A little bit of a back story.. My name is John, and I was hired by BMG Entertainment back in 2000 as manager of New Technology. I was 24 years old at the time and probably the youngest label exec around who was driving BMG's digital music distribution strategy. None the less. I can tell you from all the meetings I had, and the consulting I did that the labels have known this for years. I use to debate the fact that "What one person considers piracy another considers promotion". I knew this because I had done my own mixtapes from 1994-1998 as a drum n bass dj.
Please understand. The majors had all the chances in the world to sort it out, but they couldn't. I had met with streaming locker music services as far back as 2001! Everyone was doing what Apple was doing before Apple did it. But the labels wouldn't grant licenses. Even if they met our strict DRM, Codec, and Security mandates. Why can I say this, because I was responsible for conducting the due-diligence for the digital catalog licenses. I would approve a service but corporate wouldn't grant the license because all the labels were positioning themselves against the other majors.
Apple was the only one who could come in and give them what they wanted. A guaranteed adaption of the service. The labels knew that Apple had one thing.. the strength of millions of Apple Fanboys who were just waiting to buy whatever Steve Jobs told them to buy. So even though countless other services were ready to launch with better services then iTunes.. They were disregarded by the labels..
Do you want to see proof. At BMG, I managed the development and launch of the first B2B streaming music video platform in 2001. Go look it up on Google.. the press releases were all there. We were ready to launch with 2000+ music videos, streamed, and protected by network based backend DRM (Geographical Rights Management by the way of Akamai's edge server network.. which Akamai and I thought up while in meetings together. Until then they had never used a edge server router ID as a means to check rights to stream content to a geographical area.
I had a front seat to Napster fiasco on the label side. I literally came to work one day and found out that I was now suing my own parent company Bertelsmann. We then pushed to convert Napster into a label before Andreas Schmidt got ahold of it and fucked the whole thing up by wasting millions on something that never saw the light of day. My Streaming Video platform only costed us about 400k to develop. Guess what, I actually launched it for beta. Napster died in BeEcommerce groups hands. Remember the famous.. .nap file idea.. I mean you had the wrong people making decisions that they had no clue about.. while the smart people who they specifically hired like myself to tell them what to do.. were ignored.. and then later cast out and blamed. When really.. the blame lays on the execs who couldn't let the good old days go, and made careers out of stifling innovation as if their entire industry was depending on them to do it.
I also chaired SDMI meetings with Carrey Sherman. People don't realize that the majors never changed.. they just went out and co-opted all the indie labels.. Taking chunks in turn for distribution deals. If anyone wants the story about what really happened during 2000-2002.. Contact me.. its been 10 years.. the world should know, and I am ready to tell. I would like to write a book on it.
I think what people don't realize also is the over all influence of the Major Label accounting system effects the independent industry. While many people will say that the indies have their own value chain sorted.. (indie labels, indie artist, indie distributors, indie retailers) they are all forced to comply to RIAA publishing standards. If they even hope to get a hint of that licensing money.. they have to sign up with ASCAP or BMI.. Right there, you are forced into the major label financial environment. As people are exposed to competing with the majors for placement in brick and mortars.. The corners get shaved off the indie square as the label/artist tries to compete in the major world. This transition is usually a costly one and one reason why many otherwise successful indie ventures go belly up when trying to take it to the next level. Because the expectations change.
This is ridiculous. I shouldn't even need cable now. I should be able to watch TV on my computer through streaming channels. They drag their feet hoping that the circle shaped new media industry will some how fit into the square shaped traditional business box. Keep hammering, you might get an octagon that fits, or loss your whole business in the process to pirating much like the British TV market is with Bittorrent to the US Market. I don't want some 'cherry picked' content on BBC America.. I want all your channels, now.. and I can get them through bit torrent! I don't want to, but you leave me no choice.