Have you seen this? From last week's New York Times:
Internet Providers to Help Thwart Online Piracy
By BEN SISARIO
In a deal with the major entertainment
media companies that has been years in the making, the leading Internet
service providers have agreed to a uniform procedure for notifying
customers about repeated instances of digital copyright infringement.
The Internet providers, including AT&T, Cablevision, Comcast Verizon and Time Warner Cable, announced the deal on Thursday in Washington with the major trade associations for movies and music, the Motion Picture Association of America, the Recording Industry Association of America, as well as organizations representing independent filmmakers and record companies.
The new procedure, which is expected to go into effect early next year, is known as a graduated response, and establishes a series of six warnings that an Internet service provider, or I.S.P., can send a customer whose account shows signs of infringing activity.
These warnings escalate from simple e-mail notifications to a set of “mitigation measures,” like slowed connections or a block from Web surfing altogether. As the steps progress, a user must acknowledge to his I.S.P. that he understands the notice, and the user can also contest the complaint.
“This is a sensible approach to the problem of online-content theft and, importantly, one that respects the privacy and rights of our subscribers,” Randal S. Milch, executive vice president and general counsel of Verizon, said in a statement. “We hope that effort –- designed to notify and educate customers, not to penalize them –- will set a reasonable standard for both copyright owners and I.S.P.’s to follow, while informing customers about copyright laws and encouraging them to get content from the many legal sources that exist.”
The agreement also sets up a clearinghouse, the Center for Copyright Information, to monitor the alert system and deal with infringement issues. The center is expected to have a board made up of representatives of both the media companies and the I.S.P.’s.
The deal is a victory of sorts for entertainment media companies, which have long complained that Internet providers were not doing enough to combat piracy. Yet while the system establishes guidelines for the I.S.P.’s in how they contact their customers, it does not replace the existing legal framework for online copyright infringement. That process, established by the Digital Millennium Copyright Act in 1998, allows I.S.P.’s to shut down an infringing Web site if directed by a copyright holder.
Bob Lefsetz, who seems to have more time on his hands than I do, pretty much nails it. Or at least I think he does. And believe me, it's not easy for me to give props to Bob Lefsetz. I'll save why for another time. But check it out:
Beware of the copyright bullies.
Mickey Mouse was about to go into the public domain. So what did Michael Eisner, head of Disney, do? Pay his lobbyists to get an extension of copyright. Yup, it was just that simple. That's how America works. Is it good for the public? Don't ask that question, otherwise you'll be questioning our entire government.
Not that this agreement is law. But it was brokered by the government. Obama wanting to pay off the lefties he can count on to support his reelection campaign. Hell, Rahm Emanuel's brother runs WME, need I say more?
This policy is so wrongheaded it makes me wonder if the copyright holders have lived through the last ten years.
Let's see. You kill Napster and it's replaced by KaZaA. You kill KaZaA and it's replaced by Limewire. You kill Limewire and it's replaced by BitTorrent. You attack the Pirate Bay and now infringers use lockers...RapidShare, Megaupload, they're multiplying like rabbits.
In other words, why don't we go back to Vietnam. Spend a bunch of money to push back an indeterminate enemy whilst putting out press releases stating that we're on our way to victory!
Huh?
Ten percent of the people will always steal. I'm quoting the aforementioned Mr. Eisner here. Forget 'em, write 'em off, they're never going to pay, they're the same people who wanted to borrow your vinyl records to make cassettes but never bought an album themselves.
The rest of the public? People are interested in convenience, a better offer. Apple products are more expensive than the competition's, why does the company keep winning? Because the perception is their wares re superior and you've got less downtime due to viruses/worms/complications...
Hell, if the content industries really wanted to triumph they'd offer help lines, genius bars, both physical and phone, hell, allow people to IM, helping them with the use of new content delivery systems.
That's how you win the war. By going where the people are, by leading them into something better.
Stop focusing on today's margins. Will you make as much money tomorrow? I don't know, but if you keep holding back the future you certainly won't. Our nation's business history is an endless river of innovation, throwing off revenue streams inconceivable previously. There's no YouTube without broadband. Where is our national broadband policy? Where are the lightning speeds of South Korea? Content industries don't want them, because you can deliver a movie in minutes. But did you ever think as a result you'd end up with new revenue streams, like Hulu, which is about to pass half a billion dollars a year in revenue!
And this newfangled policy is essentially toothless. And it assumes that what the content providers say is true, that traders are infringers. But even though this is frequently the case, it's not always true. Do you like a country where you're guilty until proven innocent? What happened to the American way? What about holding that terrorist suspect on a ship for months without charging him? What happened to habeas corpus? Is America so afraid that it's willing to throw out the rule of law? Don't you want to be able to depend on the system if you're charged unnecessarily?
If one guilty person goes free that's better than killing an innocent man. But not in the content world, where there's a scorched earth policy trying to jet an entire nation into the past, an entire world.
The issue isn't piracy, it's content providers' inability to deliver their product in a way the public wants to use it.
Release those movies online for a low price day and date. If it impacts exhibitors, so what. Isn't this what got the music industry in trouble, delaying digital sales to placate Wal-Mart? And what does Wal-Mart do, shrink floor space, order fewer SKUs, huh?
Lower the price of music. Yup, music's overpriced, hate to tell you that. What's better, to get a few people to pay a lot and have the rest steal or getting everybody to pay a little. Don't fight on principle, be practical.
The RIAA has been wrong time and again. The RIAA should not be fighting digital piracy, it should be bopping copyright holders over the head to license innovative startups. Furthermore, what's hip today is passe tomorrow. Yesterday it was Pandora, today it's Turntable.fm. Charge now, ride into the future with innovators, don't try to maintain your old business model.
And too many of the artists are on the wrong side. So busy making their music, they're clueless as to digital realities. Filmmakers are the worst, especially the successful ones. I'm gonna let you in on a secret, digital allows everybody to play, from the wankers to the iconoclastic geniuses. The major labels have hemorrhaged market share to indies as a result of digital home recording and digital distribution. The movie business wants to maintain its monopoly. They're not fighting for the people coming up, but trying to keep them down.
The truth hurts.
If you think the major label or the big studio is on your side you've never had a success with either. If they pay at all, it's a fraction of what you're owed.
And streaming is the future anyway. Focusing on downloads is like focusing on pirate CDs. Wait, they're doing that! They want to circumvent the law to prevent it! What next, a campaign against illegal 78s? Wax cylinders?
If the music business were smart, and it's not, it would lower digital track prices by two-thirds, have a going out of business sale. And that's what's happening, streaming is here to replace it. Digital tracks are like ringtones, a momentary business. And if we had that aforementioned national broadband policy we could deliver hi-res files, getting people to buy what they've already purchased all over again, like we did with CDs!
Do you want to give up your e-mail? Do you want to be limited to a BlackBerry in an iPhone world? How about killing on demand TV and the Slingbox and every other innovation that makes consumption of copyrighted material easier. That's what the content providers want, the old model.
But the people do not. The people are pissed at the copyright bullies. These corporations would do better to make peace instead of war. Spotify is a piracy killer. But what does Warner do? Refuse to license it! As if anemic initial streaming royalties should be forgone to keep the CD alive. This is like refusing to license 8-track duplication because you don't want to kill vinyl records. Yes, the labels outsourced 8-track production, until they realized tape was the future and built their own duplication facilities which are now accumulating dust if not completely plowed over.
Let's save TDK. And Maxell. And Nakamichi. Why not? They were profitable, they had employees, don't they deserve to live?
No corporation deserves to live. You've got to earn your longevity. And today's media behemoths are doing their best to eviscerate their futures. Tech is both the problem and the solution. You don't succeed by resting on your laurels, but killing your young and replacing them with newborns. The iPhone is killing the iPod. If Apple were run by Doug Morris the iPhone would be shelved and the iPod would rule until it fell of a cliff and so did the company. Isn't this EXACTLY what happened to Sony? Sony's no longer my first choice in ANYTHING!
The future will come despite the antics of these despots. And it will benefit those not wedded to the past, willing to take risks.
Hopefully, that's you.
and
Is anybody other than the major labels complaining the Internet has made music worse? That free music has ruined the incentive to create? That if we don't overpay we'll get lousier tunes?
This fiction has been created by a well-compensated class that doesn't realize it's involved in an epic battle between the haves and the have-nots. One they cannot win until they come down off their perch and get into the pit with their customers.
How does it FEEL?
That's what Bob Dylan sang.
I ask you, how does it feel to get ripped off, paying $12.99 for a CD with one good tune?
How does it feel to be a fan of the band but find out that you've got to pay far in excess of the printed price to attend the show?
What is end game here? What do labels and promoters think is going to change? Do they think they can put all the customers in reeducation camps where they'll be happy to fork over all their cash to a ruling class?
Yes, that's how the fans see the artists. As rich. Why should I buy that guy's music when he's constantly flying around on his private jet, when I read online he grossed double digit millions last year? I'm struggling, he can afford it.
Of course that's an oversimplification of the issues, but that's how the customer sees it, ignorant or not. Wouldn't it be best to educate the customer? And you can't educate him by telling him you've got to make all this money to be much richer than he is. The fan has to be seen as doing you a favor, investing in you to keep you alive, to hear great new music. Buying music and going to a show are completely different from buying broadband service, or milk or eggs. Most people don't even know what brand of eggs they consume, but try to get them to go to a show of an act they don't enjoy, or don't even know, it's impossible.
Lady Gaga has got this right. From the very start, she positioned herself on the side of her fans, her Little Monsters. She fought the big bad Target on behalf of her homosexual followers. Gaga is about doing what's right instead of what's expedient.
Honesty, transparency, access and trust. Those are the bywords of business today. But where are they found in the music business?
You want the album but if you buy it at iTunes or Amazon or Target it's different, you can't get all the tunes you want. Huh? This is good for the fan how?
You've got to join the fan club or get an AmEx card to get a shot at a good seat. That's like having to buy a personal seat license to go to the supermarket.
How did we go so wrong?
A culture of greed. And people ascending the ladder and feeling entitled to their new lifestyle.
This is hampering not only music, but all of America. People want jobs. When Goldman Sachs complains about regulations no wonder the people hate them, they're so rich!
Do you see Steve Jobs posting about his wealth?
How about Warren Buffett. Actually, he testifies for higher taxes, for more equitable distribution of wealth, he's pledged to give his fortune away, isn't it interesting that he gets a public pass, even though some of his dealings are questionable.
The content industries get no pass, because of their horrendous record of egregious behaviors.
The customer is king. He'll pay a fair amount for what he wants. Don't try to trick him into buying crap through subterfuge, the Internet was built to ferret out such duplicitous behavior.
Being a successful act is about pleasing fans. Sure, you might employ radio and press to get to this spot, but if you think that radio and press are your friend, just call them up when you're broke and on the bottom. A fan will come right over, buy you a meal, cover you in his blanket. The fan believes you're still number one.
A fan does not care if you're rich if he believes you earned it, and he helped build you. But don't be greedy. That turns off the rank and file.
There's an illusion in this country that because corporations control the government, because the rich employ lobbyists and get their way, that the elite run this country. This could not be more wrong. The people run this country, the rank and file. Who now have access to information on the Internet.
People don't feel bad about stealing movies or music. It's not like any of these companies have gone out of business, and look at the outrageous salaries paid Lyor Cohen and Irving Azoff, you're gonna feel sorry for Warner Music or Live Nation?
If you believe the public is an ungrateful bunch of thieves you're gonna get the biggest wake-up call of your life. You'd better cash out now and hide your money, go live on a desert island. Because it's all going topsy-turvy. You're either with us or against us. Either you're giving us free material to go with the stuff we pay for, either you're getting me into the show at a fair price, or you're the enemy.
The public is ahead of the businessmen and the acts. If you want to survive, get on the people's side.
Four years ago, my business partner and I wrote a piece for the New York Times during a particularly difficult time for us and our CD retail business. When NYCD was thriving, every customer who opted out of buying a CD in favor of burning one off of a friend, or "finding it online," felt like a kick in the stomach. Sure, we wanted the sale, but I can speak for both of us when I say, we felt it was more than that.
The Internet providers, including AT&T, Cablevision, Comcast Verizon and Time Warner Cable, announced the deal on Thursday in Washington with the major trade associations for movies and music, the Motion Picture Association of America, the Recording Industry Association of America, as well as organizations representing independent filmmakers and record companies.
The new procedure, which is expected to go into effect early next year, is known as a graduated response, and establishes a series of six warnings that an Internet service provider, or I.S.P., can send a customer whose account shows signs of infringing activity.
These warnings escalate from simple e-mail notifications to a set of “mitigation measures,” like slowed connections or a block from Web surfing altogether. As the steps progress, a user must acknowledge to his I.S.P. that he understands the notice, and the user can also contest the complaint.
“This is a sensible approach to the problem of online-content theft and, importantly, one that respects the privacy and rights of our subscribers,” Randal S. Milch, executive vice president and general counsel of Verizon, said in a statement. “We hope that effort –- designed to notify and educate customers, not to penalize them –- will set a reasonable standard for both copyright owners and I.S.P.’s to follow, while informing customers about copyright laws and encouraging them to get content from the many legal sources that exist.”
The agreement also sets up a clearinghouse, the Center for Copyright Information, to monitor the alert system and deal with infringement issues. The center is expected to have a board made up of representatives of both the media companies and the I.S.P.’s.
The deal is a victory of sorts for entertainment media companies, which have long complained that Internet providers were not doing enough to combat piracy. Yet while the system establishes guidelines for the I.S.P.’s in how they contact their customers, it does not replace the existing legal framework for online copyright infringement. That process, established by the Digital Millennium Copyright Act in 1998, allows I.S.P.’s to shut down an infringing Web site if directed by a copyright holder.
Bob Lefsetz, who seems to have more time on his hands than I do, pretty much nails it. Or at least I think he does. And believe me, it's not easy for me to give props to Bob Lefsetz. I'll save why for another time. But check it out:
Beware of the copyright bullies.
Mickey Mouse was about to go into the public domain. So what did Michael Eisner, head of Disney, do? Pay his lobbyists to get an extension of copyright. Yup, it was just that simple. That's how America works. Is it good for the public? Don't ask that question, otherwise you'll be questioning our entire government.
Not that this agreement is law. But it was brokered by the government. Obama wanting to pay off the lefties he can count on to support his reelection campaign. Hell, Rahm Emanuel's brother runs WME, need I say more?
This policy is so wrongheaded it makes me wonder if the copyright holders have lived through the last ten years.
Let's see. You kill Napster and it's replaced by KaZaA. You kill KaZaA and it's replaced by Limewire. You kill Limewire and it's replaced by BitTorrent. You attack the Pirate Bay and now infringers use lockers...RapidShare, Megaupload, they're multiplying like rabbits.
In other words, why don't we go back to Vietnam. Spend a bunch of money to push back an indeterminate enemy whilst putting out press releases stating that we're on our way to victory!
Huh?
Ten percent of the people will always steal. I'm quoting the aforementioned Mr. Eisner here. Forget 'em, write 'em off, they're never going to pay, they're the same people who wanted to borrow your vinyl records to make cassettes but never bought an album themselves.
The rest of the public? People are interested in convenience, a better offer. Apple products are more expensive than the competition's, why does the company keep winning? Because the perception is their wares re superior and you've got less downtime due to viruses/worms/complications...
Hell, if the content industries really wanted to triumph they'd offer help lines, genius bars, both physical and phone, hell, allow people to IM, helping them with the use of new content delivery systems.
That's how you win the war. By going where the people are, by leading them into something better.
Stop focusing on today's margins. Will you make as much money tomorrow? I don't know, but if you keep holding back the future you certainly won't. Our nation's business history is an endless river of innovation, throwing off revenue streams inconceivable previously. There's no YouTube without broadband. Where is our national broadband policy? Where are the lightning speeds of South Korea? Content industries don't want them, because you can deliver a movie in minutes. But did you ever think as a result you'd end up with new revenue streams, like Hulu, which is about to pass half a billion dollars a year in revenue!
And this newfangled policy is essentially toothless. And it assumes that what the content providers say is true, that traders are infringers. But even though this is frequently the case, it's not always true. Do you like a country where you're guilty until proven innocent? What happened to the American way? What about holding that terrorist suspect on a ship for months without charging him? What happened to habeas corpus? Is America so afraid that it's willing to throw out the rule of law? Don't you want to be able to depend on the system if you're charged unnecessarily?
If one guilty person goes free that's better than killing an innocent man. But not in the content world, where there's a scorched earth policy trying to jet an entire nation into the past, an entire world.
The issue isn't piracy, it's content providers' inability to deliver their product in a way the public wants to use it.
Release those movies online for a low price day and date. If it impacts exhibitors, so what. Isn't this what got the music industry in trouble, delaying digital sales to placate Wal-Mart? And what does Wal-Mart do, shrink floor space, order fewer SKUs, huh?
Lower the price of music. Yup, music's overpriced, hate to tell you that. What's better, to get a few people to pay a lot and have the rest steal or getting everybody to pay a little. Don't fight on principle, be practical.
The RIAA has been wrong time and again. The RIAA should not be fighting digital piracy, it should be bopping copyright holders over the head to license innovative startups. Furthermore, what's hip today is passe tomorrow. Yesterday it was Pandora, today it's Turntable.fm. Charge now, ride into the future with innovators, don't try to maintain your old business model.
And too many of the artists are on the wrong side. So busy making their music, they're clueless as to digital realities. Filmmakers are the worst, especially the successful ones. I'm gonna let you in on a secret, digital allows everybody to play, from the wankers to the iconoclastic geniuses. The major labels have hemorrhaged market share to indies as a result of digital home recording and digital distribution. The movie business wants to maintain its monopoly. They're not fighting for the people coming up, but trying to keep them down.
The truth hurts.
If you think the major label or the big studio is on your side you've never had a success with either. If they pay at all, it's a fraction of what you're owed.
And streaming is the future anyway. Focusing on downloads is like focusing on pirate CDs. Wait, they're doing that! They want to circumvent the law to prevent it! What next, a campaign against illegal 78s? Wax cylinders?
If the music business were smart, and it's not, it would lower digital track prices by two-thirds, have a going out of business sale. And that's what's happening, streaming is here to replace it. Digital tracks are like ringtones, a momentary business. And if we had that aforementioned national broadband policy we could deliver hi-res files, getting people to buy what they've already purchased all over again, like we did with CDs!
Do you want to give up your e-mail? Do you want to be limited to a BlackBerry in an iPhone world? How about killing on demand TV and the Slingbox and every other innovation that makes consumption of copyrighted material easier. That's what the content providers want, the old model.
But the people do not. The people are pissed at the copyright bullies. These corporations would do better to make peace instead of war. Spotify is a piracy killer. But what does Warner do? Refuse to license it! As if anemic initial streaming royalties should be forgone to keep the CD alive. This is like refusing to license 8-track duplication because you don't want to kill vinyl records. Yes, the labels outsourced 8-track production, until they realized tape was the future and built their own duplication facilities which are now accumulating dust if not completely plowed over.
Let's save TDK. And Maxell. And Nakamichi. Why not? They were profitable, they had employees, don't they deserve to live?
No corporation deserves to live. You've got to earn your longevity. And today's media behemoths are doing their best to eviscerate their futures. Tech is both the problem and the solution. You don't succeed by resting on your laurels, but killing your young and replacing them with newborns. The iPhone is killing the iPod. If Apple were run by Doug Morris the iPhone would be shelved and the iPod would rule until it fell of a cliff and so did the company. Isn't this EXACTLY what happened to Sony? Sony's no longer my first choice in ANYTHING!
The future will come despite the antics of these despots. And it will benefit those not wedded to the past, willing to take risks.
Hopefully, that's you.
and
Is anybody other than the major labels complaining the Internet has made music worse? That free music has ruined the incentive to create? That if we don't overpay we'll get lousier tunes?
This fiction has been created by a well-compensated class that doesn't realize it's involved in an epic battle between the haves and the have-nots. One they cannot win until they come down off their perch and get into the pit with their customers.
How does it FEEL?
That's what Bob Dylan sang.
I ask you, how does it feel to get ripped off, paying $12.99 for a CD with one good tune?
How does it feel to be a fan of the band but find out that you've got to pay far in excess of the printed price to attend the show?
What is end game here? What do labels and promoters think is going to change? Do they think they can put all the customers in reeducation camps where they'll be happy to fork over all their cash to a ruling class?
Yes, that's how the fans see the artists. As rich. Why should I buy that guy's music when he's constantly flying around on his private jet, when I read online he grossed double digit millions last year? I'm struggling, he can afford it.
Of course that's an oversimplification of the issues, but that's how the customer sees it, ignorant or not. Wouldn't it be best to educate the customer? And you can't educate him by telling him you've got to make all this money to be much richer than he is. The fan has to be seen as doing you a favor, investing in you to keep you alive, to hear great new music. Buying music and going to a show are completely different from buying broadband service, or milk or eggs. Most people don't even know what brand of eggs they consume, but try to get them to go to a show of an act they don't enjoy, or don't even know, it's impossible.
Lady Gaga has got this right. From the very start, she positioned herself on the side of her fans, her Little Monsters. She fought the big bad Target on behalf of her homosexual followers. Gaga is about doing what's right instead of what's expedient.
Honesty, transparency, access and trust. Those are the bywords of business today. But where are they found in the music business?
You want the album but if you buy it at iTunes or Amazon or Target it's different, you can't get all the tunes you want. Huh? This is good for the fan how?
You've got to join the fan club or get an AmEx card to get a shot at a good seat. That's like having to buy a personal seat license to go to the supermarket.
How did we go so wrong?
A culture of greed. And people ascending the ladder and feeling entitled to their new lifestyle.
This is hampering not only music, but all of America. People want jobs. When Goldman Sachs complains about regulations no wonder the people hate them, they're so rich!
Do you see Steve Jobs posting about his wealth?
How about Warren Buffett. Actually, he testifies for higher taxes, for more equitable distribution of wealth, he's pledged to give his fortune away, isn't it interesting that he gets a public pass, even though some of his dealings are questionable.
The content industries get no pass, because of their horrendous record of egregious behaviors.
The customer is king. He'll pay a fair amount for what he wants. Don't try to trick him into buying crap through subterfuge, the Internet was built to ferret out such duplicitous behavior.
Being a successful act is about pleasing fans. Sure, you might employ radio and press to get to this spot, but if you think that radio and press are your friend, just call them up when you're broke and on the bottom. A fan will come right over, buy you a meal, cover you in his blanket. The fan believes you're still number one.
A fan does not care if you're rich if he believes you earned it, and he helped build you. But don't be greedy. That turns off the rank and file.
There's an illusion in this country that because corporations control the government, because the rich employ lobbyists and get their way, that the elite run this country. This could not be more wrong. The people run this country, the rank and file. Who now have access to information on the Internet.
People don't feel bad about stealing movies or music. It's not like any of these companies have gone out of business, and look at the outrageous salaries paid Lyor Cohen and Irving Azoff, you're gonna feel sorry for Warner Music or Live Nation?
If you believe the public is an ungrateful bunch of thieves you're gonna get the biggest wake-up call of your life. You'd better cash out now and hide your money, go live on a desert island. Because it's all going topsy-turvy. You're either with us or against us. Either you're giving us free material to go with the stuff we pay for, either you're getting me into the show at a fair price, or you're the enemy.
The public is ahead of the businessmen and the acts. If you want to survive, get on the people's side.
Four years ago, my business partner and I wrote a piece for the New York Times during a particularly difficult time for us and our CD retail business. When NYCD was thriving, every customer who opted out of buying a CD in favor of burning one off of a friend, or "finding it online," felt like a kick in the stomach. Sure, we wanted the sale, but I can speak for both of us when I say, we felt it was more than that.
We thought it was our duty as long time music fans/nerds to support both the artist and the label. But, as we watched our empire slowly and painfully become a sinkhole, we couldn't help blame the majors. We felt betrayed. Our OP-ED is below.
Spinning Into Oblivion
DESPITE the major record labels’ best efforts to kill it, the single, according to recent reports, is back. Sort of.
You’ll still have a hard time finding vinyl 45s or their modern counterpart, CD singles, in record stores. For that matter, you’ll have a tough time finding record stores. Today’s single is an individual track downloaded online from legal sites like iTunes or eMusic, or the multiple illegal sites that cater to less scrupulous music lovers. The album, or collection of songs — the de facto way to buy pop music for the last 40 years — is suddenly looking old-fashioned. And the record store itself is going the way of the shoehorn.
This is a far cry from the musical landscape that existed when we opened an independent CD shop on the Upper West Side of Manhattan in 1993. At the time, we figured that as far as business ventures went, ours was relatively safe. People would always go to stores to buy music. Right? Of course, back then there were also only two ringtones to choose from — “riiiiinnng” and “ring-ring.”
Our intention was to offer a haven for all kinds of music lovers and obsessives, a shop that catered not only to the casual record buyer (“Do you have the new Sarah McLachlan and ... uh ... is there a Beatles greatest hits CD?”) but to the fan and oft-maligned serious collector (“Can you get the Japanese pressing of ‘Kinda Kinks’? I believe they used the rare mono mixes”). Fourteen years later, it’s clear just how wrong our assumptions were. Our little shop closed its doors at the end of 2005.
The sad thing is that CDs and downloads could have coexisted peacefully and profitably. The current state of affairs is largely the result of shortsightedness and boneheadedness by the major record labels and the Recording Industry Association of America, who managed to achieve the opposite of everything they wanted in trying to keep the music business prospering. The association is like a gardener who tried to rid his lawn of weeds and wound up killing the trees instead.
In the late ’90s, our business, and the music retail business in general, was booming. Enter Napster, the granddaddy of illegal download sites. How did the major record labels react? By continuing their campaign to eliminate the comparatively unprofitable CD single, raising list prices on album-length CDs to $18 or $19 and promoting artists like the Backstreet Boys and Britney Spears — whose strength was single songs, not albums. The result was a lot of unhappy customers, who blamed retailers like us for the dearth of singles and the high prices.
The recording industry association saw the threat that illegal downloads would pose to CD sales. But rather than working with Napster, it tried to sue the company out of existence — which was like thinking you’ve killed all the roaches in your apartment because you squashed the one you saw in the kitchen. More illegal download sites cropped up faster than the association’s lawyers could say “cease and desist.”
By 2002, it was clear that downloading was affecting music retail stores like ours. Our regulars weren’t coming in as often, and when they did, they weren’t buying as much. Our impulse-buy weekend customers were staying away altogether. And it wasn’t just the independent stores; even big chains like Tower and Musicland were struggling.
Something had to be done to save the record store, a place where hard-core music fans worked, shopped and kibitzed — and, not incidentally, kept the music business’s engine chugging in good times and in lean. Who but these loyalists was going to buy the umpteenth Elton John hits compilation that the major labels were foisting upon them?
But instead, those labels delivered the death blow to the
record store as we know it by getting in bed with soulless chain stores
like Best Buy and Wal-Mart. These “big boxes” were given exclusive
tracks to put on new CDs and, to add insult to injury, they could sell
them for less than our wholesale cost. They didn’t care if they didn’t
make any money on CD sales. Because, ideally, the person who came in to
get the new Eagles release with exclusive bonus material would also
decide to pick up a high-speed blender that frappéed.
The jig was up. It didn’t matter that even a store as small as ours carried hundreds of titles you’d never see at Best Buy and was staffed by people who actually knew who Van Morrison was, or that Tower Records had the entire history of recorded music under one roof while Costco didn’t carry much more than the current hits. A year after our shop closed, Tower went out of business — something that would have been unthinkable just a few years earlier. The customers who had grudgingly come to trust our opinions made the move to online shopping or lost interest in buying music altogether. Some of the most loyal fans had been soured into denying themselves the music they loved.
Meanwhile, the recording industry association continues to give the impression that it’s doing something by occasionally threatening to sue college students who share their record collections online. But apart from scaring the dickens out of a few dozen kids, that’s just an amusing sideshow. They’re not fighting a war any more than the folks who put on Civil War regalia and re-enact the Battle of Gettysburg are.
The major labels wanted to kill the single. Instead they killed the album. The association wanted to kill Napster. Instead it killed the compact disc. And today it’s not just record stores that are in trouble, but the labels themselves, now belatedly embracing the Internet revolution without having quite figured out how to make it pay.
At this point, it may be too late to win back disgruntled music lovers no matter what they do. As one music industry lawyer, Ken Hertz, said recently, “The consumer’s conscience, which is all we had left, that’s gone, too.”
It’s tempting for us to gloat. By worrying more about quarterly profits than the bigger picture, by protecting their short-term interests without thinking about how to survive and prosper in the long run, record-industry bigwigs have got what was coming to them. It’s a disaster they brought upon themselves.
We would be gloating, but for the fact that the occupation we planned on spending our working lives at is rapidly becoming obsolete. And that loss hits us hard — not just as music retailers, but as music fans.
I am not condoning music theft. Stealing is stealing. I'm just saying, it doesn't feel as bad as it once did.
The jig was up. It didn’t matter that even a store as small as ours carried hundreds of titles you’d never see at Best Buy and was staffed by people who actually knew who Van Morrison was, or that Tower Records had the entire history of recorded music under one roof while Costco didn’t carry much more than the current hits. A year after our shop closed, Tower went out of business — something that would have been unthinkable just a few years earlier. The customers who had grudgingly come to trust our opinions made the move to online shopping or lost interest in buying music altogether. Some of the most loyal fans had been soured into denying themselves the music they loved.
Meanwhile, the recording industry association continues to give the impression that it’s doing something by occasionally threatening to sue college students who share their record collections online. But apart from scaring the dickens out of a few dozen kids, that’s just an amusing sideshow. They’re not fighting a war any more than the folks who put on Civil War regalia and re-enact the Battle of Gettysburg are.
The major labels wanted to kill the single. Instead they killed the album. The association wanted to kill Napster. Instead it killed the compact disc. And today it’s not just record stores that are in trouble, but the labels themselves, now belatedly embracing the Internet revolution without having quite figured out how to make it pay.
At this point, it may be too late to win back disgruntled music lovers no matter what they do. As one music industry lawyer, Ken Hertz, said recently, “The consumer’s conscience, which is all we had left, that’s gone, too.”
It’s tempting for us to gloat. By worrying more about quarterly profits than the bigger picture, by protecting their short-term interests without thinking about how to survive and prosper in the long run, record-industry bigwigs have got what was coming to them. It’s a disaster they brought upon themselves.
We would be gloating, but for the fact that the occupation we planned on spending our working lives at is rapidly becoming obsolete. And that loss hits us hard — not just as music retailers, but as music fans.
I am not condoning music theft. Stealing is stealing. I'm just saying, it doesn't feel as bad as it once did.
15 comments:
Rather meaty post today, Sal. But it went well with my morning...er, afternoon, coffee. It gave me a lot to think about (mainly: What else does my ISP know about me?), but the bottom line for me, and, I suspect, many others is try as I might, I just can't raise a molecule of sympathy for the major labels. Especially when they go after college kids with outrageous penalties for sharing a few albums.
After paying (more often than not) through the nose for decades for the same albums on vinyl, tape, and CD, I haven't a scintilla of guilt if I treat myself to a download of something I already own three copies of on obsolete media. Perhaps, if as noted in the quoted article, the labels actually employed fair pricing for downloads (or CDs)--although even $1/track is too much IMHO--folks would think twice before using RapidShare, but it will never happen. And for now, sticking to the Man--or rather, the faceless corporate entity--can feel mighty sweet.
OTOH...what kind of bizarre, twisted world are we living in where Lady Gaga gets it right and almost every other pop brandname gets it wrong? That's right up there with viewing Michele Bachmann as a serious presidential contender.
You know, I felt a little bit guilty in high school ('81-'85) for buying promo copies (ie., illegal) in used record stores (Rhino rocked!). Of course, I never could've afforded so many records otherwise (and I was still paying something - keeping some music business going), and I ended up being a big fan of a lot of these bands I took a chance on and spent a lot of money on future releases and/or concerts. But the situation today has no comparison. But, yeah, the record companies have gone something like 1-for-75 in the digital era (the one was making cds, every other decision they got wrong).
Anyway, what really pissed me off when the record companies started suing individuals for illegal downloading was the punitive damages. Well, also, that they assumed the person would've bought everything that was downloaded (hah! - maybe 10 or 25% would have ever been bought, and maybe that's optimistic). But to tack on a $1000 per-album-downloaded to teach the rest a lesson was just grotesque. First of all, they knew Bob and Jill, or whoever had downloaded, say, 500 albums because it was easy and free, could never pay the damages. But still, that's half a million dollars in punitive damages that would fuck up their lives in a deal that is completely in bad faith. Hey record labels - go fuck yourselves. What about all the times they ripped off the artists on their royalties. It's the exact same thing. Did they ever get punitively charged at $1000 per album (unit) royalty unpaid. I don't think so. And they could've afforded it back then... that's when I lost my sympathy for the record labels. (And when there was a new technology, did we ever get credit for already having a "license" for that music? No, that would be ridiculous. The license exists at the convenience and profit of the record label exclusively.)
Oh, man, AmEx for concert seats. A friend bought us tix to a Queens of the Stone Age concert and used his AmEx card for their seats. That section was mostly empty (they were good seats, but I've had better at the Boston Orpheum by going to the box office). I guess QOTSA fans aren't big AmEx holders. Even though the concert rocked, I had a bad taste in my mouth about the AmEx section.
Regarding Walmart, Best Buy... A friend I work with - after telling him that I couldn't find much of what I shop for at Best Buy, looked at me quizzically, what can't you find there? Ummmm, ALMOST EVERYTHING!!! And he's a great guy - just not a big music fan.
But I must admit, the one thing that made the demise of record stores less painful for me was... amazon.com. I have gotten so much good information and product availability from them that I can't badmouth them for adding to the death of record stores. Sorry. I think they deserve their success. I know it's kind of a knee-jerk thing these days to lump them in with any big chain store, but I'm not buying it. Though, I agree that the proprietary extra tracks are stupid BS. At least when they (amazon and itunes) make these extra tracks available for download singly, it's not too bad.
@Big Jim
AmEx "preferred seating" is bullshit. Having an AmEx card doesn't mean you get a choice of the "best seats," it means the seats that were set aside for AmEx cardholders are the seats offered to you. They could be the last 20 rows of the venue.
I'm with you, re: Amazon. Recently though, I was burned twice by being a supporter. Not by Amazon, but by Yep Roc.
I became of fan of the label on Facebook, after years of touting their roster. I pre-ordered both the Loudon Wainwright boxed set and the new Fountains Of Wayne through the label, only to find the Loudon was selling for $10 less on street date than Amazon, and the FOW would have bonus track on iTunes.
Not good looking-out for fans.
And, for the record, it's no longer illegal to buy and sell promos. I don't believe it ever was illegal. Somewhere a judge overturned that bullshit. I have the article somewhere. Just because something sells "do not sell" after it's been given to you? Can I give you a shirt and demand that you do not wear it?
Yeah, I like to buy straight from the independent record labels, too, including Yep Roc, but I always check amazon (and maybe iTunes) to see if they promised them something they couldn't offer to their own customers. That definitely sucks. Though that's not quite as bad as Walmart selling cds for less than NYCD's wholesale price. Dang. I think the O'Jays had a song about that. Back Stabbers. Don't Call Me Brother comes to mind, too. Go O'Jays! For my money, Ship Ahoy is one of the great albums :-)
Piracy of an album is illegal, true music is too expensive, the record companies price a digital lesser quality track for the price of what was a collectable product.
The industry fails to note how the industry has changed. For decades the target market (and profit) was from 16 - 25 year olds with disposable income.
That market has evaporated, so much else competing for their time, easy to get it free, happy to buy one song or track than an album.
CD brought with it an even larger market. The 30 - 50 year old who had done well in life, kids may have grown up,who again had disposable income.
They were fanned in to buying stuff they already owned and re-releases / box sets, even three different versions of the same album.
It extended to cd singles with countless versions.
The price was exhaustive but the fandom wasn't.
But bands stopped releasing albums anually, it became two or three years in between.
Labels found times harder and bands were easily dropped from the roster.
The internet took over.
What it did for that second market was put fans in touch with other fans that they'd never have met.
Broadband brought the opportunity to share stuff easily, just as cd writers did.
It opened a whole new world for fans in that they could get that bootleg / set out of outtakes that was never available.
The decline of the record shop and new product made that obsession grow.
The collector no longer had to search for years for that rarity, it was available quickly.
Friends were made and all that effort going into a record shop and finding two out of twelve things you wanted was unnecessary.
Pressure at work became greater, so available time was spent with people you could get what you wanted from.
I suppose that what I am trying to say is that the big collector market became a swapping game.
None of this is true piracy because it is all stuff that is unavailable to buy and continues to be.
Thousands and Thousands of albums that you can't buy, that you want, bootleg or deleted occupy our time.
That's why a lot of us are here.
It didn't and doesn't stop you buying, there's just less product to buy.
Sal is my mate, at times I talk to him daily, I had never even heard of him in his shop days.
I'm a happier person for knowing him and we both have far more gems than we did.
How on earth are these laws gonna stop that. If they stopped us sharing, we'd buy less.
All it will do is make that 16 - 25 year old listen to the radio more if it follows it's natural conclusion.
That market doesn't want to own the song, they play it until they are sick of it and then delete it.
The people who do want to own it and cherish it have little product that they want to buy.
Oy Universal, Warner et al, sort your business model out, make some deals with the artists you've screwed in the past and release those rarities.
For god sake, stop blaming everyone else for the loss of the easy money, work for it, everyone else does.
Everything from gigs to sport is about getting the maximum money from the true fan, you'll never make a living without embracing the whole market not just the obsessed few.
Interesting post Sal. A few thoughts come to mind.
First and foremost, charging 99 cents for a 3 or 4 mb file with one song on it is a total ripoff.
I've been a record/CD collector almost my entire life and I just turned 60 a few weeks ago. For many years my collecting obsession would have me buying music mags - everything from Rolling Stone to Creem to NY Rocker to Mojo - just to read the record reviews in search of new albums and bands I might like. And I can't count how many times I would buy an album based on a great review and find out when I got home that it was a piece of crap. Being able to download an album before buying it eliminates that problem.
I also can't tell you how many times I heard an album on one blog site or another, by some band I was totally unfamiliar with and liked it so much that I went straight to either Amazon or CD Baby to purchase it.
I still like to go to record stores - even though there are less and less of them around these days. I am a regular customer at Rockit Scientist on St. Marks Place in NYC and John, the owner, who knows my tastes, has turned me on to a number of great records and CDs over the years. But he too is being forced to go with the times and is getting more into selling used vinyl and less into ordering the esoteric 60s reissues that I love so much. I don't think it is what he prefers either but he does what he has to in orde to stay in business.
Another area where the major labels have totally missed the boat. If I have an album or song on mp3 that I really like a lot, I want to own it on a "real" format - either vinyl or CD. Why? Because while mp3's sound fine on my Ipod or my computer speakers, they just don't sound good at all when I am listening to my stereo at home.
When I was in my teens and early 20's, as soon as I started earning money, the first thing I did was go out and get myself a good stereo system - one that I would upgrade from time to time. This was not just me but many people I knew back then. Why are kids today content to listen to their music on sub-standard equipment in sub standard sound? Because they don't know any better. It may be too late now but if the RIAA and its ilk was so intent on 're-educating' their consumers, why didn't they take this approach?
Sorry to go on for so long but this is obviously a hot topic which I have thought about a lot over the years.
The real death knell for me came when Tower went down -- can't recall when exactly that was? But I do recall going in there routinely in the early 00s, and being shocked and amazed that most catalog CDs I picked up were list priced $18.99. Almost every disc I picked up was over-priced. About the only section I could hack was Imports, where I expected high prices. Their fall felt like the end of an era for me, as I associated so much of coming to NYC in the 80s with the wondrous shopping experience of walking into a record store as large as Tower -- it blew my mind.
I look at the fellow music fans I know (in our 40s and 50s for the most part), and all of us have spent thousands of dollars over the years, five-figure sums on music. We've traded A LOT of music back and forth, too, via CD-R and DVD discs burned with tons of music. Even with all that, it's never enough, and we all still spend upwards of $50 per month on music at a minimum. Much more for people who see multiple live shows per week.
I'm all for free music of the kind you have going -- mixes and such, the occasional rarity album or single. I have zero problems with downloading out-of-print albums and anything commercially unavailable.
Mixed emotions on this topic for sure. Just using myself as an example, I used to live with albums and songs for weeks, absorbing them fully over that period of time. Now, it's not an unusual for a friend to forward me a band's whole output, a handful or dozen albums, that in the old days I would have absorbed over the course of weeks. Buying one album, loving it, getting the urge to get others, rushing out and buying two or three at a shot, hunting down imports and rarities, bootleg material, etc.
That's all gone now! And it feels strange. I can only imagine how much stranger and emotionally disconnected it must feel for someone raised within this culture without that solid foundation fans of music up through the 90s have ingrained in their system. "Mercenary" might be a good way to describe it -- not sure how else you'd feel downloading Led Zep's entire catalog for free and not really listening to it in any traditional sense.
Excellent post and excellent comments. It's hard to muster the strength to weigh in at length on this topic. I'll just simply say I have been a purchasing music fan for over fifty years who in my prime probably bought five to ten records, cd's or even eight tracks and cassettes a week and now if I buy five to ten cd's or downloads a year it's a lot. Do I feel bad about about getting my music illegally on the interntes and the artists not getting their just rewards, well yes a little with some but I also feel so ripped off by the record companies after years of being overcharged and abused for being a fan (don't get me started on Rhino handmade or that Universal version of it or the Who) I just don't give a shit. And the smart artists aren't making their money from recorded music anymore their making it from merchandise and live performance. Ok more than I wanted to say but it's a big fucking deal what has happened to the music industry and the total mishandling of it by it's keepers.
It is probably too late but the labels should be charging no more than 10 bucks for a cd and 5 for a download. Of course it is too late to save the old industry now. That model is now no longer viable. Great post Sal.
great post sal...it was a different time, glad i grew up with records,and the excitement of a new release or band, top 40 lists and am radio... today?..i used to care but things have changed..get my music where i can, most from friends or file shares..some itunes. love all the comments..big jim and ash hit the nail on the head. i truly am sorry for the small record retailers though, and the loss of knowledge and passion we used to get at these stores....
FYI Here's the latest from Paul Rapp, copyright lawyer and columnist for Metroland in Albany NY: ....
Last week, Big Media (namely the RIAA and MPAA) and the major Internet service companies (including TimeWarner, Verizon, and AT&T) announced a big new program they say is designed to “curb piracy” by Internet users. It is the kind of grandly stupid, innocuous, convoluted and ineffective initiative that could only come from months of negotiations among a bunch of $500-an-hour corporate lawyers who are profoundly out of touch with reality and common sense.
In a nutshell, it goes like this: Investigators from the media companies will continue to monitor suspected “illegal” file sharing over the Internet and will send offending Internet addresses to the ISPs. The ISPs will then contact their customers corresponding to those Internet addresses, telling the users that they’ve been observed sharing files. There are six levels of warnings that will go in sequence, with increasingly dire messages and requirements. Users “caught” file sharing will variously have to respond to the ISP via e-mail or telephone, will be forced to look at a hideously misleading copyright reeducation website, and the like. The unlucky users who reach the sixth level of doom risk being subjected to “mitigation measures,” which could include having their Internet slowed down or, at least hypothetically, shut off entirely.
There’s going to be a procedure where one can protest these warnings, some sort of arbitration deal where a user can try to show that the offending file sharing was in fact legal, and users will be charged $35 for the pleasure of doing so.
Have you ever heard of anything so ridiculous in your life? Me neither. Apparently, this is going to replace the RIAA’s and MPAA’s disastrous campaign of suing their own customers for file sharing, although there is nothing stopping them from continuing to do that. And, of course, this doesn’t impact the rash of private file-sharing suits brought by movie producers that started popping up last year. The press releases stress that the emphasis here is on education and not punishment, and the ISPs are saying that the “mitigation measures” won’t leave any customers without “essential” services like e-mail or Internet phone service.
Reaction to this from the Big Media toadies (including the Obama administration) has been predictably rapturous, like this is the coolest thing ever. Advocacy groups (like EFF, the Future of Music Coalition, and Public Knowledge) and reality-based news and commentary sites (like Ars Technica and Techdirt) have been skeptical, although some have been surprisingly lukewarm and even supportive of the program. I suppose the positive reaction stems from several factors, including: the ISP’s assurances that punishment will be an absolute last resort; that this silly program is much less onerous than most of the alternatives that have been floating out there, like France’s draconian “three-strikes” program that reportedly has people getting bounced off the net droite et gauche; and the fact that anyone getting caught downloading movies and music six times is a freakin’ moron we shouldn’t feel too sorry for in the first place.
But it is as troubling as it is absurd. It leaves customers with unprotected wireless networks and businesses offering free wi-fi vulnerable to punishment. All of these promises of “measured responses” made by all of these mega-corporations could well mean just the opposite. The “education” programs that offenders will be exposed to will consist of copyright maximalist tripe that will ignore the realities of fair use and the fact that Big Media has been digging its own grave with boneheaded policies for years now. And if this bizarre program does get off the ground, it will succeed only in driving users to file-sharing sites that are undetectable by the industry’s investigators.
In other words, the hopelessly banal game of copyright whack-a-mole keeps on rollin’.
A small point, but I think an important one. In many cases, a the big box stores INSIST on a unique package as the cost of entry of a CD (or a toy or a book or a detergent, in some cases). If the label won't provide extras, the WalMarts and Best Buys won't carry the CD.
It's easy for us to put all the blame on the labels. With the death of record chains, the big box stores are a crucial distribution arm for the labels, and not just the majors.
@Dave
That may be so, but what came first?
Back when CDs first started boasting an $18.99 list price, the big box stores cared little about CDs. It was only when they noticed the vulnerability of the greedy majors after CD sales grinded to an embarrasssing halt, that they made their moves and pounced.
It's easy to blame the majors because it's easy to blame the majors.
The fact is, the majors got it wrong most of the time.
Hi Dave,
The Big Box Stores did get it wrong, but IMHO not for the reason you mention.
Pricing was more the issue and then a move to baked beans managers and consistency across all branches as well as pay per display.
All the local artist input into a store and personal recommendations that weren't Top 40 went west.
Sal's absolutely right.
I honestly find it hard to find one major that made a correct decision and actually have ever said they got it wrong.
The best Indies got too big so that the people with the taste and knowledge lost touch with the roster and they got to a too big stage.
Majors have for too long largely been trend followers instead of setters, quick buck and that quick buck is now X Factor.
How many of the bands we adore on here would actually get signed now?
In the K they are trying for something similar, a completely futile move. The technology is not going away and people are only too pleased to turn their friends on to tunes and bands that they have come across. If it is not possible by file download sites then people will email or snailmail memory cards that are now the size of postage stamps and can hold up to 32 meg and getting bigger by the week.
The biz is about cash not music and has been for decades. What they have failed to realise is that the music is not the thing that raises that cash, it is the merchandise and always has been. You just have to look at merchandise in a different way. Records (cylinders to 78s 45s and 33s and now CDs) plus their packaging and now ticket sales are the merchandise not the music. The music could be heard free on the radio.
So what has changed, now we can hear music free from filesharing downloading sites or streaming sites and still the radio. The only problem for the biz is the filesharers that is deemed illegal.
There is a solution for the biz though but they have to change how they look at music and merchandising - music is the advert for the merchandise so make all releases free to download and get that advert out there but produce the cd and vinyl in 12" booklets with good artwork lyrics photos etc. Then if the music is good it will advertise itself and people will want the merchandise.
I say 12" for a reason it makes it harder to copy the artwork etc as most scanners are A4, but also I can't read the small print anymore.
So the biz would not get everyone to buy all the merchandise the is associated with each free download but as has already been said did we ever. We only bought the albums that we liked best.
I called into one of the 300 record shops still open and bought some vinyl this week, sometimes I think the sleeve is better than the pressing it contains, although that is so satisfying to slide out of the dust sleeve and carefully place on the turntable. The shop owner was telling me that vinyl is making a big comeback, again possibly because of technology in the form of cheap USB decks. Good news!
This is a most excellent blog and so nice to see decent debate, thanks for all the words.
mole
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