Wednesday, February 18, 2009

Music industry gets pwnd for epic fail

(If the headline makes sense to you then you already know all about this, off you go, see you in Digg.) For the rest of us here's the story.

The music industry is having its day in court over unauthorized music downloads in what is billed as one of the most important IP rights cases in history, are they right? Only partially.

The trial, which is just entering its third day in Stockholm, Sweden, the home of Pirate Bay, pits the music industry, specifically, 20th Century Fox, Columbia Pictures, Universal, Warner Bros., EMI, and Sony BMG, against peer to peer music, video, games and software bit torrent site the Pirate Bay.

Not to get too technical, Pirate Bay hosts torrent files which allow users to download files in parts and at greater speeds from a lot of different sources. The Pirate Bay is basing its defense on technical details, details which the prosecution is having difficulty understanding - the main argument is it only hosts the torrents on its servers not any copyrighted material therefore it can't be charged with copyright infringement.

The company, in its five year history, has always laughed off 'cease and desist' letters and other threats from the music and film industry before but has finally ended up in court. But is the music marketing machine completely innocent in the growth of file sharing online and therefore deserves to win?

As victims of unethical operators with no regard for intellectual property rights in Malaysia ourselves we are sensitive to copyright and IP issues but I think the music industry and to a certain extent the film industry has got it wrong for a long time.

It is hard to feel sorry for an industry in decay the way the music industry is. Consumers seem to have said if you cannot find a better and fairer way to distribute music well, we'll do it for you.

It's well known that artists do not get a large slice of the profits from the sale of each CD with the music marketers arguing musicians wouldn't be so popular without the millions that go into promoting each album. The trouble is the way musicians get popular is changing as well, there are now about a dozen acts you would class as commercially very successful who started out as MySpace, Facebook or YouTube acts.

Should music and videos be free? Of course not. Who would continue to make music if there were no commercial gain, except hippies and church choirs. But if there was a more equatable way of purchasing music that didn't build in all the marketing costs and pass them along to the consumer they might find the business not looking so precarious.

For instance if you discovered a band online and you went off and bought their CD why should you pay the producer's marketing costs if you discovered the music virally?

Apple has it partially right but not fully. In a number of countries the iTunes store offers pay per
download songs, TV episodes and movies and, despite the hugely annoying DRM (digital rights management code attached to the songs, which means you can only play it on 5 devices and pretty much only in iTunes) it is more convenient than having to chase music on bit torrents, plus the files are stable and the libraries huge.

But it isn't available here in Malaysia like many Asian countries.

Bit torrent downloading here isn't a huge issue I guess because of the terrible broadband speeds Malaysia suffers with compared to many other markets and the ready availability of content like pirated videos, not just at the street sellers around Bukit Bintang but in proper shops across whole floors of malls in places like Little India and China town in KL and throughout other towns like JB.

If copyright owners, like the ones trying to close down Pirate Bay this week decided they wanted to start charging equitable prices for songs that could be bought separately or for a bundled price as an album they would certainly pick up some of the revenue they are losing out on through the massive downturn in CD sales over the past 10 years - due largely they argue to peer to peer file sharing.

But they seem to want to stubbornly protect an old business model at a time when old business models are falling daily in the face of tough economic times and changing consumer habits of consumption.

Also, by taking on a very vocal and very powerful internet community, even if the labels win they won't be winning any friends and the considerable backlash is well under way with blogs, forums, social news sites and tweets pulsing with anger over the trial.

If the Pirate Bay is going down it will go down as it lives, in swashbuckling style. The founders have long run a section on their site where they lampoon legal threats from record companies and artists who try to have their content (err the bit torrents) removed.

The founders have been turning up to the trial in a cheerily painted bus and remain defiant, blogging about the trial as it happens and fans and supporters have been turning up to cheer them on waving Jolly Roger flags and banners. The founders are certainly playing to the crowd.

"The record companies can go screw themselves,” was what founder Gottfrid Svartholm said about the record companies suing Pirate Bay.

Socialising online is having a dramatic impact on consumers and if companies and whole categories don't get that then it paves the way for someone who does get it to create an opportunity.

Maybe the music industry will be walking the plank on this one whether they win or lose (ok that was unecessary...)

Monday, February 16, 2009

The customer is always right ( the way of my social life)

Let me tell you a tale of two customer service experiences which reveal a lot about what is terribly right and terribly wrong with the razor sharp edge of all marketing where your front line meets your purchaser, the art of customer service.

The first was a wet market in Chow Kit where I have just started to buy food essentials on a regular basis. It was a little bit daunting at first the market is huge but it's extremely rewarding if you are prepared to dodge flying chicken parts and wade through puddles of animal's blood and other liquids.

Here I can get served by the guy who caught the fish, slaughtered the chickens and grew the chillies. In terms of his company, him and his family, he is the brand custodian, he knows his product, he can tell you where it came from and he can tell you quite a bit about it. Despite clearly getting up at a time on a Saturday morning when many of us are just getting to bed, he's relatively cheery. His prices, even though i am pretty sure I am getting a "special price", are still a lot cheaper than the fancier supermarkets.

Which brings me to the comparative experience.

If the market in Chow Kit sold coffee beans, decent olive oils and poncy tomatoes dried to about five different stages then I'd have no need to go to a more conventional supermarket at all, particularly the sort set up to separate foreigners, who suffer from occasional culinary home sickness, from their money.

I do once a week have to visit a particularly fancy supermarket in the Pavilion and on Saturday I found myself in this very supermarket and with a basket full of over priced items approached a check out.

This and not the prices is always the worst part of a visit to this particular supermarket. Often when you approach there are one but usually two very young staff clearly making plans for the rest of the weekend, none of which involve running your grocery items through their check out.

If they do break up their conversations long enough to provide some customer service, it is only to lazily push things across the scanner whilst getting involved in conversations going on several checkouts away where, like myself, there are more frustrated customers helpless to do anything but wait until the misery ends and they are out of the store.

Instead of providing a welcoming environment, which makes you want to linger and therefore help the store's owners with their ultimate goal of shifting inventory, makes you feel like you are an un-invited, over-aged and therefore somewhat creepy guest at a teenager's birthday party.

I'm fine with this vibe in a clothing shop, because it's a great indicator I am too old to be shopping there, and I am ok with this in a music shop, I can even tolerate a certain amount of it in an Apple store as long as the young staff know at least as much as I do about the products and preferably more - but in a place where I buy bread - no thanks.

Don't get me wrong I used to have part time jobs when to put myself through university myself and spent a bright shining year as a pizza maker where I was every bit not there as these guys, however I had a boss who'd kick us up the proverbial if we ever misbehaved in front of, or disrespected, customers.

The final straw on this particular visit on Saturday and I have to say most visits to this supermarket are very, very similar, was when my cashier and his cheer squad managed to ring up something wrong with my bill and had no idea how to undo it. What ensued was an argument about who would go and get the manager that went on for several minutes and left me asking "aren't there any adults that work here".

Of course my reply was a shrug from my server and his cheerleaders and after several more minutes, during which absolutely nothing happened I grabbed my credit card and said "you know what I'll come back another time". The reply was a giggle.

So the store loses a customer, one who buys something at least once a week and I tell everyone I know, and no one ever even hears about it and the customer service staff really don't care and there in lies the problem.

The marketing department may be pretty busy tying up partnerships, running campaigns both in-store and external, managing the extremely complex art of in store marketing and point of sale for numerous brands, but it never hears that a lot of the good work it does is undone by transient part-time staff who really have no association with brand or even know they are representing one.

It certainly isn't a unique Malaysia issue. Down South the problem there as well but shows itself in a different way (yes even in the service culture of Singapore). Five people will over-enthusiastically yell "good morning" as you walk into a store which is nice, but then really don't know enough about what they are selling or have the communications skills to carry through on the initial promise.

Lets cut back to the stall owner in the wet market, he can tell you anything you want to know, he isn't sitting texting on his phone or talking to his other stall buddies or watching what is going on three stalls over while you are asking when and where the prawns were caught.

He might not have a fancy orange uniform or take credit cards but he's living his brand because he knows his brand and he knows there are 40 other guys who could just as easily take my money.

You'd be surprised how many marketers are talking about a return to values and understanding customers on a more personal level as part of their survival strategy.

I say bring it on.