In a world of free music, how are we going to pay for everything?

The first floor of 1180 St. Antoine is a strange, abandoned lobby where at night people loiter asking where the party is. Its mismatched staircases are in need of a paint job and probably much more work, leading to different parts of the old building near the Bell Centre. Walking through its halls your can hear music pouring in from all directions, be it from quasi-legal venues selling cold cans of beer, or private rehearsal spaces with smoke escaping out the door seams.

Rumours of its demolition come and go, with the noise complaints coming from recent condominium neighbours, taking over other old industrial buildings that formerly housed studios, venues and other art spaces, for the six-figure income bracket. It’s the kind of rent to scare off musicians to the north or sud-ouest, ceding central territory to the ones who keep regular work hours.

In June 2014 Alexandre Bergeron is coming from the practice space he rents at 1180 St. Antoine when he calls me from a payphone to confirm which bar we’re meeting at. To avoid another regular bill to pay, neither him nor his bandmate Nick Laugher have cell phones.

Together they play as Year of Glad, a band with a fluid lineup emitting long and murky songs, propelled forward by Bergeron’s haunting falsetto. With a love of improvising live and throwing in friends for one-off performances, they’re not quite the pop package an A&R rep that one of the Big Three record labels are after. They might be a little too dense, or too abstract, for commercial radio, but they’ve made a name for themselves and their unique sound by playing often over the last two years.

It’s a few days before they leave for Calgary’s Sled Island Music and Arts festival when we meet for our interview. The summer has been busy for them, often playing a few gigs a week at local venues — mostly the Montreal dives that give a platform for bands without demanding a cash guarantee. The band has just made a short-run of cassettes for their Sled Island shows, after selling out another short-run of CDs in the spring for the release of Old Growth, their latest record.

I don’t worry about devaluing my music because the music industry has done that for me.

All their music, from the two Year of Glad albums with physical releases to the solo recordings Alexandre made in his bedroom during his first year at King's College in Halifax, is available to stream on their Bandcamp page. And all this music is offered for free download, with the option to donate money to the band through Paypal.

While major labels consolidate, independent artists have been working together, creating networks while keeping ownership over their work. The majors and the indies face similar problems, if with radically different business models: how will the audience support the creation of the music we all love? But it’s the independent artists that are opting to give away their music for free.

“In my experience with this musical climate, getting someone to even listen to your band is much better than getting them to pay you $10,” says Laugher.

“I don't worry about devaluing my music because the music industry has done that for me.“

The decline of music industry profits has been well documented, but it's now facing a second blow. Selling units is becoming a thing of the past while streaming services — free, paid or of questionable legality — become the dominant way young people listen to music. For the first time, in 2013 digital download sales started falling.

Streaming accounted for more $1.4 billion in revenue for the record industry in 2013, according to data published by the Recording Industry Association of America in March. That’s a 39 per cent increase from 2012. According to Billboard, total music revenue from that year was more than $15 billion, a number that keeps declining while streaming revenue rises.

But streaming royalties pay pennies on the dollar compared to selling digital copies of the music. Pharrell earned $2,700 in royalties for 43 million streams of "Happy" in the first quarter of 2014 on Pandora. The biggest names in pop music are essentially getting paid for radio play in exchange for people to have constant access to entire albums.

Understanding how recorded music is valued today means looking before the 2007-2008 financial crisis, when the Netflix business model relied on mailing DVDs and print media could still rely on advertising. Music was the first media industry to be shaken by the age of information. With small file sizes relative to television shows and movies, online communities would soon find ways to share their collections with each other, like a trading post for bootlegs or mixtapes but with the potential for infinite copies at virtually no cost. It’s a testament to how much these users loved music that they were so willing to share their collection with other users.

As these online communities grew, broadband internet began replacing dial-up, offering a high-speed way to share information — regardless of whose intellectual property it was.

CDs, once seen as a saviour of the music industry, were used for more than their initial intended purposes. There was nothing preventing a user from lifting the digital music off the disc, and making an infinite amount of copies for the price of one disc.

It didn’t take long for all that data to move online. With the rise in popularity of the MP3 in the mid-’90s, suddenly there was a format everyone could play at home, and acquire with relative ease. MP3s compressed the file, and a community of music fans readily traded a degradation in audio quality to the huge distribution potential of the format.   

MP3.com was made as a repository for music ripped from CDs, and soon after Napster paired this audio format with the willingness of users to share their collections.

How to fairly license music is a problem still being dealt with today. Napster couldn’t come to a licensing agreement with the major labels because they weren’t interested in simply moving the record store onto our computer screens (iTunes would claim their monopoly shortly). Both the funding model for major labels and the value seen in them by artists were about to shrink.

That’s because the digital revolution didn’t just shake up the distribution model, it also put the tools to create recorded music into the hands of anyone with a computer. When you didn’t need to borrow thousands of dollars from a major label, who essentially have operated like banks throughout the platinum age of record sales, there’s less incentive to charge listeners as much — or in many cases, even at all. Even Thom Yorke’s full-length BitTorrent album is only $6.

The result is more recorded music being made now than at any point in history. It’s given rise to short-run releases of CDs, cassettes and seven-inch vinyl. With online distribution freely available, bands can recoup their costs by selling unique or exclusive physical releases at their shows and by mail.

A wavy, orange-pink fingerprint pattern cuts through the stark black background of the SXD_EP cassette. In an interview in October with Saxsyndrum about their new EP, it's clear how much care they've given to their album packaging.

They picked the screenprinted colour blend themselves at a print shop on Van Horne Avenue, a block away from one of the lofts that hosts the kind of clandestine concerts where they got their start.

“We may not be selling a lot of it, but we want it to be something they’ll hold on to,” says Dave Switchenko, the sax-playing half of Saxsyndrum.

They’re doing what so many independent artists are these days, making a small number of unique physical releases of music available to stream and/or download for free online.

That short-run ethos is echoed by the Ottawa-based cassette label Bruised Tongue, selling their records on tape because it’s the cheapest way to do it. If anyone wants a digital copy, they can just download pay-what-you can from their Bandcamp. For Bruised Tongue artists Roberta Bondar, the whole point is to create something small, that belongs to them and their community.

“We make music on tapes, which like 10 people in the world listen to,” says singer/guitarist Lidija Rozitis in an interview ahead of their 2014 POP Montreal show.     

But the cache of tapes is only growing, giving fans a chance to buy something with pretty art and a feeling of exclusivity embedded, the short-run release acting as a symbol that you’re on the “inside”, while downloading the music for free. That gratifying feeling of supporting the artists you love hasn't totally been forgotten, either.

It’s one of the simplest macroeconomic concepts, decrease the supply to raise the value. But a growing number of bands are doing more to make these small releases unique too, with alternate covers, hand-written notes or, in the case of Toronto-based musician Andrew March (from CROSSS), release music on lathe cut picture discs. He’s one of the only people in the country working with record lathes, using gems to impress the sound onto hard plastic discs for his Craft Singles label. It’s the kind of format that only works with short runs.

Year of Glad, CROSSS, Roberta Bondar, Saxsyndrum and hundreds of other independent Canadian bands opt to offer digital copies of their music for free, with the option to donate. Laugher says it’s futile to fight against the public expectation to get music for free online.

“Thanks to how the big labels handled downloading when it first popped up, everyone basically said screw it and downloaded illegally,” he says. “[They] came to feel entitled to get music, because for so long there had been these huge barriers.”

Putting up your music for free can even be a defence tactic. When Arcade Fire’s massive double-LP Reflektor was leaked a few days ahead of its release, the band put the entire album on YouTube themselves for 48 hours.

Anyone could have lifted the album off YouTube during that time, but if the album’s already out there, people will find it. Dozens of websites are dedicated to tracking albums before their release date, and more still are dedicated to making the music available to the public. The sites that live off pop-ups and lurking adware / malware, just waiting for you to click on the wrong “Download here” link.

When the biggest success is being noticed above all the noise, the millions of records at the user’s fingertips, building a relationship with your audience is key to keep them coming back for more.

“People are really into buying physical music again, whether it's vinyl or cassettes, and this has absolutely nothing to do with the major labels or the industry ‘fixes’ they're trying to employ,” says Laugher.

“This is all because of tight-knit musical communities and the fact that people who love independent music really do love it and want to support it, so they'll still buy your stuff and help you get some gas money to get home.”

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Colin Harris is on Twitter.

Hundreds of indie labels are promising fair digital deals

"@jagjaguwar is proudly united w/indies globally in our commitment to the #fairdigitaldeal4artists"

The music industry is going through yet another tumultuous phase as big streaming deals are revaluing music in bulk form. But hundreds of independent labels are making a promise to ensure the artist doesn't get a raw deal.

The rise of free and subscription-based services is turning the whole royalty system on its head, labels getting a large lump sum for granting access to their catalogue, while artists get a per-play rate low enough to get Thom Yorke ranting at Spotify last year. This new kind of deal got some global ink when The Financial Times reported last month that a Google VP was threatening to block indie labels from YouTube if they don't agree to the terms of Google's new music service.

To combat this, hundreds of independent labels are signing a pledge to ensure they make transparent and equitable deals with artists as once again the distribution model gets disrupted. It's a move to create a new norm, one that doesn't short-change the artist as music subscription becomes a major source of income for labels.

They're signing the Fair Digital Deals Declaration, launched yesterday as a pledge that these indie labels will not diminish the value of songwriting as they explore increasingly-popular web distribution tools such as streaming.

The declaration states five principles:

1. Ensure that artists’ share of download and streaming revenues is clearly explained in recording agreements and royalty statements in reasonable summary form.

2. Account to artists a good-faith pro-rata share of any revenues and other compensation from digital services that stem from the monetization of recordings but are not attributed to specific recordings or performances.

3. Encourage better standards of information from digital services on the usage and monetisation of music.

4. Support artists who choose to oppose, including publicly, unauthorized uses of their music.

5. Support the collective position of the global independent record company sector as outlined in the Global Independent Manifesto.

The declaration was drafted by the Worldwide Independent Network, an organization that advocates for the rights and business of independent musicians and publishers. They're posting live updates of signatories (at over 730 after only one day) with the Twitter account @winformusic.

Streaming revenue in the U.S. grew to $220 million in 2013, with its market share rising to 21% — up from 15% just one year before according to RIAA data reported by Billboard. And that market is only growing.

Read the whole declaration / add your name at Winformusic.org.

More KBT News

Canadian government scraps "tour tax"

Last summer the Ministry of Employment etc. raised the cost of touring the country for small non-Canadian bands. If you were playing in places that weren't strictly for live music, a charge of $150 per musician/roadie for crossing the border was raised to $275 (or more) charged to each booking agent/promoter they're working with.

So spaces that weren't exclusively venues — like the bars that see newer, smaller bands pass through without the pressure of packing the place — were subject to potentially thousands of dollars in fees paid to the government.

Big festivals and large-scale tours were left untouched by this tax increase.

But the government has scrapped this costly bit of paperwork (full name Labour Market Impact Assessment), as reported by the Winnipeg Free Press. There's a petition demanding an end to the tour tax with over 140,000 signatures, which may have influenced the ministry to include it in the larger Temporary Foreign Worker reform happening now. With recent charges of abuse by companies including McDonalds and Tim Hortons, the government is dealing with much larger problems in this TFW reform.

Google VP says YouTube will block indie labels if they don't sign the dotted line

rebeccablack

YouTube might not be a free, unlimited song bank for much longer, if they make good on their threats to independent labels.

The Financial Times is reporting (paywall) that labels who don't want to sign up with Google's new music subscription service will be blocked from YouTube "in a matter of days," in the words of Google VP Robert Kyncl, head of content and business operations.

The  company has already secured deals with Warner, Sony and Universal for its new music services, slated to launch later this year.

In an interview with NPR, Canadian Independent Music Association president Stuart Johnson says that the indies were offered a lower royalty rate (how much would be paid per listen) than the "Big Three." Even though the majors would inevitably get more money since their songs attract more views.

"There is no reason for us to, at this point, give to one player privileges that could jeopardize the market health as a whole. This pressure over the labels is insane and will lead nowhere, but to a delay in service launch,” says Johnson in a statement released by the Worldwide Independent Network.

Google says it wants to make a better, more profitable music experience for everyone. But it's sites like YouTube (albeit before Google bought it) that created this level playing field that has allowed independent music to flourish and network like never before. Everyone has the opportunity to be discovered. Major labels can spend money on marketing all they want, but the indies are still just a hyperlink away.

If Google goes through with this, then they're going against the democratizing principle of the Internet that they're supposedly (or at least were) champions of. By strong-arming indies into taking a worse per-play deal than the majors, they're trying to wedge the music industry into its pre-Napster era.

Kyncl told The Financial Times that "it is our responsibility to our users and the industry to launch the enhanced music experience." But these tactics will only chip away at the positive side of the music industry's big shakeup: that the unknowns can make it without wooing a major label. Under this Google music service agreement it appears that they could never hope to get the same royalties as the majors – even with the same number of views/listens.

Indies will just find somewhere else to put their content, and if Google makes good on its threat, then that's the choice they have to make.

Google is a media company, whether they want to admit it or not. But like the Huffington Post and other aggregators, they don't create much content themselves. You can keep Katy Perry, YouTube. I'll kindly follow the indies elsewhere.

UPDATE June 24: Digital Music News has posted the contract YouTube sent to indies in its entirety. Though it sheds light on how exactly majors will always get a better deal than indies, the threat to block non-compliant labels from YouTube isn't in the document. There's also no proof that any indies signed this exact version of the contract, though Google is saying they have 95 per cent of the industry on board.

Amazon gives their "Prime" users access to unlimited streaming

Starting today Amazon's US$99-per-year membership gives users access to unlimited, ad-free streaming of their music catalogue.

Users will have access to content from Sony and Warner Music, though nothing released less than six months ago. It's not like these giant labels and their subsidiaries are ready to give up on the concept of actually selling their music quite yet.

Talks to acquire Universal's catalogue fell through, meaning the users won't have access to the world's largest music company, whose subsidiaries include Island, Def Jam, Mercury, Virgin and Capitol Records.

Universal acquired EMI, one of the former "Big Four," in 2012.

Verge reported that the big guys were offered a share of $25 million in royalties, and The New York Times reported that the non-giant labels share stock in a $5 million royalty pool.

The catalogue apparently has about 1 million songs, putting it far behind Spotify. But considering its huge user base, Amazon's move can still disrupt the biz.

As for the indies, a quick look shows artists signed to labels including Anti-, Secretly Canadian, Brassland, Merge and Matador have music available via Prime. This includes Glass Boys, the LP Fucked Up put out last week. So this whole six-month no-stream zone may just be for deals with Sony and Warner.

Of course, Canada is left out of the streaming fun. These licences don't extend North. Makes you wonder how the entertainment industry is going to access its U.S.-content-hungry Canadian market as streaming becomes the new norm.