Home > Business End of Piracy, Copryight, Digital Policy, P2P, Teksavvy > Business End of Piracy In The Media Industries Part 1

Business End of Piracy In The Media Industries Part 1

I’m writing this post in hopes that it might shed some light on what our current situation is within copyright.  I’ve been on a learning quest for years on this, because I used to work in the music industry.  I have aspirations of opening up a record label one day of my own.  Due to these aspirations, I’ve had to learn a lot about copyright, and how to promote potential clients moving forward. The part of the music industry I was a part of, is responsible for forcing a lot of technological change in the music industry as a whole.  As a result of that technological change, the way the music industry now does business has changed.  The current situation we’re in right now with copyright predates the current debates around file sharing. This information I think is important to bring forward to have an informed discussion.  To do this, I want to join you in on a learning quest that started for me in 1995.  I’d like to share with you some of my observations.

Before we move forward here we need to define an economic term called creative destruction.  Basically it’s an economic term that’s applied to situations in the economy when disruptive technology is introduced into the equation.  When disruptive technology is introduced into the economy, sectors of that economy, market or industry become obsolete, but at the same time there’s an explosion of innovation and growth as a result of that disruption. While one sector of an industry is dying, other new and more profitable sectors are emerging at the same time.  That’s basically the theory behind it, and I’ve observed this happening in real time on the business end of the music industry.

When we look at media, the first thing that needs to be understood is where technological disruption is occurring in sectors of the media industry, and which sectors are pushing technological advancements in the media market.  For video, it’s the porn industry.  The porn industry is responsible for introducing and pushing new technology in the video and film sectors of that portion of the economy.  VHS, DVD, and HD Blue Rays were all introduced into this market by the porn industry, which forced other players to adopt this technology.

For the music industry, it’s been the Electronic Dance Music (EDM) sector. This is where I will be focusing my efforts to explain things in this post.  I was worked within side this sector of the music industry as an industry, club, bar, radio DJ, and in 2009 I was within inches of starting up my own record label.  Many of you who lived in Ontario in the 90’s and are my age, should remember a dude by the name of Chris Sheppard. Chris and I have a lot of mutual friends in the music industry.  Chris hosted a show on the Ontario airwaves called “Pirate Radio”.  Chris named this show after a situation in the UK where a lot of pirate radio stations were popping up at the time in England.  This is where our journey into the business side of media piracy begins.

In the mid-late 80’s is when digital synthesizers, editing, and sampling technology started to become available and affordable to DJ’s.  What happened as a result was a lot of DJ’s basically “remixing” old tunes, creating new ones with samples and what not.  This was done in home studios due to the affordability of the equipment, and is what gave birth to what is now known as “house music”.  When DJ’s and remix artists started approaching radio stations to play their new creations, stations completely backed off from the idea due to the copyright infringement that this new genre purposed, and what it would mean for the station in law if they aired it.

Djs desperately wanted to push their new creations out and share them so what they started to do, was hold parties called “gatherings”, and started up their own neighbourhood radio stations to broadcast this music.  Hence “pirate radio”.  When these stations started broadcasting, there was usually a spotter outside on watch for law enforcement.  In fact it became quite the battle in the UK with pirate broadcasters, and law enforcement at the time.  Similar to what we are seeing now in P2P file sharing.  Often times these broadcasters would get caught, the smart ones usually had elaborate plans of evasion when law enforcement caught on.

As a result of the interest generated of this battle between good and evil in pirate radio in the UK, gatherings increased from a few people at home to several hundred in open fields, and underground nightclubs with these gatherings happening more and more frequent, and the movement spread to different countries including Canada.   As a result of the noticeable public interest in the music that was being played, labels started picking up on tracks, and legally clearing within copyright the samples so that the remixes could be sold and used in the marketplace.  What resulted was an explosion of creativity.  Different genres of house music started to spawn, Techo, Dance Music, Trance were all genres that spawned from house and the fight in pirated radio stations in the UK, giving birth to a new sector of the music industry called the electronic dance music sector.  Chris Sheppard introduced this genre into the Canadian market, and as a result this market became a huge money bag for the big labels, and introduced for the first time Canadian content into the mix, in which became known worldwide.

I started my DJ career in 1995.  I had a late night show on a public radio station in Waterloo. Eventually through chance, I was introduced to the people behind Chris Sheppard’s success and Chris’s best friend at the time became a mentor figure, while I was learning the ropes of not just the industry, but what’s expected of me as a DJ within the industry, how I should conduct myself with fans, and the Canadian history to the introduction of EDM into the Canadian market.  All of which I found extremely fascinating.  It’s now all very relevant to the debate around file sharing as well, as you probably have picked up on already.  I think this story needs to be told.

I would often end up in Toronto once a week to pick up music at DJ surplus stores in Toronto which serviced the EDM genre.  This is where I was introduced to white labels.  A lot of very internet savvy people have probably come across this term before.  Basically what this means is that it’s a remix of a track, or artist that hasn’t been signed yet to a label. These were tracks that essentially had just the track name on it, but not the artist.  If it’s a remix with uncleared samples it was technically “illegal”.  White labels were also sold for profit, and the success was tracked through sales of the track, DJ’s providing direct reviews on how the track went over in the clubs,  and they were often also played on Canadian airwaves.

This was an accepted use of illegal activity at the time, due to what transpired in the UK , on the premise that eventually if the track got big, a label would clear the samples to be released into the market and whatever the infringement cost would eventually pay off in the long run.  Essentially commercial copyright infringement was used as a form of a test market for new talent as a result, and was fully accepted by industry at the time because if a track got big in the clubs, it would essentially pay itself off.  All of the big labels were quietly supporting this practice.

The EDM industry has changed the way the music industry does business stemming from the days of “pirate radio”.  The next post will bring in where the industry is now with the P2P file sharing element added, some current day examples of this and on how the discovery of new music for the industry on whole has moved to the P2P networks. Part 2 and Part 3 are now posted.

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