The German Electro / EBM label Dependent Records recently declared that they will go out of business by this summer. Label cofounder Stefan Herwig published a long text about the reasons for giving up, which now got translated into English by one of their acts. It has Herwig saying:

"Money was always tight, and in the future it's only going to get tighter, because even if we were to continue to produce quality CDs, the rate with which they will be purchased legally will continue to decline. Each album released would represent an ever-increasing financial risk."

He points out that a Russian MP3 site recently distributed 5000 downloads of one of their releases in one week while the label only sold about one fith of this in physical discs. Herwig continues:

"A popular claim often seen on Internet maintains that the P2P culture weakens the majors and bolsters the independent labels. This is, we can assure you, 100% bullshit. Even if there are listeners who download first and buy later, they are clearly in the dwindling minority."

The text is a worthwhile reminder that issues like the recent 20 percent downturn in physical disc sales affect everyone in the music industry, not just the major labels. And just like the majors, everyone else is struggling to find answers to these challenges as well. Unfortunately Herwig looks at all the wrong places for a solution:

"It is actually the job of the (German) federal government to insure that musicians and record labels have a platform on which to operate. That platform is known as intellectual property law. (...) After multiple attempts, the federal government has so far failed to modify the 30 year old intellectual property law to insure that it offers those working in today's music industry a reasonable way to make a living. If the law provided even a glimmer of hope that the situation for labels and musicians would improve, then we would keep on fighting. But the outlook for the next few years is bleak."

It seems like a very European notion to assume the government ought to fix your problems - and give up if they can't. Unfortunately the very same notion exists on the other side of the debate as well. European proponents of alternative compensation models regularly invoke ideas of government-regulated taxation, whereas their US counterparts tend to propose voluntary licensing without government intervention.

Both seems far-fetched if you look at the realities of the monolithic market today. But maybe people wouldn't give up if they saw a chance of being eventually able to help themselves, instead of losing fate in relying on the help of others?

Tags: , , , , , , , , ,