from the it's-that-simple dept
Mathew Ingram covers the details of Muxtape's run-in with the RIAA. As you may recall, last month the rather useful site that let people create online "mix tapes" that could be streamed to others was shut down thanks to the RIAA. The site's founder has now admitted that he tried negotiating with the RIAA, but that it was nearly impossible. The RIAA's representatives started the "negotiation" by saying they were about to shut the site down, and then complained to Amazon (whose S3 service hosted the files) to get access to the files blocked. Now, that concerns me for a few reasons. I had created a Muxtape when it first launched, but it had no RIAA label music on it. So, why would Amazon block access to it?
However, the real point of the post is just to highlight how the RIAA views these things. As has been discussed, the RIAA wants to shut down these types of sites. By now, we've seen the pattern over and over again. The RIAA has always been unable to actually innovate with its own online offerings -- in large part because the record labels still think about how to control the music and how to limit what consumers can do with it. So, instead of learning what's innovative, the RIAA has simply decided on a two pronged strategy: (1) get every new and innovative site shut down and (2) offer them one way to return: if they hand over a big chunk of equity.
Very few people seem to be talking about this, but most of the "agreements" that the big labels have reached with various new and innovative sites have involved handing over equity. Basically, the record labels are using a protection racket system: give us some equity, or we'll shut you down. Of course, all this is really doing is slowing down much needed innovation in the music marketplace. Instead, we get bells and whistles like MySpace Music (owned, in part, by the major record labels), rather than something truly useful and innovative.
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