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Living in the Past

December 28, 2010 16:09:03.000

In a long article about the success of Spotify in Europe, we find out why it's not available in the US - it's due to the lack of sense the labels have:

None of the major labels would talk to Wired about Spotify, but several have made their opinions known. “Free streaming services are clearly not net positive for the industry,” said Warner Music CEO Edgar Bronfman Jr. during a February conference call to discuss his company’s quarterly earnings, “and as far as Warner Music is concerned, it will not be licensed. So, this sort of ‘get all the music you want for free and then maybe we can—with a few bells and whistles—move you to a premium price’ strategy is not the kind of approach to business that we will be supporting in the future.”

What Bronfman doesn't realize is that he's living in the world now. People are sharing music over torrents and skype, never mind the "sneaker net" pastime of burning a CD. He can either get on board with a legitimate business and have a stake in that future, or he can fade off into the distance. At the moment, he's chosen to fade off.

The big problem is one you see a lot in software businesses being confronted with free, open source competitors - the first reactions are to clamp down harder and complain about the unfairness of it all. Here's the thing though: evolving business models aren't about fairness, they're about the way things are. Get on the bus, stay off the bus - either way, it's heading out. With the net's existence, it's going to remain easy to pass music (and other software, for that matter) around. You simply have to account for that fact in your business model.

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posted by James Robertson

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