Six Pixels of Separation - Marketing and Communications Insights Blog and Podcast - By Mitch Joel at Twist Image
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...)