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Why Starting a Legal Online Music Vendor Is Tough
Hodejo1 writes "Former MP3.com CEO Michael Robertson offers commentary at The Register saying any attempts to build a sanctioned digital music site today is doomed from the outset. 'The internet companies I talk to don't mind giving some direct benefit to music companies. What torpedoes that possibility is the big financial requests from labels for "past infringement," plus a hefty fee for future usage. Any company agreeing to these demands is signing their own financial death sentence. The root cause is not the labels — chances are if you were running a label you would make the same demands, since the law permits it."
The root cause is not the labels -- chances are if you were running a label you would make the same demands, since the law permits it.
Irrelevant, whether or not the law "allows" it.
As various legacy-media industries (and I don't mean just the RIAA here) slowly waste away to nothing, they have two choices - Find a way to make their product available on terms we can all agree to (and do so knowing how easily we can choose to simply pirate their content)... Or cease to exist.
The right to "past damages" doesn't matter if you have no future. These industries have a wide assortment of 3rd parties all but begging to solve their current problems for them with various forms of modern online distribution; Only stubbornness, and a near-suicidal insistance on maintaining some mythical "control" they lost over a decade ago, have kept such ventures from any chance of success.
So before you absolve the labels of blame in this matter - Ask yourself, would you, starving in the gutter, turn down a lifetime supply of Big Macs because you think the world "owes" you a home-cooked steak dinner?
Competition in the free market only really works when competing products are considered to be interchangeable. Unfortunately, the music-consuming public, and much of the on-line music industry, haven't yet caught on that there are alternative, independent sources of good music. Because the entire music delivery system has been built around the big labels for decades, it will require a significant push by on-line music retailers and pull by consumers to shift the industry away from the monolithic model toward a more broadly independent and distributed model. Indeed, the big labels increasingly resemble a cartel (e.g., the RIAA business and their negotiations with on-line retailers) when it should be moving the other way.
... but I didn't see the word "iTunes" anywhere in that article.
iTunes doesn't come close to what MP3.com wanted to do.
I don't want to start a debate about how much they had available or how lax their DRM; Put simply, they do have DRM, and they don't offer everything, therefore fall woefully short of the ideal.
That said, you make a good point... iTunes has done quite well, and I would call it a good start. Even so, keep in mind that every few months we hear rumblings about how the major labels want to "renegotiate" with Apple to charge more and use more restrictive DRM - They just don't "get" it, even when offered a viable model on a silver platter.
Are you... joking?
Or are you a RIAA marketing consultant?
This is a stellar piece of propaganda. Even the part about the kids wearing shabby clothing. Priceless.
Of course, if it's true, you need to get out of that business immediately.
I don't give a flying rats ass about piracy. The entire concept of purchasing information that is tied to a small piece of plastic is silly in the digital age, prima facie.
Your grandchildren will look at you funny when you suggest that one day, music could only be purchased on round pieces of plastic. They simply won't understand why something so trivial as "data" had to be purchased by means of a physical medium.
If you want to blame the decline of your business on digital music distribution, you would be accurate, but blaming it on piracy falls somewhere between a straw man and a red herring.
Lets look at reality.
Physical CD sales declined by 88 million from 2006 to 2007. (from 588 million to 500 million)
At the same time (2007), the iTunes music store sold about 1.8 billion tracks. They were thought to have about 60% of the market, indicating that there are about 3 billion tracks sold LEGALLY online.
So, a decline in 88 million plastic thingies sold... however, 3 billion tracks legally sold (for cash-money) online during the same period.
No, it is not really a piracy issue, it's merely a change in the distribution method of music.
You're on the wrong end of it.
Get out now.
Any label is not a monopoly. The collective bargaining put together by the RIAA cartel may be, however.
I would regard it akin to... All 4 of the airlines that service my city getting together and deciding collectively to triple the price of tickets out of my city.
Yes, there are other, less desirable means of transport. The bus still runs.
Yes, it is possible to start a new airline (or a new major record label), but the barrier to entry is astoundingly high (so much as to make it almost impossible).
If all 4 carriers at my local airport were colluding to set prices artificially high, they would be slapped down HARD.
Because the RIAA labels deal in slightly more nebulous items with slightly less cohesive boundaries, they're allowed to collude all they want and nobody bats and eye.
Then there is also the problem of perception associated with the source. I could pay to self-publish a volume of my poems, but it'll be ignored by critics, unavailable to most readers and, ultimately, be a waste of money on my part.
Huh? are you going to self publish and then hide the books in a closet? Because I have self published 2 photo books and even have them on the shelves at Barnes and Noble. It's not hard to self publish and get your stuff out to the public.
If you self publish, then you have to self promote, self market, and self sell your books. I get maximum profits from that instead of making $0.75(max) a book sold by letting a publisher get all the money by doing all the work. If you want to sit there wishing, go ahead. It's what most writers and photographers do they make something and send it to some publishers and use the hope method.
The successful ones don't hope, they do. They push themselves, and work to get their stuff out there and in people's faces. If you wrote a poetry book, how many public readings are you doing a month? did you travel to Chicago last month for a public poetry reading at the Library? how have you marketed yourself?
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