Saturday, January 20, 2007

Why do the Record Labels Hate Us?

I, like most people, don't understand the major record labels. The latest thing that baffles me.... Universal and Sony's insistence that certain artist's songs be blocked from being shared via Zune's (already flacid) wi-fi sharing capabilities. We are talking about a three-play/three-day sharing model.... this is hardly the opening of Pandora's box. What are they worried about, that they are losing out on the gigantic market of people who will buy a song to only listen to it a couple of times - then never want to hear it again?

To me it appears like the labels have become the exact opposite of what they were founded to be. Back in the day, the biggest draw of a major label to an artist was the fact that they would promote them, get them radio airplay, get their music distributed. Now? Well, now they spend there time and effort making sure there artists *can't* be heard. How does that pitch go to an up-and-coming artist?? "If you sign with us, we'll make sure that everyone knows who you are, but no one has actually heard you!" Brilliant!

Yes, the amount I don't know about the inner working of a major label could fill the internet's "series of tubes". But, the labels have fallen prey to what many other companies have.... they have forgotten to look at the business from the consumer-perspective. Create a great consumer experience, then optimize for profit after that. So many today have it backwards.

I was just thinking about the newspaper business as an analogy to the music business. What helped them become so successful decades ago? They made it easy to consume their product. You could get it anywhere, easily. The delivered it to your door. Is it easy to steal newspapers? Absolutely, but most don't - because it is easier to NOT steal it. Guess what... if my Sunday newspaper wasn't legible half the time, or the newspaper box on the corner made me jump through hoops to validate I was who I said I was, then it would be easier for me to just swipe one from outside 7-11. Can I share my newspaper? Absolutely. Does that hurt the newspaper's bottom-line in any substantial way? Highly doubtful. Because people don't want to just read the same newspaper over and over again. If they do, then let them... they are not your real consumer base anyways.

The labels are suing the satellite radio guys for introducing devices that can record content. The Home Audio Act of 1992 established that recording something off of radio was covered under Fair Use. Why is this not? Well, the quote I saw from the suit was "it is manifestly apparent that the use of a radio-cassette player to record songs played over free radio does not threaten the market for copyrighted works as does the use of a recorder which stores songs from private radio broadcasts on a subscription fee basis.” That is a scary statement, and a slippery slope for consumer's rights. What's next, my TiVo won't be able to record movies off HBO?

Note to the major labels: Love your consumers, and they will love you back. Treat us like criminals and we will go elsewhere for our love.

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