Industry Needs New Score
by Greg Barnes
Originally published in the Australian
As someone who
reviews classical and jazz CDs for a daily newspaper, my sympathy
should lie with the recording companies and not with the three students
currently before the Local Court in Sydney for file swapping. I
should be barracking madly from the sidelines for the Australian
Recording Industry Association’s intervention in that case last week
when it claimed that a number of recording companies had lost up to $60
million as a result of these students’ alleged activities. After
all it’s the artists, so the recording companies tell us, who are the
victims of file swapping.
But somehow I
cannot help but see the three students as heroes. For what they
are alleged to have done, albeit illegal, is draw attention to the fact
that for years consumers in Australia, and globally for that matter,
have been ripped off by recording companies.
That this is the
case has, at least in the world of classical music and jazz, been
confirmed by the fact that one label has been prepared to strike out
and give the consumer a better deal while also looking after
artists. That company – Naxos – is on a growth curve in this
country and most other developed world nations, whilst most of its
‘name’ rivals such as EMI and Warner, and even smaller labels such as
Chandos, are desperately trying to survive.
When I wandered
down to my very friendly and helpful supplier of CDs last Wednesday, he
and I both shook our heads at the fact that the most recent recording
by Warner of French composer Claude Debussy’s beautiful “Etudes and
Images” played by pianist Pierre-Laurent Aimard is going to set a
customer back $30 when, for $10, that same consumer can purchase the
Naxos’ recording of the same music played by Aimard’s compatriot,
François-Joël Thiollier. In fact, the consumer can
purchase five CDs containing the complete piano music of Debussy from
Naxos for only $50. No wonder that Naxos sells around 3 million
CDs a year in Australia.
The founder and
owner of Naxos, Klaus Heymann, who lives part of each year in New
Zealand, has no fear of people downloading his music illegally and
distributing it far and wide. Why would anyone take the risk when
Naxos is always priced at $9.99? And that’s where Mr Heymann, who
established Naxos less than twenty years ago, has beaten his older and
more established rivals. While global companies like BMG, Sony,
Warner and other labels sell CDs for double and triple what Mr Heymann
charges his consumers the temptation to ‘beat the system’ will remain.
Sony is seeking
to get around the rise of downloading and file swapping by working with
Telstra to create a legal downloading service. Other companies
are pursuing similar strategies. What none – except Naxos – has
addressed is the real reason that their product is so expensive.
stars and rock musicians, classical and jazz musicians are demanding
astronomical fees. That fact, coupled with the high cost of
marketing and distribution networks throughout the world keeps the cost
of CDs prohibitively high for many consumers and makes the internet
such a life-threatening experience for many labels.
But Heymann has
always paid artists less. He has rightly figured that too many
orchestras, groups and individuals in the music business are paid more
than they are worth and the critics seem to agree with him. The
prestigious UK magazine, “The Gramophone” has awarded Naxos’ recordings
almost 40 major awards. Heymann has also kept his costs down by
keeping his distribution networks to a minimum. He has now
brought out his Australian distributor, for example. This means
that Australian consumers will be able to directly access over 90
percent of the entire Naxos classical, jazz and popular music and DVD
catalogue at any time.
redoubtable Mr Heymann has anticipated the Internet’s potential to eat
into his profit margins by looking at selling music directly to
consumers over the Internet. This is likely to prove easy for Naxos
because when an artist records for the label they also sell their
rights in perpetuity across all media.
vigorously pursuing students who are running a micro-business in CD
downloading and file swapping, perhaps ARIA and its members could take
a leaf out of the Naxos book and change the way they do business.
It would do wonders for their poor image among consumers.
article originally appeared on 14 October, 2003 in the Australian
Financial Review. Republished with permission from author.
Barnes is a music critic with the Hobart Mercury in Tasmania, Australia.