So Only When Piracy Gets Really Bad Will Record Labels Change Their Act?
from the just-wondering dept
Google is today launching a free, ad-supported music service in China, with the backing of more than 140 record labels, including the Big 4. The service sounds like exactly the sort of thing that people have been calling for since the Napster days: a search engine linked to a trove of music files, supported by advertising. Google's wanted to add some sort of music search to its Chinese product for some time, as it's been at a significant disadvantage to rivals like Baidu, which have the feature to thank for much of their success. The record labels say this is the first attempt to monetize online music in China, and mirrors moves by some movie studios to compete with piracy there with new products and services, rather than through lawsuits and lobbying. These efforts always give a nod to the rampant piracy going on in China -- acting as if it's a completely different environment than the rest of the world. So is the lesson here that only if piracy, or at least the labels' and studios' perceptions of it, gets "bad enough", will they do something positive, rather than sue people or try to get laws strengthened in their favor? Or is it only because those aren't viable options in China that companies try something different there? The fact that the labels are moving forward with this plan in China, given its reputation as the wild west of copyright infringement, undermine their contention that they can solve the supposed piracy problem with legal or technological means elsewhere. Furthermore, it exposes the reality that what's staring them in the face is a tremendous opportunity, not a problem.
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Filed Under: china, downloads, labels, music, piracy
Companies: google
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The other part of the chinese economic landscape is that most people don't have methods to buy online (no credit cards, mostly cash payments, even cell phones are mostly pay as you go and not monthly billing).
Add to that the growing access to the internet (some home users, but many places are still at the internet cafe stage of things), cheap access to MP3 players, and no enforcement of any copyright laws means that the people see no value in buying music. At most, they expect to pay 2 or 3 RMB for a disc from a local sidewalk merchant pushing copied CDs - and they likely got all their content from P2P sites.
Actually, the article and concepts are interesting, if for no other reason to show what happens when you lose copyright controls and the market descends into anarchy.
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Business is war; and war is hell.
The whole "let's be polite" bullshit in business oriented laws exists to keep the blood from getting too deep in the streets.
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me either
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Further proving the point...
The first step is to acknowledge it's not a physical product anymore.
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market descends into anarchy
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Re: market descends into anarchy
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Re: Re: market descends into anarchy
The keyword there is "is," not "will be." The market, as it exists, is artificially created by laws and litigation. It is crumbling in its current form. Soon, the traditional methods of exploiting politicians to pass favorable laws will cease to produce income, and the market will become like China's. Keep in mind that musicians still make music in China despite their stance on copyright (or lack thereof). There is money to be made outside of the traditional channels. The labels will either realize this, or they will collapse. It's simple.
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Re: Re: market descends into anarchy
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Re: Re: market descends into anarchy
Ideally, a market is consumer-driven, such that businesses must cater to consumer desire by providing them with goods and services that they want, at the price they are willing to pay for. If some other business comes along offering a comparable product, for instance, at a lower price, then consumers will eventually give their money for the better valued product.
WH considers consumers to be a nuisance; he thinks an ideal market is one driven by businesses, such that they should be able to provide whatever quality product they want at the price they want to charge, and the consumer should be forced to pay it if they want to consume anything at all. You cannot point out to him that market A is better than market B because consumer will have more options at lower prices in market A, because he doesn't consider that to be an advantage. He feels market B is superior because incumbent businesses are allowed to charge whatever they feel like and bilch as much money as possible out of the consumers.
It's like trying to convince a pig that wrestling in the mud is a bad time; what a pig considers to be fun is not necessarily what a human feels is fun, and thus its like two ships passing in the night.
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Re: Re: Re: market descends into anarchy
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Yed, but...
If that is so, why are the music companies bothering with this at all? Why did Microsoft create a super-low priced version of XP and Vista for this market? Why bother, since there arent any "controls" and as you have stated so many times, without them, big companies like Microshaft and the music industry wont "create" anything. Yet here they are, ADJUSTING THEIR MODEL TO CUSTOMER REACTIONS. According to WH world, this isnt possible, feasable, or will ever be done in the absence of strong copyright laws. You are wrong. Again. For the umpteenth time.
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Re: Yed, but...
But they started with nothing, they didn't start with a multi billion dollar a year business. Different circumstance altogether.
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perhaps
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Re: perhaps
$0.01 not 0.01 cent (one one hundredth of a cent)
and
$0.99 not 0.99 cent (ninety nine hundredths of a cent)
I believe there was a telcom that got into trouble with that sort of a mix up.
Just thought I would let you know,
jilocasin
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Re: perhaps
25 million probably isn't actually that much for these businesses but it is 25 million more than they'd make otherwise.
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pushback
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If it isn't because of piracy...
Think about it. Give something away in China that you could be sent to jail for in the US.
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Re: If it isn't because of piracy...
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Warning: Sarcasm
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Re: Warning: Sarcasm
Why, yes, yes they do! And when you become full of Chinese Content, just wait 15 minutes, and you'll be hungry for more!
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I hope..
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I wonder...
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Re: I wonder...
They'd just have to make their money from concerts. With a billion + people there they don't need a big % of the population to pay to see them live in order to be mildly successful or even filthy rich
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Re: I wonder...
Of course not. That would be impossible.
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Yes, but...
And, so? So what if they didnt already have a multi-billion dollar business?
A) it applies anyway, whether its $10 or $10 billion. Business is business, you adjust to the customer and marketplace or SOMEONE ELSE WILL AND YOU GO OUT OF BUISNESS (or lose money/have less).
B) So what? You arent ENTITLED to a multi-billion business, you have to EARN IT. See A).
C) If there wasnt any money in it, and a lot of it, then it isnt worth doing. This is YOUR argument. So why does it not also apply here? It does, but you just have to be an industry shill no matter what the argument is.
Your smoke-and-mirrors straw men arguments arent convincing anyone but your industry pals. FAIL. Again.
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Re: Yes, but...
RD, if you have a business that suits, I dunno, 80% of the people who pay you in totally 10 billion dollars per year, and someone asks you to stop doing that and give your products away in a manner that would get you only 1 billion next year, why would you do it?
No sane business would willingly sign off on losing 90% of it's income just for fun. They would want to see provable functional businesses that would make them back the remaining money. So far, nobody has any of that going on. So there is no reason for the music business to change in the western world. They are looking at ways to move from "THIS" 10 billion dollar business to "THAT" 10 billion or more business, but they aren't there yet.
The difference in china is that they are starting with a zero dollar business, effectively little or no music sales going all the way through the system (a small amount, but not a big number). If they can find a way to pick up 1 billion dollars here (in ad sales and what not) it is a great business.
Now, as for your points:
a) nobody else is doing the music business at any scale worth mentioning.
b) when customer demands are "give us everything for free", why bother?
c) See B. If there is no money in it, don't bother. Losing 9 billion to trap 1 billion is stupid. going from zero to 1 billion in china is smart.
You can't just tell the music business to stop making money because it doesn't match up to your communistic music desires.
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Re: Re: Yes, but...
Odd that you would say that when basic high school logic shows you are wrong - stubbornly so. Even as people show you to be wrong time and time and time and time again, you cling to your incredibly incorrect logic as if it's some sort of religious talisman.
The only one displaying high school level thinking, clearly, is you.
RD, if you have a business that suits, I dunno, 80% of the people who pay you in totally 10 billion dollars per year, and someone asks you to stop doing that and give your products away in a manner that would get you only 1 billion next year, why would you do it?
Aha. See that's where your logically infantile.
What RD and everyone else is saying is that the $10 billion market will go away *no matter what*. Why? Because the smart upstart recognizes that the way to get into that market is to offer the music for free, and make money elsewhere. So concentrating on the $10 billion you used to earn is a mirage. It's going away one way or the other.
So why site and pine for it? Why not focus on new ways to make money... where you might just discover the new market is worth a hell of a lot more than $10 billion.
No sane business would willingly sign off on losing 90% of it's income just for fun.
No. No sane business would willingly ignore obvious market trends that say that the 90% of the market is disappearing no matter what, and the way to at least retain some or all of that market is to adjust to what the market demands. Pretending you can hold on to the old, dead, market is more stupid than just about anything else you say here on a regular basis - and you do say some whoppers.
They would want to see provable functional businesses that would make them back the remaining money.
And by the time they wait that long, they're dead. The ones who actually experimented and took the risks are the ones who have sewn up the new market.
Sorry, too bad for the stragglers. I sure as hell hope you don't provide business advice to anyone, because you're pointing people right off a huge cliff.
So far, nobody has any of that going on.
Apparently WH doesn't read a damn thing that shows up on this site. Because that's clearly what's happening even as WH pretends it does not.
The difference in china is that they are starting with a zero dollar business, effectively little or no music sales going all the way through the system (a small amount, but not a big number). If they can find a way to pick up 1 billion dollars here (in ad sales and what not) it is a great business.
This shows a massive misunderstanding of the Chinese music market. It's actually a huge market that many musicians have done amazingly well in. Just look at the success some Asian artists have had via ringtones and sponsored music in China. It represents the largest market, by far, for musicians to make money in in Asia. It's just that they've figured out how to make money in a different way. A way that WH insists can't exist.
a) nobody else is doing the music business at any scale worth mentioning.
This is laughable. WH doesn't seem to understand what scale is. He seems to think that you should ignore any business model until it's too late. My goodness, that's dumb.
b) when customer demands are "give us everything for free", why bother?
Equally laughable. They're not demanding "give us everything for free." They're demanding "give us the music for free, and we'll pay for a ton of other stuff" and they do. Repeatedly. Often paying more than they ever paid for the music itself.
c) See B. If there is no money in it, don't bother. Losing 9 billion to trap 1 billion is stupid. going from zero to 1 billion in china is smart.
You have so little clue it's amazing you're able to turn on a computer.
You can't just tell the music business to stop making money because it doesn't match up to your communistic music desires.
And you can't pretend that if you just ignore where the market is going maybe it won't go there.
I mean, seriously. You're like the guy who says "well, we shouldn't invest in the computer market, because only 100 people have them. The typewriter business is sooo much bigger than that. We won't shift from typewriters to computers until we've seen that computers are a bigger market." Of course, by that time, it's too late, because everyone else owns the market, and you didn't even realize that your market was shrinking.
You seem to falsely assume that the reason the market is shrinking is because the music industry is switching to the new model. Not true. The market goes in that direction one way or the other. So why not embrace the new and recognize that it will undoubtedly be much bigger than the old market, just as is true of EVERY new innovation in the entertainment industry market. The market has never become smaller, only larger. Yet, WH thinks that fundamental economics is suddenly breaking down?
That's the sort of thing only someone without an understanding of economics or basic logic could ever suggest.
Weird Harold, some of us are still very curious what you do for a living, besides trolling and building spam sites that copy other bloggers' content? I find it hilarious that you run sites that copy others content while arguing in favor of copyright laws elsewhere. Beyond being clueless, you appear to be the world's biggest hypocrite as well.
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Re: Re: Re: Yes, but...
As for what I do: really none of you business. I will say that I do not work for the RIAA, MPIAA, I don't have a band, I don't sell music, etc. I will also say that I am not a bored college student or some high school kid in mom's basement spewing.
I will hit a couple of things:
I mean, seriously. You're like the guy who says "well, we shouldn't invest in the computer market, because only 100 people have them. The typewriter business is sooo much bigger than that. We won't shift from typewriters to computers until we've seen that computers are a bigger market." Of course, by that time, it's too late, because everyone else owns the market, and you didn't even realize that your market was shrinking.
That is just wrong as hell. Total crap end to end. The comparison would be that the day that they turned up ENIAC, that the type writer business should have shut down because they were doomed. That would mean they would have walked away from billions of sales that happened for 40+ years after that point.
Digital sales / delivery / whatever is still in the very small start phase. Itunes is as close to a business as it comes right now, and that isn't anywhere near what the "shiny disc" business is doing. It might pass it one day, but the record companies aren't going to walk away from income just for the heck of it, that would be stupid.
You make the mistake of assuming I am saying "don't go online, just sell CDs and stay out of it". Nothing is further from the truth. But so far 90% of the business models I see on here are "and give the music away for free as promotion and hope like hell you sell some concert tickets to make up for it or something". The music business so far isn't showing any great love for a business model that (a) puts them out of business, and (b) shrinks the music industry's part of the entertainment pie.
The market has never become smaller, only larger. Yet, WH thinks that fundamental economics is suddenly breaking down?
The fundemental economics, as you say, says things aren't shrinking (they are right this minute, but not generally). But what I can see happening is less and less money spent on music and concerts combined, a slight increase in concerts, and much more money ending up spent on gaming, movie tickets, vacations, and all sort of other non-music stuff. The entertainment market might not shrink, but the music part of it is looking to take a massive dive.
10 billion dollars in CD sales disappear, and re-appear as extra games for your Xbox, and a bigger HD TV. The entertainment / disposible income doesn't change, but different people get the money.
Like I said, nobody has shown me a functional business model where the record business trades 10 billion in sales of discs and recordings for 10 billion of income doing something else. I see lots of ways for plenty of other entertainment types to pick up the loose money.
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Re: Re: Re: Re: Yes, but...
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Re: Re: Yes, but...
And yet, it's still over your head.
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Dear Sadly Delusional
Once again, the customer is ALWAYS RIGHT WHEN IT COMES TO HOW THEY SPEND THEIR MONEY. You and your industry buddies dont get that, you think you are ENTITLED to thier money and they are to be given what YOU decide to give them. The consumer is showing you he will get WHAT HE WANTS and HOW and you can either participate, or be cast aside.
Also your arguments about china are specious. NO business will put money in ANYTHING without a return. You yourself said so. You also said unless billions could be made, they wont bother doing it. So, there must be money in music in China for them to be doing this. But they have no copyright protections. Ergo, this cant be possible, it wont work, according to you. Not to mention you ignore the question: If Microsoft or the music biz can do it in China (reduce prices severely to compete with "piracy") then what is the problem with these new models? It either works or it doesnt, you cant have it both ways, and you are talking out both sides of your mouth just to be a troll.
Now, go ahead and build your straw-man arguments ignoring what I just laid out, since you never answer these points anyway.
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Re: Dear Sadly Delusional
ALSO you DON'T have TO CAPITALIZE everyTHING you TYPE. It's really annoying to read.
Free doesn't work, because whatever other money is generates (A) doesn't go to the record labels, and (b) likely isn't going to be 10 billion.
Remember, that 10 billion is still there at the current level of piracy.
Out of curiosity, how old are you? Have you ever produced anything in your life that could have been copyrighted or patented?
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Re: Re: Dear Sadly Delusional
A - We do not need the records labels - let them go down in flames.
B - The 1 Billion left over goes to the folks that actually deserve it, the artists. Its the same pay they were already getting but without a middle man.
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But the thing is, in the "western world" the industry decides what the value of the product is and it has an effective monopoly, which is perpetuated and backed by copyright. This means that consumers can either accept music at that price or have no music at all (or at least this is how it was before the internet). In China, it looks like the market is deciding what and how they will pay, and the industry must find a way to monetize that.
Isn't that how the market should be? The market determines the value of a product, not the producer.
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Lets try this again....only slowly so he can keep up
Again, NO BUSINESS undertakes an investment in a NEW MODEL (or market) without a GOOD expectation of a RETURN ON INVESTMENT. Which you claim isnt possible without copyright, and where "piracy" is rampant. You would know this if you had ever started or run a business. Stop making straw man arguments that contradict your own statements and make you look like a hypocrite.
"ALSO you DON'T have TO CAPITALIZE everyTHING you TYPE. It's really annoying to read."
Thats because YOU just arent GETTING IT and like a stubborn mule (or a retarded child) you have to be hit OVER THE HEAD AGAIN AND AGAIN until you DO get it.
And yes, I have actually produced creative works that are under copyright. I STILL think the system is fundamentally flawed and severely over-balanced in favor of the holders at the expense of the needs of society AND the original purpose of copyright as a social contract (limited time, goes back to public). Life of author + 75 years is a ridiculous time.
I have used (USED, not built the entire model on!) free methods and they work, but they take a different way of thinking and leveraging. Baen books (an example you chronically ignore) is a good example of this. Their books are available, for free, as digital PDF's. They have made MORE money since implementing this. But why am I wasting air? This DOESNT WORK, according to you and your industry buddies, so obviously, its not real.
I personally feel there should only be one rule as regards copyright: you aren't allowed to duplicate in its entirety and sell it, and pretend to be the originator. Of course, this is already covered by law, and we call it "counterfeiting."
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Re: Lets try this again....only slowly so he can keep up
Again, NO BUSINESS undertakes an investment in a NEW MODEL (or market) without a GOOD expectation of a RETURN ON INVESTMENT. Which you claim isnt possible without copyright, and where "piracy" is rampant. You would know this if you had ever started or run a business. Stop making straw man arguments that contradict your own statements and make you look like a hypocrite.
First and foremost, I am not suggesting that it cannot be done where piracy is rampant. Those are your words, not mine.
Now pay attention! The record companies make effectively NOTHING in China right now. They don't have any control of the market, and there is effectively no way they can get control. If you had spent some time in China, you would understand why (my passport looks like an ad for chinese visas, and it is only 18 months since I got my newest passport). You cannot apply US market concepts to China and expect any real success, especially at the retail level.
So, the record companies now have a project similar to the "advertising supported" download projects in the US. If they can find enough marketing dollars from advertisers, minus the cost to support the website and downloads, then they can make money. There is still no functional copyright, there is still rampany piracy, but they will end up with a piece of the pie, paid for not by the end users directly, but by advertising.
Basically, their advantage will likely be faster downloads than P2P clients would give, etc. It's a good business to go into for that particular market, because piracy isn't rampant, it is pretty much the full market. So any move towards a user pays model will likely fail.
However, and this is important: Without enough advertisers or enough value / return for the advertisers,the model could shut down just as quickly as it starts.
As for Baen Books, a quick survey of their site says that the free stuff is disabled (or at least not available to firefox users). http://www.baen.com/library/ - all the download links are disabled, and clicking on titles in the list takes you to webscriptions.net, which isn't free. Please, feel free to correct me if I am wrong, but a site putting stuff up for free and then pulling it doesn't suggest success, does it?
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Re: Re: Lets try this again....only slowly so he can keep up
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Re: Re: Re: Lets try this again....only slowly so he can keep up
Yes their site is not the most intuative ever and it is odd that those icons appear on the left and do nothing - I think they are more intended as adverts than buttons and its just bad design that they look like they should be the latter
However clicking on the button labelled "The books" above them, selecting a book from the list presented takes you to the book on webscription.net
Clicking on any of the several download links below the books cover art allows you to download it - no payment or login required
I fail to see how this is hard - especially for a man as apparently well travelled and versed in multiple law disciplines (kiddie porn, corporate and copyright) as yourself
You had me worried for a moment - I thought they'd changed things, and althought the site layout does seem different to last time I looked, its still free and pretty easy
Damn sight easier than iTunes and all the associated formatting/DRM crap I used to have to put up with from them
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Re: Re: Re: Re: Lets try this again....only slowly so he can keep up
My Bad ;0)
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WH - The Magic Contradiction
"Out of curiosity, how old are you? Have you ever produced anything in your life that could have been copyrighted or patented?"
"JJ, long post, too long to answer it all.
As for what I do: really none of you business."
Wow....just....wow.
So, its ok as long as HAROLD is doing the asking, but anyone else and its "hey woah there! thats none of your buiness son!" Kinda sorta, well, actually EXACTLY like his industry buddies who can dish it out but cant take it.
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Re: WH - The Magic Contradiction
I think mom wants you to get off the computer now.
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Re: Re: Re: Re: Re: Yes, but...
Annnnddddd thats it for Harold. Thanks for playing Harold! You have nothing further to add, so go crawl back to your little bloghole and leave the adults to discuss the important issues of the day. I'd like to say its been fun, and, well, actually it HAS!
Bye now!
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Re: Re: Re: Re: Re: Re: Yes, but...
So, RD, what's your name, address, phone number? Mine is in plain site. Where is yours?
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Re: Re: Re: Re: Re: Re: Re: Yes, but...
...
Mine is in plain site [sic]. Where is yours?
Hey, mine is right there in plain sight along with yours, WH!
In fact, we might even be the same person!
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Baen Books
Then allow me, ONCE AGAIN, to correct you when you are wrong. The books are indeed free, I just downloaded a few to test. Granted they didnt make it intuitive, but anyone with a little patience and an ounce or two of brains can figure out how to:
a) click on "The Books" link on left side
b) click on the title you want
c) be taken to the WebScription website WHERE YOU CAN DOWNLOAD IT FOR FREE BY CLICKING THE LINKS THAT SAY DOWNLOAD
Really, do I have to do EVERYTHING for you? Please, if you are going to insist on trying to prove your case, DO try to at least keep up with everyone else here.
"So, RD, what's your name, address, phone number? Mine is in plain site. Where is yours?"
Its being kept to myself so it isnt misused by stalkers, crazy people, or idiots with axes to grind. Unlike YOU, I have a life to live and prefer to keep my privacy. Last I looked, that was my right as an American and has NOTHING to do with copyright law or new business models.
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Re: Baen Books
Guess what? We all make mistakes and miss things - thanks for all your help to find this.
Enjoy. (oh, and, exactly how is Baen Books relevant to chinese piracy?)
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Baen Books
Glad you asked! It has to do with "piracy" in general, and the idea that "free cant work!" I have already outlined how with Baen, so you can just refer to that, but the principle (which you seem to not understand) is how to USE free as PART of your business. AND how using free in ways that actually IMPROVE sales of your non-free items. Thanks for asking! Monty will have a small parting gift for you on your way out.
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But I understand where you are going.
Is there anything to show that this move by Baen has helped to sell more books than they would have using other means?
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Sigh...(bangs head against wall)
Except that Baen's books HAVE NO ADS. The digital copy *IS* THE AD FOR THE BOOK.
"Is there anything to show that this move by Baen has helped to sell more books than they would have using other means?"
You didnt seriously just ask that...
The fact is, Baen DID give away digital copies AND their sales increased. Whether this wouldnt have happened otherwise, there is no way to know, since they DID go this way AND it worked better. Stop trying to find every possible way to discredit and excuse these methods from working when they are proven to you.
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"The fact is, Baen DID give away digital copies AND their sales increased. Whether this wouldnt have happened otherwise, there is no way to know, since they DID go this way AND it worked better."
Actually there is a way to know, but that would require Baen Books to stop giving away digital copies and see what impact it has on sales. But Baen is not about to do that just to prove RD right or WH wrong.
So, why does everyone expect the music industry to be different?
They have a good thing going in the west; selling shiny discs is still raking in billions despite the naysayers. Why do people expect them to drop what is still a billion-dollar stream? Despite the rampant filesharing, disc sales are'nt plummeting as fast as one would expect.
Secondly, why is it acceptable if an artist directly sells shiny discs, but not when a record label does so? Isn't this plain hatred for the record labels and nothing to do with the fact that shiny discs haven't become extinct yet?
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