In China Digital Music Services Go After Ad Supported Piracy and Illegal Services.

I’m in China for the next two weeks performing and doing a series of IP and Music Industry events.   I will be occasionally updating readers on my activities. 

Congress Should Ask Digital Music Services Why They Don’t Go After Ad Supported Piracy.

Why don’t services like Spotify go after unlicensed competitors like Grooveshark? Why didn’t Apple or Amazon complain about unfair competition from the likes of MegaUpload? Why don’t the ad supported services like Pandora or Spotify complain about the ad supported piracy that directly competes with their advertising dollars?  This is something that has always puzzled us here at The Trichordist.  Why would otherwise rational business people who are obligated to protect their shareholders interest allow unlicensed competitors to get away with it?   Hell I’ve watched them cozy right up to unlicensed competitors. I’m not gonna name names here but a little people watching at SF Music Tech is quite instructive.  (The FTC or DOJ should try it sometime).

Well we gave these services the benefit of the doubt.  “Maybe no one has really thought this through? So we  back-channelled to one of these companies and asked them to join us in our campaign against ad supported piracy.  They declined.  Why?  Because they claimed they didn’t want to be seen as “anti-consumer.”  Huh?!

While it’s tempting to just call the entire digital music distribution business a bunch of glassy eyed free-culture Kool-Aid drinkers who’ve never grown up and actually  turned a profit, I won’t.  Cause while they’ve never made a profit they aren’t totally stupid.   In fact I believe they are consciously (and perhaps illegally) running a fairly sophisticated racket.

I believe that the digital services have specifically used the threat of piracy to negotiate exploitative deals with artists and rights holders.  Now they can’t come right out and say “That’s a real nice album you got there, I’d hate for it to get torrented” cause that would be illegal.  But they can create a fake scientific corporate study that says the same thing and here it is.

But as a regular reader you know this is just business as usual for these guys. This isn’t really news. What is news, is that in China the services and the content owners have come together to fight the illegal services.  As  China Music Business reports

It is impossible to make a concerted switch into a paying model when there are hundreds of sites with freely available music. While there are definitely fierce rivalries at play here, the key stakeholders are making an aligned move towards addressing this, including setting up bodies like the Alliance of the Digital Music Industry (ADMI), representing both content and service providers.

Holy shit.  Why don’t the western services get this? It’s a no brainer.  Maybe it’s time for Shareholders to ask some questions.

Read the rest here:

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