Music Matters 2008 has been going on in Hong Kong this week, offering the music business the chance to "plug into Asia." One of the featured speakers was the manager of U2, Paul McGuiness, who used the opportunity to blast Internet service providers for the harm they've done to the music business. McGuiness called on ISPs to "embrace the future," but his speech made it clear that his vision of the future includes at least two things that the ISPs are unlikely to have any interest in: playing traffic cop, and handing revenues over to the music business.
This wasn't McGuiness' first attempt to take on ISPs and, possibly as a result, his latest comments have been widely reported, with many reporters focusing on different arguments he made.
When it comes to ISPs, he appeared to suggest that the content industries were the ones drawing users to the Internet, while the ISPs "have used music to drive vast revenues from broadband subscriptions." Although music is only one of a large number of factors driving broadband adoption, McGuiness argued that service providers have a financial self-interest in helping the music business, and that self-interest should play out in part through filtering copyrighted content.
But technology for ISP-level content filtering isn't yet mature and is easily circumvented. Blocking or throttling P2P isn't a good solution, either, and ISPs that have tried it in Canada and the US have brought government investigations down on themselves.
McGuiness also promoted revenue sharing agreements between ISPs and the music business. "One way or another, ISPs and mobile operators are the business partners of the future for the recorded-music business," Billboard quotes him as saying. "But they are going to have to share the money in a way that reflects what music is doing for their business."
As most ISP customers find broadband appealing regardless of the availability of music on it, it's not clear exactly what music is doing for them. Meanwhile, various attempts at content-sharing agreements and subscription models have generally flopped; consumers have voted with their wallets, and their money has largely gone to music retailers such as Apple, who do share large amounts of money with the industry.
All of this was couched in terms designed to generate sympathy for the artists themselves; McGuiness said, "I would like to see the workers (creators) paid, which they aren't at the moment." But, even when content is paid for, little of the money makes its way back to the content creators. Apple sends around 70 percent of revenues straight back to the music business—if the performers aren't getting paid, it's hardly their fault, much less that of the ISPs. This argument was undercut by a talk at the same meeting, where Variety noted that a Warner Music executive stated that performers get only two percent of the money from download and ringtone profits.
But even as he wants to see more payment for artists, McGuiness rejected one model that has worked on the Internet—ad-supported content—because he feels it is beneath musicians. He's quoted as saying he does not want to see "artists reduced to the status of employees working for glorified ad agencies." A note from this ad-supported writer: get over yourself.
It was the music industry's steadfast refusal to engage the public's interest in downloaded music that left listeners with few legal options for years, ultimately producing a public that has grown comfortable with music sharing. If McGuiness' views typify the level of analysis involved in those piloting the music industry into the future, then musicians should be very worried.
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