Recording Industry Will Sue Until It Doesn’t Make Sense
By Anna Johnson on March 13th, 2009In a lunch meeting between TechCrunch’s Michael Arrington and an unnamed record label executive, the executive indicated that while the recording industry plans to shift its business model in the future, it just makes too much sense to sue people right now.
The major record labels are suing all kinds of people they believe are infringing their copyright. People who download music from torrent sites… the torrent sites and Internet service providers that allow such downloading… and startups that are attempting to provide music services (but just can’t seem to do so without falling afoul of the law).
Seems that if selling music doesn’t make enough money, bringing lawsuits against copyright infringers does!
For now. Apparently, the recording industry is gearing up for the day when recorded music will be free… and that’s when bringing copyright lawsuits probably won’t make sense.
This particular executive told Michael Arrington that in a few years’ time recorded music would become ‘marketing collateral’ and that the recording companies would end up paying online music services to distribute their music.
So how will the music companies make money? They’ll use ’360 music contracts’ which give them royalties on just about every revenue stream attached to a music artist – concerts, merchandise, sponsorship arrangements, and so on.
No question, that will be make for a very different business model than what most of us are accustomed to.
Personally, I think that the record labels can still make a paid music model work. But rather than charge users on a per-download or per-stream basis, they should follow the Electronic Frontier Foundation’s suggestion of imposing royalties further ‘upstream’.
Just as radio stations pay the music industry a certain amount of money in return for playing the record labels’ music, the record labels could impose a similar charge on ISPs (the gatekeepers to the Internet) and/or computer/audio device manufacturers, who would then build that cost into their ISP or device charges.
Theoretically, this should translate into a slight increase in Internet/device costs, whilst allowing people to freely access, download and share music from whatever source.
The movie studios could similarly impose charges ‘upstream’ to allow people to freely view, download and share movies too.
Of course, I’ve done no financial modeling to see how all this might work in financial terms, but it sounds plausible to me.
In any case, the years to come will be very interesting for media producers, distributors and consumers alike, as new business models are – by necessity – formed to replace those that no longer work.
