Friday, September 15, 2006

Further Proof That The Corporate Music Industry Just Doesn't Get It

(FMQB)Universal Music Group appears to be ready to take on two of the most popular Web sites around: YouTube and MySpace. UMG CEO Doug Morris spoke out against them both in a speech to Merrill Lynch investors, calling them "copyright infringers" for allowing the free streaming of its artists' music videos.

"The poster child for (user-generated media) sites are MySpace and YouTube," Morris said, according to Reuters. "We believe these new businesses are copyright infringers and owe us tens of millions of dollars." Morris added, "How we deal with these companies will be revealed shortly."

It would appear that the largest record label is planning on taking legal action against the two sites. Reuters reports that UMG has been negotiating with YouTube to allow its artists' content on their pages for a fee, as have the other major labels.

However, some experts believe that Morris' comments were merely a negotiation tactic on behalf of UMG. "This is probably a negotiating ploy," Mike McGuire, an entertainment analyst with research firm Gartner, told the Los Angeles Times. "Nobody really wants MySpace or YouTube to disappear. The music industry needs them too badly. They're just figuring out how to get paid."

Morris also noted that for years labels offered its videos to the networks without charging anything. The CEO said that MTV "built a multibillion-dollar company on our [music]...for virtually nothing. We learned a hard lesson." UMG was the first major label to charge sites such as AOL Music to stream its artists' videos.
Let me see if I understand this guy's thinking. So places like MTV, YouTube, and MySpace are supposed to pay for the streaming content that millions view for free? Doesn't the free publicity, higher profile for artists, and increased record sales make up for the fact you gave them the promotional materials for free? Why not charge record critics for their copies of CDs? I mean, they write about the band and post a photo in their magazines and newspapers without paying Universal a fee. Isn't there some way the record industry could make money from that, too? They are pathetic.


J. Marquis said...

You're so right. The more exposure an artist gets, the more product they're going to sell.

A perfect exammple is how I and some buddies burn copies of cds and mail them to each other. If I really like one of the cds a lot I will eventually go out and buy it because I believe the artist should be compensated for the pleasure they've given me. The fact my friend sent me a copy is what started the process...

Dave Splash said...

It's not like the guy has no point at all. But, I think the music business needs to look inward as to why they are losing revenue. File sharing is a small part of it. The real problem is the poor choice of artists, and their refusal to allow for artist development for less conventional bands. Currently, you get one song, and if it isn't a hit in 6 weeks, it's...NEXT. You're over.