Capitalism, creativity and the crisis in the music industry

As online networks and file sharing alter the parameters of the music industry, the tension between commerce and capitalism finds a renewed emphasis. But who is losing out and what are the implications for artistic creativity? 

Jeremy Gilbert
14 September 2012

This text was originally given as a talk at the Berlin Music Week Denkfabrik event. 

It will not come as news to any of us that the music industry is changing rapidly, and that there seem to be some very obvious losers and winners from these changes. The big changes, of course, are all largely the consequence of the development of the internet and of digital media formats which can be reproduced and distributed by anyone, effectively cost-free. The losers are those musicians and corporations who have traditionally made their living through selling various types of musical commodity: most obviously recordings in physical formats such as vinyl records, cassettes, CDs, etc. The winners, it would seem, are those at the extreme ends of the distribution chain: consumers or users at the bottom, and the large-scale aggregators and distributors of media content - such as the Apple iTunes store, Google (through youtube), etc - at the top. What I’m going to do for the next few minutes is to think about the implications of some of these changes and how we can conceptualise them.

One of the central features of this transformation in the music industry is the effective de-commodification of music. In the 19th century, with the development of a market for sheet music, and the spread of public concerts, music became something which could be bought and sold for profit. This situation was obviously given a huge boost by the invention of sound recording at the end of the nineteenth century and the consequent growth of a world market for musical recordings. One of the key effects of the technological changes which I have already mentioned has been severely to weaken the commodity status of these recordings. A commodity always depends for its status and its value on its relative scarcity; once the reproduction and distribution of that commodity become effectively free, then it necessarily loses that value and that status. This is great news for consumers of music, but for producers, it means, quite simply, that they suddenly have nothing of value to sell. I think the question which then emerges for 21st century societies is: if we want to have professional musicians at all (and of course there are those who say we don’t need them), then how are we going to pay for them? How will their work be compensated, if not through selling their wares in an open marketplace?

Now, before coming back to this particular issue, I want to elucidate some of the conceptual issues raised by these questions. Firstly, I want to make a distinction between the two sets of ‘losers’ from this process whom I have already mentioned: musicians, and traditional record companies. In the terms that I’ve described them, both of these sets of actors are trying, ultimately, to sell musical commodities at a relative profit. However, there is a fundamental difference between them in terms of what the aim of generating those profits is. In the case of musicians, apart from a handful of very greedy and ambitious individuals, the aim is generally to generate enough income for a decent standard of living which will enable them to keep making their music. We might say the same about those independent record companies which have never generated large profits above those which are reinvested in support for new music. In the case of large record companies, however, the aim is not simply the generation of acceptable income for their employees, but the long-term, uninhibited, and unlimited accumulation of capital. The difference I am positing here, is therefore a fundamental, but surprisingly unusual one: between commerce on the one hand, and capitalism on the other.

The normal understanding of the term ‘capitalism’ at least in English (I imagine that Germans are much less imprecise about these things, but perhaps this is just my fantasy) is that it is a term which covers almost all forms of commercial activity. What I’m proposing here is that we can only really understand what is at stake in the current transformations of the music industry, by getting away from any such lazy elision, and understanding that commerce - the peaceful trading of commodities for profit - is not necessarily the same thing at all as capitalism - the relentless pursuit capital accumulation through the sale of such commodities produced through the exploitation of labour. This is an important distinction for us here, because I am going to argue that the effective disappearance of a real market for musical commodities poses no threat to the smooth functioning of the process of capital accumulation (although it may slightly alter its institutional locations), even while it does pose a threat to the key sites and agents of the creativity which makes music culture possible.

Some radical theorists of capitalism argue that it is a great mistake to assume that all market systems are necessarily capitalist in nature. In fact thinkers such as Fernand Braudel and Manuel Delanda argue that capitalism always works at least partly through the creation of monopoly anti-markets; situations in which capitalists work to shut down the free circulation of commodities. Historically the music industry was always a good example of this, with ‘anti-market’ institutions (the majors record companies, large commercial broadcasters, mainstream music media, etc) working hard to homogenise the tastes of a frustratingly unpredictable public (just as Adorno described the mid-20th century ‘culture industry’ as doing) while smaller record labels, shops, and media outlets tried to create and diversify markets wherever possible. This observation suggests that it might be possible to see a degree of compatibility between the kinds of creative, collaborative relations which characterise vibrant music scenes, and a certain kind of entrepreneurial spirit which might not be motivated by political or ethical or even artistic concerns, but would nonetheless be driven to seek out novelty and creative innovation in many spheres (I’m thinking here, perhaps, of some of the great cultural entrepreneurs of British independent music - Malcolm McLaren, Tony Wilson, etc), and to counterpose both of these tendencies to the tendency of capitalism proper to want to contain all such creativity in easily manageable forms. This suggestion raises some important questions about what we might mean by ‘creativity’, which I will try to address briefly now.

‘Creativity’ has become one of the central ideas of contemporary culture, not only because of its importance for aesthetic notions of subjectivity and self-expression but also because of its pivotal role in a range of powerful economic discourses and the institutional practices which they animate. A key legacy of the Romantic moment, the idea of creativity has become fundamental to the economics of the ‘knowledge economy’. Arguably, ‘creativity’ has become to postmodern capitalism what ‘efficiency’ was to the bureaucratic corporations of the twentieth century (see, for example, Boltanski & Chiapello’s book The New Spirit of Capitalism): that mysterious individual and collective quality which distinguishes the successful from the unsuccessful; the intangible source of value and profit which techniques of education, management and administration must all be deployed in order to cultivate. The idea of ‘the creative industries’ (a term which has in many English-speaking contexts replaced ‘the arts’ altogether), so central to current assumptions about the economic value of cultural work, is only one element of a much wider configuration of assumptions which understands ‘creativity’ to be an essential characteristic of the admirable individual and the functional organisation in almost all spheres of life.

The history of the idea of creativity is in part a history of different conceptions as to who or what is actually capable of exhibiting it. Who or what is the agent of creativity? What kind of individual or collective entity is capable of being creative and likely to be so? In music culture, both popular and academic discourse contains one particularly distinctive answer to the question ‘who or what is creative?’ For many commentators, the answer to this question would be ‘the scene’ (that is, the whole aggregation of musicians, producers, engineers, promoters, media, listeners, audiences, fans who make up the social ensemble within which music actually occurs.) The idea of the scene itself as the source and agent of creativity has been famously given expression by Brian Eno’s neologism, ‘scenius’, a term designating the collective creative intelligence of participants in a more-or-less distributed music scene, which punningly subverts the individualistic assumptions inherent in the Romantic theory of individual genius. Jason Toynbee’s study of musical creativity also posits individual ‘authors’ as always necessarily ‘social authors’, nodes in creative networks - inhabiting a particular ‘radius of creativity’ - whose mutual relations are a necessary element of any possible creative innovation. What both of these terms give expression to is the idea of musical creativity as inherently collective in character, and as such inherently distributed, the effective product of oblique collaborations and mediated relays of influence between musicians, composers, producers, audiences, promoters, technicians, critics, journalists etc.

This raises an important question: what exactly is the relationship between music scenes, understood as sites of inherently collective and collaborative creativity, and capitalism, understood as the endless quest for private profit? For while scenes themselves might not seem to be oriented directly towards the process of capital accumulation, members of music scenes are invariably involved in various forms of labour which arguably contribute to the overall production of value both by the music industry and capitalism more generally. Maurizio Lazzarato famously refers to this kind of work as ‘immaterial labour’ in his essay of that name, while the American and Italian political theorists Michael Hardt & Antonio Negri refer to is as biopolitical labour. . Just think of the huge amount of work done by bloggers, youtube uploaders, itunes critics, etc. Could contemporary music culture function without them at all? And think about the ways in which this work is not experienced directly as labour, in a separate sphere of life from the rest, but is instead invested with all of the passion and energy which we attach to the business of making ourselves who we are and telling those around us all about it. This is precisely what these theorists mean by ‘immaterial’ and ‘biopolitical’ labour, and the cycles of capital accumulation in which music plays a role could not carry on without it.

Hardt & Negri develop this idea, to suggest that today everyone in the planet is engaged in various kinds of intense creative activity - ‘communication’, as they call it (just think of all that effort on Facebook) - which is in fact integral to the processes of capital accumulation, even if it is not identical with those processes. This is a development of the classic Marxist hypothesis that even while it promotes individualism and shallow consumerism on a personal level, capitalism actually tends to socialise the process of production, as the world economy increasingly comes to look like a vast, interconnected, dense, vibrant network of activity, humming like a beehive with the creative energy of its 6 billion participants.

Hardt & Negri follow a particular line of Marxist thought which sees this intense collective creativity as the real source of value and change in the world, and sees capital as having a merely parasitic relationship to it. From this point of view, capitalism has to facilitate collective creativity, by getting millions of people together and co-ordinating their activities in cities, corporations, state institutions, or global networks, or music scenes; but it only generates profits by feeding off this energy and channelling it solely into the production of commercial commodities (rather than, say, free public services, or innovative artwork, or open source software). The communist tradition since Marx, and including Hardt & Negri, has always argued that the creative power of socialised labour does not need capital in order to function; in fact, it thinks it works better when capital is removed from the picture, when what Hardt & Negri call ‘the multitude’ (this vas buzzing network to which we all belong, and which belongs to all of us) is free to interact, to innovate, to create without being limited by the dictates of commodification and profit-seeking.

Consider, for example, the central role which Myspace assumed within music culture for several critical years of the last decade. This seems to me to be a perfect demonstration of Hardt & Negri’s thesis. Within half a decade, large sections of the music industry found themselves obviated as musicians and audiences ceased to be reliant upon them for the mediation of their relationships. Significantly, these were precisely the sections of the industry which played no direct role in the creative process: marketing, ‘A&R’ departments (Artists & Repertoire - the department which signed contracts with new artists), distribution networks were precisely the points in the circuit of musical commodity production at which the most profits used to be made and the cultural authority of record corporations was exercised; but they have been shown now either never to have been fundamental to the creative process, or at least to be so no longer. Perhaps most importantly, the complete failure of Rupert Murdoch’s News Corporation to find any way to make MySpace profitable for them during the several years when they owned it - even at the height of its centrality to global music culture - perfectly illustrates Hardt & Negri’s hypothesis as to the relative independence of the creative ‘Multitude’ from the parasitic, but increasingly decrepit ‘Empire’. News Corp was simply unable to prevent Myspace from becoming what Hardt & Negri would call a contemporary ‘commons’ (in other words, a shared resource which is actively produced and renewed by the creative activity of the multitude). At the same time, it is now easy to see why many people believe that file-sharing sites such as the Pirate Bay and the original Napster site are playing an important role in liberating the productive energy of the multitude from the circuits of commodity-exchange. But this raises once again the question of how, in such a context, particular creative people might actually make a living from their work. I’ll come back to this question in a moment.

Now, I think that the analytical framework that I’ve outlined here, drawing heavily on Hardt & Negri, can give us a good deal of insight into both the traditional and the changing power dynamics of the music industry. For example, we can see the significance of the fact that independent record companies historically tended to lack the kinds of resources which required the heaviest capital outlays - recording facilities and large-scale marketing and distribution systems - superior access to which was always a great advantage to the ‘majors’ and to mainstream media outlets. On the other hand smaller companies had a particular kind of power in that they were close to the sites of creativity and close to emerging markets: they were active parts of, and not merely parasitic upon, living ‘scenes’.

It has been commonplace since the beginning of the 1990s to observe that the revolution in digital recording and distribution has enabled small-scale organisations and even individual producers and musicians to bypass the traditional power-centres, recording and distributing their own musics much more effectively than was previously possible. On other hand, however the same technological revolution has ultimately produced a situation in which it is now very easy for some of the largest capitalist organisations - most notably Apple and Google - to bypass completely the traditional mediating ‘grassroots’ institutions (clubs, local radio, local record shops, independent labels), monitoring and aggregating the individual taste preferences of millions of users every day, and exploiting them for various kinds of profit. If the old power-centres of the industry were the major-label ‘A&R’ departments, record-store chains, commercial radio and the print music press, then the new power-centres are those at which this vast quantity of individualised information is aggregated for the benefit of advertisers and for direct sale to consumers, and those - like spotify - at which the vast amount of information available to consumers is filtered and individually directed.

Under such circumstances, we see a very dramatic change in the relationships of capital to musical creativity. On the one hand, the most influential sections of capital no longer have much interest in maintaining anti-market monopoly control over musical content: while the residual music industry may still rely on its Justin Biebers to generate profit, Apple really doesn’t care if you’re downloading Bieber or the Beatles or Ash Ra Tempel (although of course it will fight to the death to maintain its monopolies at the levels that it cares about, as Samsung were reminded just last week, when a Californian court effectively ruled that Apple own the rights to rounded rectangles). On the other hand, there isn’t much need for capital to invest heavily in creative infrastructure of any kind, with so many musicians out there willing to buy their hardware for themselves and a huge community of listeners willing to research and select the most popular acts for themselves. And there’s very little need for them to pay musicians much at all, with so much back catalogue to exploit, and so much music available for free.

In fact what we see happening to musicians under these circumstances is rather terrible. In the UK, in recent years, the conventional wisdom has been that although there was now clearly no money to be made from selling recorded music, audiences were still willing to pay a premium for live performances, which would now become the main source of income for musicians. The apparently exponential growth in demand for live music led to an explosion in the number of summer music festivals on offer to the public, and this boom seemed to be escaping even the worst effects of the post-2008 recession...until last year. In 2011 the bubble burst, and Music Week - the house publication of the UK music industry - reported a very interesting statistic: no large music festival that summer had made a profit in excess of the corporate sponsorship which it had received.

This statistic is extremely important because it exemplifies a trend which can be observed across the sector. Music as such can no longer sustain itself - live or recorded - on the basis of sales to the public. Instead, it can only be sustained by corporate sponsorship. Music is now a branch of the marketing industry, whose function is to use its extraordinary power to affect our moods, our sense of self, place and time, in order to enhance the brand identities of its corporate patrons. This is a situation in which the relation between musicians and those who pay them has to some extent reverted to a quasi-feudal relation of patronage and clientism, but in other senses has simply become fully capitalist, as the employer simply pays for the musicians labour for a fixed amount of time, instead of contracting to pay them a royalty on sales. Either way, the independence and freedom inherent in the model of musician-as-entrepreneur is gone.

Musicians find themselves in a very tough spot here indeed. The response of most of those who want to defend their interests seems to be to want to defend the established mechanisms of remuneration. Essentially, this means protecting the value of copyright such that the commodity status of music is defended, enabling musicians to retain the status that they began to claim in the 18th century, as individual entrepreneurs selling their music on an open markets to a free public. I think this is certainly an understandable response, but it is also a problematic one, for two main reasons, Firstly: I don’t think it’s going to work, because the forces against it are too strong (combining as they do the desire of consumers for free product, the ingenuity of software engineers and the power of some of the wealthiest organisations on the planet, such as Apple themselves); secondly, because there was always something problematic about the idea of copyright in the first place. Copyright is a useful tool for ensuring that the labour of particular individuals does not go unrewarded, but is is a very bad tool for taking account of the collaborative nature of creativity which is invested in every piece of music, in particular every recording. At what point does an artist’s right to be recognised as the sole ‘author’ of their work end and the right of a whole ‘scene’ to be rewarded for its immaterial labour begin? This is not an easy question to find the answer to; but I’m sure that copyright - which reifies and commodities what might otherwise be seen as the product of a creative commons - is not it.

I might be wrong about this. It might be, in fact, that we already have on hand a model of a perfectly organised market within which there is no scope for excessive accumulation and in which commodity relations harmoniously mediate the relationship between artist and consumer. CD, the enormous American music distribution scheme which allows supposedly any musician to sell CDs at a price they set themselves, has enjoyed great success to date, with a current roster of over 350,000 artists, who between them have been paid hundreds of millions of dollars for their work. For artists who can find a loyal core audience of just a few thousand it can provide a reasonable living without any of the traditional restrictions of the music industry. My fear, however, is that like so many of the apparent success stories of the digital age, this one will soon be overtaken by technological advance. For the scenario I have just described depends on that audience being willing to pay at least 10 dollars for a CD: my fear is that such audiences are already dwindling into historical relics, and that once international broadband speeds reach the point where distribution of high-quality 24-bit wav files is as easy as distribution of Mpegs already is, then they will largely disappear altogether.

Under such circumstances, we may have to think much more radically about what kind of remunerative models will make it possible for us to have a music culture which is still something more than a mass exercise in sonic branding, and look for ways in which the collective nature of musical creativity, collaboration and consumption can be truly institutionalised and expressed. Perhaps this will have to take the form of direct state support for many more forms of music-making than currently receive it, but who can really imagine that happening in the near future, given the current condition of public finances in Europe and beyond? I imagine that if we all want to live in a culture in which music-making is still a vibrant and forward-looking part of life, then we will have look to a combination of such direct public support with a move towards co-operatively owned versions of cd-baby, or other kinds of collective subscription scheme. One way or another, the mutualisation of the music industry might be the only way we can retain a music culture worthy of the 21st century multitude. 

Originally given as a talk at the Berlin Music Week Denkfabrik event. Some of this material has already appeared as part of an essay, published in German in Rosa Reitsamer & Wolfgang Fichner (eds) (2011) They Say I'm Different...: Popularmusik, Szenen und ihre AkteurInnen, Löcker.

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