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p2pnet news view | P2P | Music:- The Big 4 record labels say they’re being devastated by all those wicked file sharers.

Well, the corporate music bidniz is sinking, and no mistake. But file sharing has nothing to do with it.

Vivendi Universal, EMI, Warner Music and Sony Music’s RIAA have no one to blame but themselves.

Their business plans have always been predicated on screwing customers and contracted artists alike. But when they refused to accept they’re now in the digital 21st century, where they’re accountable, and not the physical 1990s, were they weren’t, they signed their own death warrants.

Fred Wilhelms is both an entertainment lawyer and an expert on the trials and tribulations of the entertainment cartels and in ‘The last of the dinosaurs,’ he goes into detail on some of the ills besetting both the Big 4 labels and Hollywood.

However, says Quartz in a Reader’s Write, “the consumer or the potential shareholder, surely one or the other is being mislead here ? I am not happy to take much of what your stating as fact.”

Fred responds »»»

Here’s a recent report on Blue Ray sales vs DVD:

http://nobosh.com/sr/sales-of-blue-ray-digital-downloads-up-big-in-q109/216949/

Blue Ray sales doubled in the 1st Q of 2009 while DVD sales dropped 14% over the same period last year. That seems like there’s more than an offset until you look at the real numbers quoted in the article. Blue-Ray doubled to $230 million. That means an increase of $115 million over the year. DVD sales dropped 14% to $2.9 billion, which works out to a decrease of about $334 million. In the aggregate, there was still a decrease of over $200 million in sales of physical product. The precarious state of the economy is slowing the consumer’s transition to Blue Ray, and the availability of digital downloads is making inroads, too. Download revenue was more than twice the amount from Blue Ray for the quarter.

Let’s get some of the terminology straight, too.

There’s no such thing as “box office profit.” What has gone up is box office “revenue” – the amount of money made from ticket sales, before deducting any costs. You only get profit after deducting your costs from your revenue.

The revenue has gone up, but the number of tickets sold has remained steady, and, recently, shows signs of starting to decline over the past year’s numbers. This means that the record breaking revenue is more a function of ticket inflation than anything else. Keep in mind that half the box office revenue doesn’t make it back to the producer; half goes to the distributor and the exhibitor. It has been many years since Hollywood depended on box office revenue alone to make a profit. Home sales (tape, disc and download) and TV licensing revenue has become critical for the studios to show a profit.

There’s no doubt that the industry is using filesharing as a scapegoat, but there’s a real reason they’re looking for a scapegoat; the projection on the numbers isn’t good.

The Motion Picture Association of America is in the same as boat as the Record Industry Association of America and:

• All the laws in the world aren’t going to prevent filesharing
• All the DRM schemes aren’t going to stop filesharing
• All attempts at restricting access through “throttling” aren’t going to stop filesharing

They both have business models based upon creating demand through artificial scarcity for their product (limiting how and when you can access it).

Copyright laws gave control of access through control of distribution, which only made sense as long as you could control distribution. Copyright no longer works as a functioning part of the business model when you can’t control distribution. As the record industry learned, you end up spending more time and energy enforicing your rights than you do actually making money, and that’s not good for business.

But the industry believes it cannot abandon copyright because they have so much invested in it.

Imagine the successful anvil salesman who books a ticket on the Titanic as a reward for years of successful selling. When the ship starts to sink, he faces a dilemma. He can jump overboard without carrying anything and maybe save himself, or he can jump overboard carrying his suitcase full of sample anvils because they have made him a big success in the past and most certainly drown from the burden carrying him down.

You and I can see the wisdom of going empty-handed, but we haven’t made a penny from holding onto copyrights. We have nothing invested in copyrights, so their presence, and the knowledge of their cost, doesn’t affect our thinking.

We know how the story has to end.

“They think they can get somebody to declare a new ending in which they live happily ever after,” says Fred, adding:

“They’ve got as much chance of getting Congress to repeal the law of gravity that is going to send that suitcase of anvils to the bottom of the sea.”

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First they ignore you, then they laugh at you, then they fight you, then you win ~ Mahatma Gandhi

some of the ills - The last of the dinosaurs, October 13, 2009

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