Paul McGuinness speaks out at Cannes.
The full script of the speech everyone is talking about in Cannes, as made by U2 manager Paul McGuinness at Midem.
McGuinness: “Good afternoon and thank you for giving me this opportunity. I don’t make many speeches and this is an important and imposing occasion for me. What I’m trying do here today is identify a course of action that will benefit all: artists, labels, writers and publishers.
I have been managing the best-known of my clients, U2, for exactly 30 years. Sure we’ve made mistakes along the way but the lineup hasn’t changed in 31 years. They are as ambitious and hardworking as ever, and each time they make a record and tour, it’s better than the last time. They are doing their best work now. During that time the music business has been through many changes.
At the beginning U2’s live appearances were loss-making and tour support from our record label was essential for us to tour and that paid off for the label as U2’s records went to No.1 in nearly every international territory starting in the mid ’80s and I’m happy to say that continues to the present day. They have sold about 150 million records to date and the last album went to No.1 in 27 territories.
U2 own all their masters but these are licensed long-term to Universal, with whom we enjoy an excellent relationship. With a couple of minor exceptions they also own all their copyrights, which are also licensed to Universal. U2 always understood that it would be pathetic to be good at the music and bad at the business, and have always been prepared to invest in their own future. We were never interested in joining that long, humiliating list of miserable artists who made lousy deals, got exploited and ended up broke and with no control over how their life’s work was used, and no say in how their names and likenesses were bought and sold.
What U2 and I also understood instinctively from the start was that they had 2 parallel careers first as recording and songwriting artists, and second as live performers. They’ve been phenomenally successful at both. The Vertigo Tour in 2005/2006 grossed $355m and played to 4.6m people in 26 countries.
But I’m not here to brag. I’m here to ask some serious questions and to point the finger at the forces at work that are destroying the recorded music industry.
People all over the world are going to more gigs than ever. The experience for the audience is better than ever. This is proved by the upward trend in ticket prices, generally un-resisted. The live business is, for the most part, healthy and profitable. Bands can gig without subsidy. Live Nation, previously a concert and venue company is moving into position with merchandising, ticketing, online, music distribution as one of the powerful new centres of the music industry.
So what has gone wrong with the recorded music business?
More people are listening to music than ever before through many more media than ever before. Part of the problem is that the record companies, through lack of foresight and poor planning, allowed an entire collection of digital industries to arise that enabled the consumer to steal with impunity the very recorded music that had previously been paid for. I think that’s been a cultural problem for the record industry — it has generally been inclined to rely for staff on poorly paid enthusiasts rather than developing the kind of enterprise culture of Silicon Valley where nearly every employee is a shareholder.
There are other reasons for the record business’s slow response to digital. The SDMI (Secure Digital Music Initiative) of the ’90s pan-industry, was a grand but ill-fated plan to try and agree rules between the content and technology industries. It went nowhere. SDMI, and similar attempts at cooperation by record companies, have partly been thwarted by competition rules. The US government has sometimes been overzealous in protecting the public from cartel-like behaviour.
I love the record business, and though I may be critical of the ways in which the digital space has been faced by the industry I am also genuinely sympathetic and moved by the human fall-out, as the companies react to falling revenues by cutting staff and tightening belts. Many old friends and colleagues have been affected by this. They have families and it is terrible that a direct effect of piracy and thievery has been the destruction of so many careers.
Nonetheless there is one effective thing the majors could do together. I quote from Josh Tyrangiel in Time Magazine: – “The smartest thing would be for the majors to collaborate on the creation of the ultimate digital-distribution hub, a place where every band can sell its wares at the price point of its choosing”. Apple’s iTunes, despite its current dominance, is vulnerable. Consumers dislike its incompatibility with other music services, and the labels are rebelling against its insistence on controlling prices. Universal the largest label in the world has declined to sign a long term deal with iTunes. “There’s a real urgency for the labels to get together and figure this out,” says Rick Rubin of Columbia Records.
There is technology now, that the worldwide industry could adopt, which enables content owners to track every legitimate digital download transaction, wholesale and retail.
This system is already in use here in Cannes by the MIDEM organisation and is called SIMRAN. Throughout this conference you will see contact details and information. I recommend you look at it. I should disclose that I’m one of their investors.
Meanwhile in the revolution that has hit music distribution, quality seems to have been forgotten. Remarkably, these new digital forms of distribution deliver a far poorer standard of sound than previous formats. There are signs of a consumer backlash and an online audiophile P2P movement called “lossless” with expanded and better spectrum that is starting to make itself heard. This seems to be a missed opportunity for the record industry — shouldn’t we be catering to people who want to hear music through big speakers rather than ear buds?
Today, there is a frenetic search for new business models that will return the record business to growth. The record companies are exploring many new such models — some of them may work, some of them may not.
Sadly, the recent innovative Radiohead release of a download priced on the “honesty box” principle seems to have backfired to some extent. It seems that the majority of downloads were through illegal P2P download services like BitTorrent and LimeWire, even though the album was available for nothing through the official band site. Notwithstanding the promotional noise, even Radiohead’s honesty box principle showed that if not constrained, the customer will steal music.
There is some excitement about advertising-funded deals. But the record companies must gain our trust to share fairly the revenues they will gain from advertising. Historically they have not been good at transparency. Let’s never forget the great CD scam of the ’80s when the majors tried to halve the royalties of records released on CD claiming that they needed this extra margin to develop the new technology even as they were entering the great boom years that the CD delivered. It’s ironic that, at a time when the majors are asking the artists to trust them to share advertising revenue they are also pushing the dreadful “360 model.”
As Allen Grubman, the well-known New York attorney said to me recently… “God forbid that one of these acts in a 360 deal has success. The next thing that will happen is the manager gets fired and the lawyer gets sued for malpractice.”
Maybe it would help if they were to offer to cancel those deals when they repair their main revenue model and the industry recovers, as I believe it will.
But that’s an issue for the future, when we’re out of the crisis. Today, there’s a bigger issue and it’s about the whole relationship between the music and the technology business. Network operators, in particular, have for too long had a free ride on music — on our clients’ content. It’s time for a new approach — time for ISPs to start taking responsibility for the content they’ve profited from for years. And it’s time for some visionary new thinking about how the music and technology sectors can work as partners instead of adversaries, leading to a revival of recorded music instead of its destruction.
It’s interesting to look at the character of the individuals who built the industries that resulted from the arrival of the microprocessor. Most of them came out of the so-called counterculture on the west coast of America. Their values were hippy values. They thought the old computer industry as represented by IBM was neanderthal. They laughed at Bell Telephone and AT&T. They thought the TV networks were archaic. Most of them are music lovers. There are plenty of private equity fund managers who are “Deadheads.”
They were brilliantly innovative in finance and technology and though they would pay lip service to “Content is King” what many of them instinctively realized was that in the digital age there were no mechanisms to police the traffic over the internet in that content, and that legislation would take many years to catch up with what was now possible online.
And embedded deep down in the brilliance of those entrepreneurial, hippy values seems to be a disregard for the true value of music.
This goes back some decades. Does anyone remember Abbie Hoffman? He was one of the “Chicago 7,” the ‘Yippies” of the Youth International Party who tried to disrupt the 1968 Democratic Convention in Chicago and got beaten up and put on trial by Mayor Daley’s police. He put out a book with the title “Steal this Book”. I think he has a lot to answer for.
I’ve met a lot of today’s heroes of Silicon Valley. Most of them don’t really think of themselves as makers of burglary kits. They say: “you can use this stuff to email your friends and store and share your photos”. But we all know that there’s more to it than that, don’t we? Kids don’t pay $25 a month for broadband just to share their photos, do their homework and email their pals.
These tech guys think of themselves as political liberals and socially aware. They search constantly for the next “killer app.” They conveniently forget that the real “killer app” that many of their businesses are founded on is our clients’ recorded music.
I call on them today to start doing two things: first, taking responsibility for protecting the music they are distributing; and second, by commercial agreements, sharing their enormous revenues with the content makers and owners.
I want those technology entrepreneurs to share their ingenuity and skill as well. Our interests are, after all, steadily merging as lines get more and more blurred between the distributors of content, the makers of hardware and the creators of content. Steve Jobs is now in effective control of the Walt Disney Studio and ABC Television so his point of view may be changing now that he owns content as well as selling those beautiful machines that have changed our world. Personally I expect that Apple will before too long reveal a wireless iPod that connects to an iTunes “all of the music, wherever you are” subscription service. I would like it to succeed, if the content is fairly paid for. “Access” is what people will be paying for in the future, not the “ownership” of digital copies of pieces of music.
I have met Steve Jobs and even done a deal with him face to face in his kitchen in Palo Alto in 2004. No one there but Steve, Bono, Jimmy Iovine and me, and Lucian Grainge was on the phone. We made the deal for the U2 iPod and wrote it down in the back of my diary. We approved the use of the music in TV commercials for iTunes and the iPod and in return got a royalty on the hardware. Those were the days when iTunes was being talked about as penicillin for the recorded music industry.
I wish he would bring his remarkable set of skills to bear on the problems of recorded music. He’s a technologist, a financial genius, a marketer and a music lover. He probably doesn’t realize it but the collapse of the old financial model for recorded music will also mean the end of the songwriter. We’ve been used to bands who wrote their own material since the Beatles, but the mechanical royalties that sustain songwriters are drying up. Labels and artists, songwriters and publishers, producers and musicians, everyone’s a victim.
For ISPs in general, the days of prevaricating over their responsibilities for helping protect music must end. The ISP lobbyists who say they should not have to “police the internet” are living in the past — relying on outdated excuses from an earlier technological age. The internet has moved on since then, and the pace of change today means a year in the internet age is equivalent to a decade in the non-internet world.
Remember the 1990s, when the internet was being called the Information Superhighway? At that time, when the U.S. Digital Millennium Copyright Act and the EU Electronic Commerce Directive were drawn up, legislators were concerned to offer safe harbours restricting the responsibilities of ISPs who acted as a “mere conduit”. This was a different era: only a few hundred thousand illegal files could be accessed from websites. There was no inkling
at that time of the enormous explosion of P2P piracy that was to follow. If legislators had foreseen that explosion, would they have ever offered immunity for so-called “mere conduits” and, in doing so, given ISPs a decade of excuses for refusing to protect our content?
And as it turned, the “Safe Harbour” concept was really a Thieves’ Charter. The legal precedent that device-makers and pipe and network owners should not be held accountable for any criminal activity enabled by their devices and services has been enormously damaging to content owners and developing artists. If you were publishing a magazine that was advertising stolen cars, processing payments for them and arranging delivery of them you’d expect to get a visit from the police wouldn’t you? What’s the difference? With a laptop, a broadband account, an MP3 player and a smartphone you can now steal all the content, music, video and literary in the world without any money going to the content owners. On the other hand if you get caught stealing a laptop in the computer store or don’t pay your broadband bill there are obvious consequences. You get nicked or you get your access cut off.
It is time for ISPs to be real partners. The safe harbours of the 1990s are no longer appropriate, and if ISPs do not cooperate voluntarily there will need to be legislation to require them to cooperate.
Why does all this matter so much? Because the truth is that whatever business model you are building, you cannot compete with billions of illegal files free on P2P networks. And the research does show that effective enforcement — such as a series of warnings from the ISP to illegal file-sharers that would culminate in disconnection of your service — can address the problem.
A simple “three strikes and you are out” enforcement process will see all serial illegal uploaders who resist the law face a stark choice: change or lose your ISP subscription.
Fortunately, there has recently been some tremendous momentum to get ISPs engaged — notably in France, the UK, Sweden, Norway and Belgium. President Sarkozy’s plan, the Olivennes initiative, by which ISPs will start disconnecting repeat infringers later this year, set a brilliant precedent which other governments should follow. In the U.K., the Gowers Report made it clear that legislation should be considered if voluntary talks with ISPs failed to produce a commitment to disconnect file-sharers. I’d like to see the U.K. government act promptly on this recommendation.
In Sweden, the Renfors Report commissioned by the Ministry of Justiceg ISP cooperation. And in the courts, the Sabam-Tiscali ruling spelt out, in language as plain as could be, that ISPs should take the steps required to remove copyright-infringing material from their networks. The European Union should now take up the mantle and legislate where voluntary intra-industry agreement is not forthcoming. This is the time to seize the day.
ISPs don’t just have a moral reason to step up to the plate — they have a commercial one too. IFPI estimates say illegal P2P distribution of music and films accounts for over half of all ISP traffic. Others put the figure as high as 80%. This is traffic that is not only destroying the market place for people who are trying to make a legitimate living out of music and films, it is hogging bandwidth that ISPs are increasingly going to need for other commerce, especially as a legitimate online market for movies develops.
I think the failure of ISPs to engage in the fight against piracy, to date, has been the single biggest failure in the digital music market. They are the gatekeepers with the technical means to make a far greater impact on mass copyright violation than the tens of thousands of lawsuits taken out against individual file-sharers by bodies like BPI, RIAA and IFPI. To me, prosecuting the customer is counter-intuitive, though I recognise that these prosecutions have an educational and propaganda effect, however small, in showing that stealing music is wrong.
ISPs could implement a policy of disconnection in very quick time. Filtering is also feasible. When last June the Belgian courts made a precedent-setting ruling obliging an ISP to remove illegal music from its network, they identified no fewer than 6 technologies which make it possible for this to be done. No more excuses please. ISPs can quickly enough to block pornography when that becomes a public concern.
When the volume of illegal movie and music P2P activity was slowing down their network for legitimate users recently in California, Comcast were able to isolate and close down BitTorrent temporarily without difficulty.
There are many other examples that prove the ability of ISPs to switch off selectively activity they have a problem with: Google excluded BMW from their search engine when BMW started to play games. This was a clear warning to others not to interfere. Another show of power was Google’s acceptance of the Chinese Governments censorship conditions. The BBC has spent a fortune on their iPlayer project and the ISPs are now threatening to throttle this traffic if the BBC doesn’t “share costs of iPlayer traffic.” All this shows what the ISPs could do if they wanted. We must shame them into wanting to help us. Their snouts have been at our trough feeding free for too long.
Let’s spare no effort to push the ISPs into taking responsibility. But that’s only one part of the story. There’s a huge commercial partnership opportunity there as well. For me, the business model of the future is one where music is bundled into an ISP or other subscription service and the revenues are shared between the distributor and the content owners.
I believe this is realistic; the last few years have shown clear proof of the power of ISPs and cable companies to bundle packages of content and get more money out of their subscribers. In the UK, most ISPs offer different tiers of services, with a higher monthly fee for heavy downloaders. Why are there “heavy” downloaders? Isn’t that our money? News Corporation offers free broadband to light users if they take at least a basic Sky Television package for £16 [$31.78] a month.
Looking at the events in the last year, this revenue-sharing model seems to be taking hold in the music business.
Universal — U2’s label — recently struck a deal with Microsoft that sees it receive a cut of the revenues generated by sales of the Zune MP3 player. It’s unfortunate that the Zune hasn’t attracted the sort of consumer support that the iPod did. We need more competition.
Under the agreement, Universal receives $1 for every Zune sold. When you consider Radio Shack sells Zune players for $150, you’ll see that Universal has asked for less than 1% of revenue — for a company that is supplying about a third of the U.S. market’s chart music at the moment. This isn’t really enough, but it’s a start, I suppose, and follows from the U2/Apple deal, the principle that the hardware makers should share with the content owners whose assets are exploited by the buyers of their machines. The record companies should never again allow industries to arise that make billions off their content without looking for a piece of that business. Remember MTV?
Nokia has announced it will launch “Comes With Music,” a service that effectively allows consumers to get unlimited free downloads of songs for 12 months after they buy certain premium Nokia phones. At the end of the 12 months consumers will be able to keep the songs they download. Nokia gets to supply premium content and Universal gets to boost competition in the digital marketplace, to make it more competitive and open new channels to customers. A proportion of the revenue generated by sales of the handsets will flow back to Universal. The question must be asked; will they distribute that revenue fairly? Do artists trust the labels? Will artists, songwriters and labels trust the telcos and handset companies?
These are obviously commercial deals driven by self-interest. But there is a moral aspect to this too. The partnership between music and technology needs to be fair and reasonable. ISPs, Telcos and tech companies have enjoyed a bonanza in the last few years off the back of recorded music content. It is time for them to share that with artists and content owners.
Some people do go further and favour a state-imposed blanket licence on music. Let me stress that I don’t believe in that. A government cannot set the price of music well any more than a rock band can run a government. The market has to decide. The problem with the global licence proposed in France two years ago was that it would not have worked in practice. But it is in France recently that legislators have been most innovative and have shown most willingness to act to support recorded music rights. France leads the world on this.
So far I’ve focused mainly on the role of ISPs. But there are similar issues in mobile too. The mobile business accounts for half the world’s digital music revenues and, crucially, is starting out from a much better position than the internet music market. You only have to look at a market such as Japan to see the amazing potential of mobile music for getting to the young demographic.
I believe that in mobile music we have the chance to avoid the problems that have bedevilled the recorded music industry’s relationship with ISPs: and I’m not talking just of their tolerance of copyright theft. Other problems, like the lack of interoperability between services and devices; the lack of convenient payment mechanisms except via credit cards — which of course are not available to all music users; the hacking and viruses that have undermined people’s trust in online payment. All these problems can be avoided in the mobile sector, this is a task that should command the support and cooperation of labels, artists, publishers and writers. We’re all in the same boat here.
That’s a lesson for the mobile industry internationally. Don’t go the way that many of the ISPs have gone. Mobile is still a relatively secure environment for legitimate content — let’s keep it that way.
So, to conclude — who’s got our money and what can we do?
I suggest we shift the focus of moral pressure away from the individual P2P file thief and on to the multi billion dollar industries that benefit from these countless tiny crimes — The ISPs, the telcos, the device makers. Let’s appeal to those fine minds at Stanford University and Silicon Valley, Apple, Google, Nokia, HP, China Mobile, Vodafone, Comcast, Intel, Ericsson, Facebook, iLike, Oracle, Microsoft, AOL, Yahoo, Tiscali etc, and the bankers, engineers, private equity funds, and venture capitalists who service them and feed off them to apply their genius to cooperating with us to save the recorded music industry, not only on the basis of reluctantly sharing advertising revenue but collecting revenue for the use and sale of our content. They have built multi billion dollar industries on the back of our content without paying for it.
It’s probably too late for us to get paid for the past, though maybe that shouldn’t be completely ruled out. The U.S. Department of Justice and the EU have scored some notable victories on behalf of the consumer, usually against Microsoft. They have a moral obligation to be true, trustworthy partners of the music sector. To respect and take responsibility for protecting music. To work for the revaluation, not the devaluation of music. To share revenues with the community fairly and responsibly, and to share the skills, ingenuity and entrepreneurship from which our business has a lot to learn.
And the message to government is this: ISP responsibility is not a luxury for possible contemplation in the future. It is a necessity for implementation TODAY — by legislation if voluntary means fail.
There’s more exciting music being made and more listened to than at any time in history. Cheap technology has made it easy to start a band and make music. This is a gathering of managers; our talented clients deserve better than the shoddy, careless and downright dishonest way they have been treated in the digital age.”
(Paul McGuinness delivered the above speech January 28 at Midem, Cannes.)
I do not think Paul McGuiness has got it right… the industry takes this way forward, they will fail again. Somehow he assumes that all free downloads (piracy) are counts of downloads that should be paid otherwise. It is not the case. A lot of that content would not be downloaded if it were not for free. We do not love all the music we download – somehow record companies think that their music is equivalent to the best french wine, or what? -.
While it is true that many of the above mentioned companies have built their business based on the available content that flows in the internet, a technological bann (ok, you call it collaboration, I call it ban) with ISP providers will not work. IT HAS PROVEN NOT TO WORK, with DRM and many other attempts. SIMPLY DO NOT GO THIS WAY. Hackers, and end users, are wise, they will find a way around this.
Would suggest to look at the newspapers’ subscription models, and what Chris Anderson has to say about the future model of content providers in the internet, via subscription models
I do not think Paul McGuiness has got it right… the industry takes this way forward, they will fail again. Somehow he assumes that all free downloads (piracy) are counts of downloads that should be paid otherwise. It is not the case. A lot of that content would not be downloaded if it were not for free. We do not love all the music we download – somehow record companies think that their music is equivalent to the best french wine, or what? -.
While it is true that many of the above mentioned companies have built their business based on the available content that flows in the internet, a technological bann (ok, you call it collaboration, I call it ban) with ISP providers will not work. IT HAS PROVEN NOT TO WORK, with DRM and many other attempts. SIMPLY DO NOT GO THIS WAY. Hackers, and end users, are wise, they will find a way around this.
Would suggest to look at the newspapers’ subscription models, and what Chris Anderson has to say about the future model of content providers in the internet, via subscription models
Bono is often chided for being a hypocrite in his social concerns, and if he doesn’t fire McGuinness over this speech, then he is every bit the hypocrite his critics claim. The first part of McGuinness’ speech is an accurate depiction of the industry. The second half on Silicon Valley is a joke. Valley entrepreneurs are hardly “hippies,” they’re the classic Ayn-Randists. And what the hell is wrong with Hoffman and the Yippies? I’d rather trust a Yippie than the RIAA! The music industry needs more pirates, not more control of ISPs.
I agree that p2p file downloaders probably would not buy the majority of music they download, even if they could afford it. However, it is a valid point to try and engage the isp’s in stopping illegal p2p downloads as much as possible. A certain amount of theft is tolerable (just like in a grocery store). When it gets to the gargantuan proportions of today with p2p and entertainment content, then it’s like the grocery store selling one loaf of bread for every 1000 stolen…. which is just not viable.
What people choose to ignore is that there is a real cost to piracy…. people’s jobs, their families lives, food on the table. Whatever you think of the major record labels (which aren’t angels by any means and pretty much treat artists like slaves), they need to make money to pass it on. If they don’t make a profit, they lay off staff, who can’t feed their families. There is a huge social consequence for piracy on this scale that people are missing.
I think if people download music and they like it (ie listen to it more than once or twice), they should buy it…. otherwise what McGuinnes said is true… there will soon be no singer/songwriters at all, as they would make more of a living working for McDonalds than as a musician. Without the singer/songwriters, there will be a huge decrease in decent music (ie recorded professionally, not in a bedroom or garage).
Newspapers are having a harder and harder time of it as well lately, as more and more people just view the free news content online. Probably the only entertainment industry not affected badly by p2p are books, as it’s bloody uncomfortable to read a book on a computer, so not worth the effort.
As far as future music models are concerned, there are a few advertising based ones out there, but I don’t think they are sustainable. Advertisers are fickle, and their budgets aren’t limitless. Also, the first budget to be cut when times are harder, is the ad budget.
A model I do think is interesting is http://www.sellaband.com, where artists are crowd-funded to record a professional album, which is released worldwide. They offer free mp3’s as well, but the main thing is that the cd/mp3/ad revenues are shared equally between artist/label/investors. I can vouch for their fairness and interest in the artist, as my wife is releasing her album next week. We have two small girls and another baby on the way. If the album get’s stolen too much then she will never be able to do another one, and we will continue to be broke, like we are right now. Probably worse actually. That’s the real truth of piracy.
Bring on the co-operation between the ISP’s and the entertainment industry. ISP’s won’t do it voluntarily though, and will try to stall as much as possible (like they have been doing for years). Bandwidth is money to them, and p2p increases their bandwidth. I think they would prefer it to be p2p than official movie services… as p2p is free for their users, whereas movie services wouldn’t be.
Whatever is done though, techies will find a way around it. Maybe the best thing is to include digital watermarks which can’t be removed/modified/etc so they can be tracked wherever they go. The more material tracked through an isp, the more p2p ‘tax’ they have to pay and pass on to the customer.
Well, mr McGuinness misses at least one very important point. If the ISP:s should start to monitor trafic, and lock out offenders, the P2P packages would change to using strong encryption in a blink of the eye. Apart from the amount of computer power it would require to break the encryption to determine if the traffic is illegal or not (which, using strong encryption, is pretty much impossible given the amount of traffic and todays computers), it is actually illegal to do so in quite a few countries, since laws like the DMCA forbids both breaking encryption, and creating tools to do so.
Sad …another dinosaur that is getting it all wrong. It’s not like every download contributes to a loss. We are facing a cultural change here. If you think about it – Radiohead’s download model was more than a huge success …just not for the labels. See my rant on that at http://vafer.org/blog/20080102035830
PEOPLE – BANNING WILL NOT WORK!! NEVER …so move on and have the distribution work for you.
Sad …another dinosaur that is getting it all wrong. It’s not like every download contributes to a loss. We are facing a cultural change here. If you think about it – Radiohead’s download model was more than a huge success …just not for the labels. See my rant on that at http://vafer.org/blog/20080102035830
PEOPLE – BANNING WILL NOT WORK!! NEVER …so move on and have the distribution work for you.
Gary, newspapers are NOT losing subscriptions because they offer their content for free Online. Newspapers are losing subscribers because they are failing to offer news in a format people want and their content is not timely or relevant (rehashing national stuff from AP and Reuters that’s already been heard; abysmal local coverage in a lot of markets). In addition, people’s lives are so busy, they don’t have time to sit down and read a paper. It’s not a priority. Like the music industry, the newspaper industry is playing a slow game of catch up.
As for the music industry: I can respect that there is a concern over piracy, and rightfully so. HOWEVER, I think that if piracy wasn’t in the equation (and I would contend that the vast majority of pirated music wouldn’t have been bought anyway), that there would still be a big downturn in music sales due to the softening economy. Entertainment is the first thing to be cut when people are paying more for gas and milk.
Comment from Europe
I’m one of the dinosaurs. Having lived so long that I remember the Beatles coming on the scene and living in the period of time when pop/rock artists and the labels started their tour to incredible successes and profit.
Today everything has changed the artists and the labels are robbed blind by their own customers and thousands of jobs fall victim to zillions of downloaders.
But I just got a déjà vu, where did I hear the Beatles first, was it on Radio Caroline, did I hear the Stones first on Radio Londen or The Who was that on Radio Veronica??
But wait a minute were those Radio Stations official ones? NO WAY, they were on ships in the North Sea and known to the people in the near countries like England, Holland and Belgium as the Pirate Stations.
These Radio Stations however paved the way for the British Music Avalanche that later also conquered America, so basically the whole success of the music industry was based on piracy in the first place.
Today there is much talk about access also Mr. McGuinness talks about that, but where is the official access to music nowadays? Nobody listens to the radio who doesn’t inform us about new music The only access we can get is through P2P because the Pirate Radios or the FM /AOR in the Sates have gone anyway and the television stations that started as music stations have changed their programming.
It is true of course that for every CD sold because the buyer got the music in the from the web there are hundreds of downloaders who don’t buy. But that is the old story of the salesman who can also sell the products that he doesn’t have better than the one he has.
Concentrate on your market which is still BIG. Before the pirate stations came along the worldwide turnover of music was way under 1 Billion Dollars. Don’t blame all decreases on downloads there have been economical problems and there are new products like Games and Ringtones and DVD’s to compete with you.
See the net as the successor to the providers of access of another time and start to give us, THE FANS (of all ages) our music back and not the clones and copies and fillers that are dominating the markets today.
The Record was/is a bloated ego centric manifestation of capitalism. They are sharks. They have grown fat on the talent of true individual artists and in the process have corrupted them. The talent of an individual to make music is a rare gift and should be treated with respect.
The whole tirade by Paul Mcginnes is completely based on the status quo. The words ‘steal’ ‘thief’ etc. occur ad nauseam. Im sorry but weve already dispensed with that image. Its sad for all these managers that they still live in the middle ages of music where they were able to milk the profits of otherwise genuine artists without much regard for the art (only for the dollar). As for the real lives and livings of those in the industry, move on, where did all those people go who lost their jobs when manufacturing became obselete in the western world?
On the whole this whinge doesnt contribute to a new model, it only negates the old, its exclusive as opposed to inclusive, its hateful and self serving. The new model will not based on this type of exploitation of art.
I look forward to a veritively new model, and in my mind that will be artist centric.
The Record was/is a bloated ego centric manifestation of capitalism. They are sharks. They have grown fat on the talent of true individual artists and in the process have corrupted them. The talent of an individual to make music is a rare gift and should be treated with respect.
The whole tirade by Paul Mcginnes is completely based on the status quo. The words ‘steal’ ‘thief’ etc. occur ad nauseam. Im sorry but weve already dispensed with that image. Its sad for all these managers that they still live in the middle ages of music where they were able to milk the profits of otherwise genuine artists without much regard for the art (only for the dollar). As for the real lives and livings of those in the industry, move on, where did all those people go who lost their jobs when manufacturing became obselete in the western world?
On the whole this whinge doesnt contribute to a new model, it only negates the old, its exclusive as opposed to inclusive, its hateful and self serving. The new model will not based on this type of exploitation of art.
I look forward to a veritively new model, and in my mind that will be artist centric.
I’ve left a reply to Paul McGuiness Speech on my own blog here
Well said. Profound even. I’ve been saying much of the same for two years on the Napster stock message board at Yahoo (if I do say so myself). I am constantly amazed by the self-righteous ranting of manufactured excuses people continue raising in favor of outright theft simply because they have the technology to do so and there is little or no authority stopping them. They sometimes hide behind the facade of recommending the industry simply embrace the P2P model as a new form of distribution. I submit that these people know fully well there is no viable business model based on P2P and their sanctimonious ranting is nothing more than a disingenuous load of bullox. Bravo, Mr. McGuinness.
Wow, it is hard to imagine Bono buying into this kind of industry partyline or supporting government control of ISP lockouts.
The gentlemans point above is true, It isnt realistic to think of an album illegaly downloaded as a lost sale.
These industry hegemonists are just trying to further consolidate their powerbase, what a shock!!
Polishing the rail of the titanic…
As Ken Burns says, ‘Archivists always take a vow of poverty’. What do people think they’re doing when they amass huge collections of music? A philanthopist? Less is more: You only appreciate something when you’ve taken the time to listen to it at least a few times. When you’ve got a bazillion tunes, that ain’t gonna happen!
McGuinness clearly ignored the dangers of losing Net Neutrality.
The negative impacts of giving ISP’s policing power goes far beyond the music industry. As a music industry professional I understand him looking/driving for a solution, but legitimizing the ISP’s drive for laws to help them police the internet in any way shape or from is a big mistake, and certainly NOT a solution. I do agree however with his position of taxing IPS’s and digital hardware creators who have built their entire business on artists content.
McGuinness clearly ignored the dangers of losing Net Neutrality.
The negative impacts of giving ISP’s policing power goes far beyond the music industry. As a music industry professional I understand him looking/driving for a solution, but legitimizing the ISP’s drive for laws to help them police the internet in any way shape or from is a big mistake, and certainly NOT a solution. I do agree however with his position of taxing IPS’s and digital hardware creators who have built their entire business on artists content.
Kate..everything you state in your message is right – and yet you sooo miss the point here.
An artist myself, I want nothing more than connecting with a wide audience. I want to make great and emotionally stirring art.
At the exact same time I want to feed my three kids and make a decent living. Why the fuck can’t you people understand that this is getting more and more difficult when folks steal it ?
whenever a guy like Paul raises his voice he is met with these:
a) artists are always screwed by mean record companies
b) managers are invariably tonefeaf dollar lovers
c) piracy is liberating the artist, actually
d) the music is too expensive and bad anyway
e) the artists are rich scum who deserve to be robbed
and finally:
f) if we who make the music available don’t understand this, we’re simply not understanding the new dogma/new youth culture/new era anyway, we’re simply dumb and deserve to be carted out of here whining about responsibility.
Paul is acting out of necessity on behalf of the whole business of music and film – just as legitimate a business as that of milk, petrol, shoes and wheelchairs. Nobody works for free, nobody should.
with love and anger
Helen
If people don’t have to buy music to listen to it
They won’t buy it
If great new artists can’t make money from music in the future
They won’t have a future career in music
If great new artists can’t make a career from music in the future
There will be no great artists in the future
If great new artists can’t make money from music sales in the future
They have to look at other alternatives to music sales in the future
The list goes on
If people don’t have to buy music to listen to it
They won’t buy it
If great new artists can’t make money from music in the future
They won’t have a future career in music
If great new artists can’t make a career from music in the future
There will be no great artists in the future
If great new artists can’t make money from music sales in the future
They have to look at other alternatives to music sales in the future
The list goes on
Can someone please explain how piracy helps the artist? Didn’t think so.
Interesting discussion.
I believe people will still pay for music. This level of pay will reset at a new level. The rationalizations that it’s OK to pirate are juvenile. There is no workable technical solution. It’s up to the artists to remind “fans” that theft of their songs is wrong. We need to work towards making it culturaly uncool to steal from artists.
The big record companies are going away. But they are exaggerating the extent to which music theft is responsible. Have you seen the best selling albums from last year? The top three are Groban’s Christmas album, High School Musical sound track, and the new eagles album.
So the number three album is self-published work from a twenty five year old band. Number two is a sound track from a kids movie, and number one is, well, a Josh Groban Christmas Album. No analysis required. Based on this list alone, every senior executive at the major labels should find a new line of work. What an embarrassment. Why wouldn’t sales be falling?
This new era as being partly about theft, but also about disintermediation. The middle man, the traditional record company, is being cut out of the deal. I’m hopeful we’ll see a musical renaissance.
Paul McGuinness clearly doesn’t get it. But I don’t believe the future is going to be about some of the new business models thrown about: pre-selling of albums, souvenirs, ad based music, these sorts of things. It’s going to be about making more per recording sold by keeping more of the sale, and by forming closer, direct ties with fans.
To me, McGuinness reflects the old system, and will soon be replaced by a generation that does music not because it is a business, but because it is music.
There is a whole wave of new music with so much more soul than anything U2 or many other big names have produced in the last 5 or 6 years.
And besides, McGuinness contradicts himself. He says people are listening to music more than ever before, yet apparently the industry of recorded music is dying? Makes no sense. Perhaps the industry of one or two people raking in tons of cash is dying, but I dont see anything wrong with that.
To me, McGuinness reflects the old system, and will soon be replaced by a generation that does music not because it is a business, but because it is music.
There is a whole wave of new music with so much more soul than anything U2 or many other big names have produced in the last 5 or 6 years.
And besides, McGuinness contradicts himself. He says people are listening to music more than ever before, yet apparently the industry of recorded music is dying? Makes no sense. Perhaps the industry of one or two people raking in tons of cash is dying, but I dont see anything wrong with that.
I just posted my reply to Paul’s speech here: http://www.mediafuturist.com/2008/02/welcome-to-paul.html
I guess I just couldn’t resist – there is just too much bizarre stuff in this speech. Cheers, Gerd Leonhard (Music & Media Futurist, Author of “Music2.0)
Paul should go one step further… what must happen is all the money that has been taken from the consumer by the labels should be refunded… immediately! He should lobby the government until all the price fixing, payola and “Trojan horse on you CD” wrongs have been righted 😉
Seriously, many people that are far too young for Paul to relate to will not ever pay for music… and it is because of people like Paul.
All a young person hears from the RIAA et al is… “We will sue you!”, “you are bad”, and now “we will cut your broadband!” Paul and the RIAA come across as the angry old man on the bus, smelling stale and dribbling…
No matter what the labels do, there will be a solution.
I’m pretty sure thepiratebay.org is not at the mercy of any of Paul’s proposals (including the ISP “fix”)
Set my music free… I don’t think you need another big screen TV Paul
oh and Helen Shambles, if you want to feed your kids- get a job that pays!
perhaps you could sell player pianos! oh, no that won’t work- technology came a long and now people wont pay for them… (despite the protests of the publishers)
oh and Helen Shambles, if you want to feed your kids- get a job that pays!
perhaps you could sell player pianos! oh, no that won’t work- technology came a long and now people wont pay for them… (despite the protests of the publishers)
In response to Helen Shambles:
On the contrary.
The bottom line is: The paradigm is changing. Change with it or evaporate. It may not be fair but that’s the deal.
Like most of the music business, bereft of any unique, useful ideas, Mr. McGuinness–in addition to quite honestly, really, being profoundly idiotic–is doing a whole lot of whining and finger-pointing. Brilliant. Well done.
By “standing up” (your words)is Paul actually doing anything? By pushing the blame onto someone else? By calling fans “thieves?” LOL, I just can’t believe how utterly silly that is.
Please don’t tell me you’ve never made a mix tape. And if you’ve tried calling your fans “thieves” and its working well for you, please do let me know.
No one is legitimizing stealing. That is, decidedly, not the point. You have to look at the bigger picture. Which Paul isn’t.
Songs, on a CD, on vinyl, as a digital download… will no longer make you money, in the traditional sense. What will make you money is leveraging your humanity, your ability to connect as an artist.
What I’m suggesting to you and to other artists is to take control of your own destiny… why continue to let these yahoos make or break you? Whether or not your kids eat is now, more than ever before, in your hands.
If you’d like to discuss things that you could do to make this happen, please do contact me. My advice is priced at virtually free. At the very least, I’d love to listen to your music and so please feel free to send it along. You’ll find, upon researching me that I’ve devoted my career to being a true artist’s ally — for little to no money.
Kate Bradley
Outlandos Music
P.O. Box 415
Saugerties, NY 12477
kate@outlandosmusic.com
well, i know little to none about the current music situation but i will comment despite that. First off, if you post here do it properly, don’t use internet lingo that makes you sound unprofessional. All you criticize artists for trying to make a living and tell them to go work at Mcdonalds. Well if you can find one person who can make a good living by scraping gum from out of the playground let me know. Also, maybe i should just go to your job if you bums even work and steal all the products the corporation you work for creates. Thus it’ll mena zer profit for you, just like the artists. But stealing is okay right. Ill just use ur terminlogy know, stfu QUICK KILL KING ftw. MLG
Paul McGuinness calls fans thieves for for availing of free music downloads,while himself and U2 avail of tax concessions, both in Ireland and when that was finished by moving their finances to Amsterdam. Maybe if they paid their proper tax dues more fans could afford to pay for downloads. A case of the kettle calling the pot black.
Paul McGuinness calls fans thieves for for availing of free music downloads,while himself and U2 avail of tax concessions, both in Ireland and when that was finished by moving their finances to Amsterdam. Maybe if they paid their proper tax dues more fans could afford to pay for downloads. A case of the kettle calling the pot black.
Calling someone who downloads music for free or shares it with their friends a ‘thief’ is too strong a word regardless of the legal position (although un inforced) which deems them to be so.
Essentially artists ( bar the exception of the 1900’s ) have always been poor. You must suffer for your art. The ‘gift’ , and that is what the creation of art is, has a price for the ‘artist’.
If as an artist you have a family you must find a job. Being an artist is not a job. If you are a true artist it is a vocation you are following. If you get some crumbs from the table you’re lucky. Thats’ how it always was and that is how it will be.
Sad but true.
One last point. When at school in the 80’s and 90’s most people taped their music from others. THE FANS bought it, Like Christians buy the bible, Buddhists buy a yoga DVD and a fat man and Muslims buy the Koran and some nice clothes. There were few FANS back then. There are few FANS now. If you don’t buy your music you are not a FAN. That’s all. Of course you can inherit a bible, find a yoga DVD and get some nice clothes from OXfam…..( metaphors suck don’t they ).
Anyway, there never have been many FANS of music. Download people are mainly more interested in football and other things like food etc. Why not! I could starve with pleasure listening to the great music of the past 900 years that I have ‘bought’.
Oh and look what nearly always happens to rich rock/pop/jazz stars. They F*** up their lives and people they love, destroy their health and dodge paying tax by living in Ireland or wherever….
Peace be with this house.
Michael
ps if this makes no sense….that’s cool. It’s just an opinion.
Calling someone who downloads music for free or shares it with their friends a ‘thief’ is too strong a word regardless of the legal position (although un inforced) which deems them to be so.
Essentially artists ( bar the exception of the 1900’s ) have always been poor. You must suffer for your art. The ‘gift’ , and that is what the creation of art is, has a price for the ‘artist’.
If as an artist you have a family you must find a job. Being an artist is not a job. If you are a true artist it is a vocation you are following. If you get some crumbs from the table you’re lucky. Thats’ how it always was and that is how it will be.
Sad but true.
One last point. When at school in the 80’s and 90’s most people taped their music from others. THE FANS bought it, Like Christians buy the bible, Buddhists buy a yoga DVD and a fat man and Muslims buy the Koran and some nice clothes. There were few FANS back then. There are few FANS now. If you don’t buy your music you are not a FAN. That’s all. Of course you can inherit a bible, find a yoga DVD and get some nice clothes from OXfam…..( metaphors suck don’t they ).
Anyway, there never have been many FANS of music. Download people are mainly more interested in football and other things like food etc. Why not! I could starve with pleasure listening to the great music of the past 900 years that I have ‘bought’.
Oh and look what nearly always happens to rich rock/pop/jazz stars. They F*** up their lives and people they love, destroy their health and dodge paying tax by living in Ireland or wherever….
Peace be with this house.
Michael
ps if this makes no sense….that’s cool. It’s just an opinion.
In reading this story and the comments on this blog, I reflected on the music industry when U2 started recording in 1980 for Island Records and where the music industry is today.
I find it interesting that Mr. McGuinness speaks out on copying/downloading content today. Was his views the same when his client started recording? I would think Mr. McGuinness would have been only too happy to have his client’s intellectual property copied to other mediums (cassettes, CDs) as this may have translated to having more revenue generated for his client in the way of concert tickets sales, merchandising, and ultimately record sales.
As for the comments made about artists doing what they do for the love of their art or starving for their art, I have two words: spare me. No artist wants their intellectual property to be copied or downloaded without some form of fair compensation.
I do agree, however, there needs to a way for the parties involved (record companies, artists, and ISP entities) to provide a business model where revenue can be generated to protect intellectual property. I don’t believe the ability to prevent copying or downloading intellectual property will work long term. One can build a sophisticated mousetrap only to have someone else disable the mousetrap. This has proven to be the case over time.
The music industry has to come to terms that torrents sites and P2P is here to stay. Instead of fighting them, work with them to share revenue. ISP’s can help in charging additional fees for downloading from torrent sites or P2P. All the components to track where downloads containing copyrighted intellectual property is in place today.
In closing, the business model used in the recording industry needs to reflect all the potential revenue streams where the record company and artist can profit while preserving intellectual property. The ditigal age has exposed the need to change for all concerned.
I think Paul McGuinness will soon see that as sites like Amazon.com make buying mp3 audio easy and free of iTunes usage conditions, people will be buying more and stealing less. I know I’d rather buy music than deal with Limewire and get bad versions, at low rates, with no album artwork and also deal with all the general hassle.
Richard Pryde Hughes
Production Music Library – Urban Dropz
http://www.ProductionMusicLibrary.com
Paul,
I am reaching out to you because I have created a fundraising vehicle for american charities while reaching out to the youth in our country through a wearable symbol in support of Barack O’bama’s message of CHANGE. Please check out my website http://www.thechangering.com and see for yourself. It is about music, fashion, charities and much more. You can get me on that email or ajbontempo@aol.com Thank you
Paul,
I am reaching out to you because I have created a fundraising vehicle for american charities while reaching out to the youth in our country through a wearable symbol in support of Barack O’bama’s message of CHANGE. Please check out my website http://www.thechangering.com and see for yourself. It is about music, fashion, charities and much more. You can get me on that email or ajbontempo@aol.com Thank you
The change ring is major failure. its a dumb idea wanting to be cool but its nothing more than a bunch of dudes tying to steal glory off of obama.
A major public scam that seems like a “legit/nice idea for a nice cause” yeah right!
aul talks some sense about artists needing to be reimbursed for their works. However, his comments about getting ISP’s to determine what their (the ISP’s) customers are doing on behave of another industry is off the wall. Imagine the copyright holder of “Happy Birthday” telling the phone company to monitor people’s phone calls to make sure they’re not singing “Happy Birthday” over the phone (and if they do sent them a bill on behalf of the copyright holder)? Or car companies saying that toll-roads have to make sure that people aren’t driving vehicles that affect their business model? It’s just asinine to expect this, and the record companies and established big bands need to adjust to changes in the technology.
The record industry needs to determine how to adjust to new technologies, instead of trying to get new technologies to adjust to the record companies outmoded business paradigm. For example, the English band “The Arctic Monkeys” inadvertently used peer-to-peer, YouTube, and other Web 2.0’ish technologies to create, support, and feed their fan base before they released their first album: http://en.wikipedia.org/wiki/Arctic_Monkeys#Formation_and_early_years
For small bands the Internet and file sharing can be a powerful medium that they can use to reach out to ever-greater numbers of fans. And because many of the up-and-coming bands have experienced these technologies they may have a better understanding of how they work, unlikes many of the senior Record Companies executives who still don’t know or understand what the Internet is (it’s what you make of it). And because of the Internet, we may have end up with a more diverse richer music environment than if we let our tastes be determine by the Recording Industry.
Also, just about every single DRM initiative so far has failed, look at Yahoo, anyone who bought DRM music from them is now unable to listen to their legally purchased music:
http://arstechnica.com/old/content/2008/07/drm-still-sucks-yahoo-music-going-dark-taking-keys-with-it.ars
I suspect that big established bands such as U2 and Metallica are so entrenched in the 20th century record company business model that all they see is the loss of potential sales of their work. Potential sales not actual sales, an “illegally” downloaded song does not represent a lost sale. Also, the way many younger people treat music is different and changing from the way that their seniors treat music; music is no longer something you buy and owe, it’s something that’s free and which you share with your friends. For many musicians I believe that they’d be happy to know that their music reaches a larger audience, however this doesn’t put bread on the table which means musicians need to be more innovative in how they earn money to support their music. (Which means there’s a niche there for people with the technology savvy & marketing skills to help bands with this).
To be honest I feel the (majority of the) record companies cares about one thing; profits, and damn be the fans and the musicians. To bad there aren’t more companies around like the former Factory Records.
Great article.Thanks.
Great article.Thanks.
A very interesting article, but what it reeks of sour grapes…
Let’s take a look at the days before the digital age…
The music industry internationally was governed and controlled by the mega Record labels. Only those lucky enough to be selected by an A&R person
from those labels got the chance to be anything bigger than a local celebrity.
The commercial efforts of the Labels controlled what we heard what made it onto the charts…
I wonder how many people know that U2 started writing songs because they weren’t good enough to play cover songs… An admission from the boys themselves.
So they got a good manager… and got signed… Basically got very lucky… How much music was created and written but never ever got any exposure because they didn’t have any way of getting their music out there.
Musically speaking U2 had an original sound wrapped in very intense production… aimed at a purely commercial enterprise..
Talent? Bono has a voice… which from my listening is very normal and average without the wonderful production.
The songs… yeh clicky cliqued repetitous pop tunes. Like most of the music supported by the big labels.
So let’s blame all those nasty people for downloading (stealing) all those recordings from the mega labels.
The mega labels who had everything to themselves… all the control… all the money…
What has the digital age of music done?
From my reading and research, Computers and the WWW have given music freedom, and provided the opportunity for billions of people around the world
to listen to and enjoy the music they choose.
McGuinness talks of the music “industry” and whines about the digital age like someone has stolen his apple pie, yet happily gloats over the wonderful financial success of the tours…
He wants it all… He wants the old days back where Record labels created multi-millionares and mega stars…
Mega stars of what? A Mega Label’s Monopoly?
Doesn’t he see that the increase in Listeners for his live concerts is the direct effect of millions more people listen to music because of the WWW.
What he fails to acknowledge is that there are millions more artists taking a slice of his monopolic pie.
Millions more Artists have been given the chance to get their music to the ears of the world… No, they aren’t mega stars and we will slowly but surely see the mega stars of the mega era disappear over time.
Millions of wonderfully talented Musicians and Songwriters and Producers who now have a chance to bring music to the world and give people a freedom of choice, and not be reliant on Mega Labels to feed us what they decide is going to make them rich and prop it up with advertising and promotions…
And if they are seriously good and worthy of the mighty dollars they achieve then good on them..
We don’t need Mega Stars or Mega Labels, we just need good music and the freedom to get it out there, and hopefully distribute the wealth a bit so more artists can make a living out of it, instead of watching half baked talent and media moguls receive all the money.
To all of you at Silicon Valley and the creators of the http://WWW... YOU ROCK!!!
To Paul McGuiness and the boys in U2… Keep Touring! Be happy that people want to listen to your songs no matter how they obtain them.
Thanks so much for sharing this.
!
Oh, come on. I pay $25 a month for the convenience of accessing my bank accounts and paying bills from home. I pay $25 a month to read the news online rather than from a newspaper. I pay $25 a month to broaden my education. I pay $25 a month to buy music from iTunes. And I can say that there is a lot more I’d purchase if the price was cheaper. I’m prepared to pay – but not as much as the asking price. Be assured that I will *always* buy tickets to shows of artists I love. The digital age brings and opportunity to reach many more who would do the same.
Oh, come on. I pay $25 a month for the convenience of accessing my bank accounts and paying bills from home. I pay $25 a month to read the news online rather than from a newspaper. I pay $25 a month to broaden my education. I pay $25 a month to buy music from iTunes. And I can say that there is a lot more I’d purchase if the price was cheaper. I’m prepared to pay – but not as much as the asking price. Be assured that I will *always* buy tickets to shows of artists I love. The digital age brings and opportunity to reach many more who would do the same.