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RIAA Sequentially Repeating Edison's Mistakes?
An anonymous reader writes "George Ziemann has written the latest installment in his 'history repeats itself' series of articles regarding the record industry and the tactics utilized by their lobby, the RIAA. This time Ziemann focuses on the recent RIAA lawsuits against individuals who file-trade, and the search-and-seize missions against independent music stores. Slashdot posted his first two articles back in June."
Interesting article, but I wonder why he left out the most interesting of Edison's anticompetitive actions. In Hollywood, it is legendary how Edison hired assassins to shoot his competitors movie cameras when they worked on location. He could have drawn a comparison to Orrin Hatch's proposal to make computers self-destruct when playing pirated tunes.
I understand the parallels that were made between the two, but I find the discussion a bit skewed. Edison was one who had the interest of people in his mind. The reason he had the money is because he gave the people what they wanted. He helped found an electric company that gave power to houses. He invented items that have become household standards. We owe a great deal of thanks to Edison. MPAA, on the other hand, cares about nothing but profits and ways to maximize profits. Time has allowed America to become a country that can ignore the desires of the common people while searching for more profits. Such a schema would never have worked in Edison's day.
A little learning never hurt anyone.
The RIAA screws the artists.
They steal their songs, they pay them a tiny fraction of what they make from them, and they exercise creative control through the use of unfair contracts.
The RIAA screws the retailers.
This is self evident, but in case you're not observant, the CD costs the record store around 85% as much as they sell it for. They dump products on the market in the forms of "deals" in order to bump up CD sales and manipulate music charts.
The RIAA screws the public.
We buy overpriced CDs for which we have no actual legal rights. Another industry would have been hit for price fixing, but since technically the RIAA isn't a company, they technically aren't a monopoly. We get treated like criminals for violating the monopoly they technically don't have.
And we're ripping THEM off? God forbid the world evolves and this 19th century shit they're trying to pull doesn't fly anymore. 110 years ago you'd have been trying to stop Ford from building his first car, so as not to put the horse people out of business.
What's happening right now is a direct result of their exploitive business practices. People are done whining about it, and they're making their displeasure felt in the only way that counts. Now the whiners are on the other side of the fence, and we're happy to tell you all the same thing you told us: Deal with it, because there's not a fucking thing you can do about it.
Just my opinion.
ad logicam Claiming a proposition is false because it was presented as the conclusion of a fallacious argument.
I own an independent record store, my margins are in the vicinity of 100%, and I've been increasing my product line by nearly double every 2-3 weeks just by buying two CDs for every one I sell.
Of course, I don't sell Sting or Britney Spears or any of that garbage. I send those customers to Circuit City or Borders.
I move product that you can't find in stores, and you can't even get easily on the Internet. My two big Internet competitors are Interpunk and Angry, Young, and Poor. They sell the CDs for $12-$13. I sell them for $15. We both buy them for $6-$8.
I also sell T-shirts, punk pins, patches, and hats. About a 100% margin there. I move music the same way the big labels do: I play a new CD over and over and over again in my store. I carry peripheral items as well, to attract a crowd. I offer compensation for customers who bring in their friends.
I sponsor events at local shows with local bands, and sell my merch there. I give a percentage to the local band, usually more than what the venue offers them for playing. I sell the bands' music directly on consignment, and keep just 15-20%.
And guess what? I make a profit. A pretty good one. Sure, you never heard of 99% of the bands, but does it matter when I am turning over my inventory every 45-90 days? I don't sit on a CD for more than 90 days, and if I do, I move it at cost and replace it with a different one.
Let the big guys control the big bands -- there's no profit in those guys for an independent store like me. I don't have any MP3s in the store. I don't have any CD-Rs. I don't even have a CD-Recorder in my PC at the store. I block Kazaa and other apps so my employees can't get me trapped.
This is a huge conspiracy that the RIAA is walking all over guys like me -- they're not. I find a market and I dominate it and I make money.
Would I make more if I sold Sting and Bush and Avril Lavigne? Maybe. But then I'd have to work by their rules, and I won't. So I accept the fact that I can't make 7 figures a year, but I'm on track to make 6. And if I open a few more stores (with great customer service, an awesome ability to promote new bands, and a friendly atmosphere that never feels like the mall) I'll only multiply my take.
Face it -- if you think you're in a bind, controlled by a monopoly, you don't realize the big issue: you have choice on what you carry.
I can make a buck. Go try it. You can, too.
Same for hockey last year--almost.
The Ottawa Senators are the lowest paid team, and came within one goal of making it to the Stanley Cup finals last year.
Even better, when the team declared bankruptcy in January, the players all received slips in their lockers saying they couldn't be paid that week. All the players shrugged and played anyway, putting the team above themselves. A real class act, especially compared to one of the New Jersey Devils' star players, who said that if he'd received a slip saying he wouldn't be paid for a week, then by God he wouldn't be playing for that week.
Remember how the RIAA was found guilty of price-fixing on CDs and settled?
This is a direct consequence of the settlement.
The RIAA maintained the effective price-fix by instituting a minimum advertised price rule. Stores could sell CDs for whatever price they wanted, but if the price they were advertising was above a certain threshold, the RIAA would pay for the advertising. This had the effect of keeping Wal-Mart and Best Buy from achieving a near-monopoly position in retailing (and thus being able to dictate to the RIAA in matters of content and pricing). Wal-Mart and Best Buy were planning to sell CDs at cost to lead to increased sales per square foot of the store (and generate foot traffic) and their plans would depend on being able to advertise $9 CDs (from a very limited selection; only the stuff that was new and exceptionally popular would be carried).
In order to prevent the big box retailers from taking over the retail market, the RIAA cut their legs out by giving stores that were willing to charge full price (and take a guaranteed profit) free advertising. This in turn kept the small stores and music specific chains in business.
Then Wal-Mart and Best Buy sued for price-fixing and won. The result since then has been even more more blandness in the recording business; with Wal-Mart and Best Buy accounting for greater and greater shares of the retail market, they will only carry CDs that will sell a lot of copies very quickly. Artists who only go consistently gold are getting pushed out because the retailers aren't interested.
Actually, if I were in their shoes, I would not do the same. I would make my product more attractive to my most profitable demographic: the teenager. The average teenager wants to listen to "kewl" music, to instant message, and to talk to their friends on their new mobile phone.
So make the music CD computer compatible. Embrace the new technology, rather than stifle it. Make the kids want to spend the $15 or whatever it is on a new CD, rather than download the CD from kazaa - make it worth their while to do so. Add value to the tracks.
How do they do this, you ask? Here's a few suggestions:
Rather than trying to "protect our artists' IP", the record companies should be trying to attract the buyers back that they are losing to p2p.
Rather than shipping deliberately broken CDs, they should be shipping CDs that are enhanced not just in name, but in content, so downloading mp3s and a CD cover is not enough to have the whole experience.
Maybe I'm old-fashioned, but I don't think you can sell more product by alienating your customers. You sell more by having a good product at the right price.
This is happening somewhat in the movie industry. Independent films have been gaining market share. The majors have insulated themselves by distributing the independent films and by the fact that a movie theater needs to fill seats, which leaves the independent film without a large advertising budget or an Oscar nomination without a home.
The only thing the RIAA has is the fact that radio sells records, and they pay Clear Channel enough money to keep independent records off the radio. This is why they attacked internet radio so much. It represents the ultimate loss of control. This is why they don't want to distribute tracks over the internet. Almost no physical costs means the barriers to entry are almost non-existent. They have to do so now because people are just downloading the tracks anyway. It will be interesting to see what the restriction on the internet retailers will be.
Of course the big concert halls will be still be owned by the corporations, and the children with their innate need to fit in will still beg their parents for 50 bucks to see the teen heart throb. OTOH, the kids can be smart. I remember a few years ago when our clear channel station that played music which was only minimally offensive to the suburban parent finally had to admit defeat to the Hip Hop revolution. The kids couldn't bring themselves to change the radio station, but they could certainly pick up the phone and complain that the station was pretty much the only station that would not play 'Stan'.
"She's a scientist and a lesbian. She's not going to let it slide." Orphan Black
Edison muscled people and companies with all of his patents, created an empire, and utterly failed. His inventions were extraordinary, but his business practices were unethical and illegal. Shit happened and his dreams for a movie empire died--as he tried harder to squeeze his competition, the more 'star systems' slipped through his fingers.
The RIAA is doing all they know how to do: stop people from using their product without paying them. Every stupid corporation does this; Edison is merely an example.
Everything in this article rehashes the same idea over and over. The RIAA is bad. People who try to dominate and extinguish like Edison and the RIAA are bad. Wow. Big deal. We all know this. Some article.
However, the way the author tries to absolve Edison in order to paint the RIAA in a dimmer light really diluted the message the author was trying to convey. Edison was a business man. In fact, he was a very poor business man. He corrupted, controlled, and muscled people around--he was a gangster with inventions and tried to corral his ideas with piles of money and threats. The RIAA act similarly in their actions to control their cash flow, yet they've invented nothing except a product flow of ooper-dooper profit. Edison is a poor analogy.
And here's another thing, Edison and his TRUST tried to extinguish those who refuse to pay for his equipment and Kodak film. Those people, (a large, ambitious Jewish community), moved far from New York to flee from Edison and his thugs: Hollywood. Eventually Edison's association was exterminated, after trying to decimate those Hollywood "indies" that this article's author likes to reference. These indies moved on and created this thing we like to call the MPAA. And you know.. they're great.
Anyway, blah blah blah.. ooga booga... i could fill up lots of crap and say the the same thing over and over but ive said enough crap all ready.
porp
I lived in Athens Ga. a few years ago. Many of the bands had sold more records in Europe and Japan than the U.S. If an artist directly (and digitally) sells 10,000 copies of an album globally for $5 (not unreasonable at all), they are doing better than they would pushing plastic locally or regionally in the U.S.
Sites like Magnatunetake care of bandwidth and billing for a 50% cut. They offer fans the option to buy albums on a sliding scale (pay anywhere from $5-$20. Eight bucks is recommended.) And they leave the artist free to enter into any other contract they choose (they can press their own cds or have a cool label do it.) MP3 and Ogg are available for free. Purchasing the album (i.e. supporting an artist you really enjoy) entitles you to uncompressed .wav or aiff
Weedshare.com also has an interesting idea--they pay fans to distribute music. Unfortunately, they only offer .wmv at the time and they seem open for abuse. Still, how long will it be before musicians establish something like affiliate programs. Maybe if fan sites kick over enough paying customers, they get a little cut of the moola (a la Amazon) At the very least, they could support their music habit.
These are interesting and exciting times. Independent producers are the real winners and video is right around the corner thanks to Apple&friends. Now, if only I could convince my local cable monopoly to just keep their boring channels and instead offer me a 20mbps internet connection ; )
harmonious design
The only problem is that this stuff has already been tried, and I can only conclude that the fact it's not all over the joint is an indication that it didn't help matters greatly.
I particularly remember the cheesy multimedia from the Christmas/Special Edition of Aquas Aquarium ( Jesus, there goes my credibility ), and including concert footage on CD's is likewise not incredibly uncommon ( I think Dreamtheater did this on the Live Scenes from New York disk ). Garbage also included a flash based "remixer" for Androdgyny on the special edition of 2.0
The biggest problem that your proposal ( which is cool, but I suspect unlikely to work ) is that the forms of value-add which are both attractive and cost efficient to provide are also generally susceptible to the electronic duplication that is the rationale for their existance in the first place.
I buy CD's because I want Mark Oliver Everett to keep making them. I don't buy them to shore up the RIAA or Dreamworks. But that's just the way it goes. I certainly would not feel more inclined to buy a CD instead of downloading it just on the grounds of some poster or cereal box trinket. I think a substantial proportion of music buyers might feel the same way too, because whenever I go to a HMV, Virgin or a local store like Spot or Rockinghorse, most of the people doing the buying are 20-50. What kind of a give-away are you going to package with Brahms or The Doors?
One god, one market, one truth, one consumer.
Similarly with ring-tones - send in a coupon you get with a CD, and the record company emails you a one-use password for a ring-tone for your mobile phone with the tune of one of the songs on the album. It also gets those teenagers onto your mailing list, which means you can send them more "special offers" etc as a reward for "supporting our artists".
As for the 20-50 demographic, I have no ideas on how to get them to buy more CDs, although I will say that I am in that particular (broad) demographic. I went into my local record store the other day with the intention of buying a particular CD, then when I noticed it had the "CD enhanced" logo on it, I bought a book instead. I've tried to find an email address for the particular record company to let them know that I didn't buy the CD because of their practice of crippling the CDs, but can't as yet find one.