Slashdot Mirror

← Back to Stories (view on slashdot.org)

Napster Cuts Deal With BMG

Posted by Hemos on from the it-was-inevitable dept.

n8willis writes: "According to a Reuters story I caught on Excite this morning, Bertelsmann AG (owners of BMG among others) has agreed to drop its lawsuit against Napster in exchange for equity in a new 'membership'-based music service to be jointly 'developed' by the two. This 'service' will allegedly be 'secure.' Anybody smell membership 'dues?'" Probably inevitable for Napster to cut deals a la MP3.com -- but the implementation of this joint project will be the thing to watch.

2 of 149 comments (clear)

  1. Re:I wouldn't necessarily assume you'll have to pa by ToLu+the+Happy+Furby · · Score: 5

    Correct me if I am wrong, but isn't BMG one of the CD clubs that you purchase a dozen CDs for some price and you don't have any further financial commitments (as compared to some others where you have to purchase a certain number of full-price CDs within a certain time frame)? They might keep it free and load you up on ads or make money selling demographic information about you instead.

    BMG is a major record label. They run the BMG CD club, just like Columbia, another major label, runs Columbia House.

    Ironically, it is these CD clubs, not Napster, which are stealing from artists. When you get your 12 CDs for 1 penny, those CDs don't just come free from the sky--they come directly out of the artist's pockets.

    Yes, that's right. Not only is the artist not making any money (like Napster), they are actually losing it when you order their CD from a CD club. All those CDs are chocked up as "marketing costs", and billed to the artist--along with recording costs, studio time, tour costs, and other promotional costs. (The musician pays every last cent of the cost of recording and selling their album, but the label, not the artist, owns the copyright on their work.) Meanwhile, the label--not the artist, mind you--makes a huge profit by tricking people into paying for all those extra CDs that come along with membership. (For those who don't know, you don't have to pay for anything you don't order; just send it back.)

    And finally, unlike Napster, no one who rips off a musician by ordering their CD through a CD club ever goes out and pays for it, because they already have the real thing. A disgusting practice, all in all--one which Napster was helping to end.

  2. Won't Ever Work by burris · · Score: 5
    These membership models are doomed to failure. It's likely that the RIAA will demand only "blessed" MP3's be avialable from the service, there goes the availability of obscure music. Further, it's possible that the RIAA will demand that only "SDMI friendly" formats or whatever are used, there goes the convenience of MP3. ...and how will the money be divvied up anyway? If it's a fixed monthly memebership, then you can bet that the wealth will be distributed according the statistical "Business As Usual" method that will continue to line the record company and a few ultra-famous artist pockets while further marginalizing the little guys.

    In any event, nothing will stop people from trading the music on free networks.

    Record companies are still focused on the way they made money in the old days: controlling distribution and charging for every copy made. They seriously do not understand that they have lost control over distribution forever. Instead of expending so much time and energy trying unsuccessfully to control the flow of data throughout the 'Net (impossible), they should concentrate on making it as easy as possible for people to compensate the artists after they download music, no matter where they get it from. Directly compensate the artist/publisher for music you like. If your friend e-mails you an MP3 and you hate it, should you have to pay anyone for it? Hell no! You took nothing from them.

    If it were as easy clicking a button on your MP3 player to send a 'tip' to the artist/publisher, people would do it. After all, everyone knows that artists have to make some money to keep producing art. People trading MP3's want to give money to their favorite artists, the problem right now is they cannot! About as close as you can get right now is to go buy the physical album or go see a concert and/or buy t-shirts and whatever. What if you live in Abu-Dabi and can't buy the album or go see a concert? Centuries of experience with busking and recent tipping experiments on the net (such as Steven King's _The Plant_) show that people will compensate artists if they like what they hear.

    Let's face it, the 'Net provides the opportunity for more music from more artists to reach more people than ever before, for almost no cost to the artist/publisher. Instead of capitalizing on the inexpensive and efficient flow of data on the 'Net, the RIAA is trying to restrict it. It won't ever work and they will loose out as a result of it.

    Setting up compensation systems for artists/publishers will be a long and political process, but people are working hard on the solutions.

    Burris