
Big Music Will Surrender, But Not Until At Least 2011 - vaksel
http://www.techcrunch.com/2009/03/08/big-music-will-surrender-but-not-until-at-least-2011/
======
chris11
It's somewhat reassuring to know that media companies think p2p should be
embraced sometime in the future. But the RIAA's reaction is incredibly
shocking for a few reasons.

Pirates cost media companies some money.

So the RIAA sues people. This is understandable.

But they decide to go after more than just damages. This is also
understandable. I mean if you think someone is stealing from you, it's a
reasonable reaction not to want to do business with them ever again.

They write up a plan to make money off of p2p downloads. This makes sense,
piracy is not going to go away. Ok, their survival in the future might depend
on making money off of p2p.

They decide to wait to implement this plan. This might be understandable if
Big Music was just suing pirates for damages, say at max $2 per song.

But they are acting like they are trying to shut down p2p right now, so
basically they are suing their future customers. So I'm really surprised.

If you think of piracy as stealing, think of it like this. It's like a grocery
store owner who has a problem with people stealing produce. He can't stop
people from stealing, and if you do steal you are almost guaranteed to get
away from it. So the owner sues anyone he catches, and tries to get 750x the
value of the stolen goods ($750 is the minimum penalty per instance of
infringement) to discourage stealing.

But then the store owner thinks up a way to profitably give away produce for
free. He then decides to wait to implement this business model until nobody
buys produce from him anymore.

Now a few years pass and giving away produce is an acceptable and viable
business model. Now how well is that grocery store owner going to get people
to support him. I can just imagine a startup's advertising campaign: "We'll
give you our fruit for free. Sure you can get it for free from a bigger
competitor, but that company is the same one who decided that taking one apple
was worth a $750 fine."

That grocery store owner is now only going to be able to get supporters in
three cases.

1\. He has a monopoly on a specific fruit. (Basically this would happen if the
big media companies had signed all the decent bands in one genre).

2\. He gets money no matter which store a person gets their fruit from. (So a
360 contract, you support a specific artist, you support Big Media).

3\. He has more stores, so he is more convenient for the majority of people to
support.(P2P is incredibly convenient, so this would only apply to people
afraid of downloading viruses from a p2p network).

4\. His supporters have never stolen fruit from him, or thought that $750 was
a reasonable fine. (So you haven't ever pirated music, or you think the
current lawsuits are reasonable).

Big media is just like that grocery store owner. They are actively going after
an entire generation in a way that basically attacks that generation. The
register did a survey where they found that the average teen has pirated 61%
of his MP3 collection. And now they think that in a few years that generation
will actively support them.

Register Survey: <http://www.theregister.co.uk/2008/06/16/bmr_music_survey/>

Wharton article on not suing your
customers:<http://knowledge.wharton.upenn.edu/article.cfm?articleid=863>

------
pg
What their spreadsheets don't consider is that the world could change while
they're delaying.

These non-technology people don't understand the speed of change or the danger
of delay. That was what hosed Terry Semel, apparently. While he was trying to
buy Google and Facebook, they were both growing rapidly. He was used to buying
stuff whose value didn't change fast, like movie rights. But technology
changes fast.

~~~
swombat
And I hope it does change. Taking a cue from BSG, "It's not enough just to
survive, one has to be worthy of survival." Some industries are blatantly not
worthy of survival. I will not shed a tear when the last major record label
shuts down.

~~~
cabalamat
> _I will not shed a tear when the last major record label shuts down._

I'll be positively ecstatic!

------
mixmax
If I understand correctly the businessplan goes like this:

1) Keep alienating consumers and digital music outlets with courtcases and
other mafia-like behaviour until CD-sales approach zero. Make a bit of money,
and since music is going to be free anyway, who cares if consumers and the
future marketing channel hates us.

2) When CD-sales are low enough give the music away. The sites we are now
suing will play along once they get our stuff for free. And those guys over at
Apple don't know what they're talking about when they tell us that consumers
will gladly pay for music if it just works. We don't really believe that they
have digital music sales in excess of $1 billion.

3) When we can't make any more money from CD's well change to 360 music deals,
and we'll get a cut of merchandise, live events, etc. Of course well have to
find out how to do world tours and other stuff we haven't got a clue about,
but we'll worry about that later.

4) During the roll-out of the above we will ignore the fact that artists hate
us and are fleeing our labels. They'll surely come back once we get our new
business model going.

I mean seriously - is this the best they can do?

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swombat
_Until CD sales really stagnate, all those revenue streams bring in more money
than facing reality._

Sounds like it's urgent for CD sales to really stagnate. Do a Good Thing
today: convince a friend never to pay for recorded music again.

On a less snappy note, I sincerely hope that these two-faced bastards will go
out of business, along with their "360 plans" and other nonsense. The world
doesn't need Big Labels - with or without free recorded music. Their only
survival tactic is basically to maintain a cartel-like control over
distribution - this time by making big payola payouts to music sharing sites.

I don't see why anyone should feel even slightly inclined to support that kind
of mindset.

~~~
nickh
> Do a Good Thing today: convince a friend never to pay for recorded music
> again.

If you do that, how do you plan on showing support for artists whose works you
enjoy?

~~~
ciscoriordan
Concerts. Merchandise. Tipjoy.

~~~
seertaak
Concerts: so if I understand correctly, paying for concerts is morally
justified as opposed to paying for recorded music -- which apparently is
_wrong_ \-- because... you're confronted with a threatening-looking bouncer if
you attempt to jump a fence? Honestly, I admire the chutzpah in the finger-
wagging at record labels when the proffered philosophical justification
essentially runs: "I can get away with it. Ergo it's ok." That's _deep_ , man!

Merchandise: SRV dolls, anyone? There's no question that money can be made
through merchandising. But anyone who thinks this is going to work to the
_advantage_ of real acts consisting of real musicians who aren't photogenic
and doll-able etc., as opposed to say your next class of X Factor, is living
in la-la land. Or, for that matter, that merchandising can act as a substitute
for the revenue streams that recorded music sales once provided.

Tipjoy: seriously though; you're kidding, right? _Tipjoy_ is your answer to a
50% fall in revenue for recorded music in less than a decade?

Can I just suggest that all you armchair record execs put your money where
your mouth is and create this awesome benevolent no-label label which only
pushes, y'know, cool music, and makes lots of money doing it but doesn't do
anything nasty like asking you to pay for it?

Is everyone here so arrogant as to think the entire music industry consists
solely of fat buffoons who are simply lacking in vision or technical know-how
to find these el dorado musicbiz 2.0 revenues?

Recorded music takes huge time and effort on the part of a wide range of
individuals, all specialized on different aspects of the production. From
songwriting through arranging, recording and mic placement and the myriad
expertises that this requires, through mixing, mastering, etc.. You're telling
me that all of this has no value? As a singer-songwriter in a band who loves
music as much as programming let me just say: you, sir, are cheap.

~~~
cabalamat
> _Recorded music takes huge time and effort on the part of a wide range of
> individuals, all specialized on different aspects of the production. From
> songwriting through arranging, recording and mic placement and the myriad
> expertises that this requires, through mixing, mastering, etc.. You're
> telling me that all of this has no value?_

It has the value, in the market sense, of the amount of money someone is
prepared to pay for it. If people aren't prepared to pay enough money for some
musicians to make a living as musicians, they should get another job instead.
The world doesn't owe musicians a living.

~~~
seertaak
Musicians don't think the world owes them a living. In fact I can scarcely
think of an endeavour which requires more individuality and self-reliance than
music. Your callousness ("they should get another job instead") and propensity
to attribute sloth and recidivism to us, when all we're asking for is that
people pay a fair price to listen to the music they love, is unseemly and
saddening.

As for your facile lecture in economic theory: the problem, quite simply, is
that people "aren't prepared to pay enough money" because they've grown
accustomed to acquiring their music through illegal means (partly, admittedly,
as a result of missteps from the industry itself). By your argument, whenever
we encounter a situation where the technology is such that copying can occur
at zero-cost, we should just throw are hands in the air and say "that's it,
there's nothing we can do: economic theory dictates that this has no value".

By that argument, Microsoft Windows or Office has no value; its price should
be zero. There should not, in fact, exist software whose price is non-zero.
Movies, too, should not cost anything. They should be given away for free in
stores, because you can copy them too.

But why stop there? Why enforce property rights at all? After all, it requires
a massive investment in the form of a police force to stop or dissuade me, for
example, from burgling your home. Stopping property theft requires political
will. Intellectual property enforcement is different in practice but not in
principle. The goal has to be to raise the cost of downloading music illegally
until the majority cease to do so and purchase it through legal means.

In the final instance, if a potential customer thinks the prices charged for
CDs are excessive, he/she has the right not to listen to them. But if he/she
chooses to listen, then damn straight they'd better pay the asking price! --
as I mention above, massive amounts of effort, blood, sweat, and love went
into creating it. It is right and proper that that work be rewarded.

In conclusion, the public should pay for albums, not because he/she "owes it"
to the musician, because by not doing so (and still listening to the album, as
several people on this thread have advocated), you're taking away the freedom
of the musician to set the price of _his/her_ music as he/she sees fit.

It's as if you ran into a Luis Vuitton store with a gun and said: "Your prices
are too high! Give me that handbag for free!" Nobody in their right mind would
defend that behaviour, even if there's general agreement that said handbags
are over-priced. The reason is that it is Luis Vuitton's right, as the maker
of the handbags, to determine what the price for them is; not yours as a
consumer to demand a certain price and steal it if you don't get that price.

Again: we're saying: "I think this CD is worth 8 pounds. If you want to listen
to it, pay me that amount. If not, then don't listen to it".

There are many ways of obtaining music legally now. I live in the UK, and pay
ten pounds a month to use Spotify (which I heartily recommend, it's an awesome
program and works even works on Linux with wine), and I pay another ten pounds
to use napster.co.uk (which lets me listen to their _entire_ catalogue from my
browser). Or I can get the music through iTunes. Or amazonmp3. Or if I'm a hi-
fi purist, I can buy the CD.

If you're too cheap to pay 10 pounds a month to have legal access to a massive
catalogue of music, then just admit it -- spare us musicians your hypocritical
self-righteousness. You basically admit you steal music, and then you have the
gall to lecture us about "owing us a living". To paraphrase the Arctic
Monkeys: "Who’d want to be man of the people with people like you?"

~~~
seertaak
Shameless plug:

myspace.com/thesignalsuk myspace.com/martinpercossi

That's the music I'm writing when I'm not programming! [You'll note that I
don't benefit from the recording expertise I mention above ;) ]

------
melvinram
My response on TechCrunch website:

Hmm sounds like they really are waiting for 100% of the artists to be under
the 360 contracts first before proceeding to a new business model.

This seems unwise. If they wait 5 years, the patterns of discovering new music
will change drastically and they’ll miss out on the power of momentum.

Today, YouTube & social networks are becoming great ways of discover new
musicians. If this pattern continues to evolve to become habit, the role of
labels will begin to shrink… and so will their ability to negotiate with
artists.

It’s likely that there will always be packaged artists like Britney who don’t
have a musical fanbase before the labels get a hold of them. They’ll likely be
the bread & butter of labels but artists that come with a following of 100,000
subscribers on YouTube will expect different treatment/contracts.

Labels should consider developing partnerships in a way that allows them to
add value to both, the distribution partners and the artists… beyond just
managing rights and collecting money.

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old-gregg
So their customers will continue to be artists. But what makes them believe
artists will continue to need big labels' services in 2011 as they've been
needing them in the past?

I am just failing to comprehend where do they add value. Marketing dollars? I
don't see anything beyond that. And if that's true, how is it different from
VC-startup model then?

Labels appear to be just investors who ask too much in return and the only way
they "die" is when more effective "investors in music" appear, and now,
suddenly, it appears that their "death" isn't about distribution channels at
all.

~~~
seertaak
\- they act as a filter for good music, or at least, music that is likely to
achieve commercial success. Take MGMT. Two college guys with good ears put out
a demo and basically forget about it. An A&R guy hears it, likes it, and
travels out to NY in search of these two college kids. Eventually, he finds
them and offers them a deal. 6 months later, Oracular Spectacular starts
conquering the airwaves with hits like Kids, Time To Pretend and Electric
Feel. If the record label hadn't stepped in, it's very unlikely that they
would have broken through.

\- Contacts with producers. A good label will have the wherewhithall to get a
big name producer on board. Take, again, MGMT, where Dave Fridmann did an
excellent job of capturing their far-out, spacey sound.

\- Contacts, contacts, contacts. With promoters, with music publications and
reviewers, with studios, with other musicians, etc.

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biohacker42
Don't sign 360 contracts.

