Big Music sues itself

Written by tinfoil on Tuesday, 25 October 2005 01:38

p2p news / p2pnet: The pot is suing the kettle for lower royalty payments.

Or, put another way, the Big Four record label cartels BPI (British Phonographic Institute) is suing musicians royalty collection agency MCPS-PRS Alliance.

Though deals differ, labels are offering to pay about 8.5 percent royalties on the wholesale price of a digital sale, but royalty collectors want 12 percent of the retail price, says Wired News

"We have a $600 billion consortium ranged against us over 12 percent of a (99 cent) download," it has a MCPS-PRS spokesman saying.

And, According to the MCPS-PRS Alliance, most of its members earn under 10,000 pounds ($17,700) a year, so it's vital they get fairly compensated for their work as digital sales boom, says Wired.

Where do they get the completely erroneous idea that there's a "digital sales boom"? From the non-stop puff releases from various cartel-owned organs such as the BPI and IFPI (International Federation of Phonographic Industry) which claim theres a thriving corporate online music market.

Smart surfers
The IFPI says there are now around 300 online music stores supplying eager buyers at $1 and up per digital music download and quite naturally, since theyre making the music, performers want a piece of this action.

However, reports of big time Big Music online sales are nothing but piles of equine excreta and huge clouds of smoke - that and EMI Group, Vivendi Universal, Sony BMG and Warner Music PR flummery.

One of these days, there will be indeed be a true corporate market. But for now, and for the foreseeable future, most music downloads will continue to come from the p2p networks where its being accessed by smart surfers, by far the vast majority, who flatly refuse to pay through the nose for boring, formulaic product, as the labels call their music.

With the success of Apple's iTunes, labels expect digital music to account for up to 30 percent of world music sales by 2008, according to estimates submitted to the European Commission by Universal Music.

But expect is the operative word and unless the labels smarten up, that definitely wont be the case.

Instead of lowering their wholesale prices, currently at between an exorbitant 60 and 85 cents per track, the Big Four want to hike them, charging $1.50 or more for newer releases.

Online sales offer significantly lower costs
As far as Apples success goes, its sold some 500 million tracks since it launched iTunes, an iPod loss-leader, in 2003. And that doesnt amount to a hill of beans stacked against whats happening on the p2p networks where upwards well upwards of one billion file move computer-to-computer every month.

Online music lovers will gladly pay for their downloads if they're charged a fair and reasonable price. But $1 and up for each download doesn't match that description. Not even nearly,

Universal Music recently filed a European Commission complaint, accusing royalty collectors of "frustrating" development of digital music services, Wired states. In the statement, Universal slammed the collection societies, saying they cause "higher music prices," make it difficult for new operators to enter the market and "impede development of online and cell-phone services."

Universal is, of course, one of the companies that wants to jack the prices to beyond reach of anyone except the most loyal (dimmest?) Apple follower.

The BPI, meanwhile, says royalty collectors are acting "monopolistically," says Wired, going on that where Jobs (and just about everyone else who has the slightest clue about online music) has noted that online sales offer significantly lower costs and on top of that, the labels don't have to pay warehousing, pressing, printing or transportation costs, The BPI spokesman, however, said manufacturing costs are relatively insignificant in comparison to promotional costs"

not to mention legal costs under the Big Fours bizarre sue em all marketing plan, schmooze money and various off-the-books, under-the-counter government and law enforcement payments they have to continually make to keep administrations around the world acting in their best interests.

Former Pink Floyd's manager Pete Jenner has it right.

"The media is disintegrating into multimedia. Instead of trying to figure this out, labels focus on shareholder value, Wired has him saying. They need a different mindset, different skills."

He also says the labels' basic business model - cultivating a few hit acts to subsidize several money-losing ones - is flawed. Under it, Successful acts subsidize the failures".

Labels are prisoners of existing price and business models, Jenner states. They need to move to a different way of doing business, looking at music use, not sales."

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Source: p2pnet.net.

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