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Investors, "Beware" of Record Companies

kdawson posted more than 6 years ago | from the rats-heading-down-the-hawsers dept.

Businesses 301

NewYorkCountryLawyer writes "The Motley Fool investment Web site warns investors to beware of 'Sony, BMG, Warner Music Group, Vivendi Universal, and EMI.' In an article entitled 'We're All Thieves to the RIAA,' a Motley Fool columnist, referring to the RIAA's pronouncement in early December in Atlantic v. Howell, that the copies which Mr. Howell had ripped from his CDs to MP3s in a shared files folder on his computer were 'unauthorized,' writer Alyce Lomax said 'a good sign of a dying industry that investors might want to avoid is when it would rather litigate than innovate, signaling a potential destroyer of value.'"

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The vicious last bites of a wounded animal (5, Interesting)

elrous0 (869638) | more than 6 years ago | (#21894446)

The traditional music industry is like a wounded animal at this point. They're hurt and desperately striking out at anything, in hopes of somehow surviving. They missed their opportunity to innovate a long time ago and now they're just the walking dead, stubbornly digging in their heals and refusing to just lay down and die.

They may get to the point where lawsuits are the only real income they have left. When that day comes, and all their Congressional bribe money has dried up, I think we'll see the courts and politicians finally start to hit back hard and finish them off. And they'll die still clutching their outmoded CD's, like pathetic John Henry's fighting innovation to the bitter end.

Re:The vicious last bites of a wounded animal (5, Insightful)

altoz (653655) | more than 6 years ago | (#21894568)

Oh, they'll be dead before that. Artists are leaving record companies in droves. They'll start producing their own music and hiring niche marketing agencies to create demand instead. Even now, the smart ones are already moving in the marketing/concert promoter direction.

Re:The vicious last bites of a wounded animal (5, Insightful)

PhotoGuy (189467) | more than 6 years ago | (#21895090)

Oh, they'll be dead before that. Artists are leaving record companies in droves. They'll start producing their own music and hiring niche marketing agencies to create demand instead. Even now, the smart ones are already moving in the marketing/concert promoter direction.

While I agree with the sentiment, are artists really leaving in "droves?" Other than indie artists maybe never pursuing a label to start with, how many already-signed artists are leaving the labels? Can you list more than 10? More than 20? Even if you listed 1000, I'm sure it would be something like a tiny single digit percentage (or less) of the total artists on labels, hardly qualifying as droves.

I think it *will* happen, and hopefully at an exponentially increasing rate. But for now, they still have the stranglehold on the artists.

Re:The vicious last bites of a wounded animal (3, Insightful)

Shajenko42 (627901) | more than 6 years ago | (#21895508)

While I agree with the sentiment, are artists really leaving in "droves?" Other than indie artists maybe never pursuing a label to start with, how many already-signed artists are leaving the labels?
How many have the legal right to do so? Aren't most artists working for the big labels locked into Draconian contracts that restrict them to either selling their work to the labels, or not selling their work at all?

Re:The vicious last bites of a wounded animal (3, Informative)

guruevi (827432) | more than 6 years ago | (#21895772)

Sure, the artists you hear on the radio won't immediately leave the RIAA but after a while some groups and artists notice that they are not getting what they deserve and can get much better income elsewhere. Then they'll start switching. Another problem is that once you signed up with the RIAA, you can't really go back. Everything released from then on is their property and if you leave then you can't take your own work with you.

RIAA-safe albums as found on riaaradar.com (the top100) include some well known names though. Some artists that have actually dumped the RIAA include Madonna, Nine Inch Nails, Oasis, Jamiroquai, Radiohead, Courtney Love and Canadian labels Anthem, Acquarius, The Children's Group, Linus Entertainment, Nettwerk and True North Records and there has been some commotion between EMI and the RIAA too so they might pull out completely pretty soon too.

Re:The vicious last bites of a wounded animal (3, Interesting)

dimeglio (456244) | more than 6 years ago | (#21895922)

Madonna recently [usatoday.com] left Warner for Live Nation apparently for the cash. Interestingly, Live Nation does not appear in the members list [riaa.com] of the RIAA. Coincidence?

Re:The vicious last bites of a wounded animal (1)

boyko.at.netqos (1024767) | more than 6 years ago | (#21895936)

How many non-indie artists can you name that are regularly putting out records? Just the 20 or so constantly played on the radio.

Artists aren't leaving in droves, the contracts prevent them from leaving. But contracts aren't getting renewed, artists are giving up the business rather than completing their contracts, and artists now know not to sign with the RIAA's members.

Re:The vicious last bites of a wounded animal (4, Interesting)

moderatorrater (1095745) | more than 6 years ago | (#21895968)

In the past year, we've had McCartney jump to a new label, Radiohead release their own album, NIN doing their thing, and Prince bucking the trends, signing a deal that is unheard of from a record label, and distributing his cd in a way that pissed all the industry folks off. I agree that leaving in droves might be an overstatement, but it was the first year where labels started losing out in a high profile way because artists weren't playing along.

Re:The vicious last bites of a wounded animal (1)

elrous0 (869638) | more than 6 years ago | (#21895986)

You can bet they'll start leaving when the money starts to dry up. Sure, they sign when the studio can offer a huge signing bonus and stay as long as the gravy-train keeps flowing. But, as CD sales decline and the bonuses and payouts become smaller, the studios will eventually reach a point where the band says "Hey, we can do better than that selling our stuff directly and touring on our own."

Re:The vicious last bites of a wounded animal (4, Insightful)

Billosaur (927319) | more than 6 years ago | (#21894678)

The parallels with SCO are amazing, especially given the sizes of the companies we are talking about. That they could fail to see the future coming at them and more importantly read the trends (i.e. Napster) and react to them in a positive, money-making fashion, is an indictment of the corporate system, where over-priced CEOs sit in their glass-lined offices looking like suit-wearing fish and providing just about as much value to their company. When you start treating your customers as criminals, you have slipped over the edge and down the slippery slope toward oblivion.

Re:The vicious last bites of a wounded animal (2, Insightful)

timeOday (582209) | more than 6 years ago | (#21895064)

That they could fail to see the future coming at them and more importantly read the trends (i.e. Napster) and react to them in a positive, money-making fashion, is an indictment of the corporate system
I'm not convinced there's any way to die gracefully when your business becomes outmoded (SCO, too). You make it sound like all they had to do was "adapt," but what does that mean? They had a sweet setup selling CDs in shopping malls with no competition, but once the Internet made all that unnecessary, I think a decrease in their profits was inevitable. Even if they'd decided to switch everything over to something like iTunes in 1999, the selective purchasing of individual tracks and competition from indies and filesharing would still have decreased their profits, perhaps even moreso than the path they did choose.

Re:The vicious last bites of a wounded animal (1, Redundant)

Billosaur (927319) | more than 6 years ago | (#21895344)

Perhaps, but adaptation would have given them the chance to remain relevant, as opposed to going on the offensive and driving customers away.

Re:The vicious last bites of a wounded animal (2, Insightful)

Mondoz (672060) | more than 6 years ago | (#21895724)

"I'm not convinced there's any way to die gracefully when your business becomes outmoded..."

A long time ago, the tobacco companies saw that eventually, their product would be regulated, lawsuits would ensue, and their profit margins would eventually shrink.
They diversified into food products so heavily that they're making more money on food than they do on tobacco. (They keep most of their holdings in food so they can't be sued for it as well...)

The music companies could have diversified into so many other directions... If only they hadn't been so stubborn...

I'm doing my part . . . (1)

SgtSnorkel (704106) | more than 6 years ago | (#21895866)


. . . no RIAA music for me for the last five years.

Not like John Henry (5, Insightful)

Anonymous Coward | more than 6 years ago | (#21894822)

Bad comparison! John Henry was a champion for the dignity of human work. He illustrated the very real danger of big business treating individuals as disposable ever since the industrial revolution. John Henry as the RIAA? Ridiculous.

Re:Not like John Henry (0, Offtopic)

Conspiracy_Of_Doves (236787) | more than 6 years ago | (#21894870)

Someone mod this up!

Re:Not like John Henry (0)

Anonymous Coward | more than 6 years ago | (#21894984)

and he was a steel drivin' man!

Power to the workers! Down with the corporate oligarchy!

Re:Not like John Henry (5, Insightful)

elrous0 (869638) | more than 6 years ago | (#21895182)

No, he was a damned fool. Stubbornly digging your heals in, refusing to change, and fighting innovation to the bitter death isn't dignified and heroic. It's pathetic and stupid. It's like the old man who's afraid of computers, and who, instead of conquering his fears and adapting to the changing world, simply refuses to use them and becomes a goddamned living relic.

If America were full of John Henry's, we'd have become a third-world backwater a long time ago.

Re:Not like John Henry (0)

Anonymous Coward | more than 6 years ago | (#21895390)

There's something to that, but you go too far. Not everybody is young and smart and capable of making their way in a chaotic free market. Labor unions can go too far too, but I'm not interested in going back to the days of the Robber Baron either.

Re:Not like John Henry (1)

c_forq (924234) | more than 6 years ago | (#21895732)

Damned fool for fighting to keep the jobs of himself and his coworkers? I would argue that you are a damned fool if you lay over and no longer put food on the plate for your family. This isn't something where he had the choice to switch from a typewriter to a computer, but a case where a machine was going to entirely replace him and others. For modern perspective look at the fight between labor and automation in the auto industry.

Re:Not like John Henry (2, Insightful)

elrous0 (869638) | more than 6 years ago | (#21895878)

Damned fool for fighting to keep the jobs of himself and his coworkers?

No, he was a damned fool for not realizing that the era of hand-mining was coming to an end and looking for a new line of work. My great-grandfather was a coal miner back when it was booming. When it started to go out and the continuous miner came in, he went to work in a local textile plant--eventually rising to a pretty high level there before he retired. He made it possible for my grandfather to go to college. He didn't kill himself in a romantic stunt, he just adapted. That's the can-do spirit.

John Henry is a romantic bit of fiction, nothing more.

Re:Not like John Henry (2, Insightful)

cayenne8 (626475) | more than 6 years ago | (#21896016)

"Damned fool for fighting to keep the jobs of himself and his coworkers? I would argue that you are a damned fool if you lay over and no longer put food on the plate for your family. This isn't something where he had the choice to switch from a typewriter to a computer, but a case where a machine was going to entirely replace him and others. For modern perspective look at the fight between labor and automation in the auto industry."

I guess I miss your point.

I see nothing wrong with a machine taking over for jobs...especially such as those in the automobile industry. It makes it where cars can be made more efficiently and with more build quality/consistancy. (No more worrying about buying a car made on Mon or Fri).

Sure a person has to put food on the table, but, no one can ever consider their job is going to be around forever, especially today. You have to keep on the ball, and learning new things all the time. Chances are you will have to change jobs and careers more than a few times during your lifetime. That's just a fact of life.

Re:Not like John Henry (1)

haystor (102186) | more than 6 years ago | (#21895740)

For every John Henry there was someone working just as hard to build a steam engine.

Re:The vicious last bites of a wounded animal (1)

Anti RIAA DJ (1211796) | more than 6 years ago | (#21895648)

I agree that this is all they are doing. As a DJ - for local and unsigned bands ONLY I am continuously reminded of the BEST SONG EVER from an unsigned "indie" band American Lesley Jane and the song "The RIAA Sucks a Big Weenie". Absolutely perfect for everything the RIAA is.

Re:The vicious last bites of a wounded animal (1)

jddj (1085169) | more than 6 years ago | (#21895932)

Y'know, I think the industry are generally scum, certainly are doing themselves no favors with all the lawsuits against their own customers, but I still WANT to be able to walk into a store and browse and buy CDs. I'm not interested in pirating music, not interested in the DRM-laden iTunes Music Store experience, and want uncompressed, full-resolution pressed CDs as a backup and a tangible item.

It's been quite depressing to watch the CD selection shrink at Fry's, Best Buy and other major retailers, particularly since what disappears first is the good stuff. What's left is mass market ho-stamp pop and geezer retreads from the '60s and '70s.

They haven't been able to sell me a CD in a store in a while NOT because I was busy pirating something else, but because the selection was so thin they didn't have anything I'd buy, or because they didn't have anyone re-organizing the stacks so I could find things.

I'll keep my CDs, and my TV Antenna thanks.

Hey you kids! Get off my lawn!!!!

so, what would Fool say about our Friend (0, Offtopic)

yagu (721525) | more than 6 years ago | (#21894460)

So, what might the Fool say about our Friend, Microsoft, which in the last year has at least put forth the specter of litigation in light of its agreement with Novell. Yes, they've assured the community they won't litigate, but only if within the imprimatur of Novell's "version" of open source. This, coupled with a seemingly possible failure of Vista, reviewed by many as lacking in innovation. Could these be first signs of another failing "industry"?

Re:so, what would Fool say about our Friend (2, Informative)

techpawn (969834) | more than 6 years ago | (#21894508)

Could these be first signs of another failing "industry"?
It's signs of an evil company, not a failing industry. When the industry as a whole fights new innovation with lawsuits against individuals rather than adapt THEN it would be a failing industry.

Re:so, what would Fool say about our Friend (1)

samkass (174571) | more than 6 years ago | (#21894848)

I think it is a sign of a faltering, if not failing, industry. In this case, it's a sign that the profit margins upon which the industry is built are extremely fragile and unlikely to last. I don't doubt that the music industry could be profitable selling music substantially cheaper (ie. at a rate the market would naturally bear without lawsuits), but you wouldn't get nearly as much revenue. But every lawsuit increases ill will and a desire to "stick it to the man" (with the "man" in this analogy being the record labels), causing a further decline in the price the market would naturally bear.

Re:so, what would Fool say about our Friend (2, Interesting)

Score Whore (32328) | more than 6 years ago | (#21894526)

What does that say about the GPL and various developers who have threatened to sue companies that might be violating the license?

Re:so, what would Fool say about our Friend (1)

xubu_caapn (1086401) | more than 6 years ago | (#21894656)

that means nothing because thats the purpose of the GPL :) as long as they are legitimate lawsuits of course.

Re:so, what would Fool say about our Friend (0)

Anonymous Coward | more than 6 years ago | (#21894786)

They're not _customers_. It's one thing to sue someone who has infringed on your copyright (GPL violator), quite another to sue a real customer who is acting in good faith.

Re:so, what would Fool say about our Friend (2)

Neotrantor (597070) | more than 6 years ago | (#21894844)

thats breach of contract, which should be looked upon as legitimate.

The former are desperate, the later aren't (4, Informative)

DrYak (748999) | more than 6 years ago | (#21894948)

Microsoft is digging whatever they could find in their "Imaginary Property" port folio of patents to find something with which they could scare client who would potentially consider fleeing to open-source. They're basically trying to invent new ways to kill their adversary.

**AA are suing who ever they can going through complicated legal justification trying to explain why "Fair Use" never applies, trying to persuade that "Format shifting" represents "Unlawful evil piracy", etc. They're basically trying to find ways to stop everything that normally should be allowed by the law (and somewhat managed to partly achieve this goal with DMCA).

On the other hand the situation with GPL is much simplier.
The copyright law is simple : Thou shall not copy. (outside the list of exception, like personnal backups, etc. against which the **AA are fighting).
The GPL is a license : it gives additional rights, more specifically it gives you the right to freely distribute copies of GPL software, as long as you pass along the accompanying freedom to the next in the chain.
If you don't follow the license, you lose those additional rights and everything reverts to the official copyright law. Which says No-No to distributing software which you don't own personally.
They're basically making sure that the users retains their freedom by using pre-existing legal infrastructure.

You'll notice that :
- GPL isn't threatening to sue users at all. The whole "FreeSoftware" concept is about giving freedoms to users. They threaten to sue companies that would be taking away those freedoms. And in fact they don't threaten as often, as they help misguided companies who don't really understand the GPL. There are only a couple of suit-threats that we've heard here on /. whereas most of the time is companies who don't really understand how they should behave to follow the GPL. Most of the time it's more a polite exchange of explanation (you should publish that piece of code...) than threats.

The end users benefits of the GPL, whereas with the former the end user is the target.

- There are no auto-settlement-bot spilling standart cease-and-desist suit-threat

- GPL isn't trying to twist the interpretation of the law to try to remove rights that where granted in the first place (They're not arguing what is "Fair Use" and trying to limit it). The GPL is based on pre-existing laws.

Re:so, what would Fool say about our Friend (4, Insightful)

sm62704 (957197) | more than 6 years ago | (#21894544)

These guys (disclaimer: I'm not one of them and in fact haven't owned any stock for over 20 years) always say that you should pick a stock with a dividends to price ratio if ten to one or better.

Microsoft, the last I heard, pays no dividends.

So I think MS is probably a "stock for fools". If you buy a stock with the expectation of its price rising, you're gambling, not investing. That's not to say that gambling that Mars won't explode in the next two weeks isn't a good bet; some gambles are worthwhile.

As to the record companies, DUH! You don't need an expert to tell you that a company whose sales have been falling for over five years is a turkey.

Re:so, what would Fool say about our Friend (2, Insightful)

Mr. Underbridge (666784) | more than 6 years ago | (#21894666)

Microsoft, the last I heard, pays no dividends.

No longer true, I believe because they got sick of answering the questions you pose in your post. ;)

From http://www.microsoft.com/msft/FAQ/dividend.mspx [microsoft.com] : "Microsoft pays a quarterly dividend of $0.11 per share. Beginning in Fiscal Year 2005, Microsoft shifted from paying an annual dividend to a quarterly dividend."

So I think MS is probably a "stock for fools". If you buy a stock with the expectation of its price rising, you're gambling, not investing. That's not to say that gambling that Mars won't explode in the next two weeks isn't a good bet; some gambles are worthwhile.

As an aside, I think TMF has moved away from that sort of stance. Look at it this way - if I'm a long term invester (and it's better to be), then I don't need the dividend now. What would I do? Probably re-invest it. If I believe in the company enough to own their stock, I'd rather they didn't pay me the dividend, which I'd just re-invest, because (I think) if my investment isn't tax-protected that's actually better from a tax perspective. I don't want to be taxed on the dividends now while I'm working and presumably in a higher bracket, I'd rather be taxed on them later at the long-term cap gains rate.

Re:so, what would Fool say about our Friend (0)

Anonymous Coward | more than 6 years ago | (#21895184)

The income tax on dividends was changed to bring it in line with the tax on long term capital gains. Economically they are the same thing, and having different tax treatment forced companies to retain their earnings instead of returning them to their shareholders.

see, eg
http://en.wikipedia.org/wiki/Dividend_tax [wikipedia.org]

Re:so, what would Fool say about our Friend (0)

Anonymous Coward | more than 6 years ago | (#21896024)

The dividend is small, given the stock price. But the real issue is dilution. The value of MS stock bought on the market is diluted by the stock given as options to the MS insiders. MS then uses earnings to buy the options stock back, thus transferring those earnings to the MS insiders.

Re:so, what would Fool say about our Friend (1)

ErroneousBee (611028) | more than 6 years ago | (#21895944)

These guys (disclaimer: I'm not one of them and in fact haven't owned any stock for over 20 years) always say that you should pick a stock with a dividends to price ratio if ten to one or better.

TMF employs several contributors who espouse several differnt investment approaches, and also runs many discussion boards where many investment strategies are discussed.

Many of the strategies are yield or value based, and indeed Microsoft (or any other company trading at a high P/E) would be unlikely to appear as a recommended share for HYP or value strategies.

Some strategies are growth based, which means looking at companies and analysing whether they are likely to improve profits. It is entirely feasible that MSFT would get recommended at some point by TMF followers of growth or recovery strategies. However, most growth strategies focus on small companies as these are simpler to analyse.

FWIW, I have an HYP portfolio as proposed by TMFPyad on the Fool UK site.

Re:so, what would Fool say about our Friend (1)

larry bagina (561269) | more than 6 years ago | (#21895984)

A 10-1 price to dividend means it has a 10% yield. That's junk bond territory. I own high yield funds and preferred stocks that pay in the 7-10% range, but that's for monthly income; growth is pretty much non-existant. Not exactly MF territory.

PS - MSFT does pay a dividend.

Re:so, what would Fool say about our Friend (2, Interesting)

Pojut (1027544) | more than 6 years ago | (#21894576)

Maybe I am buying into their crap, or maybe I'm right...who knows. But out of all the companies in the past 20 years that I have seen making huge mistakes, Microsoft is one of the few companies I have seen that is actually at least ATTEMPTING to correct their problems. They are still going about things in a very asshatish way, but I think they are realizing that they are not the invincible juggernaut that they once thought they were.

Of course, the other problem they have is that even when they do make good gestures, many in the IT industry still see them as dicks. Can't please everyone, I suppose...

Re:so, what would Fool say about our Friend (1)

UncleTogie (1004853) | more than 6 years ago | (#21894854)

Of course, the other problem they have is that even when they do make good gestures, many in the IT industry still see them as dicks.

Ok, I'll bite. Which "good gestures" has Microsoft made that've been misinterpreted?

Re:so, what would Fool say about our Friend (0)

Anonymous Coward | more than 6 years ago | (#21895166)

I can't speak for the gp, but I guess one could claim that IE7 attempting to be more complaint is an example of Microsoft trying. Then again, one can show dozens of examples through 2007 where they have done the complete opposite.

Re:so, what would Fool say about our Friend (4, Insightful)

fotbr (855184) | more than 6 years ago | (#21894600)

I doubt he'd say much.

RIAA: track record of suing their own customers, based on "evidence" gathered via pretty shady means
MS: doesn't regularly sue their own customers (their competitors, sure, but not random joe off the street)

Failure of vista: Not the only money maker that MS has. Also not their only market.
Failure of music sales: only thing the riaa has.

Re:so, what would Fool say about our Friend (1)

Locklin (1074657) | more than 6 years ago | (#21895152)

The RIAA doesn't sell music. They are a "trade group" representing several major record labels, ie, they are a group of lawyers providing legal services to the big-label cartel. As long as the big record labels continue to pay the RIAA to sue customers, pay off politicians, and eliminate competition, then the RIAA is giving it's customers exactly what they want.

Re:so, what would Fool say about our Friend (1)

fotbr (855184) | more than 6 years ago | (#21895680)

True. I should have said "record companies" instead of the RIAA.

Re:so, what would Fool say about our Friend (2, Insightful)

Neuropol (665537) | more than 6 years ago | (#21894672)

"Could these be first signs of another failing "industry"?"

I'd say yes, but I think it's been dying for a long time now. More than a decade perhaps. Since the advent of mp3.com (the original - R.I.P.) and the ability for independent musicians to completely circumvent the rigors of major-label-pole-smoking. In terms of recording, production, and distribution bands have quickly adapted to the medium by which they can deliver the latest to the masses literally years faster than most major labels can. In almost all cases, faster than what a label can provide due to legal mumbo-jumbo that bands are required to go through before any thing moves forward in terms of contracts, tour support, and record sales projections and demands. Unless your 'label-made' like 99% of top 40 artists - born in the offices of label heads and marketing strategists, the wait has been over for a while now. The stone chunks are being taken out of the proverbial great wall of music put up by labels that had essentially created their disgustingly comfortable niche. It's close to being fully dismantled. For the sake of good Music, the sooner the better.

Music industry is big business. Huge in fact. It's laid many a great band to ruin in it's wake. And any thing that can crop it off at the knees is okay in my book.

Sounds familiar (4, Interesting)

Mick Ohrberg (744441) | more than 6 years ago | (#21894504)

[...] rather litigate than innovate [...]

Now where have I heard that before... Oh, that's right. SCO. And look where they're at...

Re:Sounds familiar (1)

Dr_Art (937436) | more than 6 years ago | (#21894538)

Is Microsoft funding the RIAA as well? :-)

Regards,
Art

Re:Sounds familiar (3, Insightful)

garcia (6573) | more than 6 years ago | (#21894838)

Now where have I heard that before... Oh, that's right. SCO. And look where they're at...

Yeah, but they didn't have much to market and a very small group that they could actually market their products (invented or real) to. SCO had to invent the "Pay us for Linux or we'll sue later" shit in order to have something that some companies would actually be willing to pay them for.

Those involved with the RIAA still have a product that is mass marketable and that plenty of people will continue to purchase. Just because the Slashbotters (me included on this one) refuse to support RIAA music doesn't mean that anyone else really gives a shit. Yes, artists are starting to come around and going around the RIAA by distributing their music online, and it's working, but it's still not to the point where it's a 100% viable method to get your music out.

It will be at least 5 years and more like 15 to 20 before we really see the fuckers die off -- as unfortunate as that is.

Re:Sounds familiar (2, Insightful)

garcia (6573) | more than 6 years ago | (#21894868)

Oh and I forgot to add:

Because they own copyrights on already recorded music that people like and will continue to buy for the foreseeable future, they will continue to have viable income for at least another 125 years. So while they might start faltering in 20 they won't be dead until the copyrights run out. Problem is that they will never run out because we'll never get those douchebags in Washington to fix the mess they were paid to create.

Re:Sounds familiar (1)

darthflo (1095225) | more than 6 years ago | (#21895164)

Old records don't sell too well, so reduced to the copyright sector their funds would be quite a bit smaller as compared to now. Without their current kind of liquidity their political weight would end after the terms of already bought politicians, lobby work couldn't be done as effectively as it is now. Consumer rights groups (supported by just about any somewhat intelligent lifeform) would have better chances to reform copyright to more sensible terms, killing off the big four's last income stream.
Availability of massive financial resources is all that's keeping the RIAA alive now, without all the bribery they'll die quicker than you're able to take your next breath.

Oh, if you should be right about never being able to convince the "douchebags in Washington to fix the mess they were paid to create": Step down from your soap box, skip ballot and jury and help yourself to some ammo already. The American system could really use a makeover, be it thru the 2008 elections or ... a bit more direct. :)

Re:Sounds familiar (2, Funny)

Drewmeister (1036004) | more than 6 years ago | (#21895642)

"Now where have I heard that before... Oh, that's right. SCO. And look where they're at..." Who?

Trade Associations Gone Wild! (5, Funny)

Presto Vivace (882157) | more than 6 years ago | (#21894524)

I guess the sue your customer business model isn't working out for them. Who knew?

Re:Trade Associations Gone Wild! (0)

Anonymous Coward | more than 6 years ago | (#21894620)

I am not sure whether that was more funny or insightful.

Re:Trade Associations Gone Wild! (5, Interesting)

mea37 (1201159) | more than 6 years ago | (#21894776)

Or rather the columnist believes that's the business model they're now in and predicts it won't work well for them.

The inference people here seem to be drawing (that the labels are in trouble because of the lawsuits) resonates well -- we want to believe that kind of justice works in the market -- but really it has the cause and effect reversed. Sales dropped first, then the law suits started.

Now, the thesis is correct in so far as "sue the customer" is not a productive response to an adverse market. They continue to spiral not because they file the lawsuits, but because meanwhile they do nothing to address the orignal failure of their position in the market.

The "ripping mp3s is unauthorized" angle is FUD all around, though. FUD on the RIAA for using that wording in the first place (yes it's unauthorized, in the same sense that I'm not authorizing you to disagree with my post), and FUD on everyone who cites this as the moment where the RIAA calls all users thieves.

Now, sure, the bad press from the lawsuits doesn't help the RIAA... among the small part of the market that sees what's going on and cares. Don't get me wrong, I'm among that small part of the market (not anti-copyright, not convinced that everything the RIAA says is wrong, but on the whole opposed to their actions over the past few years); but don't be fooled into thinking that slashdot is the world.

As to the investment point of view... yeah, to a point, I wouldn't want to be putting money behind the major labels right now. But Sony? What would be the total impact on Sony if their record label arm spun off or died out completely?

Re:Trade Associations Gone Wild! (1)

Beyond_GoodandEvil (769135) | more than 6 years ago | (#21895252)

But Sony? What would be the total impact on Sony if their record label arm spun off or died out completely?
You're right the record label arm is totally dragging down the highly profitable blu-ray division. Now, all kidding aside, if the consumer electronics part could divorce itself from the entertainment part, then perhaps Sony could go back to making consumer electronics that didn't suck.

Re:Trade Associations Gone Wild! (0)

Anonymous Coward | more than 6 years ago | (#21895270)

but really it has the cause and effect reversed. Sales dropped first, then the law suits started.

The world has changed. They no longer enjoy the absurd position of being able to charge a lot of money for whatever they wanted to sell. The whole industry was designed to take advantage of young people who "needed" to have whatever is cool more than they needed the hundreds of dollars a year buying it.

So they need to change their business model, and they have. But they made the wrong change, thinking they can force things to be they way they were before.

Does *anybody* pull out their old Britney Spears records and listen to them for the wonderful music? Of course not. That's not why they bought them in the first place.

Re:Trade Associations Gone Wild! (1)

SomeoneGotMyNick (200685) | more than 6 years ago | (#21895720)

They no longer enjoy the absurd position of being able to charge a lot of money for whatever they wanted to sell. The whole industry was designed to take advantage of young people who "needed" to have whatever is cool more than they needed the hundreds of dollars a year buying it.
As much as I'd like to see the RIAA model burn to ashes, I still have take note that the War on Drugs is working, too......

Re:Trade Associations Gone Wild! (1)

Billosaur (927319) | more than 6 years ago | (#21894804)

It's not really a business model, as they are still trying to do business the old-fashioned way, and that's where they are getting into trouble. They've failed to realize that the Internet has allowed a music artist to move beyond the need for a big-name music company to "discover" them. An artist can now produce their own music, create their own artwork, package and distribute their own material, and place it such that it's easily accessible by their fans. Their fans provide the publicity by blogging and cross-linking to the artist's site, and the rest is history. Mind you, this hasn't happened with major bands yet, though their are signs (Radiohead, Madonna, etc.) that the old model is cracking under the pressure from the Internet.

The lawsuits are the vain attempt to re-legitimize their current business model as the only way you can publish popular music, and that very act is what will cause its eventual destruction.

Shared Folder? (4, Interesting)

Anonymous Coward | more than 6 years ago | (#21894574)

I wonder how they define a shared folder? I'd imagine an shared folder to them is any folder on a computer that is connected to the internet, WAN or LAN, has a CD or DVD burner in it, has any kind of magnetic removable drive, or any computer in which the hard drive can be removed.

Re:Shared Folder? (2, Interesting)

jcaldwel (935913) | more than 6 years ago | (#21894690)

I wonder how they define a shared folder?

Any letter drive under Windows. [google.com]

Re:Shared Folder? (2, Insightful)

westlake (615356) | more than 6 years ago | (#21894772)

I wonder how they define a shared folder?

I'll take a wild guess and say that they define a shared folder as the shared files folder used by your P2P client.

Re:Shared Folder? (1)

91degrees (207121) | more than 6 years ago | (#21894796)

That was the case in Atlantic V. Howell

Re:Shared Folder? (3, Insightful)

mea37 (1201159) | more than 6 years ago | (#21894966)

And Atlantic V. Howell is the context of this story. See how neatly that works out?

It's also been the definition they used in other cases. I don't know whether they think the term explains itself, or whether they're deliberately using vague wording for some reason... or maybe they do define their meaning clearly somewhere and I haven't seen it.

In any case, I think in the long run it's in their own interest to be clear and to use a narrow definition that requires not only shared access but also indexing / notification of availability that facilitates unauthorized copying (in the "actually illegal because it's unauthorized" sense).

Heh (2, Interesting)

ilovegeorgebush (923173) | more than 6 years ago | (#21894578)

I've personally never thought - during all this suggestion from various websites - that the Music industry will ever die. In fact, I just think that the current status is a precursor to it revamping itself and embracing the digital era.

The more I read things like this though, the more it seems the downfall of such companies could actually happen. I kinda like it, too. It rumbles in my belly...

Re:Heh (1)

Dystopian Rebel (714995) | more than 6 years ago | (#21894828)

I've personally never thought - during all this suggestion from various websites - that the Music industry will ever die.

Music will live on. The Music Industry will go the way of the Telex. A sea-change in technology left it a business model without a business.

Re:Heh (2, Insightful)

ajs (35943) | more than 6 years ago | (#21895544)

The more I read things like this though, the more it seems the downfall of such companies could actually happen. I kinda like it, too. It rumbles in my belly...
No, the industry isn't going anywhere. There are some large companies that will likely be shaken up, broken up or re-build as a result of change, but the fundamentals of the music industry are sound. People do want to buy music, it's just that a) the prices have become obscene while the technology has commoditized the "song" b) it's well known that buying music doesn't support artists because of predatory contractual bondage that they must accept from the publishers c) good music (which I define as any music that requires creativity and originality to create) is frequently under-promoted or squelched entirely in favor of over-produced, formula-driven, focus-grouped noise that I'm increasingly convinced is authored by software.

I'd like to see the total devaluation of the "song" and instead a resurgence of routine live performances in public places (stores, plazas, etc.) This is the way it used to be. You never went into a large store (and even most small ones) or a good restaurant without seeing a live performer. I think that would really help the industry transition from this plastic-stamping model to a more service-oriented model where the product isn't a thing, but a performer.

This is probably the best thing to happen to them (3, Insightful)

cashman73 (855518) | more than 6 years ago | (#21894758)

Seriously, I'm no fan of the **AA. But if more investment companies warn folks not to buy their stock, and since these guys seem to be motivated primarily by the almighty dollar, maybe if they see their stock shrivel up into nothingness and their retirement blasted into oblivion,. . . maybe they'll finally, "get the memo," that their 19th century strategy isn't exactly working out in the 21st century. All we need is for one of the big fish to declare bankrupcy, the and rest will see that and stop their litigous ways and actual get back to giving consumers what they want,... And if they don't, then f*ck 'em!

Re:This is probably the best thing to happen to th (1)

techpawn (969834) | more than 6 years ago | (#21894866)

All we need is for one of the big fish to declare bankrupcy, the and rest will see that and stop their litigous ways
No, they'll all claim "ZOMG!!! T3h Pirates!!!" and sue more than ever since they would have to get money from somewhere. Part of me thinks this is a good thing to help them "get the memo" but they still won't put covers on their TPS Reports...

Besides, Most of these companies are big media and have more than just the record section correct? Warner, Sony, ETC.?

Re:This is probably the best thing to happen to th (1)

UncleTogie (1004853) | more than 6 years ago | (#21895076)

No, they'll all claim "ZOMG!!! T3h Pirates!!!" and sue more than ever since they would have to get money from somewhere.

What worries me is that the RIAA will talk Congress into subsidies... [wikipedia.org]

Talking out both sides (5, Informative)

emeb2 (536129) | more than 6 years ago | (#21894814)

A lot of discussion centers around the apparent change in the RIAA's position on ripping for personal use. With the recent change in their website removing language that suggests they're OK with it and the statements from the Washington Post article about 'steals one copy' it sounds like they're taking a harder stance on it. Meanwhile there is this article http://www.azcentral.com/arizonarepublic/local/articles/0103music0103.html [azcentral.com] which quotes a representative who says that it's not an issue.

I suppose they want it both ways - keep people on the edge and they're easier to control or something.

Oh no! My money! (2, Interesting)

maclizard (1029814) | more than 6 years ago | (#21894860)

It's about time the recording industry collapsed. Maybe I'm just bitter, but last CD I bought cost $17, very little of which went to the artist. 90% of the money made in the music industry is not music sales but concerts, t-shirts, bobble-heads... you get the picture. Free the music!!

Re:Oh no! My money! (1)

Sanat (702) | more than 6 years ago | (#21895368)

It is more than just the money. The RIAA represents "old energy" that is stagnate and therefore it will not be able to survive in the lighter energies of today and even more so... of the tomorrows. Each day the differential becomes greater and each day the RIAA becomes more like a dinosaur in our modern day. (The comparison to SCO is more than coincidental)

I believe that we will see many infrastructures such as the **AA crack and fall apart in a similar way. The next major demise will be "Insurance". Watch for it. It is old energy and regardless of what resources are put into it to ensure survival... it will still fail and crumble... simply because it is old energy.

Even if the RIAA reinvented itself in some manner... the energies would still be inappropriate for today environment and so it could not survive. Good or great management would only prolong its existence but in the end it is still doomed.

Re:Oh no! My money! (1)

maclizard (1029814) | more than 6 years ago | (#21895902)

The next major demise will be "Insurance". Watch for it.
So, are you saying that the thousands of dollars that I have pumped into my car insurance is likely going to disappear?

Magnatune.com (5, Informative)

ProteusQ (665382) | more than 6 years ago | (#21894916)

Might be a good time to listen to a [magnatune.com] few [magnatune.com] tunes [magnatune.com] from a label that's not evil.

[Caveat: I don't work for them, own any part of the company, or know anyone personally who's released a CD through them. I just buy their stuff and dig Shannon Coulter's sultry voice.]

Re:Magnatune.com (0)

Anonymous Coward | more than 6 years ago | (#21895400)

Between being fed up with the exploits of the big labels, and the garbage being put out, I buy a lot less music from major labels. Most of my recent purchases have artists under independent labels:

Stock shares? (4, Insightful)

SharpFang (651121) | more than 6 years ago | (#21894950)

Actually, I wonder how their stock shares fare.

Many companies have been proclaimed dead or dying while their shares kept going up, and they keep going up still. Some portals were proclaimed to be dead because their percentage market share vaned comparing to Google, but they actually gain users as the net grows, and they actually grow and note profits each year.

So how's it for the record industry?

Re:Stock shares? (1)

Midnight Thunder (17205) | more than 6 years ago | (#21895384)

Tried getting some info:
- Warner Music Group [google.com]
- Sony BMG Music Entertainment [google.com] , appears to be a private company, so no data
- EMI Group [google.com] , no historic data?

Re:Stock shares? (1)

jcaldwel (935913) | more than 6 years ago | (#21895626)

- Sony BMG Music Entertainment [google.com], appears to be a private company, so no data

I believe SNE acts as a holding company for the private Sony/BMG shares, so it would be included in the SNE ticker. The Yahoo! profile of the stock seems to support this. [yahoo.com]

Re:Stock shares? (1)

eastlight_jim (1070084) | more than 6 years ago | (#21895638)

Not well, generally.

Sony [yahoo.com] (the publicly listed parent company) - Fallen from 150 euros per share to around 37 euros per share now

Warner Music Group [yahoo.com] - Fallen from a peak of around 24 euros in mid 2006 to under 4 euros now

Vivendi [yahoo.com] - Fallen from a high of around 80 euros in 2001 to around 30 euros now although they have been climbing steadily since 2003.

EMI [yahoo.com] - Similar trend to Vivendi but still fallen from a high of 12 euros; to only 3.70 euros now.

Make of that what you will but it hasn't been an easy ride for investors in the music industry over the last few years.

Still curious (2, Insightful)

edwardpickman (965122) | more than 6 years ago | (#21894956)

I know it's fun to burn the school down but then you're left wondering what will replace it? I know the current preference is a pay if you want/download for free if you don't business model but it isn't exactly sustainable. The problem is always people will eventually get tired of paying and stop since they don't have to pay. Look at what happened when the 55 mph speed limit was lifted. I was living in LA at the time. For the first month people drove 55 out of habit but after that they slowly increased speeds to the new 65 limit and within three months they were already back to speeding. If you made the speed limit 100 mph some people would still speed. If the groups released their albums for free but asked people to not post them for download and to please only download them from the official site there'd be a copy on a file sharing web site with in the first hour. They can try to make money off ads on their web sites but like I say the majority will probably download from file sharing sites. Eventually the professionals will give up on releasing albums and songs entirely and just go back to playing live. Odd that things might go full circle to the pre technology days. Technology created the music industry we know and it's likely to kill it in the end.

Re:Still curious (1)

Bloodoflethe (1058166) | more than 6 years ago | (#21895284)

Because people never donate to sources of free . That's why there are no longer any freeware producers out there.

Re:Still curious (1)

morari (1080535) | more than 6 years ago | (#21895472)

That might be a problem in LA, where the roads are already heavily congressted and most drivers are assholes (like in any city). 55mph is a ridiculous speed limit in most circumstances however. I hate how the completely straight, flat, barren highways around here have an imposing 55 to 65 limit on them and are heavily enforced. Then again, law enforcement has already been good at wasting my tax money by enforcing nonlaws. :P

Re:Still curious (0)

Anonymous Coward | more than 6 years ago | (#21895576)

you are still thinking inside the box.. assuming an artist would want the album to only be delivered via the official site suggests that the only money they make is off of ad revenue from the site. there's money to be made by producing and delivering your own content. you just have to be clever about it. mark my words, the business model of the future--at least for content delivery--takes full advantage of the fact that people will post anything to a file sharing site immediately. after all, would you expend money to have something delivered across the nation when there are droves of volunteers willing to do it for free?

Re:Still curious (1)

Hub_City (106665) | more than 6 years ago | (#21895736)

The school's not burning - the students have just found out they no longer have to go there, so it really doesn't matter whether it burns down or not.

Technology has done what it always does: render some actions incredibly easy for the average person, while shifting value (and thus the ability to make money) somewhere else.

Musicians will still make music; they do that. More of them are now able to put it in front of you. Seems like, just as in the case of bottled water, you're no longer paying for the product itself, you (or someone who wants your eyeballs looking at them) are paying for the filter that put the product in front of you.

Find the value people are willing to pay money for, and you'll make money. No change there.

The **AA can't afford any more attention like this (4, Interesting)

zappepcs (820751) | more than 6 years ago | (#21895008)

If anyone here thinks that the Fool will harm the **AA's business, think again. The Fool is only telling us what is happening. In a family gathering of more than 25 people for present opening ceremonies this year, I watched quite gleefully to find that only ONE CD or DVD had been purchased. ONLY ONE! There were cameras, books, clothes, presents galore... but only ONE lonely little DVD.

My in-laws really don't care about the **AA and their ways, CDs and DVDs are JUST TOO EXPENSIVE. Never mind the lawsuits, their crap products are priced way out of order.

Time to start ePhoenix records I think....

Incorrect (1, Interesting)

Anonymous Coward | more than 6 years ago | (#21895018)

No one, including the RIAA's lawyer, has ever stated or implied or suggested that ripping your own personal copies of CDs to your computer is not a legitimate practice. The issue here is making your personal copies available for distribution on the net.

Here is what the RIAA's lawyer wrote in a supplemental summary judgement brief that ignited this firestorm and has been grossly misinterpreted by "pundits" on the net:

"Once Defendant converted Plaintiffs' recording into the compressed .mp3 format AND they are in his shared folder,
they are no longer the authorized copies distributed by Plaintiffs."

This is a pretty unequivocal statement. If you make your personal copies available for distribution, they are no longer your personal copies since distribution is not the purpose, right, or intention for maintaining personal copies .

Here is what the Judge wrote in granting summary judgment:

"However, the question is not whether Howell owned legitimate copies of
some of the sound recordings on CD, but instead whether he distributed copies of the
recordings without authorization. Howell's right to use for personal enjoyment copyrighted
works on CDs he purchased does not confer a right to distribute those works to others
without Plaintiffs' authorization. 17 U.S.C. 106(3). As he admitted that the sound
recordings were "being shared by [his] Kazaa account," Howell is liable for distributing them
in violation of the recording companies' exclusive right."

Its not just the lawsuits... (2, Informative)

phobos13013 (813040) | more than 6 years ago | (#21895052)

Take a look at Warner Music Groups stock price over the last two years [google.com] (WMG is the only publicly traded music label, in the last year it has decreased by almost $20! You screwed yourself in 2007 if you sided with the RIAA. But look at the long-term, its not just the lawsuits that make music labels a bad investment now or the last five years. Its a dying industry without the lawsuits. The digital age is here, nothing can be done to stop it. There never was anything that could be done. The industry can still exist, but its market share had decreased enormously and they need to accept it. Sorry for anyone who bet the farm on these guys, cause all you have is a cow left. Not even a cash one sadly.

Re:Its not just the lawsuits... (0)

Anonymous Coward | more than 6 years ago | (#21895754)

the digital age is in fact upon us, but i do not agree with your sentiments.. there most certainly was something that could have been done on the part of the labels. the thing is, it would have had to have happened 5+ years ago. the behemoth corporations of the 80s and 90s are starting to slowly outgrow the world around them. life moves faster than the lumbering corporate beast, and that is the sole reason the **AA et al are in this situation. the future of record labels lies with the small dynamic business that can react in real-time to the consumer market. huge companies in other industries will begin the path to oblivion. in fact, we see this daily with many industries. the giant corporation simply cannot react fast enough to survive in a modern world.

did a meteor kill the dinosaurs? i say they were doomed the minute warm blooded mammals began to run circles around them. so it is with today's industry. while the dinosaurs are taking a moment to bask in the sun to warm up brain function, the mammals have already hit the ground running and are processing information several steps ahead of the dinos. extrapolated out over a period of time, one sees an agonizingly slow yet unavoidable death for the lumbering beasts of yesteryear. nothing can save them now.

Re:Its not just the lawsuits... (1)

EMeta (860558) | more than 6 years ago | (#21895782)

This would be a more useful comment given a percentage fall or some baseline for that $20 per share drop. The high a year ago was close to $25. It's fallen very hard.

i would like to suggest something unPC (2, Interesting)

circletimessquare (444983) | more than 6 years ago | (#21895132)

where polotically correct in this sense is sensitivity to the dying music industry: maybe there really is no more money in this business

we all talk about "embracing new models", and anger at the industry for seeing napster and fighting them tooth and nail, rather than changing their business model. we yell at the music industry for not using the internet to their advantage... well what if the suits are right? there is no advantage in the internet. that it's simply death for them?

of course there is still money in concerts and movie theatres, those are real world venues. also advertising plugs. but everything that goes on media: movies, music, maybe there really is nothing but a black hole of no cash for the music and movie industries

not that the industries can do anything about it

and copyright of course means shit: it's simply unenforceable. you can trap a few scurrying mice here and there and extract a few pennies from soccer moms and college kids, but everyone will trade anyways, with just more and more bulletproof protocols and apps

not that i'm worried or complaining about this new world. one music exec assholes financial riches gone means our cultural riches greatly improved. there's more than one way to measure richness than just cash in the bank

it's a wonderful new world in fact

long live the death of the music and movie industries

this is really wonderful

CD/DVD is the consumer transmission medium (2, Insightful)

totallygeek (263191) | more than 6 years ago | (#21895210)

Really, at this point, I purchase compact discs for one purpose: to have a real product to carry from the store and then store on a shelf. I rip all my CD's so that I may listen to the music on the device of my choice; one that holds far more information than any single or group of discs. It is getting this way with movies too. I figure that I will start ripping my movies to large storage systems and build a video-on-demand device at home. Don't get me wrong though, I do not like downloading music nor movies. Perhaps I am a relic, but I want a real 'box' product. In addition, I have hated downloading music within iTunes only to be told that I cannot make a mix mp3 CD (for my truck, which reads mp3 discs) with some of the music I just paid for the right to use. I feel the same way about movies, and to take it a step further, I feel most of my drive space is something expendable. If I lose an mp3 from a rip, I simply rip again. If I lose a download, I am SOL.

Re:CD/DVD is the consumer transmission medium (1)

Nonillion (266505) | more than 6 years ago | (#21895550)

You're not the only relic here, I more or less agree with what you stated here. I still like to buy a physical product. I have no intention of selling copies of copyrighted works (real piracy). When I rip my CD and DVD's to the computer I consider that to be FAIR USE and expect it to apply the same as if I recorded my CD onto a cassette, Hi-Fi VCR, mini-disk or even 8-track tape. When I rip these products, I do so for convince, not to make these works available to every Tom, Dick and Harry on the Intertubes.

Re:CD/DVD is the consumer transmission medium (1)

NathanWoodruff (966362) | more than 6 years ago | (#21895696)

I did the same thing with the Breaking Benjamin CD Phobia. I found a FLAC rip on mininova. I had heard a song or two on the radio and wanted to hear more.

I downloaded the entire album and listened to it. After several days, I though it was good enough to purchase. I went down to Best Buy and purchased it. I have a copy of the receipt that I would love to post here, but can't.

I left the CD on the counter at the check out lane. The check out girl said "Don't forget your CD". I told her that I didn't need the CD that I already had downloaded it.

I have a whole wall full of CD's. I don't have any more space for them. The receipt is all I need, and well hard drive space that is now dirt cheap.

Just imagine how much the artist would have made if I could have purchased it directly from them.

Nathan

Word games lawyers play (0)

Anonymous Coward | more than 6 years ago | (#21895440)

OK this time I just can't pass this one up. From the article (and from the original article several days ago about this same RIAA story) is this choice little tidbit...

... a lawyer for Sony BMG said during a recent high-profile file-sharing trial that making one measly copy was, "a nice way of saying 'steals just one copy'."

Don't you just love the word games lawyers play? Well you don't have to be a lawyer to play word games. I can do it too. Here's my shot at playing games with words.

Saying "someone murdered a lawyer for Sony BMG" is just an unkind of saying "someone did society a favor."

Aren't word games fun?

Not again!!! Unauthorized does not mean illegal! (0)

Anonymous Coward | more than 6 years ago | (#21895456)

The record company does not authorize you to make copies. Fair use makes this legal, but still not authorized. This is nothing new, 100% true, and Ray Beckerman is doing a disservice by making a big deal of it.

Microsoft may get sued over this next .... (1)

scharkalvin (72228) | more than 6 years ago | (#21895502)

Many people have umbrella policies in their home owner's insurance. I do.
Now many people who own computers and are connected to the internet are buying music
from itunes, have a home network to inter-connect more than one PC for resource sharing
among computers. And many people own iPods and rip their own CD's using iTunes, leaving
the music files on the computer. We all KNOW how secure Windows is against intruders from
the internet. It's possible that some downloaded Trojan or Virus could somehow open up
our disk files to be viewed from the internet, without our knowledge. And, it's
Microsoft's fault for not making Windows secure to this threat.

So, I'm waiting for someone who get's hauled into court to face the RIAA to talk to their
insurance company about a claim against their umbrella policy for protection, since this
was NOT of their own intentional action, but a result of insecure software / hardware that
they purchased. So, insurance company counter sues Microsoft (AND ISP provider, modem / router
maker, etc).

So What Happens Afterwards? (1)

Bones3D_mac (324952) | more than 6 years ago | (#21895562)

Just out of curiousity, what happens to all that music these companies "own" if they all go down in flames? Does it all get buried under litigation for potentially decades until our legal system can define who owns what? If so, we might well be headed back to the age of "talkies", where the only music that accompanies anything is created in the present along side the content itself.

The industry should be up for a Darwin Award (1)

Garwulf (708651) | more than 6 years ago | (#21896000)

I've got to say it - the big labels really are at the point of deserving a Darwin Award at this point in time. They couldn't do a better job of committing suicide if they tried. Actually, I'd be amazed that if they had any good will left at all.

Each of the mistakes they have made is a killer:

1. Alienating their own creative talent. Copyright exists for a reason, and it isn't what the RIAA would have you believe it is - it's there to protect creative artists from the sort of treatment that the RIAA labels give the recording artists. So, it's now well known that if you sign a deal with one of these labels, they'll shaft you. Now that there are inexpensive alternatives, what do the recording artists need the labels for, anyway?

(For the record, the most important role copyright serves is to provide a legal framework for the interaction between creative artists and those who publish or distribute their work. It's thanks to copyright that a creative artist can submit their work to somebody who can market it properly, without having to worry about that work being stolen by the distributer. The end user, regardless of what the RIAA may say about it, has very little do to with the purpose of copyright.)

Easy solution: STOP SHAFTING THE ARTISTS. In fact, recording artists DO need record labels, as a corporation like a label has the assets to get music out and publicized in a way that a single recording artist could never do on their own. If the recording artists were just treated fairly, instead of being driven into debt while their CD sales make millions, then the record labels would have no difficulty retaining artistic talent.

2. Trying to wipe out new markets. Forget inability to innovate, Napster was a debacle. While it is wrong to pirate music, Napster was a huge opportunity. Imagine it for a minute - an entire community of early adapters, moving all sorts of music around on their own, and most of them people who would buy CDs, as at the time the file format wasn't as high fidelity as a CD. So, what do the labels do? Crush it.

Easy solution: take over the market. How can you get cheaper advertising than Napster? Flood it with high-quality samples for each of your albums, and watch the sales soar. That's the point of a music video, isn't it? Advertising? And these guys will do all of this for you for free! If the labels had adapted Napster instead of trying to crush it, they would have made record amounts of sales in those years.

3. This has to be one of the stupidest moves I've ever seen - starting a legal campaign against their own markets. And, they began it by impersonating police officers. So, now their own customers view them as a bunch of thugs. Then, they go after the students in the universities, which is where their future lifetime customers would be found, and sue them - or try to extort money.

Very easy solution: Stop going after the insignificant filesharers, and actual concentrate on pirates! If you're going to launch a lawsuit, go after somebody who is pressing copies of your CDs and selling them without the rights to, not some guy on a bit torrent. DON'T SUE YOUR OWN CUSTOMERS!

So, in three steps, they've alienated their talent, their distribution streams, and their customers. Who is left?

When these record labels fall, it will be their own fault. There is plenty of space for them, and they certainly could have had a profitable role in the music scene today. But to act with this much stupidity, and then be surprised when the market rejects them, is Darwin Award-worthy material.

The big problem, though, is that they could take copyright down with them, and that would be a very big problem for the rest of the artistic field. The labels may be abusive thugs when it comes to copyright protections, but the rest of us - writers, publishers, artists, etc., do need copyright intact in order to operate, and the image that the labels are creating of what copyright is in both letter and spirit is extremely misleading. The ill will they're spreading could bring the rest of us down.
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