U2's manager gave a speech for MIDEM on internet music piracy. Here's excerpts from a very long speech.
"I quote from Josh Tyrangiel in Time Magazine, 'The smartest thing would be for the majors to collaborate on the creation of the ultimate digital-distribution hub, a place where every band can sell its wares at the price point of its choosing'. Apples iTunes, despite its current dominance is vulnerable. Consumers dislike its incompatibility with other music services, and the labels are rebelling against its insistence on controlling prices. Universal the largest label in the world has declined to sign a long term deal with iTunes. 'Theres a real urgency for the labels to get together and figure this out, says Rick Rubin of Columbia Records.'
"Personally I expect that Apple will before too long reveal a wireless iPod that connects to an iTunes 'all of the music, wherever you are' subscription service. I would like it to succeed, if the content is fairly paid for. 'Access' is what people will be paying for in the future, not the 'ownership' of digital copies of pieces of music."
"I have met Steve Jobs and even done a deal with him face to face in his kitchen in Palo Alto in 2004. No one there but Steve, Bono, Jimmy Iovine [of Interscope Records] and me, and Lucian Grainge [of Universal Records] was on the phone. We made the deal for the U2 iPod and wrote it down in the back of my diary. We approved the use of the music in TV commercials for iTunes and the iPod and in return got a royalty on the hardware. Those were the days when iTunes was being talked about as penicillin for the recorded music industry."
"I wish [Steve Jobs] would bring his remarkable set of skills to bear on the problems of recorded music. Hes a technologist, a financial genius, a marketer and a music lover. He probably doesnt realize it but the collapse of the old financial model for recorded music will also mean the end of the songwriter. Weve been used to bands who wrote their own material since the Beatles, but the mechanical royalties [for manufacture of a recording for sale] that sustain songwriters are drying up. Labels and artists, songwriters and publishers, producers and musicians, everyones a victim."
"Universal U2s label - recently struck a deal with Microsoft that sees it receive a cut of the revenues generated by sales of the Zune MP3 player. Its unfortunate that the Zune hasnt attracted the sort of consumer support that the iPod did. We need more competition."
"Under the agreement, Universal receives $1 for every Zune sold. When you consider Radio Shack sells Zune players for $150 youll see that Universal has asked for less than 1% of revenue - for a company that is supplying about a third of the US markets chart music at the moment. This isnt really enough, but its a start, I suppose and follows from the U2/Apple deal, the principle that the hardware makers should share with the content owners whose assets are exploited by the buyers of their machines."
He goes on to say that the record industry should give ISP's a cut of the music business, financial motivation to prevent their customers' illegal music downloads.
"I quote from Josh Tyrangiel in Time Magazine, 'The smartest thing would be for the majors to collaborate on the creation of the ultimate digital-distribution hub, a place where every band can sell its wares at the price point of its choosing'. Apples iTunes, despite its current dominance is vulnerable. Consumers dislike its incompatibility with other music services, and the labels are rebelling against its insistence on controlling prices. Universal the largest label in the world has declined to sign a long term deal with iTunes. 'Theres a real urgency for the labels to get together and figure this out, says Rick Rubin of Columbia Records.'
"Personally I expect that Apple will before too long reveal a wireless iPod that connects to an iTunes 'all of the music, wherever you are' subscription service. I would like it to succeed, if the content is fairly paid for. 'Access' is what people will be paying for in the future, not the 'ownership' of digital copies of pieces of music."
"I have met Steve Jobs and even done a deal with him face to face in his kitchen in Palo Alto in 2004. No one there but Steve, Bono, Jimmy Iovine [of Interscope Records] and me, and Lucian Grainge [of Universal Records] was on the phone. We made the deal for the U2 iPod and wrote it down in the back of my diary. We approved the use of the music in TV commercials for iTunes and the iPod and in return got a royalty on the hardware. Those were the days when iTunes was being talked about as penicillin for the recorded music industry."
"I wish [Steve Jobs] would bring his remarkable set of skills to bear on the problems of recorded music. Hes a technologist, a financial genius, a marketer and a music lover. He probably doesnt realize it but the collapse of the old financial model for recorded music will also mean the end of the songwriter. Weve been used to bands who wrote their own material since the Beatles, but the mechanical royalties [for manufacture of a recording for sale] that sustain songwriters are drying up. Labels and artists, songwriters and publishers, producers and musicians, everyones a victim."
"Universal U2s label - recently struck a deal with Microsoft that sees it receive a cut of the revenues generated by sales of the Zune MP3 player. Its unfortunate that the Zune hasnt attracted the sort of consumer support that the iPod did. We need more competition."
"Under the agreement, Universal receives $1 for every Zune sold. When you consider Radio Shack sells Zune players for $150 youll see that Universal has asked for less than 1% of revenue - for a company that is supplying about a third of the US markets chart music at the moment. This isnt really enough, but its a start, I suppose and follows from the U2/Apple deal, the principle that the hardware makers should share with the content owners whose assets are exploited by the buyers of their machines."
He goes on to say that the record industry should give ISP's a cut of the music business, financial motivation to prevent their customers' illegal music downloads.
