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Investors, "Beware" of Record Companies

Posted by kdawson on from the rats-heading-down-the-hawsers dept.

NewYorkCountryLawyer writes "The Motley Fool investment Web site warns investors to beware of 'Sony, BMG, Warner Music Group, Vivendi Universal, and EMI.' In an article entitled 'We're All Thieves to the RIAA,' a Motley Fool columnist, referring to the RIAA's pronouncement in early December in Atlantic v. Howell, that the copies which Mr. Howell had ripped from his CDs to MP3s in a shared files folder on his computer were 'unauthorized,' writer Alyce Lomax said 'a good sign of a dying industry that investors might want to avoid is when it would rather litigate than innovate, signaling a potential destroyer of value.'"

10 of 301 comments (clear)

  1. The vicious last bites of a wounded animal by elrous0 · · Score: 5, Interesting
    The traditional music industry is like a wounded animal at this point. They're hurt and desperately striking out at anything, in hopes of somehow surviving. They missed their opportunity to innovate a long time ago and now they're just the walking dead, stubbornly digging in their heals and refusing to just lay down and die.

    They may get to the point where lawsuits are the only real income they have left. When that day comes, and all their Congressional bribe money has dried up, I think we'll see the courts and politicians finally start to hit back hard and finish them off. And they'll die still clutching their outmoded CD's, like pathetic John Henry's fighting innovation to the bitter end.

    --
    SJW: Someone who has run out of real oppression, and has to fake it.
    1. Re:The vicious last bites of a wounded animal by altoz · · Score: 5, Insightful

      Oh, they'll be dead before that. Artists are leaving record companies in droves. They'll start producing their own music and hiring niche marketing agencies to create demand instead. Even now, the smart ones are already moving in the marketing/concert promoter direction.

    2. Re:The vicious last bites of a wounded animal by PhotoGuy · · Score: 5, Insightful

      Oh, they'll be dead before that. Artists are leaving record companies in droves. They'll start producing their own music and hiring niche marketing agencies to create demand instead. Even now, the smart ones are already moving in the marketing/concert promoter direction.

      While I agree with the sentiment, are artists really leaving in "droves?" Other than indie artists maybe never pursuing a label to start with, how many already-signed artists are leaving the labels? Can you list more than 10? More than 20? Even if you listed 1000, I'm sure it would be something like a tiny single digit percentage (or less) of the total artists on labels, hardly qualifying as droves.

      I think it *will* happen, and hopefully at an exponentially increasing rate. But for now, they still have the stranglehold on the artists.
      --
      Love many, trust a few, do harm to none.
    3. Re:The vicious last bites of a wounded animal by RobBebop · · Score: 5, Informative

      Also...

      Madonna signed with LiveNation concert promotion group (I don't know if they are embedded or not).

      Harvey Danger (90's one hit wonder) released a free CD

      Barenaked Ladies have interesting views on releasing music (I can't remember the details, but they distribute through a non-traditional site)

      Beastie Boys have put out at like one Creative Commons song and I think their latest album was somehow independent

      But my favorite is any musician with decent music posted on Jamendo, where provides BitTorrent downloadable Ogg-Vorbis albums under Copyleft licenses. The site is a virtual treasure trove of exciting artists waiting to be discovered.

      --
      Support the 30 Hour Work Week!!!
  2. Trade Associations Gone Wild! by Presto+Vivace · · Score: 5, Funny

    I guess the sue your customer business model isn't working out for them. Who knew?

    1. Re:Trade Associations Gone Wild! by mea37 · · Score: 5, Interesting

      Or rather the columnist believes that's the business model they're now in and predicts it won't work well for them.

      The inference people here seem to be drawing (that the labels are in trouble because of the lawsuits) resonates well -- we want to believe that kind of justice works in the market -- but really it has the cause and effect reversed. Sales dropped first, then the law suits started.

      Now, the thesis is correct in so far as "sue the customer" is not a productive response to an adverse market. They continue to spiral not because they file the lawsuits, but because meanwhile they do nothing to address the orignal failure of their position in the market.

      The "ripping mp3s is unauthorized" angle is FUD all around, though. FUD on the RIAA for using that wording in the first place (yes it's unauthorized, in the same sense that I'm not authorizing you to disagree with my post), and FUD on everyone who cites this as the moment where the RIAA calls all users thieves.

      Now, sure, the bad press from the lawsuits doesn't help the RIAA... among the small part of the market that sees what's going on and cares. Don't get me wrong, I'm among that small part of the market (not anti-copyright, not convinced that everything the RIAA says is wrong, but on the whole opposed to their actions over the past few years); but don't be fooled into thinking that slashdot is the world.

      As to the investment point of view... yeah, to a point, I wouldn't want to be putting money behind the major labels right now. But Sony? What would be the total impact on Sony if their record label arm spun off or died out completely?

  3. Talking out both sides by emeb2 · · Score: 5, Informative
    A lot of discussion centers around the apparent change in the RIAA's position on ripping for personal use. With the recent change in their website removing language that suggests they're OK with it and the statements from the Washington Post article about 'steals one copy' it sounds like they're taking a harder stance on it. Meanwhile there is this article http://www.azcentral.com/arizonarepublic/local/articles/0103music0103.html which quotes a representative who says that it's not an issue.

    I suppose they want it both ways - keep people on the edge and they're easier to control or something.

  4. Not like John Henry by Anonymous Coward · · Score: 5, Insightful

    Bad comparison! John Henry was a champion for the dignity of human work. He illustrated the very real danger of big business treating individuals as disposable ever since the industrial revolution. John Henry as the RIAA? Ridiculous.

    1. Re:Not like John Henry by elrous0 · · Score: 5, Insightful
      No, he was a damned fool. Stubbornly digging your heals in, refusing to change, and fighting innovation to the bitter death isn't dignified and heroic. It's pathetic and stupid. It's like the old man who's afraid of computers, and who, instead of conquering his fears and adapting to the changing world, simply refuses to use them and becomes a goddamned living relic.

      If America were full of John Henry's, we'd have become a third-world backwater a long time ago.

      --
      SJW: Someone who has run out of real oppression, and has to fake it.
  5. Magnatune.com by ProteusQ · · Score: 5, Informative

    Might be a good time to listen to a few tunes from a label that's not evil.

    [Caveat: I don't work for them, own any part of the company, or know anyone personally who's released a CD through them. I just buy their stuff and dig Shannon Coulter's sultry voice.]