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How the RIAA failed the recorded music industry...
Old 15th April 2009
  #1
How the RIAA failed the recorded music industry...

How the RIAA failed the recorded music industry...

free riffin'...

I sit here reflecting on the year in music. This is the year that the inevitable truth was revealed to all. The cloud of denial was lifted. The CD is dead, and digital distribution will replace it. Along the way there was a grave missed opportunity by the major labels, as lead by the RIAA.

DIGITAL RIGHTS MANAGEMENT (DRM) = COPY PROTECTION

Digital Rights Management could have reduced losses as the industry matured fully into a digital distribution model. A statistic has been floating around that 97% of the music in the hands of consumers is not copy protected (CD's are not copy protected), and therefore copy protection is a non-issue. Hell, earlier this year I even bought into it. However, as I reflect upon this past year, and the one to begin, I'm thinking differently. I'm thinking Steve Jobs is a genius and the RIAA are clowns.

THE END OF DRM

Now this may not be news to many, but follow me here. As we go into the new year DRM (Digital Rights Management) is all but over. The first bold initiative this past year was by EMI who first brokered a deal with Apple to sell non copy protected music on Itunes in a premium format, at a premium price (an additional .30 cents for song).

JOINING THE PARTY

Eventually Apple and EMI would reduce the price of the non-copy protected music back to the norm (.99 per song as opposed to $1.30 per song). Then Universal Music Group followed suit, and as of this writing more and more music in the catalogs of EMI and Universal are available on Itunes without any copy protection or restrictions (well, sorta – I'll get to that in a minute).

THE BEGNING OF THE END

By the end of the year Sony/BMG who had been the most vocal about retaining copy protection at all costs, finally, and with a whimper announced they too would begin selling music without copy protection. The only hold out at the end of 2007 was Warner Music Group, who suffering the public humiliation of a stock price death pool (set at $7.50 per share and then crashed as low as $6.10) certainly can not hold out for long being the only major distributor not offering music without restraints.

MONOPOLY ANYONE?

So why the change? Because this is the year it became clear that digital distribution is the future. Right now there is only one player for that future, Apple's Itunes. A virtual monopoly of music retailing scares the daylights out of the major labels. Steve Jobs singularly makes the rules. Take it or leave it. Apple does not take promotional money from labels, does not sell "positioning" and does not allow labels flexible pricing that they have been seeking. The entire future, of the sale of recorded music is controlled by one man. Spooky. Very spooky if your entire livelihood is dependent on that one man…

AMAZON TO THE RESCUE?

Enter Amazon.com with Amazon Digital. Finally a digital music store from the one major player with enough clout and a large enough installed user base to compete toe to toe with the 200lb Gorilla that is iTunes. Every other digital music store has failed miserably (sans for Emusic, sit tight we're getting there). All other stores failed because the record industry has required those stores to have their own copy protection scheme. Apple's is called Fair Play. It allows users to keep purchased music on unlimited ipods, 5 computers and the ability to burn 10 audio CD copies. Sounds fairly reasonable.

FAIR PLAY, BUT NO SHARING

So why did the other stores fail? Why couldn't they use Apple's Fair Play? First, Fair Play is owned by Apple who paid to develop it for their iTunes Music Store. It is exclusive to iTunes and that means no other music, purchased from any other store is compatible with the iPod. Long story short, if you can't play purchased music on an iPod consumers aren't going to pay for it. Genius. Apple created a digital music monopoly by giving the labels exactly what they asked for in the first place. Protection.

IPOD NATION

The iPods universal dominance means than consumers are only willing to pay for music (or steal it) that can be played on an ipod. So there two options, and only two options for iPod compatible music as most iPod owners are aware. One, music purchased from iTunes is iPod compatible. Two, standard MP3's are compatible. That's it. No other music, purchased from any other digital music store can be played on an iPod (including Windows Media). No music from Sony Connect (now defunct), not the Microsoft music store, not Real Music, Rhapsody… none of them will play on an ipod.

EMUSIC's EXCEPTIONAL NICHE

The only exception is Emusic. Emusic is credited as being the second largest digital music store behind iTunes. So what can Emusic do that the other digital music stores can not? One very big thing. No copy protection. Emusic sells unprotected MP3s. Ipod compatible Mp3s. Genius. Sorta. But the failing of Emusic is that it can't sell any music by any artist on any major label. So Emusic is limited to only being able to sell music by indie artists. This immediately limits its consumer base, but it does create a unique niche for a certain demographic.

BACK TO AMAZON

What if a digital music store could sell non copy protected music like Emusic does, but with one added bonus, it could also sell the music of major labels? Amazon Digital is that store and the real reason the major labels have finally given up on digital copy protection. The majors were left with one of two options. One, give Apple a monopoly on digital music sales and preserve copy protection. Two, drop copy protection and open the playing field to competition. They chose the latter, not the former.

Amazon stood on the sidelines watching the Microsoft launch of Zune. The verdict was clear for all to see. Any competition to Itunes would need to be ipod compatible. There is only one way to do that, eliminate DRM.

THE RIAA FAILED US

The missed solution is a third option. The RIAA as the trade body for the major labels missed the opportunity to leverage Apple into sharing Fair Play as the industry wide standard for Digital Rights Managements (copy protection). Within the next two years, the majority of new releases and even back catalog will only be available for sale digitally. Over time, the proliferation of copy protected music would create a sufficient first tier deterrent to make buying music legitimately the reasonable choice for most consumers.

The major mistake for the industry was to not develop it's own industry standard DRM. Not having developed a singular DRM standard would have been like letting every retail chain sell it's own exclusive (and incompatible) type of CD which would only play on that stores player. Inconceivable right?

The labels and the RIAA should oversee the standardization of the delivery format of recorded music.

I'm sure this would not have been easy with so many parties involved, but here's what makes it easy. Either you sell digital music in the industry standard DRM or you don't sell it. With an effective first tier, shared standard DRM, the industry could have been proactive in the transition from non-DRM CDs to DRM protected digitally distributed music – compatible with all music players by all manufactures sharing the standard.

SONY AND MICROSOFT SHOULD HAVE WON

In a perfect world, Microsoft and Sony would have shared the creation of a standardized DRM and licensed it to the rest of the industry. Sony should have created the ipod and Microsoft should have created the standard DRM. But somehow, they both could not understand the problem well enough to create a solution that would speak to consumers as robustly as Apple did with the iPod and iTunes.

Apple thought like a consumer not a corporation. In doing so they asked questions and created solutions that Sony, Microsoft and the majors labels could not by being so invested in their own dogma they couldn't be objective about the needs of their customers. This is a lesson for the industry going forward from here.

MAYBE IT WAS TOO LATE ANYWAY

Fair Play is only a first tier solution with obvious work-a-rounds already known (burn CD, import the files as MP3s). But this is just about keeping honest people honest. Maybe the death of DRM would have been inevitable under any circumstances, maybe not. Maybe there was a fair way to address consumer and corporate needs at the same time.

Somehow the software industry has figured out how to deal with piracy in a "good enough" solution. I'm not sure which is more damaging, the ability for consumers to swap 30 gigabytes of music from an iPod in less than 15 minutes or the still rampant sharing of music on P2P sites (which surely can be shut down). Both of which could be significantly reduced through the use of first tier DRM.


HINDSIGHT IS 20/20

I suppose it's easier to see this in hindsight. The hand of the industry was forced when facing the erosion of record sales from P2P sites. Apple's Itunes offered the first real solution to the labels to compete with Free. Itunes was an intuitive solution that made purchasing music easier than stealing it, and for the first time ever, a song at a time.

THE BABY WITH THE BATHWATER

So now the baby has been thrown out with the bath water. It's going to be an interesting year. Many new non-drm digital music stores will open. Many of those will probably fail. But one thing is clear, consumers will have more choices to buy music legitimately and the competition will sure see some interesting dynamics evolve in the marketplace.

APPLE's LAST LAUGH

Even with the removal of DRM, the non copy protected music that is purchased from the Itunes Music Store will only play on an iPod. Of course music purchased from other sites will also play on an iPod, but music purchased from Itunes will only play on an Ipod unless converted to standard MP3s.

Apple still has the last laugh as the ipod will still likely be the leading hardware personal music player because it will quite simply be the most compatible. If people just wanted to rip their CD collections onto their music players and computers many more competing music players would have emerged. They didn't.

So ultimately Apple's loss leader to sell ipods (Itunes) is now absorbed by it's competitors selling music that consumers will still prefer to play on an Ipod.

THE FUTURE

Another blog will address the future of the industry as I see it. I believe Mp3s are a transitional music format. I believe that eventually a higher quality format will be introduced and marketed to consumers just as CDs were marketed to consumers as being superior to vinyl albums. So you get to buy all your music AGAIN (just like when you bought CDs to replace your vinyl). Let's just say it'll be called HDwav or HiFiWav…Something like that… And if the RIAA and the industry are smart, this time they'll make the rules (fairly) and not play catch up... Stay tuned…
Old 15th April 2009
  #2
Motown legend
 
Bob Olhsson's Avatar
 

The biggest failure was to not recognize the fact that millions of dollars would be spent by huge parasitic corporations defending copyright infringement. It was not treated as the assault on performers and songwriters careers that it actually was until after the public relations battle had been lost. Consequences have also been limited to civil litigation when criminal prosecution would have been a much more effective deterrent.
Old 27th June 2009
  #3
in response to the moby thread, I bump thee...
Old 27th June 2009
  #4
Here for the gear
 

DRM won't ever work unless net nuetrality fails.. Music should be free anyways. And its not like the RIAA and the major labels ever did anything good for anybody anyways. The amount of money they got compared to their artists is sickening.

Itunes is not a hero and Steve Jobs is a music tyrant because he distributes semi DRM devices with some success. Amazon is ok but they are all missing the point by distributing lossy music. They are trying to sell music that is lower quality than the music they made billions off of in years past. How does that make sense?

People just need to learn how to torrent FLAC files and call it a day.
Artists, engineers and producers need to realize that there isn't nearly as much money in the industry as there used to be, music is just like water now (says bowie) and there won't be any money in the industry until there is a MASSIVE global paradigm shift.
Old 27th June 2009
  #5
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santibanks's Avatar
Quote:
Originally Posted by redvelvetstudios View Post
Even with the removal of DRM, the non copy protected music that is purchased from the Itunes Music Store will only play on an iPod.
There are other mediaplayers that support the AAC format. Sony had a couple of product ranges that did and that was a few years ago…
Old 28th June 2009
  #6
do they play apple's aac format, mp4? I was under the impression apples AAC only plays on ipods.

Quote:
Originally Posted by rainy-taxi View Post
There are other mediaplayers that support the AAC format. Sony had a couple of product ranges that did and that was a few years ago…
Old 28th June 2009
  #7
well, it is possible bowie is wrong, and let's hope so.

if not, we need to get him to stop making music and to start predicting more things about the future we need to know ;-0

Quote:
Originally Posted by knittingram View Post
Artists, engineers and producers need to realize that there isn't nearly as much money in the industry as there used to be, music is just like water now (says bowie) and there won't be any money in the industry until there is a MASSIVE global paradigm shift.
Old 28th June 2009
  #8
Lives for gear
 

Quote:
Originally Posted by redvelvetstudios View Post
well, it is possible bowie is wrong, and let's hope so.

if not, we need to get him to stop making music and to start predicting more things about the future we need to know ;-0
He always was a wonderful songwriter, but a lousy prophet.

As for DRM -- I fail to see how that could solve anything. There's no way you can copy protect music.
Old 28th June 2009
  #9
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santibanks's Avatar
Quote:
Originally Posted by redvelvetstudios View Post
do they play apple's aac format, mp4? I was under the impression apples AAC only plays on ipods.
there is no such thing as AAC from apple. Apple adopted the format as it has a similar structure to other MPEG formats (which are all merely containers for separate audio and video streams).

AAC is from Fraunhofer (and they have some upgraded versions which allow for more audiophile and surround options) as far as I know…

Apple added DRM to AAC in itunes but if there is no DRM, then it will be playable on every machine/program capable of it.
Songbird, winamp, quicktime, itunes are a few software programs that do it. Apple and sony both support AAC (where apple uses it as its main codec because of the superior compression and soundquality when compared with mp3).
Old 28th June 2009
  #10
interesting - so you'd think there'd be a larger influx of competing hardware in players.

so - perhaps it's that any of the music purchased in the last 5 years won't play on third party players - and / or - itunes won't sync to them - which may be the bigger issue as it is certainly the #1 music library software.

Quote:
Originally Posted by rainy-taxi View Post
there is no such thing as AAC from apple. Apple adopted the format as it has a similar structure to other MPEG formats (which are all merely containers for separate audio and video streams).

AAC is from Fraunhofer (and they have some upgraded versions which allow for more audiophile and surround options) as far as I know…

Apple added DRM to AAC in itunes but if there is no DRM, then it will be playable on every machine/program capable of it.
Songbird, winamp, quicktime, itunes are a few software programs that do it. Apple and sony both support AAC (where apple uses it as its main codec because of the superior compression and soundquality when compared with mp3).
Old 1st July 2009
  #11
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santibanks's Avatar
Quote:
Originally Posted by redvelvetstudios View Post
interesting - so you'd think there'd be a larger influx of competing hardware in players.

so - perhaps it's that any of the music purchased in the last 5 years won't play on third party players - and / or - itunes won't sync to them - which may be the bigger issue as it is certainly the #1 music library software.
The point is, everyone knows what MP3 is. Most people haven't even heard of AAC.
Most people fill their iPods with mp3 files, not aac files which is why it is also featured on the ipod. Apple knows this. But who buys at the itunes store uses itunes thus can play the file.

And its true that DRM material cannot be played on third party players. That's the whole point of DRM… I cannot even put a copy on all my macs and all my ipods.
Old 16th April 2011
  #12
bump...
Old 16th April 2011
  #13
Gear Maniac
 

Bandcamp is one of the startups predicted/referenced in the OP.

It lets you sell a variety of formats of your music without DRM. It does take a 30% cut of sales.

But it's really easy to set up and put music on it.

It's just not as easy to get that music noticed immediately. But I suspect that's also the case on the iTunes store.

One thing that sets Bandcamp apart is that you can set your own price. I've got a 64 song album up that fans can currently download for free in FLAC compression, which gives you lossless 44.1/16bit files, if you're willing to download software that plays them, or in fairly high quality mp3. Once I develop a fanbase, hopefully through p2p sharing, ipod swapping and equivalent forms of word of mouth advertising, I hope to start charging for some albums.

I agree that some music should be free and that everyone should have access to music. I also think that as a musician, I give a lot of valuable work to a lot of people and it would be great to get some value back for that effort and dedication.

Diamonds should be free, too. They're shiny and they seem to make ladies happy sometimes. If we all just shared diamonds and played with them when we were in the mood, and then gave them to someone else who wanted to play with them the next day, this world would be less violent.

But I wouldn't know how to set that up, and even if I did, no one would go to the mines to dig up diamonds any more. Which is fine. Mining is dangerous, unpleasant work. But I still think we should have people working on creating music all the time, so I don't think it should all be free. I think we should reward musicians who create songs that make us happy.

I hope one day my songs make enough people happy that I can make music full-time. I think it's great that musicians and engineers are taking the time here to brainstorm ways of keeping that dream alive.
Old 16th April 2011
  #14
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JSt0rm's Avatar
dont have anything to add really. Good read. How can the film industry learn from music's mistakes?
Old 16th April 2011
  #15
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Neenja's Avatar
 

Quote:
Originally Posted by JSt0rm View Post
dont have anything to add really. Good read. How can the film industry learn from music's mistakes?
They appear to have done so. They have a unified HD format, they support rental and streaming. They have UltraViolet (and even tech to bridge UV with non-UV entities). The film industry is working for consumers while the music industry is still trying to get people to buy music that is locked to one vendor. The film industry kills the music industry in this.
Old 17th April 2011
  #16
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Quote:
Originally Posted by Neenja View Post
They appear to have done so. They have a unified HD format, they support rental and streaming. They have UltraViolet (and even tech to bridge UV with non-UV entities). The film industry is working for consumers while the music industry is still trying to get people to buy music that is locked to one vendor. The film industry kills the music industry in this.
All good points but I think the movie industry is also struggling. BluRay really seems to be a nonstarter, margins on PPV/VOD aren't great, and Netflix Streaming has no substantial revenue sans for advances. It's most likely Netflix Streaming will have to take on a two tier model. The top tier paying advances and fees similar to cable for topline product, and near nonexistent per view payments for smaller indie fair just happy to have the exposure.

So the jury is out on how to deal with the lost revenue from DVD sales due to piracy.
Old 17th April 2011
  #17
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Neenja's Avatar
 

Quote:
Originally Posted by GearOnTheGo View Post
All good points but I think the movie industry is also struggling. BluRay really seems to be a nonstarter, margins on PPV/VOD aren't great, and Netflix Streaming has no substantial revenue sans for advances. It's most likely Netflix Streaming will have to take on a two tier model. The top tier paying advances and fees similar to cable for topline product, and near nonexistent per view payments for smaller indie fair just happy to have the exposure.

So the jury is out on how to deal with the lost revenue from DVD sales due to piracy.
Bluray is doing just fine. The biggest problem that it has are people simply not being willing to rebuy movies on BD. You can only sell the same content so many times before people refuse to rebuy. Music has the same problem (and the bigs have pretty much cut all catalog) but it is ignored as an issue by the "piracy is the only reason" crowd.
Old 17th April 2011
  #18
Quote:
Originally Posted by Neenja View Post
Bluray is doing just fine. The biggest problem that it has are people simply not being willing to rebuy movies on BD. You can only sell the same content so many times before people refuse to rebuy. Music has the same problem (and the bigs have pretty much cut all catalog) but it is ignored as an issue by the "piracy is the only reason" crowd.
the issue on bluray is not catalog, it's new releases.
Old 17th April 2011
  #19
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Neenja's Avatar
 

Quote:
Originally Posted by rack gear View Post
the issue on bluray is not catalog, it's new releases.
New releases regularly outsell DVD. What is not happening is people replacing catalog like they did with DVD. Catalog sales suck in music and video but people weren't going to buy the same stuff forever. The funny thing is that declining catalog sales are never added into the equation. It's really hard to find a solution to an issue if people won't look at the facts or consider different possibilities.
Old 17th April 2011
  #20
Quote:
Originally Posted by Neenja View Post
New releases regularly outsell DVD. What is not happening is people replacing catalog like they did with DVD. Catalog sales suck in music and video but people weren't going to buy the same stuff forever. The funny thing is that declining catalog sales are never added into the equation. It's really hard to find a solution to an issue if people won't look at the facts or consider different possibilities.
that's not what I'm hearing - I'd love to see data on that - my friends who run home video dist cos, are saying to opposite. last year, consulting on a project for friends we were advised by the home video distributor to NOT incur the expense of making a BluRay release of the title, and also declining catalog on DVD also has to do with increased piracy and those title now showing up on netflix for near zero revenue.
Old 17th April 2011
  #21
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Neenja's Avatar
 

Quote:
Originally Posted by rack gear View Post
that's not what I'm hearing - I'd love to see data on that - my friends who run home video dist cos, are saying to opposite. last year, consulting on a project for friends we were advised by the home video distributor to NOT incur the expense of making a BluRay release of the title, and also declining catalog on DVD also has to do with increased piracy and those title now showing up on netflix for near zero revenue.
You may not know this, but catalog video is legally everywhere. There is no reason to ever download a single movie over 2 years old. They can be bought new for under $10 and used for $3. They are on cable constantly and On Demand type services as well. To blame piracy for the decline in catalog DVD sales is completely silly. 3D BD has had a 500%ish surge and will increase as displays that can use cheap theater glasses become the norm.
Old 17th April 2011
  #22
Quote:
Originally Posted by Neenja View Post
You may not know this, but catalog video is legally everywhere. There is no reason to ever download a single movie over 2 years old. They can be bought new for under $10 and used for $3. They are on cable constantly and On Demand type services as well. To blame piracy for the decline in catalog DVD sales is completely silly. 3D BD has had a 500%ish surge and will increase as displays that can use cheap theater glasses become the norm.
I love you man - but come on - now you're referring to bluray as bluray 3D? Selective stats, huh? BD3D is a new format introduction, so from non-existence there's going to be great. This is like saying the good news is we doubled our numbers, the bad news is we went from 2- 4 units...

Also - what is the ratio of bluray to dvd on new releases - I'd bet you that DVDs are still the MAJORITY of new releases sales, majority meaning over 51%.

As for catalog in decline, fair enough, a lot of factors, but piracy can not be discounted among them. Soon the film industry will have the same issues of the music industry, except the film industry already jumped the shark with Netflix with is essentially the same as Spotify except for movies... or worse.
Old 17th April 2011
  #23
Lives for gear
 
Neenja's Avatar
 

Quote:
Originally Posted by rack gear View Post
I love you man - but come on - now you're referring to bluray as bluray 3D? Selective stats, huh? BD3D is a new format introduction, so from non-existence there's going to be great. This is like saying the good news is we doubled our numbers, the bad news is we went from 2- 4 units...

Also - what is the ratio of bluray to dvd on new releases - I'd bet you that DVDs are still the MAJORITY of new releases sales, majority meaning over 51%.

As for catalog in decline, fair enough, a lot of factors, but piracy can not be discounted among them. Soon the film industry will have the same issues of the music industry, except the film industry already jumped the shark with Netflix with is essentially the same as Spotify except for movies... or worse.
It depends on the movie. Tron Legacy did around 70% BD the first week. There is still a lot of confusion about BD with consumers, expecially about BD players playing DVDs. Soon enough BD players will be super cheap and people will buy them as DVD replacements. It is a growing format and stays at around 20% of DVD sales. Will it overtake DVD? Who knows, but the dynamic is different than the transition from VHS to DVD. It was obvious that that needed to be done. BD is a little more difficult to sell when the economy is bad and most people think that DVD looks great and as the features they need. Also, Netflix streaming is nothing new. It has existed for some time with On Demand and DVRs. There really hasn't been a reason to buy a movie since video rental became big.
Old 18th April 2011
  #24
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Quote:
Originally Posted by Neenja View Post
It depends on the movie. Tron Legacy did around 70% BD the first week. There is still a lot of confusion about BD with consumers, expecially about BD players playing DVDs. Soon enough BD players will be super cheap and people will buy them as DVD replacements. It is a growing format and stays at around 20% of DVD sales. Will it overtake DVD? Who knows, but the dynamic is different than the transition from VHS to DVD. It was obvious that that needed to be done. BD is a little more difficult to sell when the economy is bad and most people think that DVD looks great and as the features they need. Also, Netflix streaming is nothing new. It has existed for some time with On Demand and DVRs. There really hasn't been a reason to buy a movie since video rental became big.
And yet, a lot of movies have been sold anyway.
Old 18th April 2011
  #25
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Well here's my take. I've bought my catalog music on Vinyl, Cassette and CD and i'm not buying it again. PERIOD. I don't buy movies because I don't need to see a movie 50 times. I can get something different out of music every-time I listen to it because the mind creates the images out of what I percieve due to mood changes, where you are in life etc. Movies are NOT the same and I believe it's an apples and oranges issue for that reason. Two different experiences, two different unique issues as an industry.

However, I believe we are going to an on demand culture for movies for that reason but I also believe on demand music is the future. Really, there's no reason to own music if we can all just get it on demand. The main thing to be worked out are fair royalty rates for the artists. I have not seen that as yet and until we do see that I don't think you'll see the rapid introduction of a service like Spotify. That is to say UNLESS Apple comes out with an on demand streaming music service via the cloud. If they do and we can subscribe to it and have access to everything in their catalog, plus store some music on out ipods, iphones, etc, than people. It's over. Apple wins and this will be the dominant legal, income generating way recorded music will make money. You can bet if that happens you are looking at pennies as opposed to dollars for songwriters and copyright holders but I believe it can all work out to a fair compensation. May not be what the labels made on CD and record sales but it's a hell of a lot easier to stream tunes and stream lots of them at the same time, all over the world so a penny a stream can add up to a lot of money, ya dig?

We're in a transitory period and the field has leveled a bit but as an indie, I'm excited. The future is all about the web and it's obvious, the CD is a DEAD MAN WALKING.
Old 19th April 2011
  #26
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nuthinupmysleeve's Avatar
 

Quote:
Originally Posted by sventvkg View Post
Well here's my take. I've bought my catalog music on Vinyl, Cassette and CD and i'm not buying it again. PERIOD. I don't buy movies because I don't need to see a movie 50 times.
thumbsup


Quote:
We're in a transitory period and the field has leveled a bit but as an indie, I'm excited. The future is all about the web and it's obvious, the CD is a DEAD MAN WALKING.
Again... thumbsupthumbsup
Old 19th April 2011
  #27
Quote:
Originally Posted by sventvkg View Post
We're in a transitory period and the field has leveled a bit but as an indie, I'm excited. The future is all about the web and it's obvious, the CD is a DEAD MAN WALKING.
I'd like to know who here on this board doesn't believe CDs are a dead format? There's this constant assumption that those who are anti-piracy are somehow pining over the death of the CD.

I for one, am not. I don't care about the past, I care about the future. And the future is (now) and will be about digital distribution. Figuring out effective and protected digital content delivery systems, with proper protections and enforcements is what we're looking at.

so yes, CD's are dead... so what does that have to do with online piracy?
Old 19th April 2011
  #28
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Quote:
Originally Posted by rack gear View Post
I'd like to know who here on this board doesn't believe CDs are a dead format? There's this constant assumption that those who are anti-piracy are somehow pining over the death of the CD.

I for one, am not. I don't care about the past, I care about the future. And the future is (now) and will be about digital distribution. Figuring out effective and protected digital content delivery systems, with proper protections and enforcements is what we're looking at.

so yes, CD's are dead... so what does that have to do with online piracy?
Right. Assuming it's all going online then a streaming, on demand service such as Spotify but as I surmised, maybe implemented by Apple could effectively put a severe dent in piracy as many people would simply not have the need anymore. Say, a $10 a month streaming service with access to everything in the Itunes library, on demand plus the ability to store a couple thousand tunes on your ipod, iphone, ipad and piracy gets cut down overnight. Get millions of customers a month in this country alone and 10's-100's of millions a month around the world as it rolls out and you can see HUGE revenue potential for artists even if the royalty rates are pennies. I see this as VERY viable and the labels will have no manufacturing costs so they can stand to make less per stream. Less money but more potential streams and or customers. Everybody wins. Again, they just have to work out a fair royalty rate so copyright holders can get paid. I absolutely see this model as the future when they do.
Old 19th April 2011
  #29
Quote:
Originally Posted by sventvkg View Post
Right. Assuming it's all going online then a streaming, on demand service such as Spotify but as I surmised, maybe implemented by Apple could effectively put a severe dent in piracy as many people would simply not have the need anymore. Say, a $10 a month streaming service with access to everything in the Itunes library, on demand plus the ability to store a couple thousand tunes on your ipod, iphone, ipad and piracy gets cut down overnight. Get millions of customers a month in this country alone and 10's-100's of millions a month around the world as it rolls out and you can see HUGE revenue potential for artists even if the royalty rates are pennies. I see this as VERY viable and the labels will have no manufacturing costs so they can stand to make less per stream. Less money but more potential streams and or customers. Everybody wins. Again, they just have to work out a fair royalty rate so copyright holders can get paid. I absolutely see this model as the future when they do.
I'm not sure everyone wins unless the economics are transactional with absolute minimums. For example - youtube partners are now paid on a base of about $2k per million views which, if you do the math it breaks down to a very small, micro-economic per transaction payment (.002 cents). Which BTW it looks like Spotify is looking to match those types of economics.

The translation is 350 paid streams = .70 cents or ONE itunes song download. Begs the question - if you buy a song will you listen to it 350 times?

The game will be collective bargaining to increase those payments.
Old 20th April 2011
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Quote:
Originally Posted by rack gear View Post
I'm not sure everyone wins unless the economics are transactional with absolute minimums. For example - youtube partners are now paid on a base of about $2k per million views which, if you do the math it breaks down to a very small, micro-economic per transaction payment (.002 cents). Which BTW it looks like Spotify is looking to match those types of economics.

The translation is 350 paid streams = .70 cents or ONE itunes song download. Begs the question - if you buy a song will you listen to it 350 times?

The game will be collective bargaining to increase those payments.
right, they need to get the royalty rate together to an acceptable level but it will not by what it was for a bought song on itunes. Those days are gone. It's going to be a lot less I would say.
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