U2 Manager: Free Is The Enemy Of Good; And It's Moral To Protect Old Business Models

from the morality-has-nothing-to-do-with-it dept

Fri, May 29th 2009 8:24am — Mike Masnick

While Radiohead's manager has noted that file sharing is great for music and should be legal, it appears that his counterpart, Paul McGuinness, is sticking to his guns that it's evil, evil, evil... and it's all those darn ISPs' fault. He kicked this off over a year ago when he gave a speech blaming everyone but the recording industry for the industry's problems. You see, the problem was that ISPs, Google, Apple, Microsoft and Facebook weren't coming up with ways of just giving the record labels money. Apparently McGuinness has such a sense of entitlement that he thinks it's everyone else's responsibility to fix his broken business model. Since that time, he's continued to stand by this position even claiming that no other business models were possible other than having ISPs hand over money to any content creator.

In a new interview with News.com's Greg Sandoval, he stands by this position, even when Sandoval asks him about the examples of Radiohead and Trent Reznor. McGuinness totally ignores Trent Reznor -- which is too bad, since his business model experiments are a lot more complete and well thought out than Radiohead's little experiment -- and simply says:

I admire what Radiohead have done tremendously in seeking a new model. They would take the view, and I would share it, that perhaps price has been a big problem for the music business. The music business has tried to hold onto a price that was unrealistic for a long time now. I think wider distribution of lower priced things is probably the future.

But that didn't answer the question. He says Radiohead is "seeking" a new model... ignoring that they found one and that it worked amazingly well, without requiring an ISP tax. I'm wondering if he's simply ignorant of Trent Reznor's wide-ranging experiments.

But from there, he starts saying a bunch of questionable things, including the claim that we somehow need big record labels:

It's important to remember that the traditional worldwide star-making functions of the big record companies. There's nothing on the horizon to replace that.

Oh really? Has he not been on the internet? It's true that so far nothing has been able to totally replace big record labels' marketing clout, but there are plenty of interesting new services and tools out there that are quickly improving and quickly changing the marketing equation. To claim that there's "nothing on the horizon" simply suggests he hasn't been looking at the horizon very closely. If he wants a pair of binoculars, he should call us and we'll ship him a pair and even point him in the right direction of where to look.

Amusingly, when asked about the role of new technologies, McGuiness again displays his ignorance of technology. He doesn't discuss how it's made it much cheaper to perform, record, promote, distribute and share music. Instead, he only focuses on one thing: how can tech companies give bands money:

I would really like them to willingly go to the movie studios and the music companies and say this is how we can collect money from the people who are listening to your stuff and watching your movies. We acknowledge that it's the fair thing to do and we have some responsibility for doing it. Let's do it together and let's make some money.

How about he goes to those companies and explains why he isn't paying them for decreasing the costs of recording, promoting and distributing U2's music... all of which has helped to keep the band in the headlines, selling out concerts allowing them to bring in hundreds of millions. Earlier this year, we noted that Bono had said he was upset about piracy but didn't want to complain because he was too rich. Apparently McGuinness refuses to recognize that part of what helped make them all so rich were these tools that help promote and distribute U2's music for free.

And then, of course, he pulls out the old myth: that this somehow removes money from the hands of artists:

Artists are entitled to get paid, whatever kind of art they do, the same way technologists are entitled to get paid.

You know how technologists get paid? It's not because of any entitlement... but because they build a product with a business model that makes sense. There's no entitlement. There's simply setting up a business model that makes sense. And it works for musicians too -- big, medium and small.

And then he turns it into a "moral" issue:

I'd like to get a moral tone into the discussion. I think there is a big moral question for civilization.

To which there's an obvious response: where is the moral question when embracing these trends is making artists better off? All if the artists we've seen who have embraced these trends and smart business models finds themselves better off than they were before.

And then, amazingly, he tries to claim that the copyright lobbyists are simply outnumbered and out-gunned.

One official in Brussels, a senior Brussels civil servant, came up to me after I made the speech. I was there with a small group of lobbyists and he said to me 'In Brussels there are probably five or six lobbyists representing the content worldwide. There are thousands representing the ISPs, telcos and the technology industries.' He said it's really overwhelming the forces you have against you.

Basically, that civil servant lied. The entertainment industry has more lobbyists on this issue than anyone on the "other" side. And he makes it out as if all the ISPs are against him -- but some of the biggest, including AT&T are in agreement with the entertainment industry lobbyists. There are very few lobbyists (and they have much smaller budgets) fighting for the rights of consumers.

And then there's one final attack on "free" spoken from a position of supreme ignorance of how "free" works:

I started to glimpse the politics of it at that stage. I hope that our politicians, our journalists our media gain a sense of how much we stand to lose if free prevails. Ultimately free is the enemy of good.

What do we stand to lose? Restriction on how we can use products we legally purchased? Artificial restrictions on the enjoyment of content? New and wonderful business models that allow actual content creators to benefit, rather than siphoning money off to middlemen? Free is not the enemy of good. Free is a tool that, when used properly, has tremendous advantages. Many have already figured this out. The fact that McGuinness seems unable to do so isn't everyone else's problem. It's his problem.

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Filed Under: business models, copyright, economics, free, music, paul mcguinness, piracy, u2

36 Comments

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Anonymous Coward, 29 May 2009 @ 8:48am

Cry babies.
Poor little rich boys. Wouldn't know the truth if it bit them on the ass.
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Justin, 29 May 2009 @ 8:51am

Really
Are people really this dumb or is he trying to play this off as a publicity stunt as he knows many people will give him and U2 attention?
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Anonymous Coward, 29 May 2009 @ 9:03am

Let them die
I have been disappointed with the recording/movie industry positions regarding the Internet and I just stopped supporting them. Let's let them crumble and hopefully a more productive and correct-thinking industry will form. Just let them die. I haven't missed not paying for movies and music (this isn't to say I'm stealing it, just the opposite, finding other forms of entertainment for my money).
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Anonymous Coward, 29 May 2009 @ 9:09am

Yes, Let them

Don't listen to them
don't buy music in any form from musicians under the RIAA radar
share your thoughts with friends and family, (try to stop that sharing)
keep on commenting, blogging ETC ETC!

Goodbye RIAA, What musician will want to sign under them knowing they will lose fans!
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Anonymous Coward, 29 May 2009 @ 9:11am

Look, if Paul McGuinness says free is the enemy of "good", he must be using his own definition of "good", defined as follows:

Good: A designation given to music/content by the recording industry heavyweights in order to sell more of the specific kind of music/content that they are trying to market at a given time. Rarely if ever based on the reality of what is truly good.

In other words, they've lost their platform to be the gatekeepers of content, and it makes them upset. Now the fans are the ones who truly decide what is "good", rather than what big content tells them is good. They have no sway over the market, which is a hard thing to have, and then lose.
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technomage (profile), 29 May 2009 @ 9:15am

changing times
we as consumers need to "listen" to these bozo's. We need to pay attention that the enemy of good is free. Therefore I think it is about time, that we are compensated by these labels, and request the money we are rightfully owed for listening to their music. We deserve our fair share of their marketing dollars for all of the people that we have talk to about their music. We deserve our compensation as instruments of their advertising.

It works for them, it should work for us.
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Anonymous Poster, 29 May 2009 @ 9:15am

Fuck U2.

I'll be over here giving my body and soul (and my hard-earned money) to Trent Reznor, thanks.
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Tgeigs (profile), 29 May 2009 @ 9:26am

Irish McJackass's comments
"I admire what Radiohead have done tremendously in seeking a new model. They would take the view, and I would share it, that perhaps price has been a big problem for the music business."

Outstanding, because we agree, and since we, the consumer, dictate the price eventually anyway, you'd do well to listen: the price for recorded music is zero. More importantly, it always HAS been zero. No one has EVER charged me for the product of music, they've charged me for CDs and the right to download. Otherwise, I'd have been charged when I've listened to music off of CDs owned by others.

"The music business has tried to hold onto a price that was unrealistic for a long time now. I think wider distribution of lower priced things is probably the future."

Probably? PROBABLY!!?? And what do you mean by future? If by future you mean five years ago, then yes, I agree.

"It's important to remember that the traditional worldwide star-making functions of the big record companies. There's nothing on the horizon to replace that."

Ok, McStupid, listen carefully: GOOD! I don't need you telling me who the stars are, I'll decide that for myself. Your corporate packaged garbage sucks, end of story. Until you find me ONE Bob Dylan, Jimi Hendrix, etc. in pop music today, I'd rather turn the "star-making functions" of the record companies over to the common people, where word of mouth and higher download counts will equal true star quality.

"I would really like them to willingly go to the movie studios and the music companies and say this is how we can collect money from the people who are listening to your stuff and watching your movies. We acknowledge that it's the fair thing to do and we have some responsibility for doing it. Let's do it together and let's make some money."

Who's them, the ISPs? You want Comcast to come to me and charge me for your product? And how are you going to determine who pays and who doesn't? Do the people downloading w/o infringing have to pay Comcast? What about those that don't download music at all one way or the other? Or people/businesses that have unencrypted wireless networks, what do THEY have to pay? Or maybe this idea is just dumb.

"Artists are entitled to get paid, whatever kind of art they do, the same way technologists are entitled to get paid."

Again, we agree, artists ARE entitled to get paid the same way technologists are: they aren't. They aren't ENTITLED to get paid, the get paid for performing a service or producing a tangible product. Artists get paid the same way - Service: concerts, appearences, etc., Tangible Product: Tshirts, album art, etc. - FYI, recorded music isn't EITHER.

"I'd like to get a moral tone into the discussion. I think there is a big moral question for civilization."

....What? Do I really have to listen to someone from Rock & Roll music lecture me on morality? Tell you what, Skeeter, since morality is a completely subjective and cultural issue, how about we just leave that one alone. Or maybe we should apply Native American morality which said that one cannot own land or property since it all belongs to nature anyway, ergo you don't OWN anything, least of all copyright. Idiot.

"I hope that our politicians, our journalists our media gain a sense of how much we stand to lose if free prevails. Ultimately free is the enemy of good."

Coming from an Irishmen, just throw a "dom" on the end of "free" and this becomes HYSTERICAL.
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Tgeigs (profile), 29 May 2009 @ 9:27am

Re:
You're giving your body to Trent Reznor. I like the guy, but given past history, chances are he'll be using your body as a pin cushion.
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Anonymous Coward, 29 May 2009 @ 9:29am

Record company marketing clout: providing the world with an endless stream of sound-alike look-alike no-talent boy bands and teenage female singers. Apparently it works too: look at who wins on American Idol every year. On second thought, don't look at American Idol.

I thought Bono was a pretentious self-important jerk before, so this isn't a big surprise. Hey Bono, go feed Africa with your own damn money and leave us alone.
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John Doe, 29 May 2009 @ 9:32am

I hope they do enact an ISP tax...
I for one hope they enact and ISP tax on broadband. For the $1 or $2 per month they tack onto my bill I can get and unlimited amount of movies and music. You see, I don't download or copy music or movies. I don't buy them either. I listen to the radio, internet radio and use NetFlix.

But, if they tax me for an activity I don't do, then I figure that gives me a "license" to steal. Ok, it's not technically stealing, but you get my point. If they take from me, I will take 1,000 fold from them.
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Tgeigs (profile), 29 May 2009 @ 9:39am

Re: I hope they do enact an ISP tax...
"If they take from me, I will take 1,000 fold from them."

Actually, via a point Mike has tried to educate people on repeatedly, you won't.

$2/month > $0.00 x 1000
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PaulT (profile), 29 May 2009 @ 9:45am

I have to admire how idiotic this guy is making himself look. Hey, if the manager of one of the most successful rock group in the world can be this ill-prepared for the future, this ignorant of his own surroundings and this ignorant of the very people buying his own merchandise, there's hope for us all to make some cash in this world...

Seriously though, I brought 2 things away from that article. The first is that McGuinness is clearly uninformed about his industry. The issue of prices being too high has been a consistent one for at least the 20 years I've been buying music regularly for.

When faced with a question about alternatives to his own business model, he can only name the one band that happened to hit the mainstream press and appears ignorant of the many hundreds of other artists and retailers using such models. Surely, if nothing else, Trent Reznor, Prince, Jill Sobule, The Charlatans, Marillion and others would have been mentioned somewhere in trade rags and industry meetings he reads or attends? How can he be that ignorant of his potential competition?

When faced with technology, he lashes out and blames "technologists" for his problems, handily ignoring the fact that many such companies offer products that are *free* to the end consumer (Google, Red Hat, YouTube, Facebook, etc.). If they can make money without charging for their most visible service, why can't U2? He also seems shockingly unaware of the effect (and therefore, by my reckoning, damage) done by his own industry's lobbyists, from the idiotic DMCA to the ridiculous recent developments in Korea and France.

However, many of the statement he makes are so clearly and stupidly uninformed that's it's difficult to take him too seriously. He's pushing 60 and his major claim to fame is having success with one international hit band, who are probably hated by as many people as they are loved by. His comments merely paint him as one of the "old guard", dinosaurs who can't comprehend the new internet-connected world and wish things could go back to where they used to be.

Hopefully these factors combined mean that his comments will not hit home with the majority of people who will actually shape the industry over the coming decade, and that he will not do too much damage before he retires. My only issue is that these people still think that "traditional worldwide star-making functions" are important in today's world, and that McGuinness still has some pull with the captains of the Titanics that constitute the big 4 labels, blissfully unaware that the iceberg already hit them a long time ago...
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John Doe, 29 May 2009 @ 9:54am

Re: Re: I hope they do enact an ISP tax...
True, but the industry is doing this to "combat" piracy when in fact it will have the opposite affect. It will open the floodgates of people who don't pirate now but will once they are being charged for it. So while there is still no money lost per-se, it will only increase piracy and not decrease it. Much to the befuddlement of the record industry I am sure.
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al, 29 May 2009 @ 10:13am

not a clue....
internet music is the "RADIO" of the 21'st century..
live with it..!!!!
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Uwho?, 29 May 2009 @ 10:30am

If i were Bono i would drop this guy faster than a blood diamond.
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chris (profile), 29 May 2009 @ 10:47am

money GOOD! internet BAD!
ha ha, someone from the music industry talking about morality. did he say that before or after snorting cocaine off the ass of a 14 year old hooker?

i love the moral argument. i love it because it is so irrelevant. it doesn't matter if piracy is right or wrong because it cannot be stopped.

personally, i don't think it's right that animals eat the smaller weaker animals (humans included), but it doesn't matter because there is nothing i can do to stop it.

so so rail away at piracy. enlist everyone who will listen to you to help you fight it. it won't make a single ounce of difference because piracy cannot be stopped.
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Anonymous Coward, 29 May 2009 @ 11:22am

This guy just won the Darwin Award
U2 Manager: Free Is The Enemy Of Good; And It's Moral To Protect Old Business Models

I see, then I suppose I will take to action, a moral effort to promote other artists with friends, and call the local radio station studio line whenever they play a U2 song and share with the on air personality my true feelings.

Thanks, McGuinness for helping me see the need to make it into a "Moral" argument. Kisses from NYC.
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AC #8743, 29 May 2009 @ 11:50am

It's cheap, but not free
As much as I hate the AA's, it does cost to create a song. Studio time, technicians, servers to host the music etc.

Granted it's extremely cheap compared to the number of copies, but it does cost money.
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Earl, 29 May 2009 @ 12:56pm

Here's a novel idea
How about we all STOP buying music from the traditional purveyors. It isn't as if we'll die without new music. Support independent artists and artists with alternative business models and listen to what you've already got for awhile. Then, when the the musical establishment/oligarchy gets the idea, maybe they'll come around. Stop supporting them. Period. I like music as much as the next person, but it is a want, not a need. make them NEED us.
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greg, 29 May 2009 @ 1:13pm

I think wider distribution of lower priced things is probably the future. " He says this and yet in America, U2's latest physical CD was still priced only as low as $9.99 or $8.99 for a download (wow, the packaging is only worth a buck!). I wonder if he also considers the special box set at $74.99, didgi pack with poster at $35.99 and limited edition with magazine at $49.99 all “low price wide distribution items”. While not condoning illegal file sharing, I wonder how many file sharing people would buy the new U2 should the technology not exist. Surely there has to a percentage that wouldn’t buy the album if they couldn’t get free anyway. McGuinness seems to think if file sharing went away, the old days of massive record sales would come back. I think that hey-day is gone for good. Music (on its own) just doesn’t seem that important anymore. Today interaction seems to be the thing. Look at Guitar Hero, Rock Band and even American Idol. All three are music based. The two games have moved massive product and American Idol has millions people watching every week with a large number of those people interacting by voting. It is funny though how those huge numbers don’t translate into guaranteed millions in record sales for the eventual winner. Well then again, the recording isn’t really interactive. I think trying to charge $9.99 for a 60 minute release with 30 minutes of filler material has become the norm of the music industry. Go back to a 35 minute album with at most two short filler songs and charge $4.00. Most artists seem to only have that much polished product to offer at a time anyway.
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Terry, 29 May 2009 @ 2:56pm

Re:
YouTube, Facebook, and pretty much ever other Web 2.0 company hasn't worked out a way to make money by not charging for their most visible product. YouTube spends half a billion a year on bandwidth, and they have no clear business strategy for turning a profit.

Facebook is surviving solely off money from Angels ($100 million was the last investment by a Russian group). They aren't close to making any money either.
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andre, 29 May 2009 @ 3:03pm

I think McGuinness' thoughts should have been featured without the smug comments by the author. Write a separate op-ed piece to counter his opinions.
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m3mnoch (profile), 29 May 2009 @ 3:22pm

It's Called Jealousy
yup. it's just plain, ol' jealousy, mike.

note:

radiohead's "in rainbows" has crested 3 million units sold. which is damn near the sales of u2's crazy popular "how to dismantle and atomic bomb."

http://www.zimbio.com/The+Guardian+Entertainment/articles/844/Rainbows+outsells+last+two+R adiohead+albums

who do you think profited more from their album? u2 who spent a crap-ton of money promoting their album? or radiohead who let their fans promote it?

and, to top it off, they're just making excuses for the collective *meh* that "no line on the horizon" is receiving in the sales aisle.

http://articles.latimes.com/2009/mar/12/business/fi-cotown-music12

i mean, really. the trainwreck that is britney spears outsold you? c'mon. you're doing something WRONG, paul. i wonder what that is...

they don't get it.

there's a glut of *everything* vying for attention.

the attention economy drives sales, not the "fight the pirates" economy.

m3mnoch.
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Mike Masnick (profile), 29 May 2009 @ 4:42pm

Re:
I think McGuinness' thoughts should have been featured without the smug comments by the author. Write a separate op-ed piece to counter his opinions.

Hi Andre. I'm not sure if you're new to our site (if so, welcome!), but it's an opinion site -- so I did exactly what you suggested, I countered his opinions. If you want the original comments by themselves you can click through to the news site (in this case CNET) that reported them.
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Marcel de Jong (profile), 29 May 2009 @ 6:22pm

Warning: strong language ahead.
Paul McGuinness, the worst thing that can happen you as a band manager is your band losing fans...
And right now I'm pondering whether I should distribute free copies of the CDs I have of U2, or just burn the material in a great big bonfire.

There is a very insightful book on the music industry, which used to be a parody of the industry, but now it paints a perfect, crystal clear and lifelike picture of what the music industry has become, and that book is Soul Music by Terry Pratchett.
Band managers are like C.M.O.T. Dibbler, who see only walking money bags, instead of fans, to be squeezed for every penny, cent, dime, that they own. Preferably by paying a lot more for getting less.

And the music label execs are like mr. Clete, would rather bleed their artists dry than to admit defeat.

Apparently the image of world benefactors that Bono tries to uphold for U2 is only a front for a stinking pile of hypocrisy encrusted with a top of month's old bullshit.

The ones responsible for the demise of your precious record industry are you yourself. By clinging to prehistoric ideas and notions, that do not apply any longer in the real world/the twenty first century. By stinking your heads in the sands when in fact you were given the world on a platina platter, with the advent of Napster.
Centralized filesharing, slap a fee on it, and you have what we now call itunes.
But no, you and your cohorts thought that you could nip that development of your loss of control by suing the crap out of Napster, and more recently (potential) customers, pensioners, infants, and the dead.

The RIAA of today is a joke of what it could have been. A mere shadow, with barely a right to existence, only helped by fierce lobbying.

Free is a far better business model than suing your customers, than suing your fans. But you go back to your ivory tower/gilden cage, and delude yourself that you are right. But every blow you have tried to give to the so-called pirates only made them stronger, and your case weaker.

Music isn't a commodity, music should be made by artists who like to make music, and if they can make a buck out of it, that's a good deal. It's not one of life's major needs, never has been, never will be. Make good music, and people will flock to it... think about that.

sincerely, an ex-fan of U2.
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Marcel de Jong (profile), 29 May 2009 @ 6:32pm

Re: Warning: strong language ahead.
about the disclaimer, the initial write-up had quite a few choice words among them, but I cleaned it up, as it served no purpose, forgot to remove the disclaimer.

sadly I hold no clout over any of the **AA, and can only vote with my money... no more cds/dvds/digital downloads, unless they come from the artists themselves. I have tried to keep that up, but have waivered in the past, but no more. The music industry is not getting any cent from my money, unless I can buy the tracks from the artists directly.
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Anonymous Coward, 29 May 2009 @ 10:05pm

Re: Warning: strong language ahead.
If you don't have reproduction rights, yes, yes, YES, you MUST burn the CDs, and kill them. Kill them with fire. Kill them now.

You must post again including link to a picture of the glorious blaze (using http://www.imageshack.us ) of your destruction. Heed my warning Marcel: as you lack reproduction rights.

Once this is done, Marcel, you are free. Until then, you're open and subject to legal prosecution. You must do this now.

Once free from the chains that bind you, if you hear a U2 song on the radio, call the station and ask them to stop playing the song...
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Anonymous Poster, 30 May 2009 @ 4:55am

Re: Re:
I can live with that.

Maybe he'll take pictures and turn it into an album cover or something.
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luckybleu, 30 May 2009 @ 8:08am

nin
If you read what trent reznor said he was highly dissapointed when he offered fans the option to pay what they wanted for his music ,basically they paid squat,trust me this was not a good thing for trent reznor,he is no fan of illegal downloading of his music
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Derek Kerton (profile), 30 May 2009 @ 10:34am

Re:
Hey, great idea. You should start a blog that does it that way, and give us the URL here. We'll all come by and read the good solid work that you do.

But don't criticize Mike. He has his ways. Let's just let Mike play around with his "smug" style of blog, even though most of us will switch to yours.

Lemme know when it's up.
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Derek Kerton (profile), 30 May 2009 @ 10:42am

"It's important to remember that the traditional worldwide star-making functions of the big record companies. There's nothing on the horizon to replace that."

Nothing?

Tell that to Susan Boyle, Kelly Clarkson. And that's the "big media" replacement, which also includes fan participation, or a community. Let's not forget all the examples Techdirt has trotted out, starting with Reznor.

What a clueless twit, this manager. It may not be the musician's job (like Bono) to deeply understand the business side of the music business, but it certainly IS the band manager's. This guy is just another case of a person who is bad at his job, yet has made a boatload of cash doing it.
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WM, 31 May 2009 @ 8:19am

!
It seems at times MR. Paul is jealous of not having invented the file sharing
networks as we know them today. Instead of back handing a slap at the RadioHead business model. It should be embraced as a new page in ones play book. I sure would not hire him today as he would back slide you 25 years into the past. He comes across as being a parent, who tries to live his life through his children. Forever being bitter, and nothing is ever good enough.
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Anonymous Coward, 31 May 2009 @ 3:27pm

Re: Re:
Derek,

I know that your being sarcastic. Furthermore, I doubt, as do inherently know, that it would work. You need varying viewpoints to make the blog interesting.

As for your re-enforcing the idea that this is a "smug" style of blog, it's sad to see someone whose been here for as long as you use such words.

Hopefully that was done in sarcasm as well.
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The Intl, 1 Jun 2009 @ 11:48pm

Screw that douchbag & his four papmered charges
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Derek Kerton (profile), 4 Jun 2009 @ 4:01pm

Re: Re: Re:
Of course I was being completely sarcastic. The comment on how Mike should have changed the post struck me as the laziest sort of armchair quarterbacking.

Constructive criticism is always...constructive. But the comment would suggest that the poster has little comprehension of how blogs are done, and certainly this one. It's not a newswire, where other people's stories are posted, it's not an aggregator, and it DOES add opinion.

The guys suggestions were like telling the LA Lakers that they should stop playing basketball.

And the comment itself was smug, and thus hypocritical.
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