Legend has it, the great blues musician Robert Johnson went down to a crossroads and made a deal with the devil. In exchange for unfounded musical talent, the story says, he traded his soul. It was a yes or no choice; be a guitar hero, or not. He chose the immortality of his music.
The music industry is hardly so fantastic but like the legend, the thin line between the industry’s successes and failures, or evolution and regression, seems to hinge on the big decisions made when the road of progress forks.
Looking at the music business over the last decade, as its struggled to evolve to the changing digital landscape, two pivotal moments jump out. The first was the evolution of file sharing networks and how the music industry chose to handle them. The second was the advent of Digital Rights Management (DRM) encryption and how the music industry steered its early use.
Now, it’s starting to look like the industry is reaching a third crossroads: license fee rates for streaming services .
Already this year, what companies pay for the rights to stream music is proving to be a contentious subject.
On one front, popular Internet radio stations like Pandora or Last.fm are pitted against the industry in an effort to find a licensing structure that is complimentary, and not in conflict with, the economics of ad-supported streaming services. On a second front, the industry is fighting it out with YouTube over the same issues for video streams.
A month ago, YouTube pulled its video streams (music videos) from the UK after it failed to reach a licensing deal with PRS for Music (the UK licensing body). Today, the same thing happened in Germany. Uunable to reach an agreement with Germany’s equivalent agency, GEMA, YouTube cut the music video feeds there too.
The report from Google’s side is that GEMA was seeking an untenable deal that would have charged an immediate fee of .01 Euro ( about 1.3 cents) and an eventual draw of $0.16 for each song played by a German listener.
GEMA CEO Harald Heker countered that the failure to reach a deal lies in Google’s unwillingness to give GEMA more “transparency” on how the music in listed to. Heker went onto suggest that other European collection societies will have a similar problem.
He’s probably right. A long term solution for paying royalties from streamed songs or videos isn’t going to be resolved quickly. The stakes are too high.
Related Articles from Metue
• Last.fm to play its Last Free Music Streams in Some Markets
• YouTube Pulls Music Videos in the UK Over Licensing Fees
• Warner Music Backs Away from YouTube
• Copyright Contentment: Music Royalties Stay the Same
• Disney and YouTube Reach Content Deal for TV Programming
• iTunes Tiered Pricing Set for April 7?
• iTunes Goes DRM Free
• Guy Hands Steps out of Terra Firma CEO Role
•The Paradox of DRM