The Motley Fool on Internet Radio vs The Music Industry
I often suspect the music industry also fears losing another element of its old-school model: finding mediocre musicians that appeal to only the most mainstream tastes and trends, and then pushing them down as many throats as possible.
-The Motley Fool
Excerpts from:
Putting Pandora Back in the Box
By Alyce Lomax
August 22, 2008
This innovation must be stopped!
As usual, the music industry seems terrified of any innovation that might not cut its members as fat a royalty check as they'd like. Thanks to record labels' considerable whining, government and the music business seem to have joined forces to destroy popular services like Pandora, Last.FM, imeem, and Slacker.
The Copyright Royalty Board has upped the royalties Internet-based radio outfits must pay on songs, increasing the royalties to 19/100 of a cent per song per listener in 2010, from 8/100 of a cent per song per listener in 2006. In addition, retroactive fees mean that Pandora will have to pay 70% of its projected 2008 revenue, which appears to be a likely doomsday scenario for the service.
So far, the new royalty fees aren't even consistent. Traditional radio stations pay no royalties, and satellite radio pays a less burdensome percentage than Internet radio...
I think many consumers are catching on that when the industry howls about defending artists, it's really just talking about defending the major labels' broken business model, which has been under constant assault ever since the world went digital...
Positively Jurassic
The RIAA and its friends like SoundExchange are populated by companies like Warner Music Group (NYSE: WMG), Sony (NYSE: SNE) (which recently announced plans to buy out BMG's share of the two companies' joint music venture), EMI, and Vivendi Universal. As far as I'm concerned, their draconian reactions to music's continuing evolution make them great examples of the types of companies and industries I avoid.
Services like Pandora do exactly what many music lovers want: introduce them to artists they may never have heard of otherwise. That innovation should be celebrated, not condemned. It promotes music that's geared to what we like, rather than forcefeeding us somebody else's tastes or marketing budget.
I often suspect the music industry also fears losing another element of its old-school model: finding mediocre musicians that appeal to only the most mainstream tastes and trends, and then pushing them down as many throats as possible.
As an investor, I do all I can to avoid companies that refuse to evolve, and thus find themselves on the wrong side of creative destruction. For the most part, I think the media industry fits that niche. Any company or industry that can perceive massive opportunity as a threat should strike investors as a long-term loser.
full article:
The Motley Fool
http://www.fool.com/investing/general/2008/08/22/putting-pandora-back-in-the-box.aspx
-The Motley Fool
Excerpts from:
Putting Pandora Back in the Box
By Alyce Lomax
August 22, 2008
This innovation must be stopped!
As usual, the music industry seems terrified of any innovation that might not cut its members as fat a royalty check as they'd like. Thanks to record labels' considerable whining, government and the music business seem to have joined forces to destroy popular services like Pandora, Last.FM, imeem, and Slacker.
The Copyright Royalty Board has upped the royalties Internet-based radio outfits must pay on songs, increasing the royalties to 19/100 of a cent per song per listener in 2010, from 8/100 of a cent per song per listener in 2006. In addition, retroactive fees mean that Pandora will have to pay 70% of its projected 2008 revenue, which appears to be a likely doomsday scenario for the service.
So far, the new royalty fees aren't even consistent. Traditional radio stations pay no royalties, and satellite radio pays a less burdensome percentage than Internet radio...
I think many consumers are catching on that when the industry howls about defending artists, it's really just talking about defending the major labels' broken business model, which has been under constant assault ever since the world went digital...
Positively Jurassic
The RIAA and its friends like SoundExchange are populated by companies like Warner Music Group (NYSE: WMG), Sony (NYSE: SNE) (which recently announced plans to buy out BMG's share of the two companies' joint music venture), EMI, and Vivendi Universal. As far as I'm concerned, their draconian reactions to music's continuing evolution make them great examples of the types of companies and industries I avoid.
Services like Pandora do exactly what many music lovers want: introduce them to artists they may never have heard of otherwise. That innovation should be celebrated, not condemned. It promotes music that's geared to what we like, rather than forcefeeding us somebody else's tastes or marketing budget.
I often suspect the music industry also fears losing another element of its old-school model: finding mediocre musicians that appeal to only the most mainstream tastes and trends, and then pushing them down as many throats as possible.
As an investor, I do all I can to avoid companies that refuse to evolve, and thus find themselves on the wrong side of creative destruction. For the most part, I think the media industry fits that niche. Any company or industry that can perceive massive opportunity as a threat should strike investors as a long-term loser.
full article:
The Motley Fool
http://www.fool.com/investing/general/2008/08/22/putting-pandora-back-in-the-box.aspx
posted by Rocksanne at 9:46 PM
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