Monday, November 13, 2006

The recording industry continues to hate you, and hopes you die in a fire

What else is there to say?
Yesterday, Microsoft agreed to share revenue from Zune sales with record labels and artists. Forcing the issue was Universal Music Group, which at deadline is the only label named in the program. UMG refused to license its music to the Zune unless it could receive a percentage of each device sold, in addition to standard music licensing fees for downloads and subscriptions.

"These devices are just repositories for stolen music, and they all know it," UMG chairman/CEO Doug Morris says. "So it's time to get paid for it."
Just so we're clear, Microsoft is selling Zune players empty of any Universal-branded material, and UMG still demanded a cut. Why? Because these devices are just repositories for stolen music, and they all know it.

How do they know it? Well, not because of their own research, which has repeatedly shown that a) large-capacity MP3 players are more likely to be filled by people who own large, legal music collections, not illegal file-sharing, and besides b) the people who "steal" the most music from file-sharing are also, unsurprisingly, the people who purchase the most music.

But don't forget, they just know that they're chock full of stolen media. Life is so much simpler if you don't have to justify your statements, and simply assert them as fact. And if you don't fill your Zune with stolen media? Any bets on getting your cut back from the media companies?

Aside from being childish and irrational on the part of the music companies, this is an upsetting precedent. What we have here is one large company (Microsoft) agreeing to presume the guilt of its customers, and change it's business practices because of that, all at the behest of other large companies. The idea that they're operating on a faulty premise, or that even if true their conclusion is bizarre, seems to have never entered the equation.

The only thing that makes me happy in the scenario is that the Zune is getting shitty reviews, and I hope it sells crappy for the Christmas season.


adam said...

Hasn't something like this been going on for a while in Canada with the blank media tariff? I understood that it had been introduced to blank CDs as a way to offset perceived loss in record sales, and was later applied to MP3 players as well.

Correct me if I'm wrong.

john said...

The media levy is paid to musicians and songwriters, as well as music labels - through their own organization - not solely recording labels. It isn't paid as any kind of condition for music companies to license their music. Currently, there is no levy on hard drives. (Though, absurdly, CD-Rs are charged two different levies, depending on the alleged content.)

I'm not a fan of the levy - I think it's bad policy, for many of the same reasons - but I think this MSFT-Universal agreement is different (and worse) because a) it doesn't directly compensate the artists at all, and b) private dealmaking between industry majors is always worse, as a rule, than a public policy to the same effect. Moreover, when the single largest OS company in the world makes concessions like this to the media industry, I worry a lot.

john said...

one other thing...

Because the media levy is sanctioned by Canadian law, it's helped to form the judicial interpretations of Canadian copyright law. It was the existence of the media levy, in part, that led to the Supreme Court of Canada's decision that gave a great deal of legal cover to Internet file sharing.

In other words, because of the media levy in Canadian law (as opposed to private protection money) the music that the recording industry claims is "stolen" is, in fact, legal under Canadian law.

This is far superior to this racket with MSFT.