We've noticed that pretty much every single new and innovative digital music startup that pops up eventually gets sued
by the record labels. The labels seem to view this as a part of basic negotiations -- and, in fact, many of the lawsuits have ended in partnership/equity deals. But, those deals tend to be suffocating. Given that (likelihood of getting sued or getting a deal that makes a profitable business impossible), is it any wonder that entrepreneurs are shying away from any sort of digital music startup these days
, in favor of opportunities with no obsolete gatekeepers demanding huge chunks of whatever revenue they might one day make?
At a time when the recording industry needs innovative startups more than anything else, the record labels and their oppressive lawsuits and deal terms have basically scared off exactly the people who create those businesses.