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Has Google gone too far? Indie labels say it's crunch time for The New Economy

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I truly don't see why a streaming deal should contain cash advances?

Kudos to the big labels if they've managed to negotiate a deal with advances, but it doesn't make sense to me.

A streaming deal should be pay per volume, since that is what's fair for all participants, and the negotiation should normally be about how much should be paid per stream.

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@KjetilS

"I truly don't see why a streaming deal should contain cash advances?"

Sadly, I do.

The reason why Spam "works" is not because "somebody is buying". The Spam Industry is paid in advance. Spam subverts the flow of information the same way High Frequency Trading subverts the Time Value of Money.

You are absolutely right that "A streaming deal should be pay per volume", but that does not mean the work of the unpopular should be done for free (or is not "work", if you prefer).

The Economic Man will starve you to death and hit on your kid sister at your funeral. You can not beat that mindless greed fair transaction by fair transaction. Once in a while, you have to pay to listen to some not-so-good music.

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This post has been deleted by a moderator

This post has been deleted by a moderator

Capitalism 101 assumes a perfect market place with perfect knowledge. Whilst you are right to a degree on the power that independents have on the supply side you are forgetting that Youtube has large control of the demand side - the large proportion of people who use Youtube to browse and view music they know of and then stumble across music they don't. The music they know will predominantly be from the major labels and music they don't know is the music they won't stumble across so won't know they are missing out on so won't go looking on other music services*.

Don't forget the major labels may only be 20% of the workforce but a much larger proportion of the market viewings.

* some will of course, but the majority won't

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Anonymous Coward

"...then stumble across music they don't"

Don't confuse indie labels with small, unknown or new bands. Some of the largest bands are with Indie labels.

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Anonymous Coward

"Capitalism 101 assumes a perfect market place with perfect knowledge."

Ah no.

Captialism is a system where the profits are taken by the providers of capital. By definition the providers of labour, skills, and other resources, are short changed. A captialist system is neither market driven, nor free-market, nor economically optimised. Its glaring faults saw some limited government restrictions imposed at the end of the 19th century.

It assumes a grossly distorted market must exist so that profits can be selectively funnelled to suppliers of capital, and one key ingredient in perpetuating it is restricting knowledge.

Of course Amazon doesn't appear to be a captialist company, as it doesn't seem to actually return profits to anyone. Not sure what the hell it is actually.

A free market system is defined as whatever the commentator wants it to mean.

American users of the term, usually mean the market is free of government interference. Apple is free to use its might to organise cartels to force down engineers wages and force up book prices, Amazon is free to blacklist publishers to increase margins, authors are free to eat in soup kitchens. The population is not free to use its collective might through the government however.

Perfect Markets (with perfect knowledge) - no one has the balls to want, but we should. Disclosure of all business terms and pricing would see these shenanigans just dry up. Of all the causes, it is business secrecy that is most vital to corrupt markets.

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Joke

separation of providers?

perhaps the principle needs to be the media supplier should not be the media provider....?

P.

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Go

They should probably call their bluff

I'm sure Vimeo or Veoh or similar would only be too happy to host content for them. People who like esoteric music are already used to searching in odd places anyway, it wouldn't be too much of a trauma for people to look for somewhere that isn't YouTube. They'll type their search into Google and it'll appear at the top anyway as it's official content on a legit high-traffic streaming site.

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(Written by Reg staff)

Re: They should probably call their bluff

I very much doubt you would think that, Dan55, if it was your own indie label being blocked from YouTube.

That's all.

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Re: They should probably call their bluff

When I said "they" I was thinking of the indie labels acting collectively and going somewhere else en masse. Presumably that's why their association exists in the first place, to do more than just issue press releases.

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Re: They should probably call their bluff

>>"They'll type their search into Google and it'll appear at the top anyway as it's official content on a legit high-traffic streaming site"

Not to be paranoid, but are you quite certain that Vimeo or Veoh would be given equal priority in the search results as YouTube when it came to companies that spurned Google?

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Anonymous Coward

Re: They should probably call their bluff

But organising that would risk being an illegal cartel....

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Re: They should probably call their bluff

Or offering the job to the highest bidder.

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Anonymous Coward

What dya expect?

The people Google have hired to lead these divisions will be the same suits who used to work elsewhere in the old record labels.

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(Written by Reg staff)

Actually, I hear they're over at Google Play - tearing their hair out.

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"Indie music labels say today's tech giants are behaving more badly than the old record industry "

I heard that the big labels rip off their artists and if the artists don't go with the big labels, Apple the chooses to rip them off even more !

So with a catch 22, is someone going to publish what these cartel giants pay?

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Anonymous Coward

"Songwriters are negotiating with a gun to their heads. The gun is piracy"

Excuse me if I'm wrong: but I think YouTube is saying it will simply remove all content from its service for which it has been unable to negotiate terms of use with the owner.

That's the opposite of piracy. The owner gets to keep their work and is free to licence or sell it through any other avenue they like.

You can't have it both ways: "We want to be on YouTube because we need the exposure!" "We don't want to be on YouTube because they don't pay very well!"

Why don't they just club together and build their own distribution website?

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Re: "Songwriters are negotiating with a gun to their heads. The gun is piracy"

They could call it ThouPipe.

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(Written by Reg staff)

Re: "Songwriters are negotiating with a gun to their heads. The gun is piracy"

"Excuse me if I'm wrong: but I think YouTube is saying it will simply remove all content from its service for which it has been unable to negotiate terms of use with the owner."

You're wrong. There are two different services in play here: YouTube video, most of which is already licensed, and the yet-to-be-launched audio streamer.

"You can't have it both ways: 'We want to be on YouTube because we need the exposure!' 'We don't want to be on YouTube because they don't pay very well!"

So musicians should eat poo, and accept whatever chickenfeed money YouTube throws at musicians, simply because YouTube draws a large audience?

In a functioning market, creative people are paid more if their work is popular, and less if it's less popular. So you have made an interesting argument, there. Not one I'd want to defend ethically.

"Why don't they just club together and build their own distribution website?"

Then you could complain that they're stifling innovation. Or a cartel. Or something. I'm sure that whatever the independent music sector did, you'd find a reason to complain.

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Re: "Songwriters are negotiating with a gun to their heads. The gun is piracy"

If you had some basic reading skills you would understand that YouTube is planning to introduce a new, premium-paid streaming service, for which they need licences from the content owners. In an attempt to pressure some of those content owners (the indie labels) into agreeing to their proposed terms for the new service, they are threatening to bar the indie labels from using the existing YouTube service. Is that clear enough, or do I need to explain it in shorter words?

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Re: "Songwriters are negotiating with a gun to their heads. The gun is piracy"

Re: "Songwriters are negotiating with a gun to their heads. The gun is piracy"

@Andrew Orlowski

You seem to be arguing against free choice here Andrew:

"You can't have it both ways: 'We want to be on YouTube because we need the exposure!' 'We don't want to be on YouTube because they don't pay very well!"

So musicians should eat poo, and accept whatever chickenfeed money YouTube throws at musicians,

simply because YouTube draws a large audience?"

Are you actually proposing something should be done about it? Or are you just bitching? If the former, I disagree with you. I believe in free markets and capitalism. I believe in fairness. If you're just bitching, well, okay. We all bitch once in a while.

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(Written by Reg staff)

Re: Re: "Songwriters are negotiating with a gun to their heads. The gun is piracy"

@Noom

Is it OK, or not, to use market dominance to exclude competition in another market. That is illegal in almost all competition law. Now, not everyone agrees there should be any competition law, and companies should have a "free choice" to do exactly as they please. Perhaps you can elaborate on your analysis and proposed remedies - if any.

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Google notice:

It seems that due to a typographical error a few years ago, Our motto, which was "Do no evil", has in fact been "Sue no Weevils" for last few years. We have decided this second one is better, so were keeping it and will continue acting accordingly...

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Anonymous Coward

Re: Google notice:

"Our motto, which was "Do no evil", has in fact been"

It was all a big misunderstanding.

He said "Do know Evil", and everybody just assumed he meant, "Do no evil."

Just like when that American Presidential candidate who later became know for an abysmally low IQ and terror management issues said, "Read my lips, Know new taxes!"

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Headmaster

Re: Google notice:

The actual motto was: "don't be evil"

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Anonymous Coward

Re: Google notice:

>The actual motto was: "don't be evil"

I think it was "don't bevel"

Samsung ignored it and rounded corners, at their cost

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Facepalm

Re: Google notice:

You're mixing your Bushes here.

The President who said that was the really abysmally stupid one that you mentioned's Father. Funny thing is that he introduced new taxes after winning the Election by railing against Dukakis' plans for taxation. Something that Bill Clinton capitalized on during his campaign in 1992. Even though making former CIA Officers look untrustworthy is like shooting fish in a barrel, it worked well for him.

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Yea, if you represent 80% of the market, your the dominant player, if your not managing to leverage that, it just indicates your not very good at negotiation. If they got those 80% to simply not go with Google or Youtube until a fair deal was on the table, then Google would not have a service to offer anybody with only 20% of available music on its service. So they would negotiate a better deal.

There are two things going on here, either they don't really represent 80% and in fact they know a good number of these people want to sign the contracts or they should be removed from their jobs for failing to negotiate from a powerful position.

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Anonymous Coward

But

I think the problem here is that they represent 80% as a quantitative value. Meanwhile however the remaining 20% actually have 95%* of the market. So even though they have higher numbers, their collective strength isn't quite as good.

It's like a fight of 5 vs 1, you'd think the 5 have the advantage, until you find out it's 5 toddlers, and the 1 has a decade of experience in MMA top notch training and is taking performance enhancing drugs

*this figure was taken out of my arse.

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Re: But

Yes, but to have any respectable streaming service, they do need to have those 80% of artists on their streaming catalogue, especially when people like Apple/Spotify do. They can't really negotiate a worse deal than them and they have received no flack like this, if they do try and negotiate a worse deal then they won't have those 80% of artists, meaning the streaming service will be a harder sell to customers.

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80% only if they negotiate collectively

Which Google doesn't want to do, so they're giving them all individually take it or leave it contracts. Google didn't even approach Merlin, because they wanted to use their power to screw the little guy.

I wonder how many of those who are apologizing for Google on this would say the same thing if it was Apple who was handling all the little guys take it or leave it deals to continue to be carried on iTunes?

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Simple solution. Tell Google to get lost and then sue the hell out of them for every track of yours you find on YouTube. Meanwhile post legitimate music videos to a dedicated service like Vevo.

Maybe Netflix would be interested in creating a music channel if a few labels approached them.

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"Indie Labels"

Umm, what? Isn't that a contradiction of terms? I thought that independent meant that the band was without a label and publishes thing themselves. Or did the music industry change when I wasn't looking...

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(Written by Reg staff) Silver badge

Re: "Indie Labels"

"An independent record label (or indie record label) is a record label operating without the funding of, or outside the organizations of, the major record labels. A great number of bands and musical acts begin on independent labels." [1]

C.

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Re: "Indie Labels"

So when does one stop being an indie label and become a major label? Presumably it is not beyond the realms of possibility that some of the ones who have hugely successful artists are actually making a lot of money these days. Especially the ones set up by said artists to record their own tracks and other collaborations. Does seem like a slightly meaningless term, they are all record labels, some just make more money than others.

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Re: "Indie Labels"

I think it's kind of like how "No Name" is a Brand and registered trade mark for a food store in Canada.

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h3

Re: "Indie Labels"

If it is owned by one of the big 3 record companies it is not indie. (They have supposedly indie labels that they own and operate somewhat separately but the definition is to do with ownership).

(I thought there was 5 but seems there no longer is).

Major labels since 2012 (Big Three)

Universal Music Group (part of EMI's recorded music division absorbed into UMG)

Sony Music Entertainment (EMI Music Publishing absorbed into Sony/ATV Music Publishing)

Warner Music Group (EMI's Parlophone and EMI/Virgin Classics labels absorbed into WMG on 1 July 2013)[2]

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Happy

But the advantage of the modern age....

...is you could simply host your own and then have a shopping cart to download the tracks....

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Happy

Re: But the advantage of the modern age....

"the modern age..." is not about many small shops but about a few big ones. Equally "the advantage of the modern age." is about an advantage for the very few. Socialism and bailouts for the very rich and capitalism and a kick in the ass for the rest. Interesting though how Americans seem to understand that the "J" in the DoJ has disappeared and that the EU is possible more reliable.

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Someone is being ironic here.

Malcolm Gladwell says "Amazon is being the Goliath here".

When he has just published a book which explains that Goliath was actually the underdog against David, who had agility and superior weapons on his side.

What is he really saying?

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Coat

@ Peter Johnston 1, nice, perhaps David cannot find a stone in the modern world of asphalt or perhaps the

saga is as much worth as the Noah's Ark. Then again if a company sells one in two books in the USA perhaps the word "obesity" would be more appropriate.

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Useful middlemen using legitimate business tactics to take a larger cut of profit? Good God, whatever next!

The total naiveté of businesses who got into bed with Amazon and then realised they're locked in to the revenue stream to keep their business going is astonishing. A major client of mine has always been aware of this and sees Amazon sales as a major side channel to their direct revenue streams; everything they offer is available through their own site, and there are incentives other than price for customers to buy directly rather than through Amazon. And for B2C orders, it works out slightly more in favour of direct sales than through Amazon.

That doesn't mean to say Amazon is irreplaceable. Take products away from sale there and some of those sales will be made directly, with no cut taken by middlemen. The question is how large a cut Amazon can take of your sales compared to the percentage of lost sales in not using Amazon, something that's not easily answered without some risk to your cash flow.

The fact is that Amazon, Google and Apple have invested a lot of time, money and human innovation into building software that lets businesses sell things in large volumes over the web, while producers and suppliers have lazily soaked up the profits opened up by these gateways to the global market - rather than reinvesting them in diversifying their distribution channels to prevent lock-in. Now they're whining because these innovators have taken advantage of that myopic short-termism.

I am mystified as to why there hasn't yet been a jointly owned or independent audio distribution platform funded by the major players in the music industry, who can then keep licensing costs down and empower them to give the middle finger to the giants in negotiations.. Even if it isn't the best platform to sell music on, it's existence and potential exclusivity would still be enough to make Apple, Google, Spotify et al think twice about trying to gouge their suppliers.

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Amazon as the bad guys

I think it is really neat to see Amazon as the bad guys here, when just yesterday an article about Ebook price fixing had Apple as the bad guys and Amazon as the good guys. So if Google or Amazon use their market power to push low prices on publishers (or labels) so they can give the music to the consumer for cheap this is bad. If Apple works with the publishers to establish an alternative Ebook market to Amazon, so they can charge more this is just as bad. I guess the definition of bad is really in being a consumer or a producer.

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Spotify mentioned again.

Without even *trying* to defend Youtube here, how many music streaming services are *actually* profitable, *and* pay artists something they don't hate?

The artists keep holding up Spotify as an example, but I thought Spotify was still financially sinking...

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governmental control divide up the bastards

In a world where everybody can set up a web based sales channel it is a paradox that Amazon,Google and Apple have become so big players.I really believe the big three needs to be split up into smaller competing companies, like what was done with AT&T in 1992. Most countries have laws against monopolies and cartels. But how do to exercise it on a global scale. If you have more than a 20% market share maybe a tax should be enforced.

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Unhappy

Picking them off one by one.

I hope they were on the phone to Merlin ASAP.

Google is a multi $Bn corporation.

For them SME's are just someone to turn into road kill. There idea of "negotiation" is likely to be "Here's what we're going to pay you. say "thank you" now f**k off."

Welcome to the Microsoft of the 21st century.

And like them "We're not a monopoly. Other providers are available."

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History repeating itself, again - The weavers are revolting

The objective of the game of capitalism, is to collect all of the money and any resources remaining, in one place (under one owner).

IT is an enabler of capitalism. It allows the constant manipulation of vast quantities of data (concerning the money and resources).

And so:

*********

Alison Wenham, chief exec of the Association of Independent Music (AIM) ...

"I don't think at the dawn of the internet we ever thought we'd be looking down the wrong end of a telescope that way."

*********

If the internet is IT, and IT supports capitalism. Then the very thing that was guaranteed to happen was that some one* would win. There was never going to be a world in which 10,000 search engines made an equal amount of money, from an equal amount of users.

The industrial revolution closed many cottage industries; concentrating the money, resource-ownership and power in fewer places. The technological revolution will do / is doing the same thing.

The model behind Google was the model behind every web business started at the same time and since: Own the users.

It is no co-incidence that, where ever / who ever you download your browser of choice from; the default home page is never set to blank-page. You change it to blank-page, after downloading. This might demonstrate how people (and so the little musicians, at the heart of all this, getting exploited) view the web in completely the opposite way to the companies trying to exploit it (and its users).

The web - the free side, the social side, of the internet - is powered by an exploitative business model that requires your content in order to survive and thrive. And so the music industry, with its own exploitative business model, only ever had one choice: If you value it, keep it offline.

The vast majority of musicians (authors, film makers, poets and so forth) have no choice at all - Just like always.

* Just in case my ol' friend is reading: Yes, there will always be Pepsi ;-)

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wow what a surprise! the big internet players are doing excatly what the big supermakets do on the high street, namely screw the supplier and appear to be giving the customer a good deal, how many producers have sunk without trace because of the ' we will pay what we think is fair,' policy of supermakets, now its happening on the net, everybody forgets that retailers can only survive if they have products to sell, but producers can and should establish their own retail outlets, but it takes the will to stick together and say f....k you to the big boys.

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