ARRINGTON WRITES UNNAMED EXEC SAID WHEN CD SALES BOTTOM OUT, MONEY WILL REVERSE FLOW
“It’s all part of a master plan, Michael Arrington in TechCrunch says a “big music label executive” has revealed to him. “The labels fully understand that recorded music, streamed or downloaded, is going to be free in the future.” Arrington reportedly had lunch with the unnamed executive, who revealed that by 2011 or 2013, when CD sales will have dropped to nearly zero, “music will largely be little more than marketing collateral, meaning that the Internet services… will be embraced in the future as ways to get the word out on hot new music. These services pay for the privilege today (either through high streaming rates or in court), but in the future they’ll be the ones getting paid by labels.”
But then why not flip the switch now? “Until then… suing customers and partners just makes too much sense,” Arrington reports his source as revealing. “Venture capitalists have directed hundreds of millions of dollars, via their litigation-mired startups, into the label coffers… Apple still sends a lot of money to the labels for paid downloads, and sites like MySpace Music, Imeem, Rhapsody and Last.fm pay big streaming dollars. Until CD sales really stagnate, all those revenue streams bring in more money than facing reality.”
Analysis: Can this actually be possible? The promotional power of Internet radio and other online services is something webcasters and broadcasters have understood, and argued, for years (and record label promotional execs would agree). But why would labels be spending millions of dollars lobbying for a performance royalty for broadcast radio now if their “master plan” includes this philosophical “180” in just a few years?
“It’s all part of a master plan, Michael Arrington in TechCrunch says a “big music label executive” has revealed to him. “The labels fully understand that recorded music, streamed or downloaded, is going to be free in the future.” Arrington reportedly had lunch with the unnamed executive, who revealed that by 2011 or 2013, when CD sales will have dropped to nearly zero, “music will largely be little more than marketing collateral, meaning that the Internet services… will be embraced in the future as ways to get the word out on hot new music. These services pay for the privilege today (either through high streaming rates or in court), but in the future they’ll be the ones getting paid by labels.”
But then why not flip the switch now? “Until then… suing customers and partners just makes too much sense,” Arrington reports his source as revealing. “Venture capitalists have directed hundreds of millions of dollars, via their litigation-mired startups, into the label coffers… Apple still sends a lot of money to the labels for paid downloads, and sites like MySpace Music, Imeem, Rhapsody and Last.fm pay big streaming dollars. Until CD sales really stagnate, all those revenue streams bring in more money than facing reality.”
Analysis: Can this actually be possible? The promotional power of Internet radio and other online services is something webcasters and broadcasters have understood, and argued, for years (and record label promotional execs would agree). But why would labels be spending millions of dollars lobbying for a performance royalty for broadcast radio now if their “master plan” includes this philosophical “180” in just a few years?
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