Seems only fitting they're named after a spy plane...

>> Tuesday, January 29, 2008

Apparently, U2's lifelong manager, Paul McGuinness, thinks customers are thieves--yes, he said that--and it would appear the band is endorsing that POV at least to the extent they're posting his speech on their website. He also seems to think your internet service provider should be spying on you, since he proposes that your ISP should be assisting the fight against digital piracy by blocking access to people who download copyrighted material.

Let's get a few things out of the way:
  • Downloading copyrighted material without paying for it is wrong.
  • Yes, I've done it too.
  • U2 is one of my favorite bands (but see following).
  • In fact, The Edge probably influenced my guitar playing when I was young more than anyone.
  • U2 hasn't done a decent album since 1997, and really, I'm actually the only person I know who liked it. (Screw you, "Please" is a great song.)
Anyway, back to McGuinness being a prat. Something else we need to get out of the way is that, seeing as how U2 has been increasingly irrelevant since 1993, it's a little hard to take McGuinness seriously when he says:
They [U2] are as ambitious and hardworking as ever, and each time they make a record and tour, it’s better than the last time. They are doing their best work now.
But he is their manager. I guess he's not going to say, "Hey, you remember U2, right? That Joshua Tree sure was an awesome record, right? 'Where The Streets Have No Name,' remember that one?"

But then he goes on to talk about and around the problem of what's wrong with the music industry, and of course he can't see the forest for the trees because he's in the middle of the damn woods with a shaky camcorder looking for Elly Kedward's house. To McGuinness, it's all about how
...the record companies, through lack of foresight and poor planning, allowed an entire collection of digital industries to arise that enabled the consumer to steal with impunity the very recorded music that had previously been paid for. I think that’s been a cultural problem for the record industry – it has generally been inclined to rely for staff on poorly paid enthusiasts rather than developing the kind of enterprise culture of Silicon Valley where nearly every employee is a shareholder. opposed to the way in which you now have only four major labels dominating the music industry and releasing a monotonous slab of inferior product that audiences tire of too quickly to invest in.

Let's take a minor side path for a bedtime story: once upon a time, there was a tiny record label from Jamaica that specialized in reggae and similar styles of music. This label was small, but fierce, and although they struggled just to stay alive, they were valiant. One day, someone at the record label heard a demo and obscure single recorded by four Irish teenagers who could barely play their instruments. The tiny label began to release albums by the plucky Irish lads, who made up in moxie what they lacked in proficiency, and each album did a little better than the one before until a hot July day when the young band appeared at the big international music festival. Lots and lots of bands were there, having come from all over the wide world to play, but the plucky Irish band pretty much stole the show, going from "minor band with respectable and devout following" to "international superstars who get to meet the President of the United States like Elvis did, only they're completely sober (notwithstanding those ridiculous sunglasses)."

The point of that little diversion being this: until the 1990s, there were a lot of small and mid-sized labels. Independents like Island, A&M and IRS, subsidiaries like Reprise. It wasn't just the giants like EMI or Warner, which was good because the giants didn't always discover the good stuff first: it wasn't the giant labels that were on the ground floor for punk, new wave, metal, rap or grunge.

There's no way that a little band would win a talent show and get signed by a small, desperate label with nothing to lose these days. Oh, you might see someone win a fake talent show like American Idol and get signed to a big-label subsidiary that tries to manage everything the artist does, sure. But at this point, the music industry landscape is dominated by four major corporations, and then you have miles of nothing until you get to the tiny little independents like FatCat and Saddle Creek that only exist because of the internet: they have international reach because of the web and only because of the web. Nor would you see any of the Big Four stick with a band through two or three marginally-selling records until they hit it big. (Another sidetrack: ever heard of Bruce Springsteen? Do you know how well his first two albums did? According to Rolling Stone, five million copies sold... combined. According to Wikipedia, Greetings From Asbury Park only sold 25,000 copies in its first year. Sales like that, you think a label would give him a shot at a third album? His third, by the way, was Born To Run.)

Or, getting back on track: U2 is The Man. They're Big Corporate Rockers distributed by a Big Corporate Label (Universal) and making deals with Big Companies like Apple and Microsoft. There is absolutely nothing wrong with that: my very favorite band of all time shamelessly sold out in the 1970s and hardly looked back. The problem is when you don't know you're The Man, and it's pretty clear from the tone of his comments that McGuinness doesn't get that he's The Man and that U2 is a rock'n'roll dinosaur. It gives his whole speech a funny subtext: at 31 years together, the band he manages isn't that different from Pink Floyd (40th anniversary of their first album last year), but I doubt you'll hear him actually admit they're largely in it for the money at this point.

McGuinness proposes two solutions to the record industry's woes: a back-to-basics A&R approach that focuses on nurturing promising-but-uncommercial new acts and a focus on diversity by the labels... KIDDING! No, his proposed solutions are that the labels should, first:
Nonetheless there is one effective thing the majors could do together. I quote from Josh Tyrangiel in Time Magazine: -“The smartest thing would be for the majors to collaborate on the creation of the ultimate digital-distribution hub, a place where every band can sell its wares at the price point of its choosing”. Apple’s iTunes, despite its current dominance is vulnerable. Consumers dislike its incompatibility with other music services, and the labels are rebelling against its insistence on controlling prices. Universal the largest label in the world has declined to sign a long term deal with iTunes. “There’s a real urgency for the labels to get together and figure this out,” says Rick Rubin of Columbia Records.”
Yes. Because there would be nothing illegal about all members of an industry forming a consortium to price and distribute products, and consumers would love it. That's a wonderful idea. Idiot.

Here's McGuinness' other idea:
It is time for ISPs to be real partners. The safe harbours [referring to ISP immunity from liability for how a network is used] of the 1990s are no longer appropriate, and if ISPs do not cooperate voluntarily there will need to be legislation to require them to cooperate.

Why does all this matter so much? Because the truth is that whatever business model you are building, you cannot compete with billions of illegal files free on P2P networks. And the research does show that effective enforcement – such as a series of warnings from the ISP to illegal file sharers that would culminate in disconnection of your service – can address the problem.

A simple three strikes and you are out enforcement process will see all serial illegal uploaders who resist the law face a stark choice: change or lose your ISP subscription.
Now, the only way the ISPs could send those nasty letters would be to spy on their customers, to make sure that their customers aren't using the internet to illegally distribute certain material. See, not all distribution of copyrighted material via P2P is illegal: U2's entire back catalogue, illegal and discouraged; the latest update to the Linux kernel, legal and encouraged. How does an ISP distinguish between one million bytes of one versus a million bytes of the other? By inspecting the contents. And if the ISP gets it wrong? The only way McGuinness' plan works is if the ISPs are immunized from liability.

Swell idea. Much better than the "release less crap" option.

I'd like to eat dinner now, so I'll quit. Go read the speech: McGuinness also snipes at Radiohead and trashes Abbie Hoffmann, it's sort of amusing in a "He's detached from reality but I don't think he's actually on drugs" sort of way.

Oh, and Paul: I've neither purchased nor illegally downloaded the last two U2 albums. The speech you really should be giving is the "What the hell is up with all this weak shit?" speech. To an audience of four.


Jeri Tuesday, January 29, 2008 at 9:29:00 PM EST  

Eric, you make me feel like such a blog slacker because my posts are so much shorter and not as thoroughly researched. This one is probably longer than my son's average Honors English paper

I'm not complaining...

It's super-interesting information, and I think that the copyright paradigm needs to be totally changed to keep up with electronic media capabilities. I actually wrote a rant-ish blog post on the subject a few months ago.

Eric Tuesday, January 29, 2008 at 9:41:00 PM EST  

And here I was, thinking it should have been a shorter post! Thank you.

MWT Wednesday, January 30, 2008 at 12:57:00 AM EST  

I guess now would be a good time for me to say that I enjoy reading these types of long detailed dissections of things. I don't comment very often due to not having anything to say, but I do read them. :)

Someday I'm hoping to be able to just buy music directly from the artists without having any middlemen in the way at all.

rbird Thursday, January 31, 2008 at 9:43:00 PM EST  

the fact is that the we live in different times, where people have access to free downloads, etc. the trick is to create new ways to make money within this new paradigm (if you are someone who is in the music industry to make money. everyone else who is involved in music industry because they love to play and listen to music are still doing the DIY thing much under the radar.) companies like rhapsody are working within this new paradigm (pay a small monthly fee to listen to all the music you want all day-- you just can't download.) radiohead shook the bigwigs up a little when they offered their new album for free (or as much as you want to pay). i wish that execs would quit whining, honestly. i don't think suing 14 year olds who've illegally downloaded music is the answer. and no, i don't know what the answer is, but i know that solution feels wrong.

rbird Thursday, January 31, 2008 at 9:47:00 PM EST  

p.s. so he mentions companies who should, i'm assuming, let their employees be shareholders. yes, of course! but let's not forget google, the major company alive today, who is perhaps the largest "problem" for those who want to profit off of copyrights.

Eric Thursday, January 31, 2008 at 10:55:00 PM EST  

Or perhaps the music industry might be saved if they go back to an old paradigm. But I'll have more on that over the next two days--I wrote a long post the other day that I'm chopping into a three-parter, with part one up today....

The execs absolutely should stop whining, but they're not going to: the technology is making them obsolete. The truth is that the labels aren't far from a point where they can't offer an artist anything he can't do himself with his own server and plenty of bandwidth. Unless the labels figure out a new paradigm, they may be done and doner.

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