, as ASCAP was having trouble, both with the Department of Justice but also just negotiating the rates that radio companies would pay to them, eventually in the 40s the radio companies said we are going to form our own society and use all these artists who were left out, all these composers. And so not a lot of the rock ‘n’ roll composers, but also some of the more pop singers that were a little different than what was popular in the teens and 20s came in.

And so ASCAP and BMI both exist to this day, they both exist actually under antitrust consent decrees, and so even though the rates are negotiated this is kind of a private ordering but with the judge in the Southern District of New York right there is a backstop to say, if you have behaved badly, if you have charged too much for music, then we are going to step in.

Daniel B. Rodriguez: Great. Let’s shift to the technologies or the venues. So things that folks from outside the industry and outside the business may not understand. So for example, I read where AM/FM radio doesn’t pay, obviously there are some arrangements and some regulations, but they don’t pay for sound recordings. So I’m thinking about a trip that I took in New Mexico a few years ago and every other song was the Eagles. And I thought at the time, man, the Eagles must be making serious bank on all this songs that they are making me listen to. Well, with all due respect to Glenn Frey. I love the Eagles.

But, now you tell me they don’t make money.

Professor Peter DiCola: Just for the records for our listeners, I don’t, but that’s not —

Daniel B. Rodriguez: So is that right? So AM/FM radio doesn’t have to pay for sound recording, so that’s all dealt with, through a scheme of ASCAP and other —

Professor Peter DiCola: Yeah — no, so what it is, is that there are two sides of music copyright. So the composers get paid for radio, but the recording artists don’t. There are two types of copyright, and why AM/FM get this exception and don’t have to pay recording artists, is partly because radio was an established technology, long before sound recordings got a federal copyright. And so when the sound recording copyright was created to deal with things like just record piracy of LPs and things, the negotiation in Congress resulted in sound recordings not getting what’s called the Performance Right, the right for your public performances and concert venues but also over the radio.

Daniel B. Rodriguez: So that might be just a time bad luck for AM/FM but satellite radio comes after, so had those XM-Sirius.

Professor Peter DiCola: And so they have to pay but —

Daniel B. Rodriguez: That doesn’t seem fair.

Professor Peter DiCola: — they get the benefit — it does not, but they pay a rate, they do get the benefit at least of a compulsory license.

(00:10:03)

So it works differently than the license for composers getting paid on the radio but what they — on regular AM/FM radio, the way the satellite license works a lot like the webcasting license that Pandora deals with. And so what that is, is there is a body called the Copyright Royalty Board that hears testimony from both sides about how much they think, satellite radio or how much they think webcasters should pay for the use of sound recordings, and then they make a decision about the rate per requirement.

Daniel B. Rodriguez: It seems like — how do you and I get on the Copyright Royalty Board, may be more you than me? Seems like a very powerful.

Professor Peter DiCola: Oh man, I don’t know, it is powerful, you would think that, except that lots of times, so it’s been 20 years of webcasting regulation, now actually 21 and we just now might have a rate that’s actually stable. I mean what’s happened throughout these proceedings is they will try to decide the rate for a three-year period or a five-year period and either the courts will return it or Congress will step in and overturn it because they don’t think the Copyright Royalty Board or its predecessors did a good enough job.

I think now finally, there’s enough sort of back and forth between sort of deals that happened in the market and enough experience with this process that now may be the recent rates are proceeding in December, the decision was released in December about what Pandora is going to pay, that might be a rate that the industry can actually work with.

But yeah, it’s an elaborate process, there is a lot of testimony, it’s a sort of a battle of the experts kind of thing, lot of testimony on both sides about exactly what the rate should be, big gap, but it is basically, fractions of penny per play.

Daniel B. Rodriguez: Yeah, let me take a step back or as we would say in the radio business dial it back, to ask you about webcasting. Before I do that I just want to say, Peter, the ratio between very dense legal analysis and name dropping of cool bands is out of whack, so you might want to step up your game in that regard, but take us through webcasting 101, what is that? The Spotify/Pandora —

Professor Peter DiCola: Right, the big divide is just — so when Congress created Congress was anticipating them sort of onset of Internet music, and the thought was that what you could call webcasting or Internet radio was that that would be the real killer technology. But they thought that it would really hurt record sales, and so the idea was to say, okay, you can get this rate proceeding, we will let you exist and we will force the record labels to license you basically at this rate that the government sets. So again, it is more closer to public ordering than private.

Daniel B. Rodriguez: And just to interject, and the musicians are captured as it were by their contracts with the record sales.

Professor Peter DiCola: Yeah, right. We should talk about in terms of the copyright owners, so this is really the record labels in almost every case. The concern was to protect record sales, the concern was that webcasting was going to hurt record sales, and so the statute actually includes all these incredible details about like how often you can play one band, how often you can play songs from one album, there are all these detailed requirements —

Daniel B. Rodriguez: Let’s called it the Eagles’ rules, so you can play it over-and-over.

Professor Peter DiCola: Yeah, you can play it over-and-over, and the idea was that – and that you can’t pre-announce, you can’t say, hey, in a few minutes I am going to play “Dark Side of the Moon” in its entirety so that people could record it, as though anyone doesn’t own it yet.

Daniel B. Rodriguez: You won’t have time to run out and get your expert —

Professor Peter DiCola: It’s still like a top 200 album, it’s weird; but anyway —

Daniel B. Rodriguez: Good, thank you for that. Finally we got to name dropping, although that band is 30 years old but still —

Professor Peter DiCola: Yeah, right, not exactly. Well, it’s kind of time. Anyway, the point is that there are all these specifications or what it means to be a webcast, and the idea is that they’d wanted to rule out listeners online being able to just pick a song and listen to it, what we call On-Demand Streaming. And so that’s left out of the public ordering process —

Daniel B. Rodriguez: That’s the distinction between during interactive and non-interactive.

Professor Peter DiCola: And that’s the difference between interactive and not, and so technically, even though Pandora does a lot to try to respond to your preferences and try to get a sense of what you like to listen to, what it won’t do is play you a song that you ask form it won’t do that.

Daniel B. Rodriguez: I know, I keep trying to do that, I keep trying to —

Professor Peter DiCola: You keep trying and it won’t do that.

Daniel B. Rodriguez: — hit that bunch and I want to listen to x right now.

Professor Peter DiCola: And that is the difference between them having to go negotiate a license without any backup or any statutory process and being able to try to take advantage of the statutory process and potentially at lower rate.

Daniel B. Rodriguez: So I can’t resist when this wonderful colorful phrase that I think Paul Goldstein invented the celestial jukebox. He says the technology packed satellite orbiting thousands of miles above Earth awaiting the subscriber’s order like a nickel in the old jukebox and the punch of a button doesn’t really work that way for the technologies that —

Professor Peter DiCola: Not for Pandora; so webcasting isn’t quite that, it definitely is more of a curated experience for you; people are trying to develop algorithms to understand the connections between songs and to predict people’s preferences. So that’s on one side, that’s what I call Webcasting.

On the other side there is On-Demand Streaming, and there are services that offer that. They just have to go get voluntarily negotiated licenses, and so that’s your Spotify, Rap City title, those kinds of services that offer on-demand streams.

Sometimes in addition to like a radio type offering, but the key thing that Spotify will do is it will be the celestial jukebox. If you ask it for a song and it will play it.

Daniel B. Rodriguez: So I am not a shell here for Spotify these others, but here’s a naïve question, why don’t those celestial jukebox ones on demand put Pandora and others completely out of business?

(00:15:04)

Professor Peter DiCola: Well, I think that some people like the curated experience. That’s the interesting thing is that some people don’t necessarily want to hunt around and say, okay, I just read Pitchfork that I need to go check out the new, Kurt Vile record like —

Peter DiCola: I just ask you what else to do in that.

Dan Rodriguez: Yeah, you can ask me. Anyone is welcome to ask me, and I would offer some strong opinions, but the Kurt Vile record being my favorite from last year, but the problem is, I think it’s just a question of preferences. Some people would rather have the experience. I think a lot of people listen to Pandora at work, or they listen to Pandora while driving and they are happy to have someone else choosing the songs and that’s a way to discover new music.

Other people want to pick things on demand, a lot of people of course use both. I mean, they are competing for how much time they are getting from their listeners but they do offer both.

And so it’s interesting though that in the background, the copyright regime is totally different, that Spotify has to go through this Copyright Royalty Board process, whereas what Spotify and it can kind of do is negotiate over the course of 6, 12, 18 months with the record labels and hope that the record labels allow them to exist, and here in the US in 2011 that finally happened, and so then we got Spotify here and they have been here ever since.

Dan Rodriguez: It sort of reminds me of using an old analogy from law school, but of course, I am old, is they used to talk about antitrust exemptions, different in baseball and football and other sports, and you’d understand the rationale they’d say, well, once baseball has a round ball and the other hasn’t, I know, it’s not extreme in this context, but having different legal regimes for different technologies.

Professor Peter DiCola: Yeah, so the copyright office has proposed that instead of using the Copyright Royalty Board process is essentially a first resort for Pandora and having it not available at all for Spotify that it become more of a backstop option, like a true backstop that they really try to push voluntarily negotiate the rates for both kinds of services and sort of unify the process and stop treating them differently. So that was in a report called Music in the Digital Marketplace or something like that, that came out early in 2015.

It will be a while I think before Congress acts on those suggestions from the Copyright office, but it’s a perfectly reasonable thing to suggest. I think it’s a pretty good working assumption to start treating these different substitutable modes of music distribution as substitutes instead of treating them as totally different species, and of course, I would also bring AM and FM radio and satellite radio into the same process and start getting their rates, I think that AM and FM radio should have to pay. I think that there could be arguments that they should pay a lower rate or something like that but that should be based on something rational, not just the force of their lobbying efforts in the early 70.

Dan Rodriguez: So let me shift to protecting the interests in musicians. So let me begin with a quote from Paul Williams. Now you are probably too young to remember Paul Williams, but for our listeners, he wrote the theme for ‘A Star Is Born’, wrote for ‘The Carpenters’, ‘Kermit the Frog’, my favorite part of 17:48 is the theme from ‘The Love Boat’. So here is what —

Professor Peter DiCola: Well, he wrote that, okay.

Dan Rodriguez: He wrote the theme from ‘The Love Boat’.

Professor Peter DiCola: Yeah.

Dan Rodriguez: If we had more time I could sing it for you and more patience from our listeners, but I digress.

So Paul Williams, I think Head of ASCAP, writes, “We’re songwriters who are writing for the center of our chest, providing songs for the world to dance to and fall in love to, but we’re doing it for a living. And when I’m properly paid for my songs, it becomes gas in the car to take my little girl to school. The fact is that for us to have a life, where we can continue to make music, we have to be properly paid.”

To bring it into the next century Taylor Swift who was called upon to explain why she left Spotify, says, “People can still listen to my music if they get it on iTunes.” Swift told ‘Time’. I am always up for trying something and I tried it and I didn’t like the way it felt. I think there should be an inherent value placed on art. So what about the musicians?

Professor Peter DiCola: So the history of the music industry is a history in which the musicians get treated unfairly, don’t make a huge share of the profits in a lot of cases and don’t benefit from their music. And so, this is just the next iteration, it’s something that’s going on a long time, but it’s a real thing. I mean I think the big picture here is that we are now in a much more maturer industry than where we were 15 years ago, right, file sharing and the disaggregation of the album and moving to digital, and all sorts of things at the same time change the value of music, change the amount of revenue that the industry can charge for recorded music, and it’s just a smaller pie when we are talking recorded music, whether it’s streaming or downloading or webcasting. And it’s not nothing, it’s still a pie that people see is worth fighting over, but it’s much smaller than it was 15 years ago.

Dan Rodriguez: But look at the other side of it, we might have said this 20 years ago when there emerged downloading and Napster and MP3, all these things sort of lost in the dustbin of history, and what the artists might say is, we didn’t put our stake in the ground then to fight against this, and look what happened. So now we really need to — we’ve learned our lessons.

Professor Peter DiCola: Yeah, I think so, I mean, I think it was really hard to organize musicians. I worked with a nonprofit called Future of Music Coalition for a long time that still exists. I am no longer officially affiliated with it, but they try to represent the interests of independent musicians and they have started the organization around the time the file sharing broke out.

(00:20:02)

But the point I think is that it’s been very hard to organize them with different genres, different levels of artists, major-label versus independent and established artists versus emerging artists, they don’t have the same interests, and in fact the songwriters and the recording artists don’t have quite the same interest.

Recording artists can go out and tour. They are still making — they have been able to shift their activities I think to make more money from touring than they were before, whereas the songwriters who are really dependent on sales of recorded music to an extent that the recording artists learnt they are having hard time. If you go to Nashville you will hear about the difficulties of songwriters and I really sympathize with what Paul Williams said.

But, the issue is, are we reducing their income to the point where we’re losing some songwriters on the margin, where some people can no longer sustain that living and will we really regret that?

Daniel B. Rodriguez: If they are really effective songwriters, don’t they have power over folks who go and tour on the basis of their songs?

Professor Peter DiCola: Sure, that’s right, and they are going to get some money through ASCAP or BMI or SESAC, the other collecting society for the live performances of their songs, and it’s right, to the extent that you are a really successful songwriter, they are going to get a share of that, but they’re not getting a big share of the touring money the way the recording artists are. The way recording artists make a lot of money on tour, if we are talking about the big names, if we are in the major-label world, it’s through sponsorships, it’s through money that isn’t filtered through the record labels or filtered through publishers or things like that, and so, the composers and songwriters aren’t participating in that. So touring isn’t really the answer for them. They were really dependent on a system where they were making money from record sales.

Now one thing I should point out is, historically one thing that was going on 15 years ago is that CD sales were at a peak because the industry had to just enjoy 10 or 15 years of selling —

Daniel B. Rodriguez: You should look in my garage; you can see why they were at a peak. I’ve got 500 useless CDs.

Professor Peter DiCola: Exactly, yeah — no, exactly. I just finally ripped off all of mine a couple years ago and put them in the basement for good, but some people have argued that it was a bit of a blip. I think my dad has bought The Beatles catalog now eight or nine different times, in eight or nine different formats, that ability to sell people their collections again and again was something that they benefited from much like Hollywood benefited from DVDs in the 2000.

Daniel B. Rodriguez: Of course, the move away from that has taken joy out of me wandering around the aisles of the Tower Records store looking for —

Professor Peter DiCola: Yeah – no, that’s right, I mean, you have to find those experiences online about — and they are not exactly the same of trying to get good music recommendations and things like that.

But I think the point really still holds though that music has been devalued, that the price point is just — to me shockingly low. So Spotify costs $10 a month or the other services, $10 a month, Tidal $20 a month. This is for like almost all recorded music that we have. All you can access whenever you want, it’s an incredible price, compare that to cable TV which will charge you $60, $70 for what they want to show you and not having everything on demand and you have to pay extra for things on demand.

To me it’s just like — it shows how out of whack things got, but for whatever reason I think consumer preferences, I think getting used to file sharing, I think getting used to these different options maybe being frustrated with what the record labels were offering them, people change their ideas about what was worth paying for, I think they will still pay for concert tickets but they are not as interested in paying for recorded music, I don’t know that you can ever go back as part of what I am saying.

Daniel B. Rodriguez: So I am getting weepy thinking of when Billy Joel sitting there at the bar and says, they sit at the bar and put bread in my jar and say, man, what are you doing here? Not so much bread in the jar anymore.

Professor Peter DiCola: No, I don’t think so, and Billy Joel is a great example.

Daniel B. Rodriguez: How do you like that homage though, I just pulled that out of the 70s.

Professor Peter DiCola: No, it’s really good. It’s appropriate, but also Billy Joel brings in this other part of this, which is the contracts that artists sign and the dependency they have on good management and honest management and the absence of accounting fraud and other things. Billy Joel tells these stories about the ways in which the business was rough on him, he trusted the wrong people, this happened, that happened. Smart guy who gets — take an advantage of, so he didn’t really reap all the benefits of even his giant success.

So imagine what happens with a small punk band who thinks they are signing some big great contract and what it really is when you get a $50,000 advance for two years and there is four of you, you just signed up to make $6,000 a year. It’s not exactly glamorous. I mean, no one is going to cry river for someone who is in a punk rock band, obviously there are people who are more disadvantaged in our society, but it isn’t like — a record contract hasn’t typically been the route to —

Daniel B. Rodriguez: Well, let me ask you about it. You are a trained economist, as well as a lawyer, so in simple economic terms, you would suppose that all this perfect storm you are describing would create disincentives for folks to make music, to form bands, and to record music. Are we seeing that?

(00:24:54)

Professor Peter DiCola: No, not at all, I mean, so we are missing a really important side of the equation which is that a lot of barriers to releasing recordings to the public and distributing your music on a wide scale have been removed, and of course, recording technology is cheaper, and so actually as Joel Waldfogel has pointed out in his research; he is a Business School Professor at University of Minnesota; he points out, we’ve got three times as many releases as we had 15 years ago.

And so this idea that there is a response that we’re losing music in terms of number of releases right now, is not happening, you know what I mean, and there is also no evidence that we’re losing quality or anything like that.

What I am worried about is like a longer-term thing what Paul Williams is talking about, that certain people say, oh, well, I was a songwriter, I was producing these songs and now I can’t do it, people who were really talented who can’t do it full-time. I think we are seeing lots of people who can kind of do it part-time or kind of mix music with other things, you see a wide spectrum of people.

With colleagues I have done surveys about how musicians make money and you see that they are cobbling together lots of different sources, but you might worry about people not being able to focus on it full-time, that’s I think the concern.

Daniel B. Rodriguez: We have been talking about the music industry so as we’re winding down, tell us a little bit about what’s happened in music, what do you listen to, what’s your —

Professor Peter DiCola: So I mentioned, I don’t think there’s any drop-off in quality, I think there is a lot of exciting stuff going on. I think —

Daniel B. Rodriguez: Other than Kanye.

Professor Peter DiCola: Yeah, I mean, I think that from hip-hop and jazz, and some fusion between those two you’ve got the Kendrick Lamar record from last year, you’ve got the Kamasi Washington record which is great, it is a great jazz record, I mentioned Kurt Weill, he is sort of a rocker guy from Philadelphia, there’s still some great rock ‘n’ roll, and then there is a ton of interesting electronic music, and it’s just amazing how eclectic the different festivals in the different outlets for independent music in particular, it’s just an incredible mix, you just see this range.

So I think that in that sense the industry looks healthy, but what you’re hearing on the business side is that everyone is really concerned that their check from Pandora is like $0.35 or their check from Spotify is a $1.47. People are wondering exactly how people are going to be able to sustain careers.

Daniel B. Rodriguez: So the other side of the coin as it were in the jukebox, is that although quality is excellent there are folks still recording music, they worry about whether those incentive structures will enable the next sort of era to be as good as the others.

Professor Peter DiCola: Yeah, I think that’s right and just that it might change it. People wonder about — the Kendrick Lamar record is an incredibly elaborate project; he needs to be a full-time musician to be able to do that, you know what I mean, if we create a world with fewer and fewer full-time musicians you might worry about.

Daniel B. Rodriguez: That’s why I don’t do my own white album because I would need to give up my job to be able to do that otherwise —

Professor Peter DiCola: The Beatles, The Beach Boys; Dan, as soon as people got interested in these really arty albums that are these giant works of art, it gets closer to the scale of like a film, or a Hollywood movie it takes a lot of time, a lot of investment and ability to focus on that, and that I think economically that’s what you might miss.

There are plenty of people who are hobbyists who can produce music cheaply and that’s fine too, I think that’s great, but I just think in terms of the diversity of what listeners are going to be able to hear you wonder if you lose something, if you can’t let people make that you are the next Sgt. Pepper or the next Pet Sounds or –

Daniel B. Rodriguez: Great. There is no next Sgt. Pepper.

Professor Peter DiCola: No, probably not.

Daniel B. Rodriguez: But on that note there is more to talk about, we haven’t talked about YouTube, haven’t talked about a lot, so I hope you’ll will have an opportunity for you to rejoin me, and so that’s our show for today. Thank you Peter; Peter DiCola, my colleague.

Professor Peter DiCola: Thanks, Dan.

Daniel B. Rodriguez: Here at Northwestern Pritzker School of Law for joining me. Thank you for listening, I am Dan Rodriguez signing off from Northwestern Law School.

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