Recording Industry Making It Impossible For Any Legit Online Music Service To Survive Without Being Too Expensive
from the good-job dept
You just knew it would happen again. Every time the recording industry finally agrees to license a new music service to try to take the "sting" out of "piracy," it demands licensing terms that are ridiculous. From the execs at the labels' perspective, unless you pay an arm and a leg, you don't get to offer music. So, a few companies agree, and then realize it's impossible to make any money and shut down. In the meantime, the whole point of those legal licensed music services (to compete with "pirate" sites and services) is lost entirely. Wired is chronicling how all of the legal music sites are finding it impossible to survive and offer a free music service -- including MySpace music (which beyond not offering much of value in terms of user experience) "is struggling to keep up with its own payments to music copyright holders."Of course, it's really no surprise that most of these sites have struggled. Beyond the ridiculously high licensing rates that the labels forced on them (often by negotiating through lawsuits), none of these sites put together a well thought-out business model. Instead, they all seemed to think that they could just slap ads on the site and that would be enough. But, of course, when you're listening to music, you're not looking at that website or paying attention to the ads -- and if the ads got too intrusive, they'd just go elsewhere. A real business model would have been setting up something more comprehensive, that gave listeners a real reason to buy associated with the music. Eventually we'll get there, but in the short-term, the graveyard of failed "licensed" music startups will grow, just as more and more "unauthorized" sites grow in popularity.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: expense, licensing, music industry, music services, online, recording industry
Companies: imeem, myspace, spotify
Reader Comments
Subscribe: RSS
View by: Time | Thread
"Too Expensive"
I loathe the dinosaur that is the RIAA if for no other reason than several of my favorite bands growing up essentially went on strike against them over crappy contracts robbing me and everyone else of more music.
With that out of the way... what is "too expensive"? To me spending +/- $1.00 for a song that I am able to listen to for every single moment I am breathing from now until I die doesn't seem like too much to pay. How about you?
[ link to this | view in chronology ]
Re: "Too Expensive"
I love it! That is, provided I only want *one* song for the rest of my life.
Now calculate this for someone who wants to listen to 10,000 songs from various artists during their lifetime.
That's $10,000 dollars, genius. Wait, I forgot the addition $3000 since songs are really $1.30 now.
Still think it's not too much to pay?
And note, genius, if the $1.30 model doesn't work, expect to see even *more* increases to pay those who don't sing, write, perform, or do anything else but "represent" artists who actually do but get ___SCANT___ from each "$1" made.
Insert Einstein quote regarding an infinite universe here.
[ link to this | view in chronology ]
Re: Re: "Too Expensive"
"Genius" huh? Would it surprise you to learn that I am am a musician that has recorded and toured?
Now if you wanted to call me a rich pig that might be fine (incorrect but fine).
THe question that you did not answer is what is a song worth to YOU not why am I unintelligent for feeling that a song is worth $1 to me.
One more for the record... I've never paid $1.30 for a song since iTunes opened but I (like you) did so constantly when CD's, cassettes and LP's were the media of choice.
So... holster your weapon and let us know what a song is worth to YOU and what YOU think the right business model is.
[ link to this | view in chronology ]
Re: Re: Re: "Too Expensive"
[ link to this | view in chronology ]
Re: Re: Re: "Too Expensive"
"So... holster your weapon and let us know what a song is worth to YOU and what YOU think the right business model is."
One of the problems that most of us have isn't with the $1 price tag for a song. Let's say I buy one of your songs from iTunes. How much of that $1 would you see directly? One penny? Two? Maybe half a penny? Please enlighten us to how much of that $1 you get directly.
If I did buy one of your songs, I would want most of that $1 to go to you instead of an organization that then turns around and sues everyone who dares enjoy music.
[ link to this | view in chronology ]
Re: Re: Re: "Too Expensive"
no you didn't. you paid $15 for a CD with 12 tracks. 1-4 of which were decent and the remainder was absolute crap, moving the unit price of the tracks you wanted to somewhere between $4-$15 for a decent track.
compared to that, $1.30 is a steal. had DRM free tracks been available in 1999 for $1.30 each, perhaps things would have played out differently.
unfortunately, more than a decade has passed where music has been distributed freely, changing most consumers' minds about how much a track should cost.
this is the problem: the industry types see $1.30 per track as a tenfold reduction in cost. most consumers see $1.30 per track as a thousandfold increase in cost and will therefore keep doing what they have been doing for the last 10 years.
[ link to this | view in chronology ]
Re: Re: Re: "Too Expensive"
All your music is transformed by the encoding process, which as a musician, you might appreciate the difference in. Some people don't like that.
Some people have libraries even larger than 10k songs. Mine is upwards of 20k (and legit). At $1/song, I couldn't have afforded to enjoy all that music. That price seems ok on the surface, but it breaks down as you scale it up.
I'm a musician as well, and I know I wouldn't be the musician I am today if it wasn't for more affordable music.
As this site often points out, the price of a digital good drives to zero. Unless you sell something of value (the music has value, but not the files you or iTMS distributes), people won't want to pay anything for it.
[ link to this | view in chronology ]
Re: Re: Re: "Too Expensive"
That only means you have a HIGHLY over inflated opinion of what music is "worth".
Or, perhaps... becuse you life revolves around music... you see no issue with it.
A true collector may spend $100,000 for a classic car. It doesn't mean it's worth that much. It doesn't mean someone else would pay that much. It means... to that guy, because of his passion... that particular car was worth $100,000.
It doesn't mean that a factory could start cranking out replicas and expect other people to pay $100,000.
I am so disgusted with the pettiness and greed of the music industry - and musicians in general, that I now listen to talk radio or news radio 99% of the time.
Everyone just wants to be a rockstar and get rich. Otherwise, like musicians of the past - you'd be happy just to have people listening to your music - sharing your passion.
There's a reason the "starving artist" stereotype is a stereotype. When it's a passion, you do it whether you make money or not.
Nowadays, everyone wants to bleed you dry for listening to their music... even if they only have one or two songs worth actually listening to and the rest are crap.
Back to talk radio.
[ link to this | view in chronology ]
Re: Re: "Too Expensive"
[ link to this | view in chronology ]
Re: Re: "Too Expensive"
Desipte the cost per copy of the final product being almost nothing there is a cost of creation that can be substantial. Should artists and the companies that employ and promote them eat that cost?
Unlike all you reluctant capitalists I have no issues paying for what I consume. Though I'd rather it all went to the artist. I get the RIAA sux part, I get the XXX record company sux part. I just don't get the "I'm a cheap bugger so music should be free because I want it to be" part.
[ link to this | view in chronology ]
Re: Re: Re: "Too Expensive"
Oh right. Nothing's free. Not even our shared culture.
If the entertainment industry wants to play this game then I say to hell with them. Once they pull their collective heads out of their collective asses then maybe I will feel sorry for them. But it's too late for that.
Our culture is free to share. If there exists a government-enforced monopoly on creative work that lasted a reasonable amount of time, I would be with you.
But copyright lasts centuries and that just ain't right.
[ link to this | view in chronology ]
Re: Re: "Too Expensive"
If you stop at Starbucks every monring before you go to work and buy a $4 latte you're going to spend $52,000 over the course of your working lifetime.
Put into that perspective, genius, $10,000 is nothing, fifty cents a day, 1/8th the amount you're going to spend on ONE cup of coffee.
And, by the way, 10,000 songs also meant that you were effectively buying one new song every other day during the same period. A rate of purchase I doubt you'd sustain.
Or are you saying that you value your music that much less than a friggin' cup of coffee?
[ link to this | view in chronology ]
Re: Re: Re: "Too Expensive"
[ link to this | view in chronology ]
Re: "Too Expensive"
[ link to this | view in chronology ]
Re: Re: "Too Expensive"
I'd like to use some comparative purchases to advance this discussion.
Let's say an average new car costs $15,000. It comes with a 5 year warranty after that you spend $1000 / year on maintenance. Let's leave tires, gas and oil changes out of the equation please.
You keep the above car for 10 years which is the end of it's life; so you've got $20,000 "invested" and accomplished many tasks over 10 years but now have nothing but memories.
Now you could have purchased a used car instead saving $5000 for arguments sake over the same 10 years. That implies to me that the new car is somehow worth (at least) $5000 to the purchaser.
So... If I personally had the choice of "owning" +/- a 5,000 song library for life but that required that I drive a used car for 10 years I would gladly make that trade.
Another quick example; I would rather have five new "albums" than the latest Wii game.
[ link to this | view in chronology ]
Re: Re: Re: "Too Expensive"
2) Most bad analogies contain a comparison of two items which are not alike at all.
3) This particular bad analogy goes above and beyond the call of duty with its bad financial analysis.
[ link to this | view in chronology ]
Re: Re: Re: Re: "Too Expensive"
I want to make a car. I have skill in design but need materials to make it. If i want it to be successful i need access to factories' production lines and distribution networks - many car companies have been around for a long time making their contacts and factories and have economies of scale. I can't expect to make my cars for free or to have them distributed and marketed for free so i pay the owners of the car company some of my earnings. If i didn't do this, I would never have the chance to make the car with any success.
Why is there a hatred towards record labels for a few select high profile screw-ups. They are necessary for the process at larger scale. another analogy, Bill gates didn't run his entire business himself, he got experts to help with his expertise.
[ link to this | view in chronology ]
Re: "Too Expensive"
That is to say, the current market value for a song is around $1 (or £1 ($2) in the UK...). A startup company would have to be suicidal to raise their prices *above* those of the current market leader, so they have to price their goods at $1 or less.
The issue is that the RIAA are charging so much that they cannot make a profit by selling tracks at $1. Therefore, it's "too expensive", and this is what's killing the new business models before they have a chance to succeed.
[ link to this | view in chronology ]
Re: "Too Expensive"
As others have pointed out, the issue isn't the consumer price, but how much the labels demand.
And the article wasn't about iTunes pay for song downloads, but for streaming services like MySpace, iMeem and Spotify. The labels are demanding extremely high rates that simply cannot be made up in the current business model.
[ link to this | view in chronology ]
Re: "Too Expensive"
[ link to this | view in chronology ]
Re: "Too Expensive"
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
I'll just leave this here.
[ link to this | view in chronology ]
Re:
I'll just leave this here.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re: (about the VPN comment)
;D
[ link to this | view in chronology ]
Re:
What have you gotta hide if you're going legit?
[ link to this | view in chronology ]
Re: vpn
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Too Expensive
For me, it's not so much that $1 is too much, its the fact that the majority of that $1 goes to the people who really have very little to do with creating that music that I love so much.
I don't like to support what the RIAA is doing with pretty much anything, but I would love to support the artists with the full $1. That is why when Radiohead released their full CD from their website, I paid $15 for that download, even though I didn't actually have to pay anything.
I'm not saying that business model works for everyone, but it worked for them and for me, anytime you can make the consumers happy and turn a profit at the same time, seems like a good one to me.
[ link to this | view in chronology ]
Re: Too Expensive
Couldn't agree with you more!
Some examples of this would be SST, Dischord and Sudden Death which are all / were artist run "labels" where the bulk of the cash went to the content creator not the content distributor.
I see exactly $0 added value from the RIAA but sadly they and many many others take the cash before leaving the artists with little to drop in the bank.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
A nickel a song.
Thief? Maybe, but in reaction to the alternatives.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
If you think music is too expensive, don't buy it.
But don't listen to it either. Go out and support whatever art you feel is worthwhile but quit demanding the price be at what you insist it should be. Just don't buy it.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
Ridiculous strawman is ridiculous.
[ link to this | view in chronology ]
Re:
Oh wait, what? The public domain has stopped growing because the entertainment industry bribed, sorry, lobbied the government to extend copyright for centuries.
Well, I guess I have no right to complain. But then again, I don't buy or download or listen to music.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Is this why Last.fm kinda sucks?
They don't even offer a way to actually pick what you listen to as a regular product yet. From their website:
http://www.last.fm/xbox/help
Will buying a subscription allow me to listen to any track I want?
No, our current basic subscription doesn’t allow for any on-demand listening; a basic subscription will give you the benefits described here, but it won’t allow you to play any tracks you want in full length that you can’t listen to as a non-subscriber either.
In the US, the UK and Germany we’re publicly beta testing our free listening service called “Free On-Demand”, which allows you to listen to most tracks up to three times for free. When the beta is over, we’ll offer a different subscription package with unlimited access to our music catalogue.
[ link to this | view in chronology ]
Recording Industry Making It Impossible For Any Legit Online Music Service To Survive
:D
;D
:D
[ link to this | view in chronology ]
Morons or Wily?
[ link to this | view in chronology ]
Re: Morons or Wily?
I say leave back there to rot and die. Or they could try to innovate? They've had the past 15 years to do so.
I'm still waiting.
[ link to this | view in chronology ]
Nothing is free... Muthafuckers worked their whole lives to get to the point where they are actually marketable and you just expect it for free. Just like free healthcare free gov cheese
Fuck off and die
[ link to this | view in chronology ]