Deaf and dumb

It’s clear that the music industry has learned nothing in its near-death experience at the hands of the internet and its almost-former customers. Universal Music head Doug Morris launches an attack on YouTube filled with as much numbnutty chatter as NBC below.

“What doesn’t work for us are companies trying to build businesses using our content without our getting a fair share,” Morris said.

Well, let’s not talk fair share. How much do your artists get? A fair share? I’d say not. Morris went on to haul out the old whine about MTV:

“They received the software for virtually nothing. We learned a hard lesson. Recently, companies like Yahoo! and AOL started video on demand running ads between our videos. We asked for payment; they said no. We took down our videos and they said yes. Now we share in their advertising revenue.”

Morris said YouTube and other sites “owe us tens of millions of dollars. How we deal with these companies will be revealed shortly.”

Mr. Morris: I’d pay to see you face your artists — 50 Cent, Eminem, Elvis Costello, BB King, LL Cool J, Chris Rock, et al — and call them “software” to their faces.

The smartest thing YouTube could do is just take all of Universal’s artists off and watch them scream when suddenly they’re not talked about and bought as much as their competitors. These dimwits just don’t get it: YouTube and MySpace and blogs and the internet are their new distribution and sales channels. Want to cut off your noses to spite your faces? Fine. Here’s the knife.

This is your audience you want to attack, fool. They are marketing and distributing your music for you. Don’t want them to? Fine. Plenty more where you came from.

Morris also went after MySpace. And MySpace’s owner, Fox’s Peter Chernin, went after YouTube as well, arguing that MySpace sends traffic to YouTube and so MySpace should hold YouTube by the balls.

Fool, it’s not YouTube that’s doing this. It’s not MySpace that’s doing this. It’s the people. You don’t control these services; they do. And if you try to control them, they’ll show you who’s holding whom by the balls. They’ve leave. You’ll be left holding the ball and not much else.

: Meanwhile, I got email from an exec of NBBC complaining about my post below. He refused to go into the comments to have his say or get into an open discussion here. Flunked that interactivity IQ test, I’d say. He argues that it’s not NBBC that decides where content runs but the licensor. He also says that the revenue split is a case-by-case matter. Still, I say the problem is that — just like Morris and Chernin — they think they are in control. Sorry, gentlemen. That horse is long over the horizon.

: And there was lots more discussion of the NBBC announcment and my post. Fred Wilson thinks it’s a good move. I disagree. So does Adam Kalsey, who takes it apart step by .

NBBC gets a failing grade on every one of Fred’s four points. They’re trying to build a walled garden. Lazy Sunday on YouTube scared them because they lost control over the distribution. “In the future, when we have a Lazy Sunday clip, NBBC will make a lot of money on it.”

This venture shows that. They’re deciding what content I can see. “NBBC is going to keep a distance from the hottest trend in online video — programs created and uploaded by users. The company wants to work only with established producers.”

They’re deciding where I can see it and how I can consume it. “NBBC is not going to allow the programs it distributes to be inserted on personal blogs or Web pages.”

Scott Karp has a good post identifying the key issue, once again: control.

The key to success in media today and in the future is to recognize that we, the people, formerly known as the audience, are in control. Artists, too, now have more control. Middlemen don’t. Middlemen don’t own content, software, creativity, or art. Middlemen don’t deserve 50 percent of the pie. Middlemen are doomed — unless they learn that they are not in control and figure out how to turn that into an advantage. Get content up on YouTube and MySpace and take advantage of the free — free, damnit! — marketing, promotion, branding, and distribution there to breath new life into our tired acts and TV shows and make money again. Go discover new talent (aka, new software). Listen to the public before you waste millions on products that won’t like.

Man, you can’t teach an old mogul new tricks.

  • Jim Karna

    I think one of the biggest fears of the music industry is that you tube, myspace, limewire etc make everyone a gatekeeper/ tastemaker – as soon as music (video, whatever) is posted people know pretty quickly if it’s total shit. The music industry has to rasie the bar. This goes for everyone though, there’ll be some disappointed indie bands out there who’ll plan to make their millions selling through myspace without realising that it isn’t “the man” preventing them hitting the big time but their ineptness.

    Obviously the music industry continues to be its own worst enemy, and as great a promotional tool myspace and youtube are i can understand them/ the artists feeling like someone else is getting the fruit of their labours and making the advertising buck from it. MTV built their empire on the back of convincing labels to spend big on lavish videos to give them value added to sell to advertisers and the industry is pretty bitter about it still.

  • JD

    I hope you don’t mind, then, if I tape your CUNY lectures and post them to YouTube.

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  • Jim Karna

    “These dimwits just don’t get it: YouTube and MySpace and blogs and the internet are their new distribution and sales channels.”

    Perhaps i’m thinking too narrowly about the music/ record industry

    I’m not sure the myspace sales model works though, the 50/50 split for MP3s kinda works for garage bands/ electronica but so few bands come fully formed. Labels (indie and major) spend a lot of money developing & recording records (often waaaaay to much, so they’re on a hiding to nothing from the start but thats another argument) palatable to the mass market. News International/ Myspace take half the revenue from the sale, plus all the revenue from advertising which doesn’t seem an equitable swap for the label or the artist.

    Big Media certainly needs to change its business plans; You Tube and My Space do represent excellent promotion and marketing (if not yet viable distribution and sales – its pretty difficult to equate my space “friends” to sales, and unproved how many of those friends will fork out hard earned if they have to pay for something) but in the flurry of excitement about user generated content and the ability to free up art its easy to over look where investment in new cultural capital will come from

  • One who knows copyrights

    Jeff:

    You ramblings are getting the better of your senses. You neither understand the economics of the music business nor do you know copyright 101. The more I hear your rants – the more it is obvious – your only interest is in getting some attention by saying something widly popular without any logic. If you ever get around to it, sit with one of the people who sat on the Copyright Commison appointed by President Ford, and see where it all began – the Record Labels are not only right about their thinking, it is the only way to protect the artists and their works under the LAWS OF THE LAND.

    The Major Record Labels are public corporations who have to answer to their shareholders on why thier assets are being degraded by some YouTube Superstar wanabee…. Ever hear of Shareholder Class Action Lawsuits for not managing a company’s assets properly… I did not think you do. Start with a Yahoo finance page… you might be enlightened!

    As for capitalizing on Social Networks, there are initiatives already underway by the Record Labels to capitalize on the fan base in way that benefits not just the consumer, but the entire value chain. And, of course by the time that happens you will have moved on to the next attention grabbing topic….and probably will not even make even one mention of this on your Buzz Machine – or is it “Rant Machine”

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  • CG

    This isn’t an issue about copyright.. but it does involve the economics of the business. This “software” (videos) are nothing more than advertisements for an artist’s album. There is no other reason to make them. Without MTV playing these “ads” all day every day, hyping them on the hour, or the new internet distributor of videos YouTube, explain how they would get those lines around the block for that new Timberlake or Aguilera CD (not Universal artists, just examples).

    I’ve seen some blogs that have been directly contacted by music companies – telling them to take down the videos on their sites – when the blogs are essentially promoting them for nothing. New artists that need the promotion.

    That’s what you want to do: tie the hands of the fans and the people able to distribute videos on a wide scale, because you see them making money from them. But what they’ve really done is create a central place to see the artists of ALL record companies (no one would watch a channel or visit a site that deals in a single company’s artists.. it’s too time consuming and confusing. “Who is that new artist signed to?”)

    And in the second case you tell the fans to stop talking about the music.. reason being.. greedy paranoia.

    They might show it to friends and the friends will show it to friends and we won’t collect a buck from any of them.

    When you think of the video as a promotional tool for an artist, which it is.. this ‘we must wrestle control of our videos’ mindset is like telling people to talk about me only if I tell you to or if you pay me.

    That’s the dumbest smart thing I’ve heard in awhile.

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  • Jim Karna

    CG – I think you’re right in that this isn’t purely a copy right issue and that promo clips are essentiallty just that.

    But labels build the brand of an artist and MTV/ You Tube/ My Space reap a lot of the financial rewards. Obviously a label wants the videos to run as ads (and couldn’t afford to buy the ad space for a video to play as much as high rotated video would) but at the moment labels pay £100k+ for a superstar artist’s video (Timberlake/ Aguilera in your example) they give these to MTV/ MySpace to use drive traffic and ad revenue. At least MTV pay a PRS rate to the artists when they play videos. Not something My Space or You Tube do (MySpace may have permission to use the vid purely for promo but You Tube doesn’t). Labels are paying for the content that other companies business is built on. They were stupid enough to fall for it with MTV, they’re doing their best to get stung again in the same way

    However, they continue to behave like spoiled children – there should be reciprocity, throwing toys out of the pram isn’t the solution

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  • Jim Karna

    From fiveeight.net daily bulletin:

    Warner Music has become the first major label to formally license its content to YouTube. Last month, YouTube announced an advertising deal with Warner Music as the start-up’s first partner for its new Brand Channel advertising to promote the new Paris Hilton album, this new deal will see video content from Warner artists available on the service and will allow users to incorporate music from Warner’s catalog into the videos they create and upload. Both parties will share revenue created by advertising, which will be featured around the videos. YouTube said it would use a new advanced content identification and royalty reporting system, set for release by the end of the year, to identify the music videos and help manage payment to the record labels. This announcement comes under a week after Universal Music’s Doug Morris labeled YouTube “copyright infringers” who he said owe the music industry “tens of millions of dollars.”
    http://today.reuters.com/news/articleinvesting.aspx?view=CN&storyID=2006-09-18T043049Z_01_N18228928_RTRIDST_0_TECH-YOUTUBE.XML&rpc=66&type=qcna

  • RonP

    youtube is fun and interesting but it is about to be neutered ala napster.

  • http://makemarketinghistory.blogspot.com/ John Dodds

    “They are marketing and distributing your music for you. Don’t want them to? Fine. Plenty more where you came from.”

    No there isn’t – remove the copyright material from these sites and there’s virtually nothing left. It’s YouTube that has cut off its nose by not facing up to the issue.

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  • http://www.musicbizcoach.com Tim Beachum

    Let me first say: “I LOVE THIS BLOG – IT DISPLAYS WHAT THE INTERNET IS ALL ABOUT!”

    Now that I have that out of my system, please allow me to take a little stroll down memory lane.

    They say that history always has a way of repeating itself, and if you know your history you remember a little invention called the radio. This little invention led to a rise in families spending their Sundays at the theaters. Life was good and then BAM!

    The television was created, and the theater became more or less a dinosaur. The powers that be, or the radio gods tried and tried to explain to the public that television would never catch on. After all it didn’t have any sound…

    Back to the Present – The powers that be are saying that the big bad Internet is killing the video star. Oh the poor artist are being ripped off and cheated. Hmmm lets jump back in our preverbal time machine for a moment.

    Back to the Past – Remember when the music industry gave credit to such individuals as Jerry Lee Lewis, and Elvis Presley, who were cash cows created by the music industry who “STOLE” material from other artist and didn’t pay them a dime. They then allowed their cash cows to record the stolen material and made millions. In fact they are still making millions from their infamous cash cows.

    Back to the Present – ahhh the poor music industry is reaping what the sowed. It was all fun and games when you were the robber.

    You guys (the music industry) have played the artist and fans for fools for long enough.

    The Internet is one monster that the entertainment industry will never be able to stop. The sooner you realize that the Internet is like the Borg and resistants could be futile the better off you will be. If the music industry wants to survive you must bow down and join the collective. If not the music industry as we know it will be disassembled.

    The ignorant and fearful may call the information found on this blog mere ramblings, from the mouth of a mad man. Those that truly understand would say that this blog is an excellent example of freedom of speech from someone with a firm grasp on the future technology known as the Internet.

    To you dear sir I say, “touché”. I take my hat off to you!

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  • http://www.partyboard.info Tianks

    “..it was this science which gradually took over research into the sounds of language, research which came to be called phonetics. In the second half of the nineteenth century linguistics became dominated by the most naive form of sensualist empiricism, focusing directly and exclusively on sensations. As one would expect the intelligible aspect of language, its signifying aspect, the world of meanings, was lost sight of, was obscured by its sensuous, perceptible aspect, by the substantial, material aspect of sound.”