Clueless Big Label Music seeks protection money from ISP’s

Before I get to the news item, I offer a short history lesson on the big music industry. The industry’s business model has always been about acquiring the rights to material cheaply and reselling the product eternally. They have never been interested in paying the typical artist anything. Sure there are exceptions, usually the most popular artists, but by in large artists not getting paid much by big music has been going on since the days of the Victorola. With increasing regularity, artists are not assigning rights to the labels. Of course, the labels also consider this to be piracy.

Quoting Wired:

An invitation-only meeting on the subject drew about 50 people, including representatives of IFPI, Sony BMG, T-Mobile, the giant European ISP and mobile-carrier Orange, and performing-rights organizations like BMI. The response, according to Jenner, “ranged from ‘What do we do now?’ to ‘It sounds good, but can it possibly work?’ A lot of people are like rabbits in the headlights: They’re terrified they’re going to lose their jobs. No one dares to feel that this might be the solution.”

Even so, notes Shira Perlmutter, IFPI’s head of legal policy, “none of our members are ruling anything out. These companies are all very open to creative new ideas that would allow customers to do things they want — including using file sharing technologies.”

Not everyone sees the two approaches as an either-or situation. “I love Paul McGuinness’ idea,” says another scheduled SXSW panelist, Dina LaPolt, a Los Angeles attorney who represents Mötley Crüe and the estate of Tupac Shakur. “And I love the idea of trying to make ISPs pay artists and make up for all the free crap that’s going on. I support both, so long as artists are getting paid for their work.”

Whether ISPs will be willing to ante up remains far from clear, especially since many users can be expected to protest the extra charge. One option would be to introduce different service tiers and impose the surcharge only on customers who buy enough bandwidth to make file sharing feasible. But for ISPs, other music-industry demands could be far more onerous.

In the early days of big music, “production costs” always ate up the profits before the performers were paid. As production costs began to decline, the lack of recording royalties for your average musician were blamed on “marketing and promotion”. About the time you average musician could afford a decent 4 track home studio, “home taping” was blamed and the industry wanted a blank tape tax. The industry grew fat and lazy when CD’s gained popularity re-selling our music collection to us in the new format, while little going to those who created the music. When the industry’s complacency had begun it’s steady decline, there was a rush to sue the first successful MP3 player out of existence, before there was file sharing or Napster. These companies had adopted the idea that the recorded music should not be portable from one device to another, and a new copy should be bought for every device, with no payment for the artists. Currently the big music industry love to blame file sharing for not paying artists, but the truth is, they never really have. If you’re a consistent top 100 seller, you’ll probably get some cash from BMG or Sony. If you are in the majority, you’ll see little if you distribute through them.

The new problem for the industry is that they have fought internet distribution for so long, that they’ve left themselves without a business. Production costs are no so low, that anyone with a few hundred dollars can buy the equipment to make exceptionally good recordings. The internet has made mass distribution available to anyone. Even the top 100 artists are starting to flee the big labels

When you can get a quick download for a buck, why hassle with the search for a bit torrent? Sure, there always has been and always will be piracy. The best defense is to make the product available and cheap enough that the pirate has little to gain. It’s still impossible to get “legal” copies of most of the music that has been recorded at any price, thanks to the big labels controlling distribution. This problem has contributed to file sharing as much as any other. What if the artist gives a download away to help promote live shows are a complete album? Performers can now earn far more form selling a few thousand self distributed tunes than they ever could with distribution through the labels.

The real reason the big labels now want a tax: Most artists do not need or want them. The only way they can continue to extract “protection money” from artist is to tax distribution.