Nice post, Cary. Good read. I am not so well versed in the cloud based computing and media storage to understand exactly how they all work but its apparent from reading these lists of demands that the labels see their influence on the industry slowly eroding. No longer are they controlling all aspects of what music is sold and for how much, and that scares the crap out of them. Especially in an industry like the music industry, where the flavor of the months changes bi-weekly (see what I did there? ;) ), profit must be extruded from the here and the now, and services such as a cloud media storage center (with their focus on the user experience and user friendliness rather than throughput) threaten that by giving too much power to both the consumers themselves as well as an outsider (sans Batman, natch) third party in Amazon.
Ultimately I think that at least one of the labels will win this battle but the war will continue to be fought, and eventually the labels will go the way of the old studios in Hollywood and die. Personally, I think we're going to start seeing more and more bands -- mainstream acts, not just small potatoes folks -- pulling out of their label contracts and either going independant or forming their own label which will allow them to sell their music DTC. I think Radiohead did that a few years back, right? Elimination of the old label system will allow artists to see more of the money from their product and better control how it is distributed. You are always going to have people who pirate music (it's just too easy) but artists selling direct will help the problem because let's face it, fans are more willing to pay for stuff they like, especially if the "face" they are buying it from is the artist (or at least that artist's self-run store on Amazon or iTunes). Should be interesting; Amazon just got dealt a stupid blow here in South Carolina which I did not agree with so we'll see how their luck runs here. On Apr 29, 12:09 pm, Cary Preston <[email protected]> wrote: > This is a guest post from Michael Robertson, a 12-year veteran of the digital > music business. He is the founder and former CEO of digital music pioneer > MP3.com. He is currently the CEO of music locker company MP3tunes.. > > Amazon defied the record labels by launching an unlicensed personal cloud > music service. (Disclosure: I’m CEO of competitor MP3tunes.) Music companies > immediately expressed their dissatisfaction and Amazon public stated they > would discuss licenses with labels. Since then considerable speculation has > swirled about regarding licensing discussions Amazon, Google and Apple are > having with the 4 major record labels. > > Dominating the discussions is the labels concern that personal cloud services > will exacerbate piracy and erode their business even further. Consequently > they want to impose substantial restrictions on any such service, but each > labels has different concerns and demands. Below are examples of the > startling limitations major labels wish to impose on such services. > > Universal Music Group is concerned that users will load pirated songs into > lockers. Average MP3 players house more than a thousand songs and UMG > believes that many were unpaid for. They do not want to see the billions of > songs that came from P2P system laundered (think drug money) in a cloud > service and become legitimate. > > To combat this they want only songs with digital receipts to be able to added > to lockers. For some time UMG has been demanding that online music retailers > embed personal information in every song they sell. They call it UITS. iTunes > has been inserting email addresses into every song while other retailers like > Napster are using a unique receipt number. (Techcrunch first wrote about > Dirty MP3s a year ago and how these might be used by future cloud services.) > > All songs without a proof of purchase would be assumed to be unauthorized and > not accepted into the system. Songs ripped from CDs would not have unique > identifiers and wouldn’t be loaded. Any song purchased prior to retailers > inserting personal identifiers or from retailers who have yet to personalize > every song would also be excluded. (To date, Amazon’s MP3 store does not put > any unique identifiers in songs despite UMG’s demand that they do so.) > Promotional songs download online would also not work. > > Sony Music Group shares UMGs concern about the laundering of songs, but seems > more concerned about locker sharing and downloads and is demanding > restrictions in those areas. Sony believes users will share lockers by > visiting each others houses and syncing in each others music. To combat this > Sony wants loading to happen from only one computer. Each locker owner would > have to designate a single location from which they could upload songs. Users > could load music from either their laptop or desktop or office computer but > not all three. Their belief is that this will prevent friend to friend file > sharing. > > Downloading is another area of concern for Sony. To prevent lockers from > become Napster like repositories they want to restrict downloading to one > emergency download only. Locker owners would only be able to download their > music files a single time if they claimed they were lost. All future > downloads would be forbidden. This would limit the ability for a locker owner > to go to a friends house, download all their music and then have the friend > upload those songs as their own. This means that syncing to portable players > and smart phones would not be allowed. Neither would download to laptops for > offline playback. > > Most worrisome to Warner Music Group is that users may setup multiple lockers > and the distribute the extra lockers to friends. Imagine if a locker owner > setup a locker at Apple and Amazon and then gave their less used locker away > or maybe even sold it. What WMG would like to see happen is that a central > locker authority would administer all locker assignments. For awhile they > were pushing Catch Media as the solution. More recently they may have relaxed > their demands in this area and insisted that locker identities be uniquely > tied to a valid credit card or some other such verified identity. > > The above list of demands is by no means complete but rather an illustration > of the labels mindset. There are others issues dealing with simultaneous user > access, family accounts, mobile access, local caching, regional restrictions > and more. The one company who had such a personal cloud license is the now > defunct Lala who had to agree to no downloads whatsoever, no mobile stream > (web browser only) and costly per song stream fees. > > In addition to usage restrictions, labels are demanding that cloud services > pay them an annual per user fee. Labels will demand a minimum per user fee > each year and not the more business friendly percentage model. Such a flat > fee will mean no free or advertising sponsored service will be possible. For > subscriptions services such as Rhapsody and MOG they demand the HIGHER of: > per user fee, percentage of revenues or per stream fee effectively boxing in > services and insuring they’re never able to turn a profit.. > > The challenge for cloud services such as Amazon’s is how to appease the > record labels and still have a consumer friendly service that is financially > viable. Even one of the above restrictions renders a cloud service mostly > useless. Combined they would make a locker service utterly worthless, for > sure nothing that a music fan would pay for making it impossible for the > company to cover the demanded per user fees. Amazon has publicly stated that > their position is that a license is not required for a service such as > theirs. This issue is currently being litigated by my company in EMI v > MP3tunes where we await the Judge’s ruling. With the record labels wide > reaching demands it’s difficult to see how Amazon, or any company, could > arrive at a workable license for personal cloud music. > > http://feedproxy.google.com/~r/Techcrunch/~3/XrnjqvgRJ4s/ > > Sent with MobileRSS HD -- You received this message because you are subscribed to the Google Groups "The Unique Geek" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/theuniquegeek?hl=en.
