Yes, another RIAA discussion

[Jobber of the Week 0]

Your 99c belong to the RIAA - Steve Jobs

By Andrew Orlowski in San Francisco

Posted: 07/11/2003 at 11:20 GMT

 

Wasn't the Internet, this weightless kingdom of bits and bytes, supposed to make distribution costs just vanish? Apparently not.

 

At an Apple financial analyst conference on Wednesday CEO Steve Jobs admitted that Apple makes no revenue from the online download service, the iTunes Music Store, that he launched in April. As iTMS is the leading download service, with 80 per cent market share (or so Jobs claimed), where's your 99 cents per song going?

 

Well, although it costs nothing for the record industry pigopolists, this small ragged army, to make a digital version of one of its hoardings available to hear, somebody must pay. It costs Apple real dollars to provide the hosting service that delivers that digital file to you, and to write the sophisticated software that delivers it. Meanwhile, almost all the cash is flowing back to the copyright holders. Who, when you last looked, were a dinosaur oligopoly of five record labels, desperately seeking a way to preserve their copyright cartel into a new century. They were down, and they were out: but Steve Jobs rode to their rescue.

 

"Most of the money goes to the music companies," admitted Jobs.

 

"We would like to break even/make a little bit of money but it's not a money maker," he said, candidly.

 

So now we have it on record: the music store is a loss leader. Jobs said Apple would pay its dues to the RIAA, then seek to make money where it could, from its line of hardware accessories. When the conversation turned to rivals such as eTunes and Napster, Jobs said: "They don't make iPods, so they don't have a related business where they do [make money]".

 

Running counter to several thousand years of basic human observation, Apple decided it could afford to control those points where we share music. It developed an opportunistic business with such compromises built in: a plan is to infect as many computers it could with restrictive DRM technology to allow us to rights we once took for granted. But why, you ask, is Apple helping an extinct, and unworthy industry back on its feet? Precisely why does this strike you as greedy, desperate and gasping? Let us explain.

 

DRM is non-negotiable

Digital media presents with a particularly nasty social problem: we love to share and enjoy our common culture, but we want the artists to be rewarded, too. But when the distribution medium is as careless and fluid as the Internet, dues are easily overlooked. We're simply too lazy to reward the artists. However, inspired by NGO-backed initiatives as the move to low-costs drugs, a global consensus is coalescing around the idea of something called "compulsory licensing".

 

This can take many forms, but if you want it simple, it means a cent on your income tax, or your blank CD purchases. Are you still standing? Good, for this creates a vast pool of wealth from which the artists can be rewarded. It's not alien to most people: we pay taxes everyday for roads we don't use, or healthcare for neighbours brats we'd rather see strangled. But that's how society works: with a bit of give and take. And if it means the artists gets a guaranteed income, that, we can generally agree, is a good thing. Fortunately the technology helps us here: because unlike most taxes, we'll be able to target the most popular. And all this can be done while preserving your anonymity, too.

 

Imagine such a model: you could click, download and play your favorite as much as you wanted, safely knowing that artists wouldn't be being ripped off, and that your clicks were earning them more money. Doesn't that make you feel warm and fuzzy?

 

Stripped to the core, compulsory licensing resolve two real social nasties without each side losing face. A flat tax is simply the easiest way of getting rid of the problem: we all get to swap music, and all the artists get paid. Now, problem: go away. And it's gone.

 

It doesn't make Steve Jobs feel warm and fuzzy, however, because he thinks he sees a real nasty, short-term business opportunity. Always a nervous kind of character, one to jump too early, Jobs sees a window of opportunity, by tying Apple to be the RIAA's slave.

 

When that 99 cents leaves your wallet, the RIAA monopoly swallows most of it, and the credit card companies swallow the rest. As the supplicant in this relationship, Apple is left holding the can.

 

While much of the received wisdom in both the music industries and technology industries see compulsory licenses in one form or another as inevitable, both Apple and RIAA are agreed on the short-term solution. One where the ancient copyright rules spin the money back to the pigopolists, and some sucker, like Apple, is left holding a brand of dubious (and soon to be extinct) value.

 

Alas it's Jobs who wants to be first - the first tech CEO - to offer himself up for a beheading. Having got so much right about personal computer ergonomics, it's initially surprising to find Jobs accepting a deal on such bad terms. At Wednesday's conference call, Jobs sounded positively happy that he was losing money on iTunes, so he could make the RIAA that little bit richer. But vanity plays havoc with even the finest minds.

 

At the end of the day it's for Apple's board to peg Jobs' peculiar exercises with such diametric labels as "excusable vanity" or "hopeless cause". But however you sliced it, and with the weight of history bearing pretty heavy, Steve Jobs' decision to give the RIAA a perpetual monopoly doesn't look so smart. As Jobs admitted, Apple is in a supplicant position in which it makes no money.

 

We like having Steve around, as the Jobs judgement is typically both coherent and devoid of technoutopian fantasies, but this could be fatal.

 

http://www.theregister.com/content/6/33850.html

 

Mmm, well, so much for that being the proverbial solution. Any bets on how much longer it lasts? Anyone?

[EricMM 0]

I don't understand how Apple should be losing money in this.

 

How can the RIAA completely ask for all the money here? Apple is attempting to create a 21st century business model for sharing music. And they're doing it. If it fails because RIAA took too much money out of the system, there's no way they'll ever stop piracy.

 

I guess it all goes to show that the RIAA business model will never work with downloadable music.

[Slayer 0]

I considered writing a long parody script for this, but quite frankly I don't feel like it right now...

 

RIAA wanted a viable yet appealing model for providing cheaper music online compared to CDs on a store shelf (and to reel in the more honest filesharers who actually want to see their favorite artists get compensation)... along comes Apple with said model, but the RIAA apparently is squeezing the system dry right off the bat, so much that it will not have any long-term viability.

 

Now, I know people are gonna tell me about the objective of running a business and industry (money), but everything the RIAA has done to this point (including this) goes to show that it is forsaking the future for the present.

[kkktookmybabyaway 0]

RIAA wants something (sales from songs downloaded via the Internet) without having to pay for it.

 

Downloaders want something (music) without having to pay for it.

 

At least the RIAA has something in common with its "customers"...

[godthedog 0]

of course this isn't going to make short-term money, innovations are supposed to be about long-term gains. this will depend on how big the itunes phenomenon gets; if it gets popular enough, apple can convince the RIAA how valuable it is and renegotiate.

[Slayer 0]

RIAA wants something (sales from songs downloaded via the Internet) without having to pay for it.

 

Downloaders want something (music) without having to pay for it.

 

At least the RIAA has something in common with its "customers"...

Best. analogy. ever.

[Lil' Bitch 0]

Proves the greediness of the RIAA

[Thoth 0]

Don't underestimate Steve Jobs. He has done some amazingly wacky shit before that actually worked. Though he has had failures, too.

[Guest Cerebus]

Has anyone here actually USED iTunes? It's absolute shite, nothing above 128 kbps, a really bizzare and stupid search system, and dl speeds that aren't that much higher than your average dl off of Kazaa.

[sfaJack 0]

nothing above 128 kbps

If that's true, then I won't be using any this (or any other pay service if they're all the same way) until they make 320 kbps available. I'm willing to accept a 128 kbps file off Kazaa, but if I'm paying for it, then I sure as hell better be getting a top-quality file.

[Jobber of the Week 0]

I'm not exactly sure on all that, but it is AAC and actual audiophile magazines and the like have done comparisons and found that AAC files DO sound better than MP3 files. You can try and argue that evidence and say that you've downloaded a dozen albums of Kazaa and you have the experience to know in these matters, but these were actual studies. I'd link to them if I had them.

 

I've used iTunes for 3 songs so far and Napster for 2. Napster does sound like crap but that's because their using WMA. Ick. I understand why they do (it's compatible with a good deal of MP3 players), but for listening on my PC or burning to CD (I'm too poor for a player) I prefer iTunes.

[Mik 0]

Has anyone here actually USED iTunes? It's absolute shite, nothing above 128 kbps, a really bizzare and stupid search system, and dl speeds that aren't that much higher than your average dl off of Kazaa.

I download songs off iTunes in perfect quality in 5 seconds or less. It's almost an instant transfer. I'm not really sure what you're talking about. I've only downloaded two songs, but they were on my computer instantly. And it is by far the best computer music player...for organizing music and making comprehensive playlists. And if you live in a house with multiple computers (such as a college house) you can stream off everyone else's computer to play literally 10s of the thousands of songs.

 

I love iTunes, but the fact that I have an iPod certainly doesn't hurt.

[Guest Cerebus]

In August, when I was living with my fiance, I was basically forced to use it... I told it to organize my music, and it decided to make folders inside my nice, neat artist folders to sort it by album. Not only do I not want that, but many .mp3s do not have anything in their album tags, so virtually every artist folder I have has an "Unknown Album" folder inside it. Not only that, but it chopped off the first (artist) half of all my filenames. Fortunately, I was able to restore the artist to the tags automatically using a renamer program a friend gave me; I had to pull the files out of those moronic album folders, though. Needless to say, after she went back to school in September I stopped using it.

[Jobber of the Week 0]

In August, when I was living with my fiance, I was basically forced to use it... I told it to organize my music, and it decided to make folders inside my nice, neat artist folders to sort it by album.

Hey, when you start it up, it asks you if you want it to do that. You can say no. Really. I know. A ton of Windows users were bitching when it first came out about this. It's only because of your own ignorance and that you didn't look through the options.

 

Regardless, if iTunes has arranged all your MP3s and you don't want it that way, you can choose Consolidate Library from a menu and it will cram them all back into one folder for you.

[Guest Cerebus]

A ton of Windows users were bitching when it first came out about this

 

The purpose of a good user interface is to make it (relatively) idiot-proof. The fact that a whole bunch of people had this headache means that there is a problem with the intercace for the most part as opposed to the people who use it (if it had been just me then I would admit it would be all my fault).

[Jobber of the Week 0]

No, it means too many people stick with the defaults and do not READ what the opening wizard is saying. And again, restoring it is as easy as the Consolidate Library command.