New EMI Boss Says 'Downloads May Be Good' 173
warrior_s writes "Douglas Merrill was just installed as CIO of EMI (one of the big four that forms the RIAA). The ex-Googler recently stated it is a 'poor business model to sue your customers. I don't think that's a sustainable strategy.' Quoted by the Guardian, he was referring to Warner Music, EMI, Vivendi Universal and Sony BMG's current practice of trying to use legal systems around the world to force their customers into buying products rather than using the free P2P networks and independent music sites and services. 'Previously, the music industry has rubbished studies that claim file sharing can have a positive effect on music sales. "I think people will pay," Merrill said. "There is evidence that people we think are not buying music are buying music. They're just not buying it in formats we can measure."'"
Tag (Score:5, Funny)
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Not sure how good an analogy that is, but seems good. If they make enough PR stink about this, it might just get them some business. Plan A was not working. Rest assured that plan B will be as friendly as the DMCA, on steroids.
I hope that the real truth of it is that they looked at NIN and Radiohead and did some math
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mismod (Score:2)
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"I couldn't disagree more. I use allofmp3.com as an example because people were spending substantial aggregate money there en masse in order to use a convenient, non-crippled, reasonably-priced, easy-to-use service. If the industry could manage to open a store exactly like it, they would make plenty of money from the moral majority who don't mind paying for things. But they expect market forces to answer to their demands."
We're running into a zeitgeist conflict here.
As you know, by law, each track includes mechanical royalties of about eight cents each for the lyricist and composer; this doesn't include the royalties for the perfomer or, of course, the overhead in producing the music.
You'll recall that a few months ago, the record labels were trying to get the law changed so that mechanical royalties are a percentage of the sale price, rather than fixed at eight cents. Their rationale, of course, was that this would allow them to better address a market where prices are falling.
Naturally, this notion didn't go over well on Slashdot at all. If we have our way, the law will go unchanged, and tracks will continue to have royalties of anywhere between $0.08 and $0.25.
Yet we're fond of pointing out that if the record companies were to just sell tracks for a dime each, all their problems would be solved.
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The music industry could lure both the casual pop listeners and the hardcore music enthusiasts by supplying a non-DRM'd subscription model in chunks of 6 months and 1 year (reasonable, to keep people from subscribing for one month a year and that's it). Say, $10/month for the 6-month plan and $8/month for the 1 year plan. This gets you access to all music.
Even more sustainable would be to do t
Re:Tag (Score:5, Insightful)
Honestly, I don't know anyone that still does get their music through file sharing unless they have absolutely no extra money. It stopped being convenient years ago. It's not worth dealing with the fake songs, mislabeled stuff, and crappy rips.
Besides, once you get a full time job you tend to value your time higher and your money lower. It also tends to make people appreciate the work put into making the music.
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This.
I've been considering joining a pay music site with the announcements that at least some songs will be available without DRM restrictions.
The two I'm aware of are Apple iTunes and Amazon, at least for the major labels. If I sign up for one, it'll be on the basis of overall cost, selection, and convenience. Note: I don't own an iPod.
Re:Tag (Score:4, Insightful)
Also, to download albums, and insure that you don't lose the file if your internet connection craps out, they provide a download program that opens a '.amz' file you download. Note that the client is available for Windows, OSX, and yes, many flavors of linux. The Ubuntu 7.10 deb they provide worked fine for me.
The one proviso for them is that its a one time purchase, if you lose the file somehow you can't redownload it. If you can deal with that I definitely recommend it, its easy and so far problem free. Also the lossy quality isn't enough that I notice, and while I'm no audiophile I still hate anything below about 192kbs mp3.
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I don't see why people expect to be able to re-download a file in the first place. If you buy a physical CD and then your house burns down, do you expect the music label to send you a replacement CD?
I mean, sure, it's a nice feature to have, but I'd never depend on it anyway. Just make backups.
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On a more personal note, the kind of music I want to listen to - progressive & breaks - can't even be found on most high-street stores. Even going downstairs to get my wallet constitutes unreasonable effort compared to P2P. As I work from home, the same applies to anything that involves lea
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I get my music through file sharing. And I could even spare the money.
However, I cannot get an iTunes account, as it is not available in my country.
So I suffer the crappy rips, the mislabeled stuff and everything else, for I have neither the spare cash nor the desire to buy every single album to get the songs I want.
It's an adventure, at least. Music sharing is like a box of chocolates: you never know what you're goin' to get.
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Maybe the people you work with at Walmart or Fry's or oh.. wait.. Infinadyne. Frontpage work well for you?
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Maybe.. I think that they noticed that the #1 seller of music is now by download. Apple has passed Wal * Mart as the number 1 music retailer. That only happened after Apple started offering DRM free tracks and still sold music.
They still hate high quality P-P distribution and they believe everyone should buy their own copy. Trying to sell it crippled at high prices is their problem that they haven't figured out yet.
The market is ripe for bulk (wholesale) prices. There are loads of 30 and 60 Gig devices. They are trying to trickle the product at a buck a drop. Nobody is saying fill-er-up. They go elsewhere for that. If they wanted to sell stuff, how about the entire Beatles catalog as a zip for $80. Aerosmith, Led Zepplin, Pink Floyd, Styx, Abba, Slipknot, Atreyu, Prince, or just about anyone with a fan base could clean up with the right price of the package deal for the back catalog. They are stuck in the 8 track or LP mentality of providing only 20 minutes per side at a buck a track even for back catalog stuff.
This is readily apparent when you pick up some of the buck a DVD old TV shows. Someone had to go to the expense of creating a new theme song to put on these DVD's because the labels wouldn't release the rights to the original sound track. Is that stupid or what? They had an oppertunity to sell the music, but instead didn't because they were too stupid to negotiate a deal. They got $0 for 0 copies sold. How is that a deal for them. It was much cheaper for the TV content folks to simply create a new theme song.
Pick up a copy of any of the Andy Griffith, Beverly Hillbillies, Pettycoat Junction, or other oldie buck a DVD TV show for examples of this in action. Hit a torrent and find the original theme songs. They are not even close. I think the music folks wanted to charge more than the retail price of the DVD just for the rights to the songs. If anybody knows the details on this, let me know.
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Anyway- my guess is it made royalties directly to the authoer of the music that much cheaper. you're right though- it's not like they were collecting a ton of money on those themes anyway - I'd assume.
Re:Tag (Score:4, Interesting)
according to that site, 16 episodes of Andy Griffith have fallen into public domain 55 episodes of Beverly hillbillies have gone PD
so they pay a bad music composer to make a cheap theme song, someone who's hard up for cash, and probably isn't in any guilds... it's highly unlikely they even approached the rights holders of the theme songs.
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Colour me surprised (Score:5, Funny)
CIO != CEO (Score:2)
We can hope for an influence, but there is no real mechanism there.
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It would be his job to implement new technologies to sell their product etc.
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Duh (Score:5, Insightful)
It's sad that has taken this long for "insight" like that to surface in the industry. You would think that would be an important topic in business 101, but I guess not.
Re:Duh (Score:5, Insightful)
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l4h
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He's only the CIO, not the CEO or CFO
It depends on the company, but the CIO can have quite a lot of power. Particularly if you assume that distribution is generally moving towards going over the internet, and therefore a large portion of the "record company" business will then consist of providing the IT services for online distribution. Sure, the distribution portion of the business has been taking a back-seat to marking/branding, but the CIO might still have quite a lot of sway within the company.
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New EMI (Score:2)
In general t
Sad Mentality Indeed (Score:4, Insightful)
Unfortunately, this was not how the music industry reacted to this same method of magical delivery. I realize the analogy has flaws but one would think that this would be a gift to marketing and profits. Instead, they've reacted in possibly the poorest way possible. Ignore its existence and sue the hell out of anyone doing it.
Re:Sad Mentality Indeed (Score:5, Interesting)
I suspect it's more likely the inventor would be quietly encouraged to commit suicide and his invention destroyed. Every single Western country's economy depends on such a machine not existing, if only for the fact that you could use it to reproduce your own currency. While it's nice to imagine a utopia in which society changed overnight to accommodate the idea that suddenly, material goods need no longer be scarce, society doesn't tend to change that quickly.
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What would work, however, is printing out objects with basic shapes that can be made from plastics: garden chairs, book shelves, plastic containers (I'd buy a 3-d printer just for those), etc. Yes, these indu
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we're talking objects-like-files, star-trek-style replication. right-click, copy, paste, and you've duplicated a car from random atoms, at near-zero cost. post-scarcity.
while this is not feasible now (and it may never be), as he said, it's an interesting path to wonder what would happen if we suddenly did have that capability.
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we're talking objects-like-files, star-trek-style replication. right-click, copy, paste, and you've duplicated a car from random atoms, at near-zero cost. post-scarcity.
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Still, the consumers of the music industry are demanding lower prices b
Re:Sad Mentality Indeed (Score:4, Insightful)
Re:Sad Mentality Indeed (Score:5, Insightful)
The problem with your analogy is that there has never been a high cost of duplicating product in any of these industries. In economic terms, the marginal cost of producing an additional unit is low. However, the fixed costs (paying the artists, recording studio, etc.) here are proportionally much larger. It may cost $1 million to develop a piece of software, and then $5 per unit to put it all in a box and ship it out. Let's say the software costs $50. Now, you create a better way of distribution and the marginal cost is now $0. This doesn't mean suddenly the company is going to be giving them away for free...in this simple scenario, in order to get the equivalent amount of profit per unit (ignoring changes in supply or demand), they would be able to sell the product for $45.
Now let's take a look at the auto industry. Here, marginal costs make up a much higher percentage of the total cost. To make things simple, let's say each car costs the company $10,000 to produce (in materials and labor costs), and they sell the car for $12,500. If you suddenly can lower the costs (due to your magical technology) for each car to $100, then to get the same profit per unit (again ignoring changes in supply or demand) they would only charge $2,600. In one case we only reduced the price by 10%, in the other we reduced it by almost 80%.
The problem is that people in general expect to pay near the marginal cost for an item, but in general do not take into account the fixed costs with producing a particular product. For this reason, it's easier for a person to justify spending $100 on an object they know costs about $95 in materials to produce, while they hesitate to spend $15 on a CD they know costs only pennies to create.
For more information on marginal cost and how it applies, I highly recommend taking a look at the Wikipedia article on Marginal Cost [wikipedia.org].
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To make things simple, let's say each car costs the company $10,000 to produce (in materials and labor costs), and they sell the car for $12,500. If you suddenly can lower the costs (due to your magical technology) for each car to $100, then to get the same profit per unit (again ignoring changes in supply or demand) they would only charge $2,600. In one case we only reduced the price by 10%, in the other we reduced it by almost 80%.
Ah, taking lessons from badanalogguy?
First of all, it takes way way big pile of money to design a new car, especially if it's in fact new-new design with chassis and everything and not just minor revamp of last years model.
Especially with the newfangled automatic stabilization and the like.
So if anything, making a car has higher development costs than software. And, well, hell of a lot of embedded software goes into ABS and the like. And it has to work right every time or they will sue your butt off.
For this reason, it's easier for a person to justify spending $100 on an object they know costs about $95 in materials to produce, while they hesitate to spend $15 on a CD they know costs only pennies to create.
I bit
Photo industry? (Score:5, Insightful)
Film companies like Kodak and Fuji faced exactly that challenge. Imagine a world where no one has to buy film to put in their camera and no one has to pay for film processing to print their photos. Less than 15 years ago, Kodak made most of its money from camera film and photo processing supplies, chemicals and equipment. That market has all but disappeared and yes, Kodak has had to lay off staff and close plants, but overall the company is still doing well. How? Rather than fearing the new digital technology or trying to sue or legislate it away, they have embraced it. The music industry could learn from that.
not instantaneous, but still sorta magical..... (Score:3, Informative)
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Sometimes I wonder how another industry would react if a magical technology dropped in their lap that made duplicating their product instantaneous and nearly free
You mean like the industry that used to deliver ice to peoples doors or maybe you were thinking of traveling minstrels. Perhaps you mean scribes or the mummification industry. Maybe you speak of the people who used to walk in front of cars with a big flag.
Things move on, industries lose their relevance others move abroad and the people left behind have to adapt.
In my view it is important to remember there was music before the recording industry and there will be music after it. These businesses are not
Definitely not Ivy League (Score:2)
Must not be a Harvard Boy.
*sniff*
Where's the money? (Score:4, Interesting)
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I think what he's trying to get at is the assumption that illegal downloaders don't buy music. He's saying that they *are* buying music, but just not in a way that we can track along with the download. In other words, "pirates" are also legitimate customers, but the record companies can't measure how much of their sales are going to "pirates".
At least that's my guess as to what he means, because otherwise I can't figure it out.
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I have 2 main sources to listen to the same music:
I can download it.
I can listen on the radio.
Both of these have the same result: brand recognition and advertising for the band.
When that band comes on a concert tour I will gladly shell out £100-200 for a decent pair of tickets and a night out.
Re:Where's the money? (Score:5, Informative)
If someone buys a song/album, they industry counts it as an $X gain in their records. That's the normal part.
If someone pirates a song/album, the industry counts it as an $X loss in their records. This is where they get their annual "zomg teh big scary internets are costing us eleventy hojillion dollars a YEER!!!! i <3 my private jet" statements from.
But, if someone pirates a song/album and then turns around and buys it because he or she likes it, the industry counts it as BOTH a $X loss due to piracy AND a $X gain due to the sale. That's what he's talking about. They have no way of knowing if the $X gain was due to the $X "loss" from actually listening to the song(s) first, so it goes down in both records, even if the $X gain should replace (not just neutralize) the $X "loss".
That, if I am not mistaken, is where the big scary loss figures come from. They assume that it keeps inflating the "loss" column, instead of what it should be doing, erasing from the losses. This is how they can cry over the so-called massive losses sustained from piracy while raking in ever-growing profits year after year. It's either a culture of stupidity that makes them unaware/unwilling to realize this, or a culture of greed that makes them think they can somehow translate their imaginary "loss" into profits by litigation.
Just my interpretation of it. It's probably the same as what you were thinking.
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1) Somebody downloads one album. Likes it so much, they're first in line for the next album that comes along.
2) Somebody downloads a bunch of different individual songs. Likes them. Buys an album or two from which one of those songs came.
It's all based on the idea that if somebody is excited about music, they'll spend money on it.
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1. Advertising (in two forms - being exposed to revenue generating targeted advertising as well as the free promotion/advertising a band can achieve through internet music sharing)
2. Concert tickets
3. Merchandise (like t-shirts, posters)
4. List probably continues, please add your thoughts here
I have been exposed to many bands through word of mouth from friends, streaming radio, sites like pandora or last.fm, etc. I also
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Business model (Score:5, Informative)
- Flat fee all you can download buffets.
- No DRM.
- Multiple quality formats.
- Wide variety of artists.
- Profit!
Sorry had to throw that last one in there.As a side note I don't think my ordered list worked. Bug?
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But clearly that's not a viable business model by itself. Even a low flat fee without DRM, as you suggest, might result in everyone joining for 1 month, downloading the entire library (causing huge bandwidth expense for the business), and then cancel. That's certainly not unthinkable, considering how cheap s
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A relatively low flat fee would more than offset the hassle of downloading everything you could possibly want just to save a bit of money. The time it takes is much more expensive.
I say that as a person who copied his girlfriend's entire music library, some 40 gigabytes, then deleted most of it, and still hasn't found the time to relabel and sort it.
If I could pay a nominal fee to download when I think of something, I'd probably download a few albums or several songs each month after the first (I'd downlo
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A relatively low flat fee would more than offset the hassle of downloading everything you could possibly want just to save a bit of money.
The question there, though, is whether there is a fee low enough that you'd pay it to save yourself the hassle, but high enough that record companies will feel is profitable enough to make their business worthwhile. It's not a viable business model until you determine a fee that hits that sweet-spot for both parties.
Personally, when the internet first hit, I imagined
Mistake (Score:5, Funny)
Re:Mistake (Score:5, Funny)
Only about 10 years too late! (Score:5, Insightful)
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If you're 20% of all music sales and only
that's one way of interpreting the numbers. another way of interpreting it is that you have no idea what you're talking about.
in what world do you live in where having 20% of music SALES constitute a failure? Walmart, the #1 music retai
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Wow, the music industry decides fighting the inevitable isn't a viable business strategy, and only a decade too late!
No... the music industry hired someone who already knew that. This does not mean that the music industry has learned their lesson. They just knew that hiring someone with Google on their resume was a PR win.
The good news is that this guy was hired to be their CIO. The only time you hire a CIO and send him on a press tour is if you plan to introduce new tech to solve your problems. We'll see what they come up with, and perhaps it won't suck.
Then again, I doubt he's going to be allowed to turn EMI into YouTu
Holy Crap (Score:5, Funny)
I forget - is that one of the signs of the end of the world?
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I forget - is that one of the signs of the end of the world?
Suing your customers (Score:5, Funny)
Darl McBride was not immediately available for comments.
There may be hope yet (Score:5, Insightful)
Something that even this executive hasn't received a clue about: Where do you and your corporation fit into a distribution system that you do not own, can't control, and add no value to?
Maybe I'm giving this bozo too much credit - since iTunes is currently the number one music retailer, then even this clown could figure out that music downloads "may have some value". I suspect the concept that their target market will obtain their music from the vendor that offers the most convenient product at the lowest price will completely elude him. They'll continue to turn out a substandard product, cripple it with intrusive DRM, and try to sell the digital version at the same price as a physical CD (or even higher).
The record companies need to take a look at the past to see their future. Much as the producers of buggy whips, button hooks, electron tubes (and many more) have had to either find another product to produce or go out of business, the record industry is rapidly sliding into irrelevance. "Record company" - their fate is in their name. Who produces, sells, or buys records these days?
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Until they come to terms with the idea that society (as defined by the people under 30) have determined that it should all be free, trying to get paid for music is hopeless. Maybe then they can figure out how to get paid for something - just not music.
Worried about crappy music? Well, if nobody is paying then there is no "gatek
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And your job is... what, exactly? (Score:4, Funny)
You're not writing, composing, or playing the music. There aren't any execs in the recording studios helping to put it on disc. Your only job is to take a cut of the money that someone who isn't you is trying to give to someone else who isn't you... and you can't even be bothered to keep track of how much money you're taking?! Is there anything scheduled in your day planner besides interviews, hookers, and blow?
Re:And your job is... what, exactly? (Score:5, Funny)
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P.S. Is it just my browser, or is /. extra crappy today? Why are entire threads blockquoted?
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And in other news (Score:3, Funny)
Wrong position title (Score:5, Informative)
The Sex Pistols had it first... (Score:3, Interesting)
Too many people support us,
An unlimited amount,
Too many outlets in and out,
Who?
E.M.I.! E.M.I.! E.M.I.!"
-- "E.M.I.", The Sex Pistols, 1977.
Lynyrd Skynyrd beat them by three years (Score:2)
Slickers steal my money since I was seventeen,
if it ain't no pencil pusher then it got to be a honky tonk queen.
But I signed my contract, baby, and I want you people to know
that every penny I make, I gotta see where my money goes.
-- "Working For MCA" Lynyrd Skynyrd, 1974
And this matters --- how? (Score:2)
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high evil gradient (Score:2)
He's gone from Google -- not evil (as far as we know, pretty much)...
What's his name, this CIO? Faust?
Just as well he's working for EMI (Score:2)
Well, with an attitude like that I don't think he'd have gotten very far applying for a job with SCO.
Nothing to see here (Score:2)
Quite optimistic (Score:2)
Doug Says: (Score:2)
Ask trent - they made close to 1 m buck in days (Score:3, Interesting)
EMI changing it's stripes? (Score:2)
It really does seem like at least one of the old music companies is waking up to reality and has been for a few months now.
It's just a shame the remaining 3 of the big 4 still have their heads too far up their own arses.
I'm not going to say I like EMI or anyt
see what downloads did for Vampire Weekend (Score:2)
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Reward this, by searching out the EMI catalog and buying a CD of a band you like. This type of thinking needs a reward to reinforce it.