Robertson: Major Label Licensing Will Kill Your Startup

Time to rub it in, baby!

And that’s exactly what Michael Robertson was doing Monday morning at SF MusicTech Summit.  In a licensing panel that predictably morphed into the ‘Michael Robertson Hour,’ the headstrong MP3tunes founder urged startups to avoid major label licensing – literally, at any cost.  “The odds of making money with a major record label are pretty close to zero,” Robertson told the assembled.  “I challenge you to name me a company that has [been profitable with major label licenses].  There just aren’t a lot of examples.”

The message is certainly getting jotted down by entrepreneurs, many of whom flock to SF MusicTech searching for investors and partnerships.  And, ideas on how to avoid various death traps and associated licensing quagmires.

Of course, Robertson is coming off of a monster victory over EMI Music, one that vindicated his model based on DMCA-based uses (and in fairness, punished him for violations thereof).  But the end result has gone far beyond Robertson’s little startup, as the ruling offered far more clarity for cloud-based duplications and even Grooveshark. “I’m reluctant to sign a license that is a death sentence for my company,” Robertson affirmed.

Now, EMI is appealing, and fighting for issues that go far beyond MP3tunes.  The reason is that investors – including many at MusicTech – are likely to skip label licensing amidst greater courtroom clarity.  And, most have already disavowed models that involve costly, big-label ransoms. “If you want to make money, that’s not the way to go…”

Report by Paul Resnikoff in San Francisco.

7 Responses

  1. @alexmidi

    Alex Midi

    habérmelo dicho antes, fue justo lo q me pasó a mi (pero I’ll be back)…

  2. @AllanM88

    While Robertson makes a valid point, the music business works on scale – and there just isn’t enough consumer demand for non-major label releases at the moment. Imagine Spotify or Rdio without major-label content…they’d be hard-pressed to get enough $9.99/mo. subs to be profitable being an indie-only streaming service.

  3. @kfriedson

    Katelyn Friedson

    Hey entrepreneurs – PaulG said it, now Robertson, loud & clear: stay away from music startups like the plague.

  4. garysip

    Though I have successfully secured licensing agreements with the Majors, it was a daunting task that took lots of time. It wasn’t cheap. But, we persevered and kept a low profile.

    That said, I do believe the Majors need to “empower” more digital partners. I can recall back that in the heyday of physical distribution it was fairly simple to establish an account to distribute physical product. They “empowered” just about anyone…and they flourished.

    But, with the digital era they did just the opposite and now they’re drowning.