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."

Comments

Business logic or monopolistic cartel?

[StrategicIrony]

Just because I'm allowed by law to charge someone whatever I wish for the fruits of my business, this doesn't mean I would, or that I should. I would go out of business very rapidly.

However, if I ran a cartel, controlling a monopoly share of a highly desirable resource... then I guess I understand where they're coming from.

But... wait... aren't monopolies illegal for this very reason?

Re:Business logic or monopolistic cartel?

[drakethegreat]

Except for the fact that these services aren't getting used so they demand ridiculous things but in the end if they can't get people to use it they only have their cartel to blame. Its an expendable resource at this point because its so easy to get it other places then the online stores each label sets up.

Re:Business logic or monopolistic cartel?

[plen246]

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.

Re:Business logic or monopolistic cartel?

[Richard_at_work]

Theres nothing illegal about having a monopoly on your own product - and no, that is not what Microsoft had.

Re:Business logic or monopolistic cartel?

[totally bogus dude]

Monopolies themselves are not illegal. Certain business practices may be illegal if you are considered to be a monopoly that would otherwise be perfectly acceptable. Typically anything which could be construed as leveraging your monopoly in one market to help you in another could come under scrutiny. But even then it's very much dependent on circumstances, which is why you can have a massive trial in which a company can be convicted of illegally abusing their monopoly... and then have nothing actually happen.

Possibly if a record label required you to purchase some specific device from a specific manufacturer in order to listen to their music they'd be doing something illegal; however that's very unlikely since individual labels don't have any kind of monopoly, much less an "illegal" one.

Re:Business logic or monopolistic cartel?

[StrategicIrony]

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.

Re:Business logic or monopolistic cartel?

[StrategicIrony]

However, the RIAA represents something like 90% of the music sales in the country.

The RIAA members engage in collusion to set pricing that is detrimental to their consumers.

Since music is not a necessity like fuel or food, this won't come to light in quite the same way, but imagine all of the gasoline companies with half-decent quality gasoline, all making a cartel through which they collude to set prices at their whim?

Price collusion is one of those practices which IS highly illegal when the consumer is offered little other choice.

Possibly if a record label required you to purchase some specific device from a specific manufacturer in order to listen to their music they'd be doing something illegal

Actually, no, that's not illegal. A company can could have chosen to only release their music on Mini-Disc, for example (which would have required purchase of a Sony Mini-Disc player). That's not illegal.

What would be illegal is for 90% of the record companies to collude in making the mini-disc the only outlet for music, and then collecting a premium from vastly overpriced MD players that are now required to listen to all music in the world.

Of course, this is almost exactly what TFA describes the RIAA trying to do, but in digital medium, rather than physical.

Re:Business logic or monopolistic cartel?

[Znork]

Any label is not a monopoly.

Any copyrighted work is a government protected monopoly on its own, which makes the distinction harder to make.

While an airline (or two different airlines) and a bus may get you to your destination, the fact is, despite the significant attempts to make everything sound the same, different songs are not the same destination. And you can't (generally) buy the same song from different entities.

they're allowed to collude all they want and nobody bats and eye.

See, the trouble is they don't really need to collude. Monopoly pricing is set in relation to available disposable income; it's a function of what the consumers will spend. You maximize your revenue when you raise prices to the equilibrium point where higher prices mean lower income (as the higher per-unit revenue wont be outweighed by the lost sales), and not a cent below. (This point tends to be at a level where a significant number of customers cannot afford the product, and is also the main reason for things like region coding and parallel import prevention in other similar product areas)

As the monopoly pricing is set as a function of the same thing, all the players will end up with very similar price points. After that, the main competition going on is exposure and channel control (well, apart from friendly copying).

In essence, monopoly rights are irreconcilable with a free market economy. The business logic when you have a protected monopoly simply doesn't work the same way as competitive industries, so there's a permanent conflict of interest between the bigger players and everyone else. A conflict that is unlikely to be resolved until monopoly rights are restructured as non-exclusive revenue share rights, which simply is unlikely to happen any time soon.

Re:Business logic or monopolistic cartel?

[Dan541]

but imagine all of the gasoline companies with half-decent quality gasoline, all making a cartel through which they collude to set prices at their whim? Price collusion is one of those practices which IS highly illegal when the consumer is offered little other choice.

It's only illegal IF you can be punished for it.

Re:Business logic or monopolistic cartel?

[bsDaemon]

No, the problem is the problem with any other sort of art -- either people like it or not, and whatever arguments made, for or against, by music/art/literature majors aren't going to change (at least not in any significant way) the way that "regular" people view a piece.

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. If I can't get in a literary magazine or picked up by a traditional publishing house, then the perception is that I'm not any good.

The same is only marginally less true for music, and the only reason that's the case is because of the whole punk/hardcore scene which morphed into "indie," and even then Sub Pop was just a stepping-stone to Geffen for Nirvana, and most "indie" labels have major-label distribution contracts, or try to sell their bands to the big boys so they can take their cut.

So, is most of what's out there today on MTV crap? Yes. Are the new offerings on college radio stations "interchangeable?" Functionally, yes, aesthetically, no.

But, if artists and the public realized that you don't need the distribution channel to be good, then it wouldn't be a problem -- the internet makes record labels and publishing houses anachronistic in the extreme.

Re:Business logic or monopolistic cartel?

[purpledinoz]

You're exactly right. The law allows me to charge $10000 per hour for my work, but no one in their right mind would pay me that much, and I am the one to blame for having no customers.

People want to download music to their iPods, or whatever music player in whatever format they like, and have the ability to transfer it to other mediums without restrictions, all for a reasonable price. If the labels are unwilling to provide this, then the customers are unwilling to pay.

The problem is that the labels have to accept that they can no longer be the money making machines they used to be, and must work hard for every dollar, just like everyone else. The RIAA's war on their consumers is going to be long and pointless.

Re:Business logic or monopolistic cartel?

[Anonymous Coward]

It depends on what you mean by destination. If your intent is to get the experience of riding a particular plane or bus, then you could argue that the owner of that plane or bus has a monopoly. On the other hand, if all you care about is where you are geographically after the ride, then they are not a monopoly. Regardless of whether I listen to Britney or Rihanna for the next 3 minutes, I will still be sitting here in the same place. So, by that token, they are not monopolies. Basically, the transportation/music analogy can be interpreted differently than you have done. Perhaps this point can be made clearer if you consider whether a boat cruise is a monopoly.

Re:Business logic or monopolistic cartel?

[Chaos Incarnate]

Maybe record labels. But have you seen some of the crap that's out there? Publishing houses, while perhaps anachronistic in terms of their business method, still serve a valuable function of filtering out the utter crap that you'd otherwise have to sift through on the shelf.

Re:Business logic or monopolistic cartel?

[Lumpy]

Exactly, the following quote is bizzare at best....

"The root cause is not the labels â" chances are if you were running a label you would make the same demands, since the law permits it."

Oh, so if I lobbied and bought some laws that allows me to do illegal things that makes it ok and not my "root cause"? What is this guy smoking because I want a hit.

If I buy laws that allow me to do things that are unethical that does not change the fact they are still unethical. The Root cause is in fact the labels. It lies directly in their lap, they pet it daily while plotting their evil.

Re:Business logic or monopolistic cartel?

[Lumpy]

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?

0a 6f 6e 6c 79 20 74 68 65 20 6c 61 7a 79 20 66 61 69 6c

Re:Business logic or monopolistic cartel?

[CastrTroy]

Regardless of whether there's good music out there from other sources makes no difference. If you want "hot new album", the only way to get it is through paying the copyright holder, and you have to pay whatever price they demand. Sure you could go out and buy 5 * "cool new indie album" for the same price, but you still don't have "hot new album". It's like the argument with Windows and Linux. Sure Linux is free, and maybe even a better product than Windows, but it isn't windows. If you need Windows to run some application, the only way to get a copy of Windows is to pay whatever MS is asking for Windows. That's the problem with competition with copyrightable items. No two items are the same. Some may be comparable, but they aren't the same. I buy mostly independent music myself, but it's going to take a long long long time before most people in society start buying whatever sounds good, and has a good price, rather than whatever has the most marketing.

Re:Business logic or monopolistic cartel?

[morgan_greywolf]

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. If I can't get in a literary magazine or picked up by a traditional publishing house, then the perception is that I'm not any good.

Well, this man, who has written a series of very successful novels, would most definitely disagree with you. (I can say that because I've met and talked with Merv at length about this very subject). His novels sell remarkably well in bookstores, on Amazon, and plenty of other places.

Oh, did I mention that he is a self-publisher? Yeah, that's right, his publishing company, Willow Tree Press, is him. (He outsources the printing, of course.)

Re:Business logic or monopolistic cartel?

[Eivind]

You're confused. I don't know where you got the idea that monopolies are illegal. They certainly are not and have to my knowledge never been.

Certian -practices- are illegal IF you are a monopoly. But that's different.

Indeed, selling copyrigthed material is a monopoly by definition; a single entity, the one owning the copyright, is the ONLY one who can legally make copies of and sell the material.

Re:Business logic or monopolistic cartel?

[UncleRage]

Unfortunately, your argument breaks itself down.

You may want "hot new album" but you may well need Windows for work, school, whatever. There's a difference.

Market share penetration has forced many people to adopt a technology as necessary, but there is no force in the world that dictates that I must listen to the Fall Out Boys.

If you absolutely must have that "hot new album", accept that you consume what your enemy is demanding that you eat... then like it when they dictate that it be served at room temperature, on a paper plate, buzzing with flies while you sit in a dirty chair.

Re:Business logic or monopolistic cartel?

[Machtyn]

Because I could not find a way to contact you privately, I'll ask here. Where do you start to self-publish a book? I ask, because my wife came up with an ingenious little book that we would like published.

Re:Business logic or monopolistic cartel?

[The Shah]

I work for a online Entertainment company, our product just got launched in South Africa where competition is not that big. www.getmo.co.za It was laughed at and they stats for downloads are even more laughable. There is just not enough money in this industry generated to cover the cost of the investment.

Re:Business logic or monopolistic cartel?

[Chrisje]

Yes, cartel-forming is illegal in most European nations and the US as far as I'm aware. I don't know about the US, but where I'm from those 4 airlines that got together and made pricing arrangements had better not leave any trace of the fact that they had done so, because that would lead to hefty fines and potentially jail time.

The problem is not so much the nebulous items the RIAA deals in, it's more that the organizational and collaborative structure is such that it's nigh impossible to prove it's a cartel.

Re:Business logic or monopolistic cartel?

[cashman73]

You may want "hot new album" but you may well need Windows for work, school, whatever. There's a difference.

Umm, I hate to point this out to you, but no one needs Windows, either. Ever hear of a Mac? Linux? Granted, in terms of the music industry, I guess you kind of need Windows for the DRM, but we don't like that crap here, either! For failing to mention and overglorify Linux in your post, your geek card should be revoked and your Slashdot account disabled immediately! =)

Re:Business logic or monopolistic cartel?

[Lumpy]

Start with google.

search terms... "self publishing"

http://www.google.com/search?source=ig&hl=en&rlz=&=&q=self+publishing&btnG=Google+Search

lulu is a good self publisher and known in a lot of places. if you want to get into book stores you gotta buy a ISBN number and have it on your book.

do not waste time and money on "self publishing books" Everything you need to know is on google with the above search term.

Re:Business logic or monopolistic cartel?

[Jeff DeMaagd]

Monopolies are not illegal.

Certain abuses of monopoly are illegal.

And it's not as if the companies are the only source of legal music.

Just because one label has the exclusive rights to Madonna's music doesn't prevent someone else from making their own music in the same style and selling it.

Re:Business logic or monopolistic cartel?

[Sj0]

The music industry is constantly being charged with and convicted of such violations. They're constantly being fined for it, and have been pretty much since the '50s.

Re:Business logic or monopolistic cartel?

[mea37]

Well, no, monopolies are not illegal; but they are subject to regulations designed to keep them from taking advantage of the lack of competition at the consumer's expense.

TFA is either skipping a lot of details in the author's reasoning, or is far less than insightful. First off, the quote you mention; "you'd probably charge the same, because it's legal". Well, not if it's not in my best interest. TFA claims the services are willing to benefit the industry, in which case it would not be in my interest to charge fees that keep them from doing so. The root cause, then, is one of two things: Either the services wouldn't really benefit the labels, or the labels are short-sighted. On unsound reasoning TFA dismisses those causes and blames the law... Now don't get me wrong, the law is flawed, but here it really seems the law is just being held up as an excuse.

More to the basic premise of the article, TFA fails to elaborate on why partnering with the industry leads to a lack of users. The fee structures may make the services unprofitable in spite of drawing users, but the question posed in the opening paragraph -- and then left unanswered -- is why many such services don't draw users in the first place. Again there's inference that it's because of the lables' influence, and maybe that's so... but never does TFA explain the connection. While it's true that a service subject to insane fees might never turn a profit in spite of a huge user base (which actually is somewhat iconic of the music industry), it's also true that a service subject to no costs at all would fail if it couldn't draw users.

Re:Business logic or monopolistic cartel?

[the_B0fh]

He has a book out on it...

gdr

Re:Business logic or monopolistic cartel?

[UncleRage]

Actually, I'll respond to both of the above responses here...

My point was not that the GP was wrong, just that using Windows as a supporting argument was not the best way of pushing the point across. It simply undermined his point.

Now, as for my geek card...

I hate to say it, but there are lots of niche markets out there where Windows is the only option. While the average desktop user truly needs little more than a browser, media player and a chat client; there's quite a lot in the way of third party software that is necessary for business needs that simply aren't available on either Linux or Mac. It's not a slam on Linux, OS X, *BSD, Bob's OS, what have you... just a simple fact that Joe's Insurance Binder App requires Windows 98 - XP, Vista not currently recommended. Dan's Veterinarian Software Version 8... Windows Server 2k-2k3 and Workstation clients running XP only. Vince's Buggy Video Store Software... yup, Windows only.

It may suck, but Windows is ubiquitous in many, many enterprises. It doesn't mean that you can't squeeze YourFavoriteDistro host with a Windows VM client as a "more stable" product/service offering (I've done it), it just means that you will find clients that are simply unable to run Windows.

And yes, there are schools that tell parents that they will not support Mac or Linux systems on school networks and cannot guarantee that they will "work" for classroom activities. I've seen that one, too. One would hope that common sense would dictate action, but that is not always the case.

Re:Business logic or monopolistic cartel?

[gad_zuki!]

>If all 4 carriers at my local airport were colluding to set prices artificially high, they would be slapped down HARD.

That's because air travel is important to people, thus its important to the government. In that very same airport all the food vendors collude to charge you the maximum for a sandwich. They're not facing anti-trust because people tolerate it.

In the grand scheme of things the price and distribution of music doesnt matter to most people. Its just entertainment. Its like that 8 dollar sandwich at the airport. Life is full of double-standards.

Re:Business logic or monopolistic cartel?

[compro01]

And it's not as if the companies are the only source of legal music.

No, but they do a pretty good job of ensuring they appear to be the only legal source and make alternatives more difficult, for purposes beyond private listening at least. Take Soundexchange and their compulsory licensing, for example.

Re:Business logic or monopolistic cartel?

[Omsil98]

Well, the Cincinnati/Northern Kentucky airport is dominated by one major airline which artificially sets the prices 3-4 times higher. It is the most expensive airport to fly from in the country. The same flights with an extra connection into Cincinnati from a nearby airport often costs only a third of the price.

They have yet to be slapped down hard

On the other hand, the dominant airline responsible is having all sorts of financial issues including bankruptcy. The only way to remedy the music industry is to bankrupt those responsible.

Re:Business logic or monopolistic cartel?

[telbij]

Another thing that is somewhat unique to music is the fact that until someone hears a song a few times, it's very very unlikely they will like it. This is why so much music is derivative, and why true creative genius is often under-appreciated (see Frank Zappa).

This is what makes media consolidation and payola so nefarious, and also why you find playlists getting ever shorter, with so much focus on a few big hits.

Re:Business logic or monopolistic cartel?

[gnick]

You may want "hot new album" but you may well need Windows for work, school, whatever. There's a difference.

Umm, I hate to point this out to you, but no one needs Windows, either. Ever hear of a Mac? Linux?

Sure, I don't need Windows. But I think that acquiring Windows beats finding other employment or going all the way into the office for the occasional trivial work-related chore.

Re:Business logic or monopolistic cartel?

[Anonymous Coward]

Uh, Zappa's music is pretty derivative. It's just not derived from rock/blues but from jazz. Go listen to some Sun Ra. Zappa was a hack, and his fans keep bleating about what a genius he was when he just made mediocre acid jazz and marketed it to the mainstream.

Re:Business logic or monopolistic cartel?

[KDR_11k]

They're usually comparable enough. The Windows/Linux software support thing is one of the attributes of the product, Windows has better software support than Linux. Inversely the ability to run on a given OS is an attribute of the software you run, if software A is only for windows but spftware B is multiplatform (but maybe weaker in other areas) it's your choice which to buy. Of course Windows is a monopoly product so there's reduced choice.

Marketing, too, is an attribute of the product. Indie labels could market their stuff as well, noone's forcing them to stay niche. Just sitting and hoping the masses will "get a clue" doesn't get anything done, you can sit and whine about the unfair world or you could at least try your best to make your product mass-market friendly.

Re:Business logic or monopolistic cartel?

[KDR_11k]

Look, if you really need one specific brand (or song) of music then obviously you have no choice but to buy that brand. It's the same with every market, even if it's just pea soup: Every brand has its own attributes and you pick the one with the attributes you want the most. Except for goods that were produced with little human interaction (e.g. fruit) you'll have a hard time finding two producers making the exact same good. Would you argue Coca Cola has a monopoly because no competing cola tastes like theirs? Sorry but no market is composed of all identical goods at varying prices, there's always variations in more than just price.

Re:Business logic or monopolistic cartel?

[KDR_11k]

I considered it silly more because it should be pretty damn obvious that they're not going to get a deal if they ask for such outrageous fees. They may have the right to ask for that much but they aren't required to and by insisting on terms the other party has already called unacceptable they're not going to get anything. I think it's clear they didn't want the negotiation to succeed. Their problem.

Re:Business logic or monopolistic cartel?

[ldaff]

There are a few sites out there working to change the perspective of the masses and open a reasonable store that cuts out the cartels and pays the good artists well.

I've made one of them. It's still pretty early and we're slowly building our music catalog. Our take is we give away free mp3s to people who will rate some randomly assigned stuff. This lets you passively hear a sampling of whats out there. It also lets you find music you might like in a top-25 like interface (that you can sort by everyones ratings, your friends, etc.). http://www.choosik.com/ if anyone wants to check it out. I'd love to hear feedback if anyone has it, too.

I also highly recommend http://www.amiestreet.com/ . Each song starts out cheap(.15, I think) and raises in price as more people buy it.

Re:Business logic or monopolistic cartel?

[againjj]

A monopoly is not illegal (follow the link for examples of some legal monopolies). Rather, it is abusive and unfair business practices that are illegal. Also see the US and EU law.

Re:Business logic or monopolistic cartel?

[Anonymous Coward]

So, is most of what's out there today on MTV crap?

Well, it'd be nice if they started playing music on MTV again one day...

Re:Business logic or monopolistic cartel?

[Keeper Of Keys]

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.

How can you say that, at the daily meetup of the RIAA eye-batting squad?

Re:Business logic or monopolistic cartel?

[Anonymous Coward]

Maybe record labels. But have you seen some of the crap that's out there? Publishing houses, while perhaps anachronistic in terms of their business method, still serve a valuable function of filtering out the utter crap that you'd otherwise have to sift through on the shelf.

Through internet distribution and the related database, a rating system is a much better way to filter content to casual users than having companies forecast what media the over-generalized public will buy/should be listening to (hence Coldplay).

Re:Business logic or monopolistic cartel?

[Anonymous Coward]

Yes that is the point. Either you self-promote or rely on the big boys to make any kind of real progress. Even indie labels use similar methods of promotion and advertising they may just be more open to less popular sources and arenas. If you want impressive numbers, you're likely to get them with the big timers.

our legacy?

[Anonymous Coward]

'The current rate of extinction is around 10 to 100 times the usual background level, and has been elevated above the background level since the Pleistocene. The current extinction rate is more rapid than in any other extinction event in earth history, and 50% of species could be extinct by the end of this century. While the role of humans is unclear in the longer-term extinction pattern, it is clear that factors such as deforestation, habitat destruction, hunting, the introduction of non-native species, pollution and climate change have reduced biodiversity profoundly.'

I tried and failed

[Anonymous Coward]

I bought the store about 12 years ago. It was one of those boutique record stores that sell obscure, independent releases that no-one listens to, not even the people that buy them. I decided that to grow the business I'd need to aim for a different demographic, the family market. My store specialised in family music - stuff that the whole family could listen to. I don't sell sick stuff like Marilyn Manson or cop-killer rap, and I'm proud to have one of the most extensive Christian rock sections that I know of.

The business strategy worked. People flocked to my store, knowing that they (and their children) could safely purchase records without profanity or violent lyrics. Over the years I expanded the business and took on more clean-cut and friendly employees. It took hard work and long hours but I had achieved my dream - owning a profitable business that I had built with my own hands, from the ground up. But now, this dream is turning into a nightmare.

Every day, fewer and fewer customers enter my store to buy fewer and fewer CDs. Why is no one buying CDs? Are people not interested in music? Do people prefer to watch TV, see films, read books? I don't know. But there is one, inescapable truth - Internet piracy is mostly to blame. The statistics speak for themselves - one in three discs world wide is a pirate. On The Internet, you can find and download hundreds of dollars worth of music in just minutes. It has the potential to destroy the music industry, from artists, to record companies to stores like my own. Before you point to the supposed "economic downturn", I'll note that the book store just across from my store is doing great business. Unlike CDs, it's harder to copy books over The Internet.

A week ago, an unpleasant experience with pirates gave me an idea. In my store, I overheard a teenage patron talking to his friend.

"Dude, I'm going to put this CD on the Internet right away."

"Yeah, dude, that's really lete [sic], you'll get lots of respect."

I was fuming. So they were out to destroy the record industry from right under my nose? Fat chance. When they came to the counter to make their purchase, I grabbed the little shit by his shirt. "So...you're going to copy this to your friends over The Internet, punk?" I asked him in my best Clint Eastwood/Dirty Harry voice.

"Uh y-yeh." He mumbled, shocked.

"That's it. What's your name? You're blacklisted. Now take yourself and your little bitch friend out of my store - and don't come back." I barked. Cravenly, they complied and scampered off.

So that's my idea - a national blacklist of pirates. If somebody cannot obey the basic rules of society, then they should be excluded from society. If pirates want to steal from the music industry, then the music industry should exclude them. It's that simple. One strike, and you're out - no reputable record store will allow you to buy another CD. If the pirates can't buy the CDS to begin with, then they won't be able to copy them over The Internet, will they? It's no different to doctors blacklisting drug dealers from buying prescription medicine.

I have just written a letter to the RIAA outlining my proposal. Suing pirates one by one isn't going far enough. Not to mention pirates use the fact that they're being sued to unfairly portray themselves as victims. A national register of pirates would make the problem far easier to deal with. People would be encouraged to give the names of suspected pirates to a hotline, similar to TIPS. Once we know the size of the problem, the police and other law enforcement agencies will be forced to take piracy seriously. They have fought the War on Drugs with skill, so why not the War on Piracy?

This evening, my daughters asked me. "Why do the other kids laugh at us?"

I wanted to tell them the truth - it's because they wear old clothes and have cheap haircuts. I can't afford anything better for them right now.

"It's because they are idiots, kids", I told them. "Don't listen to them."

When the kids went to bed, my w

Re:I tried and failed

[Anonymous Coward]

Troll post is bad! And has been posted many times before and is just as irrelevant.

If it's real, have the guts to register and login, and defend it. Don't just post the same bullshit over and over again.

Re:I tried and failed

[wrook]

First, I'm not sure why you posted as anonymous coward. It is an interesting story and I have deep sympathy for your plight. But I don't think your blacklist will be successful in saving your business. If it is true that piracy is destroying your business, then refusal to sell to pirates only hurts you more. Pirates can find music anywhere. I'm sure you've heard people here explaining that most of the time you can pirate things even before they are released. And as we all know, one copy might as well be a million copies given the internet.

So, your refusal to sell to someone who wanted to buy an album means that you will go out of business faster. It means that you will have less time to find some other way to make your living.

I'm really sorry, but if what you say is true, you are already on borrowed time. Why not use your favorable position as a respected business operator to springboard you into the next venture? If you alienate those around you, will it not be more difficult to create your new business?

I wish you all the best and hope you reconsider your tactics. Life is rarely fair, but sometimes new opportunities are created when old ones fail. This is the essence of being an entrepreneur.

Re:I tried and failed

[knutkracker]

Sounds familiar in many ways.

Re:I tried and failed

[Anonymous Coward]

lol wut?

Re:I tried and failed

[StrategicIrony]

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.

Re:I tried and failed

[wrook]

Huh??? Honestly, I was replying to something, but the something is gone now....

Seriously... can that happen, or have I just gone batty????

Re:I tried and failed

[Technician]

But there is one, inescapable truth - Internet piracy is mostly to blame.

It's a common scapegoat, but missing the mark. Percieved value and retail price are an order of magnitude out of place.

Instead of wasting money on a shiney disk with about 45 minutes of stuff along with one good song, I can buy a DVD for half the price.

I can carbonate water at home and add my own flavoring and sugar, but I still purchase fountain drinks for the convience.

CD's are now the oposite of convience for more money. Downloads go right on to an MP3 player. CD's have to be found if still in print, ripped and put on a player.

Online is a-la-carte. CD is a canned package.

Some compainies wanted to make and install in store CD burning kiosks. Guess who killed that in the bud?

For an industry who doesn't listen to their consumers, they sure scream P-P a lot for their lack of adjusting to the market.

If you scream P-P enough, will the death of your scapegoat really fix your root problems?

Some people are offended by my blacklist system.

This would be mostly your best customers. Those who don't listen to music don't buy CD's. Those deeply into music purchases CD's and shares copies of out of print stuff or the one good song on a CD. Blacklisting them is a great way of killing the biggest part of your business. Thanks for providing great evidence the industry doesn't understand the market.

Much of the industry is selling pig in a poke packages. I bought the DC Talk album Supernatural because our church performed Red Letters, and I enjoyed the choir rendition. I hated the album, even the good track. I'm not into acid rock. Needless to say, once burnt, twice shy.

How many times have you bought an album because you only heard one song and then didn't like the rest of the album at all?

P-P expands music horizons. Most of the time when I bought albums, I heard it from friends first. (I quit buying entirely when the industry started dropping the nuke bomb on some unlucky few as a protest.)

My peak buying days was when I was in the military while in my peak piracy days with cassette tapes. The industry doesn't understand their consumers or the market.

Re:I tried and failed

[pipatron]

Maybe after being on slashdot since forever (judging from your ID) you should have learnt by now that there is this thing called "moderation" and that articles can be "modded" up or down. You can set a limit so you will not see articles below a certain level. The post you replied to has since been modded down, thus it is now below your threshold, and you are not seeing it.

Re:I tried and failed

[hey!]

Well, I think you have some good points, but the fundamental shift I see is not in how music is distributed, but how it is consumed

The LP album is, essentially, a concert piece. Thirty years ago, singles from an album were what hooked people into buying, but people sat down and listened to a whole album, all of the A side then all the B side. They didn't play one track, hop up and take the needle off, remove the disk and put it in its sleeve, remove another record put it on the platter, then carefully set the needle down on a specific track.

CDs are the same.

With digital music players, they can and do play a jumbled sequence of single tracks. It's a kind of return to the day when wealthy patrons had musician servants that composed short pieces like "Fanfare as Lord So and So Sits Down to Dinner". People use music players to provide that kind of soundtrack to things they do in their lives, like working out on a Stair Master.

The LP or CD is more like a symphony, a longer work that makes sense in the context of middle class people making an evening of going to the concert hall.

If the labels want to sell CDs, then they have to sell CDs that are more than random collections of mediocre songs tied to one or two song that the consumer wants. It's not the mediocrity of the filler material that's the problem, it's that it is filler material in the first place. I happen to like opera, but there a plenty of bits in even the best opera nobody is going to put on their play list unless they're listening to the whole thing through.

Re:I tried and failed

[Anonymous Coward]

Yes, he was actually joking. Actually, as people on imageboards tend to say...

"this copy pasta is stale."

Re:I tried and failed

[adrianwills]

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.

Could not agree more. Well put.

On the 'sales decline' tip though I did a small study into the 'decline' of music sales and a little survey with a few dozen people (yeah yeah i know, needs to be bigger to be accurate but i think you'd be surprised) revealed another interesting result... yes a lot of people's music purchasing habits have declined but it's primary because people get sick of music these days. Between commercial radio, commercials themselves and the quantity of popular music in everything from cafe's to bookstores, to movies and advertising, a popular song gets milked for all it's worth and people aren't interested in buying it. A lot of people that previously bought popular music weren't buying the stuff being jammed down their throat.

A somewhat moot point to yours and this article, but relevant to the CD sales argument i feel.

Re:I tried and failed

[hairyfeet]

Ummmm.......You DO realize that what you are responding to is a VERY old copy/paste troll,don't you? I mean REALLY old,as in I remember reading that one when the 1x CD burners came out. Everytime someone brings up the cartels somebody copy/pastes that old thing.

As for how we can get away from these cartels,well other than forming an EFF style lobbying group to just buy our own congress critters to pass laws for THE PEOPLE for a change,is with a better way for new bands to be heard. Since I'm sure that most would agree that if you want to see a band firing on all cylinders the best way is live where the crowd can get them pumped up and rocking,why doesn't someone start a live clubnet? The clubs could get free advertising and sell merchandise to folks that would otherwise never get a chance to step foot in their club, the bands would get free publicity and could have links to their homepage where they can sell their own merchandise, and the site could sell MP3s off the bands playing.

I know I would love it if I could go to one site and see live shows from clubs across the country and maybe even across the planet live. Plus there is no better way to get a feel for a band short of being there in person than seeing how they do in front of an audience. And it wouldn't cost the giant bucks like starting up a new record label or having to kiss the cartel booty does. And finally by having it grouped by different styles it would allow us to check out bands we may have never heard of or who haven't toured anywhere near our areas. And they could start small with just a few clubs and build up slowly. But as always this is my 02c,YMMV

Re:I tried and failed

[Azaril]

I'm amazed he even went to the effort of posting it here, knowing the reaction it would get. I'm a little bit shocked about the hypocrisy in his post though. For some reason a "clean cut and friendly" buisiness is allowed to assault a customer that intends to purchase a CD in his store? No wonder his sales have dropped. I expect the fines/prison time he gets if he assaults every pirate that walks into his store probably dont help with the money issue either...

Re:I tried and failed

[YeeHaW_Jelte]

"Are you... joking?

Or are you a RIAA marketing consultant?"

And the answer is .... B.

Damn story pops up every time an article is posted that is vaguely connected to music and internet. It's just some PR drone connected to the music industry doing his sorry job.

And you had the bad luck to read it before it was modded into oblivion and took it seriously.

Re:I tried and failed

[msormune]

I have seen the same text in previous threads... It seems to be really a trollish piece of work that circulates.

Re:I tried and failed

[Per Wigren]

CD? What.CD? I don't understand...

Re:I tried and failed

[houghi]

3 billion tracks legally sold

Let us put that in perspective. At 10-15 songs per album, that is 200-300 million albums. Even at 20 songs per album, this would mean 150 million albums.

Deduct the 88 million less sold is an increase of albums sold of 62 million.
So instead of the decrease in albums sold, of 88 million, there is an actual increase.

I knew you were right. I just wanted to make it less dramatic and not compare oranges with apples.

And we do not even talk about the extra income from ring-tones. Something that did not happen in the past.

Re:I tried and failed

[Anonymous Coward]

Maybe a lot of people think it's old fashioned but without the album format we'd never have had Pink Floyd's The Wall, Jeff Wayne's War of the Worlds or even Iron Maiden's Seventh Son of a Seventh Son. Even apart from concepts, good bands record albums that cohere. The songs are just part of the album, like chapters in a book. Who would read just the most action-packed chapter of a spy thriller, for instance?

I really do think that people who complain about the album format just don't understand rock music. It doesn't suit everything - pop "albums" really are just collections of tracks, most of them bad. But the rock album is one of the world's great inventions. Loving a great song is one thing. Loving a great album is something else altogether.

Re:I tried and failed

[Anonymous Coward]

Aren't you afraid you are going to burn in hell? You go to church and brazenly conduct illegal activities, surely you aren't expecting to go heaven?

Re:I tried and failed

[Anonymous Coward]

YHBT. YHL. HAND.

Re:I tried and failed

[Lord Kano]

I've seen this bullshit story posted again and again for years.

I don't sell sick stuff like Marilyn Manson or cop-killer rap, and I'm proud to have one of the most extensive Christian rock sections that I know of.

What is "cop-killer rap"?

Re:I tried and failed

[Anonymous Coward]

You responded to a post that has been repeatedly posted for a number of years on umpteen sites whenever anything mentions the RIAA cartel and their doomed business model. I.e. the poster is a RIAA stooge dude or bored troll. I'm surprised you've never seen it before.

Re:I tried and failed

[Jason Levine]

I thought I had read this before so I did a search and came up with this: http://www.kuro5hin.org/story/2003/10/2/103735/275 This post was made in 2003 (and references a previous post on Slashdot, so it could easily be older than that.) You are simply reposting a 5 year old story word for word. I somehow doubt that you are the original author (which would, ironically, make that post copyright infringement ;-) ).

That said, there are a couple of big holes in this story.

Why is no one buying CDs? Are people not interested in music? Do people prefer to watch TV, see films, read books? I don't know. But there is one, inescapable truth - Internet piracy is mostly to blame.

The author admits to not knowing why people aren't buying CDs, but then immediately jumps to the "inescapable truth" that Internet piracy is to blame. It isn't because the selection isn't to the buying public's taste, or because a Walmart opened down the block with better prices, or because people were buying more DVDs/video games/etc. Nope, it *had* to be Internet Piracy! And why?

The statistics speak for themselves - one in three discs world wide is a pirate.

Not to overuse a XKCD meme, but: Citation Needed. So I did a Google search and came up with this article: http://www.ifpi.org/content/section_news/20050623.html

Ok, the article is 3 years old, but let's let that slide for a bit. The piracy that the article speaks of is commercial CD pressing. You know, the folks who obtain one CD, burn a hundred copies, and sell them on the street corner for $1.50 each. That is a completely different form of piracy than the guy who clicks "share this folder" in LimeWire/Kazaa/etc.

On The Internet, you can find and download hundreds of dollars worth of music in just minutes. It has the potential to destroy the music industry, from artists, to record companies to stores like my own.

Yes, the Internet does make piracy (of the P2P sharing kind) easier than it used to be. It does also have the potential to destroy the music industry as we know it now. However, many new technologies are disruptive events. The industry either has to adapt or die. When cars first came out, it was disruptive to the people in the Horse and Buggy Industry. We don't hold technology back simply because one industry doesn't want to change how they operate. For an example of how the music industry might adapt, look to eMusic and Amiee Street. As far as local record stores go, they either find a way to adapt (perhaps kiosks selling personal mix CDs) or they die out. It's just a fact of business life.

Before you point to the supposed "economic downturn", I'll note that the book store just across from my store is doing great business. Unlike CDs, it's harder to copy books over The Internet.

In the years since this post was originally written, advances in book piracy have been made.

As for the National Register of Pirates idea, it is quite obviously a bad idea. The original poster of this seemed to be of the opinion that the courts were taking too long so pirates should just be added to a list without a trial. Let's put aside the question of how the RIAA would get the pirates' identities and how it would be enforced for a moment. (Big questions, mind you, but let's assume some process gets put into place.) How will the list be kept focused on pirates and kept clean of the falsely accused? We have only to look at the No Fly List for an example of how a blacklist with no oversight or clear removal process can wind up triggering many false positives. If some other Jason Levine pir

Re:I tried and failed

[smoker2]

I agree, and significantly that's why I stopped buying CDs. I am a fan of Pink Floyd, the real Floyd, before Roger Waters left. Dark Side of the Moon, The Wall, Wish You Were Here. All of those albums were works of art, designed to be listened to in their entirety. But what happened on CD ? They put audible breaks in between the tracks. Ruined it completely for me, I may as well have recorded each track individually myself and slapped them together to form an album. Strangely enough, I can do that now and I make a better job of it than the official labels do.
This phenomenon is not unique to CDs either. Watching a movie on TV has got to be a pain these days due to the incessant ad breaks. You can't build an atmosphere and immerse the viewer in a situation when the dialogue switches to overly loud irrelevant material every 20 minutes. That's why I record things I want to see and rip the ads out - to restore the natural flow of the original work. I no longer have to keep the remote in my hand so I can rapidly turn the sound down to reasonable levels, I can sit back and absorb. Can you imagine a book where every 20 pages a loudspeaker erupts telling you that you're paying too much for car insurance ?

Re:I tried and failed

[korbin_dallas]

Its still messed up if the 'Labels' remain the gatekeepers.

What I don't get is that MP3.com, for a long time brokered Indy groups or Garage Bands who sold their CDs directly to thier fans. Why did this stop? How did that stop? Many were VERY good bands, just as good and often better than the manufactured Label stuff. Many groups I liked made lots of money.

Micheal, thats where your money is. Ever think to cross MP3.com with online Radio ??? Then MP3.com becomes the broker and RIAA can eat shit, cause you aren't peddling any mp3s that are Labeled music, i.e. NO FEES to RIAA.

Me, I hate iTunes, its such a clunky UI, and it always wants to dick with my files and folders.
Now it wants to gather all your personal info so it can choose iTunes for you... no thanks.
I have to find a basic mp3 player, or maybe I will just make my own.

Re:I tried and failed

[Wooky_linuxer]

Mod parent insightful. People must realize that nowadays everyone wants to listen to their particular selection of music. They want to mix songs, play them in whatever order they want, be it in a party, at bedtime, in your PMP or even in a business outlet. CDs, or DRMed discs, or even DRMs tracks that you can download but not copy freely between different devices simply are not suited for this. This is (one of) the real culprits of low CD sales.

Re:I tried and failed

[Miamicanes]

> This is (one of) the real culprits of low CD sales

Another is the fact that quite a few current pop CDs don't sound a whole lot better than the badly-compressed alternatives you can download for free. Part of the problem is the "loudness war" -- studios want THEIR songs to sound louder than others when played on the radio. Radio stations almost never adjust the source level for different songs. So... producers are now pressured by record companies to mix music with the average volume as high as possible. What usually results is something we all thought was banished from the earth 20 years ago -- clipping. Take a Madonna CD from the late 80s/early 90s, rip a track from it, and view the waveform in SoundForge. Then do the same with any recent CD by someone like Britney Spears, Good Charlotte, Justin Timberlake, or even Madonna. It's not subtle... you'll see the difference INSTANTLY.

It's sad... the music industry has basically forgotten (or abandoned) just about EVERYTHING it learned about producing high-quality recordings during the 80s and 90s.

And don't even get me started on the MECHANICAL quality of modern CDs. I have badly-abused CDs from high school that rip and play better than almost-new CDs subjected to a week in my car. Modern pressed CDs have almost NO scratch-resistance, and are almost as easy to destroy as records were.

Re:I tried and failed

[Anonymous Coward]

I'm proud to have one of the most extensive Christian rock sections that I know of.

The business strategy worked. People flocked to my store, knowing that they (and their children) could safely purchase records without profanity or violent lyrics

Did you vet out the violent ones? I was listening to a Christian metal song, and then ICK! it turned out that the song's narrator was getting murdered by his government, except it wasn't even something quick like lethal injection. His torturous murder just dragged on for hours, in front of a crowd of people who didn't do anything to stop it.

Christian music is sick! There's no way I would expose my kid to a store that sells that, unless I was sure the store filtered out all the Christ-related stuff. Crucifixions, prostitutes, ew!

Re:I tried and failed

[moderatorrater]

The LP album is, essentially, a concert piece. Thirty years ago, singles from an album were what hooked people into buying, but people sat down and listened to a whole album, all of the A side then all the B side. They didn't play one track, hop up and take the needle off, remove the disk and put it in its sleeve, remove another record put it on the platter, then carefully set the needle down on a specific track. CDs are the same.

You've never heard of mixed tapes? I've been making my own collections of music since cassette tapes so that I could cherry pick the best ones. I've heard the argument that the work needs to be taken in its entirety, artists that won't sell single tracks, and I think it's a mistake. If I make a series of 7 paintings, and you need to see each of them in order to get the experience that I intended, it would be a mistake for me to try to force you to look at them like that. Instead, I would get the information out there that it's better viewed like that, and then let the viewers experience it for themselves and decide. I've listened to albums where the whole is greater than the sum of its parts, but that doesn't keep the great songs from being better than the mediocre ones, it just means that the mediocre ones are a lot better when listened to in context. Guess what? I take those tracks off the CD and put them in my playlist. I still listen to the album as a whole sometimes, but not as often as I listen to the good ones as part of a playlist.

To sum it up, the artist should let the consumer enjoy their works as best they can and stop trying to force their "artistic vision" on them. People are enjoying your work; quit your bitching and enjoy the profits and the recognition.

Re:I tried and failed

[Shotgun]

Dude, don't waste your time posting facts and using logic. Sheesh!

The troll claimed that the Feds are doing a good job with their so-called "War on Drugs". Claimed he was doing well running a family friendly store selling Christian rock, then he cursed a couple customers and his poor children had to wear ragged clothing and cheap haircuts. There are way more than enough bullshit alarms and contradictions within the post itself to save you from having to do the work of digging up real data.

This is the kind of silly, self-contradictory trash that you'd expect of Bill O'Reilly or Keith Oberman.

Re:I tried and failed

[Shotgun]

NO!! Mod parent insightful, because I save 15% on my car insurance...and I'm a caveman.

Re:I tried and failed

[alvinrod]

Not so much joking as trolling. I've seen the exact same piece posted word for word on /. before as well as in a few other places over the years. It also takes a few different forms as well as I've seen it changed from a record store to a video game store. It's fairly similar to the "I don't want to start a holy war ..." post that gets thrown up from time to time.

I'm not entirely sure if it originated here or if it's a copy paste job from some other publication. In this case it was pretty much a troll, but the post probably could be used in some context to make it quite funny.

Re:I tried and failed

[geminidomino]

A reference to the fracas around This Song, I beleive

Re:I tried and failed

[Technician]

I did this with Dark Side of the Moon with Audacity. Ripped it to FLAC, edited out the dead spots carefully matching the waveform tails and saved the result. My Album now has 2 tracks, side A and Side B. Awesome. I need to take the time to do the rest.

Watching a movie on TV has got to be a pain these days due to the incessant ad breaks.

Agreed, which is why I won't miss TV when they switch off analog. I almost never watch it now.

Re:I tried and failed

[SpecBear]

I remember when the troll community was creative and vibrant. Trolls were driven, passionate individuals who truly believed in the art of jackassery. Those days are long past, and that saddens me.

The popular trolls you see today are just recycled, remixed versions of the same trolls we've been seeing on mainstream sites for years now. Common, soulless crap served up to an audience that's grown too numb and jaded to recognize it as such.

Personally, I liked this one better when it was about a video game store.

Re:I tried and failed

[Lord Kano]

The problem is that song isn't rap.

LK

Re:I tried and failed

[Anonymous Coward]

I hope you die.

Re:I tried and failed

[geminidomino]

And the facts have stopped the whole "Think of the children" and "Respect Mah Authoritah!" crowds before?

Re:I tried and failed

[Lord Kano]

That's why I was trying to get HIM to name the wrong song.

LK

Digital success rate as an indicator of future ...

[snoggeramus]

With the success rate of the officially sanctioned sites and plain "not getting it" of the music companies, it's a wonder that the traditional music industry is still in business!

Maybe I missed it ...

[Daniel Dvorkin]

... but I didn't see the word "iTunes" anywhere in that article.

It is possible to build a profitable, long-lasting, and legal online music business, Mr. Robertson. I'm genuinely sorry you failed to do it, but to pretend that the biggest player in the online music world simply doesn't exist is kind of childish.

Re:Maybe I missed it ...

[pla]

... 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.

Re:Maybe I missed it ...

[Anonymous Coward]

Also bear in mind that iTunes became successful largely due to the iPod. Apple had a huge user base to start with, which gives them clout in negotiations with labels; a new service entering the market won't ever have that.

Re:Maybe I missed it ...

[PhilHibbs]

It is odd that he doesn't mention iTunes or try to explain why it was successful. That doesn't invalidate the point that he's making, though. Maybe it's possible to start up a digital music store if you are Apple. After all, creating the most popular digital music player in the world isn't exactly hard, is it?

Re:Maybe I missed it ...

[legallyillegal]

The iPod was selling at a fairly normal pace until the middle of 2004 (iTMS was launched in 2003). iPod Sales Numbers

Re:Maybe I missed it ...

[Technician]

It is possible to build a profitable, long-lasting, and legal online music business,

It WAS possible to build a profitable,

There, fixed it for you. The industry has tried to push Apple into a layered pricing service with higher prices for more popular stuff. By then Apple was big enough to push back and win.

Small potatoes startup companies don't have that kind of clout. They also have no way to unseat Apple.

Re:Maybe I missed it ...

[perlchild]

Well speaking for myself, the only reason I buy from the ITMS is that I perceive right now that the Itunes store is happening despite the RIAA. If they started agreeing to it, I'd find that suspect, and look for someone else. They've totally alienated me as a consumer, yet they have a lock on artists I like, so I'm looking for an outlet which is refusing to be strongarmed(at least apparently).

They do "get it", itunes is their extinction, they want to renegotiate while they're still around to talk about it...

Re:Maybe I missed it ...

[compro01]

Apple largely succeeded as;

• They had a pre-existing base of a popular music player (ipod).
• They created tight integration between their music store and said music player (made them easy to use for average Joe/Jane).
• They used a DRM scheme which largely keeps out of way, yet mostly appeases the record companies initially.
• They were Able to leverage their size against the record companies.
• Later, they were able to leverage their market share to adjust the terms to better fit the market (starting to remove DRM)

Re:Maybe I missed it ...

[Blakey Rat]

Microsoft's Zune/Xbox 360 store and Amazon's Unboxed have pulled it off, too. (Well, I dunno how you define "long-lasting", but I don't see either of those services failing any time soon.)

Re:Maybe I missed it ...

[Creepy Crawler]

I just teach people how to search the internet where to find things.

We were taught in the beginning of our lives that "sharing is caring". Too bad they dont teach the capitalist version: "get your hands off my goddamned stuff! get your own!"

Tell me this: is adversarial better or worse than cooperation? I'm thinking somwhere along the lines between Deb and Ian and this guy named Linus. And dont forget the bearded freak who is effectively right: RMS.

Re:Maybe I missed it ...

[cdrguru]

Keep in mind that iTunes is not profitable. Apple needs it to supply content for the billions of iPods. It turns out that iTunes isn't losing lots of money, but it is way below what any commercial entity would be able to tolerate.

If there were no iPods, iTunes would disappear overnight.

Re:Maybe I missed it ...

[magus_melchior]

iTunes is most likely viewed by the record companies as a concession, because they want in on a major cash cow-- iPods-- and they don't want people copying CD or radio tracks to these devices.

The 1992 Audio Home Recording Act protects personal, noncommercial copies of audio recordings:

No action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings.

This activity was further protected by RIAA v. Diamond when the Diamond Rio was challenged in court. Even so, the recording industry continues to insist that making high-fidelity or exact copies off of CDs is impermissible, if not illegal. But Apple was able to use both the AHRA, and the record companies' desire to keep anyone but them from making exact copies, to bring them to the negotiating table.

If it were about money, the labels would have banded together to form their own online store using Microsoft DRM and thus bankrupt any competitors like iTMS-- any forward-thinking businessman would jump on the internet and expand their profits a few orders of magnitude. If they really cared about expanding CD sales, they would have expanded their audience by making tracks freely available for download. Instead, they are getting jumped by Apple, Amazon, and a variety of other services publishing their media with or without DRM.

It is not about money. It is about maintaining an iron grip on the production and distribution of music. I suspect they really don't care whether you pay your fair share for the tracks you rip from your CD or buy from services like iTunes-- they're much more afraid of you or anyone else but them becoming a distributor through file sharing, because that means artists can use file sharing to distribute their works, cutting the labels completely out of the process. Notice that, for all the talk of getting back their money, they're primarily targeting people who "make available" CD tracks?

It's happening already, but only the most well-known or wealthiest of artists can do it, so far, and nearly all celebrity artists are indentured to the mainstream labels. If there were a Youtube-like service where artists can inexpensively distribute their works radio-style without any involvement of the mainstream record labels, and if that service supersedes radio in listenership, that will be the beginning of the end of the recording industry cartel, which is dependent on maintaining a monopoly on music listeners. This is why they are trying to kill both mainstream and independent internet radio through the Copyright Royalties Board, and why they are trying to legislate the protection of their production and distribution model.

The first thing we must do is find a way to stop SoundExchange from collecting royalties on non-affiliate music.

Re:Maybe I missed it ...

[Ex-Linux-Fanboy]

Perhaps you can explain how Amazon can have their mp3 purchase service. Check it out at amazon.com; mp3s without DRM, major label bands.

Re:Maybe I missed it ...

[againjj]

... but I didn't see the word "iTunes" anywhere in that article.

It is possible to build a profitable, long-lasting, and legal online music business, Mr. Robertson. I'm genuinely sorry you failed to do it, but to pretend that the biggest player in the online music world simply doesn't exist is kind of childish.

The reason you didn't see "iTunes" in the article (which really jumped out at me, too) is that the author cleverly limited himself to streaming online music as opposed to any online music (making his statements factually correct) while not making that terribly clear, thus making the state of the world seem more enveloped in evil than it actually is.

Horsepucky.

[pla]

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?

Re:Horsepucky.

[Meneth]

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?

Knowing Super Size Me, starving might well be preferable to a lifetime supply of Big Macs.

Re:Horsepucky.

[stormguard2099]

I've heard a lifetime supply of just bigmacs is only 9 days tops depending on how athletic you are.

Re:Horsepucky.

[Teancum]

One of the problems here is that the author of the article seems to think the authority to change the situation lies with the court system, when in fact this is a legislative problem that is compounded by a massive mis-interpretation of what the general public thinks it ought to be about.

While I understand that the Register is a UK publication, it reads like it was written by an American (perhaps a personal bias). From an American perspective, the record companies are fighting something even tougher: The U.S. Constitution. More to the point, if the copyright clause of the constitution were to be properly interpreted to understand that the protection was only for a limited time (life + 75 years isn't a "limited time" in spite of what the U.S. Supreme Court claims). Retroactive copyright term extensions make the situation even worse... but I'm barking up the wrong issue here anyway.

The point here is that legislative bodies of the world like Congress, Parliament, and other similar bodies have been dealing with this issue as if the publishing bodies (including recording studios in the case of music) are the only individuals that need to be served when these laws are drafted. Individual consumers as well as the artists/authors/composers/performers need to be strongly considered as well, and the real point of legislation ought to be asking this question:

What can changes in the current copyright legislation do to expand the number of creative works, and "promote the useful arts and sciences"?

This is certainly not something that is being asked by legislators (MPs or Congressmen), and nearly all legislation in the past couple of decades on both sides of the pond works to kill off incentives by individuals to create these kind of artistic works. International agreements, while they do seek to "equalize copyright laws", tend to take the lowest common denominator approach and offer the best possible protection for the publisher as any of the countries in the treaty organization (aka the "Berne Convention"). This question about what can be done to promote the development of these artistic works certainly isn't being asked at these treaty conferences either, nor by the legislative bodies when the treaties are being ratified.

Re:Horsepucky.

[NoisySplatter]

That movie is an exercise in propaganda. He purposefully ate too much in order to gain weight and make a sensational movie. I would take a lifetime of Big Macs any day. Nobody ever said you had to eat the whole thing.

Re:Horsepucky.

[Maelwryth]

What worries me about this is not the root cause but the end result. How much of our culture will we lose because it was no longer worth looking after archives?

Re:Horsepucky.

[Nursie]

Yes, it's american.

Some of the comments point out that you can't actually use these sites from the UK. Which is another problem. Not only is it hard to get a successful business going, it seems almost impossible to set one up properly (in the spirit of the interwebs) and available to all, because we've woven an enormously complex web of international IP laws, and companies have tied themselves up in exclusive distribution deals where distribution itself is becoming obsolete.

Re:Horsepucky.

[rwiggers]

Actually I think the movie is quite correct. It is an exercise in propaganda, and states it clearly in the movie. Not in the fine print in the credits where nobody reads it, but in the final commentary. The film has a clear and concise set o rules and proves the point by exaggeration and also proves the point that the quantity offered is absurd. It also presents in the movie a counter-example, someone that eats big macs almost daily without any problems associated to it.

Re:Horsepucky.

[NoisySplatter]

I've never seen it. I just felt like being contrary.

Re:Horsepucky.

[Anonymous Coward]

That would be funny only if you haven't read Man says he's eaten 23,000 big macs

Re:Horsepucky.

[Belial6]

I know you are joking, but Super Size Me WAS a fake.

I heard Morgan Spurlock, the creator on the radio ( I believe it was the Adam Corrolla Show, but it was a while ago ). The guy from one of his TV show (30 days) episodes called in to the show and accused him of editing the footage to show things that didn't actually happen. Morgans response was that it was his show and he can do what ever he wants. If the caller didn't like the way he edited it, he should do his own tv show and edit it how he wants. This made it clear that Morgan Spurlock is happy to lie to 'prove' his point, and loses all credibility.

Then there is the fact that Super Size Me claimed that his liver was failing do to eating McDonalds for a month. Very simply, if eating McDonalds for a month is going to make your liver fail, you started out with massive medical problems before you ever walked into a McDonalds. So, either the guy was on the verge of death before he started, or the whole thing was a fake.

Understand, that I do realize that you were going for funny.

Excuse me but the summary is wrong

[unity100]

in here : "The root cause is not the labels"

if they are making the same demands if the law permits it, they are the root cause.

Re:Excuse me but the summary is wrong

[JAlexoi]

This article would not get published if not for the statement: "The root cause is not the labels"

Re:Excuse me but the summary is wrong

[Anonymous Coward]

They bought and paid for a lot of the damn laws. The pretty much makes them the root cause for all I care.

Insightful

[Kupfernigk]

You are right. The root cause of the issue is fundamentally monopolistic - the very idea of long lasting copyright, which gives the inventor of music a much longer protected period than the inventor of a vaccine, which is of far more benefit to society. Once musicians and authors were given this special treatment, opportunistic leeches sprang up to milk it - publishers. These people have nothing to contribute but their monopolistic practices, as far as the vast majority of musicians and authors are concerned. In fact, one of their main functions is to restrict what gets published to try and create an artificial scarcity.

Therefore, online distribution replaces their entire core business proposition, so naturally they resist it.

However, the history of every mass technology - transport, the telephone system - is that what began as a monopoly with artificial shortages (stagecoaches, cable) ends up being democratised, and in doing so creates wealth in unexpected ways. The stagecoaches tried to stop the canals and the canals tried to stop the railways, the telephone companies tried to stop the Internet, at least in the UK, and they all failed.

Limited scope

[overzero]

FTFA: "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."

Unless, of course, you didn't. The law also permits playing a guitar exclusively in a soundproof booth in the middle of nowhere so that no one will ever be able to hear your music, much less consider purchasing it, which seems like the business model the major labels are moving towards.

You could, for instance, start your own label specifically to avoid this, avoid DRM, allow anyone to stream your catalog as much as they want, offer a variety of formats and purchase options, etc. I think the law permits that too.

As for viability, it might have some issues, but Magnatune has been doing that for five years now and doesn't seem about to stop.

http://www.magnatune.com/

Wrong Conclusion

[DynaSoar]

"The root cause is not the labels â" chances are if you were running a label you would make the same demands, since the law permits it."

The law doesn't permit it, it requires it. If a rights owner doesn't pursue infringements in every case they risk losing them to a later infringer who points out the earlier failure to protect.

Re:Wrong Conclusion

[Nursie]

Err, no, it is you that is wrong.

Whilst this may apply to trademarks, it certainly does not apply to copyrights or patents.

Re:Wrong Conclusion

[JAlexoi]

Requires it? Really? Is it stated so in the copyright law?
Copyrights are eternal. The rights to pursue an person who violates it is limited to 70 years after the authors death, though not on everything.

Re:Wrong Conclusion

[langelgjm]

Isn't that "enforce or lose" issue only the case for trademarks, not copyright?

Re:Wrong Conclusion

[Dunbal]

The law doesn't permit it, it requires it. If a rights owner doesn't pursue infringements in every case they risk losing them to a later infringer who points out the earlier failure to protect.

      No, you're thinking about trademarks. Copyright belongs to the owner whether he defends it or not.

Re:Wrong Conclusion

[DynaSoar]

No, it applies to copyrights also. It was central to Harlan Ellison v AOL, RemarQ and various Does. I was a material and expert witness for Ellison. Although officially AOL settled out, we won because we forced AOL to offer it. This was helped in part because AOL funded development of Winamp, which had been used in copyright violations (ie. ripping CDs for sharing). They had dirty hands.

It was also a major point with the SFWA'a ad hoc (ie. the unofficial, preliminary, WTF Is An Internet) committee on internet piracy. Authors were being forced to pursue infringements because they were forced to sell their e-rights to the publishers even when the publishers had no intention of using them. If they didn't pursue, they risked losing their contract and being forced to refund their payments because they failed to protect partial rights which they had essentially leased to the publisher but retained ownership and responsibility. Big name authors could dictate their contract terms, lesser names couldn't and so were spending their time and earnings protecting what was left of their earnings. I was on that committee. We won that too, as evidenced by the number of SF authors now retaining their e-rights and offering free downloads of their otherwise commercial works (and some publishers doing the same).

Now, I'm only speaking from the experience of seeing the law in practice and from training by the counsels involved. Perhaps the law in theory says otherwise. I doubt it though, because the same law specifies the Library of Congress to serve as clearing house for copyright infringement notice agents for all ISPs, and AOL's supposedly changing their reporting address without notifying LOC (and so taking inordinately long to respond to official infringement notices) was the other major reason they were forced to offer a settlement.

Hit the nail on the head.

[Anonymous Coward]

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 fact that the Law is the only organisation protecting other businesses against this kind of abuse its a clear signal that 1) the music companies have become too mighty for the good of the country (no real supply-and-demand balancing) 2) does not actually want any other company possibly upsetting their distribution-methodology (by effectivily killing any competitors even before they have actually started).

But yes, if living by the Law leads to a certain dead it means that the Law is a very sick puppy (even if its not aware of it).

Starting anything legal is tough

[SystematicPsycho]

As most huxsters have worked out, even if they do something illegal or border line illegal for a while and make a killing then, having no moral conscience it pays off. Unfortunately that's what's wrong with the world today. Look at the sub-prime mortgage crisis for example, how many lenders knew they were handing out bad debt? Do they care now? Probably not, they got their commission, as for everyone else, hasta la vista.

Re:Starting anything legal is tough

[The_Quinn]

that's what's wrong with the world today. Look at the sub-prime mortgage crisis for example, how many lenders knew they were handing out bad debt?

Lenders handing out "bad debt" had nothing to due with having "no moral conscience". It had everything to do with the government telling lenders things like "we will buy you junk debt" (Fannie/Freddie) and "if you fail we will bail you out".

That is how the government manipulated the industry to try and make everyone a homeowner (no matter how poor or undeserving an individual was)

The law allowes it?

[houghi]

So if it is not strictly forbidden you MUST do it? That is a whole new twist and says more about him as a person then about the people who do it.

Re:The law allowes it?

[JAlexoi]

Actually you are not forbidden to kill people... Though you will be punished for the crime...

Re:The law allowes it?

[Anonymous Coward]

To be fair, legal complexities are so great here in the U.S. that if you don't do everything the law allows you may be left with very little to do. You can't really extend this to other analogies, but isn't the whole argument against the RIAA their complete lack of interest in digital distribution?

How is that NOT simply an activity that is "not strictly forbidden" by law?, and what else could the RIAA do? Sure, you don't sue your customers because that's assinine, but I don't think that Michael Robertson is so far off.

iTunes is doomed! Amazon is doomed!

[artifex2004]

(just to put this in perspective)

P.S. I love words which can mean virtually their own opposite, like sanction.

Re:iTunes is doomed! Amazon is doomed!

[Opyros]

You'll love this page then. It includes a supposedly complete list of the "Janus words" in English.

Re:I tried and failed (to search on Google)

[Mathinker]

First, I'm not sure why you posted ... without checking on the contents of the post you replied to.

Kind of hard to believe a Slashdot ID as low as yours has never seen that troll post before. Or are you some kind of "second-degree troll" who pretends to believe troll posts? Arrggh! My mind ties itself into pretzels thinking about the boasting conversation at a "fourth-degree troll" convention in the far future....

OTOH, I admit there has been a decided lull (thank the FSM!) in the posting of that particular one, in recent months. Maybe you just have the blessing, in this case, of a short memory. Or got stranded on a desert island for the wrong period.

Is iTunes succesful

[SmallFurryCreature]

The article doesn't mention a lot of sites, in fact none of the BIG company backed sites are mentioned. And this makes me wonder, how succesful is iTunes on its own as a business? It has long been rumoured that Apple makes its money from iPods not iTunes. If that is the case, and you accept the same from products launched by the likes of Amazon then there is a 5th category, sites that barely break even thanks to the insane costs, that help keep the online music sales at the level the music industry is comfortable with.

Steve Jobs managed to get the labels to accept the famous 99 cent, but it stalled there. 99 cent is still insanely expensive if you consider the huge cost reduction in distribution.

Apple hasn't been able to drive the price lower nor has it been able to get more music online, like getting the labels to open up their entire catelogue.

I would be very intrested to see any real figures showing that iTunes is turning a profit and enough of a profit for a company whose only product is a music store to keep it alive.

Don't forget that Apple is an awful lot like MS, it can afford to throw money at projects, and internet rumor has it that iTunes is just such a project. Not that Apple minds since the iPod is earning them every dollar spend back tenfold.

Re:Is iTunes succesful

[TheRaven64]

Apple is now the biggest music retailer in any medium. If they are making any profit on sales (I vaguely remember reading that they make something like 10Â per track) then the iTunes store is raking in money. The iTunes store and Apple-branded accessories (they don't break them down on the balance sheet, there's just iPod and 'other music-related products and services) are bringing in around $800m per quarter in revenue, which probably equates to around $100m in profit.

Re:Is iTunes succesful

[Ex-Linux-Fanboy]

It has long been rumoured that Apple makes its money from iPods not iTunes.

If Apple wasn't making money on it, why did Amazon start their mp3s for sale service? Major labels too.

Re:Is iTunes succesful

[Anonymous Coward]

But Apple has the stones and size to actually pull something they can pretend is a fair contract out of the RIAA. Imagine what would happen if you were a start up approaching the labels?

You think you'd get to negotiate? notta chance. You'd end up stuck in a deal as shitty as new artists gets.

One of two things would happen, either;

1. The RIAA would give you terms designed to see your business fail. Stupidly high price points, restrictive DRM, royalty rates designed to bankrupt you. And then they'd supply you with albums like "disco legends" and "greatest children's hits" but very little of the popular stuff you could make money from.

OR

2. You'd end up in a contract so shitty that even if you sold 100 million copies your first month you'd probably find you owed them money.

The RIAA doesn't want stores like that to succeed, because as soon as they do, they become large enough that artists sick of the labels might just ask to do business with the retailer and cut out the middle man. Back in the days when brick and mortar shops were the only way to sell you needed somebody like the RIAA if you wanted to get exposure further than your local radio station, but with the net, you only need ONE online retailer to reach the entire planet.

They might be "making" the laws, also, eh?

[Mathinker]

The summary also ignores the fact that the content industries have been gaming the legislative system, to their benefit, for quite a while....

Excuse me?

[Tim C]

I'm sorry, but just because I'm *permitted* to do something doesn't mean that I would or should.

Hand someone a right (or rather, neglect to disallow them some power) and you most certainly can still blame them for exercising it.

Another middleman

[EdgeyEdgey]

Step back a bit. Why should online vendors be able to profit from someone else's work. Having a record company between the customer and the artist is bad enough, without having to add extra middle men.
What service does the 'Legal Online Music Vendor' supply? If it's selling other peoples music then it is already obsolete.

Re:Another middleman

[TheRaven64]

They provide a service. At a minimum, they provide hosting / distribution (HTTP is still a lot more convenient than any peer-to-peer services) and payment processing. They can also provide recommendations. This is the really valuable service. There is enough recorded music in the world now that you will not be able to listen to all of it if you tried (especially since it's still being created at a rate of more than one minute per minute). The amount of recorded music which you will enjoy, however, is significantly smaller (assuming you have any taste, and don't enjoy absolutely any audio recording between a sine wave and white noise). A music retailer is not selling you music, it is selling you entertainment, in the form of access to new music that you will enjoy listening to. Once they start moving away from the idea that they are selling you tracks then their business model will become more obvious. The same is true of books and movies - I don't buy movies anymore, I subscribe to a service that gives me access to a large subset of all films ever made.

Quick!

[g0dsp33d]

Snatch up all the Apple itunes, Amazon MP3s, Rhapsody, et al before they go out of business. A shame too - Amazon was quite useful. Guess its back to Ebay.

You are making a mistake

[SmallFurryCreature]

You say at the end the examples from history about product X trying to stop product Y from replacing it and seem to think this applies to the music industry.

You are wrong, for that to work in media it would have to be theather trying to stop movies, movies trying to stop TV. That indeed does not work.

But what is really the case is that the music industry is not being replaced. There is nothing to take over, it still is the same model that existed since recordable music was invented, X performs for Y who records it who sells it to Z who listens to it. As long as X and Y expect payment from Z, the industry will remain roughly the same. Yes, with advances in tech some X can cut out Y, but this has always been the case. Lots of musicians have in the past created their own labels, in fact most labels were started by musicians out of dissatisfaction by the existing labels, until they became big themselves.

For Z having every X be his own seller is also messy, you don't buy books from writers do you? Hell, you don't even buy them from publishers mostly, you buy them from bookstores. Would you really be comfortable giving your credit card details to every artist asking for 10 cents for their latest album? Not that that would work, the credit card companies want bigger fees. Sure there are some small sites that try to be the go between but there you go already, that site is going to want payment, exactly the same as the labels, and the more they advertise their new sign-ups, the more risks they take, the more they want paid on each song they manage to sell.

The entire problem lies in the recording. In theory, this allows a musician to earn an infinite amount of money from a finite and fixed amount of work, this never works. Play around in virtual economies such as found in games for a while to see why not. Usually, the more you want to earn, the more you got to invest. Imagine a simple chart, X is amount of money invested in a concert, Y is the money earned from tickets. Obviously if you want Y to increase you first need to invest in X by renting a bigger arena.

But with recorded music, this doesn't work, the cost of recording a song is relatively straightforward, rental of studio, salery for techies, but the potential earnings can be anything really. With a piece of recorded music, with every tech advance you are getting closer to a product that has an infinite supply for a finite cost. For, lets say 3000 dollars I can get a song, that I could potentially sell an infinite amount of times and with copyright as it is I got a century to do it in.

This is of course very tempting but it only works if I am the sole supplier of that song. If everybody who has a copy can share that, then all I can count on is to sell 1 copy and at 3000 dollars, finding that first punter is going to be tricky.

The music industry can make enormous profits THANKS to the fact that its product is in infinite supply BUT it can only make those profits if it somehow makes that infinite supply finite.

Live music isn't the answer, is a concert ticket really worth 100 dollars or more if EVERYONE could have a front row seat? Well the answer is TV, everyone has good view and you don't pay 100 dollars for a live concert not even if the camera is on stage!

Live music obeys the normal economic rules, recorded entertainment does not.

What can we do about it?

Very little, you could make a law that stays every recording can only be sold an artificial number of times before it must be re-recorded. This would make it a finite supply product obeying the normal rules of the economy, if you want a specific recording, then just bid for it against other intrested parties. It would solve a lot of problems, but I doubt everyone would agree to it, including the buyers.

You could severely limit the amount of time you could sell a recording. It would have to be severe, a period of maybe a couple of years, this would give popular music a short-time to recoup their costs, give them a change to earn

Re:You are making a mistake

[cdrguru]

You are missing the one really expensive point of the "music business". Promotion. It is the promotional dollars that really add up and this is the only real service that the labels provide to the artists.

Without promotion, there is no music played on radio. Why not? Because the radio stations that play music exist because of the promotional dollars the music labels are spreading around directly or indirectly. They advertise the music, the music gets played by the radio station and the radio stations carry other advertising. No promotion equals no advertising.

There are lots and lots of other related businesses that will cease to exist when the promotional dollars end. They are certainly ending - I cannot imagine that music promotion can continue after WalMart stops selling CDs - and that market ends when broadband Internet reaches around 80% in the US.

Why ?

[Joebert]

Why would anyone want to start a "legit" online radio ?

All of the good stations started out as pirates.

Re:I tried and failed (to search on Google)

[wrook]

Ha ha! I guess we need a -1 Desert Isle moderation. I really never saw that one before. And as you might notice from my subsequent reply, I'm having a bad day of it...

Oh well... Life goes on...

the root cause is not the labels?

[nimbius]

gimme a break. the root cause is a conglomerate of labels who arguably add nothing of value anymore to music, as online distribution has supplanted them almost entirely.

its not their fault. if you were about to be unceremoniously kicked off your pile of bloodmoney, you'd fight like hell too!

Cover versions

[tepples]

And you can't (generally) buy the same song from different entities.

Lennon/McCartney's licensees would beg to differ, as would anyone else who's ever recorded a cover version. I seem to remember seeing at least a dozen different versions of "Macarena" on the old Napster. If there's no cover version of a given song, that's your cue to record one under whatever mechanical license scheme is in effect in your country.

A conflict that is unlikely to be resolved until monopoly rights are restructured as non-exclusive revenue share rights, which simply is unlikely to happen any time soon.

In the case of songs, it has already been so restructured: recording artists share their revenue with composers.

Re:Cover versions

[perlchild]

I took the GP to mean "do away with the concept of revenues from exclusivity for songs" not "the smaller players must share revenues". The problems seem to stem from laws written in the outlook of low-technology means and hard to reach populations being attempted in this era of easily reached population through technology. The industry's rights-sharing is structured with huge record-producing costs, and the assumption that a huge retail store is the only way to reach the listener. Now it's to the record companie's advantage to cling to this belief, they keep a bigger share, while their costs have been made irrelevant(you don't even need to have a physical record anymore). I've yet to see a law that mandates a maximum percentage of profit, but I think it's the only one that would curb their excesses.

Re:Cover versions

[CastrTroy]

You could do a cover, but it's again, not the same product. It's the same song , probably with the same notes and same words, but done by different people. Sometimes, the way people say the words makes all the difference. Sometimes, the original isn't even the best version of the song, and the cover is better. But each cover version is in fact a different song, because it is performed by different people.

Re:Cover versions

[tepples]

Nor does Pepsi sell Coca-Cola. Because the substitutes aren't exact, both price competition and non-price competition affect demand. Economists call this monopolistic competition.

Re:Cover versions

[Znork]

who's ever recorded a cover version

Yes, covers are partial overlaps, altho not full replacements. And sometimes there are non-exclusive deals (becoming more common with modern distributors). Hence the (generally).

In the case of songs, it has already been so restructured

Mandatory mechanical licensing is indeed a slight step in the right direction. Extend it to all parts of the chain and you'd be a good step on the way (ie, not only is the lyrics and score mandatory licensed, but also recordings/performances). And convert it to percentage of revenue shares, similar to sales taxes, to promote economic efficiency. Oh, and have a government agency (the IRS?) actually handle the transfer of money so we get public accountability over what the scheme costs the economy.

In one fell swoop you'd have a complete solution that can manage all forms of distribution, scaling from private copying through download libraries, from music warehouses to automatic on-demand cd-pressing machines, from commercial broadcasting to public performances.

That's one person's opinion...

[xednieht]

The article clearly states that it is merely an 'Opinion' note the upper left hand corner tag.

Other than that I would offer another view. There's still plenty of opportunity to grow online music.

When the dust settles, many moons from now, the emerging model will be a hybrid between what Napster was and iTunes is. It will probably emerge outside of the US because the morons on Capitol Hill are too quick to appease the idiots at RIAA. But it will emerge. Think Janis Ian and many more like her.

Of course if by some miraculous turn of events RIAA decides to invest in technology instead of lawyers it may start here, but don't hold your breath. Blinded by greed, crippled by stupidity.

DVD?

[tepples]

What would be illegal is for 90% of the record companies to collude in making the mini-disc the only outlet for music

Then why was it not illegal for 90 percent of the movie studios to collude in making DVD-Video the only outlet for copies of films sold to the home market?

Re:DVD?

[m.ducharme]

Well, in part because they're actually trying to make Blu-Ray another outlet for films sold to the home market, and up until recently many of those companies were trying to make HD-DVD into another method to sell movies to the home market. Many movies are also available on PSP as well, last I checked. DVD is, in this case, the overwhelmingly popular choice with consumers, not with companies. This is due in part to the fact that the DRM on DVDs has been cracked. Movie distributors want very badly to wean us all off DVDs for that reason, but consumers are just not willing to go.

Re:DVD?

[Chaos Incarnate]

They hardly colluded; it was market forces that killed VHS, not manufacturers' efforts. I half suspect the only reason they ever tried DVD in the first place were the higher profit margins.

Re:DVD?

[dgatwood]

This is due in part to the fact that the DRM on DVDs has been cracked. Movie distributors want very badly to wean us all off DVDs for that reason, but consumers are just not willing to go.

I don't think consumer reluctance has much to do with the DRM issue except among a handful of geeks. I'd love to think that you are right, but from what I've seen, for most consumers, the reasons not to switch are price and price. A basic Blu-Ray player costs about 3x the cost of a basic DVD player, and Blu-Ray discs start at $25 while DVDs start at $5.

Re:DVD?

[StrategicIrony]

if there was evidence of them getting together with DVD manufacturers to ensure artificial scarcity drove up prices that they could then turn around and collect a portion of....

that's what i refer to.

The fact of there being a single medium isn't the problem. It's the act of using a single medium for the PURPOSE of collecting a percentage of the over-charges for DVD players.

Imagine if there was only a few manufacturers of DVD players. The industry gets together with all of them and says "listen, we want a cut of DVD player sales. We will make our media ONLY available on DVD and you triple the price as a result and give us half."

That's unconscionable in "meat space", but in the electronic realm, that's very similar to some of the fees they impose on stores and how they are negotiated.

In our DVD example, imagine a store saying "we won't sell your DVDs at that high a price, we are going to charge a fair price." and the recording industry then says "ok, well we will make our media not functional on your devices."

That's something else that the *IAA does...

All of that stuff is evil and wrong and shouldn't be tolerated.

But we do because people are lemmings. :-)

Promotion to passengers?

[tepples]

As for viability, it might have some issues, but Magnatune has been doing that for five years now and doesn't seem about to stop.

Magnatune and other online-only labels appear to fail it in promotion to drivers and passengers in vehicles. I have never once heard a Magnatune artist's song on FM radio in Fort Wayne, Indiana, USA.

Re:Promotion to passengers?

[Anonymous Coward]

I've never heard the majority of the music I listen to on FM radio anywhere. Conversely, the majority of music I have heard on the radio is crap I would never buy.

The same seems to be true for a number of people I know.

Anecdotal evidence, sure, but artists do not need to be on ClearChannel's radar to find ears.

Re:Promotion to passengers?

[tepples]

AC wrote:

but artists do not need to be on ClearChannel's radar to find ears.

How do you discover music? And how should someone without high-speed Internet access discover music?

Re:Promotion to passengers?

[geminidomino]

There are these creatures all over the place. Carbon based, bipedal, and most of them capable of commmunication. For the sake of argument, let's call them "people."

Now, these "people" may, after varied lengths of time, "communicate" with each other and form paterns of communication based on mutual interests. Let's call it "friendship."

Some of these interests might be in sharing a preference for a particular style of organizing rapid vibration of air molecules in aesthetically pleasing ways, or "Music..."

Laches

[tepples]

False: DynaSoar's assertion that estoppel by laches applies as strongly to copyrights and patents as it does to trademarks.

False: Nursie's assertion that laches "certainly does not apply to copyrights or patents."

True: Something in between.

Confusing: The term "intellectual property", which encourages people to draw false analogies among copyrights, patents, and trademarks.

Re:Laches

[Nursie]

In practice though, that's not yet stopped any of the patent trolls from plying their filthy trade. Nor does it force a company allowing licensed distribution of their works to demand punitive damages for perceived previous violation, which was the point the OP was trying to make.

Re:Laches

[TheRaven64]

The law in the US changed a few years ago to prevent certain classes of patent troll. You can no longer claim any damages that occur between your first discovering an infringement and notifying the infringer. This prevents, to a large degree, submarine patents, since you can't let people use your patent for years and then retroactively demand a royalty. You can, however, still let people use the patents until they've built a large market and then demand royalties on future sales.

Laches and Jerome Lemelson

[tepples]

In practice though, that's not yet stopped any of the patent trolls from plying their filthy trade.

Yet. A federal district court severely blue-penciled Jerome Lemelson's machine vision patents on a laches defense.

Nor does it force a company allowing licensed distribution of their works to demand punitive damages for perceived previous violation

But contracts with other distributors that contain an industry-standard "most favored distributor" clause do.

Unless...

[hesaigo999ca]

Unless, you were the artist that created their own music and decided to sell it from your own website....so lets say I create a website where motley crue decides to set up camp, their own piece of my website becomes theirs (like facebook for artists) from there I offer them my merchant account to process their inventory (music) this allows the artist to make exactly what they want from their music (seeing as they are allowed to sell their music without paying copyrights as per Radiohead)

I would charge them a fee for using my merchant account and voila you have a repository for music that is not your own so you are not selling it, you offer a website for storage(10$ per month for any artist) and you offer a 1$ processing fee for each album sold or a 10 cent fee per mp3 sold.

Nuff said.

Re:Unless...

[BlueStrat]

Or you could take advantage of an online service to place your music in major online distribution channels like iTunes, AmazonMP3, Rhapsody, eMusic, etc. and who also manage the accounting, micropayments from streaming, and other details and pay you from one source while you concentrate on making music.

http://www.tunecore.com/

From the FAQ:

What does it cost me?

If you are delivering just one track (a single) the only fee is an annual payment of $9.99. If you are delivering more than one song (an album) the annual fee is $19.98. The only additional charges (for an album) are one time fees of .99 cents per store you choose and per track that you upload to TuneCore. For example if you deliver a two track album to only iTunes US this would total to, $21.96 with an annual renewal fee of 19.98 after the initial payment.

Cheers!

Strat

Re:Unless...

[hesaigo999ca]

Cool, as an artist this is good to know!

Re:Unless...

[BlueStrat]

Cool, as an artist this is good to know!

As an added plus, if you're in the USA, TuneCore sign-up and specials are available in any of the "Guitar Center" music chain stores. Along with CD duplication services offered through Guitar Center, it's nearly a one-stop place for musicians to obtain online sales as well as physical CD's including CD jewel-cases, jackets, cover-art, and liners...all shrink-wrapped and ready to sell or use for promotional purposes.

Cheers!

Strat

The RIAA doesn't want "legal", they want FUD...

[Joce640k]

The RIAA wants the whole world constantly negotiating with their lawyers.

Maintaining a huge cloud of FUD is the only way they can keep prices artificially high and the artists in their rightful places (artists need to believe that selling music to the public is difficult/expensive/risky).

This is also why they settle P2P lawsuits out of court for less than what it cost them to bring the suit. They don't care about winning, they just want the press to be constantly printing stories about P2P users being sued - keep it in the headlines.

No has mentioned this.....

[BitterOldGUy]

So far, every digital cable service I have seen has a music section in its upper channels - like 900s or something. There, the music is segmented. Meaning there's a channel for Classical, Romantic, 80s Rock, 70s Rock, .... Christian Rock, Christian Heavy Metal, Christian Rap, etc....everything.

In this day and age of the all in one home entertainment centers and surround sound, I'm sure many folks are using their cable subscription for their music: not pirating and not buying CDs or downloading.

Everyone needs to realize that's it's not just buy a CD or buy online or pirate.

When did the record industry miss digital age?

[upuv]

Some simple facts.

1991 mp3 became a standard ( Wikipedia )
1995 mp3 music hit the net via early file sharing ( Wikipedia )
2001 P2P was ubiquitous ( My observation )

So somewhere between 1995 and 2001 the music industry instead of embracing P2P and enhancing it to support a business model they instead asked the legal department for help. The legal department then got the green light to turn on the cash tap and drain possibly billions of dollars out of the artists pockets. This was the mistake. Instead of applying some creative thinking to the problem they simply turtled under a legal shell.

Even more amazing when online startups like napster and others popped onto the scene with vision, they freaked even more. They didn't even say "Why didn't we think of that?" Instead of using the vast resources at their command to create a product offering people would want they invented the WDM defense which good old Bush later used as well. As we can see the WDM defense does nothing but create more enemies and bad Karma.

Apple has shown them that money from music on the net is not only viable. It's hugely profitable. No packaging, No shelf space, and instant stock creation. But somehow the music execs still don't get it.

This has left the world in a nasty place. The music artist is loosing, the consumer is loosing, and the production companies are spilling cash to lawyers faster than they can make it. I can only see that this is not going to get better for the artist for possible a decade. And subsiquently the consumer.

( Sorry that almost became a full blown rant )

Re:When did the record industry miss digital age?

[cdrguru]

When will you people get it? Probably never.

Apple does not make money from music. They barely cover their costs of the iTunes operation. iTunes exists not to make money but to provide content for the billions of iPods out there. If there were no more iPods, iTunes would be shut down the very next day.

Amazon does apparently make some money from music. I don't know how their operation works but it is rather astonishing.

Nobody I know will ever pay a dime for music. Never. It is free now and anybody that tries to sell you music is ripping you off or taking advantage of your ignorance. Period. There is no "recorded music business" any longer. There cannot be - you can't make a profit on a free product. About all you can do is try to make people feel guilty (works!) or try to convince them to buy other stuff while taking their free music.

There is no business model that can make this work. There never will be.

Re:When did the record industry miss digital age?

[DaveV1.0]

Please show a business model that the record industry can use to make money using MP3s and P2P.

Uhhh... no.

[TheVelvetFlamebait]

Monopolies aren't illegal for the very good reason that sometimes monopolies are unavoidable, or at least the best option. Imagine if the single corner store in every little town had to close down shop because they were the only game in town. It'd just be silly, right? Not to mention counter-productive.

Similarly here, we have a situation where monopoly is far better to the alternative. Now we just have to make sure monopolies don't engage in anti-competitive practices.

"The root cause is not the labels"

[bug1]

"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 law doesnt and will never define morality, or ethics. Just because they are allowed to get away with it doesnt make it acceptable.

CEO's dont get a fuckwit chip inserted into them when they accept the job, they are born that way.

I really dont see any excuse for them, or why anyone else would think its not their fault, their industry is dying, they are trying to take as much as they can before they go.

What next slashdot, are we going to have stories saying that Darl McBride was really just misunderstood ?

how to do it successfully

[polyp2000]

The way to do it is start a site that enables music sharing , and turn a blind eye to anything illegal for as long a possible.

* When the music industry come down on you make sure you milk the publicity for all its worth.

* Announce you have put some security measures in place (but only implemented half heartedly)

* Do this for as long as you possibly can whilst simultaneously increasing your user base to critical mass.

* At that point your userbase is so big that your actually now a tempting proposition for aquisition / or your in a position to sign licensing deals with labels.

Im looking at you , myspace, youtube and friends...

This concept is not new. Do you think MTV paid for all those videos when they firt started out?

That makes no sense!

[91degrees]

Past infringement!?

The online seller is the one taking a risk here! He's not going to pay that much. Business ideas are easy enough to come up with. If you're going to pay a huge sum up front, you might as well start selling exotic fruit or something.

And how does holding out like this benefit anyone? You get very few people willing to pay the extortionate amounts asked. If nobody pays then that's 0 x $extortionate amount. What sort of a business are they trying to run!?

The root cause is overly long copyrights

[jmichaelg]

Back before there were lawns, copyright ran for 14 years. In 1790, it was extended to 28 years. From there, it slowly got extended until 1998 when Congress saw plenty of donations and all of a sudden, it shot up to the author's life plus 70 years.

Revert copyrights to the original 14 years and you'd see all kinds of music and art. Pandora.com (an outstanding music delivery idea) wouldn't be talking about pulling the plug and people would be exposed to so much outstanding music and video that we'd see a resurgence in creativity in this country.

Re:The root cause is overly long copyrights

[mr_matticus]

No, statutory copyright has always been at least 28 years (14+14), since 1709, when it coincided roughly with the expected length of an artist's career. It was subsequently extended as life expectancy increased, artists began working earlier with the fall of apprenticeships, adjustments to bring back some of the more expansive common law copyright terms, and ultimately as part of a larger sophomore effort in the US to protect assets and pass them on to future generations.

There has never been a 14-year limit on copyright. Common law copyright, further, had much longer terms of protection (but in some cases narrower in scope).

The US incentive-based rationale has bent from global pressure in artists' rights societies (including the EU) to extend copyright to what has become the global expectation. Even within the United States, copyright was always intended to ensure than any profitability of a work would be under the author's control. Copyright terms that are too short allow third parties to come in and profit directly from a work--anathema to artists' rights, and clearly in violation of the spirit of an economic incentive rationale.

Revert to 28-year copyrights and you'll see staggered release, withholding of production, and lower expenditures on the more expensive works. Keep in mind that a commercially successful work must not only pay for itself, but also for the commercial failures, which require time, money, and effort, too. Back when copyrights were shorter, there was nothing so costly as a motion picture or a major software title.

If the concern is record profits for a few firms at the top, it's unfair to single out one industry for that. It's a problem that must be dealt with in e.g., tax law. If the concern is greed and abuse by the record labels, which is certainly reprehensible, then it must be dealt with by dealing with the businesses. With the exception of the CTEA, prior copyright extensions were based on the beliefs of the international community and a focus on the artist's use of his works. The CTEA was purely economic pressure, but it is consistent with European terms.

The term of copyright has very little impact on new works of art. There is no appreciable shortage as it is, and no requirement that an artist use the full term of protection.

Libraries would be Illegal

[EnOne]

If we had the copyright laws we have today when libraries were first being built there is no way book publishers would allow libraries to exist.

(sarcasm)
I mean places where people can go and check out entire books for free instead of having to buy them is definitely a violation of the rights of book publishers.
(/sarcasm)

Re:Libraries would be Illegal

[DaveV1.0]

Your contention fails because there is a fundamental difference between the two activities: one is not making a copy of a book when one checks out a book from the library.

The fundamental differences between libraries, illegal file copying/trading, and online music vendors is that there is a single copy in play in the library, no copies are sold and no copies are produced. The basic tenet of copyright is that the copyright owner holds an exclusive right to make copies. The production of copies, whether for sale or not or for profit or not, is solely the right of the copyright holder and said right can be licensed to anyone under whatever terms the copyright holder demands.

Conscious Parallelism = anti-trust violation

[Anonymous Coward]

I am a retired lawyer, but back in the day conscious parallelism used to get you in big trouble. With the recent court, I am not sure how this would hold up now(one of the requirements for elevation to the appeals courts or Supreme Court in recent years seems to be that given a choice between a person and a corporation you must never have ruled in favor of the person).

Dial-up or move

[tepples]

the assumption that a huge retail store is the only way to reach the listener.

It's not as true as it was, but it's not entirely untrue either. Not everybody has a computer and high-speed Internet access or can even get broadband without moving house, especially fans of country music.

Idiots deserve to fail.

[FatSean]

You should have done your research on new technology before buying in.

Sucker!

(Careful with that troll, it's an antique!)

Nope, doesn't break down

[Anonymous Coward]

If you WANT "hot new album" you have to pay what the copyright holder wants to charge.

That you don't have to HAVE "hot new album" means fuck all. Even if you don't have to have it, you still WANT to have it. And if you HAVE to have it, then you STILL *want* it.

What not having to have it is why sales are going down for music. Which is then converted by the alchemy of "wishful thinking" into "piracy".

Whether you HAVE to have it or not is irrelevant and therefore you are wrong in your assertion the GP was wrong.

Magnatune, iTunes, eMusic, Amazon?

[argent]

I've bought digital music from all of these, and they don't seem to be fading away or going out of business.

iTunes and Amazon have the resources of an existing large company behind them.

eMusic ignores the big labels and does business with artists and publishers who are willing to play nice.

Magnatune is an online label.

Oh, and none of them started out with the handicap of previous bad court decisions that set them up for "past infringement" fees. What happened to MP3.com was appalling, particularly since they were conspicuously following the intent of the law while Napster, who were deliberately and notoriously targeting what they saw as a loophole, managed to survive. On the other hand the situation is not quite as bad as Michael makes it out to be.

I see there being three kinds of digital music company.

1. The ones who bend over for the labels and do everything the labels want from the start. These are not likely to attract a lot of customers, because what the labels want is mostly against the customer's best interests. About the only one of these that's managed to keep their head above the water is Rhapsody.

2. The ones who play hardball with the labels. There's two ways of going about this... you can be a big company and use that leverage to get a contract you can live with, or you can try and present them with a fait accompli and use that as leverage to get a contract you can live with. Michael's article is all about how the latter route doesn't work. The former route, of course, is Apple and Amazon.

3. The ones who ignore the labels, and build up a user base of people who want good music and don't care if there's a "star" name on the album. That's Magnatune and eMusic and other small operators.

The summary is wrong

[MobyDisk]

any attempts to build a sanctioned digital music site today is doomed from the outset.

Should be:

any attempts to build a sanctioned digital music site today that sells someone else's music is doomed from the outset.

Bands that want to sell their music online can do so just fine. The problem is that we have cartels that confuse people into thinking that music can only be sold through them, and that they must somehow sanction it. The very concept that I have to get permission from some organization that doesn't actually produce the product, in order to sell that product, is absurd.

Re:The summary is wrong

[DaveV1.0]

Even that is not correct.

any attempt to build a digital music site that sells music copyrighted by a major, and many minor, record labels is doomed from the outset.

Not only can a band sell it's music online but a company can make contracts with independent bands to sell said band's music online.

The very concept that I have to get permission from some organization that doesn't actually produce the product, in order to sell that product, is absurd.

The "organization" you refer to pays the person or group that "actually produce the product" to produce said product for the "organization" as a "work for hire". Therefore, you find the idea of "work created for hire" to be absurd.
Perhaps you would prefer a world where "work created for hire" did not exist. Let us take a look at that world.

• If one had professional portraits taken, one could not make copies to give away.
• If one had someone write a resume, one could not make copies of that resume.
• If one had someone write a program module, one could not include said module in code without the author's expressed written permission.
• If one had a mural done in one's home, one could not take pictures of said mural for an ad when one sold the home.
• If one got a tattoo, could not take pictures of said tattoos and send it to a friend because the tattoo is a "work created for hire".
• Most programming job would cease to exist overnight because those jobs create "work for hire" copyrighted products, even if they are just used in-house. When I write a script at work, the copyright belongs to the company because it is "work created for hire". Otherwise, if my employer wanted to use the script on another server for whatever reason, I could demand more money, even if I didn't work for the company anymore.
• Many independent design and programming companies would cease to exist because many websites, programs, brochures, logos, etc are "work created for hire".

You have a very limited understanding of how copyright law works.

reasons

[zogger]

The main reason why you see the US and some other big nations really push for more strict copyrights and longer terms and things like software patents is because they have gone way out of their way to trash traditional wealth production. They are trying to replace it with this nebulous "IP" and alleged services as the basis for the economy. It's a big fat and collapsing now mess. All those IP styled paper financial "products" they think up and tried to sell all over the planet are another similar type example. They will cling to this lame business mode alleged thinking to the point of absolute absurdity because they don't have anything else now. The expression is "screwed the pooch".

Re:reasons

[Teancum]

I think you missed the main point of my response here: We (meaning America, Britain, all of the EU, and most of the signatory members of the Berne Convention) are citizens of representative democracies that can and should demand more from our elected leaders on this issue.

For far too long ordinary folks have let the content publishers have nearly the only voice in determining copyright policies. Furthermore, organizations like the UK Foreign Ministry and the U.S. State Department are wrapped up in their own naval gazing to realize that the citizens whom they represent don't want the same things they are trying to negotiate for. They may speak on behalf of their countries in these international copyright conferences, but there is a huge dis-connect between what is happening on this level and what ordinary citizens are thinking copyright actually means.

Frankly I have my doubts that these diplomats even represent the thinking of the heads of government, much less the greater legislative bodies that must approve these treaties or the citizens they represent.

The ordinary American citizen is not really pushing for stricter copyrights, longer terms, or things like software patents... and it is unfortunate that some countries are being pressured diplomatically to think otherwise.

"past infringement" .. are you kidding ?

[Anonymous Coward]

Charging a new business for past infringement? How is it even possible for someone to suggest such a thing without laughing? If I watned to start a used car dealership, do I have to pay for all the ripoff used car dealers that came before me?

IMHO what we need is a good solid legal answer to a few of the underlying issues .. such as :

1. An act of piracy does not equal a lost sale. It does not equal 50 lost sales. There is no way do create a direct and provable correlation. You could say that each act of piracy costs you $5, $5 million , or $5 billion and still be in ' the ballpark' the way things are going now. This needs to stop. It smacks of the time Mitnick was accused of causing billions of dollars in loss to a specific company, only the company could not prove it - nor did they show the loss to their shareholders. Inflating losses that can not be proven , and then making people pay these imaginary numbers should be a cakewalk for any legal system.

2. The RIAA is acting as a strongarm monopoly. No better/worse than Microsoft , who was eventually called to task for it. Every day when I read about the latest actions of the RIAA their primary piece of proof is " because we said so ". YOu are guilty because they say so , you ow them a specific amount of money because they say so , and you have caused them an amount of damage that they determine by saying so.

Granted fully that there may be illegal activity going on , but calculating the damages and demaning money based on imaginary acts or generalized 'pulled out of my arse ' numbers is not fitting or legal.

3. Restriction of trade .... which is pretty much what this article is telling us is happening.

Ya bunch of BS

[Sycraft-fu]

Just because the law allows something, doesn't mean it'll happen. There's no law against overcharging people either. You are 100% legal to open up a store, and price everything at 10 times what it is worth. The reason you wouldn't do that, of course, is that you'd get no business. But it isn't as though the police would come kicking in your door and arrest you. In fact, there ARE businesses that overcharge. AJ's would be one of them. The open grocers in well off neighborhoods. You discover that many regular items, like vegetable oil, are priced a whole lot more than they are at a regular grocer. However, people pay it because AJ's is conveniently located, and nice to shop at. However most stores don't, not because there's a law against it, but because ti isn't good for business.

The problem is NOT that the law allows it, the problem is that record labels are extremely greedy, and are very stuck in the past about their business model. They hate and fear the online market.

Beatport.com

[deliciousmonster]

Started 3 years ago, working with smaller labels from the outset... No DRM, 2 minute previews, WAV and MP4 files in addition to MP3s (sorry, /.- no Ogg), and a revenue split that's less favorable for the artist than iTunes...

It doesn't have anything to do with past abuses. It has to do with the majors having their heads up their asses about DRM for the first 2 years, and their fear of losing face now...

Warnings and disclaimer: Yeah, it's all in Flash... get over yourselves. I didn't build it, but I am friends with the guy who did. www.beatport.com

Re:Digital success rate as an indicator of future

[compro01]

Not so much a wonder if you notice their disproportionately high (relative to the size of the industry) lobbying efforts and "campaign contributions" to various representatives and candidates of both major US political parties.

iTunes is a loss leader to sell hardware

[Anonymous Coward]

iTunes doesn't fit any of the categories referenced by MR because it is a loss leader for ancillary profitable products.

Apple brilliantly deduced that online music services were inherently unprofitable. Their strategy was to create all the layers of the cake to support the sale of hardware with defensible margins.

iTunes is setup such that it makes maybe 3 cents per track or looses 3 cents per track and Apple doesn't care because it's not supposed to make any significant revenue.

iTunes and p2p downloads set the bar for online music services. The first is convenient, fully integrated into playback hardware and extraordinarily well marketed. The second is easy, fast, comprehensive and free.

If you do not have an ancillary product on which you can maintain a defensible margin (e.g., Napster formerly Roxio) there is no way you can make a profit given the iTunes business model. You can't compete with someone who is willing and able to take zero margin when your costs are the same or more than iTunes.

No VC in his right mind should invest anything in an online music business. They will loose their money.

A Unicorn

[mosb1000]

The law also permits them to demand a Unicorn, but that doesn't mean it's a reasonable demand.

Re:A Unicorn

[DaveV1.0]

Reasonableness does not enter into the discussion. They are not required to provide other people with a license to make and sell copies of works to which they hold the copyright.

You may as well say demanding a unicorn in payment for a house you don't want to sell is unreasonable however, by demanding an exorbitant price for something one does not wish to sell, one is unlikely to get a buyer.

Re:Monopolies are not illegal

[TheSpoom]

IANAL.

As I understand it, it's completely permissible to have a monopoly on one or more industries. It's not permissible to use that monopoly to obtain a monopoly in *another* market.

Antitrust laws are all about preventing, say, the encroachment of Microsoft from a monopoly on operating systems into a monopoly on Internet browsers.

Bought law. No quarter for the guilty.

[twitter]

Cut to the chase. Big publishers purchased these bogus laws and are the root cause for all sorts of digital stupidity. Is there anything more anti-social than fighting sharing as a concept? Companies that can't exist in freedom don't deserve to exist.

copyright to derivative works

[shakuni]

On a different note, as I was reading the copyright law, it mentions that derivative works cannot be created without the explicit permission of the copyright holder. As a musician, I do not understand how one determines that a particular composition is a derived work. Musical compositions across genres can have huge commonalities in structure and along a lot of these dimensions. While the goal may be to prevent blatant plagiarism of musical compositions, I think it is virtually impossible to objectively define what is original work vs what is derived work in music.

Vijay
http://diagonalslash.blogspot.com/

Committed?

[rgviza]

>The service just isn't attracting users at all, in spite of the marketing major label WMG has committed to do

They may have "committed" but I've never heard of Lala and I'd be interested in using it. All I can say is that WMG is doing a terrible job marketing this. I have the feeling they *want* it to fail, as a propaganda stunt. It's the only explanation. WMG has bottomless pockets. If they wanted it to succeed they'd be killing everyone in the online music business with their catalog.

In fact in a search for Online music download Lala's not on the first 5 pages. A comparatively small payment to Google would ensure page rank or at least advertising on the results. Not surprisingly an Apple ad (the destination of which shows has a link to iTunes on the landing page) is at the top. They are actually trying.

Nada...
Here's what does show up:
      1.
            Download music online
            Groundbreaking technology like the
            new Genius feature. iPod touch.
            www.apple.com/ipodtouch
      2.
            Zune Music Player
            Get your ears ready for
            the ultimate music experience.
            www.Zune.net
      3.
            Download/Play/Burn Music
            Legal Access to 5,000,000+ Songs.
            14 Days Free then only $12.99/mo!
            www.Rhapsody.com
      4.
            Napster® Official Site
            Listen To 6 Million + Songs
            With a Free Trial - Napster®!
            Napster.com
      5.
            Download Music Online
            As low as $.27 per song!
            25 Free MP3 - No risk 7 day Trial
            www.eMusic.com
      6.
            Top 3 Legal Music Sites
            Top 3 Music Download Sites Reviewed
            Download All your Favorite Music
            www.Real-Music-Reviews.com
      7.
            Download Online Music
            Unlimited Free Music on AOL® Radio
            Find Music You Enjoy on One Site!
            Radio.AOL.com
      8.
            Top 5 Music Sites
            Top 5 Music Download Sites Reviewed
            Download your Favorite Music Now
            www.HotMusicDownloader.com

DRM free with lots of options and great music. The only thing killing Lala is WMG. They've got Led Zeppelin, the Beatles, the Rolling Stones, Aerosmith, Rush, and the White Stripes for crying out loud! Their catalog is unmatched.

I just joined ;) At $.89 per song too. I think the author has a warped sense of what "committed to marketing" means, or didn't bother checking for himself. If I was a WMG executive, I'd have the marketing VP in a meeting finding out what the hell he does 8 hours a day.

-Viz

Reasonable Pricing

[eav]

If they would just price their product at a relatively reasonable rate; I would be willing to pay as much as $0.01 per 100 terabytes.

Finding such friends?

[tepples]

So how do I find friends who 1. live in my town, 2. share my tastes in music, and 3. listen to music under a Free or non-commercial license? Remember that I, in this hypothetical, have dial-up or no Internet access, so I can't easily get music from online friends except through the mail.

Re:Finding such friends?

[geminidomino]

The entire purpose of #1 (which no one but you can help you with. I know this is slashdot, but come on..) is to expand #2.

As for #3, that seems to be added just to complicate and/or politicize the issue. Nonetheless, the answer to it is, in this hypothetical, you buy it, copy it from someone who already has it, etc... since this is a hypothetical, "no-labels" situation.

You hit on the other scandal

[zogger]

It is called "payola" and most of those big distributors should have been broken up by now, put out of business in other words, over it. Not all stations or DJs participate in it, but enough over the *decades* to show it is the main reason you hear the same stuff all the time. When they get caught,they pay a little fine, next day, back to business as usual again.

Re:Jumping to conclusions

[Technician]

Aren't you afraid you are going to burn in hell? You go to church and brazenly conduct illegal activities, surely you aren't expecting to go heaven?

Think young military pre-CD's. Piracy days. Later CD's, church. I have never ever used Napster, Kaza, Limewire, etc. I used Bit Torrent for Linux distro's, but Comcast broke that, so I just use mirrors.

My early days do not reflect current activities. Be not quick to judge lest ye be judged. Remember, I bought DC Talk, not pirated it. I wish I hadn't bought it or sampled the original performance before deciding not to buy it. I heard a church choir perform the one track and I enjoyed that. If the church choir released it on CD, it would have been worth the money.

Even in the piracy days, I bought a lot of great albums from artists such as Pink Floyd, Styx, ELO (go ahead and laugh), Tomita, Cornerstone, Mariner, etc. This was stuff not played on the local radio stations. It was from sharing I discovered these artists and bought the albums. Without the military housing environment, I would have bought much less music or the great audiophile stereo to enjoy it on.

Today with the youth, piracy is even cheaper (no need to buy blank tapes and copy them real time) so many people invest nothing in music unlike the older days where there was great pride in a great collection and great equipment to play it on. Much music today is compressed to lower bit rates and played on small cheap speakers or headphones. The studios have entered the loudness wars to work in noisy environments. THD of 1% to .1% is the norm. S/N ratios are not important anymore as the signal is compressed to be always loud. My used 30 year old speakers alone are worth the average price of a new iPod. I looked them up on e-bay.

Recording for a clean natural sound is no longer desirable. For me, modern recordings are undesirable, and the online stuff legal and otherwise is even lower quality.
I don't bother with piracy or purchases anymore.

Sacrifical lamb

[Anonymous Coward]

Someone should take a case of SD cards, copy a bunch of tunes to them, and then stand on the steps of the US Capital passing them out until they have racked up $1B in statutory copyright damages. At $750 a song it doesn't take too many SD cards.

Now let's have a media circus.

in other words.....

[tacokill]

$100m in profit.
They make very little...

Seriously. Apple is a $134 billion dollar company who made $4.6 billion is profits last year.

$100 million/qtr is chump change for having 90% of the online music market. (Who knows how big that is?) The market could sustain BILLIONS in profits but the idiots running the record labels still don't get it. After seeing the $100 million number, I would be surprised if the iTunes store is making "piles of money".

Root cause NOT the labels?

[shliddle]

"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." ---- This is ridiculous. You are always -legally- able to charge 'what the traffic will bear' but doing so is rarely the best business practice for the long term.

Bullshit

[Anonymous Coward]

You are such a bullshit propagandist liar, go fuck yourself.

None of that shit ever happened and you know it.

well, yes

[zogger]

Oh, I understand what you are saying and agree with it, I am just bowing to real politics and macroeconomics on the ground. The fatcats want it, so you'll get it. Peons voting has little to do with any sort of domestic or international policy. The vote (which is now hacked to pieces anyway with blackbox voting) is a political psychodrama sop to keep the "we the people" folks (as opposed to the "we the big transnational corporations) faked out that they are in any way relevant to the process. I still do, but it is only from inertia and so I can bitch about politics.

Experiment: Pick *any* subject at all now, determine what the bulk of the joe sixpacks out there would probably want..now look to see what the law says or what is political reality.

I have to say...

[sblack777]

I've followed the historic revision of MP3.com for too long without comment. MP3.com could have been the prime mover for the democratization of artistic opportunity in the music business, rather than the poster child for litigious self destruction. There was an internal war between this idealistic stance and record industry "professionals", brought into the company soon after the initial funding and before the IPO. These people were Hell Bent on opposing any change or granting increased empowerment to the artist. They shorted the stock and backed litigation loving Michael at every ruinous decision that eventually destroyed not only a dream, but betrayed the investors who had no idea of what was really going on. It's been almost 10 years and I am still sick over this... BTW, I was hired in December, 1998 as the 7th employee of MP3.com. I was there for everything until shortly before the BK and liquidation. Formerly 7@mp3.com

Re:Bought law. No quarter for the guilty.

[renegadesx]

And anyone that doesn't agree 100% with everything twitter says doesn't deserve to exist either right?

Forrest Gump

[Anonymous Coward]

> Is there anything more anti-social
> than fighting sharing as a concept?

You really do think it's that simple, don't you?