Saturday, May 30, 2009

The music industry and their part in their own downfall

Robert Sandall turns in a wonderful review for the Sunday Times of Appetite for Self-Destruction. This is Steve Knopper's careful tracking of how the music industry has been consistently getting it wrong for nearly three decades:

When the recession of 1979-82 reversed a 20-year boom that had seen record sales steadily quadruple in value, opposition to the introduction of the compact disc was rife. The tech guru at CBS demanded to know “what the hell we can expect to happen here with CDs”. His boss, ­Walter Yetnikoff, a rambunctious mogul of the old school, rejected it as an invitation to make pirated copies of albums on cassette tape, and refused to invest in new manufacturing plants. “I have no idea what they’re talking about,” Yetnikoff told his underlings.

Of course, they did finally catch on to these CD things, belatedly and in a way that screwed both artists and customers. Just in time to get it wrong all over again:
One record company bigwig who met several dotcom pioneers described the encounters as “tiresome”. The head of Liquid Audio, a company that specialised in the transmission of encrypted MP3s, was told in 1999 by a Sony honcho: “My job is to keep you down, we don’t ever want you to succeed.” As CD sales climbed to an all-time peak of 932m in 2000, nothing seriously disturbed the received wisdom in the record business that selling shiny and expensive pieces of plastic was the way forward.

There's some stuff on just how big a botch the closedown of Napster was, too:
Knopper does some impressive maths to show that, had a more equitable deal been struck offering legal downloads via Napster for $1 a track, the record industry could have benefited to the tune of $16 billion a year.

So, when the RIAA is sobbing about the millions it "loses" to unlicensed downloads, it turns out that is nothing to the money it threw away. Oh, and a legal Napster might have also headed off the take-up of bittorrent and perhaps even have stayed the inexorable rise of iTunes. As music industry mistakes go, that makes 'that guy from Decca who turned down the Beatles' look like forgetting to take an umbrella on a day when you're wearing a hat.


Anonymous said...

Slightly off-topic but have you seen this laughable report into illegal downloading?

It's from the UK government sponsored study that claims that file sharers download $19B worth of content annually. How this rubbish has managed to actually make a report I don't know. It sounds extremely suspicious that nobody doing the study has the brains to point out the giant flaw in their thinking and more like that the "Strategic Advisory Board for Intellectual Property Policy" are being manipulated.

Jim W said...

Very off-topic but I stumbled across this while looking for video of pissed up B&S member collecting a Brit award:

Ten years ago now and the big record companies running scared of the power of people on 'this internetz'? Brilliant.

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