Music Labels Screwed, DRM Is Dead

An anonymous reader writes "Peter Jenner, former manager of bands like Pink Floyd, T.Rex and the Clash, states in an interview with the Register that music label executives have lost faith in DRM and dollar-per-track online music selling isn't working too well as a model. He predicts that in two to three years time, many countries will have moved to a blanket licensing regime." The article goes on at some length, talking about the value of digital music, patterns in the music industry, and some business at the end about 'the tyranny of the playlist' that I'm not hep enough to follow. I'm not sure this rant has any connection whatsoever with reality, but it is something to think about.

dream vs reality?

I certainly doubt that unless someone does all the work for them, hands it to them on a plate and has a potential market share that can force them into it (like the itunes store back in the day) that the major record labels will continue to resist changes until they die out. Even in the early 90s bands were refering to the record companies as 'Dinosaurs on the way to extinction'. The extinction will be a long time coming but the companies are not known for their ability to adapt which will kill them in the end.

It has no connection to reality...

...but it bashes the music industry, so it gets dumped on the front page of Slashdot. Wonderful.

This guy out of the loop?

Just looking at the bands he manages - they're mostly washed up, even one of the newer ones - Billy Brag, was "popular" about 20 years ago.
He also further demonstrated his poor grasp on reality when he mentioned rich tenured professors. LOL! Professors rich??? Slave away in academia for 100K a year - that's not rich.

Perhaps...

... but I spotted a small caveat:

No, the political people have to be just well informed enough so they don't fuck it up

I think I've seen that prerequisite before.

Worse Than The Disease

So Jenner's wonderful idea is a music tax?

Frankly, I'd rather have the DRM.

The "freedom" people are telling us I have to go out and sell more T-shirts - it's an argument I find tremendously insulting.

Nobody cares, Mr Jenner. Nobody cares.

WTF

I'm not sure this rant has any connection whatsoever with reality, but it is something to think about.

Why, then?

Paying for music is dead

Whether music labels, musicians, Peter Jenner, you or I like it or not, there's a fundamental problem that everybody seems to understand: as long as lossless copies of music (or movies or photos for that matter) can be made, paying for music is dead.

What I mean is: before computers became widely available, people had the option of sharing bootleg analog copies of something (which was prone to sound degradation during copy, and media aging) or buying a legit copy of the medium with the best possible song. That is, people who wanted good quality music bought the "officially sanctionned" medium it was imprinted on. Now that everybody can copy a file a million times without any quality loss other than the one possibly introduced during sampling, who's to stop people from copying things for free? only two thing: people's sense of morality ("I don't want to steal from artists") and people's fear of the law ("I don't want to be caught with illegal copies on my hard disk"). That's hardly the basis of a healthy business model.

The one-music==one-media confusion that is the basis of the **AA's business model is dead. In reality, record companies sell plastic disks, not music, and people don't need plastic disks anymore, so record companies are now obsolete. If they want to stay alive with their obsolete business model, they have to:

- appeal to people's morality: not likely to generate revenues long-term
- DRM-protect their music: easily circumvented as shown numerous times
- DRM-protect hardware: easily circumvented regardless of the hardware, simply by playing and re-recording the music
- push for harder copyright laws: circumvented by the sheer mass of file-sharers, which effectively means that an individual file-sharer has a next-to-null chance of getting caught

*or*... they could disappear and music bands could turn back into what they once were: live performers, who were paid to play music on a stage.

So in short: Peter Jenner is wrong. Nobody will turn to X, Y or Z licensing scheme. Eventually, people will share music for free, simply because that is the logical technical and legal way it must be, and they will pay musicians directly to give them what no amount of digital files can give them: live performances.

This chap is way off mark

A blanket licensing system won't work.

It's merely a last-ditch effort by media companies to hold on to their existing business model as much as possible. What Mr Jenner is assuming in this interview is that collection organisations such as PRS and MCPS could have their reach extended further by encompassing not just broadcasters, performance venues, or regular retail, but every citizen that just *might* be using content that the media companies have acquired copyright for.

What Jenner is failing to realise here is that these collection oligarchies are rapidly becoming outmoded. Artists beginning to realise that these mechanisms which collect and distribute money are incredibly unfair, favouring only the larger artists, or at least the ones with the better-negotiated contract. To assume that a panicked extension on the remit of collection organisations would run as the BBC television license is laughable. The BBC is only able to exist on a strong public-service remit - allowing record companies their own secondary taxation would not work with an already jaded public.

Many artists, and smaller labels are realising that the old systems are not the only way to get their music to the public, and to make a living from doing what they love. If Sony BMG, Warner, EMI and Universal wish to continue to sell music, they really need to rethink the way in which they do business.

[Please insert your own ocean liner feng shui metaphor here]

DRM Is Dead - Was it EVER alive ?

only big label companies and their sponsored software developers believed to be so, maybe, for a short while.

It was stupid right from the start - digital environment, internet is a free medium. freedom is its nature and its result. monopoly, impending 100-year old control schemes for distribution of intellectual property was a 'clueless' idea at best, if not stupid.

Given the big label company ceos, execs are now of a generation that is in their 60-70s, it is no surprise that they have misjudged that we were still in 1950s.

Gramps, you are of a dying generation. you are passing away.

then, instead of trying to screw your label and your shareholders with dinosaur-worthy 'measures', embrace the new digital/internet revolution and leave a good name behind.

or, leave your chairs to younger ones, who are actually able to understand the contemporary times and participate in it.

As some with some insight in copyright industry...

...I would I believe him. For me, this interview is very informative, thank you very much :)

He's not qualified in the least

From the article:

Few people know the music industry better than Peter Jenner. Pink Floyd's first manager, who subsequently managed Syd Barrett's solo career, Jenner has also looked after T.Rex, The Clash, Ian Dury, Disposable Heroes and Billy Bragg - who he manages today. He's also secretary general of the International Music Managers Forum.

That's great! He sounds like a really fascinating, well-weathered guy who has had a hand in promoting and advertising musicians. I'm sure he has a lot of really cool stories to tell about his experiences as a manager. But has that experience working in a music culture so dramatically different from the present day one given him the ability to intuit anything about DRM, about evolving content delivery systems, about much of anything outside of managing bands? Of course it hasn't. I'd rather hear the opinion of someone who is actually involved in the online music distribution business, someone like...hell, Steve Jobs, as opposed to an aging, disgruntled outsider who has been commissioned to tell us what we want to hear.

Perhaps that's why the only thing he gives us in the interview is sloganeering, platitudes, and empty insights that most of us who have been paying attention are already wise to. DRM is already dying. You don't need to drag out the old Pink Floyd manager and have him give a curse word-laced statement to that effect.

DRM is Dead!?

My heart stopped for a second there, you shouldn't tease!

Labels' Attitude and Understanding

I went to school with somebody who later became the MD of Sony Music UK. I met him at a mutual friend's new year's party a couple of years ago and we got talking about how he signed Travis, and bout new bands, and the rise of this Internet thing.

I have a great deal of interest in the copyfight, and earlier that year had attended one of RMS's talks, was reading Laurence Lessig, et. al. Naturally, I wanted to know what he thought of all that stuff. As head of one of the most powerful A&R operations on earth, I assumed he would definitely have an opinion.

But he seemed either completely ignorant of the issues, or completely unconcerned. He said something about how their lawyers are "doing something about it" but other than that had no interest. What about copying music? "Oh, we'll sort that out I'm sure." What about the role of the publisher as gatekeeper to new talent? "Er, what about it? We put a lot of investment into choosing acts that will do well. And they do do well."

Something about rabbits and headlights came to mind, so I asked him about where he went on holiday that year (France, it was really nice, you really *must* visit the Dordogne...)

ASACP?

It sounds like a mix of the license fees that retail establishments / bars / etc pay to play music combined with radio.

You could play a flat monthly fee and listen to what you want, the various artists get paid based on what you decide to stream. If enough music was available that way it certainly would be a seismic shift in the way music is bought and sold - not just for iTunes and recored stores; but for services such as satelitte radio and cell phone providers that want to sell you music. If you could pay a flat fee and listen to what you want where you want they would add no value. The one challenge is how do you allow playing away from a streaming signal - perhaps you allow a limited amount of music to be recorded and played at will - sort of like the Blockbuster / Netflix send a DVD model.

Of course, in the end teh battle will be over money - todays and controlling the distribution to maintain a lock on future revenue.

Misleading

Anyone else find the title for this story misleading? I was expecting it to be about some new legislation that was suddenly passed, or some sort of skeleton-crack or something. What it actually should have been was "Some Guy Thinks Music Labels Screwed, DRM Dead".

Definitions

payola n, Illegal promotion of music where record companies pay radio stations to play their songs.

playlist n. Legal promotion of music where record companies pay promoters to pay radio stations to play their songs.

No news, move on...

This is news? This is the same sh!t we've heard every week for months. http://what-is-what.com/what_is/drm.html/ [what-is-what.com]

Only themselves to blame.

I know record companies are unable to adapt to changing technology them but I do feel they are in part to blame for the mess they're in. If you look at the history of the big bands and solo artists, the record companies biggest earners, they had spent 3, 4 years, sometimes more touring, building up a loyal fanbase before they got a record deal. These bands/artists created great singles and more importantly great albums, which is where they and the record companies make the money. Even when the bands were having low points in their careers, money was still pouring in from back cataloges. Nowadays, the record companies manufacture bands and artists through hype and televison programmes. They release a few singles to hype up album sales. These artists have only a shelf life of two or three albums and they're dropped. The problem is that the people who like these artists are not interested in albums, they're interested in the songs. Who wants to spend £15 on an album when they can get the tracks for nothing? There are people who will pay for these downloads but again, they're interested in the song, not the artist and mostly likely won't buy any more of the artists songs. IMHO, the record companies would still have problem if the technology of illegal downloads did not exist. Like the film industry it is a convienant excuse for failed managerial decisions.

end of drm

old music guy says: "You've got to provide stuff that people can keep, and they don't mind paying you $3 a month for."
 
....and how does that work? oh yeah, you have to pay $3 a month *FOREVER* and you don't have a choice about paying it if you want music

unfortunately, this is "brit-think" like the TV Tax. Won't work in America - where taxes are a four-letter word.

Can you imagine americans paying a tax to watch TV? ho! ho!

now we *will* pay unlimited $$$ to watch/not watch cable trash, and then bitch about how much we pay the cable companies - that is the american capitalist way; we prefer our corporate handouts/guarantees not too closely or obviously linked to the government. it allows us to keep up the independent cowboy charade ;-)

Money is there but...

End of the line is that you will have to somehow persuade people to give their money for music. Right now that money is spent on other things as access to music is easy and cheap (even free). DRM doesn't help here.
So the money is now in concerts (live performances) prices of which did rise significantly in recent years.

Flat model? Maybe (like a tax we pay to state TV houses in some countries), but it isn't going to get many people rich and money will again be ripped by clever managers and all those intermediate rats.

No, I Won't Pay $3 a Month

The music industry needs to get around the mindset that they are due a monthly stipend. That pricing system rewards mediocrity and lack of creativity, which is all to prevalent in what the music industry calls its product today. There is absolutely no way I will pay any money for a license to listen to music that I may already own or music I wish to own. The fact someone is willing to pay money for a product, whether it's $15 per CD or 99 cents per download is the incentive this industry needs to give the customer what they want, not what the music industry wants. It's been written here so many times before that the reason the industry has lackluster sales is because the product isn't what the customer wants and its delivery method doesn't suit the method the customer wants.

I can't think of too many "kids" who don't like iTunes. My kids and their friends eat up iTunes gift cards downloading the exact music they want without having to pay $15 for a CD that has one or maybe two songs they enjoy. Which heralds back to what I remember as a kid where I could run up to the local drug store, fork over a dollar and get a 45 with the exact music I wanted (yeah, I'm that old). That's what the music industry was built upon before it was turned into a cash machine that ate customer good-will. And that was before the advent of downloadable music; now the music industry is vilified to the point of no return in the eyes of its customers.

Brilliant!

"[...]the network is keeping an eye on you to see you don't download any music. And if you do without a license, we'll sue the hell out of you" - from the article As opposed to how it is working right now? (someone keeping an eye on things and sueing) And how would this work in the great many parts of the world where music downloading is very much legal?

Copyright is dead for distribution purposes

The fact is, you can't outrun supply and demand. Prices don't set S&D, S&D set prices. When the supply is near infinite, the price falls to zero, and there is nothing the State can do to control it. Imagine if they State charged for air.

This means that musicians and ALL artists will have to work just like everyone. They can create live (a show) for a fee. They can produce something unique (a jingle, or a painting) for a fee. They will have to do real jobs doing their thing if they want to make money.

This is a good thing. The free market is a great equalizer, giving power to those who want to continue creating rather than those who want to make-once-and-license. The free market makes sense: a plumber doesn't charge you per flush, he charges you to install the toilet, and then to fix it if it breaks. A musicians is like a plumber (I know, I produce a few of them); they should make their money touring and giving lessons and selling merchandise that is unique and not-easily duplicated (autographed copies makes sense).

Music taxes no good solution either

Let's say I pay a music tax -- how do the ISP in collaboration with the owner of the intellectual property then figure out who should get the money for something I downloaded? Assuming an "popularity/assumption model" is one of their ideas -- I do not want the income be split according to the popularity of artists, as that could give Madonna money for downloading from a far less common artist. And how is the fee adjusted to how much copyrighted music I'd download? Because it is, right, otherwise it's completely unfair.

This guy is almost as out of touch as...

the average poster on Slashdot. Peter Janner please meet the iTunes Music Store, iTMS, please meet out of touch guy.

The majority of people have no issue with DRM as long as it doesn't seriously inconvenience them in day to day use. The record companies aren't going away as they control the means to shelf space, both at retail and even on the Internet. There simply aren't enough venues to support every band out there, the whole idea that every band will make it's living off live performances is laughable if you actually know anything about the music business.

yeah, that'll work out well

i think i have this right...... basically he is calling for a tax on every internet connection (including cell phones etc). that tax going into a giant pot, and some magical piece of software decides what artists deserve what cut of that pot.

he compared it to the licensing schemes for radio etc, but the radio one is kind of based on radio station submitting lists of what songs get spun however many times. if the station drops the ball reporting, or the artist is not registered, then they get nothing.

i am not sure what magic software will know how many times certain songs are downloaded? he didn't call for a central government run P2P site, or something that monitors all net traffic to figure out what songs are being transferred. i could see some small artist with a computer hacker friendly fan base becoming very very profitable if they could make it looks like a lot of people are downloading their songs.

he seems to gloss over the technical difficulties, and the odd fact that, say, my mother, would pay as much as a 16 year old kid with 500 GB of hard disks to fill. i guess that's how blanket taxes work though. great. i don't see a need for world governments to unite and go through all this crap to save the music industry as we know it. even if they wanted to, i bet it would take years and years to hash it out.

wtf is with the artists?

The thing I don't understand is why doesn't a big name artist say fuck you to their studio and go out on their own. U2, Madonna, Britney, etc could all do it. Start your own site selling non DRM lossless songs, do individual deals for CD distribution, run a few commercials.

Possible Swedish tax solution

Here in Sweden the politicians are currently discussing a system where music and movie downloads would be legal while general tax would be introduced and the income distributed to the artists/record labels/movie studios. The big unresolved issue is how the incomes to the tax would be divided. You'd have to have statistics of the downloads which implies some form of centralized system, which is difficult in practice. Furthermore there are issues with international copyright laws etc. It is unlikely that this will be introduced in the near future and if it is introduced they will probably want to execute it at an EU level - which will take even more time.

There is however an immediate positive effect of these discussions - the politicians are beginning to understand that going after file sharers isn't an acceptable solution. The sheer mass of people that are sharing, and the very few lawsuits and convictions make the law basically arbitrary. And that's one thing that the law can't be - random.

In addition the trials so far have been spectacular failures for the music industry as it has been established that you can't get a search warrant on charges of copyright violation. This means that the police have no way of securing evidence against file sharers and the courts have established that IP logging and screen shots are insufficient evidence.

While it is far from over both legally and politically, both the legislative and judicial parts of the government are starting to look at the problem realistically.

A common misconception.

I would like to point out that it is a common misconception that bands earn their wages from live concerts. It is quite to the contrary! Most bands play local gigs for free, when they're small because they have to, when they're big because local gigs then become "secret gigs." Move on to much larger venues, yes, they may get paid (after the manager, producer, venue itself, etc. etc.) enough for the drinks they go for after the set, but by no means is this their primary income, merely because it's damned expensive to run a large gig, whether it be at a mainstream venue, and even less likely at a festival as the bands are usually invited and go for the free booze/food/fun/promotion. No, their primary income is from CD sales. Why do you think some bands are trying to ride at the forefront of the digital downloads? Because they feel that that's going to be their cash cow. i.e. they get a bigger commission as they're cutting out people in the middle. Secondly, their money comes from endorsements and advertising. So, these bands earn a living from their CD/Vinyl/Download sales through the pennies that they earn per sale until they gain enough clout to grab the serious cash in advertising. Remember that every rung on the ladder is harder to get to than the previous. Free gigs, CDs start to sell (usually self-produced), larger gigs, CDs sell, but contract bites them in the ass on commission, popularity increases, larger gigs, still don't pay well, but now they can live easily off of their heavy-selling CDs, finally, advertising, and they end up on "MTV Cribs."

OfRoy

We can have an 'OfRoy' - an office of royalties, or whatever you want to call it.

Did this particular shortening of the name remind anyone else of MiniTrue?

Not going to work

It's simply too difficult, without some sort of centralized tracking (such as a DRM download site) to figure out how those fees are distributed between the artist. It'll be a logistical nightmare.

There are simpler solutions - Yes, DRM is a wholesale failure. Nearly every attempt at DRM has failed technically (it gets broken), and by assuming your customers are criminals, many of them will, in fact, make a decision to be criminals, because of the fundamental fact that the P2P networks offer a *better* product at a lower price.

The solution? Stop trying to hawk inferior products. Provide a BETTER product than the P2P networks, and you will find that people are willing to pay for it if it is a better product.

Things the record companies could offer in an official product:

Convenience and selection - I hate trying to hunt around on P2P networks for some obscure non-mainstream track that few people have.

Reccommendations - Stuff like "similar artists", "people who purchased this also purchased Y", and so on.

Lower prices than the current status quo. Maybe 1/4 of what they currently charge (25 cents/track, no per-album pricing), or even something like 10 cents per megabyte. They'll likely find that their per-track profit losses are more than made up for by volume. $1 is a little expensive for an impulse buy of a track you're not sure of. $0.25 per track - At that price I would (and have) buy a full album just because I like one track. (Hey, isn't that what the record companies want us to do?)

Does that all sound familiar? Yes, allofmp3 provided all of those. I've spent more money there in the past 2-3 months (prior to Visa and MC cutting them off) than I have on music in the past 2-3 years. (With most of THAT money being back when PyMusique allowed DRM to be removed from iTMS tracks). If you can't beat em', join them. Rather than combating allofmp3 by busting out the lawyers, the solution would have been to compete with them on merit with a similar service.

More for it than against it

It does attempt to grapple with the unique aspects of digital media. It isn't likely that it will lead to other government-sponsored taxes. I don't see a government issued McDonald's coupon book for a free Big Mac/month for paying the McDonald's tax coming any time soon. So the slippery slope argument shouldn't be appropriate.

Is it entirely fair? Well, no. But would it be the worst tax we are paying? I don't think so. Our phone bills already include several dollars of federal tax. Because enough people complained the other year the tax purporting to pay off the frakkin' SPANISH-AMERICAN WAR OF 1898 has been removed though, right?

It would be an _ironic_ tax. As a proud owner of a premiere issue of Revolution magazine I'm both a dedicated Eurotrance listener and someone who is painfully aware that the genre was actively killed like a spreading weed in the U.S. So the government