And Then There Were Three: Bye, Bye EMI

Failures

from the another-one-bites-the-dust dept

The major labels have been dropping one by one. Of course, they never “die out” completely… they just get weak enough until someone buys someone else. The Big Six became the Big Five when Universal took over Polygram. The Big Five became the Big Four when Sony (formerly CBS Records) and BMG effectively merged. And, now we’re down to the Big Three as Universal and Sony pick off the remains of EMI. This was pretty much a foregone conclusion that there would be some sort of merger, when Citibank took over EMI after EMI defaulted on its debt obligations. Universal is picking up the music division for $1.9 billion while Sony gets the publishing side for $2.2 billion. Universal was already the world’s largest record label, so adding the likes of the Beatles, Coldplay and Katy Perry to its roster must be appealing. Of course, there’s some concern among regulators that this raises antitrust questions, but I really don’t see the issue here. Universal Music has been self-imploding by failing to adapt. I don’t see how merging it with EMI will do much other than to allow it to continue to be a nuisance and continue to not understand how to embrace the internet. Besides, spending $1.9 billion for more back catalog, rather than investing that kind of money into actually adapting? If anything, this simply accelerates the decline of these labels.

Filed Under: major labels, mergers, record labels
Companies: citigroup, emi, sony, universal music group

Is Apple Willing To Challenge Label's Claims That Streaming Purchased Music Needs A License?

Music Industry

from the that-would-be-nice dept

For well over a decade, the major record labels have done everything possible to fight the concept of personal music lockers. This never made much sense to me, as these lockers were designed to give people who actually had purchased music more ways to listen to that music. That is, it made the label’s music more valuable. You would, normally, think that this is a good thing that the labels would encourage. But, these are the major record labels we’re talking about here. All they seemed concerned with is making sure that any time you get more value out of music, that you pay more. They claim, with somewhat dubious legal logic, that streaming music that someone has legally purchased still requires a separate license. That is, if you use a music locker to store MP3 files that you actually paid for from an authorized source like iTunes or Amazon, and then put them into a music locker and stream them, the labels want to get paid again.

Michael Robertson, who runs just such a music locker company, MP3Tunes, notes that Apple appears to be quietly enabling this feature without making a big deal of it, perhaps because of ongoing negotiations with music labels over the widely rumored “iTunes-in-the-cloud” service. The newly enabled offering isn’t iTunes-in-the-clouds, but does allow some basic music streaming functionality for users who have music files stored on an iDisk account. This seems perfectly reasonable, of course. It’s your music, and your storage locker — why shouldn’t you be able to stream it without involving the record label?

The labels, particularly Universal Music, apparently disagree:

One company sure to be miffed at this new capability is Universal Music Group (UMG) the world’s largest music company. They have told net companies who have inquired about offering personal cloud music services that backing up and downloading music files is OK with limitations, but streaming music files requires entering into a license and paying a per stream fee. Apple’s service allows unlimited sharing (no username or password required) and now background streaming – all without a license from the record labels.

As Robertson notes, this is Apple “testing the limits” of what they can do before the labels freak out (expect that shortly). However, the question really is how far will Apple go to fight this issue with the labels. In the past, Apple has seemed perfectly willing to cave to certain aspects of record label demands in an attempt to harm Apple’s own competitors — and I could see the same thing happening here as well. Even if Apple doesn’t want to pay per-stream fees to the labels for previously purchased music, it might realize that it’s still better situated than competitors. Unfortunately, Apple doesn’t have much of a reason to fight for consumer rights in this scenario, even if it’s testing the boundaries quietly.

Filed Under: itunes, music, rights, streaming
Companies: apple, universal music group