Copyrighting Themselves Out of Business

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If there is any industry who is less out of touch with its customers than the music industry then I defy it be suggested. As if going after die-hard fourteen year-old Coldplay fans wasn’t enough, record companies are now extending their copyright war by taking legal action against websites that offer unsolicited music scores (BBC news). When are the CEO’s of these belligerent organisations going to wake up and realise that you don’t make money suing your customers?

Since the arrival of MP3 files, record company chiefs have been on nothing short of a witch hunt to identify the key perpetrators of their traditionally gargantuan and monopolistic hold over music buyers, fining key offenders of the Copyright Law up to sums of $150,000. Unlike their plans to prosecute websites ‘illegally’ publishing music scores however, the disolusioned Chief Executives and their equally moronic corporate camaraderie of amateur A&R producers haven’t been able to touch offending sites like KaZaa, Grokster and Morpheus for as far as legalese is concerned, these sites are just ‘pipelines’ and the prosecutable offenders are, unfortunately, individuals.

Most industry chiefs would have acknowledged, logically enough, that the sheer number of offenders was too overwhelming on both time and cashflow to address through the courtroom and responded to the problem by trying to provide some alternative platform for distribution to the one their ‘customers’ were currently using, offering features which made them want to pay for it. But the Magnates of Music have never much cared for treating their customers with courtesy, and they weren’t about to start this time round.

What has transpired is a five-plus year spending spree of what can only be described as cringeable management practice, with the net result of most legal campaigns – even richer prosecuting attorneys. In the process, record companies have done little else but whine to anti-trust regulators about how margins are being squeezed and get away with outrageously gargantuan mergers the likes of which would be inconceivable in any other industry.

“The problem for major record companies is that they are less music publishers than they are music retailers” one industry executive told me at a party in London earlier this year. “Where they make their money is in the in-store margins, in selling CD’s. Record companies have been clamping down so hard on copyright because it’s the income stream. ”

Well that, and the fact that these companies are led by poorly-trained Chief Executives who have little understanding and no interest in learning about the dynamics of disruptive technologies. One can’t help but speculate whether had EMI spent the same time and money on developing “EMI-Tunes” as it has wearily suing teenagers over the past five years whether its balance sheet and stock price might not look considerably healthier.

Still, the news shows that they haven’t got the message yet, or the irony that they are suing themselves out of business as savvier competitors like Apple cash in on massive consumer demand, for the truth is, prosecuting two hundred and fifty offendors a year is not going to stop the other sixty million people from changing habits that mean more convenience and less hassle.

The rule “stay close to your competitor” was immortalised by Tom Peters and is almost universal today: His Master's Voice should do a little less shouting and a little more heeding of the voices of the masses.


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