General Motors, we're told, is 30 days from bankruptcy. That's sad for the people who depend on it for a living, of course, but it's hard to have much sympathy for a firm that's spent decades making cars that pollute the planet.
GM had the answer 13 years ago - it introduced the EV1 electric car in 1996 - but decided to concentrate on gas-guzzlers instead, discontinuing the EV1 in 1999 and crushing the lot in 2003.
Today's world doesn't want gas-guzzlers, and GM is desperately trying to catch up before it goes out of business.
For gas-guzzlers, read CDs. When Napster came along in 1999, one big record company - BMG - wanted to find a way to harness the power of the internet. The other major record companies sued Napster - and eventually, sued BMG, too - starting an unwinnable war with dodgy downloads that continues to this day.
Now, like General Motors, the record companies are hurting - and like General Motors, they want the government to save them. GM wants cash; the record companies want ISPs to act as their policemen, while the Digital Britain report suggests a broadband tax to create a new organisation to fight piracy and find new and exciting ways for DRM to annoy us.
Why doesn't the government tell them to get stuffed?
Self-inflicted wounds
We don't doubt that the record companies are hurting, but many of the wounds are self-inflicted. Ten years after Napster they're still knocking down bright ideas, whether it's Pandora shutting its UK operation because of too-high licensing fees, Spotify having to cull its catalogue because of complex territorial agreements or Apple being pressured to increase the price of iTunes downloads despite digital being much, much cheaper to produce than physical products.
It's hard to have much sympathy. This is an industry that sues grannies and dead people and gets Google to zap your YouTube clip of the baby playing if Prince is on in the background. It's an industry that expects you to pay for a licence if other people can hear your radio. It's an industry whose artists, from the tax exiles of the 70s to bands today, do their very best to avoid paying tax.
It's an industry that's sued CD importing firms for daring to demonstrate that we were getting stuffed every time we paid £15 for a CD. It's an industry that penalised its best customers with terrible and short-lived legal music services that littered hard disks with unplayable, paid-for tracks when the servers shut down.
Government help? Where's the government help for travel agents, directory publishers, local newspapers, hard-core pornographers and other industries whose entire business models are disappearing thanks to online competition, legal or otherwise?
What's so special about music?
In it for the money
Andrew Dubber of New Music Strategies is an Arts and Humanities Research Council Knowledge Transfer Fellow in Online Music and Radio Innovation and a Senior Lecturer in the Music Industries at Birmingham City University, UK, and he specialises in telling the music industry the things it doesn't necessarily want to hear.
One of those things is that the record companies aren't the music industry. "The music industry is a vast, diverse ecology with lots of different people doing different stuff, but the record companies have managed to persuade the mainstream media to call them the music industry - which is a bit like the lions demanding to be called the zoo," he laughs.
Dubber, like us, isn't convinced that dodgy downloads are costing the billions of pounds the industry lobbyists claims. "How on earth do you come up with those figures, unless you say that the downturn in CD sales is so many billion pounds and the only thing that's caused it is the internet?" he asks.
The idea that every download is a lost sale gets short shrift, too. "It's like saying that every song you listen to on the radio is a lost sale. The stupid thing is that we've done all this already, fifty years ago. We went through it with radio, with the record companies refusing to provide music to radio stations... every time a new technology comes around they resist it strenuously, jump up and down about piracy, and then recalibrate their business and make money from it."
For Dubber, part of the problem is that the record companies have a very fixed idea of how the world should work - and that's the idea they're peddling to governments, with industry bodies suggesting that ISPs should kick people off the internet altogether if they share MP3s. "There's a presupposition with all of this, and it's really dodgy," he says. "It's the idea that whatever people want to do, whatever technologies are available and regardless of what the world is like, the music industry deserves to be given money. Everything starts from that premise: we provide all this value, we provide it in a way that we specify, and you must give us money... you're not allowed to hear music unless you give us money."
Your comments (6) Click to add a new comment
avi
March 11th 2009
6. If the figures given on the Youtube versus PRS thread are a guide then it's easy to see the problem. The claim is that it costs £500,000 to launch a CD and most don't sell he 500,000 necessary to break even. The record company charges the bands all this and therefore most end up in debt. Therefore the PRS, which is simply a tax collection service for the 3000 record labels and artists that have signed up, is collecting for musicians because the records have got fat from not paying them.
I've been doing some sums and I reckon you could equip a modern studio for about £20K and that having CDs made costs about 50P each, so for £40K you can have 40,000 CDs if your starting from scratch and half that if you have a studio. If the record companies need £480,000 more then they are overweight and inefficient and need to sort themselves out. If my company loses money I can't go and demand more from existing customers, so why should they or their lackeys the PRS be able to.
The article is bang on, the Record Companies are fat, lazy and inefficient and it's no surprise that an increasing number of big names would prefer to do without them. I think we'd all be better off if they did!
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darrellt
March 10th 2009
5. I appreciate any business wanting to protect it's revenue, but isn't it time that the music industry stopped moaning about potentially lost sales and started to try more positive and creative ways of motivating sales? The most obvious is to find natural and exciting talent rather than formulaic synthetic performers and by that I mean stop auditioning for bands you can create and get back to finding real ones that can sing and/or play instruments rather than doing it all in the mix and just recruiting a look.
Secondly but equally as important is instead of working against your clients that you need to keep the business afloat, work with them; create compelling incentives to encourage sales of music. CD sales can grow if perhaps there is a random concert ticket or merchandise voucher within some of the packaging as they can't be so easily copied and real fans would love that. Learn from NiN how DRM free digital sales can make fortunes. Concerts have always made the industry a lot of money, but if the artist lacks live talent then the live show lacks the incentive for customers to buy tickets.
Stop blaming the customer for your own lack of innovation and creativity, start realising that you only alienate the hand that potentially feeds by threatening them with lawsuits, etc. Positivity is infectious.
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avi
March 10th 2009
4. I don't mind buying music for a fair price and owning it, but what makes me cross (very cross indeed) is constant whinging in the press from the Record Companies about theirs and the Government's loss of revenue because of piracy (I don't believe it either), being harassed by the disgusting PRS in case someone is listening to a radio that anyone else can hear in my factory, when I hear from people who've been fined for not doing so and I was furious when we lost Pandora, I didn't even bother with Spotify because I expected these greedy, bloated, mean spirited robbers to wreck it pretty quickly and so on.
Music is okay to own if it's cheap enough and all these creeps are doing is putting everyone off it and accelerating the demise of their wretched Industry. Good riddance say I, because most of it is dire and cynically commercial anyway.
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kasino72
March 9th 2009
3. Here we go: YouTube's blocking music videos for UK users because PRS, the performing rights organisation, wants much, much more money. Says Google, anyway:
PRS is now asking us to pay many, many times more for our licence than before. The costs are simply prohibitive for us - under PRS's proposed terms we would lose significant amounts of money with every playback. In addition, PRS is unwilling to tell us what songs are included in the licence they can provide so that we can identify those works on YouTube - that's like asking a consumer to buy a blank CD without knowing what musicians are on it.
We're still working with PRS for Music in an effort to reach mutually acceptable terms for a new licence, but until we do so we will be blocking premium music videos in the UK that have been supplied or claimed by record labels.
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kasino72
March 9th 2009
2. That's something I spoke to Andrew about but it didn't make the final cut of the article - that business is about meeting demand, identifying what customers want (and are willing to pay for) and delivering it. If you don't, they'll go elsewhere - and as we've seen online, that means the yarrrr merchants.
We're not arguing that music should be free. It's like you say, millions of people want availability and affordability. That's why Spotify's getting so much good press, although IMO it's not as good since all the Babybird stuff got zapped :)
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ripsnorter
March 9th 2009
1. Excellent work by that man Marshall! The problem is the failure of the music business to come up with relevant and workable business models for today's technology. But hey! Never mind! The dinosaurs managed to evolve didn't they? Okay, some of them became birds but otherwise ...
It's the same with the film industry and DVDs, with its insistence on regional coding, different release dates and editions etc. The market and demand are there but they are just not satisfying it.
True, there are those out there who feel everything should be available to download and for free, but there are countless millions who would buy more, more often, if it were available at a fair price.
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