Right now, radio stations only pay royalties to the original songwriters for the music that goes out over the air, not to whoever owns the actual performance of the song. (This is a key distinction because usually the record labels own the performance recording rights, not the artist.) If the labels have their way, radio will be forced by Congress to start paying up.
The interesting thing is that the compromise isn’t exactly between just radio and the record labels. Broadcasters want Congress to mandate consumer electronics manufacturers to include an FM radio chip in every portable device sold in the US.
(cue to a shot of tech companies going “whaaa?” with a surprised look)
“The backroom scheme of the [National Association of Broadcasters] and RIAA to have Congress mandate broadcast radios in portable devices, including mobile phones, is the height of absurdity,” thundered CEA president Gary Shapiro. Such a move is “not in our national interest.”
“Rather than adapt to the digital marketplace, NAB and RIAA act like buggy-whip industries that refuse to innovate and seek to impose penalties on those that do.”
Now, it’s quite obvious with declining record sales and radio ratings that the NAB and RIAA are on sinking ships. I get that it’s a patently absurd mandate to place on tech firms who shouldn’t have to worry about bailing out the flailing radio and records industries.
But from a consumer perspective, would you really mind having access to an FM radio on your iPod or cell phone? I mean let’s put aside the fact that most terrestrial radio stations put out some poor product. (With a larger audience, maybe more programming chances could be taken. Playlists could widen. Songs could repeat less in a given time period.) Sometimes it’s just easier to put on a radio station and just start listening to music than it is to create a playlist on your own.
Say you’re bored waiting somewhere where there’s no cell reception. Chances are that you’ll still get FM radio reception at the least. It’s old technology, but it’s still probably more reliable than AT&T’s network. Entertainment problem solved.
Of course, this all goes out the window if our iPods and cell phones are suddenly $20 more to buy. But how much can an FM tuner chip cost these days?
All things being equal as a consumer, I feel that it’s a “why not” option for mobile devices. I haven’t had a portable radio since high school. Sometimes I wish I had one, especially when there’s a ball game to listen to and I’m not home. As long as our devices look, function, and cost the same, sure, put an FM tuner in there. We got nothing to lose, right?
@irvingazoff: New TM full disclosure pricing! http://www.ticketmaster.com/event/0D00448D1A496EA9?brand=&tm_link=tm_homeA_g7&hot_ticket_brand=home
Now that’s a little thin on explanation so here’s Irving shedding a little more light on the matter:
“Correct. Since acts, promoters and venues are fighting full disclosure all-in pricing that consumers want, TM is unilaterally doing this. Needless to say a major promoter has already written to us demanding we stop. Go ahead and print if you want Bob. Thanks. Irving”
Cool, so now we get to see how much show prices really are without having to go through the song and dance of pretending to buy a ticket right?
Not exactly.
While each event page now shows a price including “fees”, there’s no mention of the “order processing charge” that will get tacked onto your order once you actually get down to putting on your billing info. This charge is roughly around $4-$5. (In Irving’s Carrie Underwood link above, it’s $4)
But that’s not all.
I bought a pair of Arcade Fire tickets for the Los Angeles show last week and not only was there a $4.80 “order processing charge” for a pair of tickets, Ticketmaster was now having the gall to charge $4 for “standard mailing.”
[rant start]
That’s right, we’re now charged an absurd $4 to be mailed tickets via a 35 cent envelope (I know because I’m staring at a ticketmaster envelope postmark right now). The “free” standard mail delivery option used to be the only thing I could mollify myself with if I bought tickets for a show months in advance. Now I don’t even have the option to pay $2.50 for the privilege to print my own ticket. The cheapest option was a $3 fee to go to a Macy’s or some retail outlet and have them print out tickets for me.
Are you kidding me? $3 to make an out of the way trip to a retail outlet to have them print out something for me?
Mr. Azoff, go back and hide the fees from me until the end step if it’s going to end up costing me an extra $4 to buy a 35 cent postage stamp. What’s next, a $2.75 fee to send them a Self Addressed Stamped Envelope for them to mail my tickets?
[/end rant]
Don’t get me wrong, the idea of a “Full Disclosure Pricing” sounds swell to me as a consumer. I’d love to eyeball an event page and be able to figure out if I can afford to go or not without 5 minutes of fumbling with Captcha work. Perhaps this is how Ticketmaster should have done business from the beginning. Regardless, with the way Mr. Azoff talks about it, you’d think that Ticketmaster had unilaterally cut fees to the consumer by 75% or something equally revolutionary. Now wouldn’t that be something to get excited about.
Let’s not get ahead of ourselves, though. I do realize that Ticketmaster is walking a tightrope with event promoters, venues, and artists in terms of who gets paid what and how much. But please, if you’re going to advertise “Full Disclosure Pricing”, try to actually disclose the final price before trumpeting yourself as a hero of the consumer.
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In March, Billboard magazine reported that Amazon was asking music labels to give it the exclusive right to sell certain forthcoming songs for one day before they went on sale more widely. In exchange, Amazon promised to include those songs in a promotion called the “MP3 Daily Deal” on its Web site.
The magazine reported that representatives of Apple’s iTunes music service were asking the labels not to participate in Amazon’s promotion, adding that Apple punished those that did by withdrawing marketing support for those songs on iTunes.
First of all, I find it deliciously ironic that the record labels are now the victims of bullying. Secondly, is anyone actually surprised by these tactics? Maybe I’m just jaded, but when I worked in radio implicit threats were an acceptable tool in the arsenal for record promotions.
Record Label: “If you don’t play this record by <insert new band the label is trying to break>, don’t expect to get <multiplatnium selling artist> for your summer festival show.”
Those words were never said explicitly, but the general idea was understood. It also worked the other way:
Radio Station: “You gave <competing station across town> an exclusive interview with <large band>? Don’t expect to get airplay for <your next baby band>.”
Tit for tat business tactics may not be the nicest or most optimal solutions, but they’re human nature. We get wronged; we want revenge. New girlfriend sees you talking to another chick at the bar? DOGHOUSE. The same thing is essentially going on here with Apple, Amazon, and the record labels.
Granted, those were bygone days in which both parties had leverage on each other. It was a symbiotic relationship; a give and take among equal powers. Now, it seems as if Apple has all of the power here. The record labels are so desperate for iTunes’ short-term sales that they’ll acquiesce to these types of demands and whine to Mommy (the DoJ) about it.
At the end of the day, I think this is an irrelevant battle. Inquire and regulate all you want, but you can’t change human nature. On top of this, I don’t see digital a la carte sales being the music market of the future. We’re seeing consumer excitement shift more towards cloud/subscription/social services.
But that’s a discussion for another day.
I thought that terrible piece on how the Black Eyed Peas was the #1 reason to be excited about music was the most insulting thing the Rolling Stone had done to music lovers this decade.
I was wrong.
I received the above email earlier today. Apparently, I forgot I had subscribed to The Rolling Stone (and it’s email newsletter) many years ago. I can deal with the unwanted email; I probably should have double checked the newsletter preferences more closely. But to squander a communication attempt with a former subscriber on this tripe?
Come on.
CNET reports that the Webcaster Settlement Act has passed the House of Representatives unanimously. Only the Senate now stands in the way of internet radio broadcasters and business viability.
According to the article:
Webcasters are fighting for the right to negotiate with the music industry to reduce the royalty rates they must pay to stream music over the Web. Any deal must be approved by the federal government.
It’s sad that it’s even gotten to this point. The revised royalty rates from last year that put webcasters into this situation in the first place were completely unreasonable. Now they are fighting for the right to negotiate? With the music industry?
Granted, one would assume that the record labels themselves would see the futility in forcing internet radio out of business and would negotiate reasonable deals if the bill passes. However, why did they allow SoundExchange to enact such ridiculous rates in the first place? The fact that any deal must be approved by the federal goverment adds unnecessary red tape to the process.
Unanimously passing the House is a good first step; it appears as though the bill will get enacted. At the end of the day, though, it’s still a workable solution. Just not a very elegant one.
Music social networking/blogging site, MOG, announced yesterday that legendary producer and Columbia Records executive, Rick Rubin will be joining its board of directors. Seeing as how the site is financially backed by Sony BMG and Universal records, this does not come as much of a surprise.
According to Mog founder, David Hyman, Rubin’s role “…is taking a fairly active role in the development of MOG.” He then goes on to imply that Rubin is giving input on “user interface and information architecture” for the site.
Hmmmm.
This sounds suspiciously vague enough to be a “hire a big name to our company to do nothing but look good in a press release” manuever.
Listen, I have nothing but respect and admiration for Rick Rubin the music producer. Not so much for Rick Rubin the businessman or web architect. He’s accomplished nothing ostensibly in those two areas that would merit his appointment to high level positions. Bob Lefsetz had a great rant on Rick the businessman in one of his emails. As to Rick the web architect? Well let’s just say if his “information architcture” skills involve putting Google Adwords on the front page of his record label’s website, MOG is going to be fighting an uphill battle.
Wired’s Listening Post reports that Warner Music has a plan to charge people a flat fee on the ISP level for the right to download unlimited amounts of music on p2p networks without the threat of litigation.
wat.
I’m still in shock. Hath mine own eyes deceived me? Is this really happening? Someone should check on Bob Lefsetz – he might be in cardiac arrest right now.
Coming back down to earth, it looks like the plan is not very well thought out yet and there are a lot of questions still to be answered.
What is known is that Jim Griffin has been hired by Warner to create “an ASCAP for the internet, collecting fees from ISPs and divvying them up among rights holders.” In the same way that diners pay restaurant’s music licensing fees with each dish they order, ISP customers would pay a bit more per month for the right to download as much music as their hard drives can eat.
The very notion that someone at Warners gets it is pretty shocking to me. Yes, this is a solution that should have been put in place a decade ago, but as I’ve said before, this sort of rational thinking from a major label was unfathomable to us in the industry even just a scant year ago. There’s still the problem of getting the rest of the labels on board, but I’m pretty confident that once one of them has a good plan of execution in place, the rest should fall like dominoes.
Bravo Warners, bravo.
Read more [blog.wired.com]
I was actually just wondering about this earlier in the morning as I read Tycho’s latest Penny-Arcade post. It isn’t the best solution for the music-savvy since it most certainly would involve DRM and less than optimal encoding/bitrates. HOWEVER, there are just so many iPod/iTunes users out there that even a DRM hobbled unlimited music subscription model HAS to stick with a significant number of people, right?
Past research and consumer data has “shown” that subscription models have not resonated well with the public. But what if that’s just due to a small userbase? Keep in mind, only Windows Media devices currently have access to subscription music. Who knows how the general iPod owning public would respond to such an offer?
My money’s on it being a raging success.
Read the Financial Times article (warning: requires registration) [ft.com]
Taking a page out of Nine Inch Nails’ recent simultaneous announcement/release of their new album, The Raconteurs have announced that their new album, Consolers of the Lonely, will hit every possible outlet next Tuesday, 3/25.
“Album” meaning: full length vinyl, CD and digital formats; and “everywhere” meaning: local mom and pop Indie retailers, corporate superstores, supermarkets, iTunes, Amazon, the band’s own website and any other location that could get the record up and going this quickly
Personally, I think this would have had more impact had the announcement been day and date with the actual release, but it’s still a great development for the music industry. The tired old model of promoting an album months in advance via radio singles, press reviews, etc. of the actual release needed to go. As a music fan, nothing pissed me off more than reading and hearing about new material that I couldn’t own. That frustration often led people to pirate leaked copies of records because, well, that’s the only way you could hear the new material! Along with providing a good alternative to pirating new material, simultaneous availability also brings a bit of excitement back to the music industry, something that it sorely needs.
Hey, if it works for Apple and Nvidia, why not for music as well?
Read the full press release for The Raconteurs’ new album [idolator.com]
