Random Cool Thing: Shake-ups in the IFPI/RIAA

Variety is reporting that EMI, the smallest of the four major record labels, has taken the first step toward exiting the International Federation of the Phonographic Industry (IFPI), the London-based music trade group that represents the interests of the international recording industry. The IFPI, which receives most of its funding from the major labels, has recently begun an internal review of operations that will examine the “structure and operation of the organisation and its relationship with the national groups [like the RIAA] with a view to finding greater efficiencies and cutting costs,” according to comments from an IFPI spokesman. (Ars Technica)

According to the article in Variety, a source close to the IFPI has disclosed that all four majors are are in talks with the IFPI regarding changes in the structure and priorities of all major trade organizations, including the RIAA. “This is not about cost-cutting. Functions and structure need to make sense to all major labels. Right now, funding them doesn’t make sense.” EMI has threatened to pull its funding from the IFPI and RIAA if “the structure and aims of the IFPI are not aligned with the interests of EMI.” (Variety)

Both Ars Technica and Variety speculate that EMI will not actually pull out of either the IFPI or RIAA. The RIAA participates in the collection of licenses and royalties in the United States, as well as certifying gold and platinum albums. EMI can’t afford to do without either service. However, it has been widely speculated that the RIAA’s policy of suing individuals accused of copyright violation has been wildly expensive, while generating very little revenue for the group. There is no evidence that the policy has deterred file-sharers or increased CD sales. The policy has also generated a huge amount of bad press for the group and the music industry in general. If EMI is looking to have the trade organizations cut costs and align with their own interests, they may be pressuring the groups to stop the lawsuits.

I find all of this backroom maneuvering interesting because EMI has demonstrated its power to be a force for change in the music industry’s recent past. EMI was the first major label to sell music DRM free, following it’s purchase by Guy Hands and the Terra Firma fund, a private equity fund. Terra Firma is currently looking to reinvigorate the label and cut expenses, and seems perfectly willing to do so by ignoring the rules that have governed the industry for years.

Since EMI’s move to DRM free sales, the other three major labels have begun or announced plans to sell music DRM free in Amazon’s MP3 store. If this move follows the pattern set by the DRM wars, we can expect to see Warner, Universal, and Sony begin to put pressure on the trade organizations to find new ways to represent industry interests, hopefully ways that reflect the changes that the labels will need to continue to make to stay relevant.

Random Cool Thing: Sony BMG signs to Amazon MP3

via CNet

Finally. The catalog should be live in late January. I guess the MusicPass scheme got panned worse than they expected.

Despite the good news, I’ve got one eye watching for the other shoe (i.e. the only albums going up on Amazon are the 37 also slated for MusicPass). This is Sony, after all.

Rant: Sony misses point, rams head firmly back up own ass

via Crave

On Friday I got all excited about the rumors that Sony BMG would be dropping DRM from it’s digital music. I thought about hedging, added a “maybe” to the title of the post, then dropped it and decided to go ahead and believe, because we all want to believe, don’t we?

As it turns out, what I thought was too good to be true was, in fact, too good to be true. According to CNet’s Crave blog, the DRM free scheme that Sony has come up with is selling gift cards that can be redeemed for DRM-free albums online.

So, the good point: DRM free music. Yay!

The bad points: The program is supposed to go live on Jan. 15, but only with 37 titles. I guarantee, those 37 titles will not include music by The Audition, which I would really like to buy. In fact, they’ll probably only include Sony’s 37 biggest recent releases, which you can find almost anywhere. One of the reasons online music stores are so cool is that they have everything, including the indie/obscure albums that I’d rather not trek all around town trying to find. Over the weekend, I did a quick swing through music stores in my town while I was running errands. I didn’t find any music by The Audition or Breathe Carolina, anywhere. (To be fair, I’m not entirely sure Breathe Carolina are in stores. But I’m relatively sure The Audition is, or would be, if physical stores catered to anything other than Billboard’s Top 100.)

You still have to go to a brick and mortar retail store to buy the gift cards, which means that you get none of the convenience of buying online, and none of the actual physical media. Don’t get me wrong, I think CDs are a massive hassle, but if I have to go to the store to buy my music, I might as well get the album art, line notes, and maybe the extras that you get on a disc. If I’m going to a store to buy my music, I at least want to be able to play it in the car on the way home.

I have a sneaking suspicion that these gift cards won’t be much cheaper than a physical album, either. If I’m giving up said album art/lyrics/extras, don’t expect me to pay $16.99 for an album. It’s not going to happen. Especially when, if all you’re physically purchasing is a gift card, the distributor has eliminated the vast majority of manufacturing/distribution costs.

Sony, I’m still disappointed. But I can’t say I’m surprised.

random cool thing: Sony caves, ditches DRM!

via Engadget:

Evan Blass is reporting on Engadget (via Businessweek) that Sony will be dropping DRM sometime soon, obviously in response to this. Probably the fact that they were the last holdouts and the market had reached a tipping point had something to do with it, too. According to Businessweek.com, details will be released over the next few weeks.

Rant: Sony! Get your head out of your ass!

You too, Victory Records!

Over the weekend I bought tickets to see Envy On The Coast (who are awesome, by the way) in Anaheim next month. Whenever I buy concert tickets, I automatically start looking for music by the other artists playing. I can’t help it, it’s a Pavlovian response. I enjoy shows much more when I’m already familiar with the artists, so I check into any opening acts (and in this case, headliners) that I’m not familiar with.

I’ve run into a problem, though. The headliners on this tour (and one of the few bands playing that have a current release), The Audition, are on Victory Records, and Victory is distributed by Sony BMG’s RED division, and Sony BMG still has its head up its ass regarding digital distribution. Right now, the only way to buy the music I’m looking for online is through iTunes.

I have two problems with iTunes. First, I won’t pay for a DRMed product when alternatives exist. Three of the four major labels (Sony being the only hold out) are now distributed on Amazon MP3 without DRM. EMI, Universial, and most recently Warner have seen the writing on the wall and shifted their sales focus away from physical media. Indie labels have been selling music online without DRM for years. So I won’t pay for broken music.

Before anyone starts up with the piracy argument, let me tell you what my problem is. I work for a major corporation and would like to be able to play my music at work. But because I work for a large non-tech company, administrator privledges on company computers are locked down and controlled via our IT staff at headquarters, who aren’t even in the same state I am. Now, here’s the problem: to play protected iTunes music on a computer, you need to install iTunes, connect to the internet, and sign in. I can’t do any of those things. I could, if I were so inclined, strip the DRM from the iTunes tracks, but in the process I would lose sound quality (and break the DMCA, but that’s a secondary concern), and any audiophile will tell you that iTunes standard AAC is already crappy enough without burning and ripping back.

In fact, sound quality is the second reason I refuse to buy from iTunes. AAC encoding is certainly better than the equivalent bit rate MP3, but standard iTunes tracks are encoded at a crappy level. I have far from perfect hearing, but even I can hear the difference between iTunes and iTunes Plus. The encoding at my two favorite download sites, Amazon MP3 and eMusic is of higher quality than the stuff you get from iTunes.

There seems to be an ideological problem here as well. Tony Brummel, the founder of Victory Records, has criticized iTunes (and by extension, all music download services) because a download service “makes music disposable. It makes it a faceless impulse item. It steals its soul,” by allowing consumers to pick individual tracks to download. He also notes that this ability negatively impacts artist revenue. (Macworld, 2006-02-16)

This argument is full of holes. First, some sales revenue is better than no revenue at all. I rarely buy physical media because I don’t want to store it. A huge portion of the price of a CD is wrapped up in marketing and distribution costs, which I can avoid by buying a digital copy. It scratches and it’s inconvienent. The only exception I make to this is if I pick up an album at a show, where it’s usually less expensive than in a retail store. Besides, the CD is dying. Sony BMG and Victory are still hugely invested in a format whose sales declined 20% this holiday season, while total holiday spending was up 19%.

Even if I only buy a single track off an album via download, that still equates to money I wouldn’t otherwise have spent. Besides, only a tiny fraction of revenue generated from physical media goes to the artist. According to a fantastic article at Wired.com by David Byrne of the Talking Heads, in a typical deal, only 10% of the price of the CD goes to the artist. That’s about $1.60 per CD. To make matters worse, the artist’s cut is even less on iTunes, the only digital distributor that handles Victory Records.

Second, a model exists for album only digital sales. Talk to CDBaby, Mr. Brummel. CDBaby sells only full albums for download and has a variable pricing model, all the things the record labels have been screaming about for years. They currently only handle independent music, but the model exists and works. CDBaby has been in business for 10 years. That’s a lot of independent music sales.

Third, Mr. Brummel’s statement implies that the soul of music is its plastic packaging. The compact disc is the method you use to experience music, it’s not the music itself. Music bought via a download service is no more soulless than music bought on a disc. As the wonderful David Byrne says in his article, “Calling [a CD] music is like selling a shopping cart and calling it groceries.” The medium has nothing to do with the music.

What all this boils down to is, I won’t be buying music from The Audition or Breathe Carolina before the show. Which means I won’t enjoy myself quite as much. Which means I’m less likely to get all caught up in it and buy a t-shirt or poster that I’m probably too old for anyway. Sorry guys. That’s just how it is. I have too many alternatives (read: other bands, upwards of 75% of the market) to waste money on a song in a format that’s broken. Maybe I’ll pick up your album at the show. In the meantime, I have new music from Emery, Aiden, My American Heart, Pierce the Veil, Mayday Parade, and Madina Lake to get me through.