Almost everybody pirates music. Most of them would pay for it

Interesting numbers from a British Music Rights-funded study of 14-to-24-year-olds’ music consumption:

A full 95% said they’d copied music in some way or another at one time or another.

And 80% would pay for a legal subscription-based music service that would allow them to discover, swap and recommend music.

BMR’s Feargal Sharkey – yep, him from The Undertones – states the obvious.

First and foremost, it is quite clear that this young and tech-savvy demographic is as crazy about and engaged with music as any previous generation. Contrary to popular belief, they are also prepared to pay for it too. But only if offered the services they want. That message comes through loud and clear.

But the BPI’s rather weird response to a piece by BBC journalist Bill Thompson suggests that the message isn’t being heard by the record companies. No Rock ‘n’ Roll Fun does a typically excellent fisking of their press release, which [IMO] is a rather nasty attack by the BPI that, by design or by accident, misses the point of the original piece (which XRRF links to as well).

[BPI: Music companies are radically re-inventing their business models in response to changes in how music fans want to access music online.] Music companies have been forced to reinvent their business models faced with a changed world – but not in a way they can take any pride in, as they did everything to avoid getting to that point. And they’re still not trying to respond to how fans want to access music – unlimited, everywhere, for a fair price – as they’re still hobbling files, striking exclusive deals, locking formats, trying to find ways to gouge customers. Has any fan ever said “hey, you know what I really want? A music collection that I have to pay for every month or it’ll just disappear?” I suspect not.

What we have here is a situation where copyright owners simply aren’t meeting consumer demand, because they’re stuck in the mindset of what works for them, not the consumers. The internet gives the consumers the power, and the challenge for the music business is to find a way to make money from giving people what they want.

The best example of old-style music business attitudes I can think of is U2 manager Paul McGuinness, who pronounced Radiohead’s In Rainbows a failure because it was being pirated. Never mind that it generated a storm of publicity or that the album reached number one in the album charts; the fact that the free download ended up on torrents did Radiohead a favour. Delivering huge numbers of direct downloads isn’t cheap, and everybody who torrented In Rainbows saved Radiohead a few pennies on their server bills. So by torrenting the album, the pirates saved Radiohead money. Bloody pirates!

Blame Canada

Oh, for crying out loud.

OTTAWA – The federal government is secretly negotiating an agreement to revamp international copyright laws which could make the information on Canadian iPods, laptop computers or other personal electronic devices illegal and greatly increase the difficulty of travelling with such devices.

…Called the Anti-Counterfeiting Trade Agreement (ACTA), the new plan would see Canada join other countries, including the United States and members of the European Union, to form an international coalition against copyright infringement.

…The deal would create a international regulator that could turn border guards and other public security personnel into copyright police. The security officials would be charged with checking laptops, iPods and even cellular phones for content that “infringes” on copyright laws, such as ripped CDs and movies.

The guards would also be responsible for determining what is infringing content and what is not.

The agreement proposes any content that may have been copied from a DVD or digital video recorder would be open for scrutiny by officials – even if the content was copied legally.

As Jerry Sadowitz memorably put it: “moose-fuckers!”

Digital music: still shit

Record labels are losing their battle with digital piracy as the number of people who regularly download songs legally falls back, research will claim today.

That’s in the UK where, by an incredible coincidence, the overwhelming majority of digital music is still sold with DRM.

Elsewhere in the Guardian, in a piece by Tim Anderson:

“The industry has finally been able to get some hard data about how removing DRM restrictions from legitimately purchased tracks affects piracy,” says Bill Rosenplatt, DRM specialist and president of GiantSteps Media Technology Strategies. “The statistics show that there’s no effect on piracy.”

So if people aren’t downloading legally, what are they doing? Surprise!

While 28% of music fans have paid to download music from a legal download store such as iTunes or 7 Digital, just as many have tried downloading from an illegal filesharing site.

Tellingly, 22% have carried on sharing files illegally, but only 14% have continued to download tracks from legal sites.

As ever, you can use a single album to demonstrate the problem. Let’s take Madonna’s Hard Candy, the Deluxe version with three remixes tacked on the end.

• Full quality CD version from Tesco, Amazon etc (without remixes) – £8.93 to £8.99
• DRMed, standard quality iTunes with a digital booklet – £9.99
• DRMed, unknown bitrate WMAs from Tesco Digital – £10.97
• DRM-free, 256Kbps MP3s from 7 Digital with a digital booklet – £10.99
• DRM-free, 320Kbps MP3s from torrents with scans of the CD artwork – nowt

True, the CD version doesn’t include the remixes – or “filler”, as it probably should be called – but given that digital is much cheaper to produce than the physical version, charging eleven quid for a download with a couple of extra mixes makes me want to torrent the Madonna album out of sheer spite. And I don’t even like Madonna.

In the UK, digital music is all over the place. Most music is still protected WMA (Windows) or AAC (iTunes), and while unprotected music is beginning to go mainstream it’s far from perfect. iTunes Plus is still being conspiciously ignored by most of the labels. Tesco now offers MP3s (of unspecified bitrate), but its selection runs to just 40 albums, most of them older than the universe. Play.com has a better selection at £6.99 for unprotected albums (of variable quality – most are 320Kbps, but some are 192), but there are huge gaps in the catalogue and £6.99 is still rather expensive for something whose manufacturing cost is essentially zero. Nice to see Half Man Half Biscuit in there, mind you.

If digital music was some new-fangled technology then the current mess would be forgivable, but it’s nine years since Napster demonstrated the power of P2P for distributing music, eight years since AllofMP3.com suggested an alternative, and seven years since the birth of Bittorrent and iTunes.

So why on earth is digital music still a mess? Former A&R man John Niven may have the answer.

Today you can walk into Asda or Tesco and pick up an LP for seven or eight quid. Back in the mid- to late nineties a new release routinely cost £12 to £15 – nearly £30 in today’s money. Factor in manufacturing costs of a few pence per unit and a royalty rate to the artist of about a quid and you’re have a profit margin to make Third World sweatshop owners wince.

It seemed that the artificially inflated good times would roll for ever.

Comes with music. And stupidly large bills

Is Nokia’s Comes With Music deal one of the dumbest digital music deals ever struck? Could be!

The deal, which enables the phone firm to give users unlimited music downloads, could cost Nokia a fortune.

The Register has learned that Nokia must pay the wholesale per-unit rate for downloads over a certain ceiling – believed to be 35 songs per user.

DRM “still shit” shocker

I wrote this in a PC Plus feature back in 2004:

It’s been a long day, and you deserve a treat. Maybe that reissue of the Jeff Buckley album, or the new U2 one. You make a detour on the way home to stop at the record shop, but it’s boarded up – it looks like it’s gone bust. Damn, you think. That’s a shame; still, there’s plenty of CDs at home. You grab a bite to eat and pull out a few CDs, but when you play them, something strange happens. OK Computer, Exile on Main Street, London Calling… all silent. It soon becomes apparent that every single CD you’ve bought from the local record shop has stopped working. You’ve still got some CDs from other shops, but they don’t work on your stereo and you can’t be bothered getting the HMV-compatible hi-fi from the attic, or the Tower-compatible one from the study.

MSN Music subscribers have just received this message:

As of August 31, 2008, we will no longer be able to support the retrieval of license keys for the songs you purchased from MSN Music or the authorization of additional computers. You will need to obtain a license key for each of your songs downloaded from MSN Music on any new computer, and you must do so before August 31, 2008. If you attempt to transfer your songs to additional computers after August 31, 2008, those songs will not successfully play.

Yet more proof that DRM stands for “bastardy bastardy bastards”.

DVD Jon strikes again

Fed up with DRM and file format compatibility hassles? The entertainment industry’s favourite chap, DVD Jon, may have the answer: DoubleTwist.

As CNet reports, DoubleTwist is “a free desktop client that essentially allows any kind of music, photo, or video file to be shared between a long list of portable media players, and through Web-based social networks.”

The idea, according to DoubleTwist founder and CEO Monique Farantzos, is that media files should be more like e-mail. It shouldn’t matter what service you create the file in, or on what type of hardware, it all should work together seamlessly, she says.

The PC version is available now, and a Mac version’s in development.

Government listens to turkeys, bans Christmas

Rather than go over the insane anti-file sharing plan the government apparently intends to implement, here’s an extract from this month’s The Word magazine talking about EMI.

The average salary across EMI is estimated at £57,328, heavily weighted towards the top. A FTSE 100 company on average has fewer than 20 execs on £500K-plus; EMI is reported to have over 50. These top execs are the ones sitting on top of massive severance packages too…

While all labels rely on that 10 per cent of signings who are multi-platinum successes in every key territory, EMI has (Norah Jones excepted) not signed and nurtured one this side of the millennium…

EMI ignored the warnings of the last ten years to its detriment. The same accusation can be levelled at all the majors. For the first time, a format (MP3) and a delivery channel (online) were developed outside of the labels’ control; their inability to understand the opportunities and possibilities were pre-Luddite.

So obviously, the solution is to cripple the internet industry. Sheesh.

Music biz to Apple: thanks for saving our necks. Screw you! And come to think of it, screw music fans too!

I’m hoping that part of Steve Jobs’ keynote on Tuesday will be the news that all iTunes music is going to become DRM-free, but I’m not holding my breath. The big four major labels have all made Damascene conversions to the cause of unprotected music downloads, but they want to sell them through Amazon, not Apple.

The official reason for this is that the majors are worried about Apple’s dominance of digital music. But the real reason is that they want you to pay more for your downloads.

To understand this, we need a quick bit of time travel. In the bad old days – a few years ago – there were loads of digital download shops, and they were all shite. It wasn’t that the music didn’t work on iPods, although that was a pain. It was that the rights you got for your cash varied from label to label, artist to artist, track to track. Some downloads could be burned to CD. Most couldn’t. Some downloads could be transferred to your portable player (provided it was a Windows Media one). Most couldn’t. Actually working out what rights each individual download came with took longer than it had taken the artists to learn their instruments, write the songs and get them recorded.

It was a bloody mess, and punters – quite rightly – stayed away in their millions.

Enter Apple and the iTunes music store. Where there was confusion, iTunes offered simplicity. Yes, the tracks were copy protected – the record labels wouldn’t let Apple sell the tracks otherwise – but the protection was consistent, and so were the prices. You knew that a download cost X, could be played on X machines, could be copied to your iPod as many times as you like, and could be burned to CD.

Punters – quite rightly – shopped in their millions.

The difference between iTunes and everybody else was really, really simple. The other download services’ terms were dictated by the record labels, who didn’t give a toss whether the result was confusing or punter-unfriendly. iTunes, on the other hand, was more interested in making things simple for you and I.

It turns out that if you treat music buyers with a modicum of respect, they buy music. Who knew?

So what’s happening now? Apple has been banging the anti-protection drum for a while, and the labels have belatedly come to realise that Steve Jobs’ “thoughts on music” open letter – basically, DRM is shite and alienates legitimate punters – was bang on. But they also reckon that Apple has got too big for its boots, so while they’ve embraced DRM-free downloads they aren’t letting Apple get them.

A bit part of this is trying to knock Apple down a peg and show Steve Jobs who’s boss (which is ironic, as it’s the labels’ insistence on DRM that’s created the iTunes/iPod lock-in that helped make iTunes such a big deal). But more than that, it’s because the labels hate the idea of fixed prices for music. The idea that a new song is 79p and an old song is 79p appalls them, and if Apple is the only game in town then that’s what they’re stuck with. Cut Apple out of the equation, though, and they can start varying pricing.

And ultimately that’s what this is all about. Despite the massively reduced production costs of downloads, despite the massively reduced distribution costs, despite the record contracts that mean artists get a pittance from download sales, despite the Long Tail that means selling lots of old records can mean healthy profits, what the labels really want is to put the price of music back up again.

Hands up anyone who thinks variable pricing means new tracks will stay at the same price while old stuff gets cheaper?

Update, 15/1: the New York Times goes into this in some detail.Икони

Sony BMG drops the DRM and makes everything easy

This is brilliant.

We’re pleased to announce we are the final major music corporation to release electronic tracks without that pesky DRM! All you have to do is leave your house, go to a selected retail outlet, buy a special card there, go back to your house, scratch off the back of the card to find a code, go to our special MusicPass Web site, enter said code, and download one the 37 titles we have available, from Celine Dion to the Backstreet Boys!

[Via Daring Fireball]

RIAA makes last-minute bid for “dumbass of 2007″ award

Sometimes the RIAA reminds me of an unpopular child who grows up to become a minor official in something bureaucratic: now he’s got a little bit of power to abuse, he can wreak his terrible revenge by being really annoying and petty. The Washington Post reports:

In legal documents in its federal case against Jeffrey Howell, a Scottsdale, Ariz., man who kept a collection of about 2,000 music recordings on his personal computer, the industry maintains that it is illegal for someone who has legally purchased a CD to transfer that music into his computer.

And it is, technically (well, it is in the UK. Is it fair use in the US?). But actually trying to enforce it when piracy is rampant is just dumb.