Wired has a piece on the state of the music business according to Universal big-wig Doug Morris. It's generally a well written article, but it's just more of an example of the clueless nature of some music business veterans.
Allow me:
"There was a cartoon character years ago called the Shmoo," he says in a raspy tenor. "It was in Li'l Abner. The Shmoo was a nice animal, a nice fella, but if you were hungry, you cut off a piece of him and put onions on it, and if you wanted to play football you just made him like a football. You could do anything to him. That's what was happening to the music business. Everyone was treating the music business like it was a Shmoo.Ah. Except, unlike the Shmoo, the music business resisted every single change it couldn't control, or didn't provide the maximum profit for the business. Singles? Do away with them! New format? Phase out the old ones before their time! People playing CDs on their computers for convenience? Put a virus on it! That'll teach em. Don't tell me the music industry has sat there passively for decades and let all this horrible stuff happen to it. And even if they did, wouldn't that be the industry's fault?
"It was only a couple of years ago that we said, What's going on here?' Really, an album that someone worked on for two years — is that worth only $9, $10, when people pay two bucks for coffee in Starbucks?" Morris sighs.I just about spewed my tea when I read this. Yes, an artist's work for 2 years is definitely worth more than $9, $10. So why do labels like Universal only pay the artist maybe $3 out of whatever the final retail price is? The rest is pure profit for the label. And how many $10 CDs do you see kicking around?
People never really understand what's happening to the artists. All the sharing of the music, right?More of the "we're doing this for the artists" argument. See point above.
The problem is that a strategy based on quick returns is unlikely to pull the music industry out of its morass. After all, it was a reluctance to look farther down the road that got the labels in trouble in the first place. But Morris is much less interested in figuring out how to make digital music work for everyone than he is in not being the Shmoo.Bingo. The music industry's problems summed up nicely. Too bad it's Wired that has it figured out and not, you know, the music industry.
Morris' ascent coincided with the rise of CDs — the biggest boon the music business has ever known. According to industry figures, from the early 1970s through the late 1980s the total number of albums (in all formats) shipped each year in the US hovered around 650 million. In 1992, CD sales reached 400 million; six years later they hit 800 million. By 2000, more than 900 million CDs were being shipped each year. Many of those were back-catalog purchases, as music fans converted to the format that seemed destined to make all others extinct.This is a fascinating point, and an angle I hadn't thought of. Could the decline in CD sales also be related to the fact the great format transition of the 90s is finally slowing down? Albums are being remastered two, three, four times and bringing less fans in each time. How many times do you need to to by AC/DC? Or the Eagles? Now that everything has been replaced, there are less CDs to be bought, especially since the New Releases and promoted artists aren't exactly geared toward the age group that have been buying CDs for the past 15 years.
Paxton's hesitation is justified. Over the years, the label has for the most part used its market power to squeeze money out of others' ideas. And its current moves — DRM-free songs and the Total Music subscription service — aren't about serving consumers, at least not principally. They're aimed at taking on Steve Jobs and, specifically, limiting the power of iTunes.
I really need someone to explain to me why the labels, particularly Universal, hate Steve Jobs and Apple. Is it purely because he found a way to do something they weren't planning on doing, and was very successful at it? While they were going around suing the pants off anyone who might have owned a computer, Jobs found a way to make downloading legal, convenient, and profitable. Universal sure as hell wasn't going to build anything like that.
And no, I didn't drink the Mac fan-boy (girl?) kool-aide. It's just if I have to pick, my sympathy isn't going to rest with the music execs.
"Looking back, the best thing we could have done would have been to mandate one format," he says. So why didn't that happen? Morris is happy to field this one. "It never crossed anyone's mind!" he exclaims. "We were just grateful that someone was selling online. The problem is, he became a gatekeeper. We make a lot of money from him, and suddenly you're wearing golden handcuffs. We would hate to give up that income."
Throughout this interview, Morris's answer is "we didn't know", "we're not technical", "we didn't think of it". This guy is a CEO of a major corporation. I dare you to try any of the excuses he uses when you screw up at your job. It's all ok though, because they were making a lot of money. But I thought they were all about protecting the artists? Idiots.
The rest of the article is a look at how Universal plans to combat the beast that is iTunes and the iPod. I'm no dummy, I know it's not good to have one player control so much of the downloading market, especially when that player is Apple -- not exactly known for their openness. And iTunes just keeps growing. Why? Because it works.
Problem is, the music industry is head over heels in love with a subscription service, and will push for that. The entire industry is based on consumer purchasing music, not renting it. Trying to re-write copyright laws won't change how it's been for over 50 years.