Next Big Sound (a/o June 18th):
Says it all, doesn't it? Those words were actually uttered in 2008 by then Universal Music Group Chairman & CEO, Doug Morris. And it was one of several skeletons that suddenly appeared during Senate hearings on Thursday related to the proposed merger between UMG and EMI.
Throughout the deliberations, one question kept resurfacing: could a combined Universal Music and EMI effectively prevent any serious digital music startup from getting off the ground?
Senator Al Franken: "Thank you Mr. Chairman, first Mr. [Lucian] Grainge [current UMG CEO] I want to thank you and your staff for getting the information I requested yesterday. As I mentioned during our meeting I was very concerned when I heard that major record labels like yours and Warners are requiring digital platforms to turn over a piece of their equity as a condition of licensing your music library.
[pause]
"Now I understand this doesn't happen in every digital deal, but I worry that if your marketshare - and you said you negotiate, and marketshare counts in a negotiation, that's what you do, you negotiate. That if your marketshare swells to approximately 40 percent you will have every incentive to demand more equity. A larger cut of ad revenues, upfront payments and other onerous terms from online startups as a condition of turning over your content. Can you explain to me why this isn't the case?"
Lucian Grainge: "Well firstly, in terms of what my predecessor said, who is great guy, I disagree with that. We...
[long pause]
"It is our complete - in our complete interests to create as many opportunities for the music that we create so that consumers can buy it. In terms of our deals, we have well over a hundred deals in the United States, we probably run into hundreds and hundreds of deals throughout the rest of the world. We are completely agnostic. However consumers want to buy our music - whether it's on the phone, or through a stream, or a subscription model, or ad-based, we love it."
lifer Thursday, June 21, 2012
Maybe, as a fellow artist/performer, The Good Senator Franken from the great state of Minnesota will introduce legislation forcing the major labels to create "earmarks" that designate a % of equity gained in these tech companies to the artists whose backs Mr. Morris conveniently, though typically, seems to have deleted from participation in the rapacious spoils.
Jim McDermott Friday, June 22, 2012
Univeral's market share going to 40% won't make any difference, they still already have enough % to cripple any service they don't license. In reality, every major label does - no digital music service can be successful without most/all the music people know and love.
What truly needs to change is HOW digital music gets licensed for "interactive" performances, and that means changing the DMCA. Statutory licensing covers non-interactive services, but if you want a play on demand, jukebox type service, you need to negotiate with each major individually, and you get raped. In the pre-digital days, anyone could open a record store or a radio station, and NEVER talk to a record company if they didn't want to. Now you need to agree to a full body cavity search just to sell a Lynyrd Skynrd download.
None of this will ever get better until their is a statutory license method for interactive services and/or the DMCA gets revised or revoked.
@pumpsessions Friday, June 22, 2012
DAMN! Al Franken taking Lucian Grainge to school on the Senate floor
wallow-T Friday, June 22, 2012
One would have thought these issues were settled in 1948 (United States v. Paramount Pictures Inc, also known as the Paramount Decree) when the movie studios were forced to give up control of the theaters, because that sort of "vertical integration" was a violation of antitrust law.
On the other hand, antitrust law has mostly been a dead letter for the last 30 years, though it seems like it might be making a resurrection.
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