Music Labels Screwed, DRM Is Dead

An anonymous reader writes "Peter Jenner, former manager of bands like Pink Floyd, T.Rex and the Clash, states in an interview with the Register that music label executives have lost faith in DRM and dollar-per-track online music selling isn't working too well as a model. He predicts that in two to three years time, many countries will have moved to a blanket licensing regime." The article goes on at some length, talking about the value of digital music, patterns in the music industry, and some business at the end about 'the tyranny of the playlist' that I'm not hep enough to follow. I'm not sure this rant has any connection whatsoever with reality, but it is something to think about.

Comments

Re:This guy out of the loop?

[LS]

Pink Floyd and the Clash were two of the most influential rock bands of all time. And I happen to know several engineering professors that are multi-millionaires because of patents, startups, and other endeavors. It is not uncommon for engineering and science professors to be wealthy. Who's showing their ignorance now?

Paying for music is dead

[Rosco P. Coltrane]

Whether music labels, musicians, Peter Jenner, you or I like it or not, there's a fundamental problem that everybody seems to understand: as long as lossless copies of music (or movies or photos for that matter) can be made, paying for music is dead.

What I mean is: before computers became widely available, people had the option of sharing bootleg analog copies of something (which was prone to sound degradation during copy, and media aging) or buying a legit copy of the medium with the best possible song. That is, people who wanted good quality music bought the "officially sanctionned" medium it was imprinted on. Now that everybody can copy a file a million times without any quality loss other than the one possibly introduced during sampling, who's to stop people from copying things for free? only two thing: people's sense of morality ("I don't want to steal from artists") and people's fear of the law ("I don't want to be caught with illegal copies on my hard disk"). That's hardly the basis of a healthy business model.

The one-music==one-media confusion that is the basis of the **AA's business model is dead. In reality, record companies sell plastic disks, not music, and people don't need plastic disks anymore, so record companies are now obsolete. If they want to stay alive with their obsolete business model, they have to:

- appeal to people's morality: not likely to generate revenues long-term
- DRM-protect their music: easily circumvented as shown numerous times
- DRM-protect hardware: easily circumvented regardless of the hardware, simply by playing and re-recording the music
- push for harder copyright laws: circumvented by the sheer mass of file-sharers, which effectively means that an individual file-sharer has a next-to-null chance of getting caught

*or*... they could disappear and music bands could turn back into what they once were: live performers, who were paid to play music on a stage.

So in short: Peter Jenner is wrong. Nobody will turn to X, Y or Z licensing scheme. Eventually, people will share music for free, simply because that is the logical technical and legal way it must be, and they will pay musicians directly to give them what no amount of digital files can give them: live performances.

Re:Paying for music is dead

[Anonymous Coward]

Jenner is wrong about DRM being dead... because DRM is not about controlling the distribution of music and video.

You can only control data by controlling the applications that run. DRM is about the centralized development of software, and about forcing people to only run that software to access certain pieces of data. That's DRM is a nutshell.

Once you understand that, you understand why DRM is not dead, and will not die just because a bunch of record/movie companies finally get a clue. The technology companies like Intel, Microsoft, IBM, HP, Apple and Sun all *want DRM very badly* because it puts them in control. Remember: the DIGITAL in DRM doesn't just refer to music and video -- it's anything. Images, emails, word processing documents, spreadsheets... software itself is just digital data as far as an operating system is concerned (remember that when you think of Microsoft and DRM).

DRM is way past being about music and video. It's an unholy alliance between the pigopolists in the record and movie industry and the technology companies greedy to make themselves controllers of the digital world.

P.S. Absolutely *everything* that Intel has done in the last ten years has been driven by the desire to implement a pan-DRM regime -- and especially to bring a controlled locked-down environment to the PC world.

Re:Paying for music is dead

[suv4x4]

Whether music labels, musicians, Peter Jenner, you or I like it or not, there's a fundamental problem that everybody seems to understand: as long as lossless copies of music (or movies or photos for that matter) can be made, paying for music is dead.

You're pretty wrong. It's not losslessness that caused piracy. It's the fact that pirated music has less restrictions, is more convenient, and is (sounds odd but) is cheaper.

Using pirated music costs you: you can be sued, and you gotta use questionable service full of porn, scam ads and trojans. Not every price has a dollar value.

If official labels would offer cheap legal downloads of unencumbered formats, people would flock to it, allofmp3 was a good example of this.

So perfect digital copies changes only one thing: no more articial scarcity. You either play with open cards, or piracy replaces you.

Re:Paying for music is dead

[GreatBunzinni]

In reality, record companies sell plastic disks, not music, and people don't need plastic disks anymore, so record companies are now obsolete.

The previous role of the record company was more than "sell plastic disks". The record companies were the only entities that were capable of recording music, distribute the record and market it. Now, with the development and widespread adoption and use of computers and communication networks the role that the record company once played simply became obsolete. Now everyone can afford the tools necessary to record a song and can even do it in the comfort of their room, everyone can easily distribute an album worldwide with a simple click of a button and the marketing machine that the record companies had simply doesn't work as well as it once did. To put it shortly, the record companies simply aren't needed anymore. If you ask me, that change is more than welcomed. It's progress.

Re:Paying for music is dead

[illuminatedwax]

That's nonsense.

First of all, it's wrong if only because this would imply the similar death of the video gaming industry, which is not going to happen.

But to address what you say: there are a lot more things out there that are held in check merely by "morality and fear of the law" but you don't see society crumbling because of it.

Secondly, people DO want plastic disks. It might be easy for YOU to go online and get the music you want, but even in the absence of worrying about getting caught, much of the population has no idea how to find the music they want. It's much easier to go on iTunes or go to the store. And if someone does make something that's easy enough for 75% of the population, existing copyright laws will be able to control it to the industry's satisfaction. Look at YouTube for an example. The problem right now is that the copyright laws are more than enough for controlling the situation.

Secondly, record companies also do a lot more than control how plastic disks are created and distributed: they also make those disks VISIBLE - they're the gatekeepers of quality of music. Whenever you have media, you always have to have gatekeepers of quality that scale to the size of the industry. Even if all the record companies went bankrupt right now, and everyone went digital, you'd see the same the same pattern occuring: groups making money off of affiliating themselves with the best artists.

Even when musicians were live performers, people paid for copies of the composer's work to play on the piano at home. Nowadays, most musicians are live performers and composers rolled into one - which even counts groups like The Backstreet Boys or Britney Spears if you look at those groups as aggregates - Britney Spears doesn't write her own music, but the Britney Team has people who write it just for her. So people are going to pay for music for the foreseeable future at least. That's not even including those people who are going to purchase physical copies for the purpose of supporting the artist directly.

What the internet is going to do is make the entire process transparent - like Jenner says, you can get as much information about the artist as you want: blogs, live recordings, outtakes, etc. You're also going to get bands that are truly breakthrough artists, but aren't "commerical" enough for the majors that can now cause a buzz online instead. But even then, they are going to be affiliated with at least a small record company. Even if it's just the band and their friends under a label they started, it still lends credence to that band and makes tours easier to book and critics more amiable to reviewing your record. Record labels aren't going anywhere - but what I think IS going to change is that they'll stop being 4 mega-conglomerates and become more decentralized. You're already seeing this, but the majors are still maintaining control of the smaller groups. I think you're going to see a loss in this kind of control. I would also like to see a movement towards artist control of copyright.

There is a kernel of truth in what you say, however: the majority of a band's income comes from live performances.

Re:Paying for music is dead

[Bing Tsher E]

That sounds like a banal world where only 'big stadium rock' bands can survive.

Sorry. I can do without the bombast, I don't want to listen to music from the grandstands.

Re:Paying for music is dead

[pesc]

Whether music labels, musicians, Peter Jenner, you or I like it or not, there's a fundamental problem that everybody seems to understand: as long as lossless copies of music (or movies or photos for that matter) can be made, paying for music is dead.

This is what the music industry is thinking, and I disagree completely.

The filesharing we see today is not lossless copies, it is lossy MP3 files. Of course people will copy the music they buy and use the copies in their MP3 players, in the car and give some copies to their friends, just like they did before they had computers and made cassette tapes of their purchases.

And that will not kill the industry.

What the music industry needs to do is to get past their fear of people copying. They need to make the best download site ever. Combine the best of Pirate bay, iTunes Store, and eMusic, and sell DRM-free high-quality MP3s for less than $1. Make the site a joy to use and offer great reviews, bios, forums, artist facts, lyrics, videos, etc. People will come and they will buy. Because it is easier to download at the site than to search for a good copy on a pirate site. People are lazy. Offer good value for the money and don't treat the customers as thiefs and they will come.

Re:Paying for music is dead

[repvik]

they could disappear and music bands could turn back into what they once were: live performers, who were paid to play music on a stage.

And who will pay for recording in a studio? I *do* want my music recorded in a studio, as opposed to a live recording. The artists? Why? They're not getting paid for it, they only get paid for live performances.

Re:Paying for music is dead

[Graymalkin]

Hey Cory Doctrow is posting AC again.

DRM Is Dead - Was it EVER alive ?

[unity100]

only big label companies and their sponsored software developers believed to be so, maybe, for a short while.

It was stupid right from the start - digital environment, internet is a free medium. freedom is its nature and its result. monopoly, impending 100-year old control schemes for distribution of intellectual property was a 'clueless' idea at best, if not stupid.

Given the big label company ceos, execs are now of a generation that is in their 60-70s, it is no surprise that they have misjudged that we were still in 1950s.

Gramps, you are of a dying generation. you are passing away.

then, instead of trying to screw your label and your shareholders with dinosaur-worthy 'measures', embrace the new digital/internet revolution and leave a good name behind.

or, leave your chairs to younger ones, who are actually able to understand the contemporary times and participate in it.

Labels' Attitude and Understanding

[gilgongo]

I went to school with somebody who later became the MD of Sony Music UK. I met him at a mutual friend's new year's party a couple of years ago and we got talking about how he signed Travis, and bout new bands, and the rise of this Internet thing.

I have a great deal of interest in the copyfight, and earlier that year had attended one of RMS's talks, was reading Laurence Lessig, et. al. Naturally, I wanted to know what he thought of all that stuff. As head of one of the most powerful A&R operations on earth, I assumed he would definitely have an opinion.

But he seemed either completely ignorant of the issues, or completely unconcerned. He said something about how their lawyers are "doing something about it" but other than that had no interest. What about copying music? "Oh, we'll sort that out I'm sure." What about the role of the publisher as gatekeeper to new talent? "Er, what about it? We put a lot of investment into choosing acts that will do well. And they do do well."

Something about rabbits and headlights came to mind, so I asked him about where he went on holiday that year (France, it was really nice, you really *must* visit the Dordogne...)

Re:dream vs reality?

[rudy_wayne]

"why we (or they depending on your POV) are spending sooo much to build DRM systems that are designed to prevent publishing of music when this is exactly what they and the artists really want to do."

You are missing the point here. It isn't about the musicians. And it never was.

The entire entertainment industry is run by people who are so consumed with greed that they are unable to think clearly and rationally. Although the record companies will ocassionaly pay lip service to "you're ripping of the artitis when you download music from the internet", the truth is, over the past 50 years, nobody has screwed and cheated musicians more than the record companies. A record company is simply a group of people, with no talent or creative ability, who exist for the sole purpose of getting rich by stealing money from people who DO have talent.

And that's why they are so in love with DRM. The entire entertainment industry is so consumed with greed that they are absolutely convinced that there is only one way to do busines: they must maintain absolute, iron-fisted, totalitarian control over they precious "content".

The idea of "an open, collaborative culture" is impossible for them to comprehend. The idea that you can eliminate all the DRM crap and just sell a good product at a fair price, is impossible for them to comprehend.

No, I Won't Pay $3 a Month

[zentec]

The music industry needs to get around the mindset that they are due a monthly stipend. That pricing system rewards mediocrity and lack of creativity, which is all to prevalent in what the music industry calls its product today. There is absolutely no way I will pay any money for a license to listen to music that I may already own or music I wish to own. The fact someone is willing to pay money for a product, whether it's $15 per CD or 99 cents per download is the incentive this industry needs to give the customer what they want, not what the music industry wants. It's been written here so many times before that the reason the industry has lackluster sales is because the product isn't what the customer wants and its delivery method doesn't suit the method the customer wants.

I can't think of too many "kids" who don't like iTunes. My kids and their friends eat up iTunes gift cards downloading the exact music they want without having to pay $15 for a CD that has one or maybe two songs they enjoy. Which heralds back to what I remember as a kid where I could run up to the local drug store, fork over a dollar and get a 45 with the exact music I wanted (yeah, I'm that old). That's what the music industry was built upon before it was turned into a cash machine that ate customer good-will. And that was before the advent of downloadable music; now the music industry is vilified to the point of no return in the eyes of its customers.

Music taxes no good solution either

[Jugalator]

Let's say I pay a music tax -- how do the ISP in collaboration with the owner of the intellectual property then figure out who should get the money for something I downloaded? Assuming an "popularity/assumption model" is one of their ideas -- I do not want the income be split according to the popularity of artists, as that could give Madonna money for downloading from a far less common artist. And how is the fee adjusted to how much copyrighted music I'd download? Because it is, right, otherwise it's completely unfair.

Re:wtf is with the artists?

[frogstar_robot]

The thing I don't understand is why doesn't a big name artist say fuck you to their studio and go out on their own. U2, Madonna, Britney, etc could all do it. Start your own site selling non DRM lossless songs, do individual deals for CD distribution, run a few commercials.

Artists that big basically ARE the recording industry. Many of them are either producing albums for others, managing newer acts, or own their own studios. So while new acts may well benefit from a change in the status quo, these are the few who managed to win and win big from the way things are right now. These are the ones who DIDN'T get the short end of what Steve Albini and Courtney Love are trying to tell the young turks.

So no. Practically no one who is "big" in the current system is going to turn on it. What is needed now is for others to get "big" outside the studio system. This will be arduous and may take years yet. Once it happens though, the writing is on wall for the system as it stands.

The biggest established artist that I've ever heard speak and act against it is Prince. And I really think it is because they turned on him first. And anyway, someone like Prince is a transitional form. He got his name recognition from the studio system but having that declares he no longer needs them. What we are looking for is stardom created entirely outside the patronage of the big labels.

Just where do you get your ideas about artists?

[Garwulf]

"This means that musicians and ALL artists will have to work just like everyone. They can create live (a show) for a fee. They can produce something unique (a jingle, or a painting) for a fee. They will have to do real jobs doing their thing if they want to make money."

One of these days, I want to find the person who started this entire myth about what the life of an artist is like and shoot them. Several times.

I've got news for you - the creative artists who get really rich off their work are the tiny minority. Most of the creative artists out there create in their spare time - they keep their day jobs, because that's the only way to support themselves.

That first novel? Well, guess what - you're lucky if when it's all said and done you make minimum wage for the hours you spent on it - and believe me, I know - my first published print book came out to around $800/month for the time I was working on it, and I worked on it full-time. Courtney Love, in a famous speech, pointed out that most recording artists make less in their first year of recording than they would waiting tables. And most actors getting started need a part-time job to keep a roof over their heads. I can't speak for the visual arts, but I haven't heard of too many who make that massive sale to a gallery.

Now, consider this - if the compensation for the creative arts was fair and equitable, you'd be paying a lot more for it, not a lot less. Perhaps instead of talking about us like we're some spoiled children, you should be grateful that we love our craft and our art to the point that despite being short-changed for it, we are still producing work for you to consume. Perhaps you should thank us for tolerating living below poverty lines to create your entertainment. And perhaps, just perhaps, you should do some research before posting, so that you don't offend those of us who actually CREATE.

Watermarking could work

[dcmeserve]

who's to stop people from copying things for free? only two things: people's sense of morality ("I don't want to steal from artists") and people's fear of the law ("I don't want to be caught with illegal copies on my hard disk"). That's hardly the basis of a healthy business model.

Actually, I think there is a scheme which can leverage basic human psychology to get a workable system. It would go as follows:

1. Watermark the digital content, with information specific to the person who purchased it. i.e. brand it "owned by John Smith, 123 Fake Street, ... ". This info would be encrypted, and the seller (music label or artist) would hold the decryption keys exclusively (though it wouldn't really matter if one got out).

2. There would be no restrictions whatsoever on where the watermarked copy could be copied, how many times, etc. No hardware or software will have any special recognition of the watermark, other than to keep it from interfering with quality of music playback, etc.

   Also the prices would have to be reasonable.

3. The labels or artists' associations will have bots scanning the file-sharing networks, looking for items known to be produced by the given artist/label, but which either (a) have no watermarking, or (b) each have a watermark bearing ID info that doesn't match the info of the person sharing the file.

4. Bring in the lawyers -- but don't pick a few people to sue for their life savings ("going nuclear" like that only serves to discredit the lablel/artist); rather, pick thousands to send nasty-grams to. In each, describe the copyright violation for just one or a few songs, and demand remittance of $25 or $50 or whatever.

   Most people will likely just fork over the cash, change their behavior, and tell their friends how they got "dinged." That's where the human psychology comes in -- (a) most people will feel that those getting dinged did deserve it in some way, and (b) will take steps to play fair, as they would agree that the system is fair, and after all they want to support the artists.

   It's when someone ignores repeated demands for payment that the real lawsuit starts.

It will be relatively few who casually take on the risks of getting the nasty-grams sent to them, or who try to play games by ignoring them. Enough will get hit with real lawsuits that most people will say "I don't want to take that risk," keeping the number of scofflaws low enough (say, 20% of the population or less) that this system should be plenty profitable for the artists.

Re:Why?

[fyngyrz]

Why would I want to participate in the Slashdot moderation system

No particular reason, at least until they wake up and fix it.

At that point, you might want to participate so that comments that you deem more worthy than average were more easily seen by others. Just a thought. :)

Re:Stealing?

[Deagol]

...with talk about mere "copyright infringement". It just doesn't have the desired effect because people realize that - compared to other illegal activities - copyright infringements are rather harmless offences (as long as not commited on a really, really large scale).

Even with "real" piracy in Asia (that was going on long before digital tech), the major US media producers don't seem to be having financial woes. Eisner's lack of vision (resulting is shitty movies and stagnation or creativity) at Disney probably cost the company far more than the last 30 years of Asian bootlegs.