Warner Looking At Music Tax
03/30/2008, 4 months 1 week ago
Taking a new tack in the continuing war on music listeners, Warner wants to break from the current thug tactics of the RIAA and go with a fee schedule instead. This fee schedule would operate very much like a consumption tax on music, being added to your internet bill each month. What Warner isn't taking into account is whether that is something music lovers want.
What music lovers are looking for, and what many companies are already building for them, is a way to shop for the music they want wherever they want, however they want, while still paying the artists. Grooveshark gets that, as do other companies rallying to answer the call from consumers. Even Limewire and other former P2P services known for illegal downloads get it an are trying to create a paid model to replace their old and busted one. The labels don't.
Warner and other big labels just don't see that they are still thinking like a bureaucracy. That kind of old school thinking won't help them get a leg up in the new digital age of music. Assume for a moment that their PR machine helps get the idea of a “money pool” for signed artists on the major labels to get paid for their music through this music tax to pass with the masses. Where then are the independents and the unsigned artists that sites like Grooveshark and MySpace are already working to include in a compensation model?
This idea is just one more way to service the old-school model of the music business. Of course, the fact that the Warner executive who is brainstorming this idea says the label won't make the fee mandatory for everyone with n internet connection through government regulation or other means should totally reassure us. Right. I don't think so. The labels have proven time and again that they are not in it for the music listener or the artists, but only for the labels.
Is the idea of a music tax or fee better than continuing the RIAA lawsuit model? I'll have to give in and admit that yes, it is marginally better than the current litigious extravaganza of contempt being fed consumers and the legal system by the RIAA. That slim advantage over the current problem doesn't make it the solution, however. Even hiring lone gunman Jim Griffin, formerly of Geffen Music, can't lend the idea a veneer of hope. It is one more bit of evidence that the music industry waited too long to do too little, too late to get on the online music bandwagon.
Griffin does get points for his take on the direction the industry needs to go: “But we're swinging toward the vine of music as a service. We need to get ready to let go and grab the next vine, which is a pool of money and a fair way to split it up, rather than controlling the quantity and destiny of sound recordings.” Even that attitude can't make this idea seem like a complete solution.
If the music industry works with existing services instead of against them, there may be a chance to salvage it to some extent. Instead of persisting in the notion that they should control access to content, they should encourage as much digital downloading for under a dollar per song as possible, then going after the royalties they and the artists are owed. Eliminate DRM, eliminate single use licensing and the pipe dream of customers buy multiple copies of one song instead of making backups and sharing it between computers. Create monetized music feeds.
There are only a few ways to make money in the music business. The digital age has opened up these revenue streams and more, but the labels have to be open to the possibilities. Instead they continue to work from a proprietary business model that won't get them far in the long run. They could take a lesson from the rise in popularity of the data portability movement. People want that concept to apply to everything that belongs to them, even music. If labels ever figured that out, they'd have a better chance of survival.




The next vine the record labels are grasping for is already dangling in front of their faces. I subscribe to Napster and honestly love it. It combines unlimited selection, intelligent search, playlists, automixing based on taste, radio stations and the ability to purchase songs if you think you want to own some (although I haven’t seen the need to buy any since they will soon be converting to unprotected mp3 files for that). Even after they convert to mp3 I don’t see the point in buying something I already have access to and which will likely be obsolete in a few years anyway. The labels just need to get behind Napster and Rhapsody with wholesale pricing that assures their survival in this critical time, give them some marketing support and most importantly, demand hardware manufacturers embrace a single industry standard DRM for subscriptions. The labels have the licenses. If Apple doesn’t want to play ball they should pull the plug.