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.
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.
"No longer will the labels be tied to revenue limited to sales of master recordings - by then most or all artists will be under 360 music contracts that give the labels a cut of virtually every revenue stream artists can tap into - fan sites, concerts, merchandise, endorsement deals, and everything else."
I'm betting by then such deals won't be entirely necessary or at the very least can be approached via a fee basis.
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.
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.
> Do a Good Thing today: convince a friend never to pay for recorded music again.
I do that already. My argument is that when the record companies are bribing governments into enacting bad laws. This harms others and is therefore immoral. When you buy a CD, you give moeny to the recrod companies, which helps them do this. Therefore buying CDs makes you complicit in immoral behaviour.
So it's not only in your self-interest to fileshare instead of buying CDs, it's the moral thing to do.
So basically, because the record companies lobby government, the public should engage in illegal behaviour.
News flash: most of corporate America engages in lobbying -- many industries far more aggressively and successfully than music. So if you think the music industry should be shunned for engaging in this activity, why not be consistent and avoid taking aspirin, paracetamol (pharmaceuticals: avoid), avoid using toilet paper (yes, those evil consumer staples companies also vigorously lobby government!), throw away your bank cards, ditch your car, turn off the lights (energy companies, y'know)... you get the idea.
Two wrongs don't make a right. I agree that the corporate interests play too large a role in the formation of public policy, and skew the process for the worse. But liberal democracies give us a forum to address that problem; that being recourse to our elected representatives. What you're advocating is a selective and self-serving lynching of certain industries.
As I mention elsewhere, if you don't agree with the music industry's practices or prices, then you have the right not to purchase (and listen!) to the music. Nobody's forcing you to listen to music -- you do it out of your own free volition because you like it, it gives you pleasure, it, in other words, has value for you. If you feel so strongly about the evils of the music industry that you can't fathom subsidizing some Big Bad Label by buying a CD or download of your favourite artist, pick up a guitar and play that whenever you want to hear music. But don't come here with some hare-brained argument that by stealing music you're doing a "Good Thing". That's just self-serving bullshit.
> On a less snappy note, I sincerely hope that these two-faced bastards
Less snappy? Am I missing the irony here?
If I understand correctly, the poster thinks paying for recorded music is bad. 360 degree plans? Nonsense that deserves to go out of business. But if a label can't charge for music, and obtaining revenue from other sources is also nonsensical, then pray tell, swombat, where is the money to fund promotion, recording, etc supposed to come from? Should it grow off trees?
> this time by making big payola payouts to music sharing sites
Err, what? It's the music sharing sites that pay the content owners for distributing their content, not vice-versa. And if you'd done at least a iota of independent research, you'd know that the majors (e.g. Warner with youtube) are unhappy with the arrangement because their revenues to date have been minuscule.
> The world doesn't need Big Labels - with or without free recorded music.
The funny thing is you're partially right here: with free recorded music, the world doesn't need labels (not just "Big Labels"), seeing as their raison-d'etre is the creation and monetization of recorded music. Which doesn't make the statement any less silly, paranoid, and juvenile.
The article claims that in a few years, recorded music will be free. Unless you plan on paying for free music (which seems difficult,) you will support artists by going to their shows, buying their merch, etc.
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.
> 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.
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?"
I don't care that much for concerts or merchandise, I'd rather prefer the artists to spend more time creating new recordings than burning out on tours.
You really think I'm going to stop paying for Matador and Merge records because some d-bag at EMI told Arrington they were eventually going to "free" their shitty American Idol music?
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.
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.
- 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.
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.
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.