p2pnet - rss feed: Big Music sues itself
p2p news / p2pnet: The pot is suing the kettle for lower royalty payments.
Or, put another way, the Big Four record label cartel’s BPI (British Phonographic Institute) is suing musicians’ royalty collection agency MCPS-PRS Alliance.
“Though deals differ, labels are offering to pay about 8.5 percent royalties on the wholesale price of a digital sale, but royalty collectors want 12 percent of the retail price,” says Wired News.
“We have a $600 billion consortium ranged against us over 12 percent of a (99 cent) download,” it has a MCPS-PRS spokesman saying.
And, “According to the MCPS-PRS Alliance, most of its members earn under 10,000 pounds ($17,700) a year, so it’s vital they get fairly compensated for their work as digital sales boom,” says Wired.
Where do they get the completely erroneous idea that there’s a “digital sales boom”? From the non-stop puff releases from various cartel-owned organs such as the BPI and IFPI (International Federation of Phonographic Industry) which claim there’s a thriving corporate online music market.
Smart surfers
The IFPI says there are now around 300 online music stores supplying eager buyers at $1 and up per digital music download and quite naturally, since they’re making the music, performers want a piece of this action.
However, reports of big time Big Music online sales are nothing but piles of equine excreta and huge clouds of smoke - that and EMI Group, Vivendi Universal, Sony BMG and Warner Music PR flummery.
One of these days, there will be indeed be a true corporate market. But for now, and for the foreseeable future, most music downloads will continue to come from the p2p networks where it’s being accessed by smart surfers, by far the vast majority, who flatly refuse to pay through the nose for boring, formulaic ‘product,’ as the labels call their music.
“With the success of Apple’s iTunes, labels expect digital music to account for up to 30 percent of world music sales by 2008, according to estimates submitted to the European Commission by Universal Music”.
But “expect” is the operative word and unless the labels smarten up, that definitely won’t be the case.
Instead of lowering their wholesale prices, currently at between an exorbitant 60 and 85 cents per track, the Big Four want to hike them, charging $1.50 or more for newer releases.
Online sales offer significantly lower costs
As far as Apple’s success goes, it’s sold some 500 million tracks since it launched iTunes, an iPod loss-leader, in 2003. And that doesn’t amount to a hill of beans stacked against what’s happening on the p2p networks where upwards – well upwards – of one billion file move computer-to-computer every month.
Online music lovers will gladly pay for their downloads if they’re charged a fair and reasonable price. But $1 and up for each download doesn’t match that description. Not even nearly,
Universal Music recently filed a European Commission complaint, accusing royalty collectors of “frustrating” development of digital music services, Wired states. In the statement, Universal slammed the collection societies, saying they cause “higher music prices,” make it difficult for new operators to enter the market and “impede development of online and cell-phone services.”
Universal is, of course, one of the companies that wants to jack the prices to beyond reach of anyone except the most loyal (dimmest?) Apple follower.
The BPI, meanwhile, says royalty collectors are acting “monopolistically,” says Wired, going on that where Jobs (and just about everyone else who has the slightest clue about online music) has noted that online sales offer significantly lower costs and on top of that, the labels don’t have to pay warehousing, pressing, printing or transportation costs, “The BPI spokesman, however, said manufacturing costs are ‘relatively insignificant’ in comparison to promotional costs” …
… not to mention legal costs under the Big Four’s bizarre sue ‘em all marketing plan, schmooze money and various off-the-books, under-the-counter government and law enforcement payments they have to continually make to keep administrations around the world acting in their best interests.
Former Pink Floyd’s manager Pete Jenner has it right.
“The media is disintegrating into multimedia. Instead of trying to figure this out, labels focus on shareholder value,” Wired has him saying. “They need a different mindset, different skills.”
He also says the labels’ basic business model - cultivating a few hit acts to subsidize several money-losing ones - is flawed. Under it, “Successful acts subsidize the failures”.
“Labels are prisoners of existing price and business models,” Jenner states. “They need to move to a different way of doing business, looking at music use, not sales.”
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See:-
Wired News - Divvying Up the Download Payload, October 24, 2005
October 25th, 2005 at 12:22 am
Quote:
“…the Big Four want to hike them, charging $1.50 or more for newer releases.”
Ok, if you are going to set prices by age, where’s the price reduction for 30 year old songs that are no longer in the limelight and have faded long ago? They aren’t new, they haven’t had a revivial in popularity, in many cases those groups will never come to play a concert as many are no longer in existance and some have members of the group that are dead.
It seems the predominate releases are by the group “Greatest Hits” whose versitiality amazes me that they can sound just like the originals and yet churn out album after album, year after year. All of those remix albums charge just like the original for price. How long does it take to purchase those groups songs you are interested in? It seems that 30 years is far long enough for one to aquire those songs that have meaning in ones life. After that they are just fluff and come on.
Funny that I haven’t seen a price decrease across the board for the ancient stuff. Now a days in the “what have you done for me today” world where the premium is layed on the current hot stuff; the corrosponding part would be a lowering in price of old stuff. Can anyone say price fixing?
October 25th, 2005 at 3:11 pm
I agree. I want a refund, or exchange for CD for all the tapes I purchased (and still have). They were charging me over $10 per cassette for a VERY temporary meduim. The industry loved that. I had to buy my favorite tape over and over. If I wanted to archive the original, I had to make a crappy tape to tape dub. Because “home taping” was going to ruin the music business, I had to pay a fee for every blank tape I purchased, even if I only wanted to record my own bodily noises.
I am loving the slow, painfull, and ugly demise of the greedy whining giant. Please take all your “music” and go…at least all the music you generate now. Good ridance.