A tweet from David McLaughlin found me thinking, silently reflecting I suppose (and that’s mostly what this post is – an attempt to put those down), about the very (at least to me) interesting place the music industry has found itself in as we head – already – into the second month of the second year of the second decade of the second millennium.

I retweeted David’s Forbes link as it’s a pretty fascinating read that handily summarises the [renegade] rise of the-soon-to-be-household-name, Daniel Ek from geek to owner and visionary behind one of the most important musical delivery platforms on the planet right now, Spotify.

Essentially it’s a story which has been repeated hundreds of times over the centuries: man/woman, often odd, driven or a loner, has a wacky idea comes from way out on the fringes, from a place where all the corporate or establishment R&D bucks in the world can’t or won’t reach. He or she runs with the idea and it finds both its time and its audience and changes the world.

Think Gutenberg (and I’d refer you to this piece in The NZ Listener (not online yet) and by extension the book, which I’ve yet to read but will, although I having a niggling feeling it may annoy rather than illuminate in places), Henry Ford, The Wright Brothers and you get the idea. Bill Gates was one, despite the fact he ‘borrowed’ much of the framework needed to achieve his grand vision. Jobs too of course, but I think that both digital entertainment and the handheld computing device, despite the fact that he too borrowed much of the conceptual framework, will be his enduring legacy, rather than the computer I’m writing this on now.

So we have Spotify and it arrives, brilliantly, at a time when we have the technical delivery mechanisms and – finally – the arrival of a mindset rooted closer to common sense on the part major content owners.

Spotify offers cheap (read ‘free’ in most of the world) access via 21st Century technology (read fast unlimited – apart from NZ but I guess it will get there eventually – internet) access to almost everything musical. And it will grow from there.

It’s a radio station and one that the user/s programmes. Welcome to the eventual death of commercial radio as we now know it. Yep, people still listen to radio, and in some numbers, and radio folks will tell you of growing audiences and more, but this technology – along with the other arriving variants on the theme – have drawn the line in the sand. Tailored audio will eventually dominate private listening, factories, retail and just about everywhere else where we currently listen to things from a radio broadcast. And algorithms will ensure that we get what we want and the tailored broadcast will evolve as our tastes and desires evolve.

It’s a tuning knob, XFM, podcasts and niche radio all rolled into one. It has only just begun. It may take a while but that’s where it will end up. And, mostly, major content holders and corporations will control it – the RIAA’s dominant voices already own 18+ % of Spotify, thus the noise – justifiable – about double dipping by companies who already pay their acts a fairly lowly amount under contractual terms which are often less than generous.

But, man, did these same content holders fight it tooth and nail. Five years back record companies were hollering in horror at anything close to the world they now live in – and are now doing rather well in.

Remember Peter Jenner’s words, back in 2006:

….. I think in two or three years blanket licenses will be with us in most countries.

It was Jenner, former manager back in the distant past of Pink Floyd (early days), Ian Dury, and The Clash (it was he who tried to save the band from themselves and their errant destructive but inspired original and successor manager, Bernie Rhodes without success) who both touted subscription and was heavily shot down by the establishment for doing exactly that.

And yet he was (mostly) right, although it took a year or two more than he predicted in that interview. 1

Half a decade on we have found ourselves in the obvious place where all-you-can-eat audio comes from both a free model (supported by ads on your desktop) and a subscription model (on mobile devices).

And that’s not all. As shown in this (incomplete) data from Techdirt’s Mike Masnick, the entertainment industries are doing, despite the endless howls of collapse, pretty darn tidily. The news in there is nothing new of course. I was blogging something similar a couple of years back – income was rising and we had been scammed by half-truths, partial stats and more to produce a picture that was mostly smoke.

If you looked beyond IFPI, MPAA and RIAA media then the stuff you’ll see below was there for the curious to find.

Emerging from the shock of Napster, from the collapse of CD sales to the arrival of iTunes and the war the music content industries fought against the modern world, and lost, came an industry that somehow had been bludgeoned so many times that they eventually were forced to adapt.

The industry had been dying from the death of a thousand cuts: not only digital piracy (which was and is a far lesser villain than you are supposed to think it is, but I won’t go into that here), but the rise of the track as the primary unit of music, alternative demands on disposable income, recession, relentless mostly self-induced bad press, awful A&R, accountancy trumping creativity and so on.

Somewhere, slowly and with some inspired new blood mostly driven by the indie sector which has both boomed and is soon to dominate, as the bigger indies evolve into the new majors 2 the death of a thousand cuts has become the life of a thousand cuts.

Witness YouTube. We all do – all the time.

Once you get past the first few pages and the fact that it reads like an extended version of the opening scene of The Empire Strikes Back, the Megaupload/ Kim Dotcom indictment refers several times to the copying of files from YouTube to fill up the MegaVideo site. If you read through to page 30 you get this detail:

In approximately April 2006, members of the Mega Conspiracy copied videos directly from Youtube.com to make them available on Megavideo.com.

The irony in this – which seems to have escaped the Feds – is that almost everything containing third party copyrighted material on YouTube in April 2006 was deemed by the owners to be pirated. It wasn’t until the Viacom case in 2007 and the content ID system introduced that year followed by progressive licensing through to 2009 that the songs and music were legitimised on the Google site. That aside, I guess scraping copyright material technically hosted illegally is still taking copyright material – it’s almost like stealing from a fence.

That question aside, and it’s nothing more than an aside to this, the point is that the things you now watch on YouTube are more or less legit now and the industries found a way to monetise that ‘piracy’ (read the Viacom link above – it’s no more or less virulent, wide-ranging and somewhat irrational than the MegaUpload indictment) and extract cents from every play.

And extract cents from countless other sources – video, sync, games, streaming, software, toys, performance and so much more – to slowly rebuild the collapsing walls of the house that Ahmet, Geffen, Blackwell, Gordy, Davis and so many others built in the 1960s, 70s and 80s.

And so it survives, albeit radically changed – the days of the massive superstar acts are drawing to a close despite Adele (the exception that proves the rule – even Lana Del Rey’s number two US chart entry figure is, for all the fuss, way less than an album would have achieved if it had entered in the 20s a decade or so back), as is the dominance the surviving trio of majors.

Which brings us to Megaupload and it’s alleged share of the internet. Given that, really, its offences seem to be little different in scope to the rogue YouTube, as documented in that Viacom indictment, one wonders why the ‘man’ is so keen to stomp so visibly and brutally on the founder and face of the site.

The indictment seems to be both ridiculous and absurdly unsupportable in much of its content and any court outcome, even just the extradition case, is likely to take years to play out as convincingly explained by Rick Shera here.

Clearly, Kim doesn’t have a massive US corporation as a parent as YouTube did by 2007, and he has rubbed all the MegaCorps severely up the wrong way in so many documented ways. Boy, has he pissed them off. He’s the rogue geek that never came in from the cold and couldn’t believe his luck when all that cash began arriving. He’s not that clever, obviously. If he had been, he would’ve taken the opportunity to ensure that he was forever safe and loaded. It was do-able.

However, for all that I can’t quite work out exactly why no real attempt has been or is visibly being made, to monetise the fact the site clearly makes lots of money by attracting millions of people who like both music and film. Indeed, it’s long been documented that the people most likely to steal music are the same people most likely to buy music. They are fans. It is simple common sense.

So, if an algorithm can be constructed to identify and reward for content watched on YouTube, why is doing something similar not being done for the cyberlockers?

Or do they still want to hang on for the off-chance that it really will somehow return to 1998 and all will be fine.

I’m still not sure they quite get it, Mr. Jenner.

Show 2 footnotes

  1. He can be found in quite a few other places espousing the same view – he was very noisy that year.
  2. Witness the history of Universal Music: formed as a US arm of the UK Decca label in the early 1930s, it was an outsider led by Jack Kapp. Kapp then literally stole it from the UK parent in 1943 using the US government’s stripping of US based UK companies under the conditional Lend Lease dealings. Much of Decca’s early catalogue consisted of tracks they had no rights to, and simply released. By the 1980s it was in bed with the mafia. In the 1990s it was bought by Seagrams, a Canadian company who had made their fortune by bootlegging into the US in the 20s and 30s. And Napster are pirates?