Warner Music CEO Says War With Consumers Was Wrong

l2718 writes "Edgar Bronfman, CEO of the Warner Music Group, has publicly framed the music industry's failure to accommodate file-sharing as an 'inadvertent' war on consumers. I'm left wondering how you can file a series of lawsuits inadvertently. 'We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding ... By ... moving at a glacial pace, we inadvertently went to war with consumers by denying them what they wanted and could otherwise find and as a result of course, consumers won.'"

Comments

Put your money where your mouth is, Ed.

[croddy]

Put you money where your mouth is, Eddie boy. If these lawsuits offend you as you claim, dissolve your membership in the conspiracy that organizes them. As long as you're still a member of the RIAA, and as long as the lawsuits keep coming, your comments are just as dishonest as your corrput business model.

So please... don't beat me with both fists while apologizing between blows. The beating still hurts and your "apology" just adds insult to injury.

Re:Put your money where your mouth is, Ed.

[Arabani]

Eh, give him some time. It took him 5 years between "inadvertently" starting this "war against consumers" and admitting it was a bad decision. At that "glacial pace", I'd be pleasantly impressed if he called off the whole affair before 2012!

Re:Put your money where your mouth is, Ed.

[east coast]

You're drinking his kool-aid. You're making the same mistake I've seen in tons of other posts on this matter: Thinking that the RIAA is just some autonomous organization. They fact is that they're the customers of the labels too. Maybe early on the RIAA could have sold them a false bill of goods but to act like they're [the record labels] unwitting gimps this late in the game is an insult to those who know what the true relationship between these entities is.

Maybe if they can keep you pointing the fingers at the RIAA they think they're going to buy time and customer loyalty.

Re:Put your money where your mouth is, Ed.

[purpledinoz]

That might be the funniest piece of BS I've read in a long time. A war was inadvertently started against the consumers, just like Hitler inadvertently started WWII.

Re:Put your money where your mouth is, Ed.

[courseofhumanevents]

I propose we suspend Godwin's law for all future articles regarding the music industry.

Re: Put your money where your mouth is, Ed.

[sm62704]

Is this Eddie the Shipboard Computer, or Eddie Munster? At any rate, here's a message to Eddie:

Look, dude, you're glass. We see right through you and we're going to break you if you don't get the hell out of our way, and if you don't break yourself first.

We know you know that MP3s should be advertising for CDs. We also know that what you're afraid of isn't people downloading Lars and Gene's stuff, it's downloading your independant competitors' stuff. You control the FREE radio and you know it. You can't control the internet and you know it.

You're shaking in your boots over Radiohead. I'm afraid it's too late; you're cracked. It's too late, but I'll tell you what you should have done.

When Napster, the old Napster you bozos sued out of existance came along, you should have embraced it. You should have flooded it with 56k samples of every tune in your inventory, and gone on a PR blitz telling everyone how superior the CD was to MP3. It worked against vinyl when the CD first came out, despite the fact that there are pros and cons to CD and vinyl (each has its shortcomings), it would surely work with CD vs. MP3 and CD's vastly superior sound.

You blew it.

You no longer matter. A musician no longer needs an expensive studio and even more expensive factory, he can rent a studio even in a small city like Springfield, which has several. He can get his CD professionally mastered and copied with insert and jewell case for a couple thousand bucks, less than the price of a decent drum kit.

Now your only recourse to stay alive is to be a hitmaker.

You're stupid, Eddie, and I'll be glad when your twitching corpse stops kicking over the china and bleeding all over my government. Die, damn you, die, you worthles scumbag!

-mcgrew

Re:Put your money where your mouth is, Ed.

[flyingsquid]

That might be the funniest piece of BS I've read in a long time. A war was inadvertently started against the consumers, just like Hitler inadvertently started WWII.

You're seriously comparing the Third Reich to the RIAA? I think you're being a little harsh on the Germans there.

Re:Put your money where your mouth is, Ed.

[toadlife]

Anyone who says "Aye" is a Nazi!

Inadvertent post

[noidentity]

Sorry, I inadvertently just made this post and hit Submit.

Re:Inadvertent post

[ROMRIX]

Sorry, I inadvertently just made this post and hit Submit.

Yes, and now I have inadvertently replied to your post but only after deliberating with a team of attorneys to find the best way to bring legal action to stop these inadvertent posts from being viewed inadvertently.

Re:Inadvertent post

[MightyYar]

As he does everyday, he booted up his computer, checked his email, and then HIT THE CAPS LOCK KEY TO HUNT-AND-PECK HIS DAILY EMAILS IN ALL CAPS. PROBLEM IS, HE HIT THE "SUE" BUTTON INSTEAD OF "CAPS LOCK". he was wondering why everything came out in lower case that day...

Re:Inadvertent post

[NewYorkCountryLawyer]

Here's an 18 year old girl they have been inadvertently pursuing for 4 years, based on 48 song files she downloaded when she was 13 and 14 years old.

This past summer they inadvertently filed a summary judgment motion against her, trying to get a judgment for $36,000 so that she can start off her adulthood with a bankruptcy.

Truthfully

[Macthorpe]

Two words sum this up:

consumers won If consumers got what they wanted at your expense, it does seem fairly logical that you buggered the whole thing up.

Re:Truthfully

[jawtheshark]

You know what pissed me off? That we're called "consumers"... It's degrading. I'm a customer, damnit!

Disposable income not piracy is behind falls.

[Ckwop]

How can you ever win a war against your own customers? If you fight them, they don't pay you and you die. How did they ever expect to win?

I think the reason they haven't made as much money recently has little to do with piracy and everything to do with the changing perception of value. Personally, I think that the value per pound spent on an album compared to something like Halo 3 is vastly different. Halo 3 at the £40 it costs is at least ten times the value to me than the equivalent number of albums I could buy for that price.

There is only a limited number of areas I can spend my disposable income. Between, Halo, the X-box 360 to play it, the iPod, iPhone there just isn't room for such an overpriced product.

And that's why I haven't bought a single CD since 1999 - and I imagine I'm not alone. That's why the music industry is shrinking. They expect to be paid rather than realising they're competing for our money just like everyone else.

Simon.

Re:Disposable income not piracy is behind falls.

[moderatorrater]

This is definitely off topic, but I was thinking the exact opposite. I have a large DVD and game collection that I hardly ever use. I figure I've gotten maybe 5 hours of enjoyment per DVD (some more, some less) and maybe 10-20 out of an average game. On the flip side, each song that I buy from itunes at $1 each have gotten played at least 20x. That's over $1 / hour of enjoyment for music as opposed to $3-$4 for a dvd and $.50-$6 for a game. If I buy a whole album, it usually gets the same amount or more play than the songs i buy a la carte, which usually leads to a higher value over time.

It's a rare movie or game that gets played more than 2 or 3 times for me, but it's even more rare for me to have a song that doesn't get played at least 10x. From what I've read and seen, this is the case for most people.

Re:Disposable income not piracy is behind falls.

[bentcd]

How can you ever win a war against your own customers? If you fight them, they don't pay you and you die. How did they ever expect to win? I suspect that the record companies considered the group of pirates (that they wanted to squish) to not overlap much with the group of paying customers (that they technically want to woo). They went aggressively after the pirates, and it's taken them this long to realise that there is, in fact, considerable overlap between the two groups and that in squishing the pirates, they simultaneously enraged their paying customers. Well, now their disgruntled former paying customers.

Re:Disposable income not piracy is behind falls.

[MightyMartian]

I agree. I think, in part, the record industry has so saturated the popular music market with crap that the talented new artists simply sink into a sea of unmitigated mediocrity. People get upset when I wax nostalgic about the 1960s and the 1970s, but let's face it, a very large part of the music we consider classic rock and pop was recorded during that period. Even into the 1980s you had hit makers like Michael Jackson who had real talent. Compare that with the vaguely homoerotic boy bands and way-too-sexualized teen female acts like Britney Spears that started showing up in the late 1990s, and you have to conclude that somewhere in that period the music industry lost its way, and become a classic economics widget manufacturer, run by people who didn't care about music, bet everything on marketing deals and focus groups (isn't the various Idol shows to be found in North America and abroad the ultimate expression of that). You get the feeling that these guys don't listen to the music they're foisting on the public.

As to Gene Simmons bitching on another /. article today, well, he's one of the creators of the music marketing machine we see now. His descendants aren't guys like Metallica or Nirvana, but Hillary Duff and the Spice Girls.

Re:Disposable income not piracy is behind falls.

[kebes]

I think the reason they haven't made as much money recently has little to do with piracy and everything to do with the changing perception of value. Quite right. Like it or not, most music gets "consumed" in a very off-hand kind of way. For instance, people want some "tunes" for driving, working out, or while they are doing something else. They may download a song, and never listen to it (or listen to it once and decide they don't like it). As a result, the value one can place on such incidental usage is necessarily low.

Some people will indeed obtain music in order to really enjoy it, and listen to every nuance. But they are the minority (in a marketing sense anyway), and in any case they are the ones most likely to pay in various ways (CDs, merchandise, going to shows, donating money, etc.), so they are certainly not the "problem" when it comes to this "decreasing apparent value of music."

As you said, video games are a good comparison. For $30-40, you can get a Nintendo DS game that will provide you with hours and hours of focused entertainment. As such, the $/hour cost of that entertainment is low (and most people pay it without worry). On the other hand, buying an album for ~$20, when you may only listen to the tracks a few times (and listen to them "incidentally" at that) becomes ridiculous (it may end up being on the order of $/minute of entertainment).

Whether it's "right" or "wrong" is irrelevant. The fact is that people will subconsciously make these value assessments, and will not feel bad about circumventing legitimate channels if those are too expensive.

The solution, of course, is brutally simple... and totally unappealing to the music industry. If you sold music at very low cost (pennies per track, or a monthly fee that provided unlimited download of a comprehensive catalog), then people would pay for it without a second thought. But this is a scary proposition because it is tantamount to admitting that what you are selling is not some exceedingly rare and valuable product, but rather a commodity service. The industry fears that this will mean lower profits, though that is debatable.

In the meantime, people are naturally coming up with their own solutions: either ignoring copyright law or seeking legitimate channels where the pricing is more reasonable (e.g. listening to Creative Commons music from places like Jamendo and donating to "worthy" bands).

Re:Disposable income not piracy is behind falls.

[Chosen Reject]

When you watch a movie, that is usually all you are doing (and if not, please don't watch it with me). When you play a game, that is usually all you are doing. However, music is typically background stuff. So you might have played that song 20x, but did you play it 20x doing nothing but pondering its beats and rhythms, mulling over the meaning of the message? Probably not. Most likely it just made your drive to the store not so quiet, or it blocked the noise of your computer while you surfed the web. Perhaps it enhanced the mode during your dinner. As an example, iTunes says that I've listened to Still Alive (from Portal) over 200 times, but I was really paying attention to the code I was writing. Unless at a concert, music is rarely on the center stage of what you are doing.

But even that is missing the underlying point. Time is a really lousy measure of enjoyment. That's saying that any 2 hour movie is just as enjoyable as any other 2 hour movie. If I listen to music for three hours, is that exactly as enjoyable as three hours of a Lord of the Rings movie? Is that as enjoyable as playing through Portal? Maybe, depends on what you find enjoyable. But that is a big dependency.

But even that is missing the underlying point. You pay the amount that both you and the seller agree to. If the seller is smart, he takes into consideration how much of the market is willing to pay what amount and maximizes his profits. If the buyer is smart, he considers how much the seller is selling it and how much it is worth it to him. The music industry in general might not be selling at maximum customers, or even maximum profit, but they've picked a price. If you don't like the price, don't buy it.

Re:Disposable income not piracy is behind falls.

[MikeBabcock]

I think the implication here is that they failed to realize the people they were taking to court were also their customers. There's often a disconnect in the mind of business (created by those who stand to profit like lawyers) between one's customers and those who do things one may not like.

Another example that comes to mind would be loitering laws at malls (as teenagers who loiter often have the highest disposable incomes to spend, and those who complain are often the ones tight in the wallet).

Warner may have believed they were suing "bad people" and providing music at the same time on CD for "good people" and have finally realized (possibly as a result of recent studies) that they've in fact been alienating their customer base.

Yes yes, we all knew this already, but its also quite obvious to me that most executives thought the loud "we" who hate these lawsuits were also not customers of theirs and therefore irrelevant. I've had personal discussions about this with people who work for record companies (some related, some not) and they often have a strange view of my perspective as somehow only existing within the "pirate" world and don't see it as pervasive amongst their customer base.

Hopefully that's changing.

Re:Disposable income not piracy is behind falls.

[Dephex Twin]

Good point. Although, at least Metallica was doing something musically talented for a period of time before they decided to sell out far worse than anyone.

Re:Disposable income not piracy is behind falls.

[CodeBuster]

isn't the various Idol shows to be found in North America and abroad the ultimate expression of that

IMHO that is not entirely the case. In fact, compared to the "new" material that the "professional" artists are putting out in the MAFIAA label system these days, shows like Pop Idol and American Idol are a breath of fresh air. These shows actually do find and select some talented new vocalists from among the general populations (the diamonds in the rough if you will) who would never have gotten exposure otherwise under the marketing driven, make anyone sound good in the studio, craptastic MAFIAA label system. Consider the following:

1) The contestants are selected in a grueling process of elimination where actual performance is judged brutally by judges, like Simon who doesn't pull punches when the performance is sub-par, without regard to favoritism, who the contestant is connected with, or crap like that but rather solely upon whether or not, in the opinion of the judges, the contestant could earn the best return on their (Simon's) money if they sign them for a recording contract. Now, admittedly the audience sometimes votes for bad contestants just to make some trouble, but everyone knows that they are still bad so in the end it doesn't really matter that much for who wins the competition.

2) At almost every stage the contestants get to choose what songs they are going to sing and although the choices are sometimes limited to the catalog of a particular guest professional artist or genre there are generally plenty of potential song choices for each contestant.

I particularly like it when professionals make a guest appearance on the show and end up sounding worse then the talented young contestants. They invariably invite the comparison just by appearing on the show. In fact, I don't understand why some professionals appear on the show, it only highlights the fact that they are over the hill or even worse that they were never as talented as some of the up and coming contestants...a potentially bad career move for them.

Frankly, I don't much care for pop style music, but there have been some really good female African American Jazz style vocalists on the show who sound great when they sing the old standards from the likes of Billy Holiday and Ella Fitzgerald.

My point is that contrary to contributing to the problem of mediocre music, shows like American Idol, could potentially be the antidote to no-talent bands and the crap that has come out of the marketing driven "promotion" of sub-par "artists" by the MAFIAA labels. It is really hard to hide the fact that you suck when you have to sing live in front of a studio and television audience straight into the mike with no second takes, remixing, or other studio tricks. In such situations the real talent tends to come forward while the hacks leave in disgrace (or hopefully don't even make it onto the show in the first place).

Re:Disposable income not piracy is behind falls.

[garett_spencley]

I completely agree with you about Gene Simmons and was actually going to bring him up as an example of why I feel that the rest of your post isn't quite accurate.

In the 60's and 70's you had bands like Kiss and The Monkeys who were entirely about show and very little about music. Boy Bands are the descendants of Motown groups. You mentioned Michael Jackson as being an example of a talented artist but it's arguably groups like The Jackson 5 that gave birth to modern boy-bands.

Madonna was taking off her clothes on stage while Britney Spears was in diapers.

There's a lot of great music still being made it's just that MTV and the radio only cater to the most requested (and thus the most marketed hits) and so if you turn on the radio it's very easy to get the impression that only crap is being produced. There's a lot of amazing artists out there who are getting signed to big labels and touring ... Dido, Esthero, Thievery Corporation, Circa Survive, Audioslave, Velvet Revolver to name a few.

My point is, mass media has always been a circus and it will always continue to be. But buried in the cheesy clown acts that please the children are the really talented Chinese acrobats who still manage to do some pretty amazing acts even though so much attention gets put on what the kids like.

Re:Disposable income not piracy is behind falls.

[king-manic]

People get upset when I wax nostalgic about the 1960s and the 1970s, but let's face it, a very large part of the music we consider classic rock and pop was recorded during that period .... Compare that with the vaguely homoerotic boy bands and way-too-sexualized teen female acts like Britney Spears that started showing up in the late 1990s, Your forgetting the legitimately interesting bands like NIN, Smashing pumpkins, Nirvana, Food Fighters, Beck, Timbaland, Kanyewest, No Doubt, Arcade fire, Greenday, etc.. who got their start in the 90's and 00's. Remember who decides what is classic? Mostly well established influential media types who currently mostly grew up in the 60's and 70's. Music didn't lose it's way. It's been 80% suck like it's always been. You've just conveniently forgot about the dreck from the 60's and 70's.

Re:Disposable income not piracy is behind falls.

[Admiral Ag]

"Madonna was taking off her clothes on stage while Britney Spears was in diapers." That's nothing dude, Alice Cooper was wearing diapers on stage while Madonna was in diapers.

Re:Disposable income not piracy is behind falls.

[illtud]

Your forgetting the legitimately interesting bands like NIN, Smashing pumpkins, Nirvana, Food Fighters,

I missed them. I like a good bunfight, I might check them out.

[Paging Dr Freud... I'm guessing you're 20 stone and had a Hershey bar in your mouth typing that...]

stop the lawsuits

[Dr_Art]

So, umm, when are you going to drop the lawsuits???

It's easy....

[pablo_max]

"I'm left wondering how you can file a series of lawsuits inadvertently."

Easy...just like our government inadvertently took away ever more of our freedom with the patriot act ;)

Who won?

[AlHunt]

>as a result of course, consumers won.

Really? What do I get? Have all the lawsuits been dropped and all the judgements and settlements been refunded and consumers reimbursed for their legal fees? Did I miss something?

I'm still boycotting new music purchases.

Re:Who won?

[harrkev]

I'm still boycotting new music purchases.

Don't do that. Jusy boycott the big labels (the ones that support the RIAA). There are still lots if indie labels out there that are consumer friendly.

I also happen to find that the music is better, too.

Re:Who won?

[kebes]

as a result of course, consumers won. Really? Winning a battle doesn't mean you get everything you want... but it does mean you've prevented your enemy from getting the thing they wanted from you.

In the "war on piracy" their intention was to prevent people from sharing music (i.e.: to at least maintain their previous business model). However, the consumers won that war: at present people routinely fileshare. Most people I know have an iPod (or equivalent) and all of them have it filled with music, where they only paid for 0-20% of those tracks. The average consumer is file-sharing. The industry couldn't stop it. The consumers won that battle, and the industry lost.

As they say, however, the battle may be won but the war is far from over. The grander issue here is whether copyright law itself is valid in its present form... and whether changing it means more protections/enforcement (for the established industry), or more freedoms/rights (for the citizens).

I'm still boycotting new music purchases. As well you should. There are so many better sources for music (independent labels, creative commons music, etc.) that there is no excuse for purchasing any music from companies involved in the unethical legal and lobbying tactics of the established cartel.

That's when the real victory will come: when these currently "fringe" sources of music become the norm, and the established cartel withers away (or reinvents itself to survive).

Re:Who won?

[zotz]

"Don't do that. Jusy boycott the big labels (the ones that support the RIAA). There are still lots if indie labels out there that are consumer friendly."

These days, if you are not using a Free license, and preferably a copyleft one, I don't consider you consumer friendly. Your works are always subject to being bought out and abused. Even if against your will.

Even if I like your stuff, unless I am getting paid, I try my best not to promote you or your stuff unless you are going the Free route. And after all, why should expect to be paid for your efforts but think you can count on mine for free?

all the best,

drew

first end the war

[spune]

You should end the war on consumers before you start talking about how it was a mistake.

Ironically

[Floritard]

His use of the word glacial reminded me of this xkcd comic. I wonder if he's a fan...

Turn of the tide

[AmVidia HQ]

With studies showing correlation of downloaders also buying CDs, and example set by Radiohead/Magnatune that patronage model of the arts can still mean good business. And with lawsuits against students and moms failing. A testament that not even megacorps can always buy/use laws against the people.

This is when Big Media have to start looking at the internet differently. The same way the studios did when they looked at Betamax/the VCR.

Perhaps

[Otter]

I'm left wondering how you can file a series of lawsuits inadvertently.

I think he means that back in the Napster lawsuit days, when all you idiots were crying about how the RIAA should be suing illegal filesharers and offering up a stream of condescending analogies about how toolmakers shouldn't be responsible for the actions of users, they made the mistake of believing you.

Re:Perhaps

[Penguinisto]

If they had some sort of clue as to how to accurately and correctly identify illegal filesharers (you know, instead of issuing blanket subpoenas, suing dead people and obvious technophobes, et al)... most of us wouldn't have much problem with it. If they actually used some common sense in choosing folks who passed around pirated files ...that weren't children, there would be even less of a problem. If they finally restricted their targets to people who were obviously making money from it (you know, like the real physical media bootleggers do), there would've be zero problems at all.

Instead they got all ego-happy and power-hungry. They began doing blatantly stupid things.

I wouldn't be so quick to blame those who made the (very cogent) argument of going only after the actual pirates, you know? There's always at least one right way and numerous wrong ways to implement any given task.

/P

Re:Perhaps

[nine-times]

If they finally restricted their targets to people who were obviously making money from it (you know, like the real physical media bootleggers do), there would've be zero problems at all.

But you see, the problem is that they don't want/need to go after the bootleggers. It isn't the bootlegging industry that's sharing content on P2P networks. It's college kids, little girls, and the nice couple next door. The whole problem with the situation is that their business model was created by distribution, based on the inability of some random guy to press 10 million vinyl records in his basement and distribute them worldwide for free. However, in the digital age, some random guy can effectively spread millions of MP3s around the work for free (well, you have the cost of a computer and Internet service).

So don't think these lawsuits were an effort to stop bootlegging "pirates" who make money from selling illegal copies. The goal was to protect an outdated business model.

it's not the lawsuits

[l2718]

Ah, but he's not apologizing for the lawsuits -- he's apologizing for not releasing DRM-riddled restrictively-licensed music fast enough, which he thinks is what forced consumers to share music illegally. He's still behind the lawsuits (except when his own kids share music -- then it's a "family matter" best punished by the parents). He's warning the cell-phone companies that unless they allow limited sharing, consumers will find their own solutions, and not talking about tactics. The content industry (music, film etc) still seems to have no idea what the consumers want, or that the offering people what they want is usually much better than coercing them to buy what you want them to buy.

Re:it's not the lawsuits

[badasscat]

Ah, but he's not apologizing for the lawsuits -- he's apologizing for not releasing DRM-riddled restrictively-licensed music fast enough, which he thinks is what forced consumers to share music illegally.

Exactly. The bottom line is this article isn't saying anything like what's being implied in the summary; in fact, just the opposite.

His "war" with consumers, from his perspective, is that the music industry wasn't offering consumers what they wanted, so they went out and took it. But if you read the rest of his comments, the problem is he still isn't understanding just what it is that people want. He thinks that DRM-free music is just being used as a means to an end rather than being an end in itself. He thinks that if the record labels just give everybody music pre-made in the formats that they want, even if it comes saddled with DRM and even if consumers need to buy the same music over and over, that they will buy it as long as it's easy and convenient enough for them to get it.

He's totally missing the point, which is that if I have a CD, or a DRM-free digital download, I buy the music once and can then put it anywhere I want to. I can listen to it, my wife can listen to it, I can make a ringtone out of it, I can put it on my iPod or make a mix CD. His idea is still to sell you multiple copies of the same tracks in all these different places, and he thinks where his company went wrong was in not doing that early enough. That's just as wrongheaded as Warner ever has been.

And he says absolutely nothing about the lawsuits, which he will no doubt continue supporting.

Re:it's not the lawsuits

[Shakrai]

still seems to have no idea what the consumers want

That's easy. Consumers want the ability to buy content and use it on any device of their choosing. Personally, I want to be able to take my music and load it onto my mp3 player, play it on my car stereo, play it on my home stereo and listen to it on my computer. I don't want to have to buy it for each of these formats. I don't want to have to pay for it on a monthly basis with subscriptions.

Subscriptions may prove profitable for videos (Netflix is proof of this), but people generally want to own their music and be able to do whatever they want with it. This isn't rocket science people.....

Re:it's not the lawsuits

[Admiral Ag]

This is a fair comment. But, while not letting him off and continuing to remain eternally vigilant, perhaps we should salute him for admitting he was wrong, or at least beginning to admit he was wrong. Lord knows it's hard to get any of these people to do it. Barracking them unmercifully may give one a sense of self-righteous please (I know I feel that way), but it probably won't make things better and might make them worse.

If he's prepared to admit that the industry was wrong in this case, then perhaps there will be DRM free music in the near future. Apple is already selling a ton of it, and customers need to encourage the other majors to get on board (and to offer more flexible formats as well). It's been obvious to thinking people from the beginning that DRM was a dead end.

The music labels are slowly waking up to what the rest of us know. That is that it is worth tolerating a certain amount of illegal file sharing in order to give legitimate customers more reason to buy their products. I could have pirated the thousand bucks worth of music I've bought from iTunes (most of it now DRM free), but it was easier and cheaper just to pay Apple for it a bit at a time. And I haven't stopped buying CDs at all.

Re:it's not the lawsuits

[MartinB]

His "war" with consumers, from his perspective, is that the music industry wasn't offering consumers what they wanted, so they went out and took it.

Which is pretty much bang on the money. Along with point (b) which is that he finally gets that suing consumers for doing that won't help sales.

But if you read the rest of his comments, the problem is he still isn't understanding just what it is that people want. He thinks that DRM-free music is just being used as a means to an end rather than being an end in itself. He thinks that if the record labels just give everybody music pre-made in the formats that they want, even if it comes saddled with DRM and even if consumers need to buy the same music over and over, that they will buy it as long as it's easy and convenient enough for them to get it.

Actually, he's right again in principle, but where he falls down is perhaps not understanding just quite how far he needs to go to get over that easy and convenient enough barrier for enough people. And I think he gets the economics better than you do in that you're an edge case. Not that that's wrong, but he doesn't need to go so far as to please everybody; just enough to be sufficiently profitable. There's a tipping point of levels of freedom/convenience (for they are the same thing) at which enough people are satisfied enough to spend the money.

This is what Apple also realised before the record industry, and got roughly correct - you can share iTMS tracks between enough computers and burn them to CD enough times for enough people's needs to sell enough tracks to make it worthwhile. Balance it right and only the edge case people will be dissatisfied. Those being somewhat congruent with the people who demand Ogg support on their iPods.

I should also point out that that balance level of course can move over time. So the iTMS deal of yesterday may not be convenient/free enough to strike the same balance tomorrow. And it may be that in the end, the destination point is universally available, entirely unrestricted formats. But that day is not here yet.

Re:it's not the lawsuits

[Ash Vince]

His idea is still to sell you multiple copies of the same tracks in all these different places, and he thinks where his company went wrong was in not doing that early enough. The problem is that this is not without precedent. When CD's were first released a lot of people did go out and buy the same music they already owned on Vinyl on CD.

From his perspective they have managed to get the public to do this once before so why can't they do it again?

Most of the reasons why they will not get away with this again are technological and I would bet if anyone tried to explain them to him they go straight over his head. I would also bet that anyone trying to explain it to him would have a very tough time as it is probably not something he wants to hear.

Can you imagine trying to explain to your employer that his entire business model was not going work and may well bankrupt the company? Especially after he had publicly locked the company into a particular path. He would have to exercise such an about face it would end his career.

I do think that a CEO of a record company saying this is actually quite positive news though as it may be the start of a slow change of focus / direction where the executive is walking a fine line between losing shareholder confidence and completely alienating his customers. After engaging in the tactics that RIAA have been for the past 5 years can you imagine him saying that he has been wasting millions of pounds of the shareholders money on court cases that were ruining his companies public image? He would have to do a VERY good job of explaining why it has taken him so long to realise what he was doing.

Re:it's not the lawsuits

[ajs]

The content industry (music, film etc) still seems to have no idea what the consumers want No... they know exactly what the consumers want, what the consumers say they want and what the analysts say the consumers say they want. They even know that all three of those are different things.

What they also know is that they're sitting on top of the world's most rigged market with stockholders demanding increasing profits. They're literally staring down the gun-barrel at their own extinction and trying desperately to figure out how they can dodge the bullet. They can't. They know they can't. That makes them desperate.

Now perhaps bizarre DRM and rootkits will start to make sense to you. They don't think these are reasonable actions that come without gobs of risk. They're just out of options.

Its called saving face.

[DaedalusHKX]

The sheeple have moved onto a new drug... ipod, itunes, zune, etc... online shops.

The really smart ones have been pirating the music all along, and maybe buying merchandise from the actual concerts. Personally, I know a few local bands that got their start selling CDR's of their own music. They're still small but at least those of us who like them, listen to them live and know most of them by name/face in real life. Can't say that with the big boys. Once they "sell out" as it were, they all develop "star syndrome", and forget who got them where they are. Loyalties shift, from their art to their profits, and the art shows it. I am all for selling or exchanging everything under the sun, but I strongly disbelieve that better art can be produced if businessmen are involved in its production. If the primary motive is profit, it isn't art, it is mere labor. And a labor for the love of something other than the labor involved, will show in the final result. As far as I've seen, it always does.

The market is self correcting, and right now the small players have the means to play the game on their own terms. This scares the crap out of the big boys. This is why they're forcing to move government and corporations in the direction of control and restriction over the online medium. Have to reign in the freedom the internet guaranteed to those who used it. Too much information is available that challenges the status quo, and it is available for free... all one has to do is sift it. Too many products are being sold without the leeches stealing their cut... this will have to change if big monopolies, both in government and business, are to survive and oppress the next century also. China is leading the way, and the rest of the world's "democracies" are quickly learning to follow the leader.

Re:Its called saving face.

[garett_spencley]

Can't say that with the big boys. Once they "sell out" as it were, they all develop "star syndrome", and forget who got them where they are. Loyalties shift, from their art to their profits, and the art shows it.

Just curious. How many "big boys" have you known personally that "sold out" and stopped being your personal friend after they became famous and started releasing poor art ?

Also, as a musician I can tell you that a lot artists' "first album" are collections of songs that had been written and perfected over the many years that they were trying to put something together that's "successful". Then when they get signed they're under contract to put out so many albums over a specific period of time. That might support your theory that business is bad for art, but keep in mind that the bands that don't enter into such contracts end up releasing one album every 5 - 7 years (Esthero and Screaming Trees are two examples that come to mind) and their fans scream just as loudly for not having fresh content as Metallica fans scream loudly about their new stuff being crap.

It's a catch-22. Either bands put out a mediocre album every 1 - 2 years and tour and make enough money to live or they work day jobs and put out an awesome album every 5 - 7 years and don't make nearly enough to live doing what they really want to do. It's a personal choice and no one is in a position to say that one is better than the other.

Re:Its called saving face.

[HTH NE1]

The sheeple have moved onto a new drug... ipod, itunes, zune, etc... online shops.

The really smart ones have been pirating the music all along, and maybe buying merchandise from the actual concerts. How would you categorize those that have not been buying CDs long before anyone even suggested boycotting music?

Modern media is already supersaturated with music. I feel no compelling reason to possess any of it for its own sake.

Problem is with the antiquated business model

[deviated_prevert]

The industry missed the fact that consumers are miffed at the "album" way of selling music. 10-15 years ago a different business model should have been launched. If there were music kiosks in stores with the ability to burn disks on demand then there would be no reason for this situation. Consumers are more interested in choice. The consumer could pay less for cheapo compilations of mp3 crap...or more for high quality audio disks, from the same source. There would also be the added benefit of not having to put up with unsold inventory and the distribution nightmares of gazillions of disks.

An easy source for some older classical music recordings would also result in increased sales. If you have an interest in classical music the change that has taken place over the last 10 years is disgusting, there is no longer an easy source for good classical recordings which is my biggest gripe! Edgar is right the industry has no one to blame but themselves for alienating the public.

Re:Death throes of an industry

[bwy]

All these lawsuits are just an outdated industry with an outdated business model trying to stay alive. They want to keep the margins as high as they were when vinyl was being pressed. They're not adapting, they're just kicking and screaming theirselves out of business.

That is really the entire problem in a nutshell. The funny part is, this is almost 2008. The time for the recording industry to be pioneers was back in 1995! Thirteen years ago! They could have become a major player in the digital age been a guiding force. Almost every other industry in this country adapted themselves in some form or another to do business in this new age.

Doubletalk

[Spy der Mann]

Saying the war with consumers WAS (past tense) wrong, implies that the war has finished already. But what about the College Opportunity and Affordability Act, concerning colleges and filesharers?

No, the war ain't over, and we haven't won yet. But be warned: We WILL win. Sooner or later, we will win. Whether you make peace with us or are mercilessly defeated, depends on you.

They never learn

[Billosaur]

"We used to fool ourselves,' he said. "We used to think our content was perfect just exactly as it was. We expected our business would remain blissfully unaffected even as the world of interactivity, constant connection and file sharing was exploding.

He should have asked the ice man, the milk man, the telephone operator, etc. They probably thought their industries would never change, until one day they were handed pink slips. When they walked outside, the world had changed. That's the constant -- change. That's a CEO's job -- to anticipate, recognize, and plan for, change. Not only is he a little late in recognizing this (the damage that's been done isn't going to be undone anytime soon), but he hasn't done a very good job doing his job.

It's not just the overlap

[Anonymous Brave Guy]

I'm sure there is some considerable overlap between people who (to some degree) pay for music and people who (to some degree) rip it illegally. But I don't think that's the root cause of the problem (or at least, not the only root cause).

The basic problem is that by attacking the pirates, the megacorps have made their products worse even for 100% legitimate users. I am sick and tired of having to sit through unskippable ads at the start of legally purchased DVDs. I am sick and tired of having to wait several seconds while my legally downloaded music track is checked out by some DRM-checking engine. I'm sick and tired of having to jump through hoops to "activate" my legally installed software. I'm not even going near various new toys (I'm looking at you, HD discs and Windows Vista), in large part because I don't trust them not to break and the companies who took my money to leave me hanging after all the horror stories.

Now, sure, part of their problem is that by doing this they make their legal products relatively worse than the illegally ripped versions, rather than equivalent except in price and legality. This no doubt motivates a significant number of people to rip things just to avoid the crap.

But they also make their products worse in absolute terms. Why on earth would I pay the same amount of my money for something that is less pleasant to use than what I used to get? In fact, why would I pay my money at all, when I can use numerous legal alternatives that come without the headaches, even without resorting to copyright infringement? I have a finite budget, and I can find entertainment from perfectly legal sources that don't line the pockets of big media: live music or recordings by independent artists, OSS for software, etc. Does it really matter that I haven't seen the latest blockbuster movie on HD-DVD, or played the latest DirectX 10-enabled game, as long as I'm entertained by what I spend my leisure budget on?

The short answer is no, it doesn't. If the megacorps want me to spend my hard-earned money on their products rather than someone else's, they need to make the better products. This argument has nothing to do with ripped versions of the same products, and everything to do with more pleasant alternative products becoming more widely available.

and apple won

[circletimessquare]

by filling the void the record companies should have filled. now iTunes dictates to the record companies the terms under which they operate. it's a power vacuum that the record companies should have filled when they had the opportunity, and they failed capitalize on that opportunity

they instead viewed digital content as a threat because they liked their model: $20 per CD, 60 cents to the artist, "only one song i like" to the consumer

now it's belt tightening time, if not outright extinction. artists can distribute online on their own terms. giving away free music with an online tip jar is still better money than the suffocating terms the record companies pay artists. and artists make their names online: who cares if the record company can hype you on mtv or the radio. myspace, facebook, hello?

hard to figure how the old record behemoths matter anynmore. their relevancy shrivels every day. sorry, dinosaurs. must suck to realize you're extinct. guess it's time to sue some more grandmothers out of spite i suppose

nothing but shortsighted assholes and losers. good fucking riddance to the whole lot of them

Warner & Simmons

[scharkalvin]

Let's lock Gene Simmons in the bathroom with Warner's CEO and
see what happens.

Read this guy's resume.

[Animats]

Well, what do you expect? Read Bronfman's entry on Wikipedia. He was the heir to Seagram's Liquor. His whole life has been carried along by family connections. Highlights from Wikipedia:

• "He was particularly active in school theatre, an interest his parents supported by donating to construct The Ann and Edgar Bronfman Theatre during a 1967 expansion at The Collegiate School, the prestigious private school in Manhattan which Edgar Jr. attended."
• "The summer before his final year of high school, in 1972, he was a credited producer on the film, The Blockhouse. Despite his inexperience, Bronfman's involvement was accepted because of his connections and access to financing."
• "By 1994 he became the Chief Executive Officer (of Seagrams), where he began a move away from the traditional liquor business and into entertainment. The first step in this diversification was the widely criticized sale of Seagram's stake in DuPont."
• "Bronfman, Jr., then led Seagram into a disastrous all-stock acquisition by French conglomerate Vivendi in 2000."
• "Seagram's for all intents and purposes ceased to exist."
• "On February 27, 2004, Bronfman finalized the acquisition of Warner Music Group and he has served as Chairman and CEO of the music company since that time."

He didn't build up Warner Music, or move up within the company, or come to it from success elsewhere. He bought the thing with inherited money, after a long career as a failed executive.

Re:Read this guy's resume.

[Trailer Trash]

He didn't build up Warner Music, or move up within the company, or come to it from success elsewhere. He bought the thing with inherited money, after a long career as a failed executive.

To be brutally honest, it's unlikely that he can do worse than the guys who are running the other RIAA "members".

Oh hell

[sm62704]

Edgar Bronfman, CEO of the Warner Music Group, has publicly framed the music industry's failure to accommodate file-sharing as an 'inadvertent' war on consumers

I'm SO sorrry, I got that damned nasty lawyer all over you. Here, let me get you a napkin...

Pff...

[sunami]

Inadvertent my ass... They got Title IV Section 408 passed of the DMCA on purpose (http://www.xkcd.com/344/)

System Shock 2

[Akaihiryuu]

Slightly offtopic (or not), but I couldn't resist. That really reminded me of the behavior of the Hybrids in System Shock 2...how they would run at you and beat you with pipes while apologizing to you and screaming for you to run away.

Re:Paying = Winning?

[sm62704]

These are marketers. Polish that turd. It's like the old car commercials, which I have finally decoded.

Pontiac: "We build excitement". The brakes and handling suck.
Chevy: "Like A Rock". Damned thing won't start
Ford: "Quality is job 1!" They have a lot of work to do in the "quality" department.

It's kind of like the lottery, too - "you can't win if you don't play". You can't lose, either.

These boys are liars. If Zaphod were listening to these bozos, his glasses would go jet black in no time. It makes me feel dirty just listening to them.

-mcgrew

At least they recongize it is over

[cdrguru]

Consumers/sharers won. Music has no monetary value today. If you want to sell some recorded music, you might find some people that don't know how to download or have too slow an Internet connection. Some people might pay money on iTunes for the same MP3 that you or I would just download for free. A few folks with heavy guilt complexes might want to pay or they wouldn't be able to sleep at night.

Now the record companies can move on. Only problem is, where are they going to move to? Nobody in their right mind is going to pay lots of money for trinket go-with items like jewel cases for their CDs. Pretty much the "recorded music industry" is going to disappear now that the exec's have figured out their "war" is over.

I'd expect to see in the next year or so some new media distribution deal coming along. One that doesn't involve music in any way but is difficult or impossible for the average person to re-distribute. Probably because of raw size, but also temporal locality - something like a 24-hour live Big Brother show but only on the Internet. If you miss something, well, keep watching because something completely new and original will happen - just keep watching 24x7.

Just think about some unknown "instant celebrity" having a camera on them 24x7 (night vision in the dark) for people to watch. Look! She's combing her hair again! Look! She is putting on THAT dress!

i actually agree with you

[circletimessquare]

iTunes is just a stopgap measure between the old world and the new

in the new world, all music content will be free. artists will support themselves with tip jars and advertisements and touring. and THERE WILL BE NO MIDDLE MAN. because the internet has simply replaced them

iTunes, bertelsman, polygram: dust in the wind. the dutch east india company. extinct. defunct, irrelevant and unnecessary

and these developments have nothing at all to do with all the tired old legal arguments. it will just happen, because it's simple economic forces at work

the final implications of the new technology called the internet is the extinction of all music publishers

bummer

[Myopic]

Great. It seems a few people in the industry and just beginning to dawn on the idiocy of their actions.

Bummer it's too god damned late. Sorry guys, you could have delivered musical nirvana in 1996 (musical nirvana, not the music of Nirvana) but instead you refused to take any action, followed by insisting on taking only the action of suing your customers. It's a decade late for you to start saying you 'get it', and the fact is there are only a few of you who get it anyway.

(Musical nirvana would be like Napster except with an inexpensive pay system: all the music ever recorded in high-quality format easily searchable for inexpensive cost. That would have been possible in ~1995, and certainly by 2000 or 2001.)

The music industry was like the drug industry and the RIAA acted like the government: consumers had a demand and the RIAA/government thought that demand was morally bad, so instead of meeting demand in a reasonable, safe, and profitable manner, they stuck their heads up their asses and made the problem worse. In reaction, consumers filled their own needs created by their own demands with their own products and services, cutting the RIAA/government completely out of the equation completely.

If the industry 'gets it' in the next five or six years, it won't matter; if they 'get it' tomorrow, it won't matter. The time to get it was about 1997, maybe 1998, and certainly by 2000. You didn't get it, and you have caused yourself irreparable harm. You will survive, but you will not thrive in the brave new world you allowed to be created without your input or help. And I'm happy enough to see them go. I think they add value to the music culture, but not much.

Haha, nice question...

[DaedalusHKX]

I'll answer by stating merely that you and I are in the same boat. I buy little or no music at all, and for the most part I prefer orchestral music rather than lyrical stuff.

So I would call those who prefer not to go ga-ga over bands and their internal issues as "free".

----------------

Now for my own opinion of "mainstream music" and the urge to have it blasting non stop? As far as I've seen, participation in certain types of music concerts and or CD/tape collections tend to be more related to "fitting in" or "belonging" to a certain group (thus elevating one's status in society by being a member of some group or other, even if the group membership is the "depressed loner goth", it is still a "group"). It is also the fear of being truly alone with silence and introspection as one's only companions that drives participation, and the fear of silence, rather than the actual love of any type of music. The desire to hear voices and be "not alone" is what drives the urge so many have to keep the TV on, non stop and the desire to buy myriad CD, tapes, MP3's etc. It also seems to be why said discs, tapes or files have to be on the Walkman or iPod running non stop, with earmuffs drowning the user in sound.

Gods only know, if the user had some silence, with nature as their only sound source, the individual might have to take stock of the world and learn to live life, instead of merely running a rat race of someone else's design. But then again... since when is introspection valued by the fast food generations? That stuff is passe, old school, not fast enough, and it makes those senses actually work, rather than be kept on the IV drip.

My antidote to mainstream culture exposure is to take a hunting trip or fishing trip every chance I get, merely because it is relaxing to be out of doors. I rarely actually take a shot at any game, I mostly go to enjoy my time as a human being, away from all the rats chasing some cheese that is just out of reach.

Show us that we're all on the same side

[Dachannien]

If Bronfman really cared about the customer, he'd read this article and speak out against the RIAA's assault on college financial aid.

That's corporations for you...

[TheVelvetFlamebait]

... just when they look like they're going to do something not entirely unselfish (like fight piracy), they realise that they can make more money in the short term caving to populist ideology.

Getting it right

[CopaceticOpus]

Bronfman went on to say he would be pressing the RIAA to drop all lawsuits immediately, and that Warner would repay the excessive fees and settlements levied against file sharers. He then revealed Warner Music's new online store, featuring albums available in FLAC, 320kb mp3, and ogg formats, with most albums selling for $3-$5. Albums over 25 years old will be offered for free, with advertising to compensate the server costs.

He went on to state that many of his label's acts had been promoted based on style over substance, and that these acts would no longer be actively promoted. Instead, Warner's new site would also provide a place where any band could freely compete for listeners based on word of mouth and the quality of their work, with the most appealing bands rising to the top, and being rewarded with the opportunity to be promoted by Warner. Warner will split the profits from album, t-shirt, and touring sales with the bands, but the bands will retain full creative and copyright control of their works.

Oh wait, that didn't happen at all.

Too little, too late

[Legion303]

Your industry went to war with consumers the minute it placed a "piracy tax" on the blank cassettes I used for my own created music, Bronfman. "Winning" isn't good enough for us anymore.

to late, you are irrelevant

[Dan667]

I am so looking forward to the day that the top forty is not shoved down out throat and bands have to make it on talent once again.