Setting the Wayback Machine to 1995: "Cheap Speech and What It Will Do": Music: The New System

[I thought it would be fun to serialize my 1995 Yale Law Journal article "Cheap Speech and What It Will Do," written for a symposium called "Emerging Media Technology and the First Amendment.) Thirty years later, I thought I'd serialize the piece here, to see what I may have gotten right—and what I got wrong.]

[1.] The new distribution technology will do more than just make music cheaper and easier to get. It will also radically change what music is available.

I've already mentioned one way this will happen: The music databases will provide access to albums that stores otherwise wouldn't stock. Even if there are 50,000 fans of a particular kind of music throughout the country, a music store might expect there to be only a handful of these people among its customers. It can't afford to use shelf space for material that so few people want. But electronic databases can carry even albums that appeal to only a tiny fraction of the market. The result will be more diversity for the listeners (even if not all of them take advantage of this diversity).

But electronic home distribution will do more than eliminate the bottleneck of music stores. It will also greatly reduce the power of the music production companies (the "labels").

Electronic distribution will drastically lower up-front costs. Even today an artist can make a commercially viable master recording relatively cheaply.  With electronic distribution the cost will be even lower-once the master is made, there are no tangible copy production, distribution, or sales costs. An artist will no longer have to persuade a production company that his product is worth the investment. He'll be able to create it and submit it to the electronic databases himself; and once it's in the databases, the work will be as available as if it were in every music store in the country.

Many artists will probably still prefer that someone else pay for recording and editing the album, especially if they want a more-frills recording, and they'll probably like to have someone invest in advertising. Labels will thus still survive, and the artists will still have to persuade the labels that their works will sell enough to justify investment.

But the needed investment will be much less than it is today. Less money will have to be recouped for production expenses, so the labels will be more willing to back material that they think has a small audience. Even if no one is willing to invest, the artist could still pay for the recording himself, go without advertising, and hope it sells through word of mouth, good reviews, or radio play (especially through custom-mix radio, which I describe below).  Advertising is better for the artist than no advertising; but no advertising on the infobahn is still better than the current system, where without a label an artist essentially can't make the music available to the public at all.

[2.] The great obstacle to consumers getting what they want will no longer be that there are too few products available; it will be that there are too many. The new system, by reducing barriers to entry, will make much more material accessible to consumers. Some of it will be good; most will be junk.

This, of course, isn't a new problem. Tens of thousands of books and CDs come out yearly. Most of us have had the experience of going to the store and not knowing what to choose. But we've made do, largely because the information overload has spawned professionals-reviewers, radio programmers, and decision makers at the record stores and the labels-who help us wade through the material. These people's job is to find what they think we'll like most, and tell us about it, play it for us so we can decide for ourselves, or try to sell it to us.

The new system will reduce the role of the record stores and the labels, but the other sources of information, such as reviewers, will remain. Rather than sending its work to production companies, hoping for a contract, a musical group will send it to reviewers. The reviewers will probably specialize in particular genres, and there will probably be quite a few of them, of varying reputations.

Some of these reviewers will, like music reviewers today, write for newspapers, magazines, and such.  Other reviewers will select albums that they recommend and e-mail sample songs to their clients. The clients will then be able to listen to the songs at their leisure, and, if they like what they hear, buy the album (perhaps after first listening to it) at the touch of a few keys.

Still other reviewers will write brief reviews-perhaps even just give numerical ratings-for the music databases; they might also compare the music to other albums or artists.  This will let database customers search for, say, "New Reggae that has gotten a thumbs up from at least two reviewers," or "Songs that someone who likes They Might Be Giants might enjoy." This class of reviewers will probably be paid by the music database operators.

Custom-Mix Cable Radio: The most valuable review service, though, should be something akin to cable radio today. The virtue of radio as a selection tool is that, because the play list is ultimately outside of your control, radio familiarizes you with material you didn't know about. This, of course, is also its vice. You have some ability to select what's played-you can listen to a given station or a given show. But the selection is limited. Even in a big radio market you might find that no station quite satisfies you.

What one would optimally want, I believe, is the ability to specify the radio mix more precisely, without sacrificing the element of the unexpected and new that radio can provide. One would like to be able to say, for instance: "I'd like a mix of '60's rock, rock ballads from all decades, bluegrass, songs recommended by a Rolling Stone reviewer, and songs that someone who likes the Talking Heads, Paul Simon, and Concrete Blonde might like. I'd also like a small part of the mix to be random rock. And no Steely Dan!"  People would prefer this approach because it maximizes the chances that they'll like what they hear. One doesn't have to be particularly musically literate to know roughly what one enjoys, and to want to hear more of it.

It should be easy to get such a mix piped into your home. You could configure your preferences on your computer, and when you choose "home radio" mode, the computer would pick up a semi-random mix from the electronic databases and play it for you. Within the boundaries set by your preferences, the music would be selected based on the reviews stored in the databases.

Because you can pay for the music directly, you'll have the option of either a free service with commercials, or a paid service with no commercials. There's no reason to think the paid service would be very expensive, since there'll be no transmitter and FCC license to amortize, and since the copyright owners, interested in selling albums, will likely charge little for the rights. Cable radio is already available in some markets, though of course without the preference configuration system; it costs $5 to $10 per month.

You could also set up your computer to automatically store a mix every morning onto a DCC or a MiniDisc; then, you could take it into your car and play it all day in place of wireless radio.  It might bother some to have to pop in a new cassette or disc every night and take it to the car every morning. Nonetheless, this extra effort shouldn't be prohibitive, especially since investing this effort could substantially increase listening pleasure.

{Getting the custom-mix radio sent directly to your car will probably be too expensive. Maybe some day using wireless private lines will be as cheap as using the fiber optics of the infobahn, but that day may be quite some time from now.}

If a reviewer has 10,000 subscribers—and recall that the market is nationwide—he can make a decent living charging them $5 to $10 a year, plus copyright clearance costs, for a custom-mix service based on his reviews. Even with 1000 subscribers, the reviewer can make some money for not very hard work. Alternatively, reviewers can accept advertising, or take money from people who want their material reviewed. Some people might not trust reviewers paid by the musicians, but subscribers will be able to choose among those reviewers paid by musicians, those paid by subscribers, and those funded by advertising.

Of course, like the other screening mechanisms, this will give some people-no longer the labels but now the reviewers-some power over what people will hear. A band that once complained, "Our music is brilliant but the producers are keeping it off the market," will instead say, "Our music is brilliant but the reviewers can't appreciate it."

The power of reviewers, though, is based on people's approval of their tastes. Maybe the people's trust is misplaced, but it's hard for artists to complain that the reviewers' power is illegitimate. Moreover, the reviewers' power is much less exclusionary than the power of the labels. If I don't like one reviewer's taste, I can easily switch to another. If reviewers are neglecting material that at least some listeners-even small groups of listeners-would like, other reviewers will step into the breach. And the low cost of providing reviews means even small markets should have quite a few reviewers serving them.

[3.] I mentioned above that electronic music databases will succeed because both copyright owners and consumers can benefit from them. But many sound recording copyrights are owned by the music production companies. If, as I suggest, production companies will be hurt by the new system, will they be willing to license copyrights to businesses that will likely displace them?

Production companies may well be reluctant to let the electronic music databases get off the ground; but it seems to me competitive pressures will ultimately force them to go along. The new system gives copyright owners a new way of exploiting markets they otherwise couldn't reach. Even if it will prove generally bad for labels in the long term, some small labels-which may have their sights set more on selling their existing stock rather than on the long run-will want to take advantage of it. Musicians signing new recording deals may want to take advantage of it, too, because the new system is definitely in their interest; if the musician has a good enough bargaining position, the label may have to participate even if it doesn't really want to.

Also, the fact that copyrights in musical works aren't truly exclusive may play a role. A musician can record a song without the composer's permission, so long as he pays a compulsory royalty (today, 6.6 cents per song per copy).  Of course, people might still much prefer the Beatles' Let It Be to Volokh's Let It Be; but the fact that new covers of old standards constantly come out will weaken somewhat the copyright monopolist's hold on the market.

Finally, once the system gets off the ground, the lower cost and extra convenience to consumers will lead to pressure for reluctant labels to participate. Even consumers who today are willing to pay $10 for albums at stores may become reluctant to do this once they get used to paying $5 from home. Though the existing market players might not like the system, I think they'll have to accept it. To take an analogous case, prices often fall not because sellers prefer that they fall, but because new entrants, or small vendors looking for market share, drive the prices down. While large producers may try to stop this, they generally can't.