According to legend, technology giant Bob Metcalfe was once reportedly asked whether the old monopoly telephone companies were evil or just stupid. Metcalfe’s response: “Why can’t they be both?”
Metcalfe’s riposte could clearly apply to the lumbering dinosaurs of the old record companies. Get a load of this interview with Vivendi Universal’s CEO, Jean-Bernard Levy, who first opens fire the record cartel’s only serious source of income in the digital realm:
The split between Apple and (music) producers is indecent … Our contracts give too good a share to Apple.”
Hmm, well, Steve Jobs does have a reputation for driving a hard bargain. Maybe he just doesn’t allow the poor old record suits to keep enough of the income from iTunes sales. Say, just how much is that split worth, anyway?
At present, UMG, the world’s largest record company, gets 0.70 euro ($0.99) out of the 0.99 euro retail price charged by iTunes, Vivendi said.
So, let me get this straight, Jean-Bernard. You’re on the heavy end of a 70-30 spilt with the one company that keeps your products on the Internet from being 100% pirated, and you think you’re getting a bad deal? Where did you learn how to do business? Elementary school?
Oh, wait, I forgot. He’s French. But let’s resume:
Fleshing out UMG’s strategy, Levy said it planned to focus on better exploiting the “monetization of an artist’s image” which included branded clothes and TV shows.
“This is what we hope will revive our business,” Levy said. “People indulge in piracy but spend a lot of money on many other things that are linked to an artist.”
Stop and read that again. Go ahead, I’ll wait.
Back now? Good. Now think for a minute about just which “artists” are going to agree to be “monetized” by record companies. You got it–talentless bubblegum pop stars, and that’s the future strategy of one of the biggest media conglomerates in the world: market craptacular American Idolware from no-talent pin-ups to thirteen-year-old girls.
Music? Forget about it. You guys and gals who’ve spent all that time actually learning how to play instruments and write songs? Sorry, not monetizable. We don’t get a big enough cut to worry about selling music. We’re in the t-shirt business now–but we’ll still flatter ourselves by pretending that we promote “artists.”
Stupid. And pretty evil, too.