MIDEM 2008: Kennedy's endorsement

As part of The Register's coverage of MIDEM, John Kennedy of the IFPI was given a gentle going over by Andrew Orlowski.

If you have tears, prepare to shed them now, for Kennedy is upset by the perception of his industry:

On a daily basis we see people consuming more music than ever before, and yet the music industry is seen as parasites and idiots – all the worst words we can think of. So we need to turn the corner.

Oddly, the idea that perhaps stopping flouncing around suing people, behaving like you're entitled and calling for telephone companies to spy on their customers might lead to people starting to like the companies a little more hasn't occurred to Kennedy. Or if it has, he isn't saying so. Could it really be that people sit in the IFPI offices, reading bad headline after bad headline, and really not understanding why these multinational corporations are so loathed?

Kennedy's thinking is pretty - sorry, John, this might upset you, too - weak. He seems to base a lot of his policies on weak assumptions, and presumably then imposes these ideas on the IFPI as a whole. An example of this weak assumptive base:

Firstly people have loaded their iPods and music players with CDs – so they're going to back catalogues for the moment. Now they're thinking "well we need some new music".

Now, it's nice to see that - at long last - the music industry has abandoned one of its lies that people fill iPods with stolen music, but where is the evidence for people, once they've got their songs on their device, suddenly getting a desire for new music that wasn't there before? And, more crucially, if they do - and let's assume that they then steal music to whack onto the device - it might be frustrating, but there's no net loss to the music industry, as by Kenendy's logic, if they hadn't bought the mp3 player, they wouldn't be desiring the music anyway. The challenge should be in monetising the new relationship, rather than punishing. If the music industry had met this desire and found a way to work, what a happy world we would live in now. Instead, they've spent years trying to put a fence up in a world where everyone is equipped with wirecutters.

But John reckons he's right to go with trying to make ISPs police downloaders - and he's got the focus group evidence to prove it. (A focus group is where you invite a bunch of people in, tell them to say what they really feel, and watch as they try to work out what you want to hear, and then say it. Usually with biscuits):

We've put kids into focus groups, and we say to them: do you know what you're doing is wrong, and they say absolutely. Well why do you it then? They say, it's too easy. You've got to make it more difficult for us or you've got to make so there are consequences for us. We say, OK if you're in charge, what would you do? They say: well your lawsuits aren't bad, but none of our friends have been sued. We've heard you talk about disconnection – well, now you're getting scary for us, because none of us want to lose our internet connection. If you can deliver on disconnection then in fact there may be a solution – because there's a risk.

Really? Poor old John Kennedy. He's still struggling to keep up - if you switch off a broadband connection to a house, the kids will just look for a nearby open wi-fi network, or decamp to Starbucks and use their connection. Or the local library. They'll go to their mates houses, and wi-fi into their network. Or they'll simply switch to using their mobile account, and plug in a dongle from 3. And if 3 cuts them off, they'll swap to Vodaphone.

Kennedy, however, seems to think that 'connectivity' comes through one pipe, which can be switched off:

'm sure you've heard my story about my kids – there's a 19-year-old girl, a 15-year-old boy and nine-year-old girl. In my house. If the boy got them disconnected, his sisters would kill him. I started telling this story a year ago. Now it's the parents who would because the parents can't manage without the article. So the prospect of losing your interconnection is going to change behaviour – there's no doubt about it.

But is a telecoms company going to lose a customer simply because the IFPI claims that their kids might have been downloading? With all the money ISPs spend on customer recruitment? And since, as Kennedy admits, many people now can't "manage without the article" ('the article' suggesting he views connectivity as some sort of box, or a creature, perhaps), isn't there a chance that someone is going to claim that loss of a connection into the internet is akin to having other utilities - like gas, or water - removed, and thus probably illegal?

And if BT cuts off a house's connectivity, what's to stop them signing up with Sky the next day? Does the IFPI intend to maintain a blacklist? And will that be done on numbers - but what happens when family x discover they can't get broadband because family y, who used to live in their house were barred at the behest of a self-appointed trades organisation?

Or will it be names blacklisted? But what happens when Mr. Smith merely gets his partner Mr Jones to apply for a line in their name instead?

Clearly, the IFPI are keen to make ISPs police this because their members can't afford legal action and know its ineffective. And if Broadband was like a delivery of coal every week, it might be an effective measure. But over in the real world, it's never going to work.

Not that Kennedy lives in the real world. It turns out Kennedy is outraged not just the people steal songs, but that they don't steal enough of them when they do it:

You talk about people valuing music - I've noticed something recently. When you want one song from an artist, you download their whole catalogue on BitTorrent, it's there as one download. Then you get the song you want, and throw the rest away! You'd have to be a real fan to collect someone's life work once – but now people routinely throw away their life's work, as if you never had it. To me that's incredible. So isn't the "value" going down all the time you don't license music?

So... the message from the IFPI is keep all the stolen music, right?

Kennedy lives in a world where the album is sacred - he can't understand that people, when given a choice, don't want filler tracks, instrumental noodling, lame b-sides and poorly recorded live versions. He doesn't see that when people select all but one track and then delete them, they are valuing music - and they're saying that the tracks they delete have no value to them. This must be hard for a business which has made a good living for sixty years out of bundling up a mixture of pure and diamonds and making people buy it all, but surely he can see if people toss away stuff, it's because they don't want it.

Kenendy sees this a problem, but seems to think that, in time, the sixth-track-written-and-sung-by-the-bass-player will be loved again:

There's the bundling problem – where people pick one song from an album they like.

The ability to only buy what you want isn't a "problem", though, is it?

Suddenly, though. Kennedy decides, actually, it's a good thing and not a problem at all:

No, but we can't complain about unbundling. We complain not about technology but about the abuse of technology. What technology has done is give people the ability to take a single rather than an album. But we can't complain about that – that's the law of supply and demand.

I have four jukeboxes in my house, I've always loved singles. I consume almost all my music as singles then dip back into albums. We just have to find ways to make it more attractive.

The model that enables you to buy two tracks and then upgrade to the album and get credit for two tracks is a very good model. I think ten per cent of the album market in the US is now digital, that's a good sign. So the pressure comes back on the artist that you've got to deliver an opus of work that makes people to want it as a whole album.

Unbundling isn't anybody doing anything wrong, we have to accept it

Just now, though, you said it was terrible that people didn't want a complete package of work. Make your bloody mind up, man. Or at least wait to think through your positions before embarking on a pronouncement.

Kenendy admits that the more pressing challenge is getting people to pay anything, but still doesn't see that downloads are overpriced:

But the first step is to actually get people back into the habit of buying, and 99c or 79c [Euro] is not a problem for people once they don't have the choice of free.

But people would pay a fair price - really, as your own report said last week, John, free music is a rubbish way of getting downloads, it's effort and it's clunky. The problem is that your pricing propostion is equally unattractive. History shows people don't steal bread, except when inflation makes the loaves unaffordable: at the moment, 79p is an overprice loaf.

Not that Kennedy would have that:

if you give any of my kids a pound to go down the sweetshop they look at you as if you're mad. So 79p has to be a good deal. Then you have to scale up to what volumes people are going to buy.

This anecdote is quite telling - not only because Kennedy's kids would have to be the size of whaling boats if he really gave them more than a quid every time they popped down the sweetshops, but because it illustrates Kennedy's divorce from how the majority of people live. While he's sat sipping the finest on the IFPI tab in Cannes, he's picturing a world where families of five are able to easily spend five, six, ten quid on a little treat in the sweetshop. He has no idea. He doesn't understand his customers.

He doesn't understand the technology, either, as he makes his case for filtering:

Filtering can deal with encrypted material. When I started talking about filtering three years ago, it was difficult and cumbersome and not 100 per cent reliable. Now filtering is effective, it's really cheap and it works including dealing with encrypted streams.

He's got a filter than can unencrypt encrypted streams of data? Bloody hell, he should take that to the CIA, never mind to MIDEM. Perhaps he got it in a deal with a supercodedecoder ring. You'd have to use a lot of effort to break the encryption - and so you'd have to be smart about targeting your resources. So you'd have to be pretty certain you were looking at traffic from a file-sharer. And if you're that certain - why not use the old lawsuit trick?

Kennedy then talks about In Rainbows, and how terribly everyone behaved:

The Radiohead example is in some ways even more depressing. They come up with this wonderful, flexible model and people still go onto P2P and BitTorrent to download it. That's scary.

But if the album was made available on a 'pay what you want' basis, why is it scary that some people paid nothing for it by downloading it? If you've been told you can have something for free, what does it matter where you cash your voucher?

Kennedy also finds some time to flatter Guy Hands, the man whose withdrawal of subscriptions could send John tumbling into a world where a quid treat in a sweetshop becomes a very big deal. Perhaps unsurprisingly, Kennedy thinks Hands is a great man:

There are talented A&R people out there, a few, but too many people were given big salaries when they weren't that talented and didn't have that track record. So what Guy Hands is doing is absolutely right in pruning, and you need that expertise.

... just don't prune the cheque going to the IFPI, eh?

[Part of MIDEM 2008]