Pigopolists life and death

I have an undergoing discussion with a musician friend of mine. My stance, purposely provocative, is that if the music industry is not showing any added value between artists and their audiences, we should cut the middle man. He's not confortable with this idea, probably (my interpretation so far) because the present industry represents the established economical model and that traditional channels as well as the web still require a significant amount of marketing to succeed.

I'm more than happy to pay the artists for their works, but I question why I should bare a massive overcharge on what they earn, to finance intermediaries which currently do nothing but threaten my civil rights to increase their profits. The music industry appears to me as an old dinosaur which is just incapable to adapt to any change in its ecosystem. Unlike mostly all other sectors which have managed to adapt their business models and seek for new opportunities the web could offer them, the pigopolists(1) have consistently failed to show any positive sign of adaptation. Their reactions go from stellar corporate blindness (VU, thank you Jean-Marie Messier, l'exception culturelle française vous survivra) to brutal force in fighting theft at all costs, e.g. the highly criticized DMCA (and its European sequel EUCD), intrusive technological measures such as CD copy protection, knocking down civil rights like fair use or vaporizing privacy, etc.

Buying a CD is one of the least compelling things a consumer can do. When we had vinyls (a rather fragile support) it was very easy to listen before buying. Decades after CDs ( rather solid support) have been introduced, it's close to impossible to listen to them in the gigantic music stores that have replaced the shop around the corner. In Paris (a respectably big capital with zillions of tourists at all times and huge music stores open 365 days a year) you simply can't listen to music unless you're prepared to wait 45 mn for a maximum of three tracks (witnessed angrily by disgruntled trolls who start showing signs of impatience after the first ten seconds). Tired of queuing in unfriendly store, you head to Amazon, to find that you can listen only to the first 8 or 9 seconds of a CD, a choice that is not only completely stupid but totally useless (they probably have found an "efficient" way of doing this, using ridiculously underpaid morlocks who feed CDs à la chaine in automated readers).

Five years ago I had the chance to attend a presentation on Music Boulevard business model by their CTO. It is this presentation which compelled me to take a closer look at the pigopolists. The main point was that the music industry had no clue about consumers, and it was a mature if not sclerosed industry (their revenues being flat for over a decade). They have only two main clients: distributors and big music stores with high buying power. Distributors sell to retailers and know nothing besides the number of palettes they push. Retailers and music shops may be able to track individual sales but can't infer anything useful on consumers habits since they have no way to link two separate sales together. This was the driver to Music Blvd main idea: linking artists directly with their audiences and offering them innovative ways to discover one another. I find it sad that they failed, because there are plenty of signs that the music industry remains clueless about consumers.

For years now, it has been clear that the majors want us to subscribe to their catalogs. They dislike that you can hear a CD at will for a one time fee. They abhor the fact that you can lend it to someone else. They are horrified that you can read it on a PC and transfer it to your iPod. Their idea of mobile music is for you to pay a fortune to subscribe to a tiny catalog available on... your mobile phone, with the sound quality of, er, a mobile phone. I foresee more innovations like this, e.g. music unbundling: don't like the Sanctus part of Mozart's Requiem? No problem, you can subscribe only to the parts you like! Did I tell you they were clueless about what consumers want?

What is starting to make sense to me is that they are using things like P2P and digital copies as an excuse(2) to rush things towards the subscription model. They don't care that much about the Napster copycats but it gives them a formidable opportunity to build a sense of urgency and an aggressive platform to achieve their goal. Look Senator, those people are thieves, they are driving us out of business, artists will die, it's the end of civilization, you must do something now! And comes one of the most formidable plans to lock consumers out of their present rights to the pay-as-you-listen wonderland. It starts with securing the legal battlefield: prevent technological workarounds with the DMCA, set the intellectual thermostat in the United States to "permafrost", remove the embarassing bits of consumers rights by bidding them to shrink-wrapped licenses (how long before we see Microsoft-like EULA on music CDs?). Done with fair use. No you can't lend this CD and no I won't refund you because it doesn't play on your computer (are you a pirate?). You accepted the license terms by unwrapping the disk. Then it continues with the technological counter-measures: DRM, TCPA, Palladium. Sorry, you can't upload this song to your iPod because you didn't subscribe to this service. Once the plan is rolled out, they will not only have cleared all legal obstacles but also plugged the digital hole. You're surrounded, resistance is futile.

To finish on a positive note, I'd like to think that competition still stands for something, and that bad laws can be turned down. Such an unbalanced situation between record labels and music consumers is doomed to failure. I can't believe that it can go this far without eventually creating a huge opportunity for a radically new competition to the majors. May be this is the only way dinosaurs can evolve, by being replaced by fitter species.

(1) I've seen the term pigopoly appear on The Register to describe the RIAA. El Reg is very good at coining colorful descriptions and I love Briitish humour. It gives an appropriate snout to an otherwise pretty boring oligopoly. And they're doing a useful job in reporting regularly on the above mentioned subjects.

(2) It's a tactic called diversion. It's heavily used today by some guy who's using some events to make some people forget about smelly affairs, reduce their civil rights, forge a police regime, establish an empire and start world war 2.5.

1 TrackBack

Où l'on apprend, via Bucheron.com, que Microsoft vient de présenter son lecteur d'empreintes digitales permettant l'identification d'un utilisateur pour le stockage et la récupération des mots de passe. L'utilisateur lambda va sûrement aimer, si on lui... Read More

1 Comment

This situation is creating a niche for small indie record labels who embrace freely distributing low quality MP3s as previews and do not infringe the usage rights of their customers once they've bought the CD.

In other words, they move with the times and treat their customers with trust and respect rather than labeling them as criminals (as Microsoft does with software.)

There's nothing wrong with middle men, as long as they add value and don't get too big for their boots.

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