The Music Industry is Trying to Destroy Itself: Example #3789

So after recently downloading and having much fun with a couple of Donovan goodies from the Apple iTunes Store, I decided to look for some late 70's early 80's one hit wonders:
Torn Between Two Lovers (Mary MacGregor)
Escape (Rupert Holmes)
Electric Avenue (Eddy Grant)

Result: zero for three. Just to make sure I wasn't misspelling anything, I checked the Billboard top 100 by year charts that they have on iTunes, and sure enough there are huge gaps.

Since all of the tunes I was looking for were on the charts, this is clearly not an issue of Apple not wanting them -- it must be some sort of rights nonsense. And the gaps in those Billboard charts can't all be Lennon/McCartney originals -- I'm sure that most are by artists every bit as in need of some extra income as the three above.

My point: the music industry still doesn't get it, and fiddles away as Rome is burning. I don't have the time to waste, but most people will simply go to Thiefster, Lamewire or the peer to peer du jour and have no trouble finding them. If they think anyone is going to dump $15 on a CD just for one of those songs, they are hallucinating.

Until and unless the music industry stops trying to prevent people from buying music with unreasonable demands of various kinds, they are busy digging their own grave and all of Apple's efforts to save them from themselves will go down the drain, as more and more people (a whole generation, really) unlearn the joys of buying music.

Ted

P.S. I did find the fourth '70s tune I was looking for -- Chuck Mangione's Feels So Good -- only to discover that it is an "Album Only" track -- $9.99 for six songs (and I already have the thing on vinyl anyway). No sale. Wake up and smell the coffee RIAA & Co: the sheeple aren't as dumb as you think.

I had the same reaction when I tried to purchase VH1's 'Top 100 One-Hit Wonders' last year. iTunes had maybe half of them at the time.

My bigger peeve is the lack of material from current sellers. Personal fav's of mine Rammstein and Type O Negative are both MIA. Some others like The Insane Clown Posse or The Rolling Stones don't have their complete libraries available.

I think it is unrealistic to expect every single song by every single artist to be made available already. There are still thousands of albums that still haven't gotten a CD release yet, and we all know how many films aren't available on the now seven year old DVD format. I'm sure there is a reluctance among certain factions to release material online, but that doesn't mean that itunes or others like it are trying to destroy themselves. While it may appear to be a simple matter to the layperson, it still requires time and money to encode the vast music catalogues that exist, and there are other factors, such as royalty neotiations, that need to be settled before work begins on anything.

I agree with Jeff. There's so much stuff that was on LP that is obscure now.

Absolutely true. However it doesn't apply to this case.

One of the most prominent features of the iTunes store is selling stuff that was on the Billboard charts year by year. These aren't obscure songs not available on CD. They aren't gathering dust in some corner waiting to be encoded. We are talking about approximately 5000 songs out of the 1 million+ that the iTunes store carries.

This is strictly a question of someone (I seriously doubt it is the artist), refusing to license the material to Apple. There is nothing to negotiate -- Apple pays a flat rate of 65 cents per 99 cent song.

Not only are these people (the rights holders, RIAA, etc.) machine gunning themselves in both feet, they are hurting the people who are trying to sell their music on line as well.

Why? Because if customer X knows he can go to iTunes or MusicMatch or what have you and find what he wants, he'll do it, time and again. If customer X is frustrated time and again, he will stop being customer X and will become peer to peer file trader X. I might not, because I have a huge CD library and am very patient. The average (read younger) music buyer has neither library nor the patience.

That the RIAA & Co. still don't get this in 2004 amazes me.

Ted

Ted, I like your theorem. It's just one front in an all-out attempt to P-off people of all ages, races, and creeds in every way possible in the war on customer desires. Customers have a'lotta' gall having desires. The big 4 will proably be worse than the big 5 were, if they ever aggree on anything!?!

How many weeks would it take to load up half the songs ever recorded? A quarter? Surely it's not too large a number, if somebody was trying?

Back when Wayne Green (BYTE, Kilobaud Computing, etc.) was publishing a magazine about CDs, I remember an article in some magazine saying that there were over 100,000 CDs. That was a LONG time ago. There are probably several times that number now (not to mention the vinyl titles that didn't make it to CD).

So let's say 200,000 CDs "ever recorded". Time to load up 100,000 CDs (at a conservative rate of 25 per operator per day, to allow for entering titles) => 4,000 people-days or 200 people working full-time for one month. (Just a back-of-the-envelope calculation)

I know that Rachel is at least partly kidding, but again, this has nothing to do with the physical effort involved.

Have you noticed all the Partial Albums on iTunes -- especially a lot of jazz, standards there are partials all over the place. Clearly they had the CD in the computer -- do you think they were too lazy to click "import all"? It is strictly "rights" issues involved.

It is an interesting question: who has to agree for the songs on say a Peggy Lee album to be available on iTunes (she has a bunch of "partials" up there). Each individual song copyright holder? Or are the record companies themselves doing it to prevent CD sales cannibalization but, I would argue, to encourage piracy instead?

Ted

It is a rights issue.

Last night, I was browsing the store, and wound up looking for the track "Protection" by Massive Attack w/ Tracey Thorn. The rest of the album (Protection) is there, but not the title track (which, I'm guessing but don't know for certain, is the only track w/ Tracey on it). As far as her regular gig, Everything But the Girl, a few albums are represented in their entirety, while some albums (e.g., Acoustic) are represented by a single track (!).

Unfortunately, you are making broad assumptions about how the process works. Releasing a song on itunes is't just a matter of some Joe boy at Apple grabbing a CD and ripping it.

The (simplified) process would go like this: Someone makes a request to license a song. Label guy sends a memo to legal asking if they still have the rights to the song, and whether or not the contract for that artist provides for its use at the istore. Legal digs around and comes up with an answer. Assuming the track is clear, the next memo goes out to library management to locate the masters. Assuming they can be located, the next memo books studio time to do the transfer and encoding.

More likely, the contract has long since expired, and does not cover the intended use. The contract may not even be locatable given the number of mergers and defunct labels, or the rights may have been assumed by another company or reverted to the artist. The label and artist/producer/publishers (or their estates and assigns) have to negotiate an acceptable royalty, plus possibly relicense the song to the label. Then comes the hunt for useable masters, yada yada. Realistically, this proces can take a year or more.




There is a lot to negotiate when the rights to the song have expired, or there is no provision for digital downloads in the contract. Who cares what Apple pays, the negotiation is between the label, artist, publisher, producer, and any other stakeholder.

You also have to account for all the studio time required mastering the songs for use in AAC. I highly doubt they are ripping CDs, they should be going back to premasters and doing proper transfers and encoding.

Again, I think it is ridiculous to expect the itunes catalogue to cover even the top 100 over the past several decades. There are many issues that need to be addressed before a label can release material, and no sound business person would just hand over the entire catalogue, if they could even do so. While you may not be able to understand the complexities involved, they do exist.

Apple went back to the master tapes for 1 million + songs in 12 months? I don't believe it. I'm sure that they did for some "major artist" stuff, but I would bet that most comes from ripped CDs.

Jeff, as usual your points are well taken, but they don't explain to me the huge number of "partial albums" out there.

My theory, right or wrong, is that the music industry still hasn't come to terms with electronic distribution and is acting as if it is all a bad dream it will wake up from any second, and dragging its heels in the mean time...

Ted

I gotta agree with Ted on this one Jeff. For net download the paranoid music industry is going to find "usable masters"? Why, to make sure the highest quality is out there for electronic transfer? Doesn't seem likely to me.

I'm surprised that they aren't 64K MP3s as it is.


My vote is that Mr. Nerdly is assigned to rip CDs all day...well, maybe not quite that way. They'd give him a helper monkey to fetch coffee and snacks too.

Ted, with all due respect, you obviously don't understand the complexities of legally releasing music, nor the concept of marketing.

The reason for partial albums is simple, Apple didn't license them. Record companies don't just hand out licences for their assets, they sell them. Apple likely negotiated a blanket fee for a certain number of titles from the record companies. Assuming that all the stakeholders could agree on the cost of licensing, and the royalty schedule is worked out, masters are supplied. Apple would be foolish to license songs they didn't think would sell well, and there are probably stipulations on some material that requires the full album to be purchased.

Having spent 20 some years wading through the tomes that comprise recording contracts, I do have some idea what is involved in these deals. Just because an album was released in the 1970s doen't mean it can be rereleased today without renegotiating the terms. Even if the song is licensed for one use, it doesn't mean it is licensed for all. Licenses expire, stakeholders change, paperwork and masters get lost, people die and pass on their rights to estates. There are an awful lot of things that can delay or stop a release.

We haven't even touched on the marketing side of things, which can and does preclude titles getting to market until there is a desireable release window. Apple would be foolish to roll out every song it has access to simultaneously, and equally foolish to license them all at once.

I don't doubt that the labels are looking at how the revenue stream is working before commiting to more releases as well, but I suspect the biggest roadblock is Apple themselves.

I'm curious: why?

It is called business strategy. Apple is still in the process of testing its itunes store from a financial perspective. They would be foolish to dole out tens or hundreds of millions in licensing costs upon start up without having a firm grasp on how their business model works in the real world. Companies routinely roll out product over time to avoid glutting the market. They can only feature so many new releases at one time. There are also infrastructure concerns to deal with.

Apple claims that they are not running itunes as a loss leader. In that case, it would make sense to only license enough material to look established, then use the results of their sales to negotiate better deals on subsequent licenses, or establish partnering deals. There are many reasons to take things in stages, especially on a new business venture.

As I said earlier, even with a market that is thirty years old, there are still thousands, if not millions of titles that haven't been released on CD yet. To expect the Apple store to list every song released over the past 50 years in the time the store has been in existence is beyond ridiculous.

Well maybe I am royally ignorant, but I think you are totally wrong. Apple is behaving far more like Tower Records, than like Capitol Records. Apple is behaving like a store, not a label. They want to be selling the largest number of songs, albums, etc. And unlike a B&M record store, iTunes doesn't have any shelf space issues, thus it can and will stock everything it can get its hands on.

That's why they went from 0 to 1 million songs in under a year (the equivalent of say 100,000 different CDs). For competitive reasons they want to have a selection larger then any of their rivals. They are not interested in the little bit at a time marketing that a label or DVD studio does.

I am not arguing with you about how licensing works. I am however saying, that Apple does not have any partial albums because they didn't want some of the songs. They have partial albums because they could not get those songs, not because they didn't want them.

Ted

Jeff,

Do you have ANY evidence that Apple is paying any up front licensing fees?

I am under the impression that they only pay royalties -- nothing up front, unless it is for an exclusive distribution deal with a particular act. None of the stuff I am talking about falls into that category.

Ted

RIAA is out for money. It's a business.

In terms of at least some of the gaps in Apple's current offerings--e.g., not having the title track from a particular album--this seems to support the idea that Apple can't offer these tracks, not that they're holding them back to test the market.

When I saw that Disney was licensing their albums to iTunes I got excited. I'm a big ol' Disney buff and couldn't wait to get my hands on some of the soundtracks to their classic films. I was especially interested in getting the ALICE IN WONDERLAND soundtrack. Now here's the thing: the entire album is there. However, you have to purchase each track separately. Since all the tracks are quite short it would end up costing around $30 to download the whole thing. This seems to be the only Disney soundtrack that is like this. The others are all the standard $9.99. I just don't understand the unwillingness for the music companies to sell their music online. It saves them promotion costs, packaging costs, disc costs, etc. They still make a nice profit on them, especially catalog titles, and decrease the amount of bootleg product online. It's a win-win situation. I'm not giving up yet, though. Once the RIAA gets their heads out of their collective asses and realizes the potential for direct online sales, we'll see much more product becoming available.

No they are not, they are marketing a seperate product from that which is available through regular distribution channels, therefore they have to license the work for that purpose.

Do I have evidence that Apple is paying licensing fees? No, but I highly doubt that the majors are just handing over songs for nothing, as they could quite easily set up their own download services and take ALL the money. It also stands to reason that the Apple's larger title selection is due to these licensing agreements, otherwise everyone would be releasing songs at will. I would not be surprised if there aren't quotas to be met as well, on top of the royalty structure.

I am not disagreeing that Apple may not be able to secure content. That is a very real possibility. Record contracts are extremely convoluted, and vary by artist. There is no standard. In order to release something, it has to be cleared by the legal department, otherwise someone in the food chain will be taking the label to court.
Wrong again. Apple still has to host all of the files they are selling, redundantly, plus provide adequate bandwidth in order to meet demand. There is a lot of infrastructure to manage and maintain in order to keep the service running.

Well, one of them, Sony just did. You no doubt have seen how everyone has flocked to their store and abandoned Apple. Not.

If they could "easily" do it, they would have. It ain't it easy, they can't and they haven't. The reasons are many, but before there was the iTunes Store, there were some now forgotten record company controlled download services. They were user hostile in every way (UI & DRM) and were a total flop. Sony's has so far been a resounding flop.

I continue to maintain that Apple pays nothing up front (other than a handful of exclusive content deals). If someone here knows more about this than me or Jeff please speak up.

Ted