Thursday, 03.20.08

iTunes and Immiseration

Photo by Flickr user andrew stawarz

News reports suggest that Apple is in negotiations with major record labels over an all-you-can-listen music subscription that would be bundled with future iPods and iPhones.

After the Financial Times broke the story, analysts scrambled to explain the deeper significance of Apple's move. Was this a good deal for the major labels? Peter Kafka of Silicon Alley Insider argued that a music subscription service would be a home run. Others wondered if Apple would offer unlimited music for the life of the device or impose a monthly fee structure, like the popular iTunes alternative Rhapsody.

Today, as the smoke clears, we're confronted with more difficult questions. As Eliot Van Buskirk reports, EMusic, an iTunes competitor that sells a carefully curated collection of unrestricted MP3s, has accused Apple of behaving like (gasp!) Microsoft.

"That's classic Sherman Antitrust Act behavior. It's called tying, and it's where a company with a monopoly position in one market uses that monopoly position unfairly to compete in another."

Leaving aside the question of whether Apple has a monopoly on the consumption of music, a claim that seems to overestimate the ubiquity of the iPod, it's certainly true the that transformation wrought by iTunes has the music industry in a full-blown state of panic. Universal Music Group CEO Doug Morris speaks for many recording artists when he compares himself to the Shmoo.

The Shmoo was a nice animal, a nice fella, but if you were hungry, you cut off a piece of him and put onions on it, and if you wanted to play football you just made him like a football. You could do anything to him. That's what was happening to the music business. Everyone was treating the music business like it was a Shmoo.

But is this a sound characterization? To this day economists are debating the consequences of piracy and digital downloads on music consumption, and it seems that Chris Anderson is right -- the main beneficiaries are artists on the so-called "long tail," including those obscure geniuses who have a hard time finding a mainstream audience yet connect with stray fans. The platform offered by iTunes hold out the tantalizing promise that a large number of people can make a living at making music. But even in the age of the "long tail," it's more likely that making unpopular popular music will always be a lousy way to make a living.

Which is how it should be. The best pop music is made for the joy and thrill of sharing something you love with an audience of like-minded people. It's a heck of a lot better than working a square job, and some think it's worth living in near-poverty. (Indeed, sometimes the near-poverty is crucial to the band's artistic success: A celebrated 1980s group like The Replacements wouldn't have produced a great song like "Bastards of Young" if they hadn't been high school dropouts living at home with their moms.) By offering unlimited music, Apple will make it a little easier for not-so-clued-in kids to find their musical muse while skimming a little off the top. Bands will find it a little easier to make (barely) enough gas money to get to the next dingy basement venue. Eventually the kids will discover something new, and half of the band members will go to law school or wind up in rehab. You can blame Apple's iTunes for this sad fact, but it's more like an iron law of history: life stinks. Fortunately, the resulting pathos has given the world a lot of excellent music.

— Reihan Salam

Filed Under: business, Music

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