Dec 052007

Here is a development that seems like a logical progression in onslaught against all middlemen  Рbands going after scalpers. We can probably expect producers of content to get testier at middlemen profiting from their efforts.

There are problems, though, for bands in their efforts to go after scalpers and middlemen services such as StubHub. Resellers of concert tickets have long been making a fortune, and have created a two-tiered concert system – the rich and well-connected paying what the market will bear by going to middlemen, and “true fans” (the younger and those with expendable time) paying in time by waiting on line or online for their face-price tickets. Because the young generally have more time than money, they dominate the second group. Bands can eliminate this two-tiered system most effectively by hiking prices to market rate. The dominant belief is that letting the market decide might work for Streisand and her fans who tend to be older and quite wealthy, but won’t work for bands with young followers and less disposable income. This dominant belief is wrong.

Letting market forces dictate ticket prices would certainly prove more lucrative for bands today who derive ever-increasing revenue from live shows as opposed to record sales. Enforcement against middlemen does not actually eliminate black market demand, but instead forces it into venues like Craig’s List, a bizarre online bazaar of shadowy and often dishonest characters hawking everything from clothing and furniture to scalped tickets and prostitution. Caveat emptor. Letting the market dictate prices would largely eliminate this black market, along with the counterfeiting that goes along with black market pricing. The fear that the wealthy are going to scoop up all the tickets is real but probably unfounded for most bands. After all, how many investment bankers are going to swamp the next Severe Torture show? The economics for a band with wide, cross-cultural and generation appeal (think U2), might be different, though. A market system would presumably drive prices into the stratosphere, and with wealthier and older crowds, U2 might need a different mix of enforcement and market to achieve the right profit-demographic mix.

The real winners of this new effort? The lawyers. Because music industry lawyers are seeking to enforce the fine print on the back of tickets giving them the right to dictate resale terms, ” (A) lot of lawyers are going to make a lot of money,” says the article.

Oct 142007

On, some more bad news for journalists and those who aspire to the profession. The relevant quotes:

Another endangered species: journalists. Despite the proliferation of media outlets, newspapers, where the bulk of U.S. reporters work, will cut costs and jobs as the Internet replaces print. While current events will always need to be covered (we hope), the number of reporting positions is expected to grow by just 5% in the coming decade, the Labor Department says. Most jobs will be in small (read: low-paying) markets.

And broadcast journalists aren’t immune to this trend, either:

Radio announcers will have a tough time, too. Station consolidation, advances in technology and a barren landscape for new radio stations will contribute to a 5% reduction in employment for announcers by the middle of the next decade.

The writing is on the wall at Columbia Journalism School, where, according to one professor, even senior print faculty are stressing the need for all students to learn web skills. Ironically, some print students are more resistant to this emphasis than the professors, apparently fearing the technological learning curve or perhaps clinging to obsolete romanticisms of the profession.

The internet has changed the journalism economic model, with bloggers supplying content that journalists had previously charged for in print publication. At work here is the tragedy of the commons – bloggers and citizen journalists typically use news unearthed by professional journalists without compensation, republishing and repackaging the original news items with opinion. Each republishing and repackaging of the original reported content reduces the demand for the actual original form of the content – much like the case in the music industry and file-shared songs. With most news organizations losing money, the issue is whether an economic model can be developed to encourage reporting despite the lack of financial incentives to report. For even if intellectual property law developed in a way in which reported facts are protected by copyright, journalists would then only stand with musicians, trying to establish the fame necessary to generate ancillary income from (reporting) gigs that generate so little revenue of its own. By emphasizing New Media, Columbia Journalism School is trying to give its students the skills necessary to be one-man bands – to report and produce content in a variety of mediums for distribution over the internet. Each journalist would then be a hybrid – a reporter/publisher/producer/writer/techie – to varying degrees. To bring the analogy one step further, Columbia Journalism School is one step closer to making the logical yet startling concession – that traditional newspapers will wither like record companies, increasingly irrelevant distributors of content in the online world.

(Hat Tip: Instapundit).

Oct 082007

In a case that no doubt sent shudders up the spines of file sharers, the Recording Industry Association of America (RIAA) secured a $220,000 judgment against a single mother for downloading and sharing copyrighted music online.

Jammie Thomas, 30, was ordered to pay $9,250 for each of the 24 songs that the recording industry focused on in the evidence. Thomas is alleged to have shared 1,702 songs.

The culture of sharing music and other files online is so firmly entrenched that the defendant may have felt that she could go forward, notwithstanding the evidence and law arrayed against her. Also, an industry official was cited as saying how surprised he was at the length of jury deliberations. While this comment may indicate any number of things, it is not unreasonable to think that the jurors wrestled with a law they found abhorrent.

Much like during the era of Prohibition, this is an area and time where there is a chasm between the law and what people believe the law should be. While the music industry has initiated 26,000 suits against alleged copyright violators, these actions constitute but a minute percentage of the total number of people involved in illegal file sharing. These suits are incredibly expensive, and with music sales plummeting, it may be time for the recording industry to find another business model.