
Dear Record Labels: Focus on Buyers, Not Thieves - earbitscom
http://blog.earbits.com/online_radio/dear-record-labels-focus-on-buyers-not-thieves/
======
nl
From the music industry point of view, it's not about serving the customer,
it's about extracting as much revenue as possible _before_ the recorded music
market collapses.

See this 2009 article for their thinking:
[http://techcrunch.com/2009/03/08/big-music-will-surrender-
bu...](http://techcrunch.com/2009/03/08/big-music-will-surrender-but-not-
until-at-least-2011/)

~~~
earbitscom
I used a quote from this article during our Demo Day pitch. The problem I have
with these particular demands is, what if one of the companies the industry
cripples and destroys was actually on track to breathe a little life back into
the recording industry? I haven't bought this much new music in a long time
and it feels awesome. What if they prohibit features that would cause a 10%
increase in purchases because Amazon refuses to be strong armed into paying
$30M to overcome legal technicalities? Amazon doesn't make nearly what the
labels do off of the music, so $30M might be enough to stop them from doing
something that drives $1B in growth for the labels. And all of this to stop
people from stealing who are not buying anything no matter what you do. It's
just bad business.

~~~
nl
_It's just bad business_

It's actually quite logical, if you agree with their assumptions:

1) The increased availability of digital music will lead to an increase in
piracy, and

2) An increase in piracy will lead to less money being spent on recorded
music.

(Both those assumptions can be argued, but the music industry believes them to
be true).

Given that, the following argument is logical:

1) At some point in the future the money being spent on recorded music will
decrease to a point where it is not a significant source of income.

2) The longer that point can be delayed, the more money can be made from
recorded music in aggregate.

3) Anything that makes digital music inconvenient for the consumer will delay
the collapse of buying recorded music because it will reduce uptake (!!)

4) Therefor, fight _anything_ that makes digital music better/easier to use.

5) Meanwhile, try and develop new sources of income (360 deals, streaming
licencing, game licences etc)

From their point of view it's not bad business at all - it's the safest course
of action.

~~~
earbitscom
The problem is that there are $9B in recorded music sales. A small percentage
of people actually steal music (I believe it's like 9%). You have a bunch of
people who probably don't buy much music because it's inconvenient. Then you
have other people who would buy more music if it was more convenient. The % of
people who steal isn't likely to go up just because storing files online
through Amazon's PAID service (keep in mind these people are stealing because
they don't like paying for things) makes it easier to access your music. But
the potential for the $9B worth of customers you have increasing their
purchases is completely mitigated by this nonsense. If I am not an example of
a fairly typical consumer in this area, I don't know who is.

~~~
earbitscom
Wish I could comment on the comment below but...

The point is, these people are stealing already, and the difference in the
ease of stealing using what's already available and the ease of using Amazon
is not that big of a difference, and the current stealing techniques don't
cost a monthly fee. I don't see people switching to Amazon for all of their
theft. As someone pointed out, Amazon could easily monitor this behavior and
turn these people in. At least with the current theft you aren't being watched
by a big company with a vested interest in you paying for your music.

~~~
nl
(you can reply to a comment at any depth by clicking on the "link" next to the
time stamp.)

~~~
earbitscom
Thanks!

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pacemkr
I can't help but draw a parallel to computer games. I find myself buying
computer games less and less for this exact reason. If I get the game off a
torrent, I will have a better experience. Every time I sit down to play a game
I actually purchased, I feel cheated: "insert the disk, connect to the
internet, and jump through this hoop please." How about the $60 I just payed?
Not proof enough? Piracy is the publishers problem; they insist on making it
mine.

In fact, I buy more and more Indie games for this reason, even though I don't
play them that much. I just like the fact that some still have the balls to
offer their work DRM free to ensure a good experience for the paying customer.

~~~
citricsquid
I own over 200 games on Steam, from big name titles (Call of Duty) to small
indie games and I have never had a problem with DRM.

~~~
aw3c2
And what happens if Steam is offline? Do not reply "it has an offline mode"
because you have to enable the offline mode while being online.

~~~
michael_dorfman
And what happens if the power is out in your apartment? Don't reply "my laptop
has a battery", because you have to charge the battery when the power is
online.

Seriously: what kind of uptime reliability do you demand from a _game_? The
fact that it has an offline mode already puts it far ahead of most cloud-based
services. If you don't like Steam for political reasons, that's fine, but this
is a very weak line of argumentation.

~~~
vollmond
Power being out, luckily, is something that can be dealt with by the
individual consumer (call power company, go to a neighbor's house, etc). The
point here is that if Steam goes offline (through glitch or bankruptcy or
whatever reason), there is nothing at all the paying consumer can do, outside
of hacking/pirating the game. This is a massive loss of functionality from
games past.

And yes, Steam does give new features in return (online backup of your games,
unified chat, etc), but there is no technical reason to have to trade the old
features for new.

edit: removed possibly inflammatory comment

~~~
michael_dorfman
_This is a massive loss of functionality from games past._

Really? Maybe it's my age showing, but most of my "games past" are on 5-14"
floppies for DOS, or cassette tapes aimed at the Commodore 6502 architecture.

Portability over time has thus far proven to be largely a myth. If you think
that the CD/DVDs you've purchased so far are "buy once, play forever", just
you wait...

~~~
vollmond
But in that case, again, it's entirely up to the paying customer. You could
have kept your Commodore 6502 to play those games (just like I still have my
NES and Sega Genesis) - it's up to you. The actions of the company (and the
existence of the company) have nothing to do with whether you can play those
games in 2011.

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inkaudio
Majority of the people who pirate music are not going to use Amazon cloud
drive to pirate music because:

1.) Amazon cloud drive does not offer music pirates any significant advantage
over what they are currently using.

2.) People are already using alternatives for decades, it's hard to get people
to switch.

3.) It would be easier for record labels to track down and take down
infringers on Amazon cloud drive as oppose to other services.

4.) We've seen this before, it's called lala.com, and it did not become a hub
for music pirates.

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trotsky
I think taking Mr. Robertson at face value about the industry demands and the
purposes behind them is a mistake. We already have an Amazon service with no
current legal action, and we'll soon have similar services from Apple and
Google.

The music industry is excellent at providing 100 objections or hoops to jump
through for licensing while they're really just delaying your offering until a
favored son's (AAPL) service launches. Many of the rest of the objections will
come down to dollar figures. Oh, yeah, we can forget about that concern as
long as you lose a little on the back end.

Let's not forget that Michael has historically been no real friend of the
industry, and entertainment lawyers don't quickly forget things like that.
Ten+ years ago the the two industries were more or less at war, and music was
loosing. Around the time that napster got huge and got sued like crazy, and
industry players like AOL music had staff dropping decentralized p2p code
written on company time, my.mp3.com was born. It let anyone that stuck the
physical cd into their computer claim ownership of it and have access to it in
the cloud, or whatever nonsense we were calling it then. The very easy to read
nod and a wink involved there was that you could borrow your friends cd's at
work, wherever and in just a few minutes "rip" them all and have access
without all the muss of actually ripping and copying them.

The labels shut it down then, and they're unlikely to have forgotten who he
is.

~~~
daeken
The ways he's thumbed his nose at the industry go well beyond my.mp3.com. I
was employee #5 or 6 at MP3tunes (don't remember exactly), and saw it from the
inception as an indie music store to an advanced locker service. One of the
main things that led to me leaving the company was the AnywhereCD service,
which -- while being a separate company in theory -- was built in early 2007.
The concept was great: you buy a CD, and you immediately get the songs in your
MP3tunes locker, along with the physical CD mailed to you. Everything was on
track to be _awesome_ ; we signed Warner Music on for the initial launch, and
all the tech worked brilliantly.

Why did it fail? MR made the decision to allow people to ship the CDs to
nowhere. You owned the CD, but it was (in essence) thrown away. Warner
explicitly _did not_ want digital-only sales, and that was the only reason
they signed on in the first place. He could've launched a service that made
everyone happy, but instead he launched with that option, and Warner shut the
service down on day one.

MR is far too clever for his own damn good.

------
rflrob
> My iPod only holds 30GB of music, and I already have that much on there. So,
> every time I want to add a new album, I have to get rid of something else. I
> already chopped my music collection down to the 30GB limit in the first
> place. At this point, any new album I buy actually displaces an album I
> already know I love! That puts the price of discovery pretty high.

While I generally agree with the sentiment of the article, he really has
trouble picking which of the 16 days of music to take off? My iTunes is set up
to automatically load the most played couple thousand songs (4-5 days of music
or so), the most recently added songs, the most recently played couple hundred
songs, and then more or less randomly pick from the rest. There are songs I
haven't listened to in literally years, and I find it hard to imagine that I
will, while driving or elsewhere away from my computer, suddenly want to start
listening to them _right this instant_. Talk about first-world problems...

~~~
jbri
I _hate_ the term "first-world problems". It seems like _every_ time it's
used, it's in the manner of "I don't think this is an issue so I'll dismiss it
by comparing it to starving children in Ethiopia".

Corporations snooping on all your internet traffic? Talk about a first world
problem. Internet passwords being stolen? That's a first-world problem if I
every heard of one. Health insurance backrupting you if you actually need to
use it? _Puh-lease_ , just having health insurance means you've got it better
than most other people in the world!

Dismissing something as a "first-world problem" to imply that it shouldn't be
worried about is intellectually dishonest.

~~~
jcampbell1
> I hate the term "first-world problems".

It is not meant to be dismissive of arguments as much as self deprecating
satire. Cheer up mate.

~~~
prawn
Agree. In my circles, it's never dismissive but always a brief "If that's a
significant problem for you, you have it pretty good" distraction that the
group laughs about before returning to the discussion.

------
wordchute
The recording industry's bigger problem has been that for the past twenty
years or more, it seems to have gotten the idea that its consumer base
consists almost entirely of twelve year old girls, and at the same time the
bigger companies have been absorbing or destroying all the smaller labels that
actually produce the innovative music that people want to hear and would
willingly pay for. You know there's a problem when kids are saying that all
the new music is garbage and listen to music that was made before their
parents were born. That's not to say good music is not out there, it's just
really hard to find sometimes.

I have heard a few owners of small labels say that they actually welcome the
emerging distribution models, and if some of the music is downloaded or
whatever (within reason) then that's cool too. That means that they are
reaching an audience that is increasingly hard to reach, and so have the
potential to find revenue by less traditional means. So while the days of
super-bands are probably over, small labels and bands can actually make a
decent living now doing what they love to do - producing good music that
people like.

Consider this: most bands make their money through live performances and
licensing. When you look at the total record sale for a band like the Rolling
Stones versus their overall net worth, it becomes pretty apparent that,
considering their percentage of the sales, they could not have made all their
money by moving boxes full of vinyl, CDs or whatever. The same is true for
just about every artist you've ever heard of.

To the irritation of the big labels, though, these new models are quickly
cutting out the guys in the middle who don't really care about the quality of
the music. They don't seem to get the idea that if they made an effort to
produce a product that people want, then (surprise) people will but it.
Instead of putting a pile of money into five "artists" that suck, spread it
out to smaller projects that collectively do well - like the small labels do
it.

I actually heard one of these boring suits discussing the downloading problem
on a business program, and he said that if illegal downloading continued on
its present course then they would no longer be able to finance all the mega-
expensive music videos. All I can say to that is that we should all fire up
BitTorrent and make it happen.

------
gitarr
Everybody knows the record companies will fade away. It's not because of
piracy though. Two reasons that come to mind are that there are no more
physical "records" needed, and, that the quality of the produced music went
down the hill since the seventies. There are very few exceptions.

What's played on radio and music-tv stations nowadays is just bad and bad
music is pushed by the music execs to them.

Lady Gaga, Kesha, all the hip hop bullshit, all the alternative crap, most
rap, the black eyes peas (!!!) do I need to say more? That's not music, it's a
show to make money, and nothing more. No way I, or anyone else interested in
music would buy that.

I am a musician, I even studied music, and I cannot find a radio station with
proper music, I find some streams, the same way I cannot find a record label
to produce my music, they say it would be "too unpopular", I find some live
concerts though, which keeps me alive.

There is no room for just good songs anymore, so there is no room for the
record industry, who caused that.

~~~
gigawatt
I think there is actually MORE good music now than there was in the past
precisely because there is more music. For every Lady Gaga there is a
Radiohead, for every Kesha there is a TV on the Radio, for every Black Eyed
Pea(s) there is The Bad Plus. In the 70s, radio stations played Captain &
Teneille. The mass market drivel has always been there, you just can't look to
the radio for your musical discovery.

