Universal Music CEO: We're Not In This To Make Art

from the of-course-not dept

Whenever debates come up about disruptive innovation in the entertainment industry, the big record labels and big movie studios like to fall back on claiming that they (and often they alone) are the last vanguards protecting our culture. They talk about how, without greater copyright protections, their "art" may die off. But, of course, as most normal people recognize, the labels and the studios (and the RIAA and MPAA who represent them) are not representing art at all, but commerce -- and just a specific type of commerce. They represent the gatekeeper model, which makes less and less sense in a digital world where we need filters and enablers, not gatekeepers. But it's pretty rare for them to actually admit that, since their entire public persona and lobbying efforts are based on "we represent culture and art."

And then, finally, an exec speaks the truth. In a quite interesting New Yorker profile of Scooter Braun, the man who made Justin Bieber into Justin Bieber, Lucian Grainge, CEO of Universal Music Group (the biggest of the record labels) explains why he named Braun the company's first technology "entrepreneur in residence" by admitting that "art" has nothing to do with Universal Music:

The company likes hits, the fans like hits, and that's what he's there to do--make hits. We're not in the art business.

It seems like people should remind him of this every time he or his lackeys claim they're defending art. Separately, the rest of the Braun profile is well worth reading. It highlights exactly what we've been saying for quite some time, that the real "business" these days is in finding other areas of the market you can build a business around -- areas that are made more valuable by digital content:

In the beleaguered music industry, few managers can afford to focus on just selling music anymore. When Braun met David Geffen, at a party a couple of years ago, he said that Geffen had one bit of advice for him: “Get out of the music business.” So Braun has been converting his twelve-person company, SB Projects, into a many-faceted organization: it now has film and TV arms (Braun recently sold a scripted show, and has reality shows in development), a publishing division, and a technology-investment unit, in addition to a label and a management company.

And how is he building up many of those other businesses? By leveraging the star power of Justin Bieber -- something that can't be "pirated" and which is a true scarcity that Braun can control:

His YouTube channel is approaching three billion views, and on Twitter, where he acquires a new follower every other second, a single tweet from him can mobilize his supporters to perform stunning feats: sell out Madison Square Garden in seconds, conjure a horde of three hundred thousand tweens in Mexico City, induce fans to buy a hundred and twenty million dollars worth of perfume (Bieber’s fragrance, Someday), or influence the conversation about world events—in March, Bieber’s tweets brought attention to the campaign to apprehend the Ugandan warlord Joseph Kony.

[....] Barry Lowenthal, the president of Media Kitchen, an ad agency that is promoting Bieber’s new fragrance, Girlfriend, told the Times that the reach of a Bieber dispatch across networks like Facebook and Twitter would cost ten million dollars to replicate through conventional advertising methods.

As the article really highlights, there are plenty of ways to make money in the business today -- but a lot of it isn't specifically about selling music. And while some people insist that's "selling out," Braun sees it differently:

"I don't think you're selling out by allowing the masses to love your art."

And the end result is what we've been saying all along. There's tons of opportunity in and around the music business if you're smart and you know how to build a good business around it. In fact, the market is growing, and Braun recognizes that:

"This isn't a dying business, this is a changing business," he told me. "CD sales have declined drastically, but the over-all business has grown: licensing, merchandising, digital sales."

It always seems that, in these discussions, there's often an implicit conflict between art and commerce, when there doesn't need to be. But if someone's defending commerce, it should be clear that's what they're defending, and they shouldn't try to confuse that by claiming that they're really defending art or culture. Art and culture will live on no matter what. Commerce will shift around to the markets most appropriate. Neither need defending on their own, as they seem to survive just fine. The only thing struggling is one particular sector of the entertainment industry which built a "hit driven" business based on being a gatekeeper. And now we live in a world where such gatekeepers aren't necessary, and businesses can be built in other ways.

Filed Under: art, business models, commerce, justin bieber, lucian grainge, music, record labels, scooter braun
Companies: universal music

Commerce Is Bad?

from the rationalization-for-noncommercial-restrictions dept

Filed Under: commerce, economics

Patent Troll Going After iPhone/iPad Developers Who Use In-App Payments

from the oh-come-on dept

Another day, another example of a patent system holding back innovation. The latest is that a typical patent troll operation, named Lodsys, is threatening and/or suing a bunch of iOS mobile app developers for daring to make use of Apple's own in-app payment API to offer the ability to make purchases from within their apps. Lodsys lists out four patents that "are available for licensing."

• 5,999,908: Customer-based product design module
• 7,133,834: Product value information interchange server
• 7,222,078: Methods and systems for gathering information from units of a commodity across a network
• 7,620,565: Customer-based product design module

It appears that whichever patents Lodsys is using in bringing this claim, it's applying them extremely broadly. Meanwhile, the various developers who have now been sued are pretty freaked out. Most of them appear to be small shops -- perhaps just an individual developer -- whose big "mistake" was to actually use the tools Apple provided to make their software better. I can't see how anyone can defend a lawsuit like this as promoting the progress. The idea that in-app payments wouldn't have come along without these patents is -- on its face, preposterous in the extreme. Putting in-app payments into products is a natural evolution, and any programmer with a modicum of skills could have figured out ways to implement it. To claim that a patent was needed in this arena is simply ridiculous.

Filed Under: commerce, in-app payments, patents, trolls
Companies: apple, lodsys

The Web, Creativity And Commerce: The Blurry Line Between Creativity And Ownership

from the nice-quote dept

Michael Geist points us to Ivor Tossell's final web column for the Toronto Globe & Mail, which is all about how fans kept the Star Trek universe alive, creating incredibly detailed fan versions of the shows, despite all of the offical shows having ended. In many ways, it's similar to the recent story we had about a fanmade Lord of the Rings movie. But the best point is made at the end (the emphasis is mine):

There's a lot of things you can do with the Internet. You can sit around all day, strip-mining the Net for free movies. You can disappear into virtual worlds. You can log onto your favourite website and leave a comment that will cause readers to wonder whether the planet wouldn't have been better off left to the dolphins.

You can buy a webcam and do something profoundly embarrassing that will render you unemployable for years. You can spend your days filling up Facebook with a hollow performance of yourself. You can create a Web service that seems destined to change everything, only to discover - several billion dollars later - that it really changed nothing, because people are people, and the more things change, the more they stay the same.

Or you can make something. On the sunniest days, I look at the Web and I see a world of people making things. Maybe they're cat videos; maybe they're full-blown recreations of science-fiction series from the late sixties. Either way, the creative process never happens in a vacuum. It's an endless back and forth of ideas and materials, and some of them will always cross the lines of ownership and copyright.

It's unusual to tell a story of an online project that takes a corporate work, uses its intellectual property to make something new, and gets rewarded instead of sued. But then, Star Trek has always envisioned an inexplicably cheery future in which creativity trumps commerce. It's science fiction, all right, but let's run with that.

Indeed. This is an important point. The web really is an incredible tool for creativity and making stuff. It's really too bad that copyright often gets in the way of that.

Filed Under: commerce, creativity, ownership