Warner Music Group - Music as a Service Plans
Here’s an article from Slate about a proposed plan by Warner Music Group to fight piracy and in essence give the people what they want - freedom to download whatever they want, DRM free and share it all they want for a flat rate fee every month.
I actually like the idea to a point. I’ve been a Rhapsody subscriber for years and find great value in the subscription model. The underlying question I have in the Warner plan is if the music is freely shared all around the net, how do they account and pay to the artists who work so hard to produce the music in the first place.
Let me know what you think.
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The Music Industry’s Extortion Scheme by Reihan Salam
The record labels want you to pay a tax on music. It’s not as horrible as it sounds.
What would you do if a bully—let’s call him “Joey Giggles”—kept snatching your ice-cream cone? OK, now what if Joey Giggles then told you, “If you pay me five bucks a month, I’ll stop snatching your ice cream.” Depending on how much you hate getting beaten up, and how much you love ice-cream cones, you might decide that caving in is the way to go. This is what’s called a protection racket. It’s also potentially the new model for how we’ll buy and listen to music.
Let’s back up for a second. Four companies (Universal Music Group, Warner Music Group, Sony BMG, and EMI) control a staggering 90 percent of all record sales in the United States, and they’re hopping mad. CD sales are in free fall, and the recording industry’s revenues have shrunk from $15 billion to $10 billion in less than a decade. Instead of blaming themselves for failing to embrace the Internet soon enough, Big Music has pointed the finger at piracy, shaking down scofflaw MP3 downloaders with capricious, multimillion-dollar lawsuits. This has not strengthened the record companies’ position—at this point, they’re losing money and everybody hates them.
Now Big Music is mulling the Joey Giggles approach. Warner Music Group is trying to rally the rest of the industry behind a plan to charge Internet service providers $5 per customer per month, an amount that would be added to your Internet bill. In exchange, music lovers would get all the online tunes they want, meaning that anyone who spends more than $60 a year on music will come out way ahead. Download whatever you want and pay nothing! No more DRM! Swap files to your heart’s content—we promise, we won’t sue you (or snatch your ice-cream cone)! More
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4 Responses to “Warner Music Group - Music as a Service Plans”
By Stephen Waters on Apr 30, 2008 | Reply
You are absolutely right – it’s a great deal for the labels.
I was stuck on the tracking aspect as well, but don’t think it would be too long before they approached Microsoft, AOL, and others to alter their respective media players to record and transmit that information. You could use ISBN or UPC information for correctly tagged songs, and existing music recognition technology to identify untagged music. The folks who care about privacy would hate this, of course.
Strategically, I think the larger hurdle would be the people that would try to game the system by setting up dozens (or hundreds) of systems to do nothing but to play their songs over and over again to claim a piece of the action. A quick download of an IP-masking program, and suddenly you could have a number one hit.
Stephen
By Mark Levy on May 2, 2008 | Reply
Akamai Fires Engineer Who Spoke Out Against Music Tax
by Michael Arrington
Akamai engineering manager David Barrett, who spoke on the record as being opposed to the Warner Music sponsored music tax (more) last month, was fired on April 25, sources say.
http://www.techcrunch.com/2008/05/02/akamai-fires-engineer-who-spoke-out-against-music-tax/
By Matt Peterson on May 5, 2008 | Reply
I’m not actually sold on this. When you talk to the labels it’s clear that they want the $5 for every customer.. every month.
Given there are around 258 million wireless subscribers out there (cita.org), and 211 million broadband subscribers just in the US (http://tinyurl.com/y4nqus), if every bill, every month, for every user included $5, all you can eat, the music biz would be up around $30B / year, about double their best year.
My biggest concern is the user who doesn’t want music access at all. HOw do you tell that guy to suck it up and pay?
Alternatively I think instead of forcing folks, why not create the service that competes with free? I think if some of the music services out there could do a better job of allowing ubiquitous access across devices, people would opt to use them (aka rhapsody on pc, tivo, mobile, mp3 player).
By Stephen Waters on May 21, 2008 | Reply
Matt,
My point of view is that of an artist’s advocate.
While ubiquitous access would be great from a consumer standpoint, I would argue that it increases piracy, and is therefore exactly what the music industry is trying to avoid. Do you remember the DRM hoops that Apple had to jump through to bring the music industry to the table for iTunes?
I had not thought to run the numbers to get the $$ value of what $5/month would bring to the music industry. I’m glad you did. That’s a bit absurd, but coming from a group associated with the RIAA (who are popularly regarded as jack-booted thugs), I can’t say I am surprised at the initial demand.
My pie-in-the-sky solution? Collaborate with ALL of the players involved (including artists, music execs, pirates, consumers, downloaders, and EFF-types…did I forget anyone?) to determine what the real motivations of all parties are and use that information to help mitigate the free flow and commotitization of copyrighted material.