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What an ironic situation! The Canadian Recording Industry faces a $6 Billion lawsuit.
Unfair copyright laws have been affecting a lot of us and there has been a lot of conversation around copyright reform lately, especially here in Canada. However, traditionally, the recording industry has been heavily in favour of excessively long term copyright laws as it allows them to claim royalty on tracks produced decades ago! The recording industry in the United States has managed to take its paws a step further, by suing and winning lawsuits against two consumers, who were each slapped with millions in damages.
Now, the recording industry itself is being sued and if charges allocated in previous lawsuits (against consumers) are to be taken as a benchmark, the recording industry could owe Chet Baker’s estate close to $6 Billion.
What an ironic situation…although I would have preferred if this had taken place in the U.S – just to make a point.
Thoughts?
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For those of you who are unaware, Spotify is a service that offers a legal solution to music access. Through an application, Spotify will provide you streaming access to almost every catalogue in the world, either for free (with advertising) or for a monthly subscription (Ad-free). The question that now remains is whether the key demographic (18-34) will adopt this service.
Spotify is currently reported to have customers between the ages of 30 to 50 who apparently use spotify to rediscover old music rather than discover new music. The younger age groups on the other hand are what Spotify will be really interested in. Unfortunately, this group will want its music on the go…which means that Apple’s approval of the Spotify iPhone app will play a critical part in the growth of this model. But will Apple be ready to kill the iTunes model by approving the Spotify application? Further, in countries like Canada where the monthly limit on iPhone/Blackberry internet usage is quite limited and highly expensive, this streaming model may not easily catch up.
In my opinion, Spotify currently functions as a source of music access that precedes the download of an album through a p2p network. So, this poses 2 key hurdles that Spotify needs to overcome -
First, make consumers overcome their need to own their music.
Second, when consumers do want to own their music, make them pay for it (hmm).
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So, I’m assuming that Record Labels are getting a lot of pleasure in suing their own consumers and making them pay thousands and millions (in some cases) of dollars in compensation. I mean, if they aren’t, why would they do it? Wouldn’t they just (like every other business, well other than the Auto industry) rather put their resources in learning, adapting and innovating? Wouldn’t they rather create a new business model? Well, aparently not.
The RIAA recently fined Joel Tenenbaum (a student!) over $600,000 for downloading 30 tracks illegally. They basically charged him $22,500 per song. Now I would like to quote Pete Cashmore from his post on Mashable here…
“If a song is worth $22,500, the record industry is truly giving us a bargain by selling them for $0.99 on iTunes.” Right Pete! A real bargain!
Its events like these that make me proud of living in Canada. If your wondering how the law stands in Canada, Michael Geist did a blog post on it a while ago. Check it out. As far as the RIAA and its legal proceedings go, I’ve blogged on this before and I’m tired of getting frustrated and angry. Maybe someday, someone will truly change this business model.
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The IFPI in its 2009 report on the music industry indicated that 95% of all downloads in 2008 were still through illegal channels. It is therefore not surprising that Apple continues to struggle with getting its new iPod buyers to consume music through iTunes. But is this really a reasonable expectation I ask? Just imagine having to fill an iPod that holds 30,000 songs with music through iTunes. It would cost you almost $30,000! Now this is by no means acceptable – which brings us back to the decade long debate between the ideals of possessive individualism Vs- social utilitarianism in the music business.
The ‘downloader’ culture today is very different from what it was a decade ago. Consumers are looking for possible solutions that arrive at a balance between allowing music to be shared and protecting its rights to distribution. If Apple thinks that by removing DRM on its songs and implementing a variable pricing model, it has finally cracked the code, I am sorry to say that Apple is WRONG!
Apparently, we are now expected to take solace in the fact that instead of having to spend $30,000 to fill our iPods, we can now do so for just $28,999!
But the problem is not just with Apple. The root of the problem inherently lies in the inability of record labels to truly understand their consumers. It’s high time the big four (in the music industry) start understanding consumer subculture and the role music plays in the creation of social bonds. Without an understanding of why their consumers continue to behave the way they do (illegally sharing music), record labels will have to continue taking shots in the dark and those of us who are actively seeking a solution to this problem will have to continue being guinea pigs.
Additional reading on the subject matter:
1. Markus Giesler (2008). Conflict and Compromise: Drama in Marketplace Evolution. JOURNAL OF CONSUMER RESEARCH , 15.
2. Ian Condry (2004). Cultures of music piracy: An ethnographic comparison of the US and Japan. INTERNATIONAL journal of CULTURAL studies.
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