The paradigm here isn’t MTV, but Napster.<\/p>\n
MTV wasn’t pirating the labels’ wares, building a business without compensation.\u00c2\u00a0 Hell, at first the labels were eager to give MTV videos.\u00c2\u00a0 Only after record companies experienced the juggernaut did they demand payment, and they ultimately received it, albeit minimally.\u00c2\u00a0 By then they’d lost their leverage, not that they really cared, because they were selling boatloads of records.<\/p>\n
But now the labels are hurting.\u00c2\u00a0 They’re turning over every rock looking for found money.<\/p>\n
The only problem is twentysomethings and thirtysomethings are turning over the rocks first, and using copyrighted wares to build businesses.<\/p>\n
This flummoxes major labels.\u00c2\u00a0 They used to be in control.\u00c2\u00a0 They’ve got the law on their side.\u00c2\u00a0 How did things go so horribly wrong?<\/p>\n
Call it the Napster effect.\u00c2\u00a0 You’ve got to steal the labels’ wares, because you’re never gonna get a license.<\/p>\n
Oh, Ted Cohen did some innovative deals at EMI, before he got frustrated and left the company.\u00c2\u00a0 But his bosses weren’t open to new ideas until years after Napster, after the die had been cast.<\/p>\n
Have a good idea for a business employing music?\u00c2\u00a0 Try to be reasonable and ask for permission?\u00c2\u00a0 You won’t get it.\u00c2\u00a0 You’ll spin your wheels, wasting time and money, and eventually be forced to go out of business, or launch on such a limited, hamstrung basis, that you’ll end up with a site\/service that no one wants to use.<\/p>\n
So act brazenly, steal with impunity.\u00c2\u00a0 Maybe, like the principals of Hummer Winblad, you’ll be sued personally for your efforts, but you’ll go down in the history books as bringing the future to the people, as pushing the envelope, as doing a good thing.<\/p>\n
Without Napster, there’s no iTunes Music Store.<\/p>\n
Without the Rio, there’s no iPod.<\/p>\n
Don’t ask!\u00c2\u00a0 Hell, record execs are too busy in marketing meetings figuring out how to get their wares placed in the few existing slots on radio so they don’t get fired to pay attention to your wacky idea until it gets traction.<\/p>\n
YouTube got traction.\u00c2\u00a0 Airing videos that the labels didn’t even know existed, oftentimes of acts so old no nobody was working at the company when their records were released.\u00c2\u00a0 The Internet brings catalogues alive.\u00c2\u00a0 This is a good thing.\u00c2\u00a0 And the labels didn’t care, since everybody in charge is working on new stuff, even though the guy in the basement selling the old stuff is making all the money.<\/p>\n
But then YouTube started playing new stuff.\u00c2\u00a0 Well, that’s good, since exposure sells records, that’s Marketing 101.\u00c2\u00a0 But suddenly YouTube is a media darling, and might sell for as much money as MySpace.<\/p>\n
Yes, Murdoch seemingly overpays for MySpace, yet has his chip covered by an advertising deal with Google.\u00c2\u00a0 And despite all the hoopla about indie acts breaking on the service, the real story is it’s a haven of rampant copyright infringement, since seemingly every one of its tens of millions of users is utilizing copyrighted music on his space\/page.<\/p>\n
Funny how it took so long for the majors to react.\u00c2\u00a0 Especially to MySpace.\u00c2\u00a0 Everybody knows you log on to someone’s page and you hear their favorite music.\u00c2\u00a0 Was no one at a label using the site?\u00c2\u00a0 Is everybody really that out of touch, with his head up his ass, focusing on radio and even MTV to the exclusion of what’s really happening?\u00c2\u00a0 Or is it that when they found out about the MySpace action they believed the site could be utilized to break their acts, not realizing unlike radio or TV there were endless channels and it was almost impossible to get traction.<\/p>\n
Major labels\/rights holders should be paid for the utilization of music on these sites.\u00c2\u00a0 Anybody who believes otherwise not only has no understanding of copyright law, they lack a moral compass.\u00c2\u00a0 But how should this be done?<\/p>\n
Employing the Napster model above, it appears that labels want sites eviscerated, or they desire the lion’s share of the money.\u00c2\u00a0 The labels are so worried about control, and so unworried about the check!<\/p>\n
Imagine a legal\/authorized Napster.\u00c2\u00a0 There’s no KaZaA.\u00c2\u00a0 And certainly no legal expense fighting KaZaA and its brethren.\u00c2\u00a0 There’s only income.<\/p>\n
But it’s tainted income.\u00c2\u00a0 Because the idea wasn’t fostered within the halls of the label.\u00c2\u00a0 Outsiders, not members of the club, are profiting.\u00c2\u00a0 Doug Morris is a king, he can’t be a pawn in their game.<\/p>\n
But he is.\u00c2\u00a0 Music is an element of these services.\u00c2\u00a0 Not their raison d’etre.\u00c2\u00a0 Eliminate the music from YouTube and MySpace and they still exist.\u00c2\u00a0 So, you must license them.<\/p>\n
But there’s no statutory rate.\u00c2\u00a0 It’s all subject to agreement.<\/p>\n
Sure, Yahoo and AOL made deals for video on demand, but they’re run by old wave players afraid of the copyright police.\u00c2\u00a0 YouTube?\u00c2\u00a0 Come sue me!\u00c2\u00a0 Even Murdoch.\u00c2\u00a0 He knows there’s rampant piracy on MySpace and doesn’t seem to give a shit.<\/p>\n
So the labels want too much.\u00c2\u00a0 Or a guaranteed figure, even though the real money’s in percentages.\u00c2\u00a0 If you believe in YouTube and MySpace, you negotiate a royalty against their revenues.\u00c2\u00a0 With a guaranteed floor.\u00c2\u00a0 You go into business with them.\u00c2\u00a0 Yet, the labels are always interested in the short term money.<\/p>\n
But rather than figure out a way to work together, Doug Morris and his ilk want to play sheriff in the wild west.\u00c2\u00a0 Well, if you watched "Deadwood", you know that the law didn’t always win.\u00c2\u00a0 The key is to get in bed with the enemy, to play along and invest in them, rather than shut them down, because you can’t shut them down.<\/p>\n
Doug Morris was antagonistic.\u00c2\u00a0 What does this buy him?\u00c2\u00a0 Can’t he employ the dealmaker persona he utilizes when he wants to sign an act?\u00c2\u00a0 What performer would sign with Universal if Doug were confrontational?\u00c2\u00a0 You’ve got to be a friend.\u00c2\u00a0 A press story should talk about negotiation, it shouldn’t be about lobbing bombs.<\/p>\n
Artists should be paid.\u00c2\u00a0 But the way they’ll make money is to embrace the future, not try to eliminate it, which one can’t do anyway.\u00c2\u00a0 He who surfs the new world will win in the end.\u00c2\u00a0 No one can stop the wave.\u00c2\u00a0 Just get on your board and ride!<\/p>\n
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