Why Google Should Buy the Music Industry 472
Glyn Moody writes "According to one story about Google's attempts to launch its own music service, 'the search giant is "disgusted" with the labels, so much so that they are seriously considering following Amazon's lead and launching their music cloud service without label licenses.' So here's a simple solution: Google should just buy the major record labels — all of them. It could afford them — people tend to forget that the music industry is actually relatively small in economic terms, but wields a disproportionate influence with policy makers. Buying them would solve that problem too."
Music, Movie. (Score:4, Interesting)
Comment removed (Score:5, Interesting)
Another way to kill it (Score:4, Interesting)
Host a completely free website for artists. They can post new songs that the artists own the copyright, sell them on the site, 100% revenue go back to the artists. Google will eat the transaction charge. Google will also invite top the chart (google's chart) artist to preform at Googles' campus, sponsor them to play at colleges.
I for one welcome... (Score:5, Interesting)
Re:If Google bought music labels (Score:4, Interesting)
If Google bought music labels - then there is little doubt that Amazon music service, iTunes and other direct Google competitors services would be out of licenses and out of business shortly. Isn't that obvious? What interest would Google have to provide these competing services with creative work licenses? None whatsoever.
Google sells eyeballs to advertisers. If Google were to make all major label music free as in beer, then itunes et al would no longer be competitive but not because of monopolistic advantage by Google but for the same reason no one makes money selling air.
No one seriously complains that WebM being free hurts the market for 4C's h264 patent portfolio. Or that WebP hurts the JPEG patent holders.
Re:Don't be evil (Score:4, Interesting)
Re:Don't be evil (Score:4, Interesting)
They could buy one major and lead by example. It'd probably be all that's needed to drag them all into the 21th century. I'm not sure I'd trust Google not to use the opportunity to take a low blow at Apple though and that's one thing the industry doesn't need.
EMI is for sale. (Score:5, Interesting)
EMI [guardian.co.uk] is for sale, as of three days ago. They're owned by Citicorp, the bank. A venture capital firm defaulted on their debt, and Citicorp ended up with EMI. Citicorp wants to unload that unwanted asset for cash.
There was talk of Warner buying EMI, but Warner has financing problems of their own. Either Google or Apple could easily pick up EMI right now.
Re:What's in it for them? (Score:4, Interesting)
Nah,
Google is all about content for ads. The labels are all stuck in last century and DRM. Let Google buy them all and share tunes for ads!!
Re:Don't be evil (Score:3, Interesting)
Or they'll turn it into a fair business that doesn't attack it's customers?
no no, clearly they must be evil.
That can't happen. The valuation of the music labels is too high for there to be any profit in buying them, then changing their business model so that they make less money. Remember, Google is a for profit company with shareholders. They can't purchase something expensive, hemorrhage cash on it, and expect the shareholders to accept that. It seems that the legacy business model of the labels just isn't viable with cost of reproduction and cost of distribution (even cost of storage) approaching zero. So, stop the lawsuits and even more piracy happens because folks aren't scared they will be sued. What else could they change to make the same money? Right, nothing - or they would have done it already. The label execs aren't stupid - it doesn't matter that some people here think they are. They aren't. There just isn't anything they can do to support that old model. And new models don't make as much money. So they try to protect the old one as long as they can.
Re:Don't be evil (Score:4, Interesting)
Re:Thats (Score:2, Interesting)
A friend told me a story about a high level MS discussion. MS Money is a competitor with Quicken which has a firm hold on the finance management side of bank agreements and MS was trying to make inroads in getting banks to push their software. They were having trouble convincing a bank that Money would be a necessary option to offer their customers. The solution was "then buy a bank."
I'm not clear enough to recount the details and wasn't there so I can't vouch for the veracity of the exchange, but I can tell you that the moral of the story makes sense. If you can't get the relationship you want with a group of businesses and you have something consumers want, then buying one of the businesses can solve a lot of problems. If your product is appealing to consumers, then you've got competition fostered where there was little before. It forces the other businesses to either compete or loose revenue as consumers move to the new offering. Even if the other businesses still don't start offering your product on the terms you prefer, the consumer wins because the market now has a more appealing choice.
Google doesn't need to buy all the record labels or even all the big players, it just needs to buy enough of an inroad that what was previously unnecessary sacrifice of profits becomes a choice between competing or loosing completely. When Amazon and Google are offering something that consumers are flocking to instead of having to deal with the record labels, then the labels will either negotiate or die.
I honestly don't know which would be better for consumers.
Re:Great idea... (Score:5, Interesting)
Re:Don't be evil (Score:4, Interesting)
> Monopolies are bad.
No they aren't. Like anything else, they have the _potential_ to be used constructively or abused.
Currently, essential services, like Government, Electric Company, or Water company all have monopolies. Replacing them with corporations each with competing standards would be worse.
Re:Don't be evil (Score:4, Interesting)
Which industry? Music or computing? How does one qualify a low-blow?
The music biz, and a low blow would be something like locking Apple out of catalogues through pricing or by just not allowing them on iTunes. Apple's the one who for the large part made buying music on the net legit, popular and reasonably priced through the iTunes store. If Google moved in to the music business and they started to feud, carrying the fight from the computing industry over into the music business, it would strengthen the position of the traditional music companies that Apple has succeeded to cow into making concessions. That wouldn't be good for consumers I think.
I don't know of the CDBaby story. I googled it and it just came up with a one-sided story [sivers.org] by the CDBaby founder, 7 years after the fact. I'm not saying it didn't happen that way, there's a ton of stories like that and Jobs can certainly be a ruthless bastard, but anyway it worked out OK for them in the end it seems.