U2’s manager Paul McGuinness does a nice job of summing up the despair and gloom enveloping the music business at a speech today at the Midem conference. The short version of a long diatribe: The music business screwed itself, but it had help:
I suggest we shift the focus of moral pressure away from the individual P2P file thief and on to the multi billion dollar industries that benefit from these countless tiny crimes – The ISPs, the telcos, the device makers. Let’s appeal to those fine minds at Stanford University and Silicon Valley, Apple, Google, Nokia, HP, China Mobile, Vodafone, Comcast, Intel, Ericsson, Facebook, iLike, Oracle, Microsoft, AOL, Yahoo, Tiscali etc, and the bankers, engineers, private equity funds, and venture capitalists who service them and feed off them to apply their genius to cooperating with us to save the recorded music industry, not only on the basis of reluctantly sharing advertising revenue but collecting revenue for the use and sale of our content. They have built multi billion dollar industries on the back of our content without paying for it.
It’s an old argument that’s had almost zero traction to date, and hard to see it gaining any now. But it’s easy to see why Paul thinks it could work. After all, he’s already got Apple’s (AAPL) Steve Jobs to pay his band a tariff for each U2-branded iPod sold:
I have met Steve Jobs and even done a deal with him face to face in his kitchen in Palo Alto in 2004. No one there but Steve, Bono, Jimmy Iovine and me. We made the deal for the U2 iPod and wrote it down in the back of my diary. We approved the use of the music in TV commercials for iTunes and the iPod and in return got a royalty on the hardware.
Unfortunately, for big music, any leverage it once had with the tech world is long gone. Hollywood, though, still has a hammer, and it’s using it. Pretty much everyone Paul lists in his rant is making a huge push for the “digital living room”. And all of them need Hollywood’s blessing, for the time being, to make it happen.
Hence the clumsy attempts by Comcast, Time Warner Cable and AT&T to crack down on movie and tv show swappers. Even Jobs, Disney’s largest single shareholder, needed to give the movie studios what they wanted, — not the other way around — before he could roll out his new iTunes movie rental service. The music business taught Hollywood a valuable lesson about the perils of ignoring technology. Too bad the music guys can’t charge for services rendered.
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