Betting On Mobile Phones Won't Save The Recording Industry

from the grasping-at-straws dept

The recording industry hasn't had much of a strategy for dealing with the changing marketplace over the past decade (and, no, I don't consider lashing out and suing music fans as a "strategy"), so far be it for them to start now. That's why it's amusing to see articles about how the recording industry honchos are now betting on a new generation of mobile phones to save them. Funny how that works. This is the same group of executives who will claim that the phones themselves have no value without the music -- and yet here they are hoping and praying that the devices will save their industry.

But the real problem is that this isn't a strategy. It's wishful thinking. It doesn't involve any actual insight into what's happening in the market. It doesn't involve any proactive movement towards accepting new business models and changing the way business is done. It's merely the old way of thinking, trying to figure out what the "next" platform will be on which to sell music. It went from vinyl to cassette tape (we'll skip 8-track) to CD to computer... and now they want it to go to mobile. But they're missing the fact that the more popular mobile devices get, the sooner it is that we'll see file sharing apps for mobile devices pop up. Rather than waiting and praying that some new platform will be the savior, isn't it time that the industry started taking lessons from the past 10 years, and worked towards adapting to the age of digital content?

Filed Under: mobile phones, music, recording industry

Trent Reznor Gives Away New Album As A Completely Free Download

from the plans-to-charge-for-scarce-goods dept

Trent Reznor continues to show that he has a good understanding of the economics of free content. Two months after releasing a new album online, and quickly selling scarce goods that earned him a pretty penny, he's back offering another new Nine Inch Nails album as a completely free download in a variety of high quality formats. However, it's not just that. He's also planning to then sell (scarce) versions of the product as well, in CD and vinyl format for those who want it. And, given his past experiments, it seems likely that he'll figure out a way to make it worth buying. While Radiohead has basically shown that they just got lucky in picking a random publicity stunt, Trent Reznor has shown that he's actually really interested in the economics and business models that will work in the online world.

Filed Under: economics, free, music, nine inch nails, trent reznor

Recording Industry Funds Charity To Run Its Latest Brainwashing Program

from the why-should-a-charity-be-hyping-one-industry's-business-model? dept

We've already seen the entertainment industry put together propaganda curriculums for kids about "intellectual property" that are so tilted and one-sided that the kids roll their eyes and challenge many of the statements. But that's not stopping the industry. Now it's funding a children's charity to push out the same propaganda to kids, warning the kids about how awful file sharing is, and how dangerous it is. Who knew that charities could be funded to promote the obsolete business model of a dying industry? Somehow I doubt that the charity's discussion will delve into things like "fair use," collaboration, sharing, the promotional aspects of content and artists who embrace file sharing to good results. I wonder why...

Filed Under: charity, music, propaganda, recording industry, uk

Don't Read Too Much Into Radiohead's Claim That It Won't Offer Music For Free Again

from the just-wait-and-see dept

Radiohead is making some noise again today, with lead singer Thom Yorke basically saying that the band won't do a promotion giving away free music again. Some are using this to suggest the model was a failure or that those of us who recognize the clear economic trends toward free music were somehow wrong. That's not the case at all. Early on Yorke had admitted that there was no large theory behind the decision to do the name your own price offering. One of the band's managers suggested it and the group went with it as a publicity stunt -- which worked. The fact that the band then pulled down the download offering prior to releasing the actual CD confirmed that the band merely viewed the free offering as a stunt, rather than part of a larger strategy. As such, it's not at all surprising that Yorke would say the band won't do it again. Since they only viewed it as a stunt, repeating the stunt doesn't make sense. They'll come up with some other stunt for the next release. That doesn't, however, mean that the idea was wrong or a failure. Just that the band wants its publicity stunts to be new and different each time. The fact that this most recent one tapped into an obvious trend seems to have been more of a lucky guess than the sign of a well-thought out strategy. The good news is that it's made plenty of others start to realize the power of free music -- even if that line of thought hasn't permeated back to Radiohead and Yorke.

Filed Under: business models, free music, music, publicity stunts, radiohead

And On Second Thought, Maybe Starbucks Shouldn't Be In The Music Business

from the core-competencies dept

We've chronicled Starbucks' successes and failures as it tiptoed into the music industry over the past few years. The ubiquitous coffee shop was trying to position itself as a "lifestyle" brand. After successes in selling the albums it regularly played in stores, the company went so far as to set up its own record label. While we noted that this was an interesting play, it seemed like it would really only work if the the company didn't try to become a normal record label. Unfortunately, it seems like that's exactly what it did. It focused on selling albums, rather than the wider musical experience, and pretty much relied on the Starbucks connection to boost sales. That just wasn't going to cut it -- so it should come as little surprise that the suddenly struggling company is handing over the record label to someone else to deal with. Starbucks will continue to look for music to sell in its stores -- it just won't be producing albums anymore. This makes plenty of sense since Starbucks never really seemed to have much of a plan to do anything really innovative in the music business, and right now it probably has a lot more important things to concentrate on.

Filed Under: coffee, lifestyle, music, music label
Companies: starbucks

Major Record Labels Form Joint Venture With MySpace

from the to-do-what-exactly? dept

There's been some buzz about this all week, but now it's official that MySpace has teamed up with three of the four major record labels (the smallest, EMI, is still holding out, though it may join eventually) to create a joint venture offering called MySpace Music. The company is separate, but connected to MySpace. Unfortunately, the details are incredibly vague. So far, it seems to say that the new company will "let people listen to tunes and watch videos for free on the Web, as well as buy merchandise, concert tickets, and music through downloads." That's a pretty broad description, and while it sounds good upfront, execution is everything. And, historically, the major labels haven't executed particularly well when it comes to creating online music offerings. Already, it seems like they're hedging by saying that they're not committed to offering DRM-free music from this service. In fact, it often seems like these efforts are designed to fail. So, let's take this as a tentative step in the right direction, though with the expectation that the labels will likely do something to screw this up along the way. At the very least, it's the labels recognizing they need to change -- even if they still haven't come to terms with how to actually change.

Filed Under: business models, music, record labels, social networks
Companies: myspace, sony bmg, universal music, warner music

Danish ISP Latest To Offer Crippled DRM-Infested Music Subscription Service

from the read-the-fine-print dept

While the press is reporting that TDC, Denmark's largest ISP, is now offering free music downloads at no additional charge, the fine print leaves much to be desired. It turned out (not surprisingly) that these "free downloads" are DRM-infested and will stop working if you leave TDC. That would suggest that they can't be transferred to certain devices (such as iPods) and users will have no ability to promote songs by sharing them with friends. Also, there's a rather limited song selection. While three of the major labels have signed up, there are only one million songs -- or less than 17% of the songs found on iTunes. It makes for a nice headline, but it's difficult to see this getting very far.

Filed Under: denmark, drm, free, music, subscription
Companies: tdc

Ringtone Sales Falling As People Realize They Don't Need To Pay Twice

from the took-'em-this-long? dept

I have to admit that about the only surprising thing in the news last week from BMI that ringtone sales are likely to drop this year is the fact that it took this long. Since 2004 we've been wondering when people would get around to realizing that just because a ringtone is on a phone, it doesn't change the basic economics (which are even worse, as the industry kept trying to push the price of ringtones higher to "save" the industry). With users finally realizing that they can transfer songs they have elsewhere onto their phones as ringtones, the desire to pay huge fees just to prop up the recording industry just isn't going to work any more. No wonder the industry is now jumping on the music tax plan.

Filed Under: economics, music, ringtones

Warner Music Latest To Jump On The Music Tax Bandwagon

from the please,-gov't,-save-our-business-model! dept

Remember earlier this month how there was a story about a guy going around pitching a required tax on ISPs for music sharing as a good idea? Well the main guy who was pushing that proposal has now been hired by Warner Brothers to make it a reality. While the idea is gaining some momentum, it doesn't change the extremely questionable nature of this proposal. It's a proposal based on the laziness of industry execs, who want others to go out and collect money for them, which they'll then get to "distribute" (by which we mean not actually distribute) to musicians.

The fact is that there is simply no reason for this proposal to go ahead. It treats everyone as a criminal first. In the article, one supporter of the plan even admits this:

"At this point, 96 percent of the population is guilty of some sort of infringement, whether they're streaming or downloading or sharing. What we have here is the widespread use of technology that declares all of the population to be illegal."

While that 96% number is made up and pure bunk, it's a bizarre world in which someone claims that nearly everyone is breaking the law and therefore we should punish everyone, rather than get rid of the law. Considering that more and more musicians are showing that there are perfectly good business models that don't require treating everyone as a criminal, can someone explain why this "music tax" should be put in place? And can they then explain what will happen when every other industry wants its own "you're a criminal" tax included on internet connectivity?

Filed Under: copyright, jim griffin, music, subscriptions
Companies: warner music group

Wal-Mart Plays Hardball on CD Prices

from the everyday-low-prices dept

Please note the update at the end concerning the timing of this story. Good news for consumers: Rolling Stone is reporting that Wal-Mart is using its considerable negotiating power to demand lower CD prices from the recording industry. Wal-Mart and other retail stores have been using CDs as a loss leader to get customers in the door sell higher-priced merchandise. Now the retail giant has issued an ultimatum: give us CDs for less than ten bucks or Wal-Mart we'll sell DVDs and video games on those shelves instead. It seems unlikely the labels have much leverage here. The CD market is steadily shrinking, and will probably disappear entirely within the next decade, so Wal-Mart has relatively little to lose if it cuts the space it allocates to recorded music. Of course, the labels' bargaining position might not be so weak if they hadn't spent the last decade trying to kill online business models that might have given them alternative revenue sources. On the other hand, the labels could be pleasantly surprised by the result of these price cuts. Demand for music is likely to be pretty elastic, so even if they're earning less per sale, some of that might be made up through greater volume. Update by Mike: As noted in the comments, it turns out this story is from a few years ago. I'm guessing Tim found it on Slashdot, which made a similar mistake. Either way, I, personally apologize for letting this through and will be more careful in the future. That said, I think Tim's analysis is sound, even if the original effort is from a few years ago. The fact that the situation has only gotten that much worse over the past four years shows how little the record labels have been able to come to terms with what's going on out there in the marketplace.

Filed Under: cd prices, loss leaders, music
Companies: wal-mart