Originally posted by digg:

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The RIAA is looking more and more like the Mafia. Not only is it trying to kill Internet radio, but its royalty-collecting subsidiary, SoundExchange, is now claiming the right to collect royalties for ALL artists, even those who want nothing to do with the RIAA and its jackbooted henchmen.

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Originally posted by arstechnica:

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DRM, lock-ins, and piracy: all red herrings for a music industry in trouble

By Eric Bangeman | Published: April 12, 2007 - 10:51AM CT

A British media research company has peered into the music industry's crystal ball, and the outlook for the next couple of years isn't so hot. Global music sales will drop to $23 billion in 2009, just over half of 1997's $45 billion and down 16 percent from 2006. The biggest reason for the steep decline is a drop in CD sales, which Enders Analysis believes will not be fully offset by digital sales in the next five years.

Is piracy to blame? Is DRM the solution? Enders Analysis says no, instead laying the blame for the industry's sliding sales at the feet of the record labels. "As we analyze the industry's core challenges... we consistently find that the industry has lost the ability to influence and control its future," reads the report's executive summary. "Worse, the industry has often appeared caught short, and its reactions accordingly wrong-footed."

Where did the industry go wrong? At the height of the rush to DRM, the record labels decided to put their money behind expensive and ultimately unattractive subscription services at a time when Napster 1.0's popularity was it its peak. The industry favored an approach where consumers would be locked into monthly subscription deals that control how you used content.

Yet the writing was already on the wall, courtesy of P2P. Users prefer to pick and choose their favorite songs from among the sea of (sometimes free) content. It wasn't until 2003 that the iTunes Music Store opened, marking the music industry's first serious attempt at an online distribution model consumers would like. Yet by this time the industry had spent the previous years trying to fight the direction that the market was heading, which is a bit like trying to change the flow of a river. It can be done, but it's rarely easy and rarely worth it.

Speaking of Apple, Enders Analysis has some harsh words for the iPod-iTunes ecosystem. The report's authors believe that Apple's dominance of the digital music industry is hurting the market's evolution. Apple's insistence on a single, fixed price for all content hurts potential long-tail sales of older, back-catalog music. In addition, they're not impressed with the iPod-iTunes cycle, saying that Apple's reliance on iPod sales and resulting music pricing model may be squeezing both other players and music-only stores out of the market.

Of course, the recent move by EMI to liberate its catalog from the shackles of DRM will change the iTunes-iPod equation, as any player capable of playing AAC files will be able to play non-DRMed tracks purchased at the iTunes Store.


The biggest problem facing the music industry, according to Enders, is one that we've pointed out here at Ars: the decline of the album. The easy availability of digital music makes it possible for music fans to cherry-pick their favorite songs. In high school, I bought Abacab (yes, I'm old) in LP form by Genesis primarily because of the title track and "Dodo/Lurker." 26 years later, I would have just snagged those two tracks from the iTunes Store.

As you can see from the chart above, legal downloads are expected to continue their growth, but not at a rate that will be able to make up for the decline in CD sales. Although sales of a single track online arguably cost less for the record company due to the lack of physical distribution costs, the fact that music fans are picking their favorite songs from albums instead of buying the whole disc eats away at the advantages of digital distribution from a revenue standpoint.

The changing landscape has forced the Big Four labels to get creative with their revenue streams. One example is Universal's decision to sign a licensing deal with YouTube not long after suing it for copyright infringement. Under the terms of the deal, Universal will receive a chunk of the advertising revenues generated by YouTube, while YouTube gets the masters from Universal's music video library to work from.

Licensing deals will increasingly become a more important part of the revenue landscape for the record companies, but it's not likely to close the revenue gap. Unfortunately for the record labels, it looks like the glory days of the mid-90s have vanished forever, and no amount of lawsuits, DRM, or licensing deals will be able to turn back the clock.

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Originally posted by dufas:

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If one wants to get really technical, the name of a movie or a song has a copyright...Does this mean that in the future, anyone writing or uttering a movie's or a song's name will receive cease and desist letters or be sued ???

The above is about as ludicrous as the studios are really acting.

The way the politicians bend over for the entertainment industry, I wouldn't be surprised to hear of some MPAA or RIAA lawyer trying get more money using these tactics...

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