ASCAP’s Buggy Whip Protection Act

dima2.jpgI caught word of the excellent Royalty Week interview with Digital Media Association Executive Director Jonathan Potter via Radio and Internet News. RAIN reported on DiMA’s response to the CRB decision; Potter’s take is exactly the same as mine:

I think the marketing departments and the promotions departments at the record companies are at war with the finance guys and the lawyers. The lawyers want to confirm that they have the right, and they have the ability to cut anybody’s throat whom they don’t like that day—take them to court. The finance guys need money. Their business is falling off a cliff, they need current revenue. The marketing and promo guys say, “Wait a minute, we should be giving these guys the music, and letting them play it. And begging them to play it.” The record companies need to figure out the business of the future, and they’re still figuring it out. And I think that Internet radio is suffering as a result.

“Begging them to play it.” Web radio has the potential to reach more listeners, and with more focus, than ever before. Yet Scarecrow John insists there’s no promotional value.

Potter’s thoughts on another matter, the recent ASCAP suit requesting an broad expansion of the definition of a “public performance,” are also dead on. If the court grants ASCAP’s request, listening to a song on an iPod would be considered a public performance subject to royalty.

Potter sees this desperate act as an inappropriate response to a dying business model:

Creators of new technologies, those creators of new business models, should not have to pay those who relied on the old business model merely because they changed the way things operate. The manufacturers of the automobile did not have to ensure employment for the employee of the buggy whip company when the automobile put the buggy whip out of business. And I’m not being harsh, this is reality, it’s economics. If you fly an airplane to get from New York City to Boston, the owner of the toll road in between can’t say, “Hey, transportation of any form needs to pay a toll on my toll road, because you could have taken my toll road.” The answer was I didn’t, I flew.

Read the entire interview at the Royalty Week website. You’ll need to the Acrobat Reader to view it.

Internet Music Fans Find, Buy More

Via RAIN, word of a study done by the Digital Music Association showing that subscribers to digital music services like Rhapsody, iTunes, LastFM, Pandora and the like have a bigger appetite for music, spending upwards of $300 a year on the Internet to feed their habit. Additionally, these consumers are more varied in their choice of genres:

Across all three digital music services nearly 60 percent of consumers are listening to more music since they started using the service.

Digital music services have had a positive effect on overall music discussion with friends and co-workers, which in turn has led to music service recommendations.

More than 4 in 10 digital music service consumers are discussing music more frequently.

More than 7 in 10 have recommended a music service to others.

Listening to and purchasing music over the internet has expanded the musical taste of the vast majority of consumers by allowing them to discover new artists.

More than 6 in 10 digital music consumers have discovered some new artists while nearly 1 in 4 have discovered a lot of new artists.

Nearly 7 in 10 consumers have explored new genres of music.

What to make of this? Far from being a scourge to the recording industry, the availability of music online drives a bigger overall hunger for it. The study also showed that these consumers discuss music more with friends and co-workers, and recommend the services they use to other.

The only surprise I found was that the number of concerts these consumers attend stayed basically the same. 67 percent attend 1 to 5 a year, and their Internet habits had no impact on that number. More likely, obscenely high concert prices keep them indoors – which is good news for Mark Cuban.

Almost half of them spend more than $200 a year on music. 13 percent spend over $500.

Why does the industry try so hard to punish their biggest fans? I’d be very interested in learning how much P2P activity these same consumers engage in. My guess is it’s a pretty high number, which doesn’t change their tendency to buy music.