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back to article Luddite and paranoid - why the big record labels failed at digital

This is the second of four interviews on the State of Digital Music from this week's Midem event in Cannes. We'll hear from AIM's Alison Wenham next, followed by a view from the songwriters and composers. It's the conventional wisdom amongst some Reg readers that "the evil record labels" are dying, and deservedly so. But such a …

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Happy

Finally

Finally a recording industry exec that has something resembling intelligence!

//Svein

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length of copyright is out of whack...

the period is too long... there's stuff that should most definitely be in the public domain...

personally I think the terms should be 25 years on mechanical performance rights and 50 years on the actual composition itself... in return, they can have stronger policing... but let us have stuff enter the public domain far sooner so we can actually make meaningful use of it...

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Happy

"You wouldn't make private copies legal without assurance of some revenue back?"

So basically, they still want us to pay for the music twice?

Hmm, just how many obscenities can I have before el reg refuses to post the comment?

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Flame

Patronage? You're soaking in it

I am especially intrigued by this comment:

"The patrons are going to be largely commercial so brands that see an advantage to a certain kind of artist, and that is putting art far to close to commerce. That would mean marginal music wouldn't exist, you'd only have music that had a commercial upside for sponsors. That's a world none of us really want to see."

Just how is this different from the situation we presently have?

The Big 4 -- largely commercial, check.

Art suspiciously close to commerce, check.

Music with only a commercial upside for sponsors, check.

And you wonder why the youth of today stay away from music. Sure, some people rip, some people, download, some trade. That's been going on for ages. The music world is in its current decline because the artists being promoted by the MSM suck!

Get some serious artists out there, then you'll see an upsurge in sales.

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They had their chance in 1997 and blew it - or snorted it.

In 1997 I put a complete digital download and ordering system with copyright protection to the record companies. The consumer would get a cheaper product. The record companies were offered more money than they were getting and the artists were to be paid more and be paid the instant their product was paid for by the purchaser.. Every CD had full-screen hi-fi videos and fan stuff.along with weblinks back to the band's site and digital downloads of tracks or custom CD's delivered to your door in 24 hours.

Dreamworks jumped in 1st with a Henry Rollins album and were very keen.

Universal was very enthusiastic.

BMG wanted me to do it just for them and no-one else.

Sony thought they could do it themselves.

I produced product for all of them - most of them just did it to try to reverse engineer what I'd done - even Intel couldn't get usable video bigger that a matchbox off a CD on a 486 back then.

In the end I realised it just wouldn't work unless Sony came on board.

They didn't.

Tony M it is all your fault. Sony was the worst.

I told them they would lose billions. They did and still are.

In the end I truly believe it was because the record companies didn't want the artists actually getting their royalties - there was a lot of funny stuff going on back then - like costs being inflated by everyone in the chain so that your album art cost $x and an ounce of cocaine for the record co executive.

The rest is history...

If the record companies want a second chance at the pie I've got something even better up my sleeve - for everyone - consumers, artists and the record labels.

Don't miss the bus on this one - it'll knock all the pirates, Apples, Telco's and everyone else with their snout in the trough for a six.

topsecret@cia.com.au

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Anonymous Coward

RE: They had their chance in 1997 and blew it - or snorted it.

Was that the lazerdisk then? Like a vinyl sized CD? They were great. Respect.

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Exception or example?

There is a band - Show of Hands - who have been around for many years on the Folk/Rock circuit. Pretty big - played the Albert Hall a couple of times, regularly win awards, easily fill provincial venues like The Lowry, and as far as I can see make their living entirely from playing their music and selling CD's.

When I have seen them play live they have always made a point of telling people to go out there, copy their CD's, give them to your friends, tell them to copy them etc. Last time I saw them they told a story about how a chap came from Germany just to see them just because he'd heard a copy CD and explained that this demonstrated how they wanted their music to reach people. They have always worked on the basis that CD copying spreads the message of their music - the more copies, the more potential concert goers.

At concerts, people queue for the original CD's the same as anywhere. The only conclusion is that if the music is any good, and listeners respect the effort that is made to produce it, they will pay to own a part of it. Music is more than the sound, it is part of life. Owning an original CD is like keeping family photos; every so often, you dig out the old stuff, do a bit of reminiscing, remember the good times.

The record companies have to find a means of adding value to physical sales. Perhaps artwork, discount vouchers for concerts, access to limited edition clothing. Whatever. The only certainty is the present model will never work.

Also, regional copyright deals are nuts. I have ordered CD's from the USA of bands I have heard on Pandora/Radioparadise etc. Many American bands are losing potential sales with the restriction on world wide airplay caused by the stupid regional restrictions that are now being put in place on some net radio. The World is crazy.

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There is a living to be made

"The fact is in Britain you can't earn a living from live music."

This is fantasy. How does he think the folk music scene has managed all these years? Folk music CD sales are miniscule - and CDs are very much seen as a nice supplement to one's income once the artist has garnered sufficient reputation to generate sales. But they're not the mainstay of how artists make a living.

Good folk musicians make a handy living doing live gigs, despite charging about half the ticket price of a contemporary band. What they can never do is get fabulously wealthy. And they have to be good to make good money. The problem with rock/pop is that artists expect to get rich being average, and at some time being able to retire and live off their royalties. Folk musicians know they have to put the graft in and work. I've seen folk artists travel 200 miles to do a gig to 40 people at under a tenner a ticket and STILL make money. Classical musicians seem to make a handy living performing live.

Music isn't like football. Musicians don't have to retire at 35. They should expect to keep working for their living, the same as the people who pay for their music. The idea that you can't do that playing live is nonsense - live is the modus operandi of most forms of music.

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T-shirts

...So all these Reg readers who think recordings should be given away free, and foam and fulminate when the RIAA throws its lawyers around, will presumably be fully in support in future when they set the attack dogs on unlicenced t-shirt sales?

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Dead Vulture

@Tom Hawkins

What the fuck???

How does the second follow from the first? You're really digging to find SOME form of hypocracy in people who think that the current system is terminally broken.

There's none there.

The only way you can get any form of double-thinking is to take the statements of one person and the statements of another person and show they aren't in accordance, and assume that since they both don't like copyright, this shows any form of hypocracy.

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Anonymous Coward

overall interestiong, but some BS

"The fact is in Britain you can't earn a living from live music."

Really? Has that guy ever talked to ceilidh bands in Scotland (for example)? OK, they're not rolling in it and even sometimes have a second job to make extra, but they ARE making a living.

Apart from that, it is nice to see some smart execs.

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Right idea sort of

more honest than most but crutially lacks any real ideas about how to monetize.

The current system is collapsing in on itself. Personally I'm glad and feel its been a long time coming. The idea though that someone can't make a living from playing music is absurd, they just can't make the kind of living they currently do from playing music which again I think is no bad thing.

Where is the decree that states musicians or those in the music industry should be millionaires? I think the same sickness has infected sport too.

Go back to the pre-beatles days and musicians worked their whole life doing something they loved which didn't pay all that well. The salient point here is not that we regress to the 50's but that financial reward or not, they did it anyway.

What we have now is an industry largely of fame-infected artless and vacuous s***e full of coke-powered cretins looking for a fast buck and faux-adoration normally resulting in filthy rich execs and addiction-riddled damaged survivors or the more unfortunate early grave-dwellers. It's a bit like the lunatics running the asylum.

Personally I choose the old model, let the artists I like spend 20 years building a career, the short-term chancers will soon find another industry to try and milk. So you're a muscian and it doesn't pay well, so what, it's a more enjoyable job that most and most don't pay well either. boo f'in hoo.

Actually I can't think what the 'need' is for record companies anymore. the BPI and their ilk should really represent the artists, the licencing of their work, pensions etc and the artist's management should handle tour plans, gig bookings, recordings and production of physical media... all of which these days can be done to modest budgets given the availability of digital technology and internet distribution (cafe-press for artists anyone?)

so what exactly do record companies do that's *so* special they justify their continued existence let alone their vast chunk of the pie over and above the artists?

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Ned Ludd

The Luddites simply wanted a better deal for out of work weavers. They campaigned for compensation and re-training for for those put out of work by the march of technology, they weren't all brain-dead, technology smashing morons history has painted them as.

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Guess what?

having a second job = not making a living from your first one.

You cannot make money performing live music in the UK.

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CD burning?

"CD burning is much more domestic piracy, and is much more somebody avoiding paying for something."

WTF is he talking about? No one needs to burn CDs anymore.

On making a "living": who says people should become extremely rich from selling copies of an album? It's as if there's a universal law (or should that be "Universal®"?) that says so.

As for the governments intervening, same as above. Why should the government try to preserve this weird industry with levies and such? This isn't something we need for survival--it's not the governments' business, and if this industry can't survive as it is for some reason, THEN SO BE IT. Anyone who thinks music (or the other arts, for that matter) will suddenly perish if the huge corporations behind it collapse, is a blind moron.

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(Written by Reg staff) Bronze badge

Re: Right idea sort of

"more honest than most but crutially lacks any real ideas"

I heard no shortage of ideas at Midem this week. But these have to be worked out in partnership with the service providers. If people on the music business side floated them at this stage, people like you would accuse them of bullying.

"Go back to the pre-beatles days and musicians worked their whole life doing something they loved which didn't pay all that well."

Why stop there, Anonymous Coward?

We could even go back to the Victorian era, the child chimney sweeps back then looked as happy as Larry! You seem quite keen on exploitation, I'm not sure why.

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Exploitation?

There are some jobs where there is a very large supply of people wanting to do them, and a relatively small demand. Almost all arts are like this.

In what sense is it exploitation to simply note that supply and demand for 99.9% of artists are never going to make a lot of money from their art, but may well make up for that in personal satisfaction?

Of course, there is the 0.1% who make a fortune. In some cases the market can be manipulated to spread some of that money around, in some cases it can't. But it's hardly exploitation if that happens.

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Sush andrew.

"We could even go back to the Victorian era, the child chimney sweeps back then looked as happy as Larry! You seem quite keen on exploitation, I'm not sure why."

Why not further back, to the classical times. ALL production was open and freely copyable.

And we had some of the profoundest thinkers.

'course you'll say we'll go back to burning witches or bubonic plague, just to bring a downer to the scene....

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Theory of Surplus Value

> If I had to pick put one dominant theme from Register emails and comments, and it's not representative of everyone I'm sure, is that the value of sound recordings is going down.

The value that people attribute to music is imbued in the object before they buy it, not after they buy it. If it has only monetary value when someone buys it, then it can only be contingent happenstance that it acquires personal value afterwards, and the pleasure derived from it is equivalent to a bet at the races. (Tho some bet from compulsion rather than pleasure). Both customers and business can disambiguate "value", as they know the interest of the other party in the transaction. The people who seem completely confused are the "artists" in the middle. The smell of desparation is because the customer is reluctant to yield economic value as long as the business is delivering product that is without personal value.

The recent egregious and obfuscatory Radiohead stance of taking the piss may be artistically valid, but sets a bad example, and is not likely to appeal for any length of time. The "long tail" demonstrates just this, as does the folk scene.

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Buying more CD's than ever!

Oddly enough, I'm buying more CD's than ever nowadays.

I like to get something better than a low bitrate MP3 to listen to.

And CD's are getting very, very cheap.

Firstly, the supermarkets are knocking the prices down.

More importantly, I'm finding loads of good stuff, old and new, at car boot sales and in charity shops, for just a pound or two.

Why? I speculate that a lot of people who don't want to get into breach of copyright downloading, or don't know how to, are buying the disc, ripping it to their iPod, and then getting rid of the original.

Of course, most people haven't backed up their player, so when the device fails, they will have to buy everything all over again - now there's a wonderful little earner!

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What business is the music "industry" in ?

I have just been doing a management assignment for Uni on the Guy Hands takeover of EMI. What struck me most in my research was that every man & his maiden aunt say that Hands hasn't got a clue. I believe he is either still trying to work out exactly what business the music "industry" is really in (or they don't like what they are hearing), in the sense of "(Odeon Cinemas) is not in the movie business , it is in the popcorn business". Now being an aussie I don't know if the changes he made at Odeon were a good thing or bad , but at least Odeon still exists with a much leaner cost structure than before.

For the last 50 years the music industry has been about 'semi slavery' where a company throws sums of money at artists to basically "own" them for a set number of recordings/songs (and then owning those songs/recordings virtually forever) in return. This worked reasoanbly well when the labels controlled distribution, but now that they don't...

I don't have the answer but I believe the 'semi slavery' model

lies at the core of the problem. Either artists never make the money back & remain in debt to company, or artist becomes unexpectedly popular & have signed too cheap, or "damn I wish they hadn't licensed that song I wrote for use by the neo-nazis for their election campaign", or the next time round they pay artist a musch larger advance because of your track record and either you have 'gone weird' or the public taste has changed and millions of cds are crushed and used as road making materials in china.

At the moment it is the labels by making these payments are assuming most of the risk, and as a result of outsourcing the cd pressing the risk has gotten larger (bad bets that cd will be a huge seller, or don't press enough for demand & illegal copies made) and they (RIAA and equivalents excepted) are still trying to work what they are selling & how to make a profit doing it.

Interestingly it seems to be the artists managers who are fighting a reargaurd action to retain the up front payments as it easier to work out & get paid your percentage when the "big cheque" arrives. They are the ones fighting the so called 'plantation' model (days rates for recording, but higher royalties) as their payments are spread out too, with some flexibility of ownership of the words, music & performance.

As each of the majors is now an international business why are we stuck with performance x only licensed for sale in the UK - whilst the same performance with different cover art (or different sound engineering & here I am thinking about the enormous difference in sound between EMI classic recordings of same performance from Japan vs UK) is only licenced for the US, and neither is licensed for sale (& therefore legally unavailable) in Australia ?

This has led to the farcial situation where I am sitting at the computer with credit card in hand, but because my ip addy or credit card is not US or UK I can't buy what a want (it took a while but itunes finally got to australia) - but I want better than itunes quality (suitable only for use as 'aural wallpaper') - where can I legally go other than a shiny disc that will take a minimum 3 weeks (local store) or 1 week (amazon) to reach me ? I want it NOW !!!!

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Lots of people seem to want "Music 2.0".

The attitude seems to be that creative work happens at random; ideas float around in the ether, occasionally intersecting with a human brain. "There's nothing particularly special about Paul McCartney," people think, "he just got lucky and had a few good ideas. _I_ could have written those songs if I'd had those ideas." They don't see any reason to compensate people for creative work, because they don't believe that creative work is actually unique.

Sort of like Wikipedia, and other sites of that ilk. No one contributor's input is weighted more heavily than another's, because knowledge and experience are just a question of spending time on something. Anyone could be a nuclear physicist or a race-car driver or a fashion model, they just have to learn how to do it; therefore, everyone is equally qualified to discuss nuclear physics or race-car driving or fashion models.

Since my creative work is non-unique, I can't expect compensation for it; because _anyone_ could have done that. I just happened to get the idea first.

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@Mike Powers

Creative work DOES happen at random. Otherwise the Beatles would never have had to re-record or abandon work as not good enough. Part of this is that they built on other works and in a healthy society, you are immersed in a changing sea of inspiration, changing what you yourself will come up with.

And yes anyone CAN be a nuclear physicist. However, if you haven't actually done the WORK to be a nucler physicist, your word on the subject is worth less than someone who DID do the work.

You cannot expect compensation for your work AFTER YOU DID IT. In the same way as a plumber cannot do your plumbing work and then after the fact say "right, that's £300". He sets a price first and we agree TOGETHER. But for "media content" it is, make the stuff, tell me the price I'll buy at. No setting the price AFTER agreement is reached. Price by fiat.

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No, actually, talent DOES exist.

Firstly, polishing and remixing is by no means a creative effort on par with the original production. Me being able to build a structure from Lego does not mean that if Lego didn't exist I would build the structure from, e.g., dog biscuits.

Second, I'm not sure what point you're trying to make by saying that the Beatles abandoned some work.

Third: Do you actually know anything about nuclear physics? There really is a lot more to it than E=MC-squared. It's not like leveling in WoW, you don't "grind" undergraduate physics texts until you "level up".

"You cannot expect compensation for your work AFTER YOU DID IT. etc. etc."

You made two different arguments in that paragraph. Pick one and stick with it.

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Boffin

It's all in the context

Like a true journo Andrew, you quote me yet miss the next sentence which would provide context to the quote and instead go for the cheap point scoring remarks rgd an outmoded industry exploitative of children like chimney sweeps.....

in fact "outmoded, exploitative" pretty much sums up what I see as the description of todays big four record companies.

so I repeat the salient point here is not that we regress to the 50's (or the days of Mary Poppins!). The point is when people did not make a lot of money from music, they still made music anyway. I'll expand on this for you seeing as you think I'm for exploitation (maybe I work for the big four then eh!).

The music industry seems to send out the clear message that somehow p2p and piracy is 'killing music'. Until they cease making ridiculous and stupid statements such as this I have no time or sympathy for their plight.

you cannot 'kill music'. If people made no money... zero...nada...not one penny from the production and performance of a tune, song, jingle, whistle or ditty they would still do it and share it and perform it every day.

IMO what the music industry in general is saying when they use terms like 'killing music' is that their current money making method is drying up. Nothing is being killed except their ability to charge unreasonable prices for a product which until recently they had total control over the production and distribution of. They just aren't selling their products as much because like chimney sweeps, gas central heating was invented and the market shifted so radically the profession all but dissapeared.

They are a commercial industry who are not competitive anymore and are hoping to survive unchanged through legislation.... all I can say to that is good luck but I don't rate your chances.

I don't support the execs right to make millions

I don't support an artists right to make millions

I don't support an artists (and their childrens) right to claim millions from one popular song for a period of 75 years or more.

You want to produce music, earn a living through hard work like the rest of us.

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Exploitation

Years ago I used to write articles for computer magazines. The standard contract was that you were paid so much per word and the publisher got total global rights to the material. Take it or leave it. Articles I wrote were reused years later and I even found one on the web translated into Finnish. I got not a penny more.

I'm not complaining. After a while I concluded I didn't know how to play the game well enough to make a living and went back to the day job. Obviously other people do make a living at it, people who rather oddly seem to support the idea of musicians getting paid for life for an afternoon's work they did in 1957.

It's not only folk musicians who successfully work for a living. I cite The Hamsters, a blues rock band with a huge following in small clubs and festivals, who didn't look ragged, hungry or covered in soot last time I saw them. Likewise Dr Feelgood, who did have the odd "hit" in the past, but clearly aren't living off them. Both fine bands - go and see them, you'll have a better night than you ever will in the O2 Arena.

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Re:No, actually, talent DOES exist.

I never said it didn't.

But what your talent produces changes.

Ever heard of bootleg beatles? There are cutting room floor excerpts that they didn't like or didn't think good enough. And they often changed quite dramatically as they worked out what worked and what didn't.

There's as much or more creativity in the polishing stage for most music.

And yes I did a degree in physics, so I know there's more to it. And that is you denying your own dig at non musicians: you stated that our input on what copyright should be is like someone off the street talking about nuclear physics and then saying "should we listen to them" when we can ALL say what we like but we can't all say what is going on in nuclear power. So you now agree with that point.

And when someone did the work waay back, copyright was shorter. But it got extended. That's a cost taken from the public to be given to the person owning the copyright. A payment after producing it. Getting money from copying recordings is asking for money after you've done the work: it only costs pennies to copy a CD NONE of which involved any work from the artist. Another example of getting paid after you did the work, trying to get royalties.

We don't get that in any other service industry. Why music?

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Boffin

Laserdisk

Laserdisk was an analog video format (audio tracks could be digital or analog) and had no interactive features like he described, so that is not what he was talking about. LD also lacked any form of content protection.

What he was talking about was CD based and computer related.

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