Irony: U2's 'Free' Concert At The Berlin Wall, Blocked By A Big Wall

from the u2,-tear-down-that-wall dept

Dementia writes in to point out the rather ironic situation of a "free" concert put on by the band U2, at the remains of the Berlin Wall in order to celebrate the demise of the wall... but MTV decided to put up a big temporary barrier around the event so those who didn't have free tickets could not even see the event. Yes, they erected a special "wall" to block out a free concert about The Wall. As Dementia noted with the submission, "you're doing it wrong..."

42 Comments | Leave a Comment..

U2 Manager: Free Is The Enemy Of Good; And It's Moral To Protect Old Business Models

from the morality-has-nothing-to-do-with-it dept

While Radiohead's manager has noted that file sharing is great for music and should be legal, it appears that his counterpart, Paul McGuinness, is sticking to his guns that it's evil, evil, evil... and it's all those darn ISPs' fault. He kicked this off over a year ago when he gave a speech blaming everyone but the recording industry for the industry's problems. You see, the problem was that ISPs, Google, Apple, Microsoft and Facebook weren't coming up with ways of just giving the record labels money. Apparently McGuinness has such a sense of entitlement that he thinks it's everyone else's responsibility to fix his broken business model. Since that time, he's continued to stand by this position even claiming that no other business models were possible other than having ISPs hand over money to any content creator.

In a new interview with News.com's Greg Sandoval, he stands by this position, even when Sandoval asks him about the examples of Radiohead and Trent Reznor. McGuinness totally ignores Trent Reznor -- which is too bad, since his business model experiments are a lot more complete and well thought out than Radiohead's little experiment -- and simply says:

I admire what Radiohead have done tremendously in seeking a new model. They would take the view, and I would share it, that perhaps price has been a big problem for the music business. The music business has tried to hold onto a price that was unrealistic for a long time now. I think wider distribution of lower priced things is probably the future.

But that didn't answer the question. He says Radiohead is "seeking" a new model... ignoring that they found one and that it worked amazingly well, without requiring an ISP tax. I'm wondering if he's simply ignorant of Trent Reznor's wide-ranging experiments.

But from there, he starts saying a bunch of questionable things, including the claim that we somehow need big record labels:

It's important to remember that the traditional worldwide star-making functions of the big record companies. There's nothing on the horizon to replace that.

Oh really? Has he not been on the internet? It's true that so far nothing has been able to totally replace big record labels' marketing clout, but there are plenty of interesting new services and tools out there that are quickly improving and quickly changing the marketing equation. To claim that there's "nothing on the horizon" simply suggests he hasn't been looking at the horizon very closely. If he wants a pair of binoculars, he should call us and we'll ship him a pair and even point him in the right direction of where to look.

Amusingly, when asked about the role of new technologies, McGuiness again displays his ignorance of technology. He doesn't discuss how it's made it much cheaper to perform, record, promote, distribute and share music. Instead, he only focuses on one thing: how can tech companies give bands money:

I would really like them to willingly go to the movie studios and the music companies and say this is how we can collect money from the people who are listening to your stuff and watching your movies. We acknowledge that it's the fair thing to do and we have some responsibility for doing it. Let's do it together and let's make some money.

How about he goes to those companies and explains why he isn't paying them for decreasing the costs of recording, promoting and distributing U2's music... all of which has helped to keep the band in the headlines, selling out concerts allowing them to bring in hundreds of millions. Earlier this year, we noted that Bono had said he was upset about piracy but didn't want to complain because he was too rich. Apparently McGuinness refuses to recognize that part of what helped make them all so rich were these tools that help promote and distribute U2's music for free.

And then, of course, he pulls out the old myth: that this somehow removes money from the hands of artists:

Artists are entitled to get paid, whatever kind of art they do, the same way technologists are entitled to get paid.

You know how technologists get paid? It's not because of any entitlement... but because they build a product with a business model that makes sense. There's no entitlement. There's simply setting up a business model that makes sense. And it works for musicians too -- big, medium and small.

And then he turns it into a "moral" issue:

I'd like to get a moral tone into the discussion. I think there is a big moral question for civilization.

To which there's an obvious response: where is the moral question when embracing these trends is making artists better off? All if the artists we've seen who have embraced these trends and smart business models finds themselves better off than they were before.

And then, amazingly, he tries to claim that the copyright lobbyists are simply outnumbered and out-gunned.

One official in Brussels, a senior Brussels civil servant, came up to me after I made the speech. I was there with a small group of lobbyists and he said to me 'In Brussels there are probably five or six lobbyists representing the content worldwide. There are thousands representing the ISPs, telcos and the technology industries.' He said it's really overwhelming the forces you have against you.

Basically, that civil servant lied. The entertainment industry has more lobbyists on this issue than anyone on the "other" side. And he makes it out as if all the ISPs are against him -- but some of the biggest, including AT&T are in agreement with the entertainment industry lobbyists. There are very few lobbyists (and they have much smaller budgets) fighting for the rights of consumers.

And then there's one final attack on "free" spoken from a position of supreme ignorance of how "free" works:

I started to glimpse the politics of it at that stage. I hope that our politicians, our journalists our media gain a sense of how much we stand to lose if free prevails. Ultimately free is the enemy of good.

What do we stand to lose? Restriction on how we can use products we legally purchased? Artificial restrictions on the enjoyment of content? New and wonderful business models that allow actual content creators to benefit, rather than siphoning money off to middlemen? Free is not the enemy of good. Free is a tool that, when used properly, has tremendous advantages. Many have already figured this out. The fact that McGuinness seems unable to do so isn't everyone else's problem. It's his problem.

36 Comments | Leave a Comment..

U2's Manager Says No Business Models Work... But Kicking People Off The Internet Will?

from the confusion dept

A bunch of folks have been sending in the opinion piece in the Guardian written by U2's manager Paul McGuinness expressing strong support for France's approval of a three strikes law (ignoring, conveniently, that the law was passed using trickery, telling everyone the vote would happen at a later date, waiting to most elected officials had left, and then passing the law with a vote when only a few people were still around). This isn't a huge surprise, because McGuinness has gone around (loudly) blaming everyone else for the problems in the recording industry (while reaping the rewards of the more than $300 million that U2 brings in per year). So, it's no surprise that he's in favor of laws that puts the onus on others to somehow fix the business model problems he's unwilling to fix. But some of his comments deserve a response:

There are a few simple reasons why the new law deserves strong support. First, the crisis in our music community is real. A generation of artists, all over France, and further afield, are seeing their livelihoods destroyed, their career ambitions stolen. Investment that should help them build careers is draining out of the industry. This isn't just a shift in the business model from recorded to live music. It's a catastrophe for all the business models, old and new. It is a myth that artists can build long-term careers on live music alone....

There are clearly people who oppose the new law, but I have not heard of any viable economic alternative to the system now being introduced, committing ISPs to helping protect copyright. The only other proposals offered look like solutions produced for the laboratory, not for the market place.

That's odd. For someone who claims he's "followed this debate closely" for him to claim that this is a catastrophe for all business models. After all, every single other business related to music has been doing amazingly well. And, we've gone through example after example after example after example of it working in "the marketplace" rather than "the laboratory." And we've discussed how it works for bands small, mid-sized and large -- and works in ways that has allowed them to make more money than they could have in the past. So, for him to claim that those business models don't exist or don't work is simply wrong. Furthermore, he pulls a sleight of hand by pretending that the only other business model is "live music." However, as we've seen live music is one business model that works, but not the only one.

But the key thing, is that McGuinness is confusing protection with a business model. He talks about all the problems with business models, and then seems to jump to the conclusion that kicking people off the internet will suddenly make people buy music again -- as if he can suddenly turn back the clock. Kicking people off the internet doesn't make them feel better about your product. It doesn't make people more comfortable giving money to the recording industry -- it makes them pissed off and eager to spend their money elsewhere.

It's the exact opposite of a business model. It's a "piss your customers off" model.

Meanwhile, the business models that work (the same ones McGuinness is apparently ignorant of) are all about the opposite: they're about appealing to your customers, connecting with them, building up a relationship and trust. McGuinness, instead, prefers to treat them all as criminals. He shouldn't be surprised when they respond with anger rather than money.

83 Comments | Leave a Comment..

Bono Upset About Piracy, But Doesn't Want To Protest Because He's Too Rich

from the interesting-reasoning dept

U2's manager, Paul McGuinness has made some news in the past few years for blaming absolutely everyone but the recording industry for the recording industry's problems. According to McGuinness, it's the fault of digital "hippies," cable operators, ISPs, device manufacturers, P2P software companies. Could it be the fault of an industry not adapting? Of course not. It's that everyone else needs to craft ways to help U2, a band that had just brought in $355 million in a single tour when McGuinness made those comments, more money.

It's that last point that apparently has Bono being a bit more cautious than his manager in lashing out. Bono has made some statements in support of his manager -- including a letter last year that seemed to blame tech companies. This, despite the fact that he's supposedly a venture capitalist, whose firm has invested in numerous tech companies, including Palm -- and U2 has done deals with Apple for special iPods and more recently, with RIM. I guess it must be other tech companies he's talking about.

However, in an interview with USA Today, Bono has expressed his distaste for file sharing, while admitting that he really can't lead the fight since he makes so much money already, recognizing how easy it would be to target him for appearing to be a hypocrite:

"It's not the place for rich rock stars to ask for more money, but somebody should fight for fellow artists, because this is madness. Music has become tap water, a utility, where for me it's a sacred thing, so I'm a little offended."

Of course, he might want to think about why that is. The fact that he's still able to bring in millions on tour, and has a huge multi-million dollar deal with Live Nation certainly suggests that perhaps file sharing isn't destroying the industry, as he suggests.

Leave a Comment..

U2 Album Leaks... Despite Ridiculous Attempts To Block It

from the lotta-good-that-did dept

At some point, folks in the music industry are going to (finally) recognize a rather simple fact: it just takes one digital copy of a song/movie/whatever to get out there, and it's everywhere. You can't stop it. No matter how annoying it is. No matter what laws it violates. It will happen. Taking precautions against it may seem smart, but it will always just be a waste, because as soon as a single copy gets out, it's game over. However, it appears that plenty in the industry still haven't figured this out -- and it's no surprise that U2 is among them, given what Paul McGuinness, the band's manager, has said in the past.

It appears that the band went to great lengths to avoid having its latest album leaked. The band refused to send out any review copies to journalists, instead organizing special "listening parties" where all attendees had to surrender any electronic device (including phones) before entering. So what happened? Well, the album has leaked anyway and thousands of people are downloading it.

So, for all that trouble, the band spent a bunch of extra money on these "listening parties," annoyed and inconvenienced a bunch of journalists/reviewers who were unable to listen to the music as they normally do, greatly limited the ability of reviewers to hear the album (meaning fewer reviewers than normal probably heard it)... and the album still leaked. So they got all of the (supposed) "negatives" and none of the (supposed) "benefits." Great strategy there, Paul.

44 Comments | Leave a Comment..

Live Nation's Strategy Looking Even Worse As It Has To Cough Up Extra $$s For U2, Madonna

from the how-not-to-run-a-business dept

While we definitely think there's a huge opportunity for more comprehensive business models in the music industry, we're still skeptical of Live Nation's model. The company, which is mostly known as a concert promoter, has signed huge deals with some big name musicians to get them to leave their record labels and do everything through Live Nation -- including music sales, concerts and merchandise. Live Nation gets a cut of it all. On the whole, such a model does make a lot of sense, because with one entity managing all of the different revenue streams, the company is much more likely to tweak the knobs. If it realizes that it can make more money in those other products by giving away the music, it (in theory) won't hesitate. That doesn't happen when the record label only gets a cut of music sales.

The problem, though, with Live Nation's model was its decision to focus on just a few huge names, and to pay them tremendous upfront amounts. Now, it turns out, the deals are even worse than what Live Nation expected. Apparently, it paid a portion of what it owed both U2 and Madonna in stock. That, by itself, is fine. It lets the musicians share in the risk a bit. Except, for some bizarre reason, the folks at Live Nation took away all of the downside risk for the musicians by promising how much the stock would be worth. With the stock market in freefall, that's now going to cost Live Nation a ton. For example, it gave a bunch of stock to U2, and guaranteed the stock would be worth at least $25 million. In actuality, it's worth $6 million. That means the company now needs to cough up an additional $19 million in cash and give it to the band. Madonna is apparently in a similar situation, with a similar guarantee about to come due.

8 Comments | Leave a Comment..

Will U2 Manager's Next Rant Blame Bono For Leaked U2 Tracks?

from the blame-game-come-uppance dept

In the past year or so, U2's manager, Paul McGuinness has lashed out at pretty much everyone, other than those in the music industry, for the evils of file sharing. His main target was ISPs, but also device manufacturers, search engines, social networks and many, many others. It wasn't long after this that U2 lead singer Bono more or less agreed with his manager -- though using more diplomatic language. However, as a few folks are joyfully noting, it appears that the only one to blame for the leak of U2's most recent tracks may in fact be Bono himself. Apparently, someone was passing by Bono's beach villa in the south of France and heard the stereo playing incredibly loudly with new U2 tracks, so he recorded them and put them up on YouTube.

To be honest, this story has a lot of questionable elements to it, and little to back it up. So it could be entirely false. Even if it's true, it's difficult to see how the quality could be even halfway decent. Either way, though, it does show how silly it is to blame others. Instead, why not look to examples like Radiohead and Nine Inch Nails who have shown that when you control the leak, it can work to your advantage in a rather massive way?

14 Comments | Leave a Comment..

Bono Agrees With Manager: ISPs Are To Blame For The Downfall Of Music

from the blame-the-enabler dept

About a month ago, we wrote about how Paul McGuinness, the manager of U2, was repeating an earlier rant blaming pretty much everyone but the recording industry for the recording industry's troubles. Basically, the rant could be summed up:

All of these other companies actually had the foresight to see where the market was heading with digital music, and they built up businesses that made money! The actual recording industry, however, did not foresee any of this, did not build up the business models -- and, in fact, stuck to the old, increasingly obsolete business model so stubbornly that it actually pissed off many fans. Therefore, it's clearly the fault of those who accurately prepared for the changing marketplace, and they should give lots of money to the companies that deliberately chose to ignore these trends.

Well, that may be a bit of a paraphrase, but I think it's pretty close.

Anyway, despite him ranting on in such a misguided fashion for quite some time, U2's Bono has been too busy saving the world to weigh in on the matter... until now. Valleywag points us to the news that Bono has written a letter to NME Magazine, where he, too, claims that it's all the fault of these damn ISPs and tech companies building real business models that make the market for music more efficient and open up all these new opportunities to profit. However, he does choose to contradict his manager on one point: arguing that McGuinness is wrong to claim that Radiohead's experiment with pay-what-you-want for music backfired and hurt the industry. Bono claims that the experiment was "courageous and imaginative." The same, however, cannot be said for all those tech companies that actually enabled that courageous and imaginative experiment to take place. They're obviously just exploiting the musicians.

29 Comments | Leave a Comment..

U2's Manager Lashes Out Yet Again: Blames Absolutely Everyone For Not Making U2 Even Wealthier

from the let's-try-this-again dept

Back in January, U2's longtime manager, Paul McGuinness went off on a bit of a rant, blaming ISPs and pretty much any internet company for destroying the music business. His points were easily debunked -- especially coming off the fact that U2 had just completed a year in which it made $355 million on touring -- and I'd bet that a fair portion of that came from folks who listened to U2 mp3s they didn't pay for. Apparently, McGuinness chose not to read any or understand any of the criticism towards his position, because five months later, he's back again, blaming absolutely everyone but the recording industry for the industry's own failure to adapt (found via Mathew Ingram who makes some excellent points in responding to McGuinness). So who does he blame?

"Cable operators, ISPs, device manufacturers, P2P software companies -- companies that have used music to drive vast revenues from broadband subscriptions and from advertising."

Uh huh. So let me ask McGuinness this: if all of those other companies benefited from the music industry -- is he willing to also concede that the music industry benefited from some of them as well? The radio industry, for years, has helped promote the recording industry. Does he believe the recording industry is morally obligated to pay the radio industry? The internet has made it so much easier to create, distribute and promote music. Does McGuinness believe that musicians have a moral obligation to pay some portion of their own proceeds to these firms who have made that all work? I wonder why not.

McGuinness seems totally oblivious to the idea that there are such things as complementary goods, and the fact that an externality from one market may impact another market doesn't also include a moral obligation for payment. This is really the same problem we've seen over and over again, where content creators overvalue the contribution of the content, and totally undervalue (or sometimes negatively value) the contribution of the platform. Cable operators, ISPs, device manufacturers, P2P software companies have all worked quite hard to make music so much more useful to individuals.

What McGuinness is really admitting, is that everyone else (including U2, by the way) has figured out how to make good money off of music being free. It's just the recording industry that hasn't figured it out. So, clearly, there is tremendous economic value in music being free. The fact that the recording industry is unwilling to come up with ways to capture some of that value (and they don't deserve all of it) is no one's fault other than the recording industry's.

41 Comments | Leave a Comment..

U2 Manager Says Google And Its Hippie Friends Should Pay The Recording Industry

from the still-haven't-found-what-i'm-looking-for... dept

While the IFPI and the RIAA have been actively pushing for ISP liability for file sharing, it appears some in the industry are taking it even further. U2's manager for 30-years, Paul McGuinness, gave a talk at the Midem conference where he blamed Silicon Valley's "hippie values" for creating the problem, and demanding that tech companies of all stripes start paying the recording industry. He's talking not only about ISPs, but also Google, Apple, Microsoft, Facebook and basically every other successful tech company. There are so many problems with this, it's difficult to know where to begin, but let's tackle a few of the quotes:

First he blames these companies who have "built multibillion dollar industries on the back of our content without paying for it."

This is a common refrain from those in struggling industries, but it's meaningless. Complementary goods are a natural for building bigger markets, but no one expects one side to pay the other just for moral reasons. The oil industry's success is built on the backs of the automobile industry, but does the automobile industry demand that oil companies have a moral obligation to pay them? Computer makers have built a multibillion dollar industry on the backs of the internet and software companies -- yet, no one says they have a moral obligation to pay those companies anything. Travel guides have built huge business based on hotels and restaurants around the globe, but does anyone think that those travel guides owe the hotels and restaurants money for doing so? Hell, the recording industry itself was built off the backs of complementary goods such as radio, yet when they paid radio stations, it was known as payola and outlawed.

These companies, McGuiness claims, need to help out "not on the basis of reluctantly sharing advertising revenue, but collecting revenue for the use and sale of our content."

Uh huh. And I guess that automobile companies should be collecting revenue for the oil companies. And, home builders should be collecting revenue for the electricity companies. And, airlines should be collecting revenue for the hotel industry. You see, these are all separate industries. They may be complementary, but it's up to each one individually to figure out the business models that work. None should be pressured into saving the other from its own missteps.

"I call on them to do two things: first, taking responsibility for protecting the music they are distributing; and second, by commercial agreements, sharing their enormous revenues with the content makers and owners."

This is beginning to sound an awful like journalists who claim that Google has a moral obligation to "share revenue" with newspapers.

He claims that what all of these companies do is the equivalent of a magazine that "was advertising stolen cars, processing payments for them and arranging delivery."

That makes for a nice soundbite but has nothing to do with reality. First there's the little problem that nothing is being stolen here, only copied. Second, none of these companies are "processing payment" for unauthorized transactions. Third, none of them are "arranging delivery." It would be like the same scenario, but blaming the guys who paved the road on which the car was driven.

"Embedded deep down in the brilliance of those entrepreneurial, hippie values seems to be a disregard for the true value of music."

First, this shows a misunderstanding about the difference between price and value. It also misunderstands the culture of Silicon Valley, which is generally more libertarian these days than "hippie."

On top of all this, McGuiness is whining about this at the same time that U2 is pulling in incredible profits, making $355 million on its last tour. You know what helped fuel some of that? The fact that a new generation of fans are learning about U2 from downloading its music for free. Not only that, since they don't have to stretch their entertainment dollars as far on buying the actual music, they can pay the exorbitant concert ticket prices that U2 is charging these days.

The problem here isn't that others are letting the recording industry languish. It's that just about every other industry has realized that there's plenty of money to be made in the music industry. As we've pointed out, just about every aspect of the industry is doing fantastically well. More money is being made on concert revenue than ever before. More artists are making music than ever before. More music is being heard than ever before. Even more musical instruments are being sold than ever before in the past. Yet, because one segment of the market (the one selling plastic discs) is unwilling to take some simple steps to change its business model, everyone else has to pay up?

90 Comments | Leave a Comment..