Tech and the Music Industry

The tech and business of music have evolved together, creating an enormous industry. We learn how recording technology, radio and more have shaped business.

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Episode Transcript

Speaker 1 (00:04):
Welcome to Tech Stuff, a production from I Heart Radio.
Hey there, and welcome to tech Stuff. I'm your host,
Jonathan Strickland. I'm an executive producer with I Heart Radio.
And how the tech are You? I thought it might
be a good idea to do an episode or two

(00:24):
about the music industry, because how the industry works as
a business is really tightly tied to technology. In fact,
music itself is tightly tied to technology. It is the
product of technology in most cases. I mean, you can
you can sing, and I guess that's a good argument

(00:46):
to make a that that's a kind of music that
doesn't involve technology, but most music does. And the evolution
of tech has really affected music in numerous ways, for um,
the ability to record it, to new ways to create
different kinds of musical sounds, and all sorts of ways

(01:08):
to experiment with recording and music production and distribution. Even that,
you know, we we have to take all that into account.
It's not just the tech, it's not just the business.
They are tightly integrated. So from the tech used to
record music to the tech used to play it back

(01:30):
to the radio broadcasts to streaming over the internet, we
can really see how technology has shaped both art and business. Uh. This,
by the way, this whole idea of me doing these episodes,
which has taken me a long time to work on
because there's just so much to cover. It was really
prompted by the recent news that fans of certain artists

(01:51):
on the death Row Music label we're upset to discover
that some of their favorite albums and songs we're just
disappearing from the various popular music streaming services out there.
And this coincides with Snoop Dogg's announcement that he wants
to turn death Row Records, which he purchased not that
long ago, into the first major music label in the

(02:14):
metaverse and make it an n f T music label.
UM pretty extreme, but let's dial back the clock a
little bit. Before the early nineteen hundreds, musicians really only
had the option to making a living off their music
a couple of different ways. They could play live venues

(02:35):
and take a share of the box office, or they
could find themselves a wealthy or generous patron, whether that
was a specific person or maybe a government or whatever. Um.
Or they could compose music and they could then put
it onto sheet music and print sheet music and sell

(02:55):
that make money that way, But the emergence of recorded media,
which predated radio broadcasting, that would change everything. In nineteen
o four, the Victor Talking Machine company, which made phonographs,
also got into the business of producing music, because if
you don't have anything to play on your talking machine,

(03:16):
why would anyone buy one? Now? In the early days,
recording equipment was exceedingly scarce. Essentially, the companies that possessed
recording equipment were the same ones that were producing the
playback equipment. They were in the business of doing both,
and that meant from the very beginning you had gatekeepers

(03:38):
in the recorded music industry. There were no such things
as independent labels in the earliest days, just the larger
phonograph and grammophone companies, and so right from the start
we had a precedent in which a few powerful companies
determined what music would get recorded. So at that point

(03:58):
musicians had an opportun tunity to make money off recordings.
They could also count on these companies to market music
to a wider audience, so they'd reach people that otherwise
they never would have been able to. People would be
able to listen and enjoy their music and pay for
it more importantly that otherwise these musicians would never have

(04:21):
encountered and the company would only make money if people
were buying the recordings. So we quickly established this relationship
in which the musicians created the music and the recording
company did pretty much everything else, from committing music to
a physical recording to marketing the music, to sales and
distribution of that music. Now, according to a Wall, a

(04:44):
w a L is a company with an acronym that
stands for artists without a label. Uh, the nineteen o
four deal that Victor Talking Machine Company did would give
an artist four thousand dollars for a single song and
a cut of up to twenty to percent of each sale,
which is incredibly generous. And I'm imagining that four thousand

(05:06):
dollars has to have been adjusted for inflation, because otherwise
we're talking about more than a hundred thirty thousand dollars
for a single song, and there's just no way that
that's true. Heck, I find the four thousand dollars thing
hard to believe honestly, considering the time period. And again,
it wouldn't be four thousand dollars in nineteen four dollars,

(05:27):
but the equivalent of four thousand dollars today, but let's
just assume that it's all accurate and that a wall
adjusted for inflation. The Victor Talking Machine Company was one
of three major companies in the industry in those early
early days. The other two were the Columbia Phonograph Company,
and then you had the Thomas A. Edison Company, And
all three of these companies were making phonographs or phonograph

(05:50):
like devices, and so they all had a vested interest
in making sure that there was content to play on
those devices. They also each one had to dominate the industry.
They wanted to be the big player, so they would
each attempt to get exclusive deals with specific musicians and orchestras.

(06:12):
And early on you had competing formats in in the
record industry. So early early on, you had wax cylinders,
which not only didn't provide the best sound quality, but
they would also wear down unrepeated playbacks because they had
a wax coding and playing them would start to damage
the coding, so you know, after like a few dozen plays,

(06:35):
it would be really diminished quality. So even when the
industry moved from wax cylinders to flat record discs, which
were made from hard material like shellac. It would be
quite some time before the industry would move to vinyl,
but even when they went to disks, you know, the
flat disc format you had competing record disc sizes and

(06:57):
playback speeds of the playback speeds would range from sixty
rotations per minute up to more than a hundred thirty
rotations per minute, and the playback speed affected a lot
of other stuff, from how much audio you could commit
to a record to the actual playback quality of the music.
So generally speaking, the faster the rpm, the higher the rpm.

(07:21):
In other words, in the early days, the better the
sound quality typically was. Right like, if you were playing
back the record at a hundred thirty rpm, the quality
was better than a record that would play back at
sixty rpm. However, it also means that it takes much
less time for a stylist to go through the groove
of a record, uh, whether you're recording or playing it back,

(07:44):
which means you could only fit a smaller amount of
audio per side of a disc then you could if
you were doing it more slowly. So there were trade offs,
uh you know you and of course, if you played
the disc at the wrong speed, like if you had
to sixty RPM record, but you were playing it back
at at rpm. Everything would be super fast twice more

(08:06):
than twice as fast as what's supposed to be and
sold be it wold sound like the chipmunks got into
the coffee again. So the early days of the recording
industry were really a bit messy. I'm sure you're all
familiar with various format wars. I did an episode about
format wars last week. You know, it's easy for consumers
to hit limitations due to buying into a specific format

(08:28):
over and others. So you know, you buy you know,
if you were to buy the Victor Talking Machine phonograph,
then you might not be able to play anything from
any of the other companies. So the gramophones and phonographs
and turntables were pretty expensive in the early days. Most folks,
if they could even afford one, would have to make

(08:48):
a choice regarding which format they would buy into. Now,
eventually the industry would gravitate towards standardization, and you would
have three speeds that were really treated as as the standards.
You had seventy eight RBMT, r PM and thirty three
and a third RBM with fort and thirty three ultimately

(09:09):
dominating the Space seventy eight kind of faded away. Well,
let's backtrack a bit to talk about what was going
on on the business side. And then when these companies
first started getting started, what followed was a pretty easily
predictable predatory era in which these you know, agents representing

(09:32):
these different companies like the Victor Talking Machine Company or
Columbia or whatever, they would go and scour regions for
talented musicians who otherwise we're unconnected. If you've watched the movie,
Oh Brother, Where art Thou, they kind of play around
with this idea. You know, you get that that statement

(09:53):
about a feller who's paying some folks to sing into
a can. Well, that kind of stuff was actually going
on in the early twentieth century. You had these agents
seeking out talent and paying them a nominal fee to
record a song. And for the talent, the fee might
be considerable, right, there might be a few hundred dollars
into the talent. That might be an enormous amount of money,

(10:17):
but it was like a one time payment, and then
the music company would have the use of that recording
for as long as they kept the recording, and they
could make some serious money. And world's turn on such things. Then,
in n nine, the US government passed a copyright Act
which would guarantee that writers and publishers of music would

(10:39):
get a cut of record deals. However, it left out performers.
So you might wonder, well, why the heck is that.
Why would the writer and the publisher get a a
guaranteed cut but the person who performed it doesn't. Well,
in the days of orchestral performances and chamber music and

(11:01):
that kind of thing, the general philosophy was that the
bulk of the creative expression didn't come from the performers. Like, yes,
you can have someone who is very skilled play and
they're gonna sound better than someone who doesn't know what
they're doing. But if you had two different people who
are really skilled, the general thought was it's going to

(11:21):
be exactly the same, and that the real creative drive
came not from the musicians but from the composer. The
composer would describe in excruciating detail how the music was
to be played in the sheet music, and the musicians,
at least according to the philosophy of copyright law, we're
just mirror vessels dedicated to bringing that music to life.

(11:45):
But the composer was ultimately responsible for the actual work,
the creative expression, and so the composer would get the
credit and the compensation. The US government followed that same
logic when they created this copyright law in nineteen o nine.
The Act also covered the innovation of recorded sound, which
was something that wasn't a concern before nineteen nine because

(12:06):
it wasn't really possible. And this would have an enormous
impact on the music business. If a musician has a
writing credit on a song, that musician is eligible for
songwriter royalties for the length of the copyright. By the way,
length of copyright was something that continually got longer and

(12:26):
longer when big companies like Disney would lobby to extend
the period of copyright repeatedly. So while originally the period
of copyright would last couple of decades, now it's like
the lifetime of the artist, plus I forget, like seventy
years something like that. But musicians who only had a
musician credit, they're not a songwriter, they're just a musician,

(12:50):
they would not qualify for those same royalties, which is
kind of awkward. Um, and this is like this continues
to be an issue today. This also meant that if
you wrote a real banger and someone else recorded it
like they covered it, then you would be do the
royalties from any sales or performances of that version, at

(13:10):
least songwriter royalties. And by performances, we're really talking about
stuff like you know, radio play or use in TV
or movies and things of that nature. So being a
songwriter is a good way to make money over the
long run, because as long as the stuff you write
is popular, you're going to have a continued payout. For

(13:32):
musicians who are not composers, that was a different story.
They can't depend upon that same revenue stream for you know, indefinitely. Now,
technically the Copyright Act should have curtailed some of the
predatory behavior that I was talking about earlier, but there
was an awful lot of exploitation of talent in those

(13:53):
early days. The recording industry then hit some really tough
times in the nineteen twenties and the nineteen thirties. The
Great Depression hit consumers very hard, so it became pretty
tough to sell you know, players and records because people
just didn't have the disposable income to do that. And
then we get to the evolution of radio and radio broadcasting.

(14:15):
So the early days of radio, we're all about live
performances over the air. It really wasn't a thing to
play prerecorded music for the most part. This was partly
because the recording technology was such that the quality of
recordings were far inferior to live performances, so it was
considered a pretty big step down to play a prerecorded

(14:39):
piece over the radio. So the early radio business was
just like the phonograph business, and that it was dominated
by companies that made radios. The companies that were making
radios were also the companies that owned radio stations. They were,
you know, in the business of broadcasting, because just like
the phonograph, a radio ain't no good to you unless

(15:00):
he got something to tune into, right, It doesn't make
any sense to buy a radio if there are no
broadcasts in your area. So the same companies that were
making radios were creating the broadcast stations, and some of
those stations were also companies that made record players. So
you had, you know, this this convergence of audio technology

(15:21):
all coming in at the same time. I'll explain how
that changed the music industry further when we come back
after this quick break. All right, we left off talking
about radio stations. Well, these stations would hire performers to

(15:41):
come in and play music live over the radio. Radio
sales eventually began to slow down, largely because the folks
who had been interested in radio and who could also
afford one, had bought one already. So there was a
steep rise in radio sales that then plateau. The technology

(16:01):
hit a really early saturation point, and that meant that
there needed to be a different source of revenue. This
is where radio broadcasts began to incorporate advertising. And the
early days of radio there really wasn't advertising, but that
changed pretty quickly. Um, and then advertising became the primary
way that radio broadcast stations would generate revenue. Now, on

(16:24):
the consumer side, listening to music on the radio was free.
The radio sets themselves were prohibitively expensive for some folks. Um.
And really, when I say listening was free, I mean
it's free in the way that this podcast was free,
and that you know, you also had ads supporting the stuff,
but that was really the only cost of listening. Really,

(16:46):
I'm sure sounds very familiar to everyone out there, right.
And the radio also served as advertising for musicians and
songwriters because, of course, now we also had the ability
to record that music onto physical media UH and as
recording technology improved, there was a new interest in record
players and records, largely driven by teenagers. To be like

(17:08):
in the fifties or so, the kids would hear a
song on the radio, they would want to be able
to listen to that song whenever they liked so they
would rush out and by the record of that artist,
and the radio would become a key component in the
marketing of music. This would also shape music itself. In
the very early days, the limitations of recording meant you

(17:30):
could fit around four minutes of audio on a single
physical cylinder or disk, which meant that you couldn't write
music that would last longer than that, or you had
to write music that could be divided up into four
minute chunks, and then you might sell several discs for
longer pieces. But it meant that people started to settle

(17:51):
on a on a length for music of around four
minutes per song or less, which is why to this
day the way we listen to music, like a lot
of our songs fall into that general range. It was
a technical limitation of the time that created a cultural
UH standard really for like a standard length of a song.

(18:16):
There are obviously exceptions to this, right you have the Ramones,
where a four minutes song would be an epic and
then you have the late meat Loaf where a four
minute song would be the beginning of his fourteen minute song.
So there are exceptions, but generally speaking, like this is

(18:36):
what when I talk about how technology shaped music, this
is kind of what I'm talking about. The limitation of
only being able to record a few minutes of audio
per side is what shaped modern music and for songs
to be the length that they are now. As recording
techniques actually evolved, it became possible to record more content

(18:59):
per side of a record, so the limitation of four
minutes per side gradually faded away. This would end up
giving birth to the album because while you could record
a very long piece of music per side, and there
were people who did it, especially for things like classical music, uh,

(19:19):
you could also use this to create a collection of songs. However,
while that was going on, radio was swinging things back
to the early days of recording because you had the
new musical entity of the radio single coming out around
this time. Now, it was ninety nine when r C
A Victor introduced the forty five rpm seven inch record. Now,

(19:42):
these records, because of their size, the seven inch size
and their RPM speed of forty five revolutions per minute,
they could only hold a few minutes of music per side,
just like the early records of the era. And then
several things all kind of happened to make the forty
five popular. One was that, you know, you had a

(20:02):
lot of record players that could actually accommodate forty five. Uh,
they were less expensive than the larger thirty three and
the third albums. They also happened to come out just
before the rock and roll music revolution happened, and all
of that came together to completely reshape the music industry. Uh.

(20:25):
And that's really where we started seeing the focus on
singles to the point where you've got some folks who
bemoaned that, where it was potentially something that limited the
music industry. But it became a common practice to record
a musician or bands really popular song as the A

(20:47):
side of a forty five single, and then you use
the other side, the B side, to include a lesser
known piece from that band. So sometimes you might get
a demo version of a song, which is kind of cool.
Or you get a song that wasn't included on the
full album that featured the A side single. That was
really cool. It was like the only way you could

(21:07):
get those songs. Typically the fort would have the same
songs that we're getting widespread radio play on the A side,
So again the radio acted as kind of the commercial
for the music. The A side was the product, the
B side was some bonus material. Now, as the recording
industry evolved, certain companies consolidated, purchasing up smaller music labels.

(21:30):
R C A. Victor was one of those, with our
C A being famous for making radios and broadcast stations,
Victor being famous for phonographs. Then the two merged together.
Some other really big recording companies shut down. The Thomas
Edison Company dissolved its recording division back in n UM.
That was, you know, right at the Great Depression, so

(21:52):
you know, it was kind of it was coinciding with
a time where people just didn't have the money to
purchase that kind of stuff. The burgeoning film industry also
got into the music industry. There were some smaller independent
labels that were establishing themselves around this time as well,
so starting to get really interesting. By the nineteen sixties, however,
the bigger labels were gobbling up all the smaller ones.

(22:15):
Um because there's always a bigger fish. So CBS, which
started off as a network of radio broadcast stations, acquired
Columbia Records, which again was one of the big three
early early on that also acquired the American Record Corporation.
Warner Brothers ended up purchasing ABC Records and also had

(22:36):
Warner Records. Then the company bought seven Arts and Reprise, Uh,
then Atlantic, then Elektra Records labels. So yeah, you had
these big companies getting bigger, massive corporate corporations that were
shaping how the music biz worked, really fortifying themselves. Now,

(22:56):
for decades, musicians were pretty much limited by either the
huge conglomerates or they could work with a few smaller
independent labels if they wanted to record their music. Recording
required specialized equipment, mixing expertise, dedicated space. It required the
ability to actually create a master recording and then to

(23:18):
duplicate that master recording onto copies. So it just wasn't
practical for most musicians to do all of this themselves.
Remember this isn't the days of physical media like there
was no digital approach here, You could not have a
file representing a song, so you you really did need
to lean on actual organizations to do this because they

(23:42):
had the capital to get all this equipment and expertise together.
Then you actually had the process of taking recording and
mass producing copies of it for sale, again well beyond
the reach for individual performers. Then you had the marketing
and distribution side, like actually pro oding the material and
getting the material out to points of sale, another big

(24:05):
limiting factor. Most people would not be able to do
that on their own. So the symbiotic relationship between musicians
and record labels really solidified in this era. Uh and
I do say symbiotic, but depending upon the musician you
might hear it was more parasitic. The record labels had
a lot of the power, and unless you reached a
particularly high level of fame, you probably didn't have a

(24:28):
lot of leverage to lend yourself a really lucrative deal. Um. Now,
one way you could make money is to perform at
live shows. Typically artists get a cut of the gate
that is, the box officer ticket sales. They might also
set up merchandise or merch tables. They typically get most
of that as well, they have to pay out the

(24:49):
people who are working the tables, but otherwise, um, that's
that's cash in the pockets of the performers. This particular
approach also requires a out of investment anyway, because you
gotta get booked, right, you have to. You have to
establish a relationship with the venue and get an agreement

(25:10):
to perform in a certain date and arrive at the
the the divide like how much of the ticket sales
goes to the venue versus the band. And then once
you start talking about bigger venues than you also are
usually talking about a booking agent, someone who is just
specifically focused on getting that stuff sewn up, because that

(25:32):
at by itself is a full time gig. I don't
know how many of you out there have jobs or
activities that involve having to schedule stuff with other people,
but you, if you have had to do it, you
know that that is an enormous amount of time committed
to getting that to work. Just imagine doing that for
a big band that's traveling, say across the United States

(25:55):
and establishing venues where they're going to perform, knowing that
the really big ones typically get uh gobbled up pretty early,
so you have to plan this out, you know, more
than a year in advance in some cases. And of course,
over the last two years, the live performance industry took
a d an enormously heavy hit. Tons of venues were

(26:18):
shut down during the pandemic for months at a time,
so for about a year the revenue stream was essentially gone,
and even after that it was you know, it was
all dependent upon where you were. And since the vast
majority of musicians make their living by playing live shows,
things got really tough for musicians. Now. Of course, record

(26:39):
contracts earned musicians money too, It's not like they're recording
for free. The big way to earn money through records
is through royalties. Now this gets pretty complicated, particularly since
there are different kinds of royalties, Like you know, I
mentioned their songwriter royalties for example, but there are lots
of different types of royalty. Now, what a royalty is Essentially,

(27:02):
it's a payment made to the rights owner of a
particular work for the licensed use of that work. The
licensed use can include all sorts of stuff. It can
include radio airplay, it can include the use of music
and television or movies. It can include recording, it can
include streaming um with artists who have signed with labels,

(27:24):
we're talking about a percentage of the fee that gets
paid to the label in return for the use of
that music. So, in other words, the way this works
as whoever wants the music, whether it's a person walking
into an old school record store or you know, the
person who's trying to fill out the the soundtrack to
the next Quentin Tarantino movie, they go to the record label,

(27:47):
they pay for the use of that music, and then
the record label takes a cut of this, and then
a percentage of that amount that was paid to the
record label then gets paid out to the rights holder
or artist. But it doesn't really get as simple as that.
Usually artists get what's called an advance. This is a
sum of money that's paid to the artist upon some deliverable.

(28:09):
For example, it could be when an artist signs a
contract or completes an album recording. Then the artist gets
a payout, but that payout is actually counted against future royalties,
and royalties are a percentage of each individual sales. So
before you start earning lots of royalties, you first have
to recoup the money that the label spent on you.

(28:30):
With the advance. This is way easier to understand if
we actually use hypothetical example. So let's say that my
band Johnny and the tech Heads gets a ten thous
dollar advance on our new album, So that ten grand
is ours to keep unless we've done something really silly
like signed a contract that requires us to pay back
in advance if we don't recoup the expense. No one

(28:53):
should ever agree to do that. There's a reason why
it's good to get a lawyer to look over contracts,
but where you assigned them. But let's say our royalty
payment is a nickel per unit sold, so five cents
every time they sell a unit, and it doesn't matter
to me what the unit is in this case. This
is just a hypothetical example. Now, we don't actually earn

(29:14):
any royalties until we've recouped the amount of money the
labels spin on us in its advance. That means we're
kind of paying off that ten thousand dollars one nickel
at a time. That means we would have to hit
two hundred thousand units sold before we started earning royalties,
and we would start earning royalties starting with copy two

(29:35):
hundred thousand and one. So Once the advance is recouped,
the royalty checks can start coming in. Also, ten grand
is a lot of money, but you're usually talking about
splitting that with a bunch of different people. There's the band,
You probably have a manager, Uh, there's a producer that
usually you have to pay the producer's royalty out of
your own royalties. And of course we're talking about payments

(29:58):
that don't have tax with holdings. So that means that
you really need to be holding onto that cash because
you're gonna be spending some of that to pay taxes
because nothing was withheld, so you're gonna owe it at
the end of the year. Uh, That ten grand or
whatever gets willed down pretty quickly. So that's one of
the really big reasons that a lot of bands go
on tours and do lots of live shows. The albums

(30:20):
can get fans, Fans come to the shows, and that's
where the musicians really typically earn a lot of cash,
plus of course they can connect with their fan base.
In most cases, the record label is going to keep
around or more of the revenue from albums and songs sold,
with the artists getting the rest in royalties. Again, once
the advance is recouped In return, the record label handles

(30:43):
all the distribution and marketing for the musicians, and that's
the big trade off, all right. When we come back,
we'll talk about how the music industry has changed even
more in more recent years. So with the rise of
the Internet, a lot of new ways to earn money

(31:06):
have emerged for musicians. Musicians can make use of tools
like band camp or Patreon. They can sell music directly
to their fans or invite their fans to help support
their work. Patreon can be done in a way where
people are subscribing monthly to an artist, or Patreon can

(31:31):
be done so that every time something new is released
then the supporters can paid have access to that thing.
So it creates a more direct pathway between artists and
audience and bypasses a lot of the other stuff that
you would typically have to go through. Uh. Musicians can
also try to bankroll a recording by launching a crowdfunding campaign.

(31:56):
There's something like Kickstarter or indie go Go. And the
aliferation of digital recording equipment and software has really opened
up the opportunity for musicians to take on a lot
of traditional recording work themselves. Um So, in other words,
the things that we're limiting factors back in the early days,
the fact that only these big companies had access to

(32:17):
recording equipment. That's no longer the case, right, you can
go out and buy it's fairly decent recording equipment for
not that much money. Not in the grand scheme of things.
I mean, it still is going to cost you probably
a few thousand dollars, which, don't get me wrong, that's
a lot, but it's peanuts compared to what it was
back in the old days, where there just wasn't that option.

(32:40):
So you can do a lot of this stuff yourself,
although it does still require expertise and skill in you know,
executing it, and that goes from everything from the playing
of the music to the recording process through the mixing process.
All of that wires a lot of work. So it's

(33:01):
not like it's uh, plug in blay, but it's a lot.
It's a lot more within reach than it used to be.
But the technology that really has dramatically disrupted the music
industry over the last decade or so is definitely streaming.
So let's talk about what streaming actually is. Essentially, it's

(33:22):
accessing media in real time. Although we could pick some
knits with that definition and the use of the phrase
real time, but it gets across the meaning. So instead
of downloading a song to a device, you use some
sort of service. It could be an app, maybe a
browser based service to listen to music streaming from a

(33:43):
web server somewhere out there to your local device, and
your device receives the music in the form of digital
data sent pretty much like any other data that would
be sent across a computer network. So it's kind of
like radio, but it's on demand and it's not using
traditional over the air radio broadcasts and instead it's using

(34:06):
essentially zeros and ones coming from a server to your device. Now,
there are a lot of places where we could start
our story about streaming. For example, way back in when
pretty much most of the population really didn't understand what
the heck the Internet was, you had the Internet Underground
Music Archive or i u m A. This was created

(34:30):
by some students at the University of California, Santa Cruz.
They launched an organization to give independent artists away to
get their music two fans. So again, like if you
didn't have a deal with a big record label that
could distribute and and market your music. This was a
way where you could bypass all that. This was one

(34:51):
of those very early demonstrations of how the Internet can
democratize content distribution and bypass the traditional model which has
massive media companies, you know, being the gatekeepers. Which you
might guess that massive media companies weren't super crazy about
this idea, and you'd be right, because it turns out

(35:11):
if if you know, if you end up accumulating a
lot of power, you're not crazy about giving that up. Now.
I find the I U M A story really impressive
because this was before the MP three format had really
taken off. Uh. You know, MB three is a type

(35:31):
of of audio file where you're using compression to reduce
the file size. Um not audio compression but file size compression.
Two different things here, although there can be audio compression
as part of it, because the way it B three
works is that, at least philosophically, the way it works

(35:53):
is that there's there are a lot of things in
sound that humans cannot directly perceive. Are are a bill
need to hear has limitations, and so the philosophy behind
MP three is that you drop any sounds that humans
would not be able to hear. Anyway, and then you
can reduce the file size that way. I'm oversimplifying, but

(36:16):
that's generally the thought process behind MP three. It's a
psychoacoustic approach to figuring out what information is most necessary
so that you keep that and you get rid of
everything else anyway, Because the MP three had not really
become a big deal yet. In the files were often

(36:38):
in formats like wave or ai f F and those
can be much, much, much bigger than MP three files.
And you have to keep in mind that this was
also back in the day when folks were using dial
up internet. You know, it was pretty limited bandwidth. Heck,
just getting an image to load could take the better
part of a minute. So this was not streaming. This

(37:02):
was not the days of streaming. This was all about
downloading files. Nick could take a really long time to
download a single file. But this was a stepping stone
toward streaming. Another really big stepping stone was the development
of Napster. In fact, a later service with the name
of Napster would become a streaming music service, but the
original incarnation of Napster was not streaming. It was a

(37:25):
peer to peer file sharing network that specifically focused on
sharing music files. Now by this time, by the time
Napster came around, which was the late nineties, the MP
three format was established, which was great because it allowed
users to compress audio files down to a fraction of
their raw size, and that made it much easier to
transfer those files over networks. Also, we were starting to

(37:49):
get better connections to the Internet. Not everyone had it.
I had a dial up Internet connection for a really
long time, but eventually we got there. Of course, if
you really impressed music a lot, like if you use
a very strong file compression, you could affect the sound
quality to the point where it was noticeable. But you know,
if you were careful, you could find the right balance

(38:11):
between file size reduction and uh, not affecting the quality
too much. Now, peer to peer systems are not inherently wrong,
they're not inherently illegal, But it was impossible to deny
that the majority of the file transfer traffic across Napster
was with copyrighted music files, and that the people who

(38:34):
were sharing them didn't have the right to do so.
So folks might use a computer to rip music files
from a CD. They put a c D and a
CD ROM drive, use a program to pull the music
off the c d rum drive, convert them into MP
three file formats, and then store them in a Napster
folder and then make them available for other people on

(38:56):
the peer to peer network to download those files. Meanwhile,
the people who were doing this, we're also looking for
music that was available on other people's machines. Napster became
a haven of music trading and theft. Now in some cases,
folks were using it to find songs that you literally
could not find in other places, Like you could not

(39:16):
go out and buy this music because it wasn't available
for purchase. So things like bootleg albums and live recordings
that otherwise didn't exist commercially, those were getting a lot
of trade there too. Now, just because something is not
available commercially doesn't mean that you have the right to
to seek out recordings of it. But still, like you

(39:38):
could see why people would justify it, right. They literally say, like,
there's no way for me to buy this, and I
really wanted I wasn't able to experience it in person,
So this is what I'm going to do. I can
understand that philosophy. Heck, I've done it myself in the past. Um,
it's very frustrating experience to be in. But a lot
of folks, you know, they were using it just to
get hold of a song, or an album, or even

(40:00):
an entire music library without having to pay for it.
I'm not saying everyone who used napster was stealing music
left right and center, but enough people were to make
it a real problem. This happened to coincide with a
dip in music sales, and that sent the recording industry

(40:21):
into a frothy rage. I was gonna say a tizzy,
but it was way more than a tizzy. Now, was
that causation or just correlation? I think there was a
lot of correlation here. I don't think it was pure causation.
But again, when you've got a multibillion dollar industry and
they see a dip, they want very quickly to identify

(40:45):
the cause of that dip and to eliminate it, because
you know, corporations are all designed to make as much
money as they possibly can. So in this case, you
had a dip in music sales and a rise in
the use of peer to peer networks, specifically Napster, and
the conclusion was, Napster is killing the music industry, so

(41:06):
we must nuke it from orbit, because it's the only
way to be sure. So before long, Napster and a
lot of its users were the targets of multiple lawsuits,
some of which alleged that Napster had caused massive revenue losses. Now,
I would say that that is an argument that is
impossible to support in any quantifiable way. Uh. I mean

(41:29):
you could you could say that, yes, it had to
have some sort of impact. I mean, it's common sense
that folks getting access to music for free is going
to hurt music sales. But it's impossible to actually put
a quantifiable number on that because you have no way
of knowing how many of those folks would have actually
bought an album or a single in the first place

(41:52):
if there had been no Napster. You know, there's there's
no way of saying. You can't say, oh, well, if
they hadn't stolen this music, they would have bought a
legit copy. You don't know that it's possible that they
just would have gone without. But it was still plenty
enough for the music industry to go nuclear on not
just Napster, but all the folks who had been using

(42:14):
UH services like Napster to download music illegally and it
was a really really ugly time. Napster itself, in its
original form anyway, shut down by two thousand one. The
brightest stars burned out the quickest, I guess. So. In
the early two thousand's we saw the first emergence of
legitimate digital music stores, you know, ones where you could

(42:37):
actually purchase a song and uh and money would go
presumably to the record label behind that song. In the
early early days, most of these were operated by the
individual music labels. It would be a little bit later
before we would get the iTunes store. Uh. The iTunes
Store didn't actually launch until two thousand three, and there

(43:00):
was no denying that this was, at least in part
a response to the problems that the industry had seen
with services like Napster. Apple was stepping in saying, you
don't want people just stealing your music, but people do
want access to digital copies of your music. How do
you manage this? Tell you what, Let us manage it
for you. And this was like a huge, huge step

(43:22):
forward for Apple. It would end up being one of
their most brilliant ideas they came up with when it
comes to ways to make more money. Now. Initially, these
music label stores they didn't offer any streaming capabilities either.
Customers would go to the stores purchase specific songs or
albums and then download those files to their computers or

(43:44):
other devices. Of course, in the earliest days, we're mostly
just talking about downloading to computers. Then you would have
to actually use a physical cable to connect something like
an MP three player, you know, like an iPod to
your computer, and you would transfer or music over the
cable that way primitive, right, you know, this was again

(44:05):
before you had these devices that had WiFi capability or
cellular capability built into them. Oh and by the way,
to get off on a little bit of a tangent,
this was also the time where you learned very quickly
that Apple was great at creating a uh AN experience
that worked within a specific ecosystem. So if you had
a Mac computer and an iPod and you used iTunes,

(44:28):
it was all pretty seamless. It was easy to do.
It was easy to update your iPod. Like if you
bought new music on iTunes and it went to your computer,
you could update your iPod pretty easily by connecting it
to your Mac. If, however, you owned a PC and
you used iTunes for PC and you had an iPod,
it was a nightmare. Speaking of someone from who you

(44:50):
know had that experience, it was terrible. Um and and
you learned very quickly that the ecosystem was going to
be a big deal in the future or of tech.
And that is another one, right the getting caught in
a specific ecosystem where if you want to kind of
explore beyond it, you end up getting punished for it. Anyway,

(45:14):
as digital music stores were taking shape, you had a
few different groups working on pieces of tech that collectively
would allow for music streaming. Uh. And that is where
we're going to leave off when we come back for
our next episode. In this we will start picking up
at the birth of musical streaming, how that got started,
and then how that in turn had a big impact

(45:37):
on the music industry and how people make money. We're
going to explore issues like is there money in streaming.
You've probably heard people complain that they're getting pennies on
the dollar because of streaming, and that their revenue has
taken a huge hit in the wake of streaming. So
we're gonna look at that and see what's going on there.

(45:57):
We're gonna take a look at the big streaming serve
us is out there and how they are performing, and uh,
maybe even start talking about what's next. I mean, we've
have seen kind of a resurgence in interest in physical media.
Is that going to be more of a thing or
is it just a little, you know, a little interesting
flash in the pan. Those are things we will talk

(46:19):
about in our next episode. For now, we're gonna wrap
this up. If you have suggestions for topics I should
cover on future episodes of tech Stuff, please reach out
to me. The best way to do that is on Twitter.
The handle for the show is text Stuff hs W.
I'll talk to you again really soon. Text Stuff is

(46:43):
an I Heart Radio production. For more podcasts from my
Heart Radio, visit the i Heart Radio app, Apple Podcasts,
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