Comments on: Radiohead's Web venture spooks Wall Street

Two analysts downgrade Warner Music Group and say artist defections, "free culture," and spiraling CD revenue mean more losses for record industry.

[xcrusader]

i have little sympathy

i have very little sympathy for companies that sue single mothers for 266K damages for doing something that hundreds of millions of people are doing.
Its clear that if the record companies would like to survive they need to adapt. I have been saying this since '99. They need to move from being a CD based sales company to an online library of all songs ever recorded professionally. The major labels must band toegther and offer all material online... snap in some discreet advertising revenue and...Charge a monthly membership to use the sattelite or cable tv model.
The provision of quality service that people want at a fair price is the only model that works in an open and free society... and thanks or curse (depending on what side you are on) the internet and digital copying has removed the power control of the labels. They have no choice, they must be competative again.

[teh_chrizzle]

adapt or die

recorded music is free, has been free, and will continue to be free forever. start selling other stuff or dry up and blow away. i don't really care what happens either way.

[russkeller]

You reap what you sew

The writing was on the wall and the adjustments were obvious and not THAT big a deal. But instead they're suing single moms. I hope they all loose everything for being idiots.

[TinyIoda]

hmm

while i agree in theory...alot of my favorite bands are signed, in some way, to these companies. without a constant stream of money they would be unable to produce the music i love!

not to mention the small unknown indie bands that have no cash flow.. with the downfall of the RIAA and its canadian counterpart.. these bands may never be able to get off the ground.

[hairywart]

You're Exactly Right

Such as the ability to use the English language properly in a simple header. Next time try 'You reap what you sow'. Plants are sown, pants are ripped. Get it? Good!

[Waam]

Losing Bargaining Chips Everywhere

The CD is rapidly moving the way of the dinosaur. I don't see
how Universal could dare stick their noses up to Apple at this
point. They want their piece, and sure, they deserve credit for
all their hard work, but they have to see the signof the times...
people just aren't willing to pay what they used to for music
anymore. Artists are going to have to bring thier music live, and
find other ways of making a buck, even if it's a little less buck.
It's what the market is princing their talents at. It's true, adapt
or die.

Then with TV shows... I think it's ok to try all things. I've tried
Hulu.com, but would rather watch TV. iTunes is about
accesability, and bringing my shows mobile and does a great job
at this. I have chosen this format, why would Universal not want
to continue to support thier customers this way? Hulu is an
undesireable version of my Tivo because I can't even keep it.
They might be making a good buck on the ads with Hulu, but 15
million is not so bad with a small but definately growing
audience on iTunes.

[WJeansonne]

The downloadable single sales are what's killing them

No longer forced to buy a CD loaded with poor performances or lackluster tunes to get at the one song you want. That business model is dead for sure. I can't believe they are still selling CDs for as high as $24 bucks. What a joke!

[Penguinisto]

Yes, no, and slightly maybe.

Certainly charging a mint for a typical album: 1-2 excellent songs, 2-3 other okay songs (depending), and the rest filled with crap... well, that's a dumb business model.

OTOH, Sometimes (rarely with an RIAA member-produced album these days, but once in awhile...) an album has music that takes time to grow on a person.

The band Dream Theater was like that - Their album "Images and Words" (the first one I bought from that band as a young man) had one song that got my attention immediately and got me to buy the thing. At the time, the rest of the songs just made me go "***!?" a lot. Over time, I went back to listen to them, and discovered that they were actually pretty good, and as my own music tastes grew and developed, I can say with certainty that perhaps only one or two songs on that album is still not-so-good.

It led me to seek out the rest of their discography, and I currently have pretty much everything they ever sang.

But... like I said, this is a rare occurrence. In most other cases, the album has a couple of decent songs on it, one really good one, and the rest suck. And that's if I get lucky.

This probably explains why I only buy from independent (read: Non-RIAA) sources these days... they usually give you a free listen of all their goods, and you can buy 'em as albums or as singles.

/P

[dargon19888]

TANSTAAFL applies.

AFAIK, the radio head album wasn't "free". There were some service charges and a minimum price set.

Moving forward, the issue is that you still have to pay for your bandwidth, servers, etc ... so you still need to make some revenue from the sale.

Yes the model is changing and the revenue the artists are going to recognize is from performing and licensing their songs, not from the purchase of CDs or digital downloads.

Current DRM technologies impact on the user's rights to copy their music and distribute to their own infrastructure of players. (Transfering their mp3s from their PC to their portable device to their car... all should be allowed.)

The music labels and the artists are going to have to adapt and come to terms with each other. While established stars can shun the producers and labels, upcoming stars cant. You can't get an audience without play time, and you can't get the mass appeal without marketing. So the artists may buck the system, they will not win in the long term.

[protagonistic]

RE: Radiohead album

"Of those who downloaded Radiohead's digital
album, In Rainbows last month, about 62 percent
walked away with the music without paying a cent,
reported ComScore, an Internet research company."

The biggest problem with studies like this is
that there is no way to factor in how many people
downloading the album were doing so out of
curiosity and would not have bought the album
anyway. The next biggest problem is how do you
factor in people who had never heard of them and
will now become fans.

The only concrete piece of data you can get from
this is how many people downloaded the album.

As for Warner, they are a dinosaur that refuses
to see the winds of change and they deserve the
fate that is coming to them. All they do is put
out canned music and movies with no real value
and then they expect us to pay for the garbage on
top of that.

[dinkeldorf]

That's scaremongering BS

The little bands have a better chance of success with microlabels that understand the modern mixed media entertainment industry than the current leviathans.

[Renegade Knight]

Wall Street is normally wrong.

Wall Street is normally wrong. They can guess a companies earnings to the penny but they can't figure out jack about what a company should do in the long run. They reward the short run which runs companies into the ground, while slamming long run decisions that can keep a company going.

If you read Wall Streets past reccomendations on what Apple should do (all short term) vs. what Apple did to be the succes it is I can rest my case.

Wall Street understands bean counting, but not passion. Passion about what they do is why Toyota, Apple, Google and others are doing well. Wall Street Bean counting is why GM, Gatewway and others...not so well.

If the music industry finds it's passion for music they will innovate new and better ways to get music to fans. Ways that work, and pay the bills.

[Nodack]

:(

We have had quite a music history in the US throughout the
years. We made it all the way to the 80s before big business
killed off any creativity. Now that you can steal music for free
too, it has pretty much killed what was left of the music business.

In a way it is really sad, but in a way I'm not so sad. The whole
music business needs to be blown up and rebuilt. The internet
has allowed people to find music that would never be signed by
a major label or played on any corporate radio station because it
doesn't fit the cookie cutter mold.

[rdupuy11]

RIAA's lies revealed

The RIAA just recently wrote a really long letter, having you believe their policy of suing fans was a success.

However, the drop in CD sales from $14 billion to $10 billiion, when, had it kept pace with inflation and the economy, should have gone to $17 billions....just shows that their policy is, not, as they claim, working...but IS, as so many others have said, a last ditch effort to keep a stranglehold on artists and the industry.

Record companies are dinosaurs...they serve no legitimate purpose in an era where distribution and manufacturing is all digitial.

What's ashame is that there are companies making money here...its just not the record companies, who, instead of innovating, made a grab to have Congress legislate their revenues (like they do in Canada).

Shame on you RIAA....now go die quietly.

[rdupuy11]

dreamworld

quote: not to mention the small unknown indie bands that have no cash flow.. with the downfall of the RIAA and its canadian counterpart.. these bands may never be able to get off the ground

That's not how the RIAA works. They aren't funding the small unknown india bands...thats rather a dream world you live in.

The RIAA tries to latch on to someone that is already a success, and take the majority of the profits for themselves.

The collapse of the RIAA, neither helps nor hurts a small unknown band...its always a huge challenge to make it big, and it always will be, because there are a lot of bands trying to make it.

It will be done in different ways, going forward.

[complex09]

This is all based on a phony story! Comscore is spyware!

Something very fishy is going on. This is the reason. Since Radiohead has dropped their record company and the album is only being sold through Radiohead?s website, they are the only people who would definitely know the sales / download number. Radiohead has very publicly said that they will release the information six months after the download release. Why all of the news companies are trusting Comscore company which is a known spammer and spyware installer is beyond me (check Norton and also McAfee).

Who on earth would allow a company to install a monitoring software to watch everything you do online. Especially while purchasing which involves disclosing your credit card numbers. This is called spyware. Not only that but how do they know how much people paid? You did have to pay at least $1 in service processing fees to download the album. Check out the web site!

Here is my take on it. Music companies are paying Comscore to release phony numbers to make the band look silly to prevent other bands from dropping their record company. I bet if there was an investigating reporter they could easily find the story. After all, why is Comscore putting out an effort to tract the Radiohead deal? Someone is paying them. Follow the money.

[k4v3h]

Record labels not in equation.

What people also forget is that the record company is not in the equation anymore. So Radiohead is getting almost all the buck in their pockets.
One problem with online distribution is online payment. I personally don't have a credit card and I live in Sweden were many has recently started to use credit card payment online, young people don't have credit cards at all. Most people I know don't shop regularly online because of a lot of security issues with payment online.
So online payment must become safer, faster and easier for me too start shopping online regularly.

[jc364]

Radiohead would have spoken about this

If Comscore was reporting bad information, then I think that Radiohead would have made this known.

The same sort of scenario as Radiohead's would happen if you put any product up for sale with the sign 'Pay what you want.' Imagine if a convenience store adopted that same policy. Its very hard to imagine different results. Virtually every store in existence has some sort of security installed because of a simple principle: Someone will cheat the system if they can get away with it. I'm really having a hard time understanding why the results are that surprising. Especially when many people don't even have the intent of getting something for nothing; they just want to listen to the music before they decide on a price to pay. I think that analysts jumped the gun on this... lets wait to hear what Radiohead has to say.

I do applaud Radiohead for trusting the fans and for cutting out the middlemen; I hope the results go well for them.

[mattumanu]

The real reason CD sales are down.

I wish someone would stop for a second and look at the CD itself. It's got songs on it, and a little booklet, and most of the time that's it. But look at a DVD. Most DVDs have running commentaries, extras, Documentaries... The value is huge, at a price of between 15 dollars to 24 dollars (not including special editions that cost more, that would be like the box sets released of certain bands). If you have a choice of buying a CD with maybe (I'm being generous here), 4 songs you care about for 15.00, or a DVD of a movie with gobs of extras for the same price, what would you do?

I realized my reaction was to buy the DVDs instead. Yes, the movie industry is having similar (albeit smaller) problems with piracy, but for the most part DVDs still have a greater value for your buck, even over a free copy you can get of a movie online. CD, on the other hand, have the songs, and that's it.

The record companies haven't just dropped the ball on music downloads, but also on value in general. I might buy more CDs if there were more value in them, or even DVDs of music with extra value, documentaries, interviews... But right now, there's no extra value.

In fact, I have some old vynal records, the big gatefold types with lyrics and large artwork... Beautifully rendered compared to CDs today. Here's "the point of no return", the front cover is gorgeous! The CD is this little tiny thing... meh! Back in those days people WANTED to have the full records because of the value... I wouldn't have settled back them for a low quality tape or high quality tape even! I wanted the big album covers!

Today, there's almost no value in a CD at all. The record companies have dropped the ball, big time.

[avonjax]

The real reason CD sales are down

I partially agree with you. But I believe the price of CD's in general is too high. I still believe there are plenty of albums that are great not just 2 or 3 songs. Radiohead's In Rainbows is a good example. It's really too bad that people had a chance to tell the record companies that this concept would work and that people would pay for a good product. Instead most people just downloaded it for free. (I paid 10.00 by the way.) And I think too that much of the product that is being released these days is not worth a dime. There are great artists out there who never get heard, because the industry has insisted on signing and releasing a "product" instead of a work of musical art. As long as the music industry is only about money and not the art, they will continue to dry up until they become extinct.

[BobKalk]

When the Epitaph is Written

Here lies the recording industry. Its demise assured by RIAA.

Creative ones live on, only the parasites are gone. Rejoice!

[fred dunn]

RIAA is struggling for it's life....

With all of the negative PR it's been getting for good reason it won't be long before it's paying members (studios, production companies) run away like rats off a sinking ship (good analogy).

I buy music either CD, DVD, or online, but I am sick and tired of the DRM in the online and DVD versions.

I am very happy to hear that some online stores are now offering DRM-Free MP3s instead of those draconian proprietary formats (Microsoft, Apple).

I don't think the studios and production companies will disappear but they do not have the stranglehold on the public that they once had and flaunted. As far as the RIAA, other than a standards group I think they will disappear.

[lingsun]

It doesn't matter. 62% of downloaders didn't pay

Any band stupid enough to give away it's music deserves what it gets.

[paulej]

Percentage of paying customers means nothing

What is far more important is the profit earned. If 38% paid for the music and the profit margins are higher, they may still have pocketed more money. Also, it is interesting to ask: did that 38% that downloaded music represent 110% of the customer base that actually paid for their last release? Interesting question. Perhaps they sold more than before... I just don't have the facts.

I'd like to hear directly from the band on how well the trial went in a few months.

[coryschulz]

Actually...

It's estimated that they made just as much money as they would've made had they gone with a record label. And this only takes into account the downloaders. They also offered a box/vinyl set for around 60 to 80 $ that, from what I hear, a lot of loyal fans were willing to pay. When you factor all of that together, they probably made significantly more than they would've had they gone with a major record label. And that's just in the last month. In the next few years, after the CD is in stores, and what not, they'll make even more money. So they probably made a few million dollars total so far off that one album. That's a couple hundred thousand a band member. That's good money for someone who already has made millions off of their previous records. They're not hurtin for cash.

[barrygaskins]

They still make more money

If they let the record label distribute their music then they get very little of the money the fans pay for the music. Of the 99 cent you pay to download a song from itunes the record label takes most of the money. The band might get a few pennies. So getting most of the money from 62% of the fans is probably a lot more money than the record companies would have paid them anyway.
Also a lot of the 62% of the downloaders would never have bought the cd anyway so they do not lose anything on them. I have never heard any of their songs but I am tempted to go download some and give it a listen to see if I like it. I might become a fan and send them some money if it is good. So they get a lot of valuable advertising. The label was going to charge a lot more than 62% of the revenue for promoting them.
But more important is the fact that they still own the rights to their songs. If they sign with a label then the label owns their songs forever. Now they are the masters and not the slaves.

[digitboy-201514575024412298112]

I tried to do the DRM...

But it DOESN'T WORK. I subscribe to Yahoo Music, Rhaphsody and Emusic. Emusic is lovely DRM-free music.

Yahoo and Rhaphsody are a scam, plain and simple. My player needs to be re-connected on a seemingly random basis to update licenses of the songs I've downloaded, otherwise they DON'T PLAY.

Even then, I have now lost about 20% of the songs on my player because they are "no longer eligible for relicensing". What a crock!

Or, sometimes the relicensing process doesn't work... and Yahoo Music tries (and fails) to walk me through a process of uninstalling the application and SEVERAL MICORSOFT HOT FIXES to get it to work again... after several days of effort.

THIS is the online convenience these services promised us? They should be prosecuted for selling a fraudulent product. And the RIAA should be sued for extortion.

I have NO SYMPATHY for the fragile economic condition of the record companies.

[benjwah]

Here frickin' here

Just chimin' in in total agreement

[paulej]

You could not have been more accurate

As everybody who bought videos from Google learned, when the shop closes you lose all of your investment. Google was kind enough (and had the cash) to give a refund. So, in essence, you're just renting the content when you buy something that covered with DRM. This is a very big difference from actually buying physical media.

I purchased several songs in the past that had DRM restrictions. Every single time I buy a new computer, I have problems. It is not fun. It's a huge waste of my time. Just imagine if you go out and buy 1000 songs at 99 cents and then discover that none work next week when you upgrade your system or when the company from where you bought them closes up shop.

It is not only the cost of the products, but the wasted time trying to address DRM issues. Even if a company gives you a refund for your purchase, as Google did, who pays for your time to go re-acquire the products you bought? Nobody, that's who.

It is my own view that music ought to be sold as such ridiculously low prices that nobody really cares about the price. They buy what they need for their MP3 player and don't worry about losing it. At 99 cents, people care. What about 5 cents? At what price would people feel comfortable considering the money they paid to put music on a device as entirely disposable? It is at that point where the music industry actually might see an increase in sales, because people pay for the same music over and over again. People would likely buy songs even if they did not necessarily love the song too much.

Has anybody explored the idea of pricing music at prices that makes the investment entirely disposable?

[JadedGamer]

Bogus data

Can the media PLEASE wait with their analysis of Radiohead's stunt until they actually release some numbers in a few months' time?

"comScore maintains a group of users who have monitoring software (with brands including PermissionResearch and OpinionSquare) installed on their computers."

Okay? It's a totally skewed sample.

[PFreak]

Rather than steal, why not just not get the music?

So many posts here say there are only one or two good songs per
album so why pay for the CD. If the music is that bad why are you
bothering to steal it at all? You don't get to decide how much you
are willing to pay for anything. Try going into a Porche dealership
and saying you'll give them $2,000 for a 911 and watch them
escort you out the door. If you like the song, buy it. If you don't
then don't steal it then ***** if you get sued.

[MSSlayer]

Copyright infringement is not stealing

Is it just paid RIAA shills that are here posting BS or are people really this stupid?