Open Letter to Tom Silverman of Tommy Boy Music

Mr. Silverman,

In a recent interview with – after your testimony before Congress on the Napster affair – you expressed your belief that CD prices for popular music are not overpriced. You indicated – for unexplained reasons – that an average CD could very well cost upwards to $30. In your opinion, a CD priced at $17 is a deal. Recording executives in your position may very well believe that $17 is a bargain – yet millions of consumers feel otherwise. In fact, it appears that the FTC not only believes CDs are artificially priced, but also that the industry has colluded to force prices up. The interviewer, of course, did not mention this – nor did you.

“It isn’t too expensive,” you explain, “it is way too cheap when you consider the heart and soul that artists put into it.” On its face, this is an absurd statement, especially considering the raw deal most artists get from the labels. I’m not talking about the super star artists, but rather the average artists who can easily become indebted to labels for recording, promotion, and other costs. For instance, Courtney Love has commented that – even with her status as a popular artist – she lives a middle class lifestyle. She believes executives in the industry profit more from her music than she does. If this is true, there is something rotten with the industry you defend. It needs to be reformed and it will be – at the behest of the Internet, which you apparently fear and loathe.

You also failed to mention that the industry standard for CDs is about to rise even higher – to $18.98 for a frontline CD. This represents a 12 percent increase since 1998. Forget that we are fortunate enough to live in a robust economy with very low inflation. Obviously, the industry you represent and defend is interested in maximizing profits at the expense of consumers – and, since the industry controls 90% of all recorded music, it apparently believes they can force consumers to bite the bullet on prices. If we are to take into consideration the “hidden” income the industry makes – radio licensing and unfair and politically imposed royalties on DAT tapes, blank CDs, and CD recorders – we soon realize the industry is not only interested in squeezing music consumers out of every last penny, but computer users and musicians as well. The last time I checked, the recording industry brought in approximately $16 billion annually. While I have nothing against profit for you and your stockholders, I have problems with your assertion that prices are anything but too high. In fact, I view your statements as an apology for an industry that routinely swindles not only consumers, but artists as well. If you doubt the industry screws artists out of money, please explain why artists do not see any of the money collected by the above mentioned royalties and licensing fees. Under the DMCA, these artists are supposed to collect 50% of the take on licensing and royalties, yet they do not. If you doubt this happens, please contact the RIAA – they more or less admit it and say they are not in the business of telling the labels what to do with this unfair and politcally imposed windfall. How true – they are in the business of telling consumers what to do – and under the threat of legal action.

Finally, you make a rather blanket – and entirely unfair – assertion about Internet culture in your interview. You indicate your belief that Internet culture is one of infringement. While I am not exactly sure what you mean by this, I have a pretty good idea – it has to do with the popularity of Napster and other fire-sharing programs. Mr. Silverman, you display your ignorance – like many of your brethren in the recording industry – about Internet culture when you say such things. The vast majority of Internet users do not download music with Napster – and I would venture to say most of them have problems with Napster and are generally respectful of copyright laws. Yet, for reasons I do not fully comprehend, you insist on characterizing all Internet users as copyright infringers.

Mr. Silverman, in the not-too-distant future the recording industry – and this includes the independent labels such as Tommy Boy Music – will need to accommodate Internet users and their musical tastes and habits. If not, they will surely go out of business – or realize a loss of revenue and shrinking market share. You may not like it, but a growing number of music lovers want their music delivered over the Internet – and in open formats such as MP3. They will not pay $30 for a digitized CD – in fact, they will expect to pay far less. Your industry must rethink its current business model – one that dictates to consumers and not the other way around. If you are unwilling or unable to do this, music lovers will continue to trade MP3 files of popular music – and the practice will increase exponentially. Can you seriously blame consumers for taking music for free when it is not seriously offered in an Internet-friendly format by the industry at reasonable prices? More than a million consumers have spoken with Napster – they demand digitized, Internet portable, and inexpensive music.

It is up to you and the industry to serve them.

Kurt Nimmo

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