

Why Google Should Buy the Music Industry - gammarator
http://opendotdotdot.blogspot.com/2011/04/why-google-should-buy-music-industry.html

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ethank
A few things, and I'm speaking as a (now former) major label executive:

Google should not buy a label or a music company. It wouldn't make sense at
all. The friction going on right now is because Google views music as
something that the labels don't. They view it as data that makes their device
better. The music industry views it as intellectual property.

I side with Google on this, depending on WHAT Google wants to do with the
data. If they are common carrier, locker in the sky. Great. But as soon as
they use it as a means of advertising/marketing (a la Youtube) they are
stepping into waters that the RIAA has nothing to do with. It's just normal,
silly US copyright law and the contracts that our heroes the artists signed.

On the other side, imagine if the labels went to Google and demanded all their
source code so they could setup their own internal Google and make them some
money that way, to add value to their technology. Just as silly.

The other thing: don't conflate the "Music industry" with the big 4. They are
not one and the same. The Music Industry is a HUGE thing that uses and
represents the most long lasting of culture artifacts in terms of
marketability. It includes Spotify, Soundcloud, Songkick, Hypemachine, Big
Champagne, CrowdSurge, Apple, Google (through YouTube right now), Amazon, etc.
Then the management companies: The Firm, The Collective, QPrime, Red Light. A
vast space.

Some operate on the infrastructure level, some license content, some fill
voids and some you've never heard of.

That being said, the future of the music INDUSTRY is the disintermediation of
the big 4 by means of a restructuring of what they do. Artists don't need them
if they don't want them, and certainly the companies that make up the industry
know this (see Fanbridge, TopSpin, etc).

The industry in the last two years has diversified substantially. The real
power is transferring to management companies, startups, distribution, artist
services, open-source technology and API based business development.

What will happen to the big 4, and starting with 2 (WMG and EMI) is new
owners, and hopefully an entrepreneurial sensibility informing their
restructuring. They need to be nimble, technology forward, representing their
artists using technology and manning up when it comes to the value of their
content (because there is value, and "free" is value if done correctly).

Anyhow, blog posts for another day.

~~~
fletchowns
What do you think about Steve Albini's rant on the music industry? Has the
distribution of who gets what changed much in the last 20 years?

<http://www.negativland.com/albini.html>

~~~
ethank
To a degree the broad points are still valid. However the economics are a lot
more complicated now because of 360 deals.

A while ago, labels realized that if they were investing a lot into a band on
things like art, tour support, promotions and marketing, it was silly when
other third party companies made the money, often with worse splits with the
band.

360 or all-rights deals mean that the label helps with all aspects of the band
from Fanclub to touring and publishing, and splits profits, usually 50/50 on
all but recorded music (which has different splits)

So basically the band an label are in a agency/client model. This is great if
the label can deliver on the promise of the deal. That is why I was brought
into a label, for in house tech. Not happening as much right now but that can
change.

This is a similar way CAA and William Morris work. Shared risk/reward and if
done properly on both sides can leads to more incremental gains earlier and
with less upfront spending.

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SkyMarshal
I wish Google would find a way to undermine the music industry instead.
Actually Amazon may be better positioned for such a move.

I am not an expert but it seems the basic trade the music industry offers
artists is, recording, publishing, distribution, and promotion in return for
ownership of the artist's work and a huge cut of the revenues.

It's always irked me that artists are forced to sign over the fruit of their
labor, talent, and passion. I wonder if there's not an alternative deal where
the artist gets the same benefits but also keeps legal ownership of their
music, perhaps in exchange for an exclusive license or increased revenue
share.

It would be cool to see something like that pull the proverbial rug (the
artists) out from under the music industry.

~~~
njharman
> undermine the music industry instead

Digital distribution (aka the internet) has beat them to it. It's just not
clear because of the legal distortion field IP lobbyists have created.

~~~
SkyMarshal
> legal distortion field IP lobbyists have created.

Yeah, that's the part I hope there's a way to undermine. Pull the IP rug out
from the music industry and they're done.

~~~
ethank
And what exactly does "they're done" get you? How far do you extend the IP rug
pulling?

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inkaudio
Google cannot buy the entire music industry because the music industry is more
than the so called major labels. That said, Google or even Apple\Microsoft
could buy the all the major labels from their respective owners, if they
wanted too. Especially EMI and WMG

Please read:

[http://www.nytimes.com/2011/04/11/business/media/11warner.ht...](http://www.nytimes.com/2011/04/11/business/media/11warner.html?_r=1&ref=business)

Warner music group is currently for sale and EMI is available if the right
offer comes along.

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taylorlb
Except that no one company could ever get approved by regulators in the US or
EU to purchase ALL the major music companies. It would be extremely unlikely
that Google would even get approved to purchase the two that are up for sale
already.

~~~
gte910h
But google AND amazon could buy them all.

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bf84
"...the music industry is economically quite small and unimportant compared to
the computer industry."

For some perspective, the largest label groups in the "music industry" are
owned by corporations that are bigger than Google. Universal: owned by
Vivendi. Sony Music: owned by (guess who). EMI: owned by Citigroup. Not
exactly small economic players...

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larrykubin
Sony (market cap 29 billion) is bigger than Google (market cap 170 billion)?
Google has 35 billion cash in the bank.

~~~
latch
So it would take all of Google's cash on hand to buy 1 player (assuming they
could even pull it off). It isn't like google's market cap is something they
can liquidate or even really make any significant usage of.

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wmf
If you want Sony Music you wouldn't buy all of Sony. Of course, these
conglomerates may not be willing to sell off their "money-losing" record
labels.

~~~
reeses
Definitely not Sony. How would they find artists to put onto
minidisc/atrac/doomed-technology-de-la-décennie?

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skymt
Google really doesn't need to attract any more antitrust attention right now.

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drivingmenuts
A better article would be "Why Google should pay to have the music industry
killed painfully and slowly".

 _That_ I could get behind.

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ph0rque
The music industry is pretty good at dying slowly itself... and painfully, for
some values of pain, I suppose.

~~~
drivingmenuts
It's a bit too slow and not nearly painful enough.

I want to hear all those useless executives screaming in agony.

It's time to bring back impaling.

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melvinram
Not exactly the best use of money. It would be kind of like Time Warner buying
AOL.

~~~
erikpukinskis
It would be more like AOL buying Time Warner, which would've been a very
different transaction.

~~~
JMiao
aol _did_ buy time warner.

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joe_the_user
It's not so much that the music industry is large as such.

It is that the music industry something like a token in the game of control
proprietary content. Music is something of a thin wedge for showing the
ability to deliver highly valued content - Look at what Apple's iPod brought
it and indeed, would Apple ever want a rival control the rights to the content
it has mastered selling?

Possibly, the recording industry of something of a stand-in for the movie
and/or television industry, an industry which is not small by any stretch of
the imagination. And the movie industry, gigantic as it might be, is something
of stand-in for proprietary control of popular culture...

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StuffMaster
The music industry's legal canines need to be sawed off, one way or another.

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jnhnum1
In what possible way could ease of licensing be worth $29+ billion?

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mryall
The music businesses wouldn't be worth anywhere near that much. And it would
help Google's goal of making the world's information universally accessible
and useful.

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FireEatre
Wow another ridiculous blog post! And on HN! Fuck you for wasting my time.

~~~
patrickk
Feature suggestion: a time delay on new accounts being able to post a comment.
Would prevent trolling like this.

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JMiao
"if all you have is a hammer, everything looks like a nail"

