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The Clash of Cultures: The Disconnect Continues Between Rights Owners And Tech Companies

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I was at a conference this week (that I highly recommend; Music 4.5 focuses on being refreshingly informative). There were rights representatives and digital music services represented. One of the music services put forth that there is nothing beyond “business” in the equation of rights licensing and they are just trying to get on with digitally distributing music. It is an interesting point since business does require a number of things to get up and running. When you need electricity, you look for a plug, water, a tap. The bill comes at the end of the month. With music; where’s the plug? Where’s the toll-free number? Music is not a utility and should not be treated like one. The big boys in the “business” of digital music distribution are looking to secure rights to music in order to attract and maintain customers and they want a toll-free number and a monthly bill.  They will also use their muscle to push governments to get there.  So, if music technology companies need content as part of their business and the music business needs to keep in line with the ways that their music is delivered to the consumer, I ask, why can’t we all just get along?

The disconnect started decades ago. When Microsoft for instance was constructing a music offering it looked around the campus for a couple of minutes and put the onus of contacting the labels on a techie. You love music, right?  Go out and get us the rights. At the same time hundreds of hours were spent on building the Microsoft culture while little or no thought was given at all to the fact that there might be a music business culture. What should have been a series of great bedfellows ended up a contentious mess partly fed by arrogance (on both parts) but in the end it was just a lack of respect. Cut to the era of ring tones licensing, where the disconnect was forced wider when digital distributors either grossly under reported or didn’t report content use at all. With the assets rushing out the door for free, what is a rights owner to do?  Once again, the people in technology who became responsible for bringing the music to the people turned their back on to the people who facilitate the creation of that music.

The consumer is King. We used to say content was King until technology outstripped the ability of social structures to make rules against piracy. Technology trumped content. Morality was left up to the individual. Self-regulation in these matters doesn’t always work. So, the music business declines and declines and the artist suffers. Hargreaves (knowingly or not) and the major players looking to cut fire sale deals for music rights are kicking the industry when it is down.

Why can’t we all just get along?  Like Aretha says, it’s about R-E-S-P-E-C-T.  If techies and their business partners would just respect the rights owners enough to bring them into the business model creation process BEFORE the last screw is tightened the relationship would change from contentious to cooperative. In the good old days, the labels supported their distributors and retailers. After all, if a record store didn’t sell the product they could return it AND BE RIMBURSED. What a deal. Nowadays the labels are struggling to make ends meet financially, making it impossible for them to throw money at a new on-line or mobile digital music service provider models.  But the value they can add is being proactive in the building of the product that provides a superior service to music consumers, because that is what they have always been in the business of doing.  When was the last time a head of digital at a label was asked by a licensing hopeful, “what kind of a model have you been dreaming of”, or “how do you see the future” or ”let’s build something together”? Instead, the new music models are often created in a vacuum by well-intentioned smart folks full of hope; but without any regard for the culture of the rights owners who are so desperately needed in the equation.  Disrespectful in a way; you can see why wounds don’t close.

I also heard at the 4.5 conference that rights negotiations shouldn’t be good ‘ol boy’ sessions but rather hard cold and aggressive negotiations. I don’t agree. If you know your rival negotiators way of thinking, culture, you have a much better chance of coming to some agreement even if it means agreeing to agree. I have proof. Some deals I have made for new experimental licenses could not have been made if I didn’t have colleagues/friends at the board level and above all approached the process with respect for the culture of the other side. All too often the rights owners grit their teeth when the phone rings as one of the usual subjects wants to set a meeting to hammer away at the rights structure with little regard for the culture or the sanctity of the intellectual property at stake.  And for the future of music and all who love it, that has to change.

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