Jeff Stuart - Memoirs of a CPUNERD

http://arstechnica.com/tech-policy/news/2009/04/should-youtube-pay-more-154-million-rickrolls-11.ars

The main argument being presented is this: Youtube (owned and operated by Google) is now a near-monopoly for video sharing. The music labels wanted more money for showing videos, and thus Google decided not to renew contracts in fear of losing too much money (in case you’re wondering, Google supposedly loses half a billion USD per year with Youtube). The record companies feel that Google must accept their terms and anything else is unfair.

So that’s the argument. Here’s the question for the music labels. If you think that people really want to see your videos, and they want it so bad that you (the labels) should be getting paid everytime someone views them, then why not either just use iTunes to sell videos (which you’re doing), or band together and create a site similar to Youtube. You can then charge per view or per video (unlimited views).

The answer: BECAUSE NO ONE WOULD PAY! iTunes makes the overwhelming majority of its music revenue from songs and albums, not videos. Youtube doesn’t charge to view their videos. People wouldn’t pay to watch them (at least not enough to finance an operation as demanding as Youtube).

Some might say “but it works on TV!” And you know what, they’re right. Because TV is a different model. People watch an entire show, and if a video happens to be on that show, then royalties are paid. However Youtube and the internet allow one to skip the fluff and get at what they really want, and only what they really want. The record labels refuse to face reality, that the internet and all the innovations thereby created have condemned their old model to death. The record labels need to change and figure out new revenue models (trying to milk Google and Youtube is not the answer), or they will die.

Trent Reznor, creator, founder, and artist under Nothing Records, realized this a long time ago. With one of his most recent albums, Ghosts I-IV, he offered a scheme where one ould get the music for free, or one could pay for higher quality versions, versions with extra media, and physical media as well. This worked! Radiohead tried something simila with a pay as much as you want approach. This didn’t work as well… But the point here is that bands and a few labels are trying new things.

The modern world of the internet is a fast-changing and unforgiving place for businesses. You either innovate or die. If all a record label chooses to do is try to prolong its dying breath by milking money from other businesses, may they rest in piece.