Sunday, February 21, 2010

Performance Tax?

When I see something like the "Performance Rights Act" (or performance tax, as most are calling it), I can draw one of two conclusions:

1) Legacy media (and their partners in government) really don't understand that there's a fundamental flaw in their business model, and are trying to use the government to hold back the coming flood.

2) Legacy media understands perfectly well the doom that they are facing, and they are simply trying to suck all the blood out of a dying beast before moving on.

There is a very big problem if the two biggest threats to your music business are having fans that want to hear your music and having those fans who want to share it with others. I truly feel bad for radio stations. Remember when record companies would *pay them* to play their music? Now they're trying to *charge them*. Astounding.

Technically, even the idea of charging radio to play music isn't quite accurate. They want to *tax* them.

Here's my suggestion to the RIAA:

If your business model has been undermined by progress, and the there's no way to market your goods, then get out of the business. Do not use your influence in Washington to extract money from a sector where you can no longer earn it. The market is giving you very important information. That information is: you aren't needed anymore. Because you used to be an industry does not mean you always will be.

The same could be said to all legacy media companies. There was a time in our history where they did not exist. There is a time in our future where they may not exist. Legacy media companies like newspapers and record companies had a business model, because they filled a need: moving the product from producer (writer/artist/musician/reporter) to consumer. Thanks to the Internet, for good or ill, this is no longer a need, hence the business model is dying.

We still need people to create, write, report, comment, perform, sing, and play. So, we need to find the business model that works for *them*, instead of the intermediaries who used to do something useful back in the 20th century.

I know we live in the age of the bailout, but if we ask the government to step in to prevent the creative destruction of every single industry that gets overturned by the Internet, that isn't progress, it's regression.

2 comments:

  1. The last remaining value point that the record companies are providing is that of a reviewer. They filter through the noise of millions of hacks to find those that might have some potential. By signing those artists the DJs have a far less daunting job of filtering through a significantly smaller pool of artists and songs to determine what will best appeal to their audience.

    Perhaps the new market place will be of a reviewer, similar to money market managers. These media companies will provide (for a cost) lists of immerging artists and songs to major radio stations.

    Or more likely they will spend billions on lobbying and we'll spend the next ten years blogging and reading blogs on the subject :)

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  2. Or we'll just be shooting links of our favorite music at each other in iTunes or Zune Social or Facebook, or whatever, and we'll use our friends as reviewer instead of old men at a record company. :-)

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