South Park and Music Sharing

I don’t know how many of you caught it, but last night’s episode of South Park was a hoot. Stan, Kyle, Cartman and Kenny are attempting to form a band (“Moop”), when Cartman breaks off to form a Christian rock band because the market is easier. Cartman and Kyle bet $10 on who will have the first Platinum record.

Stan, Kyle and Kenny decide that the best way to establish a style is to listen to many other bands, but when Kyle’s request for $300 to purchase several CDs is denied, they discover that they can download music off the Internet for free. However, after downloading three songs, the FBI arrives and promptly arrests them. The kids say that they didn’t think they were hurting anyone, so an FBI agent brings them through a hilarious tour of musicians that are unable to purchase gold-encrusted shark tanks, must fly in Gulfstream-3 jets (instead of Gulfstream-4 jets), and can’t purchase islands for their children’s birthdays. The kids decide to go on a music strike because of this, and soon Metallica, Britney Spears, and others have joined them.

After a while they realize that they shouldn’t be striking because musicians are artists and they should be doing what they do for art’s sake, not just for money. Of course, Metallica, Britney and the others say that they are in it for the money. Kyle decides that if they produce good music, that people will pay for it, whether as CD purchases or concert tickets.

So, this is clearly the “it’s-time-to-change-the-business-model” argument for the music industry, where my head is currently at. I believe that this attempt to legalize music on the Internet (iTunes, etc) is a wrong headed attempt to force consumers to pay virtually the same amount for bits that they were paying for atoms. Until the prices significant drop (to about 25 cents per song), I think the music industry is going to continue to flounder. The business models must change, and Kazaa, Morpheus, Limewire, and other P2P apps continue to push this along. I think that the record contracts should start to change so that the industry gets more involved in the promotion of concert tours for these artists — that’s where their next dollars will be coming from. While it’s great to believe that someone can record something once and continue to get paid for it many times, the music industry has finally hit a wall where the goods are so desired that everyone is willing to break the law to get them. That’s when things just have to change.

Anyway, if you can catch the replay of this episode, it’s worth it. You’ll get a good laugh at the RIAA’s expense.

Moviebeam from Disney

Disney has released a set top box that holds about 100 movies, designed to compete with Blockbuster and other video rental stores. The service, called MovieBeam, doesn’t use satellite or cable to transmit the movies. Instead, it comes with about 100 movies preinstalled at a cost of $6.99 per month with movie rentals between $2.49 and $3.99. There’s no equipment to purchase with this service — the monthly charge presumably covers it (some areas require a setup fee).

The movies themselves are transmitted from a local TV station, using up any extra bandwidth. So this is clearly not “video on demand”, especially since the movies could take a while to download. But Disney does envision that this will compete successfully with video stores.

I’m less optimistic than they are in this regard. It seems to me that the primary competition won’t be video stores but pay per view and Netflix. Netflix charges $20 per month. You can consume as many DVDs as you want, but only 3 at a time. Assuming you did pretty well and watched 3 DVDs a week (does anyone really have that much time?), MovieBeam would cost you more than NetFlix. In addition, MovieBeam only lets you watch a movie for a 24 hour period, which is kind of lame compared to the video stores.

MovieBeam would be better if you could select a certain number of videos per month for a fixed subscription price. After that, you’d have to pay extra or wait until next month. That would match up better with Netflix and be more convenient to boot. Another alternative would be a check-in/check-out policy where you could select three videos, for a minimum time period of 24 or 48 hours. That would closely match Netflix, where the rate of video rentals is held back by the fact that they have to mail you the DVDs. If you selected a MovieBeam video and couldn’t select another for two days, it’d have roughly the same effect in terms of limiting, but would allow you to watch the video for longer if you wanted to.

An Argument For Compulsory Licensing Of Music

William Fisher wrote this well-thought out article for CNET on an approach to establishing a compulsory license as a solution to P2P music sharing. It’s worth reading. Essentially he takes the position that a compulsory licensing system is going to be the only solution to the continued increase in music sharing on the Internet. A similar system was set up when radio stations started playing music — a way for the record industry to colllect fees without requiring rigid tracking and licensing of individual albums and songs.

The net result of a compulsory license would be a tax on ISPs, likely passed through to consumers, and then distributed to the recording industry. Fisher notes that CD burners and MP3 might also be taxed for the same reasons. For the record, I believe that this is a good thing. I think that this approach provides a good opportunity to legitimize song sharing while continuing to provide compensation to the artists. There’s even a possibility that more artists will be compensated as a result of this.

Read the article — see what you think.

Harry Potter and the Houses of the CEOs

Just couldn’t resist, being a Harry Potter fan, posting this article from Motley Fool, where Rick Munarriz sorts various current and former CEOs into the Houses of Hogwarts. I’m surprised WorldCom’s Bernie Ebbers didn’t make thie list for the House of Slythern. I would imagine that Katherine Graham when she was alive would have been in the house of Hufflepuff. John Sidgemore strikes me as a Gryffindor. Other nominations? I’ll post the best ones.