Putting differences aside for the common good is a step too far for most. But when things get bad enough, we’re left with no choice. Many of the problems that I have and will outline on this site all need one thing to be solved. Cooperation. If the (supposed) World Leader and Taliban Chief to my left can do it, why can’t the two corporations they represent?
Unfortunately, the market in which Major Labels operate is a perfect example of one that breeds high levels of competition. A shrinking market, high exit costs (the cost of switching industry’s), high fixed costs and low product differentiation all add to the need for fierce competition, at least according to my vague memory of a Business Studies degree. But when faced with change of this scale and an inability to deal with it, and of course ever dwindling profits, I firmly believe it’s time to forget old rivalries and address the problems at hand. Together.
Launching New Services
The all-you-can-eat Virgin deal with Universal has collapsed because rivals wouldn’t sign up, according to media. Just weeks prior, this deal was announced, which will allow Sony to stream music across all of it’s devices. How will this actually launch without other labels consent? It won’t.
Rather than two forward thinking, game changing services, EXCITING services, we’re left with none. Who wins? Spotify (the new partner with Virgin) and illegal sites. The labels in question are the only real losers. Yes the BPI are trying, but attempts are so half hearted that I suspect their main aim is to convince government they are thinking ahead, rather than actually achieving anything.
If the industry is to switch to one that monetizes billions of streams and downloads, rather than millions of single CD purchases, then the number of transactions will increase substantially. When each song is played, the service needs to start a chain reaction that notes what song it is, where it was played, and who the rights holders are in that country, who then instantly know who wrote the track, who played on it, at what royalty rate, and who collects those royalties. This process currently takes months, but as consumption practices change this system will fail spectacularly.
All this information is contained in the Metadata, which is a large set of information bundled with a song, album, or whatever is being sold. There needs to be a complete overhaul of current metadata management systems involving all parties involved, not just the labels. But this level of cooperation is unheard of in the music industry and will probably be solved externally, by a firm who will then make a LOT of money licensing this technology back to those who once had the power to initiate it.
There have been attempts to sort this out. The Digital Data Exchange (DDEX) is a collaborative attempt from all EU rights holders to agree on standardised data, but is in direct competition with its US counterpart, NARM. The Global Repertoire Database Working Group has been set up as a central repository where all data exists in one place, but without the money and support from the major industry players it won’t get far.
Google has made billions in revenue by monetizing the act of displaying information. Essentially, that’s all they do. Record labels have all the information required to listen to music. Packaged and sold correctly, this information has the power to revive the industry.
For more detailed insights into this, read this post, ‘Please Release Me‘. Songs are often available on radio 6 weeks before they are available for download, breeding yet more piracy and frustrating customers, in the hope that they will chart higher than rivals releases.
If radio don’t understand this and want to retain their imagined exclusivity, which in turn creates high peak entries (sometimes) and immediate drop offs, then as one the labels must say no.