Those authors and publishers who are busy defending their right this week to keeping in place protection so as to ensure an income stream, might like to examine the fate of the classical music recording industry. Market forces and innovation, in the guise of a new recording model that simply does away with the outmoded idea of income for every copy sold and huge marketing budgets, has beaten them.

It is the consumer who is most important when it comes to reading or listening. If products are too expensive — whether they be books or CDs — because those who create them are running a high cost business model, then they can expect that there will be someone out there who will produce the product for less and rain on their parade.

In the case of classical music recording it came in the form of Klaus Heymann and his budget label Naxos. Before the emergence of Naxos in the late 1980s, classical music CDs were prohibitively expensive. The big labels like Decca, Deutsche Gramophon and EMI had ensured this was the case. They spent millions on marketing their stables of talent, and paying bucket loads in royalties so that people like the renowned and supremely arrogant conductor of the Berlin Philharmonic Orchestra Herbert Von Karajan became seriously rich.

When you walked into a CD store in Australia before Naxos emerged you could expect to pay north of $25 to listen to Arthur Rubenstein playing Chopin or Lenny Bernstein conducting Mahler. The consumer could not do anything except keep their hands in their pockets and be deprived of aural pleasure, or just pay up.

Along came Heymann. He decided that marketing was too costly, and that he would pay performers a one off fee for recording with his label. That way he could sell his CDs for under $10. In the early days Heymann recorded with obscure former Iron Curtain ensembles and musicians, albeit excellent ones. Today Heymann is still around. He now has some of the leading orchestras and musicians in the world on his books, the likes of  conductors Marin Alsop and Leonard Slatkin and the London Philharmonic.

But while Naxos continues to grow in every market in which it competes, its more venerable rivals have fallen by the wayside. As industry observer and blogger Bill Stensrud notes:

The remaining three “major” labels — Universal, Sony and EMI — will be out of the classical business within two years. They will create no more than a handful of additional classical CDs. With the possible exception of a few “crossover” artists the labels will drop all of their classical artists. The remaining viable classical label will be Naxos. Their costs are dramatically lower and their business model allows them to operate profitably in a smaller industry and with much lower sales numbers.

Stensrud is no iconoclast — his is a commonly held view and rightly so because the evidence is clearly there. Big name labels were captured by their artists and a stream of profits that could only be sustained by ripping off the consumer. A nimble and smarter player came along and killed them by doing something very simple — offering a substantially lower price for classical music.

Australian authors and their publishers should study the classical music recording world very closely because they too will inevitably find themselves done out of business for failing to put the consumer in front of their own pocket. Naxos might even go into the publishing game — here’s hoping.