Technology, Piracy, and the Classical Record Label

Hyperion Records is the United Kingdom’s biggest independent classical label. Founded by Ted Perry in 1980, the label is now run by Ted’s son Simon, and it remains a leader in classical music recording in the UK.

I met with Simon on a sunny November day, at Hyperion’s warehouse and office in London. Simon has consistently been one of the most supportive people I met during my research in the British classical recording industry, and he has often taken the time to talk with me at length about his company and the record industry more broadly. On this particular day, our conversation turned to insurgent technologies and the ways Hyperion has adapted to them.

The challenges of piracy in the early 2000s are well documented and much discussed with regard to popular music—Napster, Limewire, various other peer-to-peer sharing services and torrent sites that made recordings available to download for free. However, Simon asserted that piracy was also a problem that impacted his classical music business quite substantially. He gave me these examples:

I found a website last year…that was offering a free download of our Eric Whitacre Cloudburst album by Polyphony, which is one of our most successful recent recordings.  And in one year it had been illegally downloaded 20,000 times.  There was also a site where somebody had posted the complete piano music by Franz Liszt on the Hyperion record label, which is 54 volumes across 95 CDs.  They put it into one file and put it up on a server, and it had been downloaded over 6,000 times.

While a precise relationship between lost sales and illegal downloads is notoriously hard to figure, these illegal downloads of the Hyperion catalog are understandably galling to Simon. And there’s not much he can do to stop it. At the time we first spoke about the issue (almost a decade ago), Hyperion’s tactic was to occasionally search the web for sites hosting Hyperion records illegally, and if they saw “flagrant piss-taking,” to report it to the British Phonographic Industry (BPI). But as a relatively small company, Hyperion does not have the resources to pursue legal cases against people stealing their music—and even if they did, there’s not much evidence that legal solutions have curtailed piracy, even in the cases of the major labels.

In fact, Hyperion’s relatively modest scale of operations means that they probably will always be financially at risk. At no time during my research in Britain’s classical recording industry (which focused on various independent and live record labels) did anyone ever tell me that things were great, the industry was booming, or business was solid and secure. There is always the sense of the wolf at the door for a label like Hyperion, so the piracy problem is one that Simon approaches with irritation, a frustration that he doesn’t need, even if solving it wouldn’t ultimately increase his sales figures all that substantially. (The relationship between illegal download and sales figures is notoriously difficulty to quantify with any accuracy, but there isn’t much evidence that eliminating illegal downloads would substantially boost sales.)

Interestingly, Simon tied the problem of classical record sales to a broader cultural stigma of classical music.

There was a real embarrassment about classical music. You know, it’s all very highbrow and very snooty, people say. “Oh, I don’t really understand it.”

In this regard, Simon actually suggests that (legally) downloading holds great potential to grow classical music’s audience. It gives people the opportunity to sample and consume classical music casually, as they might sample other musical forms, and in some cases this translates into sales. Simon has always been proud of Hyperion’s online store, where customers can buy CDs or download high-quality audio files of the company’s entire catalog.

But the one place where Simon has steadfastly refused to expand is into the world of streaming. In his view, this is where the classical record companies might ultimately be driven out of business for good. Referring to one of his competitors, he told me that they see services like Spotify and Apple Music as just a new source of revenue, some “free money” that they receive each month without having to do anything for it. But his view is longer and darker: streaming has the potential to undermine sales in the long-term, and it would not nearly be sufficient revenue to sustain the operations of his label. While he didn’t indicate what sort of revenues he would expect to receive from Spotify or Apple Music, were he to license Hyperion’s catalog, all publicly available evidence suggests that it would be a pittance compared to album and track sales—and availability of streams could potentially cause the label’s sales figures to crater.

It’s hard to see how the tension between classical labels and insurgent technologies plays out in the coming years. Most labels have decided that streaming services are inevitable and have struck agreements with the leading companies. (Even longtime holdout ECM appeared on Apple Music and Spotify late last year.)

But I sense that there is grim truth in Simon’s assessment of the situation, where giving in to streaming may force smaller labels to radically revamp their business models, if not go out of business altogether. If Hyperion were dependent on streaming revenue for their business, it’s not clear that they could pay for sessions as they do now. In that case, they would follow many other labels who have shifted that burden onto musicians themselves.

In this model, if you want to make a record, you go to the label, propose the project, and agree to pay all the recording costs yourself. The record company functions less as a recording company in the conventional sense than as a catalog service to distribute records, taking a large percent of the revenue for themselves. It is predatory in a very neoliberal sense: record companies who operate this way take on very little risk themselves, displacing all of the financial risk of each individual project onto the musicians. (I will write much more on this in the future.)

Hyperion is one of the few remaining holdouts against this capitulation to the technology companies, but for how long?

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