Why Does The Entertainment Industry Seek To Kill Any Innovation That's Helping It Adapt?

from the it's-all-about-control dept

Fri, Apr 15th 2011 7:39pm — Mike Masnick

The LA Times recently had a good article about Hulu's struggles with its corporate parents, the various TV companies. While Hulu itself has been massively successful, the TV companies are suddenly claiming it's a threat (even though they own it) and are seeking to cripple the service in a misguided and shortsighted bid to "protect" their legacy offerings.

Combine that with our recent story about the record labels crippling Spotify and the Hollywood studios seeking to cripple Netflix, and you've got a pattern. Any time a new service comes along that helps drag the content industries into the present, the industry's hit back by trying to kill off or cripple the golden goose.

The simplistic answer is that the entertainment industry is all about control, and they freak out about these success stories (that make them money) because they realize they're losing control. I think it's a little more complex than that, but not too much. The established entertainment business, for many, many years, has operated under the principle of being the gatekeeper to their industry. They've (incorrectly) believed that their value and the key to their business is in being the gatekeeper. But the amazing thing about the internet is that it knocks down fences and walls with ease.

Gatekeepers don't make much sense.

If you view yourself as an enabler, then these new services seem great and wonderful and a huge opportunity. If you see yourself as a gatekeeper, you see these other services as a path to route around your gate. The mistake is in thinking that the answer is to shut down or limit that alternative. That's because, the alternatives (generally) are not really gatekeepers themselves. Of course, to the existing gatekeepers they look like gatekeepers, which leads to this reaction. But the reality is quite different. In a world where there are no real walls or fences, you don't need gates, and thus you don't need gatekeepers.

Instead, you need enablers: the curators, aggregators and filters who help you make sense of the wide open world. That's what Spotify, Hulu and Netflix all do, in a legal fashion. But it's also what various unauthorized sites and services do in an often less than legal fashion. But none of that changes the fact that the gates are no longer needed and the fences are down. Spotify, Hulu and Netflix aren't the new gatekeepers. They're compelling enablers who have built the new hotspot that people want to go to, because of the additional value they provide. Knocking them down doesn't bring back the need for the gates. Those are gone forever. It just takes away one of the more useful services -- which actually does pay the copyright holders -- and drives people to the many other (perhaps unauthorized) sources.

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Filed Under: control, entertainment industry, gatekeepers, innovation, movies, music
Companies: hulu, netflix, spotify

130 Comments

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ChurchHatesTucker (profile), 15 Apr 2011 @ 7:54pm

Short term vs. Long term
... the media companies fear they may be encouraging consumers to drop cable and satellite TV services, one of their chief sources of revenue.

Hulu's management, on the other hand, contends that the current strategy of reaching the widest possible audience on the free site will ultimately generate higher advertising revenue.

Well, yeah. If the traditional delivery middlemen are undermined, then advertisers will bid up the value of the middleman YOU OWN!

But, there will probably be some bad quarters between those two events, and we can't have that.

I'm actually glad that the media companies are this short-sighted, but it is a sad indictment on the 'efficiencies of the market.'
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Anonymous Coward, 15 Apr 2011 @ 9:53pm

"But the amazing thing about the internet is that it knocks down fences and walls with ease."

This is where I think you have an issue. The gates and gatekeepers still exist, but they are just one level removed - the ISPs.

I have no doubt that some day, and hopefully that day is in the near future, the fences and walls the ISPs have erected and continue to build will also be knocked down, but as of today they still stand.
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Transbot9, 15 Apr 2011 @ 10:16pm

Ah, but there is a lot of money in being a gatekeeper
For decades, they have had the control, and made a lot of money with liscenses - particularly regional deals, contracts, etc. There is a lot of money locked up in the old distribution channels.

The problem is that these contracts for exclusivity do not take the internet into account. Say Warner Brothers has a contract with a distributer in India or Russia that is rather lucrative. The localized gatekeepers pay a lot of money for their exclucivity. The internet ruins this distribution model, which means that now Warner Brothers has to deal with a ticked off client worth a lot of money. If this old distribution model fails, then there are a lot of middle men to upper management with plenty of business degrees and knowledge of an outdated model that find themselves with the looming prospect of being unemployed.

That's one example nobody goes into. Many of these people are not just fighting for their business, they are fighting for their very job security and see it slipping away.

The other part is that there are a lot of people in these content industries that have had a lot of success doing things a certain way over the last 40+ years who don't understand the technology. Us "darn kids and our internet" are messing with that model, and while to us it looks futile to try to stop it, to someone who doesn't understand the technology the course of action seems logical. With the dot com bubble bursting in early 2000's, many are wary of people who are experts (or so-called experts) in the technology.

Does it mean that the behavior is not ultimatly self-destructive? No. But understanding why they do what they do is helpful to the debate.

"The more you tighten your grip, Tarkin, the more star systems will slip through your fingers"
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Anonymous Coward, 15 Apr 2011 @ 10:30pm

What Spotify and Hulu actually do...
Spotify and Hulu devalue content. Neither has been able to make more than a drop in the bucket in terms of revenue. Neither has proven a capacity to be anywhere near sustainable in revenue.

Giving away content virtually for free via these services and making nothing back is no different than piracy. In the end, it cheapens your product and you get nothing back except "free promotion."

If non-subscription streaming services could earn enough money to support costs of content production (the same way subscription services can), everyone would support them. But they don't.
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Anonymous Coward, 15 Apr 2011 @ 10:35pm

Re: Ah, but there is a lot of money in being a gatekeeper
Do you have any idea how minuscule the earnings are from "free" streaming services like Hulu and Spotify?

Perhaps you should look them up. They are practically non-existent.

Why don't people in the business of making music/movies support them? Because they don't make money.

There is no anti-technology conspiracy. It's honestly as simple as that.
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PaulT (profile), 15 Apr 2011 @ 10:46pm

Re: What Spotify and Hulu actually do...
"Spotify and Hulu devalue content."

Yep, kick off with an ignorant and rather silly assumption why don't you? This only works if you equate value with price which, as has been demonstrated to you on many occasions, is false equivalence.

The content is still *valued* the same. In fact, most people pay exactly the same for the content as they would have done otherwise via TV or radio. The mistake here is believing that they are replacing CD sales or DVD sales. They are not. In fact, they may well encourage purchases.

I personally pay more for content via Spotify than I was before I joined the service. I'm sure I'd do the same via Netflix or Hulu if the morons in charge would allow me access to it or an equivalent system. But I'm apparently sat on the wrong patch of dirt to do that, so I don't.
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Anonymous Coward, 15 Apr 2011 @ 10:57pm

Re: Re: What Spotify and Hulu actually do...
This only works if you equate value with price

You can't get around the fact that there is a price to producing/manufacturing/whatever u want to call it, the content that is most desired.

If that quandary changed, then there might be some movement.

But at the moment, content on, Jamendo for example, is not as desired as content put out by WB, etc..
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misterdoug (profile), 15 Apr 2011 @ 11:06pm

The Media Industry is at that awkward age
I see most of this copyright bru-haha as kind of like hospice care for the entertainment industry, while it dies kicking and screaming.

The sheer volume of free entertainment produced by people just for their own satisfaction is growing fast, and a small percentage of it is actually very good. We're not far from the point where a lone amateur with an ordinary computer will be able to turn a script into a studio-quality feature movie with completely realistic human characters and voices.

As more people get their hands on that technology, the small percentage of high quality free material they generate will consume more and more of people's entertainment time, until at some point studio-produced movies and television won't have a big enough audience to remain profitable, and the industry will die.

Similarly, musicians are gradually getting wise to the fact that a recording contract isn't a ticket to the big time, it's a lottery ticket; the prize is the big time and the price is giving up the rights to their own work or even their own names. Eventually the amount of great music available for free will destroy the market for recordings. Recordings will continue to do what they have always done for musicians -- induce people to go out and pay to hear live music -- but without the horde of blood-sucking leeches in the middle.

Even after the business of producing new entertainment withers to nothing, the huge backlog of rights-industry-controlled material will still be worth protecting for a long time. It will be several decades until enough Baby Boomers and GenXers have died off and the value of that backlog shrinks to the point where buying legislation to protect it is no longer cost effective. Without wheelbarrows full of money rolling from Hollywood to Washington DC, the voices speaking up for copyright sanity might finally be heard.

Gonna happen, yes. Gonna take a long time, ooooh yeah.
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Anonymous Coward, 15 Apr 2011 @ 11:11pm

Re: Re: Ah, but there is a lot of money in being a gatekeeper
http://musically.com/blog/2010/10/28/spotify-reveals-e30m-payout-to-rightsholders-in-2010/
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Anonymous Coward, 15 Apr 2011 @ 11:14pm

Re: Re: What Spotify and Hulu actually do...
This only works if you equate value with price

http://en.wikipedia.org/wiki/Value_%28economics%29

Value in economics is always related to price.

Piracy drives both down by diminishing revenues per use and exclusivity. The only positive it provides is "free promotion", which if any copyright holder wants, they can already get by releasing for free.

Non-subscription use of Spotify and Hulu have so far offered little better returns than piracy.
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Anonymous Coward, 15 Apr 2011 @ 11:17pm

Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
Drop in the bucket.

Hulu has the same problem.

http://articles.latimes.com/2011/apr/12/business/la-fi-ct-hulu-20110412/

These services aren't making nearly enough. Until they start pushing more people into subscriptions, they are little more helpful to bottom lines than The Pirate Bay.
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Anonymous Coward, 15 Apr 2011 @ 11:21pm

Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
It's fun watching you twist away from your own statements.
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Anonymous Coward, 15 Apr 2011 @ 11:28pm

Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
My second comment in this thread makes the only point I am trying to make about these services:

"Non-subscription use of Spotify and Hulu have so far offered little better returns than piracy."

If you consider pointing that out a "twist", have fun. But that's all that's going on here.

No one is trying to "kill" Spotify or Hulu. This is about trying to drive more users to subscriptions and thus make them more sustainable.
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Anonymous Coward, 15 Apr 2011 @ 11:36pm

Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
Ah, yes, "pushing" users into paying by crippling your entry level offering has always been successful.

With people like you it's no wonder the recording industry is dead.
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Anonymous Coward, 15 Apr 2011 @ 11:44pm

Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
Ah, yes, "pushing" users into paying by crippling your entry level offering has always been successful.

With people like you it's no wonder the recording industry is dead.

If you give people everything for free, they have no reason to pay. If you force them to pay up front, you lose exposure.

Companies from all walks of life have dealt with this quandary by offering things like "30 day trials". No one offers "free forever unless you feel like throwing us some change". Except perhaps panhandlers.
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PaulT (profile), 16 Apr 2011 @ 12:03am

Re: Re: Re: What Spotify and Hulu actually do...
...and what exactly does that have to do with your assertion that *the exact same content* is somehow less valued through Spotify than through iTunes. It's not. Price != value.

Do you have an intelligent point to make here, or are you just going to continue with your faulty assumptions and lack of understanding about what your potential customers actually value?
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PaulT (profile), 16 Apr 2011 @ 12:07am

Re: Re: Re: What Spotify and Hulu actually do...
"Value in economics is always related to price."

*Related* to price, perhaps, albeit not directly. *Equated* to price, no. I was arguing with the latter assertion.

"Non-subscription use of Spotify and Hulu have so far offered little better returns than piracy."

Citation needed.

How do you know those free users have not gone on to purchase more music outside of Spotify as a result of their listening, attended more concerts, and so on? Spotify's profit margins and direct revenue are a long way from being the full picture.

It would be helpful if you didn't assume that they were, unless you have data to back that assumption up.
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Jay (profile), 16 Apr 2011 @ 12:12am

Re: What Spotify and Hulu actually do...
"Spotify and Hulu devalue content. Neither has been able to make more than a drop in the bucket in terms of revenue. Neither has proven a capacity to be anywhere near sustainable in revenue."

HAAAAHAHAHAHA!

Oh wait, you're serious?

Spotify is making money

Hulu is being held back by the legacy industries. They can make money. The problem is that their financiers are holding them back, and Hulu knows it.

"Giving away content virtually for free via these services and making nothing back is no different than piracy."

News flash, both are competing with piracy and getting money in ad revenue. So do you want the pirates to get the ad revenue of consumers or do you want it in your pocket as the "official place for XYZ broadcasting?" Think about that, bucko.

"If non-subscription streaming services could earn enough money to support costs of content production (the same way subscription services can), everyone would support them. But they don't."

Nice way to marginalize but that's quite inaccurate. But you know what? I believe now is the time to say "I told you so" when Spotify has established itself quite well in Europe and Hulu seems to be on the verge of getting away from the broadcasting industry.
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PaulT (profile), 16 Apr 2011 @ 12:16am

Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
"No one offers "free forever unless you feel like throwing us some change". Except perhaps panhandlers."

Except, you know, free to air TV. Or radio. Or free newspapers. Or shareware / open source software developers. Or... pretty much anyone with the business savvy to build a successful business around the idea.

But, that's beyond your understanding somehow.
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Nicedoggy, 16 Apr 2011 @ 1:17am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
You forgot Google.

Google is a giant today much like the New York Times in the 60's.

So advertisement is live and well is just some companies don't know how to make money on the internet, and they will die eventually.
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PaulT (profile), 16 Apr 2011 @ 1:35am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
You are of course correct. I've never given Google a penny of my money, nor have they asked me for any, and I would probably stop using their services if they did. Yet, I use their search service and browser every single day and they make a healthy profit. I guess that makes them "panhandlers" by AC's logic.
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Tom Abell, 16 Apr 2011 @ 2:09am

Fighting for Innovation
Hey Mike,

I totally agree with you, it's like they are shooting themselves in the foot. I wrote an article not long after CES about how the way to get people interested in the "connected home" was via Entertainment (streaming content, etc) rather than the whole "Energy Savings" justification.

People get exited about media and content, not energy, but they are stifling the industry with all this arguing. They should just accept that this indeed is the future and they need to figure out how to work around it.

Check out the article if you like, it resonates with this: http://www.homesystemintegration.com/2011/01/content-not-energy-can-make-2011-the-year-of-the-connec ted-home/

Thanks for the article!

Tom
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PRMan, 16 Apr 2011 @ 3:32am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
You forgot that their market cap is 10x the poster's market cap...
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Togashi (profile), 16 Apr 2011 @ 3:47am

Re: What Spotify and Hulu actually do...
Oh my, I'd forgotten that I was paying NBC, ABC, CBS, and FOX for their broadcast television channels. Oh right, I'm not, and they've been making money for quite a long time.
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Anonymous Coward, 16 Apr 2011 @ 3:55am

Re: Re: Re: Re: What Spotify and Hulu actually do...
Thank
you
for
your
stock
response
to
an
anonymous
poster
it
was
most
enlightening
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Anonymous Coward, 16 Apr 2011 @ 4:10am

Re: Re: What Spotify and Hulu actually do...
Good thing the "legacy" industries don't produce all the content people really "value", huh?

oh wait...
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Anonymous Coward, 16 Apr 2011 @ 4:16am

Re: Re: Re: Re: What Spotify and Hulu actually do...
Your theories on economics are fascinating.

Everything to be consumed should be free and cost of production is irrelevant.

Best of luck with that, duder.
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PaulT (profile), 16 Apr 2011 @ 4:23am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Said stock response being to ask you to back up your own assertions, which are nakedly inaccurate (and I'm pretty sure there's only one poster here with your arrogant, fact-free writing style).

I can offer many examples of why this is false, so there's no point continuing on your line of fantasy unless you can actually tell me how price and value are the same thing, or how I value the album I listened to on Spotify today less than the bought copy I have at home.

Yes. I wish it would enlighten you at some point. If you ever want to have a conversation that doesn't involve false claims, lies, misrepresentations of others' opinions and other fallacies then we can have a conversation. Until that day, the above will be my response.
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PaulT (profile), 16 Apr 2011 @ 4:26am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Failing at reading comprehension again, I see. I did not claim a single thing that you just claimed I did. Please stick to arguing with peoples' actual positions, and you might get somewhere.
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senshikaze (profile), 16 Apr 2011 @ 6:19am

Considering Netflix's approach to desktop Linux and Android (basically "it isn't windows or doesn't have a 'drm framework', so we are going to pout in the corner and throw a temper tantrum and they can't play with our toys."), I hope they get crippled. But I'm a spiteful person. What can I say.

I agree that is all about control, but I think another problem under all the other one is that the industry is afraid of change. I would bet that most of the highest level execs still think computers are just a fad and that the world will reassert itself into a pattern that makes them money with little to no effort, like before. Without these gatekeepers we wouldn't have the culture we do (whether that would be a good or bad thing is up to social anthropologists centuries from now), but now that they have served their purpose, and we don't need them, they are terrified we will (figuratively)execute them as dead weight. They are afraid of the changes that the people want and even though they are in the best position overall to accomplish it, they won't do it.

I would also bet that the highest of high execs don't even know what a computer even IS. Much less why it is stealing away their market.
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Anonymous Coward, 16 Apr 2011 @ 6:33am

Honestly, where do they expect me to get it?
I live in Canada. Hulu refuses me service. Amazon won't sell me MP3s.

Honestly, where do they expect me to get it?
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PaulT (profile), 16 Apr 2011 @ 6:47am

Re:
"Considering Netflix's approach to desktop Linux and Android (basically "it isn't windows or doesn't have a 'drm framework',"

I have a sneaking suspicion that you'll find it's the content providers creating that particular restriction rather than Netflix themselves. Just as I know they'd love to allow people like myself to pay for their service (as evidenced by their plans to open in at least one European country this year), but aren't allowed to due to licensing restrictions.

"They are afraid of the changes that the people want and even though they are in the best position overall to accomplish it, they won't do it."

This is essentially the same argument made in the article. They have been acting as gatekeepers to the content, a role that was very lucrative for them. They don't like the fact that the world has changed, making most of the limitations that made this success possible completely irrelevant. Part of the problem is that users get to choose what, where and how they consume content, which may not be as profitable as CD sales were in the 90s. But then, what is?

These new services are pointing the way forward, and they don't like it because they lose both the control and obscene profits they once commanded. So, rather than compete, they try to force people back on to the old system. It will never work, "piracy" or no "piracy". A lot Spotify customer is not going to automatically start buying more music, just as a lost Netflix customer isn't suddenly going to start buying DVDs. They're just as likely to use other media or use other existing free methods of accessing content (and yes AC, those exist and have done for decades).
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The eejit (profile), 16 Apr 2011 @ 8:11am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
I'm sorry, the rational you have dialled has not been recognised. Please check and try again.
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The eejit (profile), 16 Apr 2011 @ 8:15am

Re: Honestly, where do they expect me to get it?
Out of a chicken's egg? Bit of an issue if you're allergic.
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Anonymous Coward, 16 Apr 2011 @ 8:44am

Re: Re: Re: What Spotify and Hulu actually do...
Nothing's quite so boring as the Deliberately Obtuse Troll.

It's like listening to a dial tone.
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CommonSense (profile), 16 Apr 2011 @ 9:19am

Re: What Spotify and Hulu actually do...
From the linked article:
"Hulu's management, on the other hand, contends that the current strategy of reaching the widest possible audience on the free site will ultimately generate higher advertising revenue. They say revenue is expected to top $500 million this year, proof that its current emphasis is paying off.

In a short time, Hulu has exploded into one of the top Internet video destinations, defying skeptics who predicted that a service backed by such an unwieldy joint venture would never work. It now attracts some 27 million users every month, according to ComScore Video Metrix."

Hulu offers a subscription for their streaming service, which I happily pay to have their content available on my TV. On their site, they ask me if certain ads are relevant to me, so that they can tune the ads to only be things I'm interested in, ads I'd actually want to watch, and for the most part, it works pretty well. I canceled my cable subscription, not _because_ of hulu, but it made it a lot easier. I canceled cable because it was becoming _priced_ higher than I _valued_ it. If hulu wasn't there, I'd either pirate it or ignore it. My subscription is assurance to advertisers that they know where they can reach me, and when they hear that I only watch ads that might really interest me, and they also hear that I don't have a cable subscription anymore, than the value to them starts to shift from "old school" to "new school." They start paying cable less for ads, because I'm not watching cable, and cable can't pay as much to the content providers. All the while advertisers start to pay more to hulu, for the assurance of attentive eyes, and with the 70% deal, hulu's owners start getting paid a lot more, and oh yeah, aren't they the content providers??

To make this happen, Hulu needs to continue to get better, not get worse. Destroying Hulu won't save the "old school" cable services. People don't take leaps forward like Hulu and then revert back to what they realized they weren't happy with. They find other ways to keep moving forward. I do not pay for cable TV now, and I never will again. For the money I'm saving, I'll happily wait for it to come to netflix, should hulu suffer, and if it doesn't make it there, then I'll probably never know about it, because they don't show me commercials at all :-).
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Anonymous Coward, 16 Apr 2011 @ 9:39am

Re: What Spotify and Hulu actually do...
"Neither has been able to make more than a drop in the bucket in terms of revenue."

because they don't make as much money as you would like them to, that's bad?

"Neither has proven a capacity to be anywhere near sustainable in revenue."

They've were doing just fine before the "entertainment industry" started interfering.
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Anonymous Coward, 16 Apr 2011 @ 9:45am

Re: Re: Re: What Spotify and Hulu actually do...
"Value in economics is always related to price. "

Value doesn't depend on price. Price is influenced by value. Consumer surplus is how much value consumers get over price. The air you breath has plenty of value, you pay nothing for it, so it's value is entirely in the form of consumer surplus. Monopolies reduce consumer surplus and hence are bad. Good and valuable for the monopolists perhaps, but bad for the public.

"The only positive it provides is "free promotion", which if any copyright holder wants, they can already get by releasing for free."

The problem is that copy'right' and the legal system should not be about the copy'right' holder, and how much value the laws provide for them, but about the public and what's in their best interest.

"Non-subscription use of Spotify and Hulu have so far offered little better returns than piracy."

Even if true, they offer plenty of consumer surplus, which is the point.
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Mike Masnick (profile), 16 Apr 2011 @ 9:50am

Re: What Spotify and Hulu actually do...
Spotify and Hulu devalue content.

This is false. In both cases, they make the content *more* valuable both by making it *more accessible* and *more social*.

Neither has been able to make more than a drop in the bucket in terms of revenue.

Also false. While both are *smaller* than some old (dying) lines of business, they're growing rapidly and when you look at the important metrics, they're doing quite well. Spotify is now making *more money* for copyright holders in Sweden than iTunes is.

http://www.techdirt.com/articles/20101028/23021911645/if-spotify-is-making-labels-so-much-mon ey-in-europe-why-are-they-still-demanding-crazy-upfronts-in-the-us.shtml

Meanwhile, Hulu is able to command *higher ad rates than TV* on key shows, because of the nature of the platform.

http://www.techdirt.com/articles/20090628/1603045385.shtml

Neither has proven a capacity to be anywhere near sustainable in revenue.

Both are starting out and growing rapidly and anyone who can read basic trendlines and do simple math can see that both will be good revenue providers going forward.

Giving away content virtually for free via these services and making nothing back is no different than piracy. In the end, it cheapens your product and you get nothing back except "free promotion."

Totally, and ridiculously, false. Both pay decent amounts of money today and are growing quite quickly. Unauthorized sites provide no direct payments back to the providers.

And, the mistake you're making is to think that the choice is between some magical subscription model and a system that involves free. This is wrong. Because the subscription models don't work. The choice is between the model that is working and growing (what you see today) and pushing most of those users back to actual unauthorized access.

You really aren't paying attention if you think the right solution is to push people back in the other direction.

If non-subscription streaming services could earn enough money to support costs of content production (the same way subscription services can), everyone would support them. But they don't

Wait, how can sub services do that? Nearly every sub music service has been a dramatic failure.

And, you're also wrong about "everyone would support them." When we have seen those sub services (Napster, Rhapsody, PressPlay, MusicNet, etc.) the labels have continually tried to burden them with stricter rules and higher prices and generally helped speed up all of their failures.
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Mike Masnick (profile), 16 Apr 2011 @ 9:51am

Re: Re: Re: What Spotify and Hulu actually do...
You can't get around the fact that there is a price to producing/manufacturing/whatever u want to call it, the content that is most desired.

Who said there was no price to create content? No one. What we're doing is showing ways to actually make more money by giving consumers what they want and then monetizing that smartly.
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Mike Masnick (profile), 16 Apr 2011 @ 9:54am

Re: Re: Re: What Spotify and Hulu actually do...
Value in economics is always related to price.

Related to is not equals.

Value is part of the demand curve, but is not the price. Price is the intersection of supply and demand. Value explains the demand curve. If the value is OVER the price, you don't buy. If the value is UNDER the price you do.

So, no, having music available for free does not devalue the music. In fact, it can *increase* the value of the music, because it enables things like cultural sharing and exchange.

I thought I explained this to you (pretty sure it was you) just a couple days ago. I'm confused why you would make the same fundamental error so soon.
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Anonymous Coward, 16 Apr 2011 @ 9:56am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"Everything to be consumed should be free and cost of production is irrelevant. "

No one said that.

You think that everything to be consumed should be consumed at monopoly prices and the cost of production is irrelevant. That's the industries thinking. It's why the government grants a monopoly on practically everything (from broadcasting spectra to cableco infrastructure to taxi cab monopolies). But this line of thought is wrong and intentionally immoral.

and saying that people aren't entitled to a monopoly on something is different than saying that "Everything to be consumed should be free and cost of production is irrelevant. "

If you want something that's expensive to produce, fund it yourself. Don't impose your expensive to enforce (expensive on both the taxpayer and on my time to psychically determine what's infringing and what's not) freely granted monopolies on me to fund it.
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Mike Masnick (profile), 16 Apr 2011 @ 10:01am

Re: Re: Re: Re: What Spotify and Hulu actually do...
How do you know those free users have not gone on to purchase more music outside of Spotify as a result of their listening, attended more concerts, and so on? Spotify's profit margins and direct revenue are a long way from being the full picture.

Actually, Will Price, the economist for PRS had a good paper on this, where he noted that many Spotify users were *complete non-buyers* in the market previously. He noted that only 40% of the overall population are music buyers in the first place. If those switched over to Spotify only, then perhaps it would mean less money. But if Spotify is getting the 60% who spend NOTHING on the market, and turning them into spenders, then Spotify is helping the industry. And, guess what, the early research suggests that Spotify is turning many of those non-buyers into positive revenue consumers.

You can see the beginnings of this research here: http://www.prsformusic.com/creators/news/research/Documents/Economic%20Insight%2016%20ARPU.pdf More is on the way soon...
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Anonymous Coward, 16 Apr 2011 @ 10:14am

Re: Re: Re: Re: What Spotify and Hulu actually do...
Value is the independent variable. You change value, price changes. You change price, value doesn't change.

Though MM might actually have a good point, if anything lowering the price can actually increase value because now you can better share something with others and that sharing of that something could make something more valuable.

Conversely, I suppose having an expensive car could be more valuable to you if you are the only one with it so that you can show it off to others? I guess there could be more value in showing off something that you have exclusivity over in opposed to showing off something that everyone has. So exclusivity itself could bring value. But I don't know that attempts to create envy in others is something that should be valued. There are some strange people that value strange things, like any pain they may cause others through their malice, but we shouldn't create laws just to help provide every strange person with their convoluted values.
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Jay (profile), 16 Apr 2011 @ 10:29am

Re: Re: Re: What Spotify and Hulu actually do...
Yeah, because people don't create content except through legacy gatekeepers, making the "products" they use more valuable.

Oh wait...
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Vincent Clement (profile), 16 Apr 2011 @ 10:34am

Re: What Spotify and Hulu actually do...
Giving away content virtually for free via these services and making nothing back is no different than piracy. In the end, it cheapens your product and you get nothing back except "free promotion."

You do realize that before Cable TV and the Internet, TV networks gave away their content for free. It was called "over-the-air" broadcasting.

The viewer needed a TV and a decent antenna and they could watch as much TV as they wanted without paying a single cent to the TV network. Amazing times. Giving away content for free. How did the TV networks survive?
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Vincent Clement (profile), 16 Apr 2011 @ 10:37am

Re: Re: What Spotify and Hulu actually do...
And I would further note, that plenty of TV stations continue to broadcast over-the-air for free, now in beautiful non-compressed HD.
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PaulT (profile), 16 Apr 2011 @ 10:51am

Re: Re: Re: Re: What Spotify and Hulu actually do...
Part of his usual schtick.... If you point out to him that content exists without the need for a gatekeeper or a corporation, he'll just dismiss it because it's not to his taste or point to amateur (not professional) YouTube videos as if that's the only content possible. He'll ignore successful independent artists because they haven't sold a million records and pretend that there's no market for anything that's not soulless commercial product.

...and as we see here, if you debunk his arguments by pointing out that TV and radio existed quite healthily long before consumers were ever expected to pay anything for them, he falls strangely silent.

If he returns, I expect a healthy ignoring of any decent points raised and attacks on things that have never been stated by anybody, while pretending that anybody interested in the real future of the industry is a pirate. If defeated, he'll disappear to another thread on Monday, where he pretends that he's right about everything and start the whole pathetic dance again.
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Vincent Clement (profile), 16 Apr 2011 @ 11:06am

Re: Honestly, where do they expect me to get it?
From those top quality Canadian services ;)

I remember when I subscribed to Musicmatch Radio. I was listening to all sorts of new music. Ended up buying plenty of music from what I heard.

Then regional licensing reared it's ugly head and Musicmatch notified that my subscription would not be renewed due to licensing restrictions. There was no comparable service in Canada at the time. So I stopped listening to music via the internet. I bought way less music.
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Ed C., 16 Apr 2011 @ 11:21am

Re: The Media Industry is at that awkward age
Er... Just because I'm a GenXer that does value some, however so little, of that back catalog currently owned by the labels doesn't mean that I support them at all. I fact, all I can really say about their inevitable collapse is GOOD RIDDANCE! I know I'm not the only one in my generation to share your sentiments, even know some "boomers" that feels the same way.
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Rock N Roll Buddha, 16 Apr 2011 @ 11:27am

Labels Aren't Killing Spotify...
I keep reading lately about how labels are killing innovation i.e. Spotify to protect legacy business models. It is simply not true, and couldn't be further from the truth.

The fact is - the labels/copyright holders have been MORE than willing to license music and test the waters with myriad (supposed) new models over the past 10 years - and they keep getting BURNED.

All these supposedly wonderful new innovations make wild promises about huge scale making up for minuscule payments per play i.e. Spotify - and in the cold light of day relaity sets in: Artists music gets MILLIONS of plays and only a couple of hundred bucks in return. That kind of model doesn't keep the lights on. All these "new" models have shown so far is that their creators are making money and getting VC money, and the ISP's are making money - at the expense of the Artist, Labels, and Copyright holders.

Its takes LOTS of resources to develop a Musical Artist (time/energy/money and PEOPLE) and unfortunately we have the worst PR in the world in communicating that to the wider world.

For the record: Despite the popular meme that everyone in the Music Business or at a Record Label is a scamming, thieving scumbag - there are lots of Good, Honest, incredibly hard working people getting hurt in this massive transition. They are in it because they LOVE music.

Free is not a business model, "Freemium" is weak at best. Most of us that are still in it are scrambling madly everyday trying to stay alive until we can find a viable new model. We WANT a new model, TRUST ME! So far, we haven't found one that is sustainable. The labels aren't asking for large upfront paymenst to stifle innovation - its become a neccessity because every time one of these innovators comes along and asks us to either share the risk - or more often than not BEAR THE RISK... We get burned. It ends up just cheapening the perceived value of music even more. And that is simply unacceptable.

We are NOT luddites - bring us a mutually beneficial, sustainable model, and we will work with you!
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PaulT (profile), 16 Apr 2011 @ 12:07pm

Re: Labels Aren't Killing Spotify...
"The fact is - the labels/copyright holders have been MORE than willing to license music"

No, no they haven't. In fact, they've killed many good business models before they could get started by demanding ridiculously inflated fees, and then tried artificially restricting who has access to the music they've licensed - first by demanding DRM (which fragmented the burgeoning market and gave all the power to Apple - but didn't stop piracy or save CD sales), then by region and windowing (which doesn't work). If they were more willing to licence, they would have a larger market.

"Artists music gets MILLIONS of plays and only a couple of hundred bucks in return."

How much do they get individually from radio airplay? How many dollars do they get from people who buy the music, merchandise and show tickets after listening on Spotify? Why are they not capitalising on their fame - which they clearly have if hundreds of thousands of people listen to their music on a regular basis, on a service that only services a small fraction of the planet?

Besides, this is only a complaint if you assume that everybody on Spotify *used* to buy tracks individually and now

"Despite the popular meme that everyone in the Music Business or at a Record Label is a scamming, thieving scumbag"

Not everybody. Just the people who run the major labels and have been ripping off both audiences and artists for decades.

"They are in it because they LOVE music."

GREAT! So, why are they moaning that they're not getting paid millions like they used to in the 90s? Why aren't they happy that their music is no longer beholden to radio airplay chosen by accountants targeting the lowest common denominator? Why aren't they using the internet to connect with fans who love their music?

Here's a clue as to one method: you have a potential audience here of a great many possible listeners, many of whom are rabid consumers of music who love to support up-and-coming artists. Yet, you fail to mention which name you record under, give no links to your website and therefore offer no way for these potential fans to check you out. Use the tools supplied to you - for free! - and then maybe I won't just assume you're poor at promoting yourself (that's the real issue here - simply being a musician does not entitle you to anything).

"It ends up just cheapening the perceived value of music even more."

Price != value. I value the music I can access through Spotify more than I value the crappy CDs I bought 10 years ago and are still gathering dust in a box back in the UK.

Besides, the industry itself cheapened the perceived value of music a long time ago (see: boy bands, models hired to lip synch, X-Factor/American Idol, etc.). When the mainstream "artists" are karaoke singers hired to sing other peoples' songs, the damage is already done.

"Free is not a business model,"

Nobody is saying it is.

""Freemium" is weak at best"

Not if used correctly, and there's many examples of it working for those who do so.

"Most of us that are still in it are scrambling madly everyday trying to stay alive until we can find a viable new model."

Spend less time bitching on the internet and start connecting with your peers. There are many different models covered here that are working for them. Why not you?

"more often than not BEAR THE RISK."

You also get most of the reward if it's successful. It's not Spotify's fault if you don't have another viable revenue stream if you find their royalties too low.

"We are NOT luddites - bring us a mutually beneficial, sustainable model, and we will work with you!"

OK, how about this: you accept that international borders are irrelevant on the internet and start coming up with a licensing scheme that doesn't pretend that they don't. It doesn't take a genius to work out that expanding your potential market to the same number of people with access to pirate sources (i.e. everyone) is a good start.

Then, maybe you can start listening to what your audience wants, build a proper fanbase who wish to pay you money in ways that gain you a higher profit margin... you know, common sense stuff you should have been doing for a decade rather than bitching about "pirates" and people who want to help reach those fans. But then, why does someone have to come along and "save" you? There's enough information out there to tell you what people are willing to pay for.

If you don't get this then, well, music existed a long time before the record industry and it will continue even if you can't personally work out how to use access to the entire planet to sell yours.
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Anonymous Coward, 16 Apr 2011 @ 1:25pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
comparing software/a search engine to music? i don't see the connection, sorry...
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Overcast (profile), 16 Apr 2011 @ 2:01pm

Radio and Broadcast TV were 'Free' for longer than cable and XM has been charging for the service.

Odd - by some logic, they should not have survived.

Of course, never mind the fact that without Radio - the music industry would have likely sold considerably less music. Never mind that most people don't buy a CD if they haven't heard the music first.

The technology to deliver content on the web exists, for almost any media now. People know the potential of it and are annoyed that even customers who don't have a problem paying are restricted because of those that won't.

People have been duplicating Cassette Tapes and 8-Tracks since they had a record feature, it's nothing new. It's just that the duplication devices now are so much more powerful, but then so is a good content delivery system.

But also people are well aware that $15.00 for a CD with 15 songs is far more than can be expected considering the delivery system now as well.

Doesn't matter what the theory is - as long as the Media Industries are treating customers like the enemy, this problem will exist. Make it too difficult to deal with and people will just find something else to do. Life is difficult enough without 'entertainment' adding to it.
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The eejit (profile), 16 Apr 2011 @ 2:05pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
Well, considering you keep doing it to explain away other people's logic, I'd say it's pretty damn relevant, wouldn't you?
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The eejit (profile), 16 Apr 2011 @ 2:07pm

Re: Labels Aren't Killing Spotify...
You sound like a broken record industry.
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PaulT (profile), 16 Apr 2011 @ 2:22pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
Of course, that's not what's being done. We're talking about business models, not the end products. Go back up the thread if you want opinions purely on the music industry, and feel free to follow the conversation from there or redirect it back to just taking about music.

That said, there are lessons to be learned from companies like Google as to how to think about building a successful business despite your most prominent products being free to the end user. The market realities on the ground may be different, but the fundamental ideas are basically the same.
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Tom Abell, 16 Apr 2011 @ 2:27pm

Fighting for Innovation
Hey Mike,

I totally agree with you, it's like they are shooting themselves in the foot. I wrote an article not long after CES about how the way to get people interested in the "connected home" was via Entertainment (streaming content, etc) rather than the whole "Energy Savings" justification.

People get exited about media and content, not energy, but they are stifling the industry with all this arguing. They should just accept that this indeed is the future and they need to figure out how to work around it.

Check out the article if you like, it resonates with this: http://www.homesystemintegration.com/2011/01/content-not-energy-can-make-2011-the-year-of-the-connec ted-home/

Thanks for the article!

Tom
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JEDIDIAH, 16 Apr 2011 @ 2:43pm

Re: Re: Re: What Spotify and Hulu actually do...
Being awash in cheap DVD copies of the last 80 years of video content also "devalues content". There just isn't any getting around the whole "devaluing" thing. Although I think that this is more a "market correction" than anything else. There has been an inflated notion of value before now and that is currently collapsing.

We are talking about TV here: the ultimate free content.

Most of what Hulu has to offer can be plucked off the airwaves whether you are talking about new stuff or things that are 50 years old.

There are plenty of things that "devalue content" these days. It's not just about piracy. Even the forced digital switch is bound to undermine some of the cash cows.

Better OTA reception might help kill off forms of "pay TV".
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Anonymous Coward, 16 Apr 2011 @ 4:02pm

Re: Re: Re: What Spotify and Hulu actually do...
"Piracy drives both down by diminishing revenues per use and exclusivity."

Why must everything be about what's in the monopolists best interests. Artificially high prices and exclusivity are not good for society. Sure, they're good for monopolists, as you point out, but not everything should be about what's best for the monopolists.
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JEDIDIAH, 16 Apr 2011 @ 4:22pm

Partnered with someone with an obvious conflict of interest.
> I have a sneaking suspicion that you'll
> find it's the content providers creating
> that particular restriction rather than
> Netflix themselves.

...except that limitation doesn't exist with either Amazon or Hulu. Also, the Mac doesn't have the same sort of pervasive DRM that Windows does. It is very much like Linux in this respect.

The problem with Netflix is that they got into bed with Microsoft and based their PC platform on technology that really is out of step with the approach they take to other devices.
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Anonymous Coward, 16 Apr 2011 @ 4:23pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
The main problem is that the government grants a monopoly on both content and content distribution (ie: cableco infrastructure and broadcasting spectra). This is about as unethical as it gets and the government and the monopolists know it. It gives a wider audience easy access only to monopolized content while denying them easy access to non-monopolized content. While the Internet is starting to change that, resulting in all sorts of freely available content, the fact is that it's much easier for those who wrongfully hold govt imposed monopolies on these information distribution channels to attract a larger audience and hence to attract more ad-revenue. Hence they can better afford to provide content, not because of the copy'right' that the govt provides on the content, but mostly because of the fact that, thanks to the government restricting how others can reach an audience, they can much more easily reach a wider audience than others. We need to remove the cableco infrastructure and broadcasting monopolies so that more people can more easily use these communication channels to provide their own content to a wider audience and hence to better help them find ways to use that audience to fund the content that they provide.

Also notice that the thing that's always expensive is the thing that the monopolists charge for. When it comes to charging monopoly prices on content that can cheaply be distributed, the argument for charging such high prices is "distribution/making copies is cheap. Content creation is expensive".

Then, when it comes to wanting the government to remove the cableco and broadband monopolies that it creates and wanting ISP's to lower broadband prices so that we can better upload and stream the user generated (and other permissibly licensed) content that the Internet does have to offer, the argument is that "Content creation is cheap. Distribution is expensive."

The thing that's always expensive to produce is the thing that the monopolists are charging monopoly prices for.
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Kaden (profile), 16 Apr 2011 @ 4:49pm

Re: Fighting for Innovation
Hey Tom,

You already posted this up thread.
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Anonymous Coward, 16 Apr 2011 @ 6:45pm

Customer treatment
Everytime I read a post or article about the legacy industries as gatekeepers, I am reminded of the Toll Booth scene in Blazing Saddles. Do they think people are stupid?
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Mattheww (profile), 16 Apr 2011 @ 9:30pm

Or maybe they know their business better than you do
Tech industry zealots make me yawn. "If you worry about short term profits you just don't get it" ...until the entire field was revealed to be in the midst of an unsustainable bubble.

"Media companies that abuse their customers and lobby Washington to protect their revenue streams are evil" ...Until we're talking about Internet companies rifling through address books to target ads.

A cheap blog can sustain itself on banner ads. A $3 million dollar an episode tv series is another story. In any case, why would the companies you are second-guessing jeopardize the many big-money paydays a movie or show generates under the present system in favor one minute before they have to? To look forward-thinking until it turns out they were full of crap? To delude themselves they are doing something loftier than making a buck?

Those approaches may work for you guys but they're not for everyone.
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PaulT (profile), 17 Apr 2011 @ 12:12am

Re: Partnered with someone with an obvious conflict of interest.
Ah, fair enough. I was making an educated guess, but given that I'm not permitted to use Hulu, Netflix or Amazon's digital content I had to make some assumptions about their operation.

Still, having said that, I wouldn't be surprised if Netflix had been forced to go the MS route as they were one of the pioneers and then later services had the ability to be more open. Call me a cynic, but I do tend to find that when a relatively new company does something that works negatively against the consumer's access, there's an backward-thinking incumbent forcing that upon them.
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PaulT (profile), 17 Apr 2011 @ 12:30am

Re: Or maybe they know their business better than you do
It may have escaped your notice - certainly many people who attack positions here haven't bothered to read what they actually are - but I and many people like myself come to this issue not as fans of tech, but as fans of entertainment. Yes, the tech industry has its problems - that does not excuse the actions of the entertainment industry.

I come from a position of someone who is constantly frustrated by attempts to BLOCK me from legally accessing the content that I am willing to PAY for. Every single move they make seems to be designed to protect the old school status quo - which does not exist any more - and further frustrate consumers like myself who end up paying LESS.

You're going to defend this?

"A cheap blog can sustain itself on banner ads. A $3 million dollar an episode tv series is another story. "

Until very recently, TV was funded almost exclusively by ads. Why is it suddenly different now? Maybe they could start looking at exactly why that episode's budget has ballooned to $3 million when many full length features are produced for less. Waste, greed and avarice are not things that are necessary to produce quality entertainment.

"why would the companies you are second-guessing jeopardize the many big-money paydays a movie or show generates under the present system in favor one minute before they have to?"

Because they're still labouring under the illusion that regional and time windowing actually work in the internet age? Because they're still pretending that mid-90s business models are workable 25 years later? Because they believe the fantasy that they can force people to pay a premium if they just restrict more convenient outlets?

"Those approaches may work for you guys but they're not for everyone."

...and yet, the legacy models are also not working. What do you suggest? Stay still and die, or innovate and risk having to work a little harder to give audiences what they actually want?
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Ronald Scott, 17 Apr 2011 @ 12:48am

Well said
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Anonymous Coward, 17 Apr 2011 @ 2:06am

Re: Re: Re: Re: What Spotify and Hulu actually do...
Except you have absolutely no evidence that this breaks even for any act other than tiny live acts. This is simple math, and it seems you're under the impression that rhetoric allows you to ignore simple math.

TV in the US is a $90,000,000,000 product. Nothing you've suggested even comes close to that. Have you ever even put a client over $1m in revenues? If your client (or show, or production) only makes $60k in revenues, that means you can only produce a $60k act. I don't like Lady Gaga's music, but she grosses over $100m alone. Video is even harder, but TDS gets more viewers from a single episode than nearly all viral videos, and that's 20something minutes of content they can monetize with ads and product placement. So excuse the entertainment industry if they don't want to cannibalize their revenue streams.

Seriously, if you're so good at managing production of content, why are you constantly bitching about the key players instead of doing it yourself?
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PaulT (profile), 17 Apr 2011 @ 2:34am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
One of the problems when discussing this is that people like you are obsessed with the tiny percentage of acts that make obscene amounts of money, and then pretend that this is the only thing that can matter.

Yes, Lady Gaga makes a lot of money, but how many of her contemporaries can say the same thing? How many people like her exist in the current marketplace? Does the fact that many more working musicians make a decent if unspectacular living by other means somehow validate or invalidate the major label model? (Interestingly, I'm very familiar with Gaga's music and videos, yet I've never paid a penny for it - and no, I've not "pirated" it either. If I were to listen to an album of hers through Spotify, would that "make" or "lose" her money through your logic?).

The same with video, which you seem to completely misunderstand (the only way a video can truly go viral is if it's free, so of course it won't make money. But, with most virals, that's not the point unless they're advertising a separate product).

"TV in the US is a $90,000,000,000 product."

...and falling, if I'm understanding the complaints from the industry correctly. Perhaps if they allowed people outside the US to access their content legally on a regular basis and timely manner, they could get more money? I'm sure there's plenty of advertisers willing to work with Hulu in countries where no similar service currently exists but who are served well by P2P (most of them).

"Seriously, if you're so good at managing production of content, why are you constantly bitching about the key players instead of doing it yourself?"

In my case, it's because I'm a consumer who's blocked by arbitrary and unworkable mechanisms form legally accessing the content I wish to view. I shouldn't have to produce content myself to be allowed to watch a new TV show within 2 years of its production. Why do you people think that content producers are the only ones with a say?
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techflaws.org (profile), 17 Apr 2011 @ 3:44am

Re: Or maybe they know their business better than you do
A $3 million dollar an episode tv series is another story.

And yet these are still being paid and produced despite all the rampant TV piracy. Weird, don't ya think?
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Anonymous Coward, 17 Apr 2011 @ 3:47am

Re: Re: Re: Re: What Spotify and Hulu actually do...
The "monopoly" canard is a non-starter. Go look up the definition of monopoly.

If they so desire, any person can now create and release content in any form on the internet, at any time they wish.

Calling the movie studios or record labels "monopolies" just means *you* have tethered yourself to *their* content, and are angry they can choose to handle it in the way they wish.
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Anonymous Coward, 17 Apr 2011 @ 3:53am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Sort of like you pretending more people consume Jamendo content than record label content?

How often do you try and convince people the sky is green and not blue?
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Anonymous Coward, 17 Apr 2011 @ 3:57am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
Except, you know, free to air TV.

oh yes, I want my music experience littered with more ads than Times Square.

You're fucking brilliant, aren't you?
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vivaelamor (profile), 17 Apr 2011 @ 4:17am

Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"Sort of like you pretending more people consume Jamendo content than record label content?"

Where, pray tell, did he suggest that?
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PaulT (profile), 17 Apr 2011 @ 4:26am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
Classy. Got nothing, then?

Believe it or not, there are many free TV stations around for people who don't mind the ads. There's places where they can access content without the ads, but they involve upfront payment. Both of these can, and do, coexist with each other.

Feel free to pay your cable subscription if you want to avoid the ads, but don't try to pretend that the "free" model isn't possible just because *you* don't like the compromises involved, especially as ad-supported broadcast TV *predates* paid cable or whatever other format you prefer.
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PaulT (profile), 17 Apr 2011 @ 4:29am

Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"If he returns, I expect... attacks on things that have never been stated by anybody"

I have to buy some lottery tickets soon, my psychic powers are apparently in good shape.

So, yet again you attack me for something I haven't claimed. Please, point out to me where I've even mentioned Jamendo, let alone made a comparison between them and labels. I'll wait.
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Anonymous Coward, 17 Apr 2011 @ 5:11am

Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Your response is so full of debunked arguments and ignorance of economics that it barely warrants response. Example:

In my case, it's because I'm a consumer who's blocked by arbitrary and unworkable mechanisms form legally accessing the content I wish to view.

How is this in any way addressed to you? It's addressed to Mike, the guy who represents himself as some content industry messiah who knows what he's talking about, and claims that the guys running these multi-billion dollar industries are hurting themselves.

Go take a few courses in accounting/finance. Whether it's entertainment, pharmaceuticals, electronics, or any other product, the winners always subsidize the losers.

The rest of your post is the hobbyist/amateur argument which doesn't work in the marketplace. No one wants to pay for shitty web videos and rage comics.
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The eejit (profile), 17 Apr 2011 @ 5:19am

Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Perhaps I will take some lessons in accounting/finance (again) when you take lessons in intellectual honesty.

To use your TV example, why not allow people form other countries to see your content? Each person is an untapped revenue stream in potentia. A lot of the things that are market leaders today are simple things. Look st Google, who manages to monetize more money in a month than the entire recording industry in a year.
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Gill Bates, 17 Apr 2011 @ 5:26am

Same reason
"Why Does The Entertainment Industry Seek To Kill Any Innovation That's Helping It Adapt?"

Same reason that much of the energy industry is trying to kill any clean or renewable energy initiatives - fear, shortsightedness and greed. They want everything to "stay the way it is."

The irony is that they will, in the long run, hurt themselves.
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The eejit (profile), 17 Apr 2011 @ 5:29am

Re: Or maybe they know their business better than you do
And that's the point: this won't work for everyone. What it does is give people a starting point, in the same way that avoiding Edison's patents was the starting point for MGM and co. Sort of like how American Idol gives people a starting point for success.

...I feel dirty now.
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PaulT (profile), 17 Apr 2011 @ 5:46am

Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"Your response is so full of debunked arguments and ignorance of economics that it barely warrants response."

Yeah, thanks for that evidence-laden response to set me right. No way I can argue with that logic.

"How is this in any way addressed to you?"

It's a public debate. I offered my own opinions, as I am free to do so.

"claims that the guys running these multi-billion dollar industries are hurting themselves."

They regularly shoot themselves in the foot with actions that demonstrably haver tarnished their brand and lost sales (see: DRM on music, Sony rootkit, etc). They repeatedly make the same mistakes and fail to learn from history (see: "home taping is killing music", Sony vs Betamax - both of which made the industries major money when they stopped fighting and embraced new tech and have direct parallels to modern issues). They base their businesses on market realities that no longer exist, and fail to accept new technologies until well after their competitors (i.e. "pirates") have embraced and perfected them.

Please enlighten me on how none of this is "hurting themselves"?

"The rest of your post is the hobbyist/amateur argument which doesn't work in the marketplace."

As I've stated in the post you failed to comprehend, I'm not a businessman. I'm the sort of person the business makes their money from, and they actively block me from paying for the content I wish to buy.

Maybe I'm missing something here, but when I'm blocked from accessing material for no reason other than "that's how it works", how is it wrong to criticise them and point out that they're losing my money? How is telling the industry what I wish to buy from them wrong?

"No one wants to pay for shitty web videos and rage comics."

Again, it's yet to be demonstrated that this will be all that's left when the business models change. Since I don't have time to take the courses you think are necessary, maybe you can point to the studies and evidence that show that this will be the case?
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Anonymous Coward, 17 Apr 2011 @ 6:03am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"TV in the US is a $90,000,000,000 product. Nothing you've suggested even comes close to that. Have you ever even put a client over $1m in revenues?"

So you're comparing how much the industry makes to how much a single entity in the industry makes and noting "the industry makes more than a single business". Your point is .....

and why is the industry's revenue stream so important? Because the industry provides the government with campaign contributions? I'm more interested in things like consumer surplus, not industry profits, and that's what the government should be more interested in as well.
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senshikaze (profile), 17 Apr 2011 @ 6:20am

Re: Re: Partnered with someone with an obvious conflict of interest.
you are probably right, but what pisses me off is the attitude every blog post and comment that netflix has put out has the tone of "Well, why not just buy windows/ios/wii/ps3?"

That is not the damned point. If I wanted to use those things, I would. The point is that you are telling me that, as a potential (and previous) customer, my money isn't worth as much as a windows/ios/wii/ps3 owner's money. That I don't have the right to use what I see fit.
I am okay (sort of) with them not supporting Linux because of pressure from above (and probably from Microsoft as well), but insinuating that I should change my ways because you can't support them is utter bullshit.

http://www.techrepublic.com/blog/opensource/the-netflix-linux-conjecture-how-netflix-sn ubs-the-linux-community/1745

http://blog.netflix.com/2010/11/netflix-on-android.html

They really are a bunch of assholes, regardless of the pressures from the movie/TV industry
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Anonymous Coward, 17 Apr 2011 @ 7:40am

Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
(and notice how the constitution doesn't say "to promote the profits" but it says "to promote the progress" instead. You seem to have things backwards).
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Anonymous Coward, 17 Apr 2011 @ 7:46am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"If they so desire, any person can now create and release content in any form on the internet, at any time they wish."

But they have the disadvantage of not being able to release it over public airwaves and cableco infrastructure outside the Internet, while the monopolists can. and our government is responsible for this wrongdoing.
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Anonymous Coward, 17 Apr 2011 @ 7:53am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"Calling the movie studios or record labels "monopolies" just means *you* have tethered yourself to *their* content, and are angry they can choose to handle it in the way they wish."

No it doesn't mean that. First of all, I do not buy or pirate their content. Sure, I listen to it on the radio or when other people play it if I'm at a party, but that's about it.

Secondly, copy'right' isn't about letting them handle 'their' content how they want, it's about promoting the progress. I'm angry because the laws aren't being used to promote the progress as intended.

Once their content is released, the government has no obligation to allow them to control what others do with it and others have no obligation to comply with the industry's wishes. What the government does should be in the public interest, not in the industry's interest of letting them handle their content how they want.

Thirdly, they are monopolists because they have monopolies over the communication channels necessary to distribute their content outside the Net and the government is responsible for that. That's also partly why I'm angry. The existence of the Internet in no way justifies the monopolies that they do have.
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Anonymous Coward, 17 Apr 2011 @ 7:56am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"The "monopoly" canard is a non-starter. Go look up the definition of monopoly."

"exclusive control of a commodity or service in a particular market, or a control that makes possible the manipulation of prices. Compare duopoly, oligopoly."

http://dictionary.reference.com/browse/monopoly?r=75&src=ref&ch=dic

They have a monopoly over the distribution of a song. It's still a monopoly.
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Anonymous Coward, 17 Apr 2011 @ 7:57am

Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Also see

"the exclusive possession or control of something."

"the market condition that exists when there is only one seller."
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Dave, 17 Apr 2011 @ 8:15am

Re: What Spotify and Hulu actually do...
Bingo.
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Kaden (profile), 17 Apr 2011 @ 8:24am

It's a real shame there isn't a near infinite number of TV stations clamouring for programming content that producers could syndicate their legacy content to, thereby extending their monetization streams exponentially.

Oh... wait...
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The eejit (profile), 17 Apr 2011 @ 8:36am

Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
So you're basing the other person's correctness on an alternative definition of a word, and telling them they're wrong. Nice cherry tree you have there.
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Jay (profile), 17 Apr 2011 @ 8:56am

Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"Your response is so full of debunked arguments and ignorance of economics that it barely warrants response."

So let's look at your argument and see where the holes are:

"So excuse the entertainment industry if they don't want to cannibalize their revenue streams."

They are by not releasing content. It has been proven over and over that piracy is about having underserved customers.

More people are going to the internet and foregoing cable. Link. All of those "no ones" that you seem to dismiss are going to add up eventually to a new reality without a cable box.

BTW, did you just hear about Youtube? They've decided to make live concerts that much better by streaming the entire thing for people through their partners.

You, sir, have been debunked.
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Anonymous Coward, 17 Apr 2011 @ 8:56am

Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Actually, I think you meant to respond to the other person, not me, because that's what the other person is doing.
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Kaden (profile), 17 Apr 2011 @ 9:05am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Ah, but there is a lot of money in being a gatekeeper
Where do you live that has ad free cable TV? On my homeworld, we have no such wonders.
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Jay (profile), 17 Apr 2011 @ 9:28am

Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"Sort of like you pretending more people consume Jamendo content than record label content?"

Ya know..

When you look at all of the people that AREN'T using the record label content and are using:

Jamendo
Dmusic
Magnatune
Last.fm
Pandora

You begin to wonder... Who's really the boss here? The record label may be clamoring to compete, but there is no chance in hell that there's more record label content than the combined content of indies trying to make their own living.
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BongoBern (profile), 17 Apr 2011 @ 11:12am

Killing the Future
This is like religion and the government, so filled up with grumpy old men, following concepts that "worked perfectly for all these years..." Even most of the new guys have been trained by grumpy old business models. They don't think, they react.
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Mattheww (profile), 17 Apr 2011 @ 11:58am

Re: Re: Or maybe they know their business better than you do
First off, let's put to bed this fantasy that people only steal entertainment because companies give them no alternative. That was a convenient rationalization before iTunes gave everyone immediate cheap access to music, yet I notice Pirate Bay is still hopping.

Secondly, more rational business people have been galloping in to save Hollywood from its excesses since they built the place; they always leave penniless and bewildered. You can make a TV show for a million dollars an episode until your star demands two million. If you have a solution to that problem, Hollywood is all ears. Replace the star? Unless it's a procedural, your audience will flee. That lesson 10,000 time over is why Hollywood actually must behave in all the crazy and wasteful-seeming ways that it does. Outsiders never connect the dots -- wow, an entire industry that is as filled with dedicated and competent professionals is behaving in ways that seem absurd to me... *maybe there's something I don't know.* No, never, it must be them.

Then there's the revenue question. Yes, TV commercials are advertising too -- advertising that brings in hundreds of thousands of dollars a pop. Throw in the retransmission fees affiliates and cable companies pay networks, the international sales, the ancillary markets of syndication and home video, and you are talking about a "legacy" model that is still very, very profitable.

And what is the alternative? Studios can put up their shows on the likes of Hulu and yes, absolutely, feel like they are part of the future instead of the past. Instead, perhaps you will understand if they prefer to be part of the present. Something like Hulu is great for the consumer that isn't thinking things through -- I get to watch whatever I want wherever I am for free! Except: That sell-once, always-on-everywhere approach eliminates the many big-money revenue streams listed above in favor of... right now? Next to nothing. Divide Hulu's profits by the amount of content you would prefer it offered and what does it come out to? Enough to make that content? No? What is your proposed solution?

No one making your points ever has one. Media companies are supposed to forsake their underpinnings and jump blindly into the new-media abyss and be happy with the knowledge that one day all media will be consumed this way and they got there first!

Maybe eventually an internet-centric distribution model will evolve that can sustain the high costs of entertainment creation, though so far none have. If it does, the companies will migrate there then. Maybe it will come to pass that the internet can never sustain the costs of professional-quality entertainment but nevertheless is where people insist on consuming it. If so, the entertainment industry will crumble. Right now your message is: You're dying anyway, so why don't you kill yourself?

Thanks just the same.
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Kaden (profile), 17 Apr 2011 @ 12:07pm

"the costs of professional-quality entertainment"

The preponderance of well received cheap-as-dirt to produce reality shows currently flooding the market would indicate that you don't actually know what you're talking about.
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The eejit (profile), 17 Apr 2011 @ 12:37pm

Re: Re: Re: Or maybe they know their business better than you do
When the industry has spent billions purchasing the services of lawyers and Congresscritters, that's money 'wasted' that could be re-invested or saved.

There are going to be people who just don't want to give their money to Newscorp, to Time Warner, to MGM. These are the people TPB caters to. For most of the others, people are fast losing sympathy for these companies, because of their apparent lack of morality at the top.

And there are other ways you can monetise a show which work just as well for musicians, for example, merchandising - make special edition items and rarities, like selling off parts of a reel with boxsets.

Just because you can't think fo a way to monetise something, doesn't mean that others can't either.
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Mattheww (profile), 17 Apr 2011 @ 12:43pm

By the way, the future as I see it...
By the way, the future as I see it:

The performance-capture technology of �Avatar� will become widely available and trivially inexpensive, much as once-fancy-pants �morphing� has done since 1992, but with far broader implications. Because you won�t have to replace the performer with a blue alien, you of course can also replace him with a computer model of himself. Or a computer model of a photorealistic 3D puppet of your own creation. There go the $2M salary hold-ups, but by then it won�t matter -- this technology also eliminates the need for costly sets and extended production time multiple camera set-ups require. Anyone will be able to shoot �24� in their living room after work one evening, and they will. They may even tart up their work with special effects of dams bursting near cities and people jumping between the roofs of cars speeding down freeways, but they also might not bother -- spectacle will lose its currency when you can generate any visual you have a hankering to see in real time from a free app on your phone.

We sometimes take as absolutes things that were the product of technical limitations. Before 1980, the next best way to reach someone after TV and radio was the telephone, the next best way after books and newspapers was writing letters. Producing entertainment was prohibitively expensive, as were the very few means of its distribution.

Technology will... is... changing all that. What is unknown is what those changes will do to our appetites. When the same movie had to entertain the entire planet, it needed to star someone the entire planet found appealing. That person then transformed under such an unnatural level of attention into the modern star. That stars have their appeal is a given. Already, though, Facebook has replaced soap operas. Who needs fictional dopplegangers when the real thing is at hand? Similarly, in short enough order you will be able to instruct your television to replace Bruce Willis with your wife when it plays �Die Hard.� Not that you will need �Die Hard� -- this stuff will be so easy to create that ameteur stuff will clog the internet, much of it good. It�s possible the sheer ubiquity of such offerings, and the forms having given up the ghosts of its creation that once made it seem magical (or even just believable,) will drain narrative visual entertainment of its ability to entertain.

This is somewhat going on in music right now. Anyone can create and post songs from their laptops, and many do. By some measures music has flowered as a result. And yet it�s hard to escape the feeling that music as a form has receded in importance in the popular imagination, or not suspect that the best and brightest are no longer drawn to the field.

So what, of course. Except that -- as it pertains to this discussion -- if you are a media company it is your doom foretold. In the long run, there likely is no smart set of actions that can deliver them from extinction. They are smart enough to realize it, and are in no hurry to hasten its arrival.

Would you be?
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Anonymous Coward, 17 Apr 2011 @ 2:04pm

Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Look st Google, who manages to monetize more money in a month than the entire recording industry in a year.

moron. get your facts straight. google grossed 8.4 - 6.7m in each of the last 4 months. lady gaga alone averages 8.3m every month. you guys seriously know nothing about accounting.
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The eejit (profile), 17 Apr 2011 @ 2:32pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Okay, I was wrong about that. I apologise. Note, however, that Google is actually making a profit, whereas Time Warner is operating as a considerable loss (as in $14bn loss/quarter). I wonder which one will last longer.
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Christopher (profile), 17 Apr 2011 @ 3:05pm

Ironic song lyric of the day
"We hate what we don't understand,
River Bottom Nightmare Band!"
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number cruncher, 17 Apr 2011 @ 3:41pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
I'm not calling you a moron but you are actually the wrong one here. Google made 8.3 billion not million to your proposed Lady Gaga 8M in monthly's.

Maybe you should learn how to read financials.
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AWA, 17 Apr 2011 @ 3:44pm

Google's Profits
Please check Google's financials again. Those numbers are in 000's. As a result, those "millions" you quoted should read "billions."
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Kaden (profile), 17 Apr 2011 @ 4:10pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Sure, but Lady Gaga would have *eclipsed* Google's numbers if it wasn't for those darned pyrites. Er... pirates.
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Corey, 17 Apr 2011 @ 5:02pm

Greed...
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Mr. Coward, 17 Apr 2011 @ 5:15pm

Movie poster at Walmart
The movie industry is clearly worried about Netflix and Redbox. The latest Harry Potter DVD release poster at Walmart states clearly and in large letters that "This film is not available on Netflix or Redbox". Someone took the cork off the fork and the movie industry just poked their eye out.
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Mike Masnick (profile), 17 Apr 2011 @ 8:45pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
moron. get your facts straight. google grossed 8.4 - 6.7m in each of the last 4 months. lady gaga alone averages 8.3m every month. you guys seriously know nothing about accounting

This is classic.

1. You call the earlier poster a moron and tell him to get his facts straight.

2. You falsely claim that Google grossed between 6.7 million per month in the last four months

3. You claim that "we" know nothing about "accounting."

It appears that you have no idea how to read an income statement. First, those are *billions* not millions, which... er... makes a bit of a difference. Second, those are quarters, not months.

And, just to be clear, Google *netted* between 1.8 and 2.5 billion (with a b) in each of those quarters.

For comparison, let's look at Warner Music, who for at least a few more days will remain a public company so we can see its finances:

http://finance.yahoo.com/q/is?s=WMG

Over the last four quarters, it has topped out in *gross* revenue at 789 million, and its *Net* income was negative in every quarter.

So, want to try again?
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Anonymous Coward, 17 Apr 2011 @ 9:46pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
And just to remind everyone, Mike Masnick doesn't think piracy hurt Warner Music, and Google hasn't made money on the back of pirated content.

The karma police are getting closer every day.
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Justin Olbrantz (Quantam), 17 Apr 2011 @ 10:14pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Hmmm. Stating that there are only two options when there are really more is a "false dilemma". What do you call it when you state that there is only one option but there are more? I guess that's simply a counter-factual assertion. How boring. You could have at least gone for a logical fallacy with a fancy name.
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Jay (profile), 17 Apr 2011 @ 10:47pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Warner Music hurt themselves with their entitlement issues. Piracy is also the fault of underserved customers

The fact police have called. They need you in for questioning.
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Justin Olbrantz (Quantam), 17 Apr 2011 @ 11:19pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Fine, I'll help you out. I'll make you a fancy Latin name for your fallacy: affirmatio contra veritatem.
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Anonymous Coward, 17 Apr 2011 @ 11:22pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
That's the problem with IP maximists. They have no merits whatsoever, they want to make money without making any effort whatsoever. Even properly reading an income statement requires too much effort on their part and so they won't do it. They're just so used to making money without doing anything.
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topfan (profile), 17 Apr 2011 @ 11:28pm

no more
it is like dry flooor
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Mike Masnick (profile), 17 Apr 2011 @ 11:35pm

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
And just to remind everyone, Mike Masnick doesn't think piracy hurt Warner Music, and Google hasn't made money on the back of pirated content.

First of all, we've already pointed out to you that what we've said is that *if you don't react well to it* then yes, unauthorized file sharing will hurt your business. So, yes, we agree that WMG reacted very poorly to the internet.

But, to the specific point, because one company does well, and another fails, it does not mean that one company is the cause of the other's failure.

I mean, that's pretty basic stuff. Do you really not understand this?

The karma police are getting closer every day

I'm confident that the karma police understand logic and aren't fooled by false dilemmas.
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Mike Masnick (profile), 17 Apr 2011 @ 11:51pm

Re: Labels Aren't Killing Spotify...
I keep reading lately about how labels are killing innovation i.e. Spotify to protect legacy business models. It is simply not true, and couldn't be further from the truth.

Do I believe what you say, or what you do?

The fact is - the labels/copyright holders have been MORE than willing to license music and test the waters with myriad (supposed) new models over the past 10 years - and they keep getting BURNED.

That's an interesting retelling of history. It's also false. The record labels love to claim this is true, but they put ridiculous restrictions on the licenses. The only reason -- the ONLY reason -- they get burned is because of the restrictions they put on those licenses.

All these supposedly wonderful new innovations make wild promises about huge scale making up for minuscule payments per play i.e. Spotify - and in the cold light of day relaity sets in: Artists music gets MILLIONS of plays and only a couple of hundred bucks in return. That kind of model doesn't keep the lights on. All these "new" models have shown so far is that their creators are making money and getting VC money, and the ISP's are making money - at the expense of the Artist, Labels, and Copyright holders.

Also, not true. Most of the companies show that they're growing and make it clear to you guys that the large dollar numbers don't come so quickly, but will come as they ramp up, and they have the math to support it. The labels get greedy however.

These companies are not making much money in revenue themselves, contrary to your claim. They're all in startup mode, which is why they need VC money. You talk about them getting VC money as if that's going straight into the company execs pockets, but it's not. It's there to invest in the service. And the ISPs aren't making money from these things. They make money from providing connectivity.

Its takes LOTS of resources to develop a Musical Artist (time/energy/money and PEOPLE) and unfortunately we have the worst PR in the world in communicating that to the wider world.

No one denies that. But that's besides the point.

For the record: Despite the popular meme that everyone in the Music Business or at a Record Label is a scamming, thieving scumbag - there are lots of Good, Honest, incredibly hard working people getting hurt in this massive transition. They are in it because they LOVE music

Sure. I know plenty of people who work at the labels who are nice and decent people and who love music. But there are also people who are in it only for the money, and you have a layer of management at the top who doesn't understand technology and really doesn't understand trends.

Free is not a business model,

No one said it was. In fact, we've said that it's not. But it can be a *part* of a business model, and when you're dealing with digital goods, it almost certainly has to be a part of the business model.

"Freemium" is weak at best

For many areas, yes, Freemium is weak. I don't recommend it for most businesses that I've consulted with. But you seem to be implying that freemium is the only sort of business model that involves free. It's not. It's just one.

Most of us that are still in it are scrambling madly everyday trying to stay alive until we can find a viable new model. We WANT a new model, TRUST ME! So far, we haven't found one that is sustainable.

Here's the problem. If you wait for the perfect business model it'll be too late. Look at the history of creative destruction. It's filled with companies making the same statement you're making above. "Oh, we don't see any future in automobiles, but we'll be able to shift into that market if there's a real future." Thing is: by the time that market is established, they *don't need you any more*.

You can't wait. You have to be in it.

The labels aren't asking for large upfront paymenst to stifle innovation - its become a neccessity because every time one of these innovators comes along and asks us to either share the risk - or more often than not BEAR THE RISK... We get burned. It ends up just cheapening the perceived value of music even more. And that is simply unacceptable.

No. You're not getting burned. Look: music is free. For most users they can get it free. That doesn't decrease the value of music, it increases it. Because it makes the music more shareable, more of a cultural phenomenon. I find music that is available for free (in an authorized manner), more valuable, because it means I can share it with my friend.

Your industry has NEVER gotten "burned" when you've licensed music. You've lost money because you put ridiculous restrictions on companies (hello... imeem), but that's not you getting "burned."

We are NOT luddites - bring us a mutually beneficial, sustainable model, and we will work with you!

This makes me laugh. No wonder your industry is dying.
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PaulT (profile), 18 Apr 2011 @ 2:31am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"The karma police are getting closer every day."

OMG you just pirated Radiohead. Expect their lawyers any minute to address your devaluing of their music... by your logic anyway.
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PaulT (profile), 18 Apr 2011 @ 2:47am

Re: By the way, the future as I see it...
"There go the $2M salary hold-ups"

Erm, no. Most stars who command that kind of salary also have control over uses of their likenesses, and the only reason they command that kind of salary is because their likeness is expected to bring in that kind of money at the box office.

"Anyone will be able to shoot �24� in their living room after work one evening, and they will. "

They can now, the problem is distribution - i.e. people expect to be able to watch TV on their TV.

"They may even tart up their work with special effects of dams bursting near cities and people jumping between the roofs of cars speeding down freeways, but they also might not bother -- spectacle will lose its currency when you can generate any visual you have a hankering to see in real time from a free app on your phone. "

Already done, and it got the guy who did it a $30 million movie in return

http://www.huffingtonpost.com/2010/01/10/panic-attack-ataque-de-panico-30-million-video_n_ 418047.html

"We sometimes take as absolutes things that were the product of technical limitations."

This is the ENTIRE problem of the music, film and television industries.

"And yet it�s hard to escape the feeling that music as a form has receded in importance in the popular imagination"

Yes and no, but this could easily be the result of increased competition for the entertainment dollar (e.g. DVD and videogames being as important to the average teenager as music was 20 years ago). Access to music does not devalue the end product as matter of course, and it's a ridiculous assumption to assert that it does.

"the best and brightest are no longer drawn to the field"

The talented people who make music because they love it are. The leeches who see it as a "product" and exist only to make money are not. This is not a bad thing.

"In the long run, there likely is no smart set of actions that can deliver them from extinction."

Except that there is.
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PaulT (profile), 18 Apr 2011 @ 3:04am

Re: Re: Re: Or maybe they know their business better than you do
"First off, let's put to bed this fantasy that people only steal entertainment because companies give them no alternative."

Hmmm... I forget where I claimed that, can you point it out to me?

"That was a convenient rationalization before iTunes gave everyone immediate cheap access to music"

iTunes is not cheap. Amazon is, but I'm not allowed to buy digital music from them.

"You can make a TV show for a million dollars an episode until your star demands two million."

...and therein lies the rub. There's other kinds of waste, but nobody *needs* 2 million an episode, and such obscene salaries are only the norm in your country. One person should not have the ability to demand more than the show costs to produce otherwise. That's clearly a problem.

"If you have a solution to that problem, Hollywood is all ears. "

You seem to be randomly switching between TV and Hollywood. Which industry are you trying to address?

"Throw in the retransmission fees affiliates and cable companies pay networks, the international sales, the ancillary markets of syndication and home video, and you are talking about a "legacy" model that is still very, very profitable."

...and yet also lose a lot of money! People pirate as a direct result of windowing. International sales lead to piracy when people have to wait a year after everybody on the internet is already talking about a show before they can see it. Syndication is largely an American phenomenon, but DVDs are great... until licences mean that the soundtrack is changed or that people aren't going to bother releasing it in your country, and you're region blocked from viewing the US release.

"Something like Hulu is great for the consumer that isn't thinking things through -- I get to watch whatever I want wherever I am for free!"

The industry itself created this expectation, and "piracy" is always going to compete. This doesn't mean you can't make money, however.

"Divide Hulu's profits by the amount of content you would prefer it offered and what does it come out to? Enough to make that content? "

Like many people on the industry side, you seem to be labouring under the delusion that Hulu will become the only revenue stream. It won't. It addresses the needs of a particular demographic, but there's others. There are those who will pay subscription, those who will pay nothing. Those who will want to pay for a particular programme or genres, and those who will want a permanent copy with commentaries, who will want to buy models or visit an "experience" in Vegas (as I paid top dollar a couple of years ago for CSI).

"No one making your points ever has one."

Unless you read the years of comments where people like myself state exactly what we want and are willing to pay for.

"Maybe it will come to pass that the internet can never sustain the costs of professional"

...and maybe it won't. Actually, it won't as we've seen many examples over the years of high quality entertainment made for very little money. The bloated, wasteful incumbents will eventually die, and good riddance. No need to reduce our civil rights in the process.
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Jay (profile), 18 Apr 2011 @ 5:17am

Re: By the way, the future as I see it...
*sigh*

" Throw in the retransmission fees affiliates and cable companies pay networks, the international sales, the ancillary markets of syndication and home video, and you are talking about a "legacy" model that is still very, very profitable."

All of those fees go away with something like Youtube. The industry HAS to adjust to the cold hard facts of reality.

No one is paying attention to the 301 Report which has NO basis for being used to intimidate countries into compliance. No one wants to hear the MPAA/RIAA tell how to use home devices. No one is listening as American interests keep Brazil from building a pharmaceutical plant to rival the US. Those are the BIG issues.

What the trade industries do to try to challenge noncommercial filesharing is far worse. Ramping up enforcement and stamping out due process.

It's about time to realize that government subsidies can only last so long. Yes, they can get away with it for now. But how long before even the government says "we're pulling the plug"?
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Anonymous Coward, 18 Apr 2011 @ 5:58am

Wait so they own the service and they're complaining about piracy and that they need to burden it as much as possible? My god where is the logic???

Various TV companies: OMG MY ARM IS BRINGING FOOD TO MY FACE IT MUST BE POSSESSED :O

Various TV Companies: Obviously i don't need it so i'll just strike it with a blunt object till it doesn't work anymore.

Several years later: Well s**t that wasn't the best of ideas I guess I could just say piracy made me bludgeon my own appendage and ask the government to give me a new arm (i mean who cares as long as i'm not paying for it lol).
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indieThing (profile), 18 Apr 2011 @ 6:11am

Re: Re: Re: What Spotify and Hulu actually do...
I'd love to know why the labels actually paid radio stations to give away their 'content' for free, if there's no return on free, because as far as I'm aware, no one pays to listen to the radio (unless you're in the UK of course!).
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PaulT (profile), 18 Apr 2011 @ 6:35am

Re: Re: Re: Re: What Spotify and Hulu actually do...
"no one pays to listen to the radio (unless you're in the UK of course!)"

One of the things I'm most grateful for is that the BBC had this model when I was growing up. Due to this funding model, the charts were based solely on sales and not airplay. Radio 1 also had to allocate a certain number of hours to new music. I loved the switch at around 6-8pm from commercial crap over to anything from Pete Tong's Essential Selection to later shows based around reggae dancehall and John Peel's assortments of randomness.

Today's teenagers get the same experience from listening to music on the internet if they wish. They don't have to be forcefed whatever the labels are currently trying to flog. That's what scares them.
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Anonymous Coward, 18 Apr 2011 @ 10:48am

Re: Movie poster at Walmart
And they're running around the room banging a pot with a spoon yelling 'OKLAHOMA OKLAHOMA OKLAHOMA!'

I forget if that's before or after they pee themselves at the dinner table.
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indieThing (profile), 18 Apr 2011 @ 12:21pm

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
Yeah, although I don't like the enforced license fee, it's still pretty good value. BBC4 TV has had a lot of really good music shows recently, covering the history of various bands and music genres with lots of old archive footage.

And not forgetting Radio 6 for new indie music. Thank God they didn't manage to close it down in their last spending cuts - too many people protested !
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fgbouman, 18 Apr 2011 @ 4:06pm

Re: Short term vs. Long term
Gatekeepers want to keep the monrey they make that's above and beyond the service they provide. That's understandable. Unfortunately we don't have a way to separate those who provide value from those who are merely gatekeepers. Newspapers are failing as they struggle with the problem that they've used their gatekeeping revenues to support the valuable non-gatekeeping services they provide. There may be no solution to this problem and we will end up worse off as a res.ult.
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Hephaestus (profile), 19 Apr 2011 @ 7:59am

Re: Re: Re: Re: Re: What Spotify and Hulu actually do...
"Everything to be consumed should be free and cost of production is irrelevant."

I am going to point to a small historical fact you may not know about. There are these things called radio and TV. People can listen to, and watch them for free. That is what we are returning to, content that is free to the consumer.

Content will only be good for advertising revenue, or promotion, nothing more. The sooner you plan for this the better.
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Hephaestus (profile), 19 Apr 2011 @ 11:06am

Re: By the way, the future as I see it...
"The performance-capture technology of �Avatar� will become widely available and trivially inexpensive, much as once-fancy-pants �morphing� has done since 1992, but with far broader implications. Because you won�t have to replace the performer with a blue alien, you of course can also replace him with a computer model of himself."

Actually the Nintendo 3ds already has some of these capabilities. It will not be much longer before the TV studios start feeling the heat from portable gaming systems, cellphones, and pads.

"In the long run, there likely is no smart set of actions that can deliver them from extinction. They are smart enough to realize it, and are in no hurry to hasten its arrival. .... Would you be?"

If I was them I wouldn't be in any rush to accelerate this. But they are following the same failed path they have followed in the past. They are attempting to prevent innovation through legislation and law suits.

In every case in the past this strategy has failed them. But they have walked away thinking they have succeeded in stopping the threat. They are still acting that way. The things that protected them were monopoly distribution, a virtual monopoly on promotion, and being the only game in town to become a "star". Not the laws they had passed. Now all that is gone. The only thing they have left are their catalogs ... and ... well, they are become less valuable as they age.
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