U2 Manager Says Google And Its Hippie Friends Should Pay The Recording Industry

from the still-haven't-found-what-i'm-looking-for... dept

Tue, Jan 29th 2008 4:35am — Mike Masnick

While the IFPI and the RIAA have been actively pushing for ISP liability for file sharing, it appears some in the industry are taking it even further. U2's manager for 30-years, Paul McGuinness, gave a talk at the Midem conference where he blamed Silicon Valley's "hippie values" for creating the problem, and demanding that tech companies of all stripes start paying the recording industry. He's talking not only about ISPs, but also Google, Apple, Microsoft, Facebook and basically every other successful tech company. There are so many problems with this, it's difficult to know where to begin, but let's tackle a few of the quotes:

First he blames these companies who have "built multibillion dollar industries on the back of our content without paying for it."

This is a common refrain from those in struggling industries, but it's meaningless. Complementary goods are a natural for building bigger markets, but no one expects one side to pay the other just for moral reasons. The oil industry's success is built on the backs of the automobile industry, but does the automobile industry demand that oil companies have a moral obligation to pay them? Computer makers have built a multibillion dollar industry on the backs of the internet and software companies -- yet, no one says they have a moral obligation to pay those companies anything. Travel guides have built huge business based on hotels and restaurants around the globe, but does anyone think that those travel guides owe the hotels and restaurants money for doing so? Hell, the recording industry itself was built off the backs of complementary goods such as radio, yet when they paid radio stations, it was known as payola and outlawed.

These companies, McGuiness claims, need to help out "not on the basis of reluctantly sharing advertising revenue, but collecting revenue for the use and sale of our content."

Uh huh. And I guess that automobile companies should be collecting revenue for the oil companies. And, home builders should be collecting revenue for the electricity companies. And, airlines should be collecting revenue for the hotel industry. You see, these are all separate industries. They may be complementary, but it's up to each one individually to figure out the business models that work. None should be pressured into saving the other from its own missteps.

"I call on them to do two things: first, taking responsibility for protecting the music they are distributing; and second, by commercial agreements, sharing their enormous revenues with the content makers and owners."

This is beginning to sound an awful like journalists who claim that Google has a moral obligation to "share revenue" with newspapers.

He claims that what all of these companies do is the equivalent of a magazine that "was advertising stolen cars, processing payments for them and arranging delivery."

That makes for a nice soundbite but has nothing to do with reality. First there's the little problem that nothing is being stolen here, only copied. Second, none of these companies are "processing payment" for unauthorized transactions. Third, none of them are "arranging delivery." It would be like the same scenario, but blaming the guys who paved the road on which the car was driven.

"Embedded deep down in the brilliance of those entrepreneurial, hippie values seems to be a disregard for the true value of music."

First, this shows a misunderstanding about the difference between price and value. It also misunderstands the culture of Silicon Valley, which is generally more libertarian these days than "hippie."

On top of all this, McGuiness is whining about this at the same time that U2 is pulling in incredible profits, making $355 million on its last tour. You know what helped fuel some of that? The fact that a new generation of fans are learning about U2 from downloading its music for free. Not only that, since they don't have to stretch their entertainment dollars as far on buying the actual music, they can pay the exorbitant concert ticket prices that U2 is charging these days.

The problem here isn't that others are letting the recording industry languish. It's that just about every other industry has realized that there's plenty of money to be made in the music industry. As we've pointed out, just about every aspect of the industry is doing fantastically well. More money is being made on concert revenue than ever before. More artists are making music than ever before. More music is being heard than ever before. Even more musical instruments are being sold than ever before in the past. Yet, because one segment of the market (the one selling plastic discs) is unwilling to take some simple steps to change its business model, everyone else has to pay up?

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Filed Under: blame, complementary goods, hippie values, morals, music industry, paul mcguinness, recording industry, silicon valley, u2

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Anonymous Coward, 29 Jan 2008 @ 4:54am

Ah! So this is why no one listens to U2 anymore.... Hippie Values. "That's the ticket" the PR folks suggest. Not the fact that there hasn't been any new music, or even a tour in the past four years.

You should have hired Bill Gates based on his Guitar Hero score. Instead, why not blame it on this new PR term called "Hippie Values".

God Damn you U2 and the horse you rode on.
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Anonymous Coward, 29 Jan 2008 @ 5:02am

Bono and team seems to be focused on other efforts and not creating new music. Not that that's a bad thing, I actually miss U2 but it's been a while since we've seen anything new.

I don't understand where this "hippie values" statement comes from. I suppose that absent of hippie values, U2 would have sold more albums..?

Still, the issue is in creation of new art. Maybe the recording industry needs to return to the core competency of 'creating an environment which allows artists to create' from what seems to be the core comptency of 'suing people'.
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ScaredOfTheMan, 29 Jan 2008 @ 5:02am

The proper response
I believe the proper response would be to tell him to go F$%K himself. However I am satisfied with Mike's rebuttal.

An industry decimated by its own greed and poor business decisions, and this is their response? Sort of enlightens you to how they got their in the first place.
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Alfred E. Neuman, 29 Jan 2008 @ 5:03am

What a Tool
It's probably in his contract that he must make a fool of himself on behalf of the MAFIAA.

I think he has been drinking too much Guinness. Hey, can you now get one at the drive up? Do you want fries with that?
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inc, 29 Jan 2008 @ 5:03am

yeaa yeaa yeaa yeaaaaahh....
bad joke :)
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ThePengwin, 29 Jan 2008 @ 5:05am

Crappy magager for a crappy band
U2 as a band suck. now i will refuse to listen to their music, i know im not missing out on much anyway

Also, for the lulz:

http://www.thebestpageintheuniverse.net/c.cgi?u=11worst
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Anonymous Coward, 29 Jan 2008 @ 5:06am

U2 has been added to my list of Boycotted musicians joining the ranks of Garth Brooks, Prince and others.
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Hellsvilla, 29 Jan 2008 @ 5:07am

I wonder if he realizes...
I do wonder. Do you think he realizes he just hurt U2's sales by trolling in such an unbecoming manner?
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ReallyEvilCanine, 29 Jan 2008 @ 5:10am

Conttrarily
Travel guides have built huge business based on hotels and restaurants around the globe, but does anyone think that those travel guides owe the hotels and restaurants money for doing so?
On the contrary, hotels pay the guides for placement, referrals and general advertising.

And, airlines should be collecting revenue for the hotel industry.
Once again, the hotel industry pays airlines directly or subsidises tickets through agencies. This is most easily recognised in ticket prices to Vegas and Disney.

The problem is that McGuinness, like his peers, doesn't understand the math, or doesn't want to. If the former, then he needs to see the supposed lost $3M of CD sales as sunk costs in concert promotion which paid off more than 30:1. If the latter it's because he knows no one outside the industry knows how their internal accounting works and thinks they have a shot at an even bigger purse. I know I'd rather count on sucking at one huge teat in Mountain View than try to scrounge a feeding from licking ten million tiny nipples around the world.
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fuse5k, 29 Jan 2008 @ 5:17am

bono
Bono(otherwise known as the world's biggest turd) and U2 SUCK BALLS
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Anonymous Coward, 29 Jan 2008 @ 5:19am

Re: Conttrarily
Travel guides have built huge business based on hotels and restaurants around the globe, but does anyone think that those travel guides owe the hotels and restaurants money for doing so? On the contrary, hotels pay the guides for placement, referrals and general advertising. Reputable sources do unannounced visits and reviews so as not to bias the results (if the hotels/restaurants know they're coming, do you think the service will magically improve?). And, airlines should be collecting revenue for the hotel industry. Once again, the hotel industry pays airlines directly or subsidises tickets through agencies. This is most easily recognised in ticket prices to Vegas and Disney. True, although that's more a both-sides-cooperating for lock-in. In both cases however, the partnerships are voluntary, which is key. Mandating that all business should be done in those manners would destroy the independence of the reviews, allow big players on one side to dictate which services on the other were successful regardless of which is actually better, and be flat-out business nonsense. Sounds rather like what the music industry wants, actually . . .
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Matthew Dismuke, 29 Jan 2008 @ 5:24am

Nice Article Except
By using this statement "The fact that a new generation of fans are learning about U2 from downloading its music for free. Not only that, since they don't have to stretch their entertainment dollars as far on buying the actual music, they can pay the exorbitant concert ticket prices that U2 is charging these days." You are saying it is ok to steal because of how much they charge? I cannot see the logic in this statement.
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Sajjon, 29 Jan 2008 @ 5:28am

Hollywood found a way to record sales in 2007 despite having the same file sharing issues as the music industry. Hmmm. Refocus and find a better way than lawsuits please.
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WarOtter (profile), 29 Jan 2008 @ 5:28am

What's that wailing I hear?
Ahh the cry of the marginalized. Go back to sucking the corporate teat Bono, your music has become cliche and is now mere detritus. Have fun snuggling with Metallica.
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happymellon, 29 Jan 2008 @ 5:34am

Hippie???
So does some one else not find the irony in a guy representing Bono, calling everyone else hippies? Come one now, Geldofs BFF?
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Jon, 29 Jan 2008 @ 5:36am

WOW!!!
What kind of douchebaggery is this? I can only guess the kind of 'support' he will receive from all of us 'hippies' that work in the tech industry. Maybe we can all go hug a tree instead of helping him and U2 implement the technology behind their next concert.
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Iron Chef, 29 Jan 2008 @ 5:41am

Thoughts on the future...
"It's a Pendulum. It swings right and then swings left... It's Newton's law. To each action there's an equal reaction." An incredibly smart person told me...

Considering this, the next four years will release eight years of pent up frustration within the artisan community. I see it as a rebirth. The sequestering of the writers only adds to the fire.

There won't be enough outlets... Businesses will be created to fill the voids that Apple, Stephen Colbert, Jon Stewart, Google, and NBC won't be able to fill, just to create a name outside of (then commotized) Youtube.

It will be a great time for companies who utilize everything we've learned in social networks, folksonomies, and libertarian values over the last eight years.
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Self-Promotion, 29 Jan 2008 @ 5:43am

Re: Matthew Dismuke
If you read a few of Mike's other posts on the topic, you'll find that he considers music as-such to be advertising for the band. You don't charge people to watch your ad, that's just dumb.

You'll also find he has an aversion to using "steal" when you really mean "copy," as theft requires some finite good which is denied to another, and digital music is infinitely copyable by it's nature -- you don't have less music if I "take" it from you.

Even that aside, Mike argues that music SHOULD be free to download, legally, BECAUSE then (1) you will get more fans through exposure and (2) You'll be able to make more from concerts because your fans don't need to decide between seeing you and getting your latest album.
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Anonymous Coward, 29 Jan 2008 @ 5:46am

So you are quoting an article about what he is saying, but not actually quoting what he is saying? Interesting. Seems like a nice way to spin something that is already been spun.
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Whoopenstein, 29 Jan 2008 @ 5:53am

Doesn't Paul McGuinness owe U2 something then?
Paul McGuinness is obviously a greedy Hypocrite. He's just a band manager, not a musician. So, I would guess that he's made quite a bit of cash over the years from the band's ability to write and perform music. It looks like his services as manager are complimentary to the band's efforts and I guess he owes them some money now.....

I don't think the band got together in a garage somewhere and said 'Ok, we've got a bass, drums, guitar and a singer...all we need now is a greedy weasel manager and we can start making lots of money.' Nope, bands start because people want to make music. If they didn't want other people to hear it there would be no such thing as the recording industry.
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ButlerTronic, 29 Jan 2008 @ 6:00am

Musicians call for more suppression
What the hell is going on here?
How can someone in involved in the music business harangue a bunch of US tech people and businessmen for being "hippies" and not preventing their work from being shared freely?
Surely this should be the other way round, aren't the artists and the people who work with them supposed to have something to say, some message to be heard while all the big corporations* conspire to shut them down? But no, those damn hippies are letting all the music out for free - and they won't even admit it, let alone pay Bono. Who is clearly suffering so badly he was forced, FORCED I tell you, to move his whole operation out of Ireland just to save a few hundred million Euros in tax.

*AKA "The Man"
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Pope Ratzo, 29 Jan 2008 @ 6:07am

Get a job
Maybe this "manager" of U2 should stop leeching off the talent of a group of musicians and go get a real job. As a rock band's "manager" he must be qualified to do something besides score drugs and tell the stars how great they are.

The entire music "industry" could collapse tomorrow and I wouldn't shed a single tear. There will still be music and musicians will still make livings.

Of course, certain female superstars with family problems will have to crawl back into the white trash swamp that spawned them. But that's OK by me.
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confuzled, 29 Jan 2008 @ 6:07am

hippies in silicon valley...
I thought the hippies were in the music biz...
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kissfour, 29 Jan 2008 @ 6:17am

kissfour
Of course, certain female superstars with family problems will have to crawl back into the white trash swamp that spawned them. But that's OK by me.

http://www.87717.com
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Kilroy, 29 Jan 2008 @ 6:23am

about facilitating delivery of content
"Third, none of them are "arranging delivery." ...

In that the tech companies are providing the medium by which copied content is shared, there might be a basis for an argument that "they are facilitating in the delivery of goods". I know that when I am looking for the lyrics of songs on the web I am frequently offered video & audio content that I have paid no royalties for. If I were to click on the link provided by Google, you might say that they aided me in obtaining content that I had not paid for.
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music-loving tax attorney, 29 Jan 2008 @ 6:24am

one reason mcguiness is upset
U2 (and quite a few other non-U.S. artists) have in the past few years moved the ownership of almost all their assets to the Netherlands. By moving pretty much everything except for concert revenue, all profits from music sales, merchandise, etc, flow through that country. Why do they do this? Because the Netherlands allows this kind of money to flow into and out of its banks tax-free. So, there you have it. Non-U.S. artists like U2 would much prefer to have record album sales than record profit sales because the concert profits get sliced and diced by various taxing authorities and the profits from licensable material arrives in full. Furthermore, if the manager receives a percentage of net (rather than gross) profits (and I have no idea what the arrangement is here), then he too would have a keen interest in seeing greater album sales over concert ticket sales. Besides, despite the high ticket price for U2 concerts the band ends up taking a fairly small amount after paying all of the associated costs of touring. Do you have any idea what it costs to move a U2 concert around the world? How about planes, trains and automobiles (read huge tractor trailers) in the dozens.

So, there you have it. My 2 cents. Which is all their worth in the case of a silly blog post.
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Anonymous Coward, 29 Jan 2008 @ 6:24am

"This is a common refrain from those in struggling industries, but it's meaningless."

So his words come from a struggling industry? Doesn't that kind of not match your later words of "On top of all this, McGuiness is whining about this at the same time that U2 is pulling in incredible profits, making $355 million on its last tour."

First you say he is struggling, then you write they pulled in incredible profits? Which one is it? I doubt it can be both.

It is pretty damm easy to tell someone else in a different industry what their business model should be. Maybe this guy knows what it is like in the real world of music?
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Eric Aitala (profile), 29 Jan 2008 @ 6:38am

Uh, ya
U2 can bite my shiny metal ass.

Eric
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Trollificus, 29 Jan 2008 @ 6:40am

@ReallyEvilCanine: Good point, but...
...this could probably be considered arousing. You know, if somebody were really warped.... :uhoh face:

"I know I'd rather count on sucking at one huge teat in Mountain View than try to scrounge a feeding from licking ten million tiny nipples around the world."
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Anonymous Coward, 29 Jan 2008 @ 6:50am

Re:
The industry claims it's struggling due to all the piracy that is obviously slashing their profits down to next to nothing.

I think Mike's use of the term "struggling industry" is a sarcastic comment on how they see themselves rather than how it actually is.

Plus the industry is struggling, in a way. Struggling to end "rampant piracy" at least.
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jacquecuse, 29 Jan 2008 @ 6:59am

So I guess nobody like U2!!
Wow...such vitriol. Let's take a step back. Forget that McGuinness manages U2 and forget what you may think about Bono. Let's even try and forget that McG referred to hippies (I suspect the majority of the techie world is being run by the sons or grandsons of hippies but maybe he doesn't mix with them.) What was the guy saying? "our industry is in deep sh*t and we need to look again at the role ISPs and Internet play." I'm not going to run through all of Mike's rebuttal, some of which makes great sense. But really "the oil industry's success is built on the back of the automobile industry..." not exactly the same thing as they both fundamentally need and benefit from each other (at least until we've cut down all the forests to grow those wonderful fuel alternatives). What is it that seems to have infuriated you all so much. The concept that a distribution outlet should contribute somehow in financing the content it distributes. Do you find it offensive that the TV channels pay for their programming? I know that the majors have been slow to work out new business models but does that mean we condemn the whole industry? And finally, as I was sitting in on McGuinness' speech, I have to say that the music biz people present were on their feet clapping by the end - which makes a change from the industry being on its knees for the rest of the year.
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ehrichweiss, 29 Jan 2008 @ 7:00am

honestly...
Screw U2. They have been the enemy of artistic freedom since the early 90's when they sued Negativland over their album called "U2". And U2 denied that they knew anything of the album much less had anything to do with the lawsuit, instead stating that it was Island Records that was pursuing it.

About 5 years ago it all came out at a Stanford(?) conference on intellectual property when one of the members of Negativland happened upon the road manager for REM and it was discovered that he had found their album, thought it was neat and, thinking they might like it as well, forwarded a copy to U2 who then promptly sued Negativland into bankruptcy. No cease and desist letter.

Bono and crew are the enemy and always have been.

I used to have the link to the video that shows how all this came to be known but can't find it now. Maybe someone else will be so kind.
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Overcast, 29 Jan 2008 @ 7:00am

Here we go again... the blame game.

Don't forget to blame the power company, after all - without their power, you couldn't run the PC to get to google.

Get the Plastic Companies too! Without them, you couldn't have ripped the CD to your hard disk!

Don't forget the shipping companies...

and on... and on... and on...

Well - U2 doesn't have to worry! I wouldn't download their music anyway!
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Eric (profile), 29 Jan 2008 @ 7:01am

Struggling?
How about struggling with reality?

Or struggling with creating a new business model when they can't do math - from the MPAA piracy in higher ed study?

Or struggling to remain relevant with a potential member leaving the RIAA?

Eric
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Vincent Clement, 29 Jan 2008 @ 7:15am

Re:
No, Mike is saying that the recording industry (aka the record labels) is struggling - or at least that is what the record labels keep telling us.

The music industry - which includes the recording industry - is thriving. This includes musical acts such as U2 who are making wonderful profits on tour.
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Vincent Clement, 29 Jan 2008 @ 7:16am

Well this will make me think twice before I buy the next U2 album or see them live.
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Chuck Norris' Enemy (deceased), 29 Jan 2008 @ 7:16am

Position opening
Maybe there is a high-up position opening in the RIAA office and he is just sprucing up his resume.
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Jim (profile), 29 Jan 2008 @ 7:20am

Re: Conttrarily
"I know I'd rather count on sucking at one huge teat in Mountain View than try to scrounge a feeding from licking ten million tiny nipples around the world.
"

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Anonymous Coward, 29 Jan 2008 @ 7:20am

Re: Nice Article Except
'stealing' music is like 'stealing' fire. There's no stealing that which self-replicates
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Cixelsid, 29 Jan 2008 @ 8:00am

I called it!
All of this just proves my point that Bono is a turd golem.
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Steve, 29 Jan 2008 @ 8:07am

Bono(er)
Bono act's like he see's the world through rose colored glasses.
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humann, 29 Jan 2008 @ 8:11am

I love listening to billionaires whine about how m
Anybody wanting to get a quick reality check about how much this industry cares about 'their' artists should read this old Steve Albini article: http://www.negativland.com/albini.html

Still the exact truth about the same beast doing the same things to the same people. And when the lables point to their 5%-'partners'/artists as being the real victims of 'piracy,' I see a pimp holding up his whores and saying, "C'mon, man, pay up! These hos need some food!"

Everybody, please--make your own records.
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Anonymous Coward, 29 Jan 2008 @ 8:16am

I see a pimp holding up his whores and saying, "C'mon, man, pay up! These hos need some food!"

The Economist has a good article on this exact same topic. A study by Steven Levitt (co-author of Freakonomics" wrote that prostitutes do better with pimps-they work fewer hours and are less likely to be arrested by police or preyed on by gang members. The study author stated that a few prostitutes asked the researchers to introduce them to pimps.

So I guess you may be wrong in comparing the labels to pimps, or maybe just that the labels and pimps are a good thing.
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Anonymous Coward, 29 Jan 2008 @ 8:20am

"They only take home a small part of touring profits" will mean something to me when it means that musicians are living more like college kids and less like big-time celebrities. until then, take your $100k+ a year and cry yourself to sleep in your penthouse suite.

(A small piece of $355M is still a nice chunk of change, and I'm fairly certain that's not their sole income for the year.)

Even if they're making less now than they used to make in the 90s they're making more than the rest of us, and saying they "deserve" to because they're "talented" is a bit of a stretch, IMHO.
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Anonymous Coward, 29 Jan 2008 @ 8:24am

Re: The proper response
"An industry decimated by its own greed and poor business decisions, and this is their response?"

See how well the RIAA brainwashing has worked. In your own post against them you still are supporting them by stating they are losing money.

Please explain:

"On top of all this, McGuiness is whining about this at the same time that U2 is pulling in incredible profits, making $355 million"

Is $355 million "decimated" in your opinion? Or perhaps you are referring to the recording industry profits and not U2;s. While I don't have any figures for how much the recording industry made, I would best my left nut it was more than U2 made.
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Thomas, 29 Jan 2008 @ 8:28am

The Funny thing is...
The music and movie industry had a chance to invest and buy DRM technologies years ago that may have made a difference, but they chose not to. They were so stingy that they wouldn't pay for good technologies and the whole DRM 'industry' was sunk. Nice job Hollywood. Hey, at least they're entertaining!
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me, 29 Jan 2008 @ 8:59am

ITS TIME FOR THE RECORDING INDUSTRY TO GO UNDER
THAT'S RIGHT, YOU HAVE A PLATFORM OF EXTORIONISTS WHO HAVE DECLARED WAR ON THE CUSTOMER BASE AND EITHER FORGOTTEN THAT MUSIC IS ART AND NOT A BUSINESS MODEL OR THEY HAVE A SIMPLE DESIRE TO DISTRIBUTION OF ANY AND ALL MUSIC. IT'S TIME FOR THE INDUSTRY TO DIE, AND TO START OVER.

FUCK YOU RIAA, FUCK YOU VERY VERY MUCH AND THE SAME GOES FOR ANY SO CALLED ARTIST WHO STANDS BY THEM.
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Joe, 29 Jan 2008 @ 9:02am

Ha Ha Ha
Everybody blames everything but themselves...
You make music... and post it everywhere... tv, computers, radio...

Then you blame people for getting music... even people who buy the CD, they believe should buy the cd again in computer version, to listen on the computer, then buy it again for your mp3 player... then if you made a mp3 cd for your car, you should have to buy it again?

Ever since artists and the music industry started to complain, did everyone that I know say "screw it, new music sucks balls, and I already bought everything I need"

Bottom line, is that good music sells. If a company had an employee who was decent then complained and annoyed everyone all day every day... they would get fired
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Anonymous Coward, 29 Jan 2008 @ 9:12am

thats really surprising after all bono has always been known how his Altruism.

i guess marketing goes a long way.
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rstr5105, 29 Jan 2008 @ 9:14am

Re: Nice Article Except
No, he isn't saying that it's okay to "steal" (which it really isn't, but I'm not going there) What he is saying is that even though it is illegal, more music fans - the downloaders - are devoting attention to U2 that they may not have before with the way prices are on physical media, and because they AREN'T paying for the physical media, they have more money to spend on the concert tickets.

If you'd been following all his previous arguments you would know what he was talking about.

PS: Techdirt, the word "Okay" isn't in your spell check.
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Anonymous Coward, 29 Jan 2008 @ 9:21am

Re: Nice Article Except
he's saying rather than making it stealing throw it out there and consider it an advertisement expense. since there is already a huge mark up to the cost of tickets bump it up $16 $17 per ticket and you don't even have a loss, the people who would have bought the cd now have the music and are at the show. as opposed to the person who has $20 and instead of buying a cd they heard about from dear old dad, decide to buy lunch instead. thus losing a potential life long customer who through out their life would contribute thousands of dollars on your concerts and merch. sounds like a high price to make $16
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Debunked, 29 Jan 2008 @ 9:48am

Prove the Profits
Mike quote:

"More money is being made on concert revenue than ever before."

You are doing only a surface analysis by looking at the concert top-line grosses only. Musicians will ultimately make decisions to tour based on the leftover profits not the gross. What is left over as profits which would have to take into account:

1. Higher gas and transportation costs (rule number one- the van will break down)
2. Huge increase in minimum wage costs for loaders/unloader help if it is not a union facility
3. Increase in liability insurance costs on the promoter side (leaving less money for the band)
4. Increase in medical expenses (musicians get sick and need treatment on the road- many times without health insurance coverage). If the singer gets a serious cold, or the drummer strains their back loading stuff all income stops.
5. Where are your numbers for merchandise? Can you even verify if those numbers are up or down? Isn't a portion of this activity under the table to avoid taxes. If so is it fair to not pay taxes? If just local or states sales taxes were enforced that would be a huge drag on sales to have to do the accounting properly.
6. Someone up above properly mentioned income tax burdens and how one splits profits across state and country lines- these are very pricey to pay and very pricey for the accounting help burden
7. Many more items could be added to this list but I am running out of time

Bottom line, Mike, I don't have access to the exact profit numbers because they span the public, private, and underground sectors of the economy. I doubt that you can produce those numbers in sufficient detail to prove out your above quoted statement. And some people intimately involved in the concert business seem to think your analysis is flawed.
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Nick (profile), 29 Jan 2008 @ 9:58am

@31
For some reason I don't think the band is standing behind this. It was not U2 who sued Negativeland, it was Island Records. When Negativeland's friend R.U. Sirius had the opportunity to interview The Edge, he had Negativeland secretly do it. Halfway through the interview, Negativeland revalued their identity and The Edge, he told them he was bothered by Island Records tactics.
http://en.wikipedia.org/wiki/Negativeland#The_U2_record_incident
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mr record label, 29 Jan 2008 @ 10:00am

i agree with the guy
he's right, people like music and label managers etc. still need that revenue for their commissions and boni. we all have bills to pay too, you know...
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Anonymous Coward, 29 Jan 2008 @ 10:08am

Nice to see how so many of you like to justify stealing other people's work. I know, U2 makes so much money, that is the crime. Screw them, they don't deserve millions so just steal their work.

Yeah, go with your revolution, only the land you will inherit will not be worth living in.
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Anonymous Coward, 29 Jan 2008 @ 10:21am

Re: Nice Article Except
You are saying it is ok to steal because of how much they charge?

So you are saying that you're a pedophile?

(See how easy it is to put words into peoples mouths?)
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Anonymous Coward, 29 Jan 2008 @ 10:36am

hi,i,m from ireland and am ashamed of bono,this guy goes around the world preaching, claiming his a (self proclaimed) messiah ,the fly's in africa have a feast on the shit he talks,this wanker brought a ordinary women to the cleaner's over a hat and sun glasses whom used to work for them ,bono had some respect before,now we see what money and power did to him the fucker thinks his mother threasa,U2 can fuck off noting but a bunch of thieve all the money they have and all the people starving people in africa most people find it hard to make ends meet and we are the thieves why are these people allowed to have such vast amount of money,we are inslaved servents to the rich and powerful,fuck you,fuck off i hope you end up in hell enslaved talaban virgin.
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Matthew Dismuke, 29 Jan 2008 @ 10:41am

Re: Re: Matthew Dismuke
Everything you mentioned are just symantics. If they recording industry is charging for the music then you should pay to listen to it.
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Anonymous Coward, 29 Jan 2008 @ 10:44am

hi,i,m from ireland and am ashamed of bono,this guy goes around the world preaching, claiming his a (self proclaimed) messiah ,the fly's in africa have a feast on the shit he talks,this wanker brought a ordinary women to the cleaner's over a hat and sun glasses whom used to work for them ,bono had some respect before,now we see what money and power did to him the fucker thinks his mother threasa,U2 can fuck off noting but a bunch of thieve all the money they have and all the people starving people in africa most people find it hard to make ends meet and we are the thieves why are these people allowed to have such vast amount of money,we are inslaved servents to the rich and powerful,fuck you,fuck off i hope you end up in hell enslaved talaban virgin.
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ehrichweiss, 29 Jan 2008 @ 10:50am

Re: @31
http://realserver.law.duke.edu/ramgen/spring04/framedafternoon2.rm

Nope, it was U2. U2 pretended they knew nothing of the band or the lawsuit but the above video says differently. You may have to watch a little bit to get to the juicy parts but it's all there.
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ehrichweiss, 29 Jan 2008 @ 10:52am

Re: honestly...
http://realserver.law.duke.edu/ramgen/spring04/framedafternoon2.rm

That's the video of REM's manager describing how U2 got their hands on the album and how suddenly and "without U2's knowledge", a 110-page lawsuit was filed. It takes a bit to get to the juicy parts but it's very enlightening.
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MusicUsedToBeGood, 29 Jan 2008 @ 12:08pm

It kills me...
Complementary goods are a natural for building bigger markets Situations like this, where an artist is complaining about others being able to build upon the success or popularity of their product, and make money. Does U2's manager think that U2 should share their profits with Les Paul, the Beatles, Chuck Berry, the Elvis Estate, Ramones and everyone else who invented the instruments and created the music from which U2 was borrow and build upon? U2 is making a lot of cash on the backs of others...
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Mike (profile), 29 Jan 2008 @ 12:20pm

Re:
So you are quoting an article about what he is saying, but not actually quoting what he is saying? Interesting. Seems like a nice way to spin something that is already been spun.

At the time, the only quotes were what was available in the articles themselves. The full text is now available, however. Feel free to read it yourself:

http://www.billboard.biz/bbbiz/content_display/industry/e3i062b16e707aa99916c212e660cbf fd3e
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Mike (profile), 29 Jan 2008 @ 12:23pm

Re: Conttrarily
On the contrary, hotels pay the guides for placement, referrals and general advertising.

But that's a mutually agreed upon deal. It's not one industry demanding the other pay up for moral reasons.

Once again, the hotel industry pays airlines directly or subsidises tickets through agencies. This is most easily recognised in ticket prices to Vegas and Disney.

Again, mutually agreed upon deal that makes both better off. Not because of some moral obligation.
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Mike (profile), 29 Jan 2008 @ 12:25pm

Re: Nice Article Except
You are saying it is ok to steal because of how much they charge?

No, not at all. I'm saying that bands that recognize how they can benefit from file sharing stand to do better. That's not the same as saying it's ok.
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Mike (profile), 29 Jan 2008 @ 12:27pm

Re:
First you say he is struggling, then you write they pulled in incredible profits? Which one is it? I doubt it can be both.

No, I'm saying that the band is doing well, while the *recording industry* is struggling. Note that recordings are only a part of where a band makes money from. So, the band is doing fine, but the recording business is struggling.

Sorry if that wasn't clear.
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Anonymous Coward, 29 Jan 2008 @ 12:40pm

U2 is irrelevant. U2's manager is even more irrelevant. Sounds like the ramblings of a mad man to me.
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Michael Wilde, 29 Jan 2008 @ 1:18pm

the next metallica
Looks like this guy took a page from Lars Ulrich's manual of how to turn your back on the fans, and their technologies. He also might want to mention print media, whom sells tabloid magazines "on the backs of celebrities like Bono". Ridiculous. If you're making 355M on tour, life isn't bad--don't look a gift horse in the mouth.
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Dave, 29 Jan 2008 @ 2:18pm

Re:
U2 has just been scratched from my list of bands to see and CDs to buy. No need to worry McGuinness, your pockets won't be loosing any money from me not buy U2's CDs, whether I download them off the net or not. I will never ever purchase an album from this band period.

And while we are on the subject Bono, stick to making music and keep your nose out of other country's affairs. Your big mouth should be used for your profession, music. On political matters outside of your country, keep your fat mouth shut. We are all tired of your self righteous blabbling about how much we should send to dictators in Africa.
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4-80-sicks, 29 Jan 2008 @ 2:23pm

Re: the next metallica
If you're making 355M on tour, life isn't bad--don't look a gift horse in the mouth.
but but but they have to pay for GAS and AIRPLANES and INSTRUMENTS and THEIR MANAGER and manufacturing T SHIRTS and then the pittance that is left has to be divided among FOUR PEOPLE how can they ever make enough money like this!
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Bret, 29 Jan 2008 @ 2:37pm

Good grief.
If the RIAA wasn't stupid enough, we now have U2's manager to mock. Time for U2 to get a new manager.
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brian, 29 Jan 2008 @ 4:49pm

Re: Nice Article Except
"ok to steal"???
when i learn about a new artist on the radio or hear a new song on the radio, is that stealing? if i hear a song on the phone while i am on hold, is that stealing? if i go to my friends myspace page and hear a new song, is that stealing?
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Kate, 29 Jan 2008 @ 5:43pm

More to the point
I'm not sure just where McGuinness got the idea that the ISP's "built multibillion dollar industries on the back of our content without paying for it”(direct quote from liked FT article).

As popular as sharing music online may be, it really has very little to do with the explosion of ISPs. Bono may think he's the second coming, but the entire music industry really needs to get over itself.
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Stephen Pate, 29 Jan 2008 @ 6:03pm

U2 Manager Rant
That's just so much billionaire blather. The reason the music industry is in trouble is 1) the product sucks mostly - the current CD market is awash with junk, forgettable music including U2 who have lost their way (2) the music industry is 20 years behind their customers, still making 78's. People want downloadable music and Apple is too expensive. Songs will cost 25 cents before its over and the musicians will distribute over the web. Bye Bye over paid music exec's with their bimbo girlfriends and coke habits.
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Jonathan Leffler, 29 Jan 2008 @ 7:30pm

Principle of Incoherence
C J Date (of database book fame) has a "Principle of Incoherence" which states that it is often impossible to criticize coherently statements which are themselves incoherent.

It seems to me that this speech is one of the times to invoke the principle.
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Anonymous Coward, 29 Jan 2008 @ 8:24pm

Sure, U2 may suck and their manager (and maybe the band) ignore new business models and it is wrong of them to charge so much money for their music, but that doesn't change the fact that quite a few of you are cheapskates.
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Unimpressed, 30 Jan 2008 @ 1:44am

U2's Boner
Well it sounds like the end for U2 anyway. Every U2 song sounds like every other U2 song. Boneboy just mumbling to some airy-dull flolopy sounding tune.

I watched a biography of Leonard Cohen, for some reason they thought Bony would lend credence to it I guess. All I noticed was that Bono impressed Bono.

He has yet to impress me.
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Metro, 31 Jan 2008 @ 11:45am

Great post
"Yet, because one segment of the market (the one selling plastic discs) is unwilling to take some simple steps to change its business model, everyone else has to pay up?"

Thank you, thank you, thank you for pointing this out. The music industry knew at least as far back as 1994 that digital music sharing was coming.

Why did they stick their fingers in their ears and refuse to make the shift, leaving a vacuum to be filled by Napster (tho old, "illegal", good version) and all the others?

Possibly to preserve huge profit margins? Possibly out of fear that next year's proprietary technology would be the following year's Betamax? Possibly out of an inability to work together just long enough to become the pre-eminent source of internet music?

No matter. They knew it was coming. The actions of the RIAA and thinkalike groups now are akin to a maker of oil lamps suing GE for producing light bulbs. And I refuse to pay for their cascade of lousy business decisions ( of which suing someone for ripping his own bought-and-paid-for CDs to his computer has to rank stupidest).

The people who really lose out, oddly enough, aren't the musicians. It's the middlemen between the artists and the public. And it's sure as hell not the bands of U2's stature.

Wonder if their manager gets his percentage from CD sales?
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Chris Alpiar, 1 Feb 2008 @ 1:09pm

No this is dead serious to the music industry
What Paul McGuinness really is saying is a voice for all of the artists out there, not a greedy money grubber.

As a professional composer and performer who isnt in the top 1% of success and MTV rock monsters I am THRILLED that someone with clout is making these issues be vocalized. Its not the U2s and the Mettalicas that suffer, its the indie artists, score composers, and working musicians that are being destroyed by the wide open not even attempted at regulating illegal downloading of all kinds of media, including music, song & albums, films, art, scores, etc

Thank you Mr. McGuinness for bothering to talk about the issues that are a nuisance to you but are life threatening to thousands of us!

I also was a dot com boom programmer and I was an original pre-IPO member of InfoSpace and I understand the tech side very much. I will say that what happened is a natural evolution of technology and human nature. Clicking on files and getting that intellectual property of another person was SO EASY and since it was just digital it felt to have to real value. But we all listened to those MP3s and watched those quicktime movies. And we LOVED the fact that we could stuff a 200 gig firewire drive to the brim with all the music we ever wanted to listen to and not pay a dime. If you didnt do it on some level you are probably either a priest or someone without internet

And so Mr McGuinness is saying lets not blame individuals and human nature, but something MUST be done about this and soon before we lose many facets of modern art and culture to the destabilizing and deflation of its economy.

Its no joke and its not like yea yea whatever, its like EMERGENCY *DINGDINGDING* EMERGENCY. Right now the AFM (musicians union) performance fund (which is the fund for retirement and emergency funding for professional musicians) is about to die, because it is based on CD sales. There are *countless* programs similar to this that are dead or dying quickly because of illegal downloads.

Certainly non-"mainstream pop" art forms like non-synthesizer orchestral film music, among many others are going to become extinct and then fade away completely the farther this goes without being checked.

There absolutely needs to be legislation that forces ISPs and tech companies to create technology to stop non-paid-for illegal downloading of music, film and art. This would be relatively very easy to create. All it needs is ubiquitous agreement and cooperation from all sources that host and transmit data.

Without it our world is going to become a shallow grey world without culture and professional art. That is a place I don't want to live in.
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tuberrrr, 4 Feb 2008 @ 3:10pm

who knew?
i knew about prince and metallica etc.. but i just made a video montage of a bunch of photos of one of my models w/ vertigo as background music. ..didn't know about bono ....uploaded it to youtube.. within three hours they had that SOB flagged for 3rd party content. the boy is ON IT!
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Gerd Leonhard, 13 Feb 2008 @ 6:24am

Futurist's comment on Paul McGuinness rant
Greetings everyone, I just posted my reply to Paul's speech here: http://www.mediafuturist.com/2008/02/welcome-to-paul.html I guess I just couldn't resist - there is just too much bizarre stuff in this speech. Cheers, Gerd Leonhard (Music & Media Futurist, Author of Music2.0) "Let me ask you this, Paul: do you really advocate web sites, communities and networks scanned and censored, emails read and screened, Instant Messenger conversations monitored, Skype calls supervised, USB sticks DRM’ed, hard-drives sealed, flash memory cards locked, rootkits and software locks on our computers, a read-only web, the end of remixes, and the implementation of an online police state that without a doubt will only bring us new censorship and the demise of fair use and free speech while the un-paid and unlicensed trading of music will soar to new heights in 100s of new ways that we don’t even know about today..."
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KJP-STL, 15 Feb 2008 @ 9:13am

Bottom Lining It - Someone has to
Fact: No one can argue that copyrighting is not important.

Fact Restated: "blaming the guys who paved the road on which the [stolen] car was driven" is the same as blaming the ISP for file sharing copyrighted media.

Facts Needing Stated: The roads are policed by authorities; that authority given by the people, the users, the citizenry. The cyber-world is as policed as the real world so comparisons between them have inherent holes.

I do love the fact the web is quite unregulated. AND, my heart is certainly not broken for the music industry (what comes aroudn goes around). But if want to apply real-world analogies to the cyber-world, should we put them on a even playing fields? Should we police the cyber-world like we do the real world? These are just questions, but quite valid!
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KJP-STL, 15 Feb 2008 @ 9:14am

Re: Bottom Lining It - Someone has to
Correction to the comment, insert "not":
The cyber-world is NOT as policed as the real world so comparisons between them have inherent holes.
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legal music listener, 11 Jun 2008 @ 7:09am

Oh okay, why don't we charge google so the cost in browsing and high tech will go up so i can no longer search for and legally buy your music online. is that what you want? you know, there are some law abiding people in this world. places like google do what they can to stop illegal trading of music and videos.

bottom lining it - the internet is unregulated my bum. the USA has a consenting adult porn witch hunt going on right now which is revolting.
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Altscribe, 22 Feb 2009 @ 7:41pm

The real gripe of U2
McGuinness did not just call the techies "hippies", but also "Deadheads". As a Deadhead, and a techie (helped design something called email back in 1978) let me say I knew Jerry Garcia, and most of the Grateful Dead. They knew that by allowing music to be recorded and swapped freely that it would 1) increase their concert attendance and fan base, and 2) create demand for their CD's because no concert tape or bootleg could EVER match the quality of what they could make in the studio, and later, with their own technicians from their master concert sound mix board. This made them all multi, multi millionaires; even though they only had one top ten hit in over 25 years and only two top twenty hits, and really low radio airplay.
Generosity increases profits, greed does the opposite. An open hand can hold more money than a clenched fist. I used to think U2 was pretty cool and smart, although stuck in a rut artistically since 1990... Now I know better. The fact that people are sick of $18-$20 CD's and iTunes at pitiful 128bit "quality" would make a smart industry up quality and lower prices.... Even hippies and Deadheads know that, and creating and running the Internet is nothing to be ashamed of either IMHO...

altscribe
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Greg, 1 Mar 2009 @ 12:28am

some concern for all future artists...
There are a lot of reasons why the music industry is struggling. And yes- it is, in fact, struggling: it might not be evident with internationally successful bands like U2, who've been around and gained worldwide recognition/fans multiple *decades* before the advent of file-sharing, but you have to think about how this issue affects TODAY's artists... all the thousands upon thousands of musicians/performers trying to make it in today's industry - not to mention in today's suffering economy. As much as they absolutely are not seeing anywhere near the sales they used to, both major and independent labels aren't my largest concern, in all honesty. I'm fearful for the serious impact this all has upon the ability of ARTISTS, the ones who're responsible for creating the music in the first place, to have careers as musicians in the first place. It's an unfortunate fact of our economic system (
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Greg, 1 Mar 2009 @ 12:29am

Re: some concern for all future artists...
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Greg, 1 Mar 2009 @ 12:31am

Re: some concern for all future artists...
capitalism), but you simply can't CREATE music these days without having the necessary financial backing, as well: if not the musicians themselves [prior to being signed & backed by a label] who covers all the costs incurred by recording, the equipment, the touring, merch., distribution, etc.? If young aspiring musicians see firsthand how increasingly hard it is on their pockets to "just go for it" and try to "make it", they're going to realize before long that being a musician in a band simply isn't an option anymore. They need to give up and focus on trying to get a career elsewhere, and it's because of the side-effects that illegal downloading has upon the music industry - for both those at the top as well as those trying to start out at the bottom of it.

Like it or not, money is directly involved in the production of popular music - the framework of the entire system is structured around it being a commodity, something to be bought and sold, regardless of whether or not you consider it an "art form". The fact that it WAS a functional market/industry is what separated the music world of as far back as the 1930's from today's- in which most people simply just do not see that great of a reason to pay for their music anymore. Let's face it: with a connection to the internet and some technological prowess, it's incredibly easy to find an artist's music online and obtain it for...
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Greg, 1 Mar 2009 @ 12:33am

Re: Re: some concern for all future artists...
...free - equally easy is our ability to explain this act through our own moral justifications: "the industry is doing fine, they're just trying to squeeze out a couple more bucks and have been doing exactly that for WAY too many years now!", or "they need to learn that lashing out with lawsuits against loyal fans is only hurting them... [and my means of protesting against them is therefore to download an artist's work for free, instead of contributing to the financial support they'll NEED if they plan to release albums/singles in the future.]"... while it's arguably true that major labels and high-ranking record execs are making some grave mistakes around the issue of piracy - pubic reception to the release of their statements or to the lawsuits filed, their attempts at "fighting" illegal downloading, is fostering a growing buzz of resentment among music fans - but it doesn't change the fact that if we all continue in the direction we've been heading, downloading music for free via the internet, there isn't going to BE much more music as we know it in the future.

Yes, practically anybody can throw some songs together in GarageBand and upload them onto a Myspace, or make them freely available via a personal blog - yet for exactly that reason there are SO MANY more artists seeking to directly catch our attention these days, both signed and unsigned... the information overload is not unlike that of advertising clutter, if you think about it. I can't help but wonder how this changes the overall value of music. The value that gets ascribed to an artist's work - to their album, to even a single song - when we're living in a cultural environment of shortened attention spans and an accelerated metabolism for music, so to speak.
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Greg, 1 Mar 2009 @ 12:35am

Certainly, there's a need for change in within the music industry - whether its in their business models, distribution strategies, etc. - but taken to a hypothetical extreme, if ALL RECORDED MUSIC was available for free... where would the incentive among artists come from? It's "fun", it's "furthering the development of culture", sure... but like I said earlier there's a substantial amount of money necessary if you're trying to play music and actually have people HEAR it, separate from the question of whether or not you're even trying to MAKE money from it in the first place. If it were all free, is the artist then expected to pay, out of their own pocket, the costs of buying quality musical equipment and producing/distributing high-quality recordings, knowing that they'll be making no money of any of these recordings in turn? Assuming live shows are, in this hypothetical situation, still trying to sell tickets (and merch.) at a price - the assumption is that the artist will just make their money here, instead. Flawed theory, in the long run: to actually make any money from live shows, there needs to be a large support base (fans) in the first place, and in order to GET THERE artists need to be heard. In order for emerging artists to be heard [aka: to "get noticed"], in today's crowded (increasingly-digital) marketplace, they basically need either a divine miracle, or the higher level of promotion, distribution, and funding that a label can offer.

I'm being brief here, I know - there's radio airplay, blogs, free shows done as "complementary goods" to attract fans, etc. - but I think you can get the idea of what I'm trying to say here. It all leads back to the production of the songs themselves - the creation of the music, in the first place - and I'm arguing that this will cease to occur in the future if something doesn't seriously change with illegal downloading. With the weight that society places upon the value of recorded music, in other words. For better or worse (depending on your personal taste in music): there wouldn't BE a U2 if they were trying to start out in today's music industry. Of course I'm very willing to hear peoples opinions on this - most likely there will be disagreement (assuming any of this actually gets read?) and criticism, and I'd be happy to hear any and all of that. After all my aim in writing this is not to criticize you or anyone in particular, but rather to discuss this issue and (ideally) to hear out each other's opinions in an intelligible manner.

Thanks for reading.
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Hippieland, 18 Nov 2010 @ 1:17am

The Old recording industry is out dated,Bands can create their own recordings and distribute them on the internet with out the help of the Recording industry.
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