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Why Starting a Legal Online Music Vendor Is Tough

Soulskill posted more than 5 years ago | from the all-about-the-benjamins dept.

Music 214

Hodejo1 writes "Former MP3.com CEO Michael Robertson offers commentary at The Register saying any attempts to build a sanctioned digital music site today is doomed from the outset. 'The internet companies I talk to don't mind giving some direct benefit to music companies. What torpedoes that possibility is the big financial requests from labels for "past infringement," plus a hefty fee for future usage. Any company agreeing to these demands is signing their own financial death sentence. The root cause is not the labels — chances are if you were running a label you would make the same demands, since the law permits it."

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214 comments

Business logic or monopolistic cartel? (5, Interesting)

StrategicIrony (1183007) | more than 5 years ago | (#24944117)

Just because I'm allowed by law to charge someone whatever I wish for the fruits of my business, this doesn't mean I would, or that I should. I would go out of business very rapidly.

However, if I ran a cartel, controlling a monopoly share of a highly desirable resource... then I guess I understand where they're coming from.

But... wait... aren't monopolies illegal for this very reason?

Re:Business logic or monopolistic cartel? (1)

drakethegreat (832715) | more than 5 years ago | (#24944161)

Except for the fact that these services aren't getting used so they demand ridiculous things but in the end if they can't get people to use it they only have their cartel to blame. Its an expendable resource at this point because its so easy to get it other places then the online stores each label sets up.

Re:Business logic or monopolistic cartel? (5, Insightful)

plen246 (1195843) | more than 5 years ago | (#24944173)

Competition in the free market only really works when competing products are considered to be interchangeable. Unfortunately, the music-consuming public, and much of the on-line music industry, haven't yet caught on that there are alternative, independent sources of good music. Because the entire music delivery system has been built around the big labels for decades, it will require a significant push by on-line music retailers and pull by consumers to shift the industry away from the monolithic model toward a more broadly independent and distributed model. Indeed, the big labels increasingly resemble a cartel (e.g., the RIAA business and their negotiations with on-line retailers) when it should be moving the other way.

Re:Business logic or monopolistic cartel? (3, Interesting)

bsDaemon (87307) | more than 5 years ago | (#24944723)

No, the problem is the problem with any other sort of art -- either people like it or not, and whatever arguments made, for or against, by music/art/literature majors aren't going to change (at least not in any significant way) the way that "regular" people view a piece.

Then there is also the problem of perception associated with the source. I could pay to self-publish a volume of my poems, but it'll be ignored by critics, unavailable to most readers and, ultimately, be a waste of money on my part. If I can't get in a literary magazine or picked up by a traditional publishing house, then the perception is that I'm not any good.

The same is only marginally less true for music, and the only reason that's the case is because of the whole punk/hardcore scene which morphed into "indie," and even then Sub Pop was just a stepping-stone to Geffen for Nirvana, and most "indie" labels have major-label distribution contracts, or try to sell their bands to the big boys so they can take their cut.

So, is most of what's out there today on MTV crap? Yes. Are the new offerings on college radio stations "interchangeable?" Functionally, yes, aesthetically, no.

But, if artists and the public realized that you don't need the distribution channel to be good, then it wouldn't be a problem -- the internet makes record labels and publishing houses anachronistic in the extreme.

Re:Business logic or monopolistic cartel? (2, Insightful)

Chaos Incarnate (772793) | more than 5 years ago | (#24945029)

Maybe record labels. But have you seen some of the crap that's out there? Publishing houses, while perhaps anachronistic in terms of their business method, still serve a valuable function of filtering out the utter crap that you'd otherwise have to sift through on the shelf.

Re:Business logic or monopolistic cartel? (5, Insightful)

Lumpy (12016) | more than 5 years ago | (#24945113)

Then there is also the problem of perception associated with the source. I could pay to self-publish a volume of my poems, but it'll be ignored by critics, unavailable to most readers and, ultimately, be a waste of money on my part.

Huh? are you going to self publish and then hide the books in a closet? Because I have self published 2 photo books and even have them on the shelves at Barnes and Noble. It's not hard to self publish and get your stuff out to the public.

If you self publish, then you have to self promote, self market, and self sell your books. I get maximum profits from that instead of making $0.75(max) a book sold by letting a publisher get all the money by doing all the work. If you want to sit there wishing, go ahead. It's what most writers and photographers do they make something and send it to some publishers and use the hope method.

The successful ones don't hope, they do. They push themselves, and work to get their stuff out there and in people's faces. If you wrote a poetry book, how many public readings are you doing a month? did you travel to Chicago last month for a public poetry reading at the Library? how have you marketed yourself?

0a 6f 6e 6c 79 20 74 68 65 20 6c 61 7a 79 20 66 61 69 6c

Re:Business logic or monopolistic cartel? (2, Insightful)

CastrTroy (595695) | more than 5 years ago | (#24945169)

Regardless of whether there's good music out there from other sources makes no difference. If you want "hot new album", the only way to get it is through paying the copyright holder, and you have to pay whatever price they demand. Sure you could go out and buy 5 * "cool new indie album" for the same price, but you still don't have "hot new album". It's like the argument with Windows and Linux. Sure Linux is free, and maybe even a better product than Windows, but it isn't windows. If you need Windows to run some application, the only way to get a copy of Windows is to pay whatever MS is asking for Windows. That's the problem with competition with copyrightable items. No two items are the same. Some may be comparable, but they aren't the same. I buy mostly independent music myself, but it's going to take a long long long time before most people in society start buying whatever sounds good, and has a good price, rather than whatever has the most marketing.

Re:Business logic or monopolistic cartel? (1)

Richard_at_work (517087) | more than 5 years ago | (#24944263)

Theres nothing illegal about having a monopoly on your own product - and no, that is not what Microsoft had.

Re:Business logic or monopolistic cartel? (5, Insightful)

StrategicIrony (1183007) | more than 5 years ago | (#24944319)

Any label is not a monopoly. The collective bargaining put together by the RIAA cartel may be, however.

I would regard it akin to... All 4 of the airlines that service my city getting together and deciding collectively to triple the price of tickets out of my city.

Yes, there are other, less desirable means of transport. The bus still runs.

Yes, it is possible to start a new airline (or a new major record label), but the barrier to entry is astoundingly high (so much as to make it almost impossible).

If all 4 carriers at my local airport were colluding to set prices artificially high, they would be slapped down HARD.

Because the RIAA labels deal in slightly more nebulous items with slightly less cohesive boundaries, they're allowed to collude all they want and nobody bats and eye.

Re:Business logic or monopolistic cartel? (5, Informative)

Znork (31774) | more than 5 years ago | (#24944545)

Any label is not a monopoly.

Any copyrighted work is a government protected monopoly on its own, which makes the distinction harder to make.

While an airline (or two different airlines) and a bus may get you to your destination, the fact is, despite the significant attempts to make everything sound the same, different songs are not the same destination. And you can't (generally) buy the same song from different entities.

they're allowed to collude all they want and nobody bats and eye.

See, the trouble is they don't really need to collude. Monopoly pricing is set in relation to available disposable income; it's a function of what the consumers will spend. You maximize your revenue when you raise prices to the equilibrium point where higher prices mean lower income (as the higher per-unit revenue wont be outweighed by the lost sales), and not a cent below. (This point tends to be at a level where a significant number of customers cannot afford the product, and is also the main reason for things like region coding and parallel import prevention in other similar product areas)

As the monopoly pricing is set as a function of the same thing, all the players will end up with very similar price points. After that, the main competition going on is exposure and channel control (well, apart from friendly copying).

In essence, monopoly rights are irreconcilable with a free market economy. The business logic when you have a protected monopoly simply doesn't work the same way as competitive industries, so there's a permanent conflict of interest between the bigger players and everyone else. A conflict that is unlikely to be resolved until monopoly rights are restructured as non-exclusive revenue share rights, which simply is unlikely to happen any time soon.

Cover versions (2, Interesting)

tepples (727027) | more than 5 years ago | (#24944597)

And you can't (generally) buy the same song from different entities.

Lennon/McCartney's licensees would beg to differ [wikipedia.org] , as would anyone else who's ever recorded a cover version [wikipedia.org] . I seem to remember seeing at least a dozen different versions of "Macarena" on the old Napster. If there's no cover version of a given song, that's your cue to record one under whatever mechanical license scheme is in effect in your country.

A conflict that is unlikely to be resolved until monopoly rights are restructured as non-exclusive revenue share rights, which simply is unlikely to happen any time soon.

In the case of songs, it has already been so restructured: recording artists share their revenue with composers [wikipedia.org] .

Re:Cover versions (1)

perlchild (582235) | more than 5 years ago | (#24945211)

I took the GP to mean "do away with the concept of revenues from exclusivity for songs" not "the smaller players must share revenues". The problems seem to stem from laws written in the outlook of low-technology means and hard to reach populations being attempted in this era of easily reached population through technology. The industry's rights-sharing is structured with huge record-producing costs, and the assumption that a huge retail store is the only way to reach the listener. Now it's to the record companie's advantage to cling to this belief, they keep a bigger share, while their costs have been made irrelevant(you don't even need to have a physical record anymore). I've yet to see a law that mandates a maximum percentage of profit, but I think it's the only one that would curb their excesses.

Re:Business logic or monopolistic cartel? (0)

Anonymous Coward | more than 5 years ago | (#24944937)

It depends on what you mean by destination. If your intent is to get the experience of riding a particular plane or bus, then you could argue that the owner of that plane or bus has a monopoly. On the other hand, if all you care about is where you are geographically after the ride, then they are not a monopoly. Regardless of whether I listen to Britney or Rihanna for the next 3 minutes, I will still be sitting here in the same place. So, by that token, they are not monopolies. Basically, the transportation/music analogy can be interpreted differently than you have done. Perhaps this point can be made clearer if you consider whether a boat cruise is a monopoly.

Re:Business logic or monopolistic cartel? (1)

totally bogus dude (1040246) | more than 5 years ago | (#24944297)

Monopolies themselves are not illegal. Certain business practices may be illegal if you are considered to be a monopoly that would otherwise be perfectly acceptable. Typically anything which could be construed as leveraging your monopoly in one market to help you in another could come under scrutiny. But even then it's very much dependent on circumstances, which is why you can have a massive trial in which a company can be convicted of illegally abusing their monopoly... and then have nothing actually happen.

Possibly if a record label required you to purchase some specific device from a specific manufacturer in order to listen to their music they'd be doing something illegal; however that's very unlikely since individual labels don't have any kind of monopoly, much less an "illegal" one.

Re:Business logic or monopolistic cartel? (2, Insightful)

StrategicIrony (1183007) | more than 5 years ago | (#24944391)

However, the RIAA represents something like 90% of the music sales in the country.

The RIAA members engage in collusion to set pricing that is detrimental to their consumers.

Since music is not a necessity like fuel or food, this won't come to light in quite the same way, but imagine all of the gasoline companies with half-decent quality gasoline, all making a cartel through which they collude to set prices at their whim?

Price collusion is one of those practices which IS highly illegal when the consumer is offered little other choice.

Possibly if a record label required you to purchase some specific device from a specific manufacturer in order to listen to their music they'd be doing something illegal

Actually, no, that's not illegal. A company can could have chosen to only release their music on Mini-Disc, for example (which would have required purchase of a Sony Mini-Disc player). That's not illegal.

What would be illegal is for 90% of the record companies to collude in making the mini-disc the only outlet for music, and then collecting a premium from vastly overpriced MD players that are now required to listen to all music in the world.

Of course, this is almost exactly what TFA describes the RIAA trying to do, but in digital medium, rather than physical.

Re:Business logic or monopolistic cartel? (1)

Dan541 (1032000) | more than 5 years ago | (#24944627)

but imagine all of the gasoline companies with half-decent quality gasoline, all making a cartel through which they collude to set prices at their whim? Price collusion is one of those practices which IS highly illegal when the consumer is offered little other choice.

It's only illegal IF you can be punished for it.

DVD? (1)

tepples (727027) | more than 5 years ago | (#24944633)

What would be illegal is for 90% of the record companies to collude in making the mini-disc the only outlet for music

Then why was it not illegal for 90 percent of the movie studios to collude in making DVD-Video the only outlet for copies of films sold to the home market?

Re:DVD? (1)

m.ducharme (1082683) | more than 5 years ago | (#24944851)

Well, in part because they're actually trying to make Blu-Ray another outlet for films sold to the home market, and up until recently many of those companies were trying to make HD-DVD into another method to sell movies to the home market. Many movies are also available on PSP as well, last I checked. DVD is, in this case, the overwhelmingly popular choice with consumers, not with companies. This is due in part to the fact that the DRM on DVDs has been cracked. Movie distributors want very badly to wean us all off DVDs for that reason, but consumers are just not willing to go.

Re:DVD? (1)

Chaos Incarnate (772793) | more than 5 years ago | (#24945045)

They hardly colluded; it was market forces that killed VHS, not manufacturers' efforts. I half suspect the only reason they ever tried DVD in the first place were the higher profit margins.

Re:Business logic or monopolistic cartel? (1)

purpledinoz (573045) | more than 5 years ago | (#24944801)

You're exactly right. The law allows me to charge $10000 per hour for my work, but no one in their right mind would pay me that much, and I am the one to blame for having no customers.

People want to download music to their iPods, or whatever music player in whatever format they like, and have the ability to transfer it to other mediums without restrictions, all for a reasonable price. If the labels are unwilling to provide this, then the customers are unwilling to pay.

The problem is that the labels have to accept that they can no longer be the money making machines they used to be, and must work hard for every dollar, just like everyone else. The RIAA's war on their consumers is going to be long and pointless.

The RIAA doesn't want "legal", they want FUD... (1)

Joce640k (829181) | more than 5 years ago | (#24944905)

The RIAA wants the whole world constantly negotiating with their lawyers.

Maintaining a huge cloud of FUD is the only way they can keep prices artificially high and the artists in their rightful places (artists need to believe that selling music to the public is difficult/expensive/risky).

This is also why they settle P2P lawsuits out of court for less than what it cost them to bring the suit. They don't care about winning, they just want the press to be constantly printing stories about P2P users being sued - keep it in the headlines.

Uhhh... no. (1)

TheVelvetFlamebait (986083) | more than 5 years ago | (#24945065)

Monopolies aren't illegal for the very good reason that sometimes monopolies are unavoidable, or at least the best option. Imagine if the single corner store in every little town had to close down shop because they were the only game in town. It'd just be silly, right? Not to mention counter-productive.

Similarly here, we have a situation where monopoly is far better to the alternative. Now we just have to make sure monopolies don't engage in anti-competitive practices.

Re:Business logic or monopolistic cartel? (1)

Lumpy (12016) | more than 5 years ago | (#24945069)

Exactly, the following quote is bizzare at best....

"The root cause is not the labels â" chances are if you were running a label you would make the same demands, since the law permits it."

Oh, so if I lobbied and bought some laws that allows me to do illegal things that makes it ok and not my "root cause"? What is this guy smoking because I want a hit.

If I buy laws that allow me to do things that are unethical that does not change the fact they are still unethical. The Root cause is in fact the labels. It lies directly in their lap, they pet it daily while plotting their evil.

our legacy? (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#24944131)

'The current rate of extinction is around 10 to 100 times the usual background level, and has been elevated above the background level since the Pleistocene. The current extinction rate is more rapid than in any other extinction event in earth history, and 50% of species could be extinct by the end of this century. While the role of humans is unclear in the longer-term extinction pattern, it is clear that factors such as deforestation, habitat destruction, hunting, the introduction of non-native species, pollution and climate change have reduced biodiversity profoundly.'

I tried and failed (-1, Troll)

Anonymous Coward | more than 5 years ago | (#24944133)

I bought the store about 12 years ago. It was one of those boutique record stores that sell obscure, independent releases that no-one listens to, not even the people that buy them. I decided that to grow the business I'd need to aim for a different demographic, the family market. My store specialised in family music - stuff that the whole family could listen to. I don't sell sick stuff like Marilyn Manson or cop-killer rap, and I'm proud to have one of the most extensive Christian rock sections that I know of.

The business strategy worked. People flocked to my store, knowing that they (and their children) could safely purchase records without profanity or violent lyrics. Over the years I expanded the business and took on more clean-cut and friendly employees. It took hard work and long hours but I had achieved my dream - owning a profitable business that I had built with my own hands, from the ground up. But now, this dream is turning into a nightmare.

Every day, fewer and fewer customers enter my store to buy fewer and fewer CDs. Why is no one buying CDs? Are people not interested in music? Do people prefer to watch TV, see films, read books? I don't know. But there is one, inescapable truth - Internet piracy is mostly to blame. The statistics speak for themselves - one in three discs world wide is a pirate. On The Internet, you can find and download hundreds of dollars worth of music in just minutes. It has the potential to destroy the music industry, from artists, to record companies to stores like my own. Before you point to the supposed "economic downturn", I'll note that the book store just across from my store is doing great business. Unlike CDs, it's harder to copy books over The Internet.

A week ago, an unpleasant experience with pirates gave me an idea. In my store, I overheard a teenage patron talking to his friend.

"Dude, I'm going to put this CD on the Internet right away."

"Yeah, dude, that's really lete [sic], you'll get lots of respect."

I was fuming. So they were out to destroy the record industry from right under my nose? Fat chance. When they came to the counter to make their purchase, I grabbed the little shit by his shirt. "So...you're going to copy this to your friends over The Internet, punk?" I asked him in my best Clint Eastwood/Dirty Harry voice.

"Uh y-yeh." He mumbled, shocked.

"That's it. What's your name? You're blacklisted. Now take yourself and your little bitch friend out of my store - and don't come back." I barked. Cravenly, they complied and scampered off.

So that's my idea - a national blacklist of pirates. If somebody cannot obey the basic rules of society, then they should be excluded from society. If pirates want to steal from the music industry, then the music industry should exclude them. It's that simple. One strike, and you're out - no reputable record store will allow you to buy another CD. If the pirates can't buy the CDS to begin with, then they won't be able to copy them over The Internet, will they? It's no different to doctors blacklisting drug dealers from buying prescription medicine.

I have just written a letter to the RIAA outlining my proposal. Suing pirates one by one isn't going far enough. Not to mention pirates use the fact that they're being sued to unfairly portray themselves as victims. A national register of pirates would make the problem far easier to deal with. People would be encouraged to give the names of suspected pirates to a hotline, similar to TIPS. Once we know the size of the problem, the police and other law enforcement agencies will be forced to take piracy seriously. They have fought the War on Drugs with skill, so why not the War on Piracy?

This evening, my daughters asked me. "Why do the other kids laugh at us?"

I wanted to tell them the truth - it's because they wear old clothes and have cheap haircuts. I can't afford anything better for them right now.

"It's because they are idiots, kids", I told them. "Don't listen to them."

When the kids went to bed, my wife asked me, "Will we be able to keep the house, David?"

I just shook my head, and tried to hold back the tears. "I don't know, Jenny. I don't know."

When my girls ask me questions like that, I feel like my heart is being wrenched out of my chest. But knowing that I'm doing the best I can to save my family and my business is some consolation.

Some people are offended by my blacklist system. I may have made my store less popular for pirates and sympathisers, but that's a sacrifice I'm willing to make to save my industry from destruction. I am inspired by artists such as Metallica that have taken a stand against the powerful pirate lobby. When everyone believes 2 + 2 = 5, to simply state the truth, that 2 + 2 = 4, is a courageous act.

Re:I tried and failed (0)

Anonymous Coward | more than 5 years ago | (#24944207)

Troll post is bad! And has been posted many times before and is just as irrelevant.

If it's real, have the guts to register and login, and defend it. Don't just post the same bullshit over and over again.

Re:I tried and failed (1, Insightful)

wrook (134116) | more than 5 years ago | (#24944223)

First, I'm not sure why you posted as anonymous coward. It is an interesting story and I have deep sympathy for your plight. But I don't think your blacklist will be successful in saving your business. If it is true that piracy is destroying your business, then refusal to sell to pirates only hurts you more. Pirates can find music anywhere. I'm sure you've heard people here explaining that most of the time you can pirate things even before they are released. And as we all know, one copy might as well be a million copies given the internet.

So, your refusal to sell to someone who wanted to buy an album means that you will go out of business faster. It means that you will have less time to find some other way to make your living.

I'm really sorry, but if what you say is true, you are already on borrowed time. Why not use your favorable position as a respected business operator to springboard you into the next venture? If you alienate those around you, will it not be more difficult to create your new business?

I wish you all the best and hope you reconsider your tactics. Life is rarely fair, but sometimes new opportunities are created when old ones fail. This is the essence of being an entrepreneur.

Re:I tried and failed (1, Insightful)

Anonymous Coward | more than 5 years ago | (#24944231)

lol wut?

Re:I tried and failed (1)

wrook (134116) | more than 5 years ago | (#24944375)

Huh??? Honestly, I was replying to something, but the something is gone now....

Seriously... can that happen, or have I just gone batty????

Re:I tried and failed (1)

pipatron (966506) | more than 5 years ago | (#24944525)

Maybe after being on slashdot since forever (judging from your ID) you should have learnt by now that there is this thing called "moderation" and that articles can be "modded" up or down. You can set a limit so you will not see articles below a certain level. The post you replied to has since been modded down, thus it is now below your threshold, and you are not seeing it.

Re:I tried and failed (to search on Google) (3, Funny)

Mathinker (909784) | more than 5 years ago | (#24944353)

First, I'm not sure why you posted ... without checking on the contents of the post you replied to.

Kind of hard to believe a Slashdot ID as low as yours has never seen that troll post before. Or are you some kind of "second-degree troll" who pretends to believe troll posts? Arrggh! My mind ties itself into pretzels thinking about the boasting conversation at a "fourth-degree troll" convention in the far future....

OTOH, I admit there has been a decided lull (thank the FSM!) in the posting of that particular one, in recent months. Maybe you just have the blessing, in this case, of a short memory. Or got stranded on a desert island for the wrong period.

Re:I tried and failed (to search on Google) (1)

wrook (134116) | more than 5 years ago | (#24944585)

Ha ha! I guess we need a -1 Desert Isle moderation. I really never saw that one before. And as you might notice from my subsequent reply, I'm having a bad day of it...

Oh well... Life goes on...

Re:I tried and failed (1)

hairyfeet (841228) | more than 5 years ago | (#24944563)

Ummmm.......You DO realize that what you are responding to is a VERY old copy/paste troll,don't you? I mean REALLY old,as in I remember reading that one when the 1x CD burners came out. Everytime someone brings up the cartels somebody copy/pastes that old thing.

As for how we can get away from these cartels,well other than forming an EFF style lobbying group to just buy our own congress critters to pass laws for THE PEOPLE for a change,is with a better way for new bands to be heard. Since I'm sure that most would agree that if you want to see a band firing on all cylinders the best way is live where the crowd can get them pumped up and rocking,why doesn't someone start a live clubnet? The clubs could get free advertising and sell merchandise to folks that would otherwise never get a chance to step foot in their club, the bands would get free publicity and could have links to their homepage where they can sell their own merchandise, and the site could sell MP3s off the bands playing.

I know I would love it if I could go to one site and see live shows from clubs across the country and maybe even across the planet live. Plus there is no better way to get a feel for a band short of being there in person than seeing how they do in front of an audience. And it wouldn't cost the giant bucks like starting up a new record label or having to kiss the cartel booty does. And finally by having it grouped by different styles it would allow us to check out bands we may have never heard of or who haven't toured anywhere near our areas. And they could start small with just a few clubs and build up slowly. But as always this is my 02c,YMMV

Re:I tried and failed (2, Insightful)

knutkracker (1089397) | more than 5 years ago | (#24944225)

Sounds familiar [kuro5hin.org] in many [slashdot.org] ways [slashdot.org] .

Re:I tried and failed (5, Insightful)

StrategicIrony (1183007) | more than 5 years ago | (#24944237)

Are you... joking?

Or are you a RIAA marketing consultant?

This is a stellar piece of propaganda. Even the part about the kids wearing shabby clothing. Priceless.

Of course, if it's true, you need to get out of that business immediately.

I don't give a flying rats ass about piracy. The entire concept of purchasing information that is tied to a small piece of plastic is silly in the digital age, prima facie.

Your grandchildren will look at you funny when you suggest that one day, music could only be purchased on round pieces of plastic. They simply won't understand why something so trivial as "data" had to be purchased by means of a physical medium.

If you want to blame the decline of your business on digital music distribution, you would be accurate, but blaming it on piracy falls somewhere between a straw man and a red herring.

Lets look at reality.

Physical CD sales declined by 88 million from 2006 to 2007. (from 588 million to 500 million)

At the same time (2007), the iTunes music store sold about 1.8 billion tracks. They were thought to have about 60% of the market, indicating that there are about 3 billion tracks sold LEGALLY online.

So, a decline in 88 million plastic thingies sold... however, 3 billion tracks legally sold (for cash-money) online during the same period.

No, it is not really a piracy issue, it's merely a change in the distribution method of music.

You're on the wrong end of it.

Get out now.

Re:I tried and failed (0)

Anonymous Coward | more than 5 years ago | (#24944539)

Yes, he was actually joking. Actually, as people on imageboards tend to say...

"this copy pasta is stale."

Re:I tried and failed (1)

adrianwills (1355627) | more than 5 years ago | (#24944551)

Your grandchildren will look at you funny when you suggest that one day, music could only be purchased on round pieces of plastic. They simply won't understand why something so trivial as "data" had to be purchased by means of a physical medium.

Could not agree more. Well put.

On the 'sales decline' tip though I did a small study into the 'decline' of music sales and a little survey with a few dozen people (yeah yeah i know, needs to be bigger to be accurate but i think you'd be surprised) revealed another interesting result... yes a lot of people's music purchasing habits have declined but it's primary because people get sick of music these days. Between commercial radio, commercials themselves and the quantity of popular music in everything from cafe's to bookstores, to movies and advertising, a popular song gets milked for all it's worth and people aren't interested in buying it. A lot of people that previously bought popular music weren't buying the stuff being jammed down their throat.

A somewhat moot point to yours and this article, but relevant to the CD sales argument i feel.

Re:I tried and failed (1)

Azaril (1046456) | more than 5 years ago | (#24944621)

I'm amazed he even went to the effort of posting it here, knowing the reaction it would get. I'm a little bit shocked about the hypocrisy in his post though. For some reason a "clean cut and friendly" buisiness is allowed to assault a customer that intends to purchase a CD in his store? No wonder his sales have dropped. I expect the fines/prison time he gets if he assaults every pirate that walks into his store probably dont help with the money issue either...

Re:I tried and failed (2, Interesting)

YeeHaW_Jelte (451855) | more than 5 years ago | (#24944641)

"Are you... joking?

Or are you a RIAA marketing consultant?"

And the answer is .... B.

Damn story pops up every time an article is posted that is vaguely connected to music and internet. It's just some PR drone connected to the music industry doing his sorry job.

And you had the bad luck to read it before it was modded into oblivion and took it seriously.

Re:I tried and failed (1)

msormune (808119) | more than 5 years ago | (#24944733)

I have seen the same text in previous threads... It seems to be really a trollish piece of work that circulates.

Re:I tried and failed (2, Informative)

houghi (78078) | more than 5 years ago | (#24944805)

3 billion tracks legally sold

Let us put that in perspective. At 10-15 songs per album, that is 200-300 million albums. Even at 20 songs per album, this would mean 150 million albums.

Deduct the 88 million less sold is an increase of albums sold of 62 million.
So instead of the decrease in albums sold, of 88 million, there is an actual increase.

I knew you were right. I just wanted to make it less dramatic and not compare oranges with apples.

And we do not even talk about the extra income from ring-tones. Something that did not happen in the past.

Re:I tried and failed (0)

Anonymous Coward | more than 5 years ago | (#24945141)

YHBT. YHL. HAND.

Re:I tried and failed (5, Interesting)

Technician (215283) | more than 5 years ago | (#24944387)

But there is one, inescapable truth - Internet piracy is mostly to blame.

It's a common scapegoat, but missing the mark. Percieved value and retail price are an order of magnitude out of place.

Instead of wasting money on a shiney disk with about 45 minutes of stuff along with one good song, I can buy a DVD for half the price.

I can carbonate water at home and add my own flavoring and sugar, but I still purchase fountain drinks for the convience.

CD's are now the oposite of convience for more money. Downloads go right on to an MP3 player. CD's have to be found if still in print, ripped and put on a player.

Online is a-la-carte. CD is a canned package.

Some compainies wanted to make and install in store CD burning kiosks. Guess who killed that in the bud?

For an industry who doesn't listen to their consumers, they sure scream P-P a lot for their lack of adjusting to the market.

If you scream P-P enough, will the death of your scapegoat really fix your root problems?

Some people are offended by my blacklist system.

This would be mostly your best customers. Those who don't listen to music don't buy CD's. Those deeply into music purchases CD's and shares copies of out of print stuff or the one good song on a CD. Blacklisting them is a great way of killing the biggest part of your business. Thanks for providing great evidence the industry doesn't understand the market.

Much of the industry is selling pig in a poke packages. I bought the DC Talk album Supernatural because our church performed Red Letters, and I enjoyed the choir rendition. I hated the album, even the good track. I'm not into acid rock. Needless to say, once burnt, twice shy.

How many times have you bought an album because you only heard one song and then didn't like the rest of the album at all?

P-P expands music horizons. Most of the time when I bought albums, I heard it from friends first. (I quit buying entirely when the industry started dropping the nuke bomb on some unlucky few as a protest.)

My peak buying days was when I was in the military while in my peak piracy days with cassette tapes. The industry doesn't understand their consumers or the market.

Re:I tried and failed (3, Insightful)

hey! (33014) | more than 5 years ago | (#24944527)

Well, I think you have some good points, but the fundamental shift I see is not in how music is distributed, but how it is consumed

The LP album is, essentially, a concert piece. Thirty years ago, singles from an album were what hooked people into buying, but people sat down and listened to a whole album, all of the A side then all the B side. They didn't play one track, hop up and take the needle off, remove the disk and put it in its sleeve, remove another record put it on the platter, then carefully set the needle down on a specific track.

CDs are the same.

With digital music players, they can and do play a jumbled sequence of single tracks. It's a kind of return to the day when wealthy patrons had musician servants that composed short pieces like "Fanfare as Lord So and So Sits Down to Dinner". People use music players to provide that kind of soundtrack to things they do in their lives, like working out on a Stair Master.

The LP or CD is more like a symphony, a longer work that makes sense in the context of middle class people making an evening of going to the concert hall.

If the labels want to sell CDs, then they have to sell CDs that are more than random collections of mediocre songs tied to one or two song that the consumer wants. It's not the mediocrity of the filler material that's the problem, it's that it is filler material in the first place. I happen to like opera, but there a plenty of bits in even the best opera nobody is going to put on their play list unless they're listening to the whole thing through.

Re:I tried and failed (1)

Per Wigren (5315) | more than 5 years ago | (#24944771)

CD? What.CD? I don't understand...

Re:I tried and failed (0)

Anonymous Coward | more than 5 years ago | (#24944923)

Maybe a lot of people think it's old fashioned but without the album format we'd never have had Pink Floyd's The Wall, Jeff Wayne's War of the Worlds or even Iron Maiden's Seventh Son of a Seventh Son. Even apart from concepts, good bands record albums that cohere. The songs are just part of the album, like chapters in a book. Who would read just the most action-packed chapter of a spy thriller, for instance?

I really do think that people who complain about the album format just don't understand rock music. It doesn't suit everything - pop "albums" really are just collections of tracks, most of them bad. But the rock album is one of the world's great inventions. Loving a great song is one thing. Loving a great album is something else altogether.

Re:I tried and failed (0)

Anonymous Coward | more than 5 years ago | (#24945015)

Aren't you afraid you are going to burn in hell? You go to church and brazenly conduct illegal activities, surely you aren't expecting to go heaven?

No has mentioned this..... (1)

BitterOldGUy (1330491) | more than 5 years ago | (#24944933)

So far, every digital cable service I have seen has a music section in its upper channels - like 900s or something. There, the music is segmented. Meaning there's a channel for Classical, Romantic, 80s Rock, 70s Rock, .... Christian Rock, Christian Heavy Metal, Christian Rap, etc....everything.

In this day and age of the all in one home entertainment centers and surround sound, I'm sure many folks are using their cable subscription for their music: not pirating and not buying CDs or downloading.

Everyone needs to realize that's it's not just buy a CD or buy online or pirate.

Re:I tried and failed (1)

Lord Kano (13027) | more than 5 years ago | (#24945161)

I've seen this bullshit story posted again and again for years.

I don't sell sick stuff like Marilyn Manson or cop-killer rap, and I'm proud to have one of the most extensive Christian rock sections that I know of.

What is "cop-killer rap"?

Digital success rate as an indicator of future ... (1)

snoggeramus (945056) | more than 5 years ago | (#24944139)

With the success rate of the officially sanctioned sites and plain "not getting it" of the music companies, it's a wonder that the traditional music industry is still in business!

Maybe I missed it ... (3, Interesting)

Daniel Dvorkin (106857) | more than 5 years ago | (#24944151)

... but I didn't see the word "iTunes" anywhere in that article.

It is possible to build a profitable, long-lasting, and legal online music business, Mr. Robertson. I'm genuinely sorry you failed to do it, but to pretend that the biggest player in the online music world simply doesn't exist is kind of childish.

Re:Maybe I missed it ... (5, Insightful)

pla (258480) | more than 5 years ago | (#24944181)

... but I didn't see the word "iTunes" anywhere in that article.

iTunes doesn't come close to what MP3.com wanted to do.

I don't want to start a debate about how much they had available or how lax their DRM; Put simply, they do have DRM, and they don't offer everything, therefore fall woefully short of the ideal.

That said, you make a good point... iTunes has done quite well, and I would call it a good start. Even so, keep in mind that every few months we hear rumblings about how the major labels want to "renegotiate" with Apple to charge more and use more restrictive DRM - They just don't "get" it, even when offered a viable model on a silver platter.

Re:Maybe I missed it ... (0)

Anonymous Coward | more than 5 years ago | (#24944205)

Also bear in mind that iTunes became successful largely due to the iPod. Apple had a huge user base to start with, which gives them clout in negotiations with labels; a new service entering the market won't ever have that.

Re:Maybe I missed it ... (1)

legallyillegal (889865) | more than 5 years ago | (#24944309)

The iPod was selling at a fairly normal pace until the middle of 2004 (iTMS was launched in 2003). iPod Sales Numbers [systemshootouts.org]

Re:Maybe I missed it ... (1)

PhilHibbs (4537) | more than 5 years ago | (#24944251)

It is odd that he doesn't mention iTunes or try to explain why it was successful. That doesn't invalidate the point that he's making, though. Maybe it's possible to start up a digital music store if you are Apple. After all, creating the most popular digital music player in the world isn't exactly hard, is it?

Is iTunes succesful (2, Interesting)

SmallFurryCreature (593017) | more than 5 years ago | (#24944371)

The article doesn't mention a lot of sites, in fact none of the BIG company backed sites are mentioned. And this makes me wonder, how succesful is iTunes on its own as a business? It has long been rumoured that Apple makes its money from iPods not iTunes. If that is the case, and you accept the same from products launched by the likes of Amazon then there is a 5th category, sites that barely break even thanks to the insane costs, that help keep the online music sales at the level the music industry is comfortable with.

Steve Jobs managed to get the labels to accept the famous 99 cent, but it stalled there. 99 cent is still insanely expensive if you consider the huge cost reduction in distribution.

Apple hasn't been able to drive the price lower nor has it been able to get more music online, like getting the labels to open up their entire catelogue.

I would be very intrested to see any real figures showing that iTunes is turning a profit and enough of a profit for a company whose only product is a music store to keep it alive.

Don't forget that Apple is an awful lot like MS, it can afford to throw money at projects, and internet rumor has it that iTunes is just such a project. Not that Apple minds since the iPod is earning them every dollar spend back tenfold.

Re:Is iTunes succesful (3, Informative)

TheRaven64 (641858) | more than 5 years ago | (#24944903)

Apple is now the biggest music retailer in any medium. If they are making any profit on sales (I vaguely remember reading that they make something like 10Â per track) then the iTunes store is raking in money. The iTunes store and Apple-branded accessories (they don't break them down on the balance sheet, there's just iPod and 'other music-related products and services) are bringing in around $800m per quarter in revenue, which probably equates to around $100m in profit.

Re:Maybe I missed it ... (1)

Technician (215283) | more than 5 years ago | (#24944417)

It is possible to build a profitable, long-lasting, and legal online music business,

It WAS possible to build a profitable,

There, fixed it for you. The industry has tried to push Apple into a layered pricing service with higher prices for more popular stuff. By then Apple was big enough to push back and win.

Small potatoes startup companies don't have that kind of clout. They also have no way to unseat Apple.

Horsepucky. (4, Insightful)

pla (258480) | more than 5 years ago | (#24944165)

The root cause is not the labels -- chances are if you were running a label you would make the same demands, since the law permits it.

Irrelevant, whether or not the law "allows" it.

As various legacy-media industries (and I don't mean just the RIAA here) slowly waste away to nothing, they have two choices - Find a way to make their product available on terms we can all agree to (and do so knowing how easily we can choose to simply pirate their content)... Or cease to exist.

The right to "past damages" doesn't matter if you have no future. These industries have a wide assortment of 3rd parties all but begging to solve their current problems for them with various forms of modern online distribution; Only stubbornness, and a near-suicidal insistance on maintaining some mythical "control" they lost over a decade ago, have kept such ventures from any chance of success.

So before you absolve the labels of blame in this matter - Ask yourself, would you, starving in the gutter, turn down a lifetime supply of Big Macs because you think the world "owes" you a home-cooked steak dinner?

Re:Horsepucky. (1)

Meneth (872868) | more than 5 years ago | (#24944213)

Ask yourself, would you, starving in the gutter, turn down a lifetime supply of Big Macs because you think the world "owes" you a home-cooked steak dinner?

Knowing Super Size Me [wikipedia.org] , starving might well be preferable to a lifetime supply of Big Macs.

Re:Horsepucky. (4, Funny)

stormguard2099 (1177733) | more than 5 years ago | (#24944233)

I've heard a lifetime supply of just bigmacs is only 9 days tops depending on how athletic you are.

Re:Horsepucky. (2, Informative)

NoisySplatter (847631) | more than 5 years ago | (#24944457)

That movie is an exercise in propaganda. He purposefully ate too much in order to gain weight and make a sensational movie. I would take a lifetime of Big Macs any day. Nobody ever said you had to eat the whole thing.

Re:Horsepucky. (1)

rwiggers (1206310) | more than 5 years ago | (#24944665)

Actually I think the movie is quite correct. It is an exercise in propaganda, and states it clearly in the movie. Not in the fine print in the credits where nobody reads it, but in the final commentary. The film has a clear and concise set o rules and proves the point by exaggeration and also proves the point that the quantity offered is absurd. It also presents in the movie a counter-example, someone that eats big macs almost daily without any problems associated to it.

Re:Horsepucky. (1)

NoisySplatter (847631) | more than 5 years ago | (#24944815)

I've never seen it. I just felt like being contrary.

Insightful (1)

Kupfernigk (1190345) | more than 5 years ago | (#24944259)

You are right. The root cause of the issue is fundamentally monopolistic - the very idea of long lasting copyright, which gives the inventor of music a much longer protected period than the inventor of a vaccine, which is of far more benefit to society. Once musicians and authors were given this special treatment, opportunistic leeches sprang up to milk it - publishers. These people have nothing to contribute but their monopolistic practices, as far as the vast majority of musicians and authors are concerned. In fact, one of their main functions is to restrict what gets published to try and create an artificial scarcity.

Therefore, online distribution replaces their entire core business proposition, so naturally they resist it.

However, the history of every mass technology - transport, the telephone system - is that what began as a monopoly with artificial shortages (stagecoaches, cable) ends up being democratised, and in doing so creates wealth in unexpected ways. The stagecoaches tried to stop the canals and the canals tried to stop the railways, the telephone companies tried to stop the Internet, at least in the UK, and they all failed.

You are making a mistake (2, Interesting)

SmallFurryCreature (593017) | more than 5 years ago | (#24944491)

You say at the end the examples from history about product X trying to stop product Y from replacing it and seem to think this applies to the music industry.

You are wrong, for that to work in media it would have to be theather trying to stop movies, movies trying to stop TV. That indeed does not work.

But what is really the case is that the music industry is not being replaced. There is nothing to take over, it still is the same model that existed since recordable music was invented, X performs for Y who records it who sells it to Z who listens to it. As long as X and Y expect payment from Z, the industry will remain roughly the same. Yes, with advances in tech some X can cut out Y, but this has always been the case. Lots of musicians have in the past created their own labels, in fact most labels were started by musicians out of dissatisfaction by the existing labels, until they became big themselves.

For Z having every X be his own seller is also messy, you don't buy books from writers do you? Hell, you don't even buy them from publishers mostly, you buy them from bookstores. Would you really be comfortable giving your credit card details to every artist asking for 10 cents for their latest album? Not that that would work, the credit card companies want bigger fees. Sure there are some small sites that try to be the go between but there you go already, that site is going to want payment, exactly the same as the labels, and the more they advertise their new sign-ups, the more risks they take, the more they want paid on each song they manage to sell.

The entire problem lies in the recording. In theory, this allows a musician to earn an infinite amount of money from a finite and fixed amount of work, this never works. Play around in virtual economies such as found in games for a while to see why not. Usually, the more you want to earn, the more you got to invest. Imagine a simple chart, X is amount of money invested in a concert, Y is the money earned from tickets. Obviously if you want Y to increase you first need to invest in X by renting a bigger arena.

But with recorded music, this doesn't work, the cost of recording a song is relatively straightforward, rental of studio, salery for techies, but the potential earnings can be anything really. With a piece of recorded music, with every tech advance you are getting closer to a product that has an infinite supply for a finite cost. For, lets say 3000 dollars I can get a song, that I could potentially sell an infinite amount of times and with copyright as it is I got a century to do it in.

This is of course very tempting but it only works if I am the sole supplier of that song. If everybody who has a copy can share that, then all I can count on is to sell 1 copy and at 3000 dollars, finding that first punter is going to be tricky.

The music industry can make enormous profits THANKS to the fact that its product is in infinite supply BUT it can only make those profits if it somehow makes that infinite supply finite.

Live music isn't the answer, is a concert ticket really worth 100 dollars or more if EVERYONE could have a front row seat? Well the answer is TV, everyone has good view and you don't pay 100 dollars for a live concert not even if the camera is on stage!

Live music obeys the normal economic rules, recorded entertainment does not.

What can we do about it?

Very little, you could make a law that stays every recording can only be sold an artificial number of times before it must be re-recorded. This would make it a finite supply product obeying the normal rules of the economy, if you want a specific recording, then just bid for it against other intrested parties. It would solve a lot of problems, but I doubt everyone would agree to it, including the buyers.

You could severely limit the amount of time you could sell a recording. It would have to be severe, a period of maybe a couple of years, this would give popular music a short-time to recoup their costs, give them a change to earn some money but not an infinite amount. Problem would be for media that takes longer to return a profit. Reduction of copyright is often suggested as a solution, but the copyright owners don't like it and in fact want copyright extended. Can you really expect a business to say goodbye to infinite profits?

Neither can we expect the musicians to change their tune, copyright is not absolute, any musician can release their work in the public domain when they choose to do so. Frank Sinata and a lot of the rat-pack work has been released this way, although the heirs could still claim copyright, they don't and their works are free to share.

But that is rare.

We need a solution that the music industry can agree to. Because unlike say the stagecoach or canals or telephone companies, there is no new industry ready to take over. The music industry got a the worsed kind of monopoly, one that can't be replaced by a superior product.

Re:Horsepucky. (4, Interesting)

Teancum (67324) | more than 5 years ago | (#24944389)

One of the problems here is that the author of the article seems to think the authority to change the situation lies with the court system, when in fact this is a legislative problem that is compounded by a massive mis-interpretation of what the general public thinks it ought to be about.

While I understand that the Register is a UK publication, it reads like it was written by an American (perhaps a personal bias). From an American perspective, the record companies are fighting something even tougher: The U.S. Constitution. More to the point, if the copyright clause of the constitution were to be properly interpreted to understand that the protection was only for a limited time (life + 75 years isn't a "limited time" in spite of what the U.S. Supreme Court claims). Retroactive copyright term extensions make the situation even worse... but I'm barking up the wrong issue here anyway.

The point here is that legislative bodies of the world like Congress, Parliament, and other similar bodies have been dealing with this issue as if the publishing bodies (including recording studios in the case of music) are the only individuals that need to be served when these laws are drafted. Individual consumers as well as the artists/authors/composers/performers need to be strongly considered as well, and the real point of legislation ought to be asking this question:

What can changes in the current copyright legislation do to expand the number of creative works, and "promote the useful arts and sciences"?

This is certainly not something that is being asked by legislators (MPs or Congressmen), and nearly all legislation in the past couple of decades on both sides of the pond works to kill off incentives by individuals to create these kind of artistic works. International agreements, while they do seek to "equalize copyright laws", tend to take the lowest common denominator approach and offer the best possible protection for the publisher as any of the countries in the treaty organization (aka the "Berne Convention"). This question about what can be done to promote the development of these artistic works certainly isn't being asked at these treaty conferences either, nor by the legislative bodies when the treaties are being ratified.

Re:Horsepucky. (1)

Nursie (632944) | more than 5 years ago | (#24944645)

Yes, it's american.

Some of the comments point out that you can't actually use these sites from the UK. Which is another problem. Not only is it hard to get a successful business going, it seems almost impossible to set one up properly (in the spirit of the interwebs) and available to all, because we've woven an enormously complex web of international IP laws, and companies have tied themselves up in exclusive distribution deals where distribution itself is becoming obsolete.

Re:Horsepucky. (1)

Maelwryth (982896) | more than 5 years ago | (#24944481)

What worries me about this is not the root cause but the end result. How much of our culture will we lose because it was no longer worth looking after archives?

Excuse me but the summary is wrong (3, Insightful)

unity100 (970058) | more than 5 years ago | (#24944175)

in here : "The root cause is not the labels"

if they are making the same demands if the law permits it, they are the root cause.

Re:Excuse me but the summary is wrong (1)

JAlexoi (1085785) | more than 5 years ago | (#24944333)

This article would not get published if not for the statement: "The root cause is not the labels"

They might be "making" the laws, also, eh? (2, Insightful)

Mathinker (909784) | more than 5 years ago | (#24944381)

The summary also ignores the fact that the content industries have been gaming the legislative system, to their benefit, for quite a while....

Limited scope (5, Informative)

overzero (1358049) | more than 5 years ago | (#24944293)

FTFA: "The root cause is not the labels - chances are if you were running a label you would make the same demands, since the law permits it."

Unless, of course, you didn't. The law also permits playing a guitar exclusively in a soundproof booth in the middle of nowhere so that no one will ever be able to hear your music, much less consider purchasing it, which seems like the business model the major labels are moving towards.

You could, for instance, start your own label specifically to avoid this, avoid DRM, allow anyone to stream your catalog as much as they want, offer a variety of formats and purchase options, etc. I think the law permits that too.

As for viability, it might have some issues, but Magnatune has been doing that for five years now and doesn't seem about to stop.

http://www.magnatune.com/ [magnatune.com]

Promotion to passengers? (1)

tepples (727027) | more than 5 years ago | (#24944649)

As for viability, it might have some issues, but Magnatune has been doing that for five years now and doesn't seem about to stop.

Magnatune and other online-only labels appear to fail it in promotion to drivers and passengers in vehicles. I have never once heard a Magnatune artist's song on FM radio in Fort Wayne, Indiana, USA.

Wrong Conclusion (0)

DynaSoar (714234) | more than 5 years ago | (#24944303)

"The root cause is not the labels â" chances are if you were running a label you would make the same demands, since the law permits it."

The law doesn't permit it, it requires it. If a rights owner doesn't pursue infringements in every case they risk losing them to a later infringer who points out the earlier failure to protect.

Re:Wrong Conclusion (2, Informative)

Nursie (632944) | more than 5 years ago | (#24944357)

Err, no, it is you that is wrong.

Whilst this may apply to trademarks, it certainly does not apply to copyrights or patents.

Laches (1)

tepples (727027) | more than 5 years ago | (#24944667)

False: DynaSoar's assertion that estoppel by laches [wikipedia.org] applies as strongly to copyrights and patents as it does to trademarks.

False: Nursie's assertion that laches "certainly does not apply to copyrights or patents."

True: Something in between.

Confusing: The term "intellectual property", which encourages people to draw false analogies [fsf.org] among copyrights, patents, and trademarks.

Re:Laches (1)

Nursie (632944) | more than 5 years ago | (#24944697)

In practice though, that's not yet stopped any of the patent trolls from plying their filthy trade. Nor does it force a company allowing licensed distribution of their works to demand punitive damages for perceived previous violation, which was the point the OP was trying to make.

Laches and Jerome Lemelson (1)

tepples (727027) | more than 5 years ago | (#24944721)

In practice though, that's not yet stopped any of the patent trolls from plying their filthy trade.

Yet. A federal district court severely blue-penciled Jerome Lemelson's machine vision patents [wikipedia.org] on a laches defense.

Nor does it force a company allowing licensed distribution of their works to demand punitive damages for perceived previous violation

But contracts with other distributors that contain an industry-standard "most favored distributor" clause do.

Re:Laches (1)

TheRaven64 (641858) | more than 5 years ago | (#24944951)

The law in the US changed a few years ago to prevent certain classes of patent troll. You can no longer claim any damages that occur between your first discovering an infringement and notifying the infringer. This prevents, to a large degree, submarine patents, since you can't let people use your patent for years and then retroactively demand a royalty. You can, however, still let people use the patents until they've built a large market and then demand royalties on future sales.

Re:Wrong Conclusion (1)

JAlexoi (1085785) | more than 5 years ago | (#24944395)

Requires it? Really? Is it stated so in the copyright law?
Copyrights are eternal. The rights to pursue an person who violates it is limited to 70 years after the authors death, though not on everything.

Re:Wrong Conclusion (1)

langelgjm (860756) | more than 5 years ago | (#24944405)

Isn't that "enforce or lose" issue only the case for trademarks, not copyright?

Re:Wrong Conclusion (1)

Dunbal (464142) | more than 5 years ago | (#24945165)

The law doesn't permit it, it requires it. If a rights owner doesn't pursue infringements in every case they risk losing them to a later infringer who points out the earlier failure to protect.

      No, you're thinking about trademarks. Copyright belongs to the owner whether he defends it or not.

Hit the nail on the head. (0)

Anonymous Coward | more than 5 years ago | (#24944307)

The root cause is not the labels -- chances are if you were running a label you would make the same demands, since the law permits it.

The fact that the Law is the only organisation protecting other businesses against this kind of abuse its a clear signal that 1) the music companies have become too mighty for the good of the country (no real supply-and-demand balancing) 2) does not actually want any other company possibly upsetting their distribution-methodology (by effectivily killing any competitors even before they have actually started).

But yes, if living by the Law leads to a certain dead it means that the Law is a very sick puppy (even if its not aware of it).

Starting anything legal is tough (2, Insightful)

SystematicPsycho (456042) | more than 5 years ago | (#24944315)

As most huxsters have worked out, even if they do something illegal or border line illegal for a while and make a killing then, having no moral conscience it pays off. Unfortunately that's what's wrong with the world today. Look at the sub-prime mortgage crisis for example, how many lenders knew they were handing out bad debt? Do they care now? Probably not, they got their commission, as for everyone else, hasta la vista.

The law allowes it? (3, Insightful)

houghi (78078) | more than 5 years ago | (#24944345)

So if it is not strictly forbidden you MUST do it? That is a whole new twist and says more about him as a person then about the people who do it.

Re:The law allowes it? (1)

JAlexoi (1085785) | more than 5 years ago | (#24944455)

Actually you are not forbidden to kill people... Though you will be punished for the crime...

iTunes is doomed! Amazon is doomed! (1)

artifex2004 (766107) | more than 5 years ago | (#24944351)

(just to put this in perspective)

P.S. I love words which can mean virtually their own opposite, like sanction.

Excuse me? (2, Insightful)

Tim C (15259) | more than 5 years ago | (#24944427)

I'm sorry, but just because I'm *permitted* to do something doesn't mean that I would or should.

Hand someone a right (or rather, neglect to disallow them some power) and you most certainly can still blame them for exercising it.

Another middleman (1)

EdgeyEdgey (1172665) | more than 5 years ago | (#24944433)

Step back a bit. Why should online vendors be able to profit from someone else's work. Having a record company between the customer and the artist is bad enough, without having to add extra middle men.
What service does the 'Legal Online Music Vendor' supply? If it's selling other peoples music then it is already obsolete.

Re:Another middleman (1)

TheRaven64 (641858) | more than 5 years ago | (#24945007)

They provide a service. At a minimum, they provide hosting / distribution (HTTP is still a lot more convenient than any peer-to-peer services) and payment processing. They can also provide recommendations. This is the really valuable service. There is enough recorded music in the world now that you will not be able to listen to all of it if you tried (especially since it's still being created at a rate of more than one minute per minute). The amount of recorded music which you will enjoy, however, is significantly smaller (assuming you have any taste, and don't enjoy absolutely any audio recording between a sine wave and white noise). A music retailer is not selling you music, it is selling you entertainment, in the form of access to new music that you will enjoy listening to. Once they start moving away from the idea that they are selling you tracks then their business model will become more obvious. The same is true of books and movies - I don't buy movies anymore, I subscribe to a service that gives me access to a large subset of all films ever made.

Quick! (1)

g0dsp33d (849253) | more than 5 years ago | (#24944465)

Snatch up all the Apple itunes, Amazon MP3s, Rhapsody, et al before they go out of business. A shame too - Amazon was quite useful. Guess its back to Ebay.

Why ? (1)

Joebert (946227) | more than 5 years ago | (#24944507)

Why would anyone want to start a "legit" online radio ?

All of the good stations started out as pirates.

the root cause is not the labels? (3, Insightful)

nimbius (983462) | more than 5 years ago | (#24944589)

gimme a break. the root cause is a conglomerate of labels who arguably add nothing of value anymore to music, as online distribution has supplanted them almost entirely.

its not their fault. if you were about to be unceremoniously kicked off your pile of bloodmoney, you'd fight like hell too!

That's one person's opinion... (3, Interesting)

xednieht (1117791) | more than 5 years ago | (#24944607)

The article clearly states that it is merely an 'Opinion' note the upper left hand corner tag.

Other than that I would offer another view. There's still plenty of opportunity to grow online music.

When the dust settles, many moons from now, the emerging model will be a hybrid between what Napster was and iTunes is. It will probably emerge outside of the US because the morons on Capitol Hill are too quick to appease the idiots at RIAA. But it will emerge. Think Janis Ian and many more like her.

Of course if by some miraculous turn of events RIAA decides to invest in technology instead of lawyers it may start here, but don't hold your breath. Blinded by greed, crippled by stupidity.

Unless... (1)

hesaigo999ca (786966) | more than 5 years ago | (#24944813)

Unless, you were the artist that created their own music and decided to sell it from your own website....so lets say I create a website where motley crue decides to set up camp, their own piece of my website becomes theirs (like facebook for artists) from there I offer them my merchant account to process their inventory (music) this allows the artist to make exactly what they want from their music (seeing as they are allowed to sell their music without paying copyrights as per Radiohead)

I would charge them a fee for using my merchant account and voila you have a repository for music that is not your own so you are not selling it, you offer a website for storage(10$ per month for any artist) and you offer a 1$ processing fee for each album sold or a 10 cent fee per mp3 sold.

Nuff said.

When did the record industry miss digital age? (1)

upuv (1201447) | more than 5 years ago | (#24944997)

Some simple facts.

1991 mp3 became a standard ( Wikipedia )
1995 mp3 music hit the net via early file sharing ( Wikipedia )
2001 P2P was ubiquitous ( My observation )

So somewhere between 1995 and 2001 the music industry instead of embracing P2P and enhancing it to support a business model they instead asked the legal department for help. The legal department then got the green light to turn on the cash tap and drain possibly billions of dollars out of the artists pockets. This was the mistake. Instead of applying some creative thinking to the problem they simply turtled under a legal shell.

Even more amazing when online startups like napster and others popped onto the scene with vision, they freaked even more. They didn't even say "Why didn't we think of that?" Instead of using the vast resources at their command to create a product offering people would want they invented the WDM defense which good old Bush later used as well. As we can see the WDM defense does nothing but create more enemies and bad Karma.

Apple has shown them that money from music on the net is not only viable. It's hugely profitable. No packaging, No shelf space, and instant stock creation. But somehow the music execs still don't get it.

This has left the world in a nasty place. The music artist is loosing, the consumer is loosing, and the production companies are spilling cash to lawyers faster than they can make it. I can only see that this is not going to get better for the artist for possible a decade. And subsiquently the consumer.

( Sorry that almost became a full blown rant )

"The root cause is not the labels" (1)

bug1 (96678) | more than 5 years ago | (#24945083)

"The root cause is not the labels -- chances are if you were running a label you would make the same demands, since the law permits it"

The law doesnt and will never define morality, or ethics. Just because they are allowed to get away with it doesnt make it acceptable.

CEO's dont get a fuckwit chip inserted into them when they accept the job, they are born that way.

I really dont see any excuse for them, or why anyone else would think its not their fault, their industry is dying, they are trying to take as much as they can before they go.

What next slashdot, are we going to have stories saying that Darl McBride was really just misunderstood ?

how to do it successfully (1)

polyp2000 (444682) | more than 5 years ago | (#24945107)

The way to do it is start a site that enables music sharing , and turn a blind eye to anything illegal for as long a possible.

* When the music industry come down on you make sure you milk the publicity for all its worth.

* Announce you have put some security measures in place (but only implemented half heartedly)

* Do this for as long as you possibly can whilst simultaneously increasing your user base to critical mass.

* At that point your userbase is so big that your actually now a tempting proposition for aquisition / or your in a position to sign licensing deals with labels.

Im looking at you , myspace, youtube and friends...

This concept is not new. Do you think MTV paid for all those videos when they firt started out?

That makes no sense! (1)

91degrees (207121) | more than 5 years ago | (#24945157)

Past infringement!?

The online seller is the one taking a risk here! He's not going to pay that much. Business ideas are easy enough to come up with. If you're going to pay a huge sum up front, you might as well start selling exotic fruit or something.

And how does holding out like this benefit anyone? You get very few people willing to pay the extortionate amounts asked. If nobody pays then that's 0 x $extortionate amount. What sort of a business are they trying to run!?
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