It's past time that a major media outlet started taking a look at the tactics the RIAA has been engaged in - and kudos to BusinessWeek for breaking out of the pack and writing about it. I'm not a huge fan of the RIC laws, but boy - if anyone deserves to be put through that wringer, it's the RIAA.

Technorati Tags: RIAA, DRM, stupidity

If the music industry hasn't figured out that downloads are the only path to the future, maybe these numbers - representing January, 2008 sales of music - will make it clear (from Ars Technica):

When digital moves past Wal-Mart, maybe even the denser ones in the industry will start to figure things out...

Andrew Dubber has a great take on the "piracy" issue as it relates to music:

I'd also suggest that piracy is not something that tends to happen on the scale that the mainstream media seems to suggest. Unauthorised duplication goes on, but not piracy. The idea that these two things are the same is one that major record labels tend to be quite fond of, but it bears no resemblance to either external reality, or what words actually mean.

The key question to ask yourself is whether those unauthorized copies actually represent a lost sale or not. As Andrew puts it:

When asking "€˜Should I be worried about piracy?" the real underlying question is about whether there is a significant potential loss of income as a result of unauthorised copying. And here we're talking about what'€™s generally referred to as the "€˜Lost Sale"€™.

The one off copies aren't costing you much, and can't be stopped anyway - it's the organized, mass copying efforts (organized crime) that are a real problem. In general, when a copy floats to someone through a peer network, the liklihood of a future purchase of new music probably goes up. The person listening to music on the radio didn't pay directly, but the hope is, it will drive a sale. The same goes for peer sharing. The only thing lost is the ad revenue (and that was mostly a mutually agreed upon fiction anyway).

In the PR game, some people say that any publicity (good or bad) is a net positive. I wouldn't go that far, but with peer music sharing, it is true - the individual level sharing of music should be looked at as ad hoc marketing. The beauty of it is, you don't have to pay an agency for it, and it's almost certainly more effective.

Technorati Tags: sharing, peer to peer, copyright

Mathew Ingram is skeptical about the notion of a mandatory ISP tax to cover music. The industry backers say it's akin to the radio situation, but it's not:

Griffin says that “eventually” advertising might cover the charges, and those who wanted to surf without ads would have the choice to pay the fee. But it sounds like in the beginning the fee would be mandatory -- even for those who don’t do any downloading at all. Does that sound fair? No. We have mandatory fees for things like education and road-building, but I don’t think music licensing falls into the same category. What about people who pay for songs legally through iTunes -- do they get a free pass, or do they have to pay twice? Maybe Warner sees this as a way to put Apple out of business.

With radio, anyone listening to a station that plays music is getting the music. With an ISP, that's simply not the case, so there's a basic equity problem here. The industry is still casting around for a way to retain their current level of bloat, and it's just not going to work out.

Technorati Tags: copyright, law

The music industry is getting more reality delivered to them, from Wal-Mart: the retailer is telling the industry that $15.99 for a CD is ridiculous, and that a price cut will be coming - or else they can kiss shelf space goodbye. Why do they need to care? Rolling Stone has this:

In the past decade, Wal-Mart has quietly emerged as the nation's biggest record store. Wal-Mart now sells an estimated one out of every five major-label albums. It has so much power, industry insiders say, that what it chooses to stock can basically determine what becomes a hit. "If you don't have a Wal-Mart account, you probably won't have a major pop artist," says one label executive.

I think the labels are in the "meeting people on their way back down" phase. They didn't make any friends on the way up, either.

So much for the idea that it's about "protecting the rights of the artists"

Despite collecting an estimated several hundred million dollars in P2P related settlements from the likes of Napster, KaZaA and Bolt, prominent artists’ managers are complaining that so far, they haven’t received any compensation from the labels. According to a lawyer, some are considering legal action.

I'd call the RIAA a set of tools, but I don't want to insult the tools of the world.

It's practices like this that make the record labels look more like the mafia than like legitimate businesses - and the kinds of margins that they grew used to are what is breeding the desperation and stupidity:

Artists had to pay their own recording costs yet companies ended up owning the records. 'The bank still owns the house after the mortgage is paid,' is how Senator Orrin Hatch described it. Could we imagine film stars having to pay the costs of the movies they starred in and then giving the rights to the company that distributed it?

Artists also had to pay a packaging deduction of around 15 per cent. This, despite the fact that packaging rarely cost more than 5 per cent. The remaining 10 per cent was enough to pay the record company's entire cost of manufacturing the record. All in all, it meant an artist who sold 200,000 copies of a first album would still owe the record company although the record company had made a profit of a million.

As the Guardian points out, the multinationals that bought up the labels expected that kind of gravy train to continue indefinitely. The end of the road caught them by surprise, and they've sent the last half decade trying to stop the future from happening. As they die, the yelling is only going to get louder.

Technorati Tags: copyright, management

Mathew Ingram identifies the elephant in the living room for any streaming music service:

Although Rhapsody has a free, ad-supported version of its subscription service, the main offering is a paid streaming model, and both the free and paid services are of course all wrapped up in some tasty DRM. But the biggest problem with Rhapsody — and with Yahoo Music — is simple: Most people don’t want to stream their music like a radio station. They want to download it and do whatever they want to with it. Period.

This is why the current wet dream of the labels is ultimately doomed - Ingram is totally correct here, and they are chasing something no one wants.