Google Music

You remember the music industry.

You hardly hear anything about it these days. Even radio gets lots of publicity – most of it bad, but nonetheless.

I’m wrong.

Wired reports “Judge Hints at Mistrial in RIAA v. Jammie Thomas”. She’s the music fan RIAA targeted and initially defeated in her Minnesota piracy trial.

According to a Wired account, this is what got U.S. District Judge Michael Davis to thinking:

At issue is whether the RIAA needs to prove that copyrighted music offered by a defendant on a peer-to-peer network was actually downloaded by anyone. During Thomas' trial last October, Davis, on the RIAA's recommendation, instructed (.pdf) the jury that no such proof was necessary; if Thomas had the music in her Kazaa shared folder, where it could be downloaded, she could be found liable "regardless of whether actual distribution has been shown."

But in May, long after Thomas had lost the trial and was dinged $222,000, Davis developed second thoughts. He wrote in an order that he may have committed a "manifest error" with that instruction. "I think I surprised everyone," Davis said at the outset of the Monday's hearing. As the hearing wrapped up, there was little evidence that the RIAA's lawyer had changed the judge's mind.”

Don’t say the record industry isn’t committed.

Committed to suicide by lawsuit.

Many label execs dislike the entire RIAA lawsuit campaign but somehow they let their trade organization continue to pursue suing their customers. They’ve made no friends and have not made a dent in music piracy which remains brisk.

Oh, there was something else. But you may not call it news.

As Steve Meyer reports in Disc & DAT “Music Industry Should Embrace Illegal Websites”.

“The music industry should embrace illegal file-sharing websites, according to a study of Radiohead's last album release that found huge numbers of people downloaded it illegally even though the band allowed fans to pay little or nothing for it.”

Look, the record business is over if it has to depend on the sale of CDs. We’ve already seen where that is going.


Year after year.

In fact, if the music industry has to depend on legally purchased digital downloads to make up the difference, well – we know where that is going, too.

Not up.

Is there anyone on this planet – and that includes record labels – who really believes there is a financial replacement for CD sales? If so, I have a bridge in Brooklyn I would like to talk to them about.

Bit torrent sites are the best friends of the next generation. Gen Y is not all of a sudden going to buy CDs or even purchase legal downloads when it is so easy to get it for free.

This is a serious problem from a business perspective and not so much so from the eyes of youthful consumers.

You see, they’ll still spend money on concerts because concert venues can control who gets in. If they could find a way to get past security and get in for free, this generation just might be the ones to do so.

But the labels cannot control their delivery system. They can’t make it so the only way you can get music is to buy it from them.

Unless of course the labels only release established acts on CD and not iTunes.

Of course, this is contrary to everything American. Piracy of music is not only the American way but the international system of accessing music. Arguably, labels could sell more CDs if the right act withheld its music from iTunes, but this strategy certainly doesn't cooperate with the inevitable.

The record label situation needs to be resolved. Rights revenue alone is not enough of a business to sustain the music industry if CD sales are going to continue their decline.

360 deals will turn out to be 180 -- a disappointment as well. Maybe the lawsuits over them will be interesting.

The music industry can’t have Radiohead doing all of its thinking.

And, Live Nation does not have the best interests of the music industry at heart. It has Live Nation’s best interests at heart. They’re not a label. They’re a promoter. Good luck with Madonna at 60.

The labels will have to find a new business – or businesses. That’s very hard for manufacturers who are left with nothing to sell.

1. They need to get into the podcasting business. They can work out the rights arrangements. Twenty minutes here, thirty minutes there. Hire the best radio program directors to create mini-programs – the kind that young people would love on their phones and mobile devices. Podcasting leads to merch.

2. They need to seriously get into the merch business. I know. They’re already in merch. Not the way I see it. They’ve got to be huge. Not just the usual items.

3. They need to bite the bullet and feed the monster – give the music away for free to sell other products and/or services to consumers. As I said earlier, if they can’t control the delivery system, they can’t maximize their profits. There is evidence all around us that music stolen on the Internet feeds consumers desire for more music. Young consumers have money – and their parents do, as well. They are not going to spend it on music when they can get it for free, but – they prove all the time that they will buy music-related products.

4. The labels should become Google. Not work with Google. Be Google. Control the flow of everything music on a platform that can accept advertising, deliver social networking opportunities and give away free music. The money is made the way Google makes their money – targeted advertising. Now, who the hell wouldn’t want to be able to target young consumers by the singers and bands that they support? Music is more important to this next generation than food or sex. (Okay, you get the point). Labels, good luck with this. It’s a better idea than hitching your future to CDs but way out of the labels’ comfort zone.

If they’re waiting for ISPs to charge their customers for all the music they can consume or monthly fees on cell phone plans, the labels are deader than they look right now.

Young consumers don’t want access to every song that has ever been recorded.

They want what they want or what their friends tell them is cool.

If you drive them to a recording industry site, a consortium of labels and publishers, where consumers can fill their iPods and mobile phones up with free music, you can monetize it with a Google-like source of revenue they can control.

And control is something the record labels have been losing for the past ten years.

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