Rumor: Google “Disgusted” With Record Labels

The latest rumor to emerge from the Google campus is that the company’s much anticipated music service is just about at the end of their rope with the major label licensing process. A source close to the negotiations characterizes the search giant as “disgusted” with the labels, so much so that they are seriously considering following Amazon’s lead and launching their music could service without label licenses. I’m told that, though very remote and my guess is that it would never come to this, Google may go so far as to shut down the music service project altogether.

 

Though, as I reported last week, Google is frustrated from the grief they seem to be getting from all of the labels, much of which appears to be coming from WMG. Observers say that WMG has staked its future on the cloud and the label’s head of digital, Michael Nash, is said to be convinced that Google should be charging users $30 a year for the cloud. Google, in response, is said to think that is way too much and wants the first 500 tracks stored by users to be free of charge. At this point the negotiations are said to have gone sideways and Google execs are looking at alternative strategies.

 

I’m told that this is when the idea of launching without licenses came up. Google may be starting to think that if the industry weren’t going to sue Amazon, then why would they take on Google? After all, who needs whom the most in this scenario? Could you even wrap your brain around the legal costs? As a source pointed out to me, “Larry, Serge and Eric could buy the entire music industry with their personal money”.

 

Once again, Warner is the fly in the ointment, the same company that praises Spotify one day, renews their licenses for the rest of the world and then the next day doesn’t want to license them in the US.

 

Billboard’s Glenn Peoples published an analysis of data compiled by the IFPI last week and found that the seven EU countries in which Spotify operates had an average digital growth rate of 43% in 2010. By contrast, the other 8 European countries where Spotify does not operate had an average 9.3% digital growth. The increase in digital growth began with Spotify’s launch in October of 2008 in the UK, France, Spain, Norway, Sweden and Finland. So from Michael Nash’s point of view, it seems that Spotify may be good for the rest of the world, but not good enough for the US.

 

Makes perfect sense, doesn’t it?

 

© 2011, Wayne Rosso. All rights reserved.

28 comments for “Rumor: Google “Disgusted” With Record Labels

  1. Ashley
    April 27, 2011 at 9:24 AM

    Joe, if people are prepared to pay for it if there is no other means of obtaining it, then there is demonstrable value. But just because something currently is free does not mean it has no value. If there was only one flower in the world, people would pay to see it/smell it. The same with music and the people who create music. There is value. I mean technically, all you need in life is a blank room and someone to push food through the door. Life clearly is a lot more than that.

  2. Ryan
    April 16, 2011 at 6:28 PM

    If you truly can not appreciate music, trying to explain to you why it’s worthwhile is ineffable.

  3. j.d. rockafella
    April 16, 2011 at 11:20 AM

    Google should approach this as they approach any of their business endeavors, in the time-honored tradition of software business. That is, acquire the personnel / infrastructure to produce the content they are currently attempting to “license,” and proceed to eviscerate the business model of the current market leaders (i.e. the Music Industry). Amazon is already brutally serious about this as can be seen in their deep cost cutting and sales.

    Google could quite easily go one better here. Buy a record label. A substantial record label, but not the entire bloated industry. Immediately change all management (implement Google’s hiring procedures) and shift the economic model to, oh, let’s say, a 70/30 split in favor of the artists. Sounds familiar, sounds fair, right? Not in these parts.

    Overnight you’ll have nearly every musical artist (major or otherwise) clamoring to get on Google’s label. You would see a groundswell of support from fans when they understood that finally their hard-earned money would be directly funding something they care about deeply: the music and the musicians they love. Give it some time and the rest of the industry would be forced to change their profit model toward Google’s — even great indie labels that currently grant their artists a 50/50 split.

    All of a sudden the music industry will be pressing Google for deals on its terms, rather than the other way around.

    This is the way forward.

  4. Parah Salin
    April 16, 2011 at 3:48 AM

    Google should just create a music label and get the artists on their side. I’m so sick and tired of reading “Sorry this is not available in your country.” I mean seriously ? How do you expect people to know about and listen to your music if the can’t access it !?!? And record labels wonder why people download music…

  5. Pedant
    April 15, 2011 at 11:34 PM

    could -> cloud

    Same letters, both valid words, different meanings.

  6. Bill Jackson
    April 15, 2011 at 6:20 PM

    What is needed is a creators rights law, so that 50% of the ‘gate’ of a music track that can not be signed away or stolen by accounting etc. So a track sells for $1, the author get 50 cents and the label get 50 cents directly up front by the credit card processor/portal. If the labels want to give advances, let them get their minds around the fact that they can recover that advance from their 50 cents. If a creator sells his own he/she gets it all.
    Make this retroactive to old music as well. Copy right limited to 50 years is plenty, no need for multi-generational enrichment.

  7. April 12, 2011 at 5:30 PM

    I guess compensating the creators of art is lost cause out side the US. Why is a 4 buck cup of water poured over beans worth more then the work of the many that often is behind one song. BTY don’t for a minute think that Major Labels are the same thing as Indie labels and it really is the Indie’s that suffer the most already and google allowing everyone to become a cloud streaming portal is not going to help them or the fans. FYI if we allow Google and like to suck the life out of the art you will only get CorpArt. Buy Indie Support Locals.

    • Ryan
      April 15, 2011 at 8:21 PM

      Anyone who defends the RIAA is in serious denial. They in no way represent the artists. They only represent the money they make off the artists and their desire to preserve a defunct business model.
      If you haven’t already, show the Big 3 that you do not support them. Buy music directly from the artist, from indies, or not at all.

      I have to go steal some music…

    • Joe
      April 15, 2011 at 8:21 PM

      Maybe the indie artists should get real jobs that contribute to society… then, maybe they can support themselves and do their “art” in their free time. People shouldn’t expect to make a living off of creating something that holds no real value.

      • Ryan
        April 15, 2011 at 10:01 PM

        I’m quite sure that’s how the majority of artists, indie or not, live. They’re not holding you at gunpoint and demanding your money.

        That’s the RIAA’s gig.

      • Sue
        April 15, 2011 at 11:11 PM

        Joe: If you honestly think that music holds no real value, I pity you and the inherently flavorless life that I’m sure you must lead.

        What is even more unfortunate for you, is that you probably have no idea what you’re missing by indulging your narrow minded opinions.

        • bob
          April 16, 2011 at 4:26 PM

          Let me guess… You are at starbucks on your Apple sniffing your farts and are gonna hop in your hybrid and go to your studio apt.

        • Nate
          April 17, 2011 at 4:11 AM

          Of course it has value. If it didn’t they wouldn’t be so desperate about losing their ability to get it for free.

          Transparent and empty talk from someone that voraciously consumes someone else’s labor but thinks they aren’t obligated to compensate them for it.

      • Dave
        April 16, 2011 at 2:38 AM

        Joe, while in some ways I agree with you, on the whole, I just cant.

        Creating ‘real art’ is not something you can ‘just do’ in your free time, it requires true commitment, dedication and hard work, and is a full time job. Imagine Jimi Hendrix working a 9-5, then playing some gigs at night, or Mozart tending horses and composing on the side, etc, etc. and if these aren’t indie artists, who is? Why shouldn’t these artists expect to be compensated for their contributions and hard work.

        I also can’t agree that music, ‘holds no real value’, that is like saying that ‘books hold no real value’, or paintings hold no real value, what is ‘real value’ then? The fruits of these creative endeavors have enriched my life and I cant imagine a world without them.

        (Side note, yes the RIAA is horrible but don’t blame the musicians, we need a new musician business model)

        I’ll ‘get off your lawn’ now,…

      • Oscar
        April 16, 2011 at 5:11 AM

        Pointless comment. If you don’t understand the importance of music and art in general then I’m afraid you are up for a pretty dull life. Are you a robot by any chance?

        • Joe
          April 16, 2011 at 12:50 PM

          Almost, just a cold hearted and logical person, with a macro view on society. Please do tell me how an artist’s contribution to society will better human kind. Sure, art, video games, and etc. can be fun and I agree on that point. But there are so many lazy people out there (hipsters I am looking at you) trying to leech off of society by having fun and doing their “art”.

          • Robin Munn
            April 16, 2011 at 5:40 PM

            Please do tell me how an artist’s contribution to society will better human kind.

            Beethoven. Handel. Bach. Mendelssohn. Rachmaninoff. Mozart. Chopin. Dvorak. Haydn. Do you want me to go on?

            And the RIAA should take note: all these people lived and worked in a time when the business model for paying artists was different than today’s. The RIAA isn’t essential to society. If they get in the way of good art too much, society will find other ways of funding artists. In fact, I would argue that this is already happening.

          • Nate
            April 17, 2011 at 4:13 AM

            LOL. Someone lives in a very dark place…

          • Joe
            April 23, 2011 at 11:33 AM

            LOL. Those old dudes made art… so what. You did not at all address how they made contributions to society and don’t give me some BS about they made people “happy”. I really dislike the RIAA as well, but your statement about how they are not essential to society is laughable. That contradicts your statement that artists contribute. The RIAA just provides a platform (albeit crappy) to distribute music and acquire funds through litigation (don’t get me started on that point).

            I liken music to drugs, sex, and alcohol. They all make people happy and feel good. Sex perpetuates the human race, but, noone in their right mind can say that drugs, music, and alcohol provide a meaningful contribution to society. That being said, I do drink and partake in drugs once and a while and gasp… I listen to music constantly. Make your argument – how do they contribute to society? And for those who are indie artists, how are you any different than one who makes and sells drugs (aside from the physical side affects that the drugs produce)?

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