The Revolution of Greed and the Music Industry

By: Benn Jordan

A decade ago, while being an amateur musician and daytime computer
technician, a tech-savvy friend of mine called me raving about MP3s. He even
sent me some files on my painfully slow dialup connection. He spoke of groups
on BBS systems and IRC that were ripping and trading albums. I eventually
figured out what they technically were, and how they worked. The technology
impressed me, but I didnt worry about it either. I thought to myself:
Surely nobody is going to spend 40 hours downloading an album at a horrible
audio quality.
Of course I didnt speculate how advanced the internet would become 10 years
later. Terabytes, iPods, wireless networking, and broadband internetI just
didnt have the foresight. Those who did either fought it or became millionaires.
Now before you start getting excited about being part of a music revolution,
Im going to share my rendition of it, which isnt going to be inspirational in the
least bit. The point of all it all is, well, that nearly everyone involved is unethical
and greedy. From the largest corporation all the way down to the consumer.

Napster
I was the first guy on my block to be using Napster, and by that point, having
started to make a very meek living in the music industry; I started to realize that
I was at the beginning of the end. Digital music piracy existed before this time,
but Napster made it so damn easy. Id get into a girls car and see a backseat
filled with marked CD-Rs. Now you could buy CD-Rs at Walgreens. It became
impossible to find a portable CD player as the market flooded with MP3 players.
Every software developer in the world was making a shareware CD ripper and
encoder.
America stopped buying music, and there was a brand new industry to
collect on the money everyone was saving while stealing their favorite
bands new albums.

RIAA
The few remaining major labels put on a great show over the last decade. They
acted scared to death of piracy, when, in my opinion, they knew exactly how to
use it as a tool. As if the recording industry wasnt monopolized enough, the 5
largest media conglomerates used RIAA (an organization that was formed to
create technical standards in music production) to join forces and profit off of
what we believed to be their worst nightmare.

After enough lobbying to get the Digital Millennium Copyright Act passed,
anyone who pirates (or pirated) music now legally owes RIAA $750 per song
downloaded and $150,000 per song shared.
Since then theyve aggressively sued the makers of software, media players,
and over 20,000 individuals for violating the copyrights of their albums. My
favorite example is RIAA VS. AllOfMP3.com for $1.65 trillion. Thats right,
trillion.
Theyve raised prices of CDs to punish us for losses to piracy, while of course;
this only punishes honest music customers.
RIAA has now stooped to sending out letters at random accusing internet users
of sharing files and directing them to a website, where you can make discount
settlements payable by credit card.
How can they sue you for $750 for downloading a digital song thats sold to
retailers for less than $0.70? I have yet to hear the answer to that question.
So naturally, I think to myself: Hey! I own a record label! How can I get involved
in this profit party?. Oh, RIAA is a private club. Small businesses dont seem to
be allowed.
So does this mean that if I sign with a major label Ill get my fair share of these
lawsuits battling the theft of my material? Nope. Artists are only compensated
for post-recoup sales. 0% of this lawsuit money is trickled down to the
artist.
So basically, if youre not one of these companies, you cant win.

The Consumer
Im not going to be one of those artists who pretend to support music piracy. Im
not even going to deny that Im tempted to stab the occasional person who
compliments my music by saying I downloaded all your albums and After all,
the greedy consumers are the ones who made all of this possible. Anyone
whos gone through the epic saga of making, negotiating, signing, and
promoting an album can surely agree with me. If I wanted my music to be free,
Id have it for free download on my website. Id give away CD-Rs at my shows.
If I dont personally give you a copy of my album, then I dont approve of you
having it without compensating me for it. Plain and simple. However, I wont be
suing anyone for $750 a song of course.
The problem is, RIAA has been depending on music pirates to destroy the
independent market, and the independent music fans have done just that.
When I was on tour with Dillinger Escape Plan, a website in Eastern Europe
was hosting most of my albums on an HTTP server for free. These sites were
so heavily trafficked that when you searched my name in Google, the pirated

albums would show up before my own website would. No label had the funds to
help me with legal fees, and I ended up losing upwards of $2,000 out of pocket
to pursue just the cease and desist order of this web server. I, nor my labels,
could afford an actual copyright lawsuit. The reason this couldnt be afforded by
an otherwise well-run record label was because we were facing a stifling 1 to
9/purchase vs. pirate statistic for the genre.
It only grew worse. Labels started dropping like flies. Successful labels like
Schematic and Merck have gone bankrupt from piracy. Now, the greed has hit
home.

Sublight Records, R.I.P.

It wasnt breaking news to me. A while ago I knew that if my next album as The
Flashbulb (Soundtrack to a Vacant Life) didnt sell a miraculous amount of
copies, Sublight would be done. I wasnt expecting to bring miracles. In a way,
even though it would be at my own expense, I liked the idea of providing the
labels first and last albums. I felt that since Aaron Rintoul had faith in me to kick
start the label, that I should be the one to go into the coffin with it. Unfortunately
it was too late.
While attendance on my tours has been rising, and while I cant seem to make
enough T-shirts to sell on my own site, the music sales have again dropped.
Aaron came to terms with everything and realized that his love for music
combined with the lack of ethics in many of his listeners would result in
unrecoverable debt. All releases after this months compilation are canceled,
including Soundtrack to a Vacant Life, and Sublight Records will close its doors
forever. Music lovers have lost one of the only labels that discriminate strictly on
the art of the trade.

The Numbers
As I started meeting more musicians who had well exceeded me in notability
and record sales, I noticed that most of them were worse-off than I was
financially. This is because a very small part of my work schedule goes to
working for film and advertisement agencies. But surely, someone selling
200,000 records should be in a way more secure place than I am! Wrong.
So for the first time in years, I started going through my numbers. Since the
Sublight days I never really cared about the specifics of sales since it was
pocket change compared to what I was making from touring and licensing. My
record label, Alphabasic, has intentionally never shaken hands with a big
distribution network, so my head was buried in a hole. A couple years ago, I
didnt think I was capable of selling more than 1,000 CDs. When finally paying
attention, I was surprised and to find that most of my albums have sold out and

gone through multiple reprinting cycles. Youd expect me to be delighted, but I

was horrified. Someone, somewhere in the cycle, was ripping me offBAD. So
in the recent months I began nosing around, trying to figure out where all this
money my albums were making was going.
After all, how could I be making a few hundred bucks for every thousand CDs
Im selling when the retail prices of my CDs are upwards of $15?
I always considered myself to be a good businessman. After all, I come from a
family and area that did nothing but negotiated and haggled their way through
life. My contract with record labels are of the best Ive ever seen. Ive always
had a very strict policy on the profit and control I retain for my work and name,
and Ive turned down offers from much larger labels for that very reason. Larger
labels offer unbeatable promotion to boost sales, but its at a cost, and in the
end, that cost comes out of my pocket. I dont release albums with the goal of
being in Rolling Stone Magazine or being interrupted by a fan while my girlfriend
and I eat dinner. I release albums because I have a passion for writing them,
and because it feeds me. Being on top of some pretentious musical hierarchy
doesnt contribute to my happiness; in fact, it waters down the beauty of the
creative process. With that being said, what the larger labels offer has no
benefit for me and my interests.
So it definitely wasnt Sublight who was walking away with the loot. Aaron, in
fact, was living on much lower income than most of his artists. I moved up a
step and started talking to distributors. They made their cut, but again, it was a
petty one. In fact, independent music distributors are in the same dwindling
shape as independent labels and small record shops that buy direct from labels.
So, was it really possible that Best Buy, Amazon, or Borders were making
more money than everyone else combined when they sold one of my
albums?
You see, since Im not on a major label, these retailers can consider my albums
rare. They claim that theyre more valuable, yet they buy them wholesale for
the same price, if not less than what they buy a Madonna album for. Ive seen
Kirlian Selections tagged as high as $33.99, and it was on backorder! That
means that they take your $34, keep $26 of it, then order the CD for $8 from the
distributor, and ship it to you (for a nominal shipping fee of course). In the end,
youve paid over $37 for a CD that mechanically costs $1.17 to make. All of this
while Im trying to discourage my fans from pirating my music!

It all started making sense. The richer the middleman between artist and
consumer, the more they were profiting from my music. How did it get so bad?
Music piracy is forcing independent labels to make less quantity of their albums,
while retailers claim a higher value and double their profits. My fans spend more
money, we make less, and corporate retailers make more.

The iTunes Scam

Since I completed the almost impossible task of trying to figure out where all of
my iTunes royalty went, I was equally disgusted as I was with the numbers
outlined above. Apple is no different than Best Buy, Wal-Mart, or RIAA when it
comes to bleeding the creator of the music for everything they have. Not only is
it an unfair share they claim, somewhere in the digital distribution system, all
of the remaining profit gets eaten up.
Heres an average example of where your money goes when you buy an
independent record labels song from iTunes (Note that major labels figures are
much worse, and some independent labels deals are better when using an
ethical distributor).

How did it get like this?

When Apple first opened iTunes, I sent them email after email for years asking
how I could get Alphabasics content in their program. I filled out their
applications over and over again, and not once would they grace me with a
response. Many of my friends that run other labels dealt with the same problem.
Of course the largest labels had no problem getting on iTunes, and took a head
start in paving new ways to continue screwing artists out of their cut.
Today anyone can be on iTunes, of course theyll have to go through a digital
distributor or pay a fee through another middleman. Lucky individuals like me
can get involved with an ethnical digital distributor such as Storming the Base,
that doesnt think its right to take an additional profit off of a download. These
distributors are still few and far between, and often only distribute music they
endorse.
Last year, Apples website promoted iTunes as Fair to the Artists. Believe me,
nobody hates Apples false advertising tactics and poor business practices
more than myself, but this one hit home. I sent Apple letters and emails asking
them to display an artists cut of each album on the iTunes interface if they truly
believe that what theyre doing is fair. While, of course, this never happened,
they did change the site to remove the false claims of their fairness.
The part of these new music delivery methods that sickens me is that its all
unnecessary in its current form. If we werent so distracted by RIAAs Sue
America campaign, we couldve taken control of the entire industry. Unlike 15
years ago, middlemen between the artist and music-lover are not needed. This
technology is incredible, and it shouldve destroyed the financial exploitation of
musicians, not perpetuated it. There are no more production costs, distribution
costs, or shipping costs in digital media, and promotion is much easier. The
major label, the distributor, and the retailer are almost obsolete.
But no. Again, artists are still the ones who work the hardest for their product,
but profit the least from it.

New Ideas
Ive been working on Soundtrack to a Vacant Life for about 2 years, much
more time and money than Ive ever dedicated to an album. One would think
that the collapse of its record label would upset me, but Im oddly happier. 3
months ago everything was tightly negotiated and cast in stone. I knew what
sales figures to expect, the artwork limitations, and the budget limitations.
The day I got the email from Sublight delivering the bad news, I got excited and
inspired, for the first time in my life, to release and promote an album. The
album is an attempt to score the most inspiring and important parts of my life.
For a piece of work that Ive slowly crafted for 2 years, its no wonder my moral
was at an all time low. Itd be exploited through piracy, and the small percent of
conscientious fans who purchased the CD would get a an economically
designed jewel case and pay twice as much for it, in which I would be sparsely
compensated.

Amazon and Ebay would take out ads for it on Google, and 20 year old reps
from Cingular would probably continue to try and persuade me over email to let
them make ringtones out of it. I couldnt be happier to remove it from the
exploitive aspects of the music industry and regain control of what happens to
my work. Its at perfect timing too, as Ive recently acquired 100% ownership of
Alphabasic. If my ideas are too optimistic or pretentious, then Ill be the only one
taking a financial hit. I no longer have to worry about other peoples
investments, which allows me to be more creative.
Im happy to announce that Soundtrack to a Vacant Life be released this year
in its 100% unaltered format, and itll be something youll want to buy. Im going
to put a lot of time and money into the artwork, the packaging, and the quality. If
all goes well with negotiations, Ill even release an early limited edition with an
accompanied professionally printed book of my photography, custom tailored
for the album.

Half Record Label, Half Alliance

I have to admit that Alphabasics growth has been stubbed by my own schedule
and pessimism. It was never planned to be a record label that sold CDs through
retailers, and most of our releases have been sold at live events or on the
internet. This led to accidental success. When we released the CD version of
Acidwolf Legacy, 1995-2005, we were simply too busy to deal with
negotiating distribution deals. The CD was exclusively sold on the website and
at some raves.
I made more from the limited pressing of a one-time-alias release than I have
from my larger releases as The Flashbulb. That may not seem stunning at first,
but think about it. My The Flashbulb alias has been used while Ive supported
big acts on tour, and its been credited on award-winning ad campaigns that
have been viewed by over 100 million people. Those are big numbers, but
facing the uphill battle against piracy and financial exploitation, they cant
compare to releasing a creative product to your own network of supporters that
grows through word of mouth.
Lets take a look at where peoples money went for Acidwolf, as you can see,
the system is much simpler:

While my customer spent less money and got more expensive, creative, and
collectable packaging, I received over 25 times more compensation for the
album by cutting out the corporate retailer. The 18% reflects my initial
investment for the album, which was returned by nearly 5 fold.
Im currently trying to release some of the other albums canceled by Sublight
under this system. The artists will have the option of working under the profit
and distribution methods similar to the one above, or having the CD
manufactured by the distributor and shipped to retailers, which is more similar to
their original deal with Sublight. As for the four albums I have on Sublight, I will
be acquiring the rights to them and may remanufacture them under one of these
systems for future sales.

This is Plan Z
At least until theres a major shift in the way things work in the music industry, it
is becoming an increasingly painful experience to be a part of the system. I
can only hope that decreasing retail price, increasing artist profit, and making a
more genuine product will be a good compromise against the staggering effects
of music piracy; hopefully enough to keep an independent record label above
water to do its job, which is release quality, artistic music that challenges the
listener.
My other options require me to sign with a bigger label that will want an
exclusive percentage of income made from my name and licensing rights. As
some of you would guess, I make most of my living from licensing and
composition and would never be foolish enough to sign that income away. So
my fingers are crossed. I still love contributing to the world of music.
The recipe is simple. Many of us artists have people who enjoy buying and
listening to our music. Its time to starve out the portion of the music industry
that has treated us so poorly, which is nothing short of ironic, because they

need us a lot more than we need them. No modern consumer is going to stop
listening to their favorite band because Circuit City doesnt carry their CD.

Thank You
for reading my rendition of past and current events in the music industry. I
hope it helps those who pirate music understand what their actions are doing to
smaller artists, labels, distributors, and retailers. I hope it helps people
understand where their money is going when they do buy music from larger
retailers.
Almost always as a rule, the best way you can support an album is by
ordering directly from the record label if possible.
If my decisions with the future of my career and my labels fate are at all
successful, I hope that theyll stand as an example of how much more artists
can be getting compensated for their hard work by refusing to do business with
the reptilian giants that are trying to fool us with the illusion that they still control
the music industry.

Sincerely,
Benn Jordan