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Music Labels Charge Too Much For Microsoft
Bret540 writes "Yahoo is reporting that Microsoft has ended license talks with four major music labels. From the article: 'The paper [the Wall Street Journal] reported negotiations broke down Friday over what Microsoft considered high royalty rates.' How much more can the music labels demand when even Microsoft won't go to market? With other recent developments, one must wonder how long the music industry can keep pushing."
It's pretty bad when a company that lost $8 billion breaking into the gaming industry says you're charging too much.
FanFictionRecs.net
What's the difference between a record company and Microsoft? I'll tell you: One is a monopolistic leviathan, saddled with an outdated business model and unfairly, perhaps illegally, leveraging a chokehold on one market to try and take over another, desperately afraid of emerging free alternatives and assailed by customers for ridiculously high prices and shoddy quality. The other ... hmmmm, let's try this again.
What's the difference between a record company and Microsoft?
I'll tell you: One will be entirely bankrupt in 10 years, while the other will at least limp along selling a Flight Simulator.
Payback's a beeyotch, INNNIT??!!
There are three good reasons why the music industry wants third party online services to fail.
First, imagine if a service such as iTunes became very successful. For example, 50% or more of all music sold was sold via iTunes. Now imagine you're a successful musician and it's time to resign to a label. Do you sign or do you get a marketer and simply sell your tunes on iTunes and keep the vast majority of the profits for yourself? If any third party online service succeeded, the current music industry would be toast.
Second, the music industry has historically cooked the books, i.e., over reported sales of some artists to hype them or under-reported sales of successful artists to screw them out of royalties. With a third party keeping precise track of every song being sold the music industry loses control. Suddenly they can't "fix" the charts and artists are demanding their fair share. They don't want that.
The third reason is that they want ALL profits for themselves. Why should Apple or Microsoft get some of the profits when the music industry can get it all? Let's face it, they are a monopoly. E.g., you can only legally buy a System of a Down CD from Sony, and no one else.
This refusal to negotiation fair rates with third parties certainly shows that the music industry is doing pretty well. If they were as bad off as they claim they would more willing to open new markets and new models.
If someone says he and his monkey have nothing to hide, they almost certainly do.
New technology threatens the RIAA's control in all three of these areas. Home music studios are becoming more viable. The internet provides a fresh avenue of promotion. The internet is providing a cheap means of distribution.
Now, the RIAA still has quite a foothold in each of these areas, and is looking to maintain control. Distribution is probably where they're most vulnerable. However, as long as "distribution" still means "physical media shipment", their likelihood of maintaining control is much better. It's expensive to produce all those CDs, and difficult to get them stocked at all the various music chains across the country.
If, on the other hand, people become so accustomed to buying music online that physical media distribution becomes semi-obsolete, then the RIAA will have lost 1/3 of their strangle hold on music right there. Musicians will be able to release directly online, and record companies, even if they maintain the production/marketing areas, will find it hard to claim all the profits from sales (which they pretty much do now).
Call me paranoid, but that's my theory as to why the RIAA seems dead-set on sabotaging online distribution.