http://arstechnica.com/business/2009/03/musics-copyright-battle-made-worse-by-the-fear-of-change/
Music industry: licensing is a problem, but how to fix it?
Last Thursday's Digital Music Forum: East saw a heated debate break out when …
If this year's Digital Music Forum: East event offered a glimpse
into the collective mind of the music business, then it was obvious
that the industry is suffering from multiple personality disorder.
There was an overall recognition that licensing music was too complex
and too harmful to efforts to find ways of competing with the free,
unlicensed material that's available online. But it was also clear that
different parts of the music business have different visions about
what's worth saving as the industry evolves, visions which, in some
cases, are decidedly trapped in the past.
Two sessions, one on copyright reform, the other called "Licensing 2.0," really highlighted the challenges facing the industry, the first and foremost of which is that licensing is a mess. Even one of the people who tended to argue for the status quo, Jim Cooperman of Wind-up Records, started his talk with an extensive introduction to how complex the process of licensing any music is, and why that's likely to discourage anyone from getting involved in the music business.
The Licensing 2.0 panel brought out some of the complexities, as it became clear that there were both multiple licensing groups, and that different types of digital music—downloads, streams, subscriptions—may require different combinations of mechanical and performance royalties. Given the rapid pace of software development, the precise combination that's legally required hasn't even been formalized yet for some media, although the ASCAP representative on the panel made it clear that his group would be happy to grab its share of payments whenever possible. Presumably, the same is true for the other licensing bodies.
Despite this mess, everyone in the music business reiterated that they wanted to work with the people who are trying to do innovative things with digital music—they want the kids in the dorm room who might otherwise write the modern-day equivalent of Napster to try to make sure they start out legitimately, instead of worrying about the legal mess only when called to by the courts. But how they expect some kids in a dorm room to navigate the licensing maze without major reforms wasn't made clear. Besides, argued the Consumer Electronics Association's Michael Petricone, new developments are always disruptive: "new technologies are a bit like rowdy teens—they run around and blow up mailboxes a bit, but then they settle down."
But even if the industry wants the licensing for the rowdy teens to be made easier, it's clear that many of its members hope that this can be accomplished without anything else in the business changing. Jay Rosenthal of the National Music Publishers Association argued that the RIAA's lawsuit binge was a good thing for the music business, and he was joined in that by Wind-up's Cooperman. (Petricone was incredulous and pointed out that surveys suggested the RIAA had made itself as unpopular as Haliburton.) Rosenthal also argued that fair use has been pushed too far, and when talking about songwriters and performers, said, "I don't want them to be digital street musicians." That's a far cry from Warner Music's Jim Griffin, who had said the day earlier that "Sound recording's economics is now a tip jar."
Regardless of legal tactics or the fact that stadium seats are now too expensive to encourage sellouts, it didn't seem to register that the business model where labels launch superstars might have been a historical aberration, one that was a product of radio and physical media dominating music distribution.
The CEA's Petricone was the only one who did seem to get this, as he pointed out that the same medium that was causing all the problems—the Internet—was allowing bands to experiment with ways to connect directly with their fans. He mentioned a case where a band was offering bonus download tracks once their albums sold certain numbers, which encouraged fans to evangelize their friends, and another where the band was willing to schedule dates anywhere they were guaranteed a certain income. That could be in small venues that knew they'd hit a minimum of ticket sales, or in someone's back yard, provided their friends were willing to pay.
Wind-up's Cooperman dismissed this by saying that the bands were only making money by touring. What might have been more relevant is that money from touring generally doesn't go through the record company.
These two panels made it clear that nearly everyone in the music business recognizes that the complexities of getting legal access to music was harming the business as a whole. But it was also obvious that there are people in the business that hope the licensing can change without any impact on their corner of the industry, and that everyone involved is still looking to get their cut from any new technology that comes along. The sort of pessimism this engenders was probably best voiced by DiMA's Jon Potter. "The fact that the law is driving the business is a problem," he said. "The fact that we're sitting here saying the same things year after year is a problem."
ht-battle-made-worse-by-the-fear-of-change/ Two sessions, one on copyright reform, the other called "Licensing 2.0," really highlighted the challenges facing the industry, the first and foremost of which is that licensing is a mess. Even one of the people who tended to argue for the status quo, Jim Cooperman of Wind-up Records, started his talk with an extensive introduction to how complex the process of licensing any music is, and why that's likely to discourage anyone from getting involved in the music business.
The Licensing 2.0 panel brought out some of the complexities, as it became clear that there were both multiple licensing groups, and that different types of digital music—downloads, streams, subscriptions—may require different combinations of mechanical and performance royalties. Given the rapid pace of software development, the precise combination that's legally required hasn't even been formalized yet for some media, although the ASCAP representative on the panel made it clear that his group would be happy to grab its share of payments whenever possible. Presumably, the same is true for the other licensing bodies.
"The fact that the law is driving the business is a problem," DiMA's Jon Potter said. "The fact that we're sitting here saying the same things year after year is a problem."The clearest sense of how messy things are came from Cecily Mak of RealNetworks, who said her company had negotiated agreements with over 300 different groups. Many of these were simply proactive attempts to make sure the company doesn't wind up getting sued if the mechanical vs. performance royalties question gets settled in a way that would otherwise leave Real in legal hot water.
Despite this mess, everyone in the music business reiterated that they wanted to work with the people who are trying to do innovative things with digital music—they want the kids in the dorm room who might otherwise write the modern-day equivalent of Napster to try to make sure they start out legitimately, instead of worrying about the legal mess only when called to by the courts. But how they expect some kids in a dorm room to navigate the licensing maze without major reforms wasn't made clear. Besides, argued the Consumer Electronics Association's Michael Petricone, new developments are always disruptive: "new technologies are a bit like rowdy teens—they run around and blow up mailboxes a bit, but then they settle down."
But even if the industry wants the licensing for the rowdy teens to be made easier, it's clear that many of its members hope that this can be accomplished without anything else in the business changing. Jay Rosenthal of the National Music Publishers Association argued that the RIAA's lawsuit binge was a good thing for the music business, and he was joined in that by Wind-up's Cooperman. (Petricone was incredulous and pointed out that surveys suggested the RIAA had made itself as unpopular as Haliburton.) Rosenthal also argued that fair use has been pushed too far, and when talking about songwriters and performers, said, "I don't want them to be digital street musicians." That's a far cry from Warner Music's Jim Griffin, who had said the day earlier that "Sound recording's economics is now a tip jar."
Where are the sold-out stadiums of yesteryear?
Over the course of the panel, it also became clear that both Rosenthal and Cooperman cared as much for the basic structure of the record business from the past few decades as they did for the artists within it. There was lots of wistful talk about how record companies used to be able to launch careers that led to sold-out stadiums, but have failed to do so in recent years. Jon Potter of DiMA, which has been negotiating with SoundExchange on behalf of streaming Internet radio, retorted that this was because they're spending the money suing Pandora rather than on developing musicians.Regardless of legal tactics or the fact that stadium seats are now too expensive to encourage sellouts, it didn't seem to register that the business model where labels launch superstars might have been a historical aberration, one that was a product of radio and physical media dominating music distribution.
The CEA's Petricone was the only one who did seem to get this, as he pointed out that the same medium that was causing all the problems—the Internet—was allowing bands to experiment with ways to connect directly with their fans. He mentioned a case where a band was offering bonus download tracks once their albums sold certain numbers, which encouraged fans to evangelize their friends, and another where the band was willing to schedule dates anywhere they were guaranteed a certain income. That could be in small venues that knew they'd hit a minimum of ticket sales, or in someone's back yard, provided their friends were willing to pay.
Wind-up's Cooperman dismissed this by saying that the bands were only making money by touring. What might have been more relevant is that money from touring generally doesn't go through the record company.
These two panels made it clear that nearly everyone in the music business recognizes that the complexities of getting legal access to music was harming the business as a whole. But it was also obvious that there are people in the business that hope the licensing can change without any impact on their corner of the industry, and that everyone involved is still looking to get their cut from any new technology that comes along. The sort of pessimism this engenders was probably best voiced by DiMA's Jon Potter. "The fact that the law is driving the business is a problem," he said. "The fact that we're sitting here saying the same things year after year is a problem."
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