Warner Music Continues The Trend: No Innovation Unless It Owns A Piece Of It

from the chilling-effects dept

Warner Music has a rather long history of being first in line to sue pretty much any new and innovative online music service out there. While it doesn't get nearly as much attention, we've heard repeatedly from people that Warner offers many of those sites a deal: give us a big chunk of the company and we'll drop the lawsuit. The lawsuit is merely a big stick used in the "negotiation" to get a piece of the company. So, when you see a lawsuit and then a settlement, involving Warner Music, often the reason is because the other company agreed to hand over a hefty chunk of equity. It's difficult to think of any major online music service that Warner hasn't threatened, sued or received an equity chunk from.

According to TechCrunch, that activity on Warner Music's part has now killed off an attempt by Facebook to open up its own music service. The company had been working for nearly a year on such a service, but Warner simply wouldn't allow it -- especially since it already had ownership stakes from a bunch of other players, and didn't want the competition. This is exactly the sort of chilling effect on innovation that we're consistently talking about. It's rather ridiculous that one company can hold up new and useful ways of listening to and sharing music. When things like the DMCA and other copyright extensions came out, the RIAA insisted that it would never try to block any new devices or services, but its members -- and Warner Music, in particular -- have never lived up to that agreement. Warner Music especially overvalues the music, and undervalues any service that makes that music more valuable -- and thus needs to block or kill off any such service that it can't own in some way. That's not the intention of copyright law, at all. In fact, it's a drastic abuse of copyright law.

Filed Under: chilling effects, innovation, lawsuits, music
Companies: facebook, warner music group

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  1. identicon
    Sandy, 15 Jan 2009 @ 10:43pm

    The problem with Warner, and the other majors, has been building for at least the last twenty years. Well before the digital age came to be. They stopped nurturing artists and started looking for the quickest way to make money by selling substandard music to the consumers. And by consumers I mean 12-17 year olds. Add to that their dominating the airwaves with pay-for-play scams and getting into cahoots with major retailers to fix prices. They created a whole class of music fans who really don't care about the effect their actions have on the labels and artists. The along came the internet and gave those fans a means to circumvent the industry all together.

    The problem is that most of the majors are run by suits who are more concerned about whether they'll get that new Mercedes or be able to make the payment on their mansion and aren't thinking about how best to operate in the changing market. There most definitely are people on the internet who are parasites and taking advantage, but I would venture to guess that there are a lot more who are willing to work with the labels and offer them something in return for access. But the majors aren't interested unless they can monopolize the market. I do giggle with glee when I see a major take a hit, because they've created a market where it's hard for an honest label to make a living. But then again, I also know of a few labels who are keeping their heads way above water by adapting.

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