The Labels: “Mission Impossible” or “Get Smart”

Record labels just can’t get it right.

Recently, Universal licensed its library to QTrax, the startup company that did an aborted launch a couple of months ago because it somehow forgot to get the majors to sign off and give permission. Now with Universal on board with this next iteration of a way to get young people to buy music.

When you download music the advertising on the site helps compensate the artists and the labels. Not all the labels are on board and even when they are, I've got bad news for the major labels.

QTrax will lay an egg.

Not worth it. I'll bet young people don't embrace it.

One bad move down, and plenty more to go. Next?

Just last week some 200 plus Congressmen announced their opposition for what Clear Channel correctly dubs a music industry “bailout” by seeking to force radio stations to pay additional fees above and beyond its current licensing tariffs.

The NAB will have to stay on it because even if the legislative move to repeal the exemption fails this time, it will be back soon to try again.

Rep. Howard Berman (D-CA) and his buddies have constituents who must not be denied – the music industry and Berman et al are going to carry their water.

It’s a stupid idea – at the worst time in radio’s history – to think that a dying industry could bail out another dying industry.

Self destruction.

Eagles singer Don Henley has been running his mouth again -- this time in Rolling Stone -- about the unfairness of radio getting to play and promote music without being charged for that service. A sample:

"When you hear a song on the radio, the singer doesn't get a performance royalty unless the singer also wrote it or owns the publishing," Henley says between spoonfuls of tomato soup. Encyclopedic on everything from global warming to high school textbooks, he can deliver opinions like a volcano delivers lava.

"The United States is the only country in the free world where the performer gets nothing. And consequently, other countries don't pay American artists a performance royalty for radio either. They say, 'We're paying our citizens who are artists but not you. Why should we treat you fairly when your own country won't?' Which they get away with because the National Association of Broadcasters is so powerful in Washington. The NAB says, 'We're making you famous.' What they forget to mention is that multibillion-dollar empires have been built on the content that artists provide free so those stations can sell advertising."

The labels need only to look in the mirror -- not to radio.

They are producing too much music that is unremarkable. In an era when music is stolen and shared routinely, the labels need to focus on polishing up their best acts.

They also need to be out there finding new acts across all genres.

But if there was ever a last ditch option for a record label it is to prepare professional music and acts as no one else can. The music industry critic Bob Lefsetz says why not produce one good album a year for fewer artists. He has a point.

Free is the new radio and the labels either don’t get it or don’t want to get it.

Just as radio stations used to influence the record buying public by playing music for free over the air, free filesharing serves that role today. Back then, consumers could have recorded music off a radio station on, say, a boom box – at lesser fidelity and with dj patter included, but most opted to go to Tower Records or Sam Goody.

The record business is not going to survive by selling all music but some music very well produced, done and packaged.

The RIAA campaign against record label customers has one foot in the grave and the other on a banana peel. The labels find it hard to stand down even though piracy increases ever year in spite of the threat of lawsuits. The situation just gets worse for labels. I give it a few more years and then even they will throw in the towel.

The question is: Is the record industry “Mission Impossible” or “Get Smart”?

Only they can change the channel -- and time continues to run out.

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