Here’s Steve Albini – legendary producer, Shellac frontman and author of the famous 1993 essay The Problem with Music – giving the keynote address at Melbourne’s Face The Music 2014 conference. His words define and confirm every conclusion about modern music that I’ve slowly been groping towards over the last few years. It’s a long, dense talk that rewards careful study but basically his conclusion boils down to eight words “The Internet Has Solved The Problem With Music.”

Read The Guardian’s Full Transcript here.

The full length talk above is packed with detail and makes fascinating reading/listening. But to whet your appetite here’s a paraphrased summary of the points Steve makes in it:

HOW MUSIC WORKED
Some colleagues say these are rough times: that pretty soon nobody will be making music anymore because there’s no money in it. People who used to make a nice income from royalties have seen them dry up. People who used to make a living selling records are having trouble selling downloads. There’s a tacit assumption that this lost money needs to be replaced and lot of energy is spent arguing where that money will come from.

In the pre-internet era the music industry was essentially the record industry: people principally experienced music through records and radio. All bands aspired to getting recorded, as a mark of legitimacy. But recording was a rare and expensive enterprise: even your demo tape required considerable investment. So most bands went through their entire lifecycle without so much as a note of their music recorded.

In 1979 you could buy a single for $1 a new album for $5, see a club gig for $1 or a stadium gig for $7. Note the relative parity between the live show costs and the recorded music costs. The whole industry depended on record sales, and sales depended on exposure. So bands on big labels toured, essentially to promote their recordings, and the labels provided promotional support to keep them on the road. This supported a network of agents and managers and roadies and promotional staff, so the expense was considerable.

For many people radio was the only place to hear music so record companies paid dearly to influence stations. Program directors who could add records to playlists, independent DJs who could get records played in nightclubs, and journalists and editors who could place reviews, were all subject to much buttering up. Retail outlets also offered special placements and promotion: displays, posters, mentions in print ads, giveaways, trinkets and end cap displays.

It was a leaky system, riddled with inefficiencies, but a lot of people made a living through it. Record store owners, buyers, employees, ad agencies, designers, club owners, label reps, A&R, producers, recording studios, publicists, lawyers, journalists, program directors, distributors, tour managers, booking agents, band managers, and all the ancillary services they required: banking, shipping, printing, photography, travel agencies, limos, spandex wardrobe, cocaine dealers, prostitutes.

The costs of making a record were (already) taken out of the income the band might otherwise receive as royalties. But the costs of all the above – promo copies, posters, radio pluggers and payola men, producers, publicists, tour support, 8×10 glossies, shipping, freight… in fact anything that could be associated with their specific record – was also paid for by the band, not by the label. And if the label is paying these bills with someone else’s money, they don’t need to care how much they spend.

So bands – unless they were monumental stars – earned very little from record sales. Often bands would never reach the point where they had sufficiently recouped to get paid anything at all.

THE INDEPENDENTS’ DAY
But some bands did exist outside that label spectrum, and for them everything was always smaller and simpler. Promotion was down to flyers, occasional mentions on college radio, and fanzines. Bands like ours could forget about press coverage – and commercial radio was locked up by the payola-driven system of pluggers and program directors. International exposure was extraordinarily expensive: you ended up shipping promo copies overseas at terrific expense, never sure if they would be listened to or not. So these bands had to be resourceful. They built their own infrastructure of independent clubs, promoters, fanzines and DJs. They even made their own record labels: some were collectives – others operated on a profit-sharing basis that encouraged efficiency. Punk rock taught us it was possible to make your own records, conduct your own business and keep control of your own career.

An incredible number of records were released this way: it was the beginning of what we would call the peer network. By mid-90s there were independent labels and distributors moving millions of dollars of records and a healthy underground economy of bands making a reasonable income. And that’s what we lost when the internet made everything available for free. And make no mistake, we have lost it. There’s still an independent label network but it’s a slim fraction of what it was. Labels have only survived by supplying niche music to a discerning audience.

FANS AND BANDS
In the pre-internet era the audience and bands – those two ends of the spectrum – were hardly considered by the rest of the business. Fans were expected to listen to the radio and buy records. Bands were expected to make records and tour to promote them. That all the thought either of them were given. But the audience was where all the money came from – and the bands were where all the music came from.

Since the big record companies didn’t see how to make money from the internet they effectively ignored it, leaving it to the hackers and the audience to populate a new landscape of downloading. People who prefer the convenience of CDs over LPs naturally prefer downloaded music even more. In the blink of an eye music went from being rare, expensive – and only available through physical media in controlled outlets – to being ubiquitous and free worldwide.

Look at that experience from a fan’s perspective. Music that was hard to find is now easy to find. Music to suit my specific tastes is now accessible by a few clicks. I have more access to music than I ever imagined, curated by fellow enthusiasts. Long-forgotten music has been given a second life.

Now look at today’s conditions from a band’s perspective: recording equipment and technology has simplified and become readily available. Computers now come pre-loaded with enough software to make a decent demo recording. Guitar stores sell inexpensive microphones and other equipment that was previously only available at a premium from speciality suppliers. Every band now has the opportunity to make recordings.

And they can do things with those recordings. They can post them on Bandcamp, YouTube, SoundCloud or their own websites. They can link to them on message boards, Reddit, Instagram, Twitter and even in the comment streams of other music. Instead of spending a fortune on international phone calls trying to find someone to listen to your music in each territory, every band now has free, instant access to the world.

Previously, the local record industry would dictate what music was available in remote markets isolated by location or language. A small independent band could never get market penetration into, say, Greece or Turkey, Japan or China, South America, Africa or the Balkans. How would you manage the business and currency complications of sending four or five copies of a record there?

Today those places are as well-served as New York or London. Fans can find music they like and develop direct relationships with the bands. It is absolutely possible that a kid in one of these far-flung places can find a new favourite band, send them a message, and the singer of that band will personally reply from his cell phone half a world away. It’s infinitely better than having your relationship to a band limited to reading the back of their record jacket.

A couple of years ago my band mounted a tour of eastern Europe: the Czech Republic, Poland, Croatia, Slovenia, Macedonia, Bulgaria, we made it as far as Istanbul, Turkey. We played to full houses at the same size venues as the rest of Europe – the key difference being that in most of these places we’d literally never sold a single record. 100% of our exposure had been over the internet or hand-to-hand.

ALL CHANGE
The internet has made it much easier to conduct the day-to-day business of being in a band and has increased the efficiency. Scheduling rehearsals using online calendars, booking tours by email, selling merchandise from online stores, raising the funds to make a record… The old system was built by the industry to serve the industry. But today’s system – where music is shared informally and bands have a direct relationship to fans – skips all the intermediary steps. It’s no longer necessary to spend money to let people hear your band. It happens automatically.

All this has instigated another, much subtler change. People no longer have to make do listening to whatever is on the radio playlist, and are no longer limited to owning what the store decides to stock. So my friends now listen to exotic playlists they have dreamed up themselves, full of counterintuitive and contrasting choices that are uniquely theirs. There are now online communities for every kind of music – and its subcultures. These are a vital part of the scene – where all the interesting conversations about music are happening.

As a result fans are more ardent for this music and willing to spend more on seeing it played live. They’re willing to buy more ephemera and eager to establish a personal relationship with the people who make the music. Gig prices have escalated as a result, and the merchandise tables are teeming with activity. As a result, gig income for bands has increased exponentially. Some places where my band used to earn four or five hundred dollars we now earn four or five grand.

This ease of access and increase in income has created new partnership possibilities between individuals, bands and visual artists, online film-makers, choreographers and other kinds of public people. All of those possibilities were instigated by the online sharing of music: if not directly, then indirectly by changing the expectations of listeners and musicians.

WHO IS THIS “WE” ?
“We need to figure out how to make internet distribution work for everyone.” This vapid platitude fills the air whenever someone asks the question “How is the music scene these days?”. It maintains hope that the current state of the music scene, presumed to be tragic, can be changed for the better. For “everyone”.

To the people using the sentence, the physical distribution model worked for everyone. But the new one does not.  I disagree that the old way is better: inside that trite sentence “We need to figure out how to make internet distribution work for everyone” hides the skeleton of a monster.

Let’s start at the beginning. Who would do the “figuring out” that “we” need to do? The Industry or consumers? Did the consumers get a vote about how their music would be compressed or tagged or copy protected or made volatile? These things were just done and we had to deal with them. Clearly the “we” of this sentence doesn’t include the listener.

Do the bands get a seat at the “we” table? Of course not. What bands want is a chance to (1) expose their music and (2) have a shot at getting paid by their audience. I believe the current operating status satisfies (1) exquisitely and satisfies (2) at least as well as the old record label paradigm.

So who is this “we”? The administrative parts of the old record business, that’s who. The vertical labels who hold copyright on a lot of music. They want to do the “figuring”. They want to set the agenda. And they want to do all the structural tinkering. The people who make music and the people who pay for it – the bands and the audience – are conspicuously not in the discussion.

WHAT IS THIS “NEED”?
The “need” is actually a “want”, a preference. These remnants of the music industry are unsatisfied with how the bands and the audience can get along fine without them. So they prefer to change things to re-establish their own relevance. You see this in the 360 deals being offered, where the record label offers startup money and everything a band does – from music to T-shirts – belongs to the label. But Kickstarter has proven more effective and efficient at raising money directly from the audience that wants to support the music.

How about “make” distribution work? This implies that we have control over distribution, but once we release music it’s out of our control. The verb “release” is a perfect description if you consider what happens when you release a bird or a fart. The bird may fly outside and crap on windshields; it may get shot down by a farmer. It’s been released, so you have no control over it. You can’t recall the fart, however much you would like to. You can’t protect the bird.

The prior meaning of “distribution” implied scarcity and the allocation of physical products. You could inventory these, you could tax them, or search somebody’s book bag for them. None of that is true with digital files. If it were even possible to return digital files to the strict control of record labels (it isn’t, don’t worry), what incentive would they have to be honest in their accounting? How on earth would you inventory a digital file – count how many were left on the shelf?

The most problematic word in the sentence is “work”. It will have contradictory meanings, depending on who uses it. For a label the system would “work” if it generated profit, controlled access, and provided opportunities for advertisers, push marketing and promotion. For the listener it would mean low or no cost, open access, lack of push marketing and lack of advertising. For a band it would mean finding an audience, having no barrier to participation, and no limits on the amount of material made available.

As for the conclusion “for everyone” – I don’t think it’s necessary to have everyone involved in defining the relationship between the band and its audience. We already seem to accept that record stores (which now get their appeal from carrying secondhand, speciality and niche material too marginal for corporate attention) are no longer part of the “everyone” in the sentence. So why insist that any of the other obsolete bureaux and offices of the lapsed era should be brought along into the new one?

If we’ve learned anything over the past 30 years it’s that – left to their own devices – bands and their audiences can get along fine. The bands can figure out how to get their music in front of an audience and the audience will figure out how to reward them. The internet has facilitated the most direct and efficient relationship ever between band and audience, and I do not mourn the offices or inefficiencies that died in the process. I suppose some people are out of work. But the same things happened when the automobile replaced the horse, and all the blacksmiths had to adapt, spending their time making garden gates rather than horseshoes.

IN CONCLUSION
I want to reiterate how terrific the current music environment is. There are more gigs, more songs available than ever before, bands are being treated with more respect, and are more in control of their careers and destinies. I see them as a constellation of enterprises: some big, some small. Most small – but all with a more immediate response from their audience – and a greater chance to succeed.

I believe the very concept of intellectual property with respect to recorded music has come to something like a natural end. Technology has brought to a head our need to embrace the meaning of the word “release” – as in a bird or a fart. It is no longer possible to maintain control over digitised material and I don’t believe the public good is served by trying to do so.

There is great public good by letting creative material lapse into the public ownership. There’s a huge body of work that is not legally in the public domain, though its authors, creators or rights holders have died or gone out of business. Nobody may copy or re-release it because it’s still subject to copyright.

Other absurdities abound: innocuous usage of music in the background of home videos is technically an infringement. If you want a video of your wedding reception it’s off limits unless it is silent. If your little daughter does a kooky dance to a Prince song don’t bother putting it on YouTube.

Music has entered the environment as an atmospheric element, like the wind, and in that capacity should not be subject to control and compensation. Not unless the rights holders are willing to let me turn the tables on it. If you think my listening is worth something, OK then, so do I. Play a Phil Collins song while I’m grocery shopping? Pay me $20. Def Leppard? Make it $100. Miley Cyrus? They don’t print money big enough.

Read The Guardian’s Full Transcript here.