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Record Labels Unveil Greed 2.0
theodp writes "Unsatisfied with $2.49 ringtones and as much as 70 cents of each 99 cent iTunes download, Newsweek reports that record labels want a bigger cut of digital music profits. One example: If you type in 'Madonna' - a Warner act - at the Google Video site, and the results are accompanied by ads, Warner wants a share of those ad dollars." Even more ridiculous demands than those put forth in previous stories.
Studio time is expensive, man. The whole recording process (hiring a producer, studio musicians, whatever you need to get the sound you want) can be really expensive, so until that's no longer an issue there will still be labels around willing to front the cash in return for the potential profits a successful record can generate.
Some day the major labels will be irrelevent, but today is not that day (maybe that's why they're so desperate to maximize their profits in the short term... they know the long term doesn't exist).
The answer is simple: Delist Madonna and all the acts in question. Also de-wiki them untill they are paid to list them. Instead point all the references to Mary, the mother of Jesus. The only thing worse than not participating in the profits is to de-googled, de-yahooed, etc. Also close all their blogs. Google could ask for a list of all the names they would like to have stricken from the database. in fact this kind of counter poison should shock the hell out of the music buiz when the major search engines strike them from the internet record. The funniest thing about this is that PR people do everything they can to get people to talk about their star/product/act and then when they do they want to tax it. the reason there is a google is because of advertising.
It's no secret that corporations are greedy and will do anything they can to increase their wealth. Them charging more for music is minor compared to the grand scheme of things.
The wealth has to come from somewhere. That somewhere is the poor below. They talk of trickle economics for the the poor getting money from the wealthy, but it's quite the reverse. Wealth, often in the form of labor, flows from the bottom up. If not, they wouldn't be so rich.
To back this stance, it is worth nothing that the wealthiest wealthy grew wealthier between 2003 and 2004, partially thanks to tax cuts. The poor, however, became poorer. During that time period the number of Americans living in poverty grew by 1.4 million. Source: this CNN article.
I'm not an advocate of pure communism, but what we have today isn't really capitalism, it's a crappy corporate welfare system that intentionally pisses on the poor.
Advice for my fellow geeks: before seeking out that threesome you dream of, you might see what a TWOsome is like first.
i would speculate that just like film production, record companies use their music groups as a captive market for their own recording studios, screen printers, media production, printing, etc. the acts then get charged inflated prices for these services which they pay out of their royalties.
requiring musicians to use record company owned resources let's the recod companies control costs without having to pass on the savings to the musicians. i believe the record industry actively fights legislation that would require it to exercise fiduciary responsibility. that would end the party for the muisic companies.
it's no wonder that once an act becomes even a little successful, it then goes on to equip its own recording studio. my guess is that musicians would love to gain control over how they are promoted and distributed, if only to keep the music companies from freely spending the musicians' money.
when religion is no longer the opiate of the masses, governments will resort to real opiates.
the more i work with bands and record labels (labels that are meant to be indie) the more dirt i find out about this industry.
so many bands nowadays are picked up or formed by majors (RIAA labels) secretly, then they are put on an "indie" label for their first cd. then once the indie/punk/insert_somewhat_underground_genre_here crowd loves them, they release the next album on the major.
then when they are on mtv/radio, the people who just buy into whatever they hear love them, and so does the underground (or at least those who'd like to theink they are) crowd.
it's ingenious, and disgusting.
-- lol pwned
What google should do then is beat the RIAA at their own game.
Start by charging people an extra "RIAA Advertisement Fee" to run an ad on "Madonna" or the like. This money goes into a big pool. Then, from that pool, make up a list of services and subtract out 90% of the money for things like "fiscal management" "trademark research" "artist contact costs" or anything else that sounds good but is total contractually-agreed-to bullshit.
If I have been able to see further than others, it is because I bought a pair of binoculars.
Hey! I have a degree in economics!
s tories/04biz.htmh eney1988.htm
Oh. What was the question again??? = )
Well, happy to pointificate!
Hmmm.. Boycot Exxon? OK, well, they would just advertize like BP. Sunflowers, responsibility, alternative energy. Bla bla. People would believe it too. All the while they pump that oil...
Prices of gas are increasing faster than crude because they are different markets. Now there are limited amounts of refineries in the US and few companies can invest that much capital to build one... I understand they take a few years to build and get onstream..
Not that Bush's idea (subsidize the building of oil refineries) is a great one. The oil companies are making big bucks: they should do it right? I heard that one made more profit last quarter than any other company in history. Could have been Exxon, I don't remember.
To me, the question is: why are there so few refineries now? Did the oil excecs get to gether some golf game and say: Let's not build any more for a couple years? Was it *really* environmental regulation that quashed them? Collusion in that market would have the benefit of huge profits for them. I remember Cheney had secret meetings with the oil 'boyz' a few years ago, and they collectively decided US energy policy, without ever releasing the minutes of those meetings.. I think that was pre-Iraq so they might make some fun reading in 40 years.. It could have been similar to:
Cheney: Thanks for the donation, boyz. Like the cigars? They're Cuban! Batista! Well, to business then. We agree that you don't make any refineries in the next few years (and collect excess profits), support us in Iraq, and we'll get you those Iraqi drilling contracts, leash the anti-trust hounds. Of course we'll expect future consideration...
Oil barons: No refineries? None of us? We're "Gung Ho" for Oil Contracts! (puff.. puff...) OK, deal.
Well it *could* have been like that! = )
In general, you are better to vote in politicians that support consumers, not oil companies, than attempt to get a boycot organized. Companies (Oil or RIAA members) do not have to adapt to change if they are protected by fiat. And one can buy policy so cheaply these days:
$200M building an oil refinery could get you say a %50 return if you bet correctly on oil prices.
$50,000.00 donation/investment to Cheney's PAC could help get you $8,000,000,000 in return.
Where would you invest? The law requires you to act in the best interest of your share holders, not your country.
http://www.mailtribune.com/archive/2005/0429/biz/
http://www.opensecrets.org/pressreleases/cheney/c
Katrina and Rita wipes out a few refineries and it all goes to hell for the consumer...
Of course nobody will know what the truth is until these folks are long gone.
Cheers,
-b
Consider an analogy. Alice and Bob each has a fruit stand selling apples. Both are selling identical apples for $1 a piece. They've been doing it for a while, until Alice decided to hire Carol, a marketing exec, to increase sales. Carol immediately gets to work: she installs a loud boombox, girls in skimpy outfits and a blimp hovering overhead - all advertizing Alice's apples. Crowd gathers around Alice's stand and sales go through the roof. Even after paying Carol marketing fees, there is still handsome profit left - more than she ever had before.
Where did the profits come from? Was there any new value created? Well, the apples didn't change, but the demand did. The demand was created exclusively by Carol.
Bob in the meantime kept his costs low and did not hire any marketers. He did notice something interesting, however - because of all the increased interest in the apples next door, demand for his apples started to pick up as well. Marketing effort paid for by Alice has began to increase Bob's revenues.
Question: does Bob owe anything to Alice?
In the physical world, generally, yes. It's called "location, location, location". Bob can setup a fruit stand out in the middle of nowhere and pay nobody for the privilege. Or he can open a stand in a downtown mall, which will cost him.
Back to RIAA.
Without heavy and expensive promotion by RIAA, the value of, say, 50 Cent would be hovering just above zero (some would argue below). RIAA effectively created the artificial demand for his product, which, supported by copyright laws, fuels a vast ecosystem of businesses. Why shouldn't those benefitting from selling, reselling or otherwise commercially benefitting from 50 Cent's music own portion of profits to RIAA who created majority of the value in the first place?
Disclaimer: I think that RIAA should die and music should be free, but that would be preaching to the choir and, therefore, boring.