
The Creative Apocalypse That Wasn’t - aaronbrethorst
http://www.nytimes.com/2015/08/23/magazine/the-creative-apocalypse-that-wasnt.html
======
exelius
Good article. I think the voices that cried the loudest about this were people
at the top of the food chain -- they are the ones getting cut out. In the
music industry, what happened were bands just started self-producing albums
once it became feasible to do so with a consumer PC. The bands ended up making
more (which wasn't hard because record companies had been screwing them over
for years) and suddenly had a publicity outlet other than radio. Most bands
were more than happy to give their music away for free because they had been
doing it for years anyway.

And I think we're starting to see the beginning of the "content crash" hitting
TV as well. With the rise of cord cutting, the big TV networks are going to
have a hard time justifying the prices they charge to cable providers. Cable
video prices will have to come down significantly -- millennials are not
willing to pay $30/mo AND have to watch ads when they can pay $8/mo for ad-
free content from Netflix. People may be willing to spend $30/mo on video, but
they're going to want that content to not be laden with ads.

~~~
rhino369
Netflix has set the price for large quantity of video content way too low.
They have successfully exploited the media industries price discrimination to
get a ton of content for absurdly low prices. But now netflix is killing off
the media companies it free rode on.

Normally I'd say that the price would move to account for it, but netflix has
been pretty unable to move their prices without a huge amount of rage from
consumers. I think it's similar to how the 99 cent app set the market
psychology on mobile apps, Netflix's 8 dollars a month has sort of screwed the
video on demand market.

I also believe Netflix knows this. That is why they are getting into original
programming. But that is so much more expensive than buying second run tv
shows. Especially since they created the binge watch trend.

Netflix spends a 150 million on a season of House of Cards and I watch it in a
day and a half. Look at what HBO produces for 15 a month. It's high quality,
but it's not a ton of a content.

I'm guessing that in 10 years netflix will have tiers and packages. You'll be
able to buy an AMC package and a comedy central package, etc.

Re:30 a month

Cable pays about 30-50 dollar a month to channels for content depending on
area and whats in a package. A pretty big chunk of that is sports. I bet you
could buy all non sports from the channels for like 25 bucks a customer a
month.

But typically channels get half their revenue from advertising.

I'm guessing 30/month is way to low. 50/month maybe?

~~~
exelius
It's not about what revenue level will sustain the existing players in the
market; it's about what price consumers will be willing to accept. I don't
think consumers will be willing to spend $30/mo on a single video service in 5
years. Maybe across multiple services, but the whole concept of channels is
going away in favor of individual shows. The networks don't have the power
anymore; the shows do.

I also bet that rather than go through Netflix, AMC et al will sell
subscriptions directly to consumers. The value add from Netflix isn't that
big; you could set up a very similar service on AWS and Akamai with very
little investment since they already own the content rights. Much of the
appeal of Netflix is in the simplicity; and I don't see them throwing that
away (or consumers accepting it).

~~~
dasil003
Having spent the last 8 years building a Netflix competitor, I think you
overestimate the commoditization of VoD tech. You need a lot more than AWS +
Akamai. The costs of those are too high for the types of margins a Netflix-
like service has. Also, you need apps everywhere, and those apps have to be
_good_. Even though it's getting a lot easier every day, it's still way
outside the reach of any individual show, they're just not structurally set up
to build and manage the tech side. HBO can do it because they are just barely
big enough, but individual shows will never jump that canyon.

What's going to happen is not that shows replaces channels, but that
_services_ become the new channels. Instead of having a few cable companies
monopolizing the last mile, building and running all the distribution tech,
and charging an arm and a leg for access, the new model is that there are no
gatekeepers on distribution. But that is not to say distribution is a
commodity or easy, in fact doing good distribution ala Netflix that cuts
across devices, geography, and a long tail of content will become an essential
value-add and it will be more competitive than it's ever been.

~~~
exelius
Having also spent the last decade or so building a similar service, the tech
side is commoditized by at least a half dozen companies. The ingest workflow
is still somewhat manual, and there's a lot of QA that has to go in to your
metadata, but the tech side (transcoding, CDN delivery, etc) are commoditized
-- especially if you're a network that already owns the rights to your
content.

This is all headed towards a world where the big ISPs run CDN nodes and all
the channels buy delivery from them not because they force them to, but
because the big ISPs can run their CDNs with a lower cost base (they already
have the interconnects and disk space is cheap). The gatekeepers will still
exist because they own a market control point -- you didn't think it was going
to be that easy, did you?

Apps are an issue, but they're not that cumbersome to create, even cross-
platform. I was able to hack together a prototype iOS app that played back
video from a CMS attached to a CDN reasonably well in about 4 hours -- and I'm
not even a professional developer. For the long tail, there are always
services like YouTube and Vimeo -- they're a better fit than a custom app
anyway because you get access to a larger audience.

~~~
dasil003
Your response is orthogonal to my main point—which is that services will be
the new channels, and they will have much more power than they did under the
cable regime.

The mega-services at Netflix/Hulu scale will definitely by CDN capacity direct
from ISPs, but that in no way means that these ISPs are gatekeepers with
anything near the power that is crumbling from the grasp of the cable
companies today. That would only be the case if the ISPs defeat net neutrality
and become as evil as possible about restricting outside content to reach
their users, and frankly if they twirl their mustache that hard consumers will
revolt and regulation will come down on them like a ton of bricks.

------
zeveb
> As a society, what we most want to ensure is that the artists can prosper —
> not the record labels or studios or publishing conglomerates, but the
> writers, musicians, directors and actors themselves.

I'd think that as a society what we most want to ensure is that _art_
prospers. If that means prospering artists, great. But the goal for society is
not wealthy artists but a wealth of art.

~~~
saint_fiasco
There is already more art than can be consumed in a lifetime. I think at this
point, some people really do buy art to support high status artists.

------
TheGRS
I'd like to know more about how ticketmaster has affected the world of live
music. Its such a bizarre market of scalping and reselling. You have entire
companies now dedicated to the act of scalping, like stubhub, where the artist
doesn't see a dime of the transactions. The article points out that the
revenue generated by ticket sales is greater than it once was, but it still
hasn't eclipsed the amount once made from album sales. I have to wonder if the
"ticket industry" has something to do with that, but of course its like
comparing apples to oranges.

~~~
AnimalMuppet
Well, the artist sees some of the original ticket sold. And places like
StubHub may increase the total number of tickets sold (or may not, I have no
actual data).

> The article points out that the revenue generated by ticket sales is greater
> than it once was, but it still hasn't eclipsed the amount once made from
> album sales.

That's revenue, though. How much did the _artist_ see from album sales? In
most cases, not much, given the way the game was rigged to favor the labels.
The artists saw a much bigger slice of the ticket sales.

------
davidw
I'd like to see more discussion, numbers and focus on the 'margin' \- those
people who are on the edge of being able to work full time on their
art/music/whatever. That's where gains or losses will be, not with bands that
can sell out stadiums.

------
AstroJetson
A well researched article, I love it when people write/speak and have the data
to back up their positions.

As far as $30 a month goes for content, my Comcast bill sans internet is about
$45 (I split the taxes in 1/2). I'm about to cut the TV part out, I can get
all the shows we watch other ways for about $25 a month.

I also pay for some of the online content, I have enough value for the NY
Times that I pay to get past their paywall (I'm trading down Starbucks $$$
coffee for a better information flow)

Another poster asked about Ticketmaster / Stubhub / etc. I've given up on
major venue's, I can't afford the $100+ seats to be next to a drunk yelling
"California!!" (Yes, looking at you G131 at the last Brian Wilson concert) We
will go to smaller places where the ticket price isn't so bad.

One of the points in the article that's very true for me is that I have a big
music library of new music that's not from the traditional mainstream
publishers. I'm always picking up new stuff that I get leads on. (Which
reminds me there was someone here that said they had a new album out and I got
it, so that direct to consumer model works).

Things change due to technology. Buggy whips are mostly gone at this point and
there isn't anyone lobbying congress about bringing them back.

------
jpatokal
Interesting read, but there's one fairly major shift the author missed: the
transition away from long-form printed books into bite-sized, often free/ad-
supported online content.

In the charge-by-the-piece print publishing world, the economics don't work
for anything smaller than a hundred pages or so, which means you need to get a
single author to write a lot (= a book) or compile together a bunch of stuff
from different authors (= magazines, anthologies, etc). We take this as
granted, but a hundred years ago smaller works were still common: Marx's
_Communist Manifesto_ was a 30-page pamphlet.

In the online world, this is no longer a concern. Much of my print reading has
been replaced by following blogs, many of them on "serious" topics, where even
the longest post is rarely longer than a single book chapter. And whereas it
was previously quite difficult for an unknown to get accepted into a magazine,
much less a book, it's now an everyday occurrence for an aggregator like HN to
pick up a piece and get tens of thousands of readers for it. This parallels
what we're seeing in music and film: the barrier to entry has been drastically
lowered, but the effort/skill/luck needed to make money off it has gone up to
compensate.

------
aschearer
I think the same trends are playing out with game development. As development
and distribution have gotten easier the winners are winning more. It reminds
me a bit of Sam Altman's "Upside Risk":

    
    
      > It’s common to make more money from your single best angel investment than all the rest put together. 
    

Applies to games as well as start ups.

~~~
stephengillie
Book publishers and movie studios have been operating off of this model for
decades. Probably others as well.

------
multinglets
Nothing will ever be more bewildering than the people who get all
sanctimonious that some rando can no longer get rich turning his blues scale
riff into a 7 year marketing cicada.

People who actually care about music and can do something unique with it are
currently taking advantage of the internet's costless promotional channels,
getting famous, and making a perfectly good living off of youtube views if
nothing else.

The real issue is that these promotional channels exist and the entrenched
players don't control them, so they can't fabricate a superstar out of
regurgitated shitmusic anymore. Cry me a river, mainstream media. Cry me a
river, narcissistic "band" who aspires to be millionaires.

~~~
bsder
> People who actually care about music and can do something unique with it are
> currently taking advantage of the internet's costless promotional channels,
> getting famous, and making a perfectly good living off of youtube views if
> nothing else.

Hogwash. Every heard of Mike Keneally? Exactly. He fits your description to a
T.

Except that you _have_ heard of him. He plays for this guy:
[http://www.satriani.com/splash/](http://www.satriani.com/splash/)

Oh, and he happens to play guitar in this band:
[https://en.wikipedia.org/wiki/Dethklok](https://en.wikipedia.org/wiki/Dethklok)

Now, if _that_ guy can't make it work, I doubt anybody can.

~~~
leoedin
It would be far more informative if you could tell us why he isn't making it
work? Is he not making a living playing music?

Regardless, music is the ultimate free market. Regardless of how talented you
are, if you don't make something that people will vote with their money to
see, you won't make any money. This hasn't changed for 50 years and has
absolutely nothing to do with the fall of record sales. 30 years ago talented
musicians were still being ignored because their genre wasn't fashionable.

Do you really doubt that anyone can make it work as a professional musician?
Really? Because I don't work anywhere near the music industry and I know a
handful of professional musicians. Sure, there's far more people who play
instruments and can't make it work professionally, but that's always been the
case.

------
hullo
Worth noting article is by Steven Johnson, author most recently of How We Got
to Now. Bonus points for Walter Benjamin reference in the lead.

~~~
henrik_w
How We Got to Now is excellent! Quick and fascinating read. Especailly loved
the story about Ada Lovelace at the end - waaay ahead of her times.

~~~
nubianwarrior
Was my favorite part as well. Surprisingly fun read.

------
coldtea
Someone said in the comments that “the voices that cried the loudest about
this were people at the top of the food chain”.

In reality I think those were just the voices that were heard more. Because
obviously being at the top of the food chain gives them more visibility.
Plenty of small-scale artists cried too, but nobody heard them or cared for.

Regardless of what people NOT in the music business will say, the thing, from
all I’ve been able to gather, goes like this:

1) Album sales ―which before mp3s used to be a decent way for a small scale
independent artist to make a living (shifting even 50.000 units was enough to
live on as an independent artist in the eighties and early nineties)― have
dried up.

Top acts sell this myth in their interviews that if you weren’t in the charts,
or you barely made spot number 46 for example you might as well not exist.
That, in IT terms, is like saying that 37 Signals is not a “real company” and
only Google and Facebook are. Just because they were used to limos and
champagne release parties doesn’t mean the thousands of artists outside
top-100 didn’t make a living and create their art.

So, yeah, there WAS a huge, booming scene outside the “Billboard Top 100” (not
to mention the UK and regional European scenes, and obviously elsewhere in the
developed world), and those musicians could make a decent living too.

Mp3 and streaming have killed that for the most part (the “decent living”, not
the scene part).

1.2) A small aside regarding this:

You’ll hear musicians tell horror stories about how the company took all their
profits, and even charged them for recording costs, held their advance etc
(e.g. the classic rant by Steve Albini). That was something that mostly
happened to first-time stars and star-struck kids.

Musicians with some experience in the game, independent lower-volume selling
acts etc, could always go to an independent label, have better contracts and a
personal experience, etc. And of course those independent musicians also
didn’t need 1.5 year in the studio to make an album, blowing most of their
time (and advance money) on hookers and coke.

2) In the early days of mp3 (and still today) you heard people saying “piracy
hasn’t harmed album sales, I buy more music now, since I can hear more stuff
before I decide what to buy” etc.

Those people were either outliers or telling BS — the declining numbers of
both CD and digital sales all this time disprove their claims.

3) There’s another suggestion often heard to “make money from playing live”.

First, for smaller bands (that weren’t the Rolling Stones or the Grateful
Dead), live shows were a loss leader for album sales — and it’s not much
better now. In fact, in most of the world, people — when adjusted for growing
up — go to fewer live shows that they used to.

Second, while this might work for some, it’s a very american thing to assume
that musicians exist to “play live”. In Europe there were lots of electronic
musicians (not DJ/EDM style) having decent album sales that never cared for
playing live.

There’s also the issue that a musician with 30.000 fans buying their albums
around the world, might not have the required number of fans in any single
town (apart from his hometown or some mega-city like NY) to hold concerts. And
with the 30.000 fans becoming 2.000 people still buying his CD (and 28.000
just downloading it of somewhere) the artist is now screwed.

Then there’s the inane “sell merchandise” “solution”, as if a musician is just
some merchant, and if one thing (selling music) doesn’t work, he’ll just pivot
to selling some other stuff.

Not to mention that all those ideas are based on very US-centric perception,
where all music that matters contains guitars and plays live, and all
musicians are selling to 13 to 25 year old kids (because those are the
primarily buyers of BS band merchandise — not 40 or 50 year old jazz, blues,
electronica etc fans).

4) Streaming just made all of this worse.

5) I’m not saying we can go back in time. Or that we have some duty to provide
musicians with a living if their business model doesn’t work.

I’m Just stating this, to recap: independent musicians that used to do well
income-wise in the album days, are fucked up in the digital/streaming/piracy
days.

That doesn’t stop them making music (especially since you can now create
something from your home studio that used to take thousands upon thousands in
studio time and you can release on your own on the internet), but it does stop
them making a career in music, in the way musicians in the 70s, 80s and 90s
used to.

~~~
sheepmullet
I don't think the problem is piracy. I think the "problem" stems from the huge
amount of good quality cheap content we have available.

I have around 1 hour of free time each weekday to spend on entertainment.

I have so many cheap sources of content, costing well under $1/hr, vying for
my time. All available on demand.

Content decays very slowly. A good show from the 90's is still worth watching
today. Good music from the 80's and 90's is still worth listening to today.

I just spent the last 3 months of my small amount of free time re-watching
Friends. For the 2 months before that it was playing dota and watching
starcraft2 videos on youtube.

~~~
coldtea
That's part of it -- music today competes with YouTube, the internet, games,
social media, mobile, tv series, 100+ channels, etc. Most teenagers -- the de
facto pop music consumers -- don't care for music the way teenagers in decades
without all these did, when a new album was a window to another world.

But music sales have started declining even before all those become prevalent
-- youtube, social media, mobile, all either began or become popular circa
2005. In 1997-2005, it was mostly the "free" downloads that did music sales
in.

Now it's a combination of these and of all the other stuff competing for
people's attention and winning it.

