Mike McGuireConflicting reports as to YouTube’s revenue-generating potential were brought to us in the past week, and within the same news cycles, we also got news that the label’s industry group, the Recording Industry Association of America (RIAA) is going to eliminate its years-long campaign of suing alleged individual file-sharers.
First, we have this article in which a Universal Music exec is claiming that the label (the world’s largest music label in terms of revenue) is pulling in “tens of millions” of dollars in revenue from You Tube. And that’s certainly interesting in that YouTube is actually delivering on its potential for generating money. One can argue that the labels new-found willingness to experiment online is actually paying off. In fact, the newly revamped www.emi.com is exactly that, according to EMI execs, one big experiment. EMI’s site now allows users to make playlists of songs and videos, do searches for artists and get recommendations. (I’m going to be trying to get some insight about what recommendation system or technology they are using, so stay tuned.)
Then we got word that for all the joy Universal might be feeling for YouTube’s revenue model, at least one label, Warner Music Group, believes YouTube’s is not generating enough revenue. According to this (WSJ, subscription required) story, WMG states the revenue YouTube generates for the label is below that of other ad-supported portals using WMG’s content.
To me, this situation boils down to one word: negotiations. Expect more of this sort of thing any time licensing contracts are up.
And here (WSJ, subscription required, or here, News.com’s reportage)we note that the Recording Industry Association of America (RIAA) which represents the labels has decided that the copyright infringement suits its lawyers have been tossing out by the truckload during during the past five to six years have, will cease. “Over the course of five years, the marketplace has changed," said Mitch Bainwol, the RIAA’s chairman, quoted in the WSJ story.” Litigation, Bainwol continued in the story, was successful in raising the public’s awareness that file-sharing is illegal. The RIAA believes there is a newer, better tactic to pursue.
That new strategy? Working with ISPs to monitor traffic and (perhaps) shutdown users who are allegedly uploading or downloading copyrighted files. To which we say, “Good luck with that.” Mass lawsuits certainly raised the public’s awareness but not exactly in the way that the music industry hoped. As the lawsuits continued to pour out of the RIAA’s offices, there was an inversely proportional drop in the public’s opinions of the RIAA and the labels. For ISPs, trading in their protection from liability for what their users do with their broadband connections would seem to require a significant benefit. And talk about a slippery slope!
It’ll be interesting next year and it’s not all going to be sweetness and light. The reliance on CD revenues, rigid licensing regimes (that are reportedly starting to loosen) and an uneven approach to DRM when it comes to download stores, not to mention, um, the economy means 2009 will be an interesting mix of white-knuckle financial news, under-the-microscope examinations of how the social-media sites are helping, or not, the business case for musicians and music labels.
As always, things will be complicated by the stream of new technologies being deployed by consumers and their ever-shifting modes of consumption.
Comments Off
Category: Uncategorized Tags:
