August 19 2008

Music Discovery May Soon Die

The Recording Industry Association of America (RIAA) is at it again. I know… you’re all shocked.

The RIAA, the goverening body that is charged with the protection of musical copyrights, is again going so far in their efforts to protect music, that they seem to be doing more harm than good.  The latest confirmed casualty is the startup website called Muxtape.

The site, without a doubt, was questionable in its legalities from day one.  It allowed users to upload MP3s to the site and they could then make a “Muxtape” from those.  It was meant to bring back some of the feeling people got from making mix tapes for friends back in the 1980’s and 90’s.  You were limited to putting 12 songs on each Muxtape, and there was no means for downloading the songs present in the site, all in an effort to show the record industry that this was merely a way for people to promote the music they loved.

As of August 19th, the image shown above here appeared on the front page of the Muxtape site.  The problems more than likely stem from the fact that third-party developers came up with ways for people to download the music, even though one of the owners of the site repeatedly pleaded with poeple to not do soThe company blog does make things a little less clear, though:

No artists or labels have complained. The site is not closed indefinitely. Stay tuned.

Whatever is going on with Muxtape involves the RIAA, and that is never a good thing.

So, while clearly Muxtape was on shaky legal ground all along, you then have the case of Pandora, which is 100% legal, but may be shut down by virtue of the greed of the music industry.  According to a story in the Washington Post, last year a federal commission, the Copyright Royalty Board (CRB),  ordered that the royalty rate online radio stations pay to SoundExchange be doubled.  Mind you that at this time terrestrial radio does not pay any royalties (although the RIAA is looking to charge radio stations now), and satellite radio, which is subscription based, pays a lesser fee rate than online radio does.

Pandora is free to its one million daily users, and has become one of the most popular applications on the iPhone/iPod Touch app store, and all of this is made possible via advertising revenue.  Under the new fee structure, Pandora will have to pay somewhere in the neighborhood of 70% of its projected $25 million in revenue to SoundExchange.  If this should go into effect, Tim Westergren, the founder of Pandora, says he will have to shut the site down because the company will only be wasting money at that point.

Okay, lets do some simple math for the music industry shall we?

Old Pandora fee structure
35% of $25,000,000 is $8,750,000
Sales of music discovered due to people listening to Pandora is impossible to calculate

New Pandora fee structure
70% of nothing due to Pandora shutting down under new fees is $0
No sales of music discovered due to people listening to Pandora is not impossible to calculate, it is $0

Which one looks more attractive to you?  The old fee structure, or the new, greedier structure, that leaves the music industry with earning nothing?  I think I’ll take curtain #1, Monty!

The music industry is going berserk with the online industry because I think they feel like they finally have a way to track stuff.  The amount of piracy that went on while I was in high school was astronomical.  We were all constantly taping off CDs for each other, passing them around, taping music off the radio and so on, but the industry could do nothing about it because they had no way to track it.  Now comes the Internet and they have ways to see how many times everything gets played, how many times something gets downloaded, and they have gone absolutely bat crazy with trying to figure out how to squeeze every penny they can out of it.  Remember when they wanted a percentage of each iPod sold because Steve Jobs couldn’t sell them if it wasn’t for the music to put on them?  Yeah, prove to me they aren’t trying to take insane amounts of money they shouldn’t be able to.

As I see it, the problem here is that the industry is forgetting that without the ability to discover new music, they won’t have any sales.  I have no desire to listen to commercial radio and be forcefed they drivel they program.  Sites such as Pandora are amazing because they learn from you and what you like, and then they will recommend new music based off of that.  I have discovered several bands I had never heard of via this site, and now it may go away because the music industry just simply can’t control their never-ending greed.

Perhaps this actually is there plan.  Perhaps they want to be able to dictate how we discover music so they can continue to force us to listen to the likes of Britney Spears.  There is something horribly broken in the music industry, and it isn’t a couple of stolen MP3s from the likes fo sites like Muxtape, or from Pandora not paying enough in royalties, it is from the music industry having this omnipotent style attitude that essentially everyone in the world works for them.  Enough is enough.

In the above linked article about Pandora, towards the end, there was this quote from a musician (you know, the people this is supposed to all be about?) that I think sums it all up pretty well.

Matt Nathanson, a singer-songwriter who has recorded for both major and independent record labels, said he is worried that the demands placed on Internet radio could “choke” the industry before it gets its footing.

“Net radio is good for musicians like me, and I think most musicians are like me,” he said. “The promotion it provides is far more important than the revenue.”

There you have it folks.  True, this is just one musician, but this is still an actual musician saying that this is more important as a promotional tool than a revenue stream.  Every industry has promotional tools, why does it seem the music industry can’t have one without taxing it to death?  And if they aren’t taxing it to death, they want to sue people who listen to music… or they want to dictate how you can listen to it via Digital Rights Management (DRM)… or they want to impose a tax on all Internet subscribers to help cover “the cost” of piracy… the list of endless as to how this industry is attacking the consumers.

It is time you finally voice your opinion on this in various manners.

It’s up to us folks, how much longer will we stand for an industry that so clearly hates us, but isn’t essential to our everyday well-being like food or water, dictate such insane policies?

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