UK Music Label CEO Still Doesn’t Get It

In yet another attempt by a major music label to justify it’s continued existence, the CEO of the UK label BPI has written a rather pathetic, rehashing of the same old arguments against file-sharing masked as a look back on the ten years since Napster changed everything, forever:

Many critics have argued that the music industry could have avoided some of the problems it faces today if we had embraced Napster rather than fighting it. That’s probably true, and I, for one, regret that we weren’t faster in figuring out how to create a sustainable model for music on the internet.

Ok, I’m listening.  Tell me what how your new vision and understanding will translate into a new busines model that takes advantage of, instead of fights futilely against what the internet does best:

But this innovation, and the vital investment by labels in new music, is constantly undermined by the various P2P successors to Napster. These companies take and exploit what musicians and artists create, without being honest enough to reward them. And the publishers of books, journalism, films, TV programmes and other media are now lining up with us in the fight against illegal downloading.  Like us, they see how it will destroy their ability to create new content. So we are united in calling for ISPs to play a more positive role in steering consumers towards digital services that reward creators.

Oh, wait, you don’t want to change anything AND you aren’t even remotely listening to the issues and complaints by some of music’s biggest acts including Radiohead and NIN.

Well, maybe you’ve at least moved beyond thinking that the future of the music business will be driven by album sales:

It is true that some people use P2P for music discovery and spend more on music as a result, but in the aggregate they are heavily outweighed by the number of people whose downloading substitutes for purchases. If the reverse were true, our business would be booming and not contracting right now.

Christ, you still think you’re business is collapsing because of pirates?! How about your insane treatment of fans as criminals?  How about your insistence on raising the cost of an album even while the cost of making and distributing that album has plummeted?  How about all the artists that have been screwed by devious contracts and cheating accountants?

Once again, the music industry demonstrates why they will not be long in this new world.

Universal Teams with Virgin UK to (almost) Give Away Music

Lots of reports out there about the Universal Music deal with Virgin UK’s ISP:

The service — a world first — will enable any Virgin Media broadband customer to both stream and download as many music tracks and albums as they want from Universal Music’s entire catalog, in return for a great-value monthly subscription fee. Downloaded music will be theirs to keep permanently and to store on any MP3 compatible device.  LINK

I haven’t seen firm pricing but I have heard something in the range of $15-$40/month.  Now, this is by far the cheapest offer so far from a major label especially when you consider that a really dedicated subscriber could easily download a few thousand songs in a month without breaking a sweat.  Remember, this isn’t just unlimited streaming, it is unlimited download-to-own forever MP3’s.

There are still a few big problems, however,  While Universal is a huge label it is not clear that just getting access to their catalog is enough to put a dent in P2P file-sharing.  Even if all the labels join, it is still a deal only going out to users of Virgin’s ISP service.

Still, this is one big step closer to an ever more likely result – a blanket subscription fee that we all pay via our ISP in exchange for the free and legal right to download all the music we like.  For this sort of deal to truly compete with the current option (i.e. free piracy) it will have to be much cheaper than I imagine the labels will be able to swallow and it will have to make all the music easily and quickly accesible.

This might solve the problem of everyone downloading music for free but it will never come close to replacing the revenue lost from traditional album sales. So, at best, these sorts of deals are just bandaids over bullet wounds.

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Music Industry “Caves” to Chinese Pirates

The New York Times has an interesting article about a plan from Google and the Major Record Labels to distribute their music for free in China and make their money solely through advertising.

Why would the labels just cave in like that in China while their still dragging American’s into court for downloading a pirated Jay-Z track?  This pretty much sums it up:

According to the International Federation of Phonographic Industries, which represents the global record makers, 99 percent of the music downloaded in China violates copyrights.

Lawsuits by major music labels and promises by the Chinese government to crack down on Internet piracy have failed to deter the practices.

Gee, this sounds oddly prophetic when you think about the state of the music industry in the US and Europe.  So, this revelation that you can’t sell songs for a profit and need a new business model that offers the music for free must be a sign of what’s to come here, right?  Well, not according to the industry execs:

…they say the China deal is not a model for the rest of the world. They say different regions call for different approaches — some that charge for downloads, some that stream music for a single subscription price and some that are supported by advertising.In China, they decided an advertising-supported model was best.

Exactly what makes these execs think that they can quarantine segments of the internet from region to region?  Yet more pie-in-the-sky dreaming or total misunderstanding of how the internet works?

It is difficult to see how this decision in China will not basically force the music industry’s hand worldwide.  The truth is, they’ve been losing on all fronts simply because they refuse to let go of a dead business model.

LINK

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ManiaTV Takes a Shot at Being a Music Label

PaidContent has a bit of information about ManiaTV’s latest venture, an attempt to reinvent what it means to be a music label:

it’s jumping into the music business with a new show called Making the Music, which effectively seeks to take over the role long played by the music labels. The original series is focused on hip-hop producer Scoop Deville as he works on a new album—and maniaTV will get a cut of the revenues once the LP is released.

The idea is that Scoop et. al. will be able to use the social media aspects of show as a way to test-market and hone their final product.  Of course, this only works if people tune in and get involved.

I am always interested in new takes on music production and promotion and this is certainly an intriguing idea.  One does have to wonder, with LP sales decreasing pretty steadily, if getting a cut of the record sales is really worth all that much.  Maybe they are cut into the other potential revenue streams such as licensing, touring and merchandising?

Atlantic Records Goes Hardcore Digital and Beats Expectations

Image via Wikipedia

Seems like all I am doing today is citing the NYT.  Maybe they hope that by actually covering the internet they can remain a relevant media outlet…

Anyhow, they have another piece about the challenges facing the major music labels in the digital age.  This has been discussed ad nauseum but they do highlight one fascinating fact that ArsTech also picked up on: Atlantic Records became the first big record label to make more money via digital sales than via CD sales.

The interesting thing to note is how this was accomplished:

“In making that transition to a digital business, the music business has become immeasurably more complicated. Replacing compact disc sales are small bits of revenue from many sources: Atlantic Records’ digital sales include ring tones, ringbacks, satellite radio, iTunes sales and subscription services.”

It used to be much easier to be a record label – just sell records.  Well those days are long gone and for the labels that refuse to accept that fact it’s going to be a fast trip to backruptcy.

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Wrigley’s Buys Chris Brown for a Song

WSJ is reporting that Wrigley’s (the gum people) are going to announce tomorrow that they are the sponsors on R&B singer Chris Brown’s top 10 hit “Forever”

“Sharp-eared pop-music fans may have noticed a brief reference to an old chewing-gum jingle buried in “Forever,” Chris Brown’s top-10 hit. “Double your pleasure/double your fun,” the R&B singer croons in the chorus.

What listeners don’t know — and what Wm. Wrigley Jr. Co. planned to reveal Tuesday — is that the song is a commercial.

“Forever” is an extended version of a new Doublemint jingle written by Mr. Brown and scheduled to begin airing next month in 30-second spots for Wrigley’s green-packaged chewing gum.”

Many, like Gawker, are up in arms, saying:

“This was all done in secret. Tomorrow the company holds a big press conference revealing the whole scam, presumably with the expectation that music fans will clap with delight and declare Wrigley to be their new favorite gum manufacturer. I would suggest that the more fitting response would be a bonfire of Doublemint, angry sloganeering, and boycotts of the company and Chris freaking Brown and his record label.”

Personally, I’m not sure what the big deal is.  First, we all know people would much rather not pay for the music they listen to but the musicians still have to make money somehow.  Second, how different is this from having an existing song used for a commercial campaign. If we start condeming every band and every product that has worked together there wouldn’t be much left.

Maybe it is the lack of transparency that folks find upsetting.  That’s understandable but it’s still not a reason to start a revolt.

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Nine Inch Nails and “Fun” in the Same Post

Nine Inch Nails, and Trent Reznor in particular, has been a pretty outspoken advocate of ditching the “major labels” and embracing digital distribution and all of its opportunities and challenges.

TechDirt has a great update of the some the band’s schemes, including hiding tickets around LA and posting coordinates on their website.  Of this, TechDirt says:

“While it may be a little silly, it is yet another way for Reznor to build up a really loyal fanbase. He’s making being a fan fun.”

I think that’s a brilliant observation.  They’re making being a fan fun.  Think about that.  How often are things about being a fan not fun?  Standing in line in the rain is not fun.  Having to deal with TicketMaster is definitely NOT fun.  By making “fun” a key part of being a fan, Nine Inch Nails is showing just how they’ve remained relevant for so long in such a volatile market.

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Merlin is a New Model for Label Success

Merlin is a very cool company that is succeeding with a new model for success as a “major label.”  Unlike traditional labels, Merlin actually represents a huge number of indie labels under a single banner (via ArsTech):

“Merlin isn’t a “real” label in the sense that it doesn’t do business the same way. The group negotiates licensing arrangements on behalf of its members so that small labels can get the benefits of a more sizable organization, but Merlin does not take any control of copyrights and does not do marketing or promotion.”

This is a great example of building a business model in response to current conditions.  Instead of desperately trying to hold onto the old model where making money was about selling albums, Merlin saw a need a provided a solution.

The Majors could learn a lesson from them…but they probably won’t.

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