The RIAA's Playbook: No New Business Models Without RIAA Ownership

from the it's-that-simple dept

Fri, Sep 26th 2008 10:44am — Mike Masnick

Mathew Ingram covers the details of Muxtape's run-in with the RIAA. As you may recall, last month the rather useful site that let people create online "mix tapes" that could be streamed to others was shut down thanks to the RIAA. The site's founder has now admitted that he tried negotiating with the RIAA, but that it was nearly impossible. The RIAA's representatives started the "negotiation" by saying they were about to shut the site down, and then complained to Amazon (whose S3 service hosted the files) to get access to the files blocked. Now, that concerns me for a few reasons. I had created a Muxtape when it first launched, but it had no RIAA label music on it. So, why would Amazon block access to it?

However, the real point of the post is just to highlight how the RIAA views these things. As has been discussed, the RIAA wants to shut down these types of sites. By now, we've seen the pattern over and over again. The RIAA has always been unable to actually innovate with its own online offerings -- in large part because the record labels still think about how to control the music and how to limit what consumers can do with it. So, instead of learning what's innovative, the RIAA has simply decided on a two pronged strategy: (1) get every new and innovative site shut down and (2) offer them one way to return: if they hand over a big chunk of equity.

Very few people seem to be talking about this, but most of the "agreements" that the big labels have reached with various new and innovative sites have involved handing over equity. Basically, the record labels are using a protection racket system: give us some equity, or we'll shut you down. Of course, all this is really doing is slowing down much needed innovation in the music marketplace. Instead, we get bells and whistles like MySpace Music (owned, in part, by the major record labels), rather than something truly useful and innovative.

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Filed Under: bullying, business models, music, negotiations, riaa, startup
Companies: muxtape, riaa

24 Comments

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Anonymous Coward, 26 Sep 2008 @ 11:16am

The R.I.A.A. cannot drum up business for itself cause they treat their customers like fucking criminals!

R.I.A.A.

Not 1 cent!
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Killer_Tofu (profile), 26 Sep 2008 @ 11:17am

Why can't
a site just get away with doing these sorts of things, have completely have NO RIAA music on there in any way at all.
Have a system that checks if it belongs to an RIAA member. If it does, block the song.
Then when the RIAA comes a knockin, just tell them to go f**k themselves, as they have no say what-so-ever.
If they try something, sue them for "felony interference with a business model". lol
No but seriously, they shouldn't be able to do anything then, right?
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Anonymous Coward, 26 Sep 2008 @ 11:20am

The RIAA has been suing Americans left and right in hopes of deterring piracy that has become increasingly simple during the digital age. There is a way to fight against the RIAA:

Stop giving them your dollars and stop supporting their artists.

My beef with the RIAA isn’t that it is fighting for “justice”, because to a certain extent, they are just trying to stop “theft”. However, they are acting as a bully and essentially resorting to fear tactics to control Americans. Artists aren’t even benefiting from the RIAA bullying, it’s the recording industry and big-name labels that increase their bottom line and therein likes the problem.

I’m not a big fan of corporations that operate entirely on their greed and power. With the rise of fascism in America and the danger of lost liberties. I’d also rather not support organizations that are dedicated to screwing consumers (and artists) in order to help the corporations increase profits.

Below is a link to a website that will help you know what artists are associated with the RIAA and I’d advise everyone to stop supporting them PERMANENTLY. This is not just a Christmas thing, not just a “one day boycott”. I am telling you that in order to hurt them and make them stop acting like bullies, you need to fight back.

http://riaaradar.com/
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wnyght, 26 Sep 2008 @ 11:59am

So the RIAA basically says that other people need to hand over some of their profit to stay in buisness? Hmmm.... Sounds very similar to tactics used by the mafia. Anyone else see the correlation?
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ChurchHatesTucker (profile), 26 Sep 2008 @ 11:59am

Re: Why can't
"a site just get away with doing these sorts of things, have completely have NO RIAA music on there in any way at all."

Actually, the way they gammed it, that's not an option.

Seriously.
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J.Locke, 26 Sep 2008 @ 12:08pm

Common Sense
Think about it, why would a bunch of lawyers be interested in exploring business models that didnt require a bunch of lawyers . . . its just common sense.
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Eliot, 26 Sep 2008 @ 12:12pm

RIAA's purpose...
I never looked up what the RIAA's stated purpose was, but, have read it, I think that everything they do has made sense:

Its mission is to foster a business and legal climate that supports and promotes our members' creative and financial vitality.

I don't know about others, but I think the RIAA is doing precisely what it promised to do, because, to me, this pretty much translates into "sue everybody."
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Anonymous Coward, 26 Sep 2008 @ 12:16pm

I still don't understand why the RIAA can control non-member music. How can they be paid for music they don't have rights to?
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Stephen, 26 Sep 2008 @ 12:29pm

Equity for Distributors?
I noticed the statement in the MySpace mention about equity and thought it very odd. Does Proctor and Gamble get an equity stake in Walmart in order for Walmart to carry their products? No. P&G goes begging Walmart to carry their products.
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Anonymous Coward, 26 Sep 2008 @ 12:32pm

I look forward to muxtapes return!
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Anonymous Coward, 26 Sep 2008 @ 12:33pm

Re: Equity for Distributors?
You have that analogy backwards. Otherwise, it is not apt.
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Anonymous Coward, 26 Sep 2008 @ 12:51pm

Re: Why can't
This is the best way to win. The more artists see the popularity of the sites they will say

Artist: "Hey agent guy, why aren't we on that site, i want free exposure to my demographic"

Agent Guy "Sorry dude, your protective organized crime protection racket that is all about exploiting you for money and owning you, isn't allowed on this site".

Artist: "Ok i want out of the RIAA, they suck and take my money while simultaneously making it harder for me to sell music and survive as an artist".
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Anonymous Coward, 26 Sep 2008 @ 1:30pm

I support Sellaband.com and other independent artists. To hell with the RIAA.
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Anonymous Coward with Teeth, 26 Sep 2008 @ 1:52pm

Hi RIAA, Meet RICO
Seriously, if federal law enforcement would just check http://en.wikipedia.org/wiki/RICO, then look at the chastizing given to RIAA in serveral cases, and by just simple observation, they would find that RIAA needs to be drug into court for violations (several) of this act.

1. Bribery. (lobbists and gifts)

2. Extortion. (offering amnesty for $$$ to avoid criminal prosecution)

3. Dealing in obscene matter. (ask Tipper Gore, or just buy any 2live crew album (I have!))

4. Embezzlement of union funds. (They claim to be a collective bargaining authority for the artists, but someone please show me where all the bankrupt artists they keep babbling about have received benefits?)

5. Racketeering. (See #2)

6. (possible) Obstruction of justice. (I believe this has been cited by judges in a couple of cases.)

There may be more, but that's up to the DOJ to decide that.

Yes, piracy is a crime, but committing several crimes to extort money, instead of jail time, from those guilty of it, sure smells criminal too.

Now damnit, would the Feds please turn their attention for a moment on RIAA itself (and maybe the MPAA too), and see the big bust they could have. Rather than arresting grandmothers, who never had internet service, but had someone use their name for bad purposes. Something smells bad and it's got **AA written all over it. RICO was passed by congress to protect the citizens from groups like this, but why is it not being used, even for the sake of investigation to see if there is a case?
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Dillybong!, 26 Sep 2008 @ 2:19pm

Great Article
HAHAHAH! So much for your ideas Mike.
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bob, 26 Sep 2008 @ 3:25pm

Re: Why can't
Because the RIAA has a complete, blanket license from the US govt to regulate *any* recorded music. That's their effective job - to protect the rights of anyone who has recorded sound ever.

Thus the great RIAA foobar.
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phil, 26 Sep 2008 @ 3:51pm

Re: Why can't
It does exist. I started my company about a year ago to promote Indie bands/artists. I do not deal at all w/ RIAA/IFPA and any other similar organization. If they happened to get signed, they are removed from the site. We are still in our infancy, but we are growing - worldwide.

It is this type of thing that piss off the Majors, and scares them. The only thing the labels are good for any more is distribution, which is still difficult on the net, but getting easier - they don't like that.
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Killer_Tofu (profile), 26 Sep 2008 @ 7:58pm

Re: Re: Why can't
Thank you.
I will check out your site.
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mike allen, 27 Sep 2008 @ 12:15am

Re: Why can't
Simple reason the IRAA will expect to have the money for ALL music even music on indie labels not members of the IRAA check out the copyright laws.
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Bruno, 27 Sep 2008 @ 12:16am

Re: Mafia morphs to RIAA
Yeah... In de old days you hadda take our jukes in your bars and restaurants (or else, if ya git my drift)... just nickel & dimes stuff, but it was a living. Then my nephew got a necktie and a law degree, and biznez has neva been beddah.
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mike allen, 27 Sep 2008 @ 12:20am

Re:
the IRAA dont hold any rights themselves the member companies hold the rights NOT the IRAA
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snowburn14, 27 Sep 2008 @ 4:18pm

Re: Re: Equity for Distributors?
It isn't backwards... P&G makes the stuff, as do the artists the RIAA claims to represent, and Walmart and MySpace distribute said stuff. Where's the backwards piece?
However, P&G seems a poor choice. With the number of brand names those guys offer, they don't beg anyone. Half the shelves at Walmart would be empty if they didn't do business with P&G, at least among the groceries. While they might not be able to get a deal with Walmart, they could probably intimidate more local chains into something like the Myspace deal if they really wanted to.
And to #4: "Sounds very similar to tactics used by the mafia. Anyone else see the correlation?"
Um, yeah, when Mike calls it a protection racket, I'd say it's safe to assume he saw the correlation.
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Anonymous Coward, 28 Sep 2008 @ 8:30am

Re:
..cause they lubricate usgov personal pockets with A LOT OF MONEY.
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Black and Yellow "B", 29 Sep 2008 @ 11:42am

Re: Re: Why can't
F.U.B.A.R - fubar.
Fucked
Up
Beyond
All
Recognition

Please know how to spell something when using it in a public forum.
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