Behind The Scenes: Record Labels Demands From Amazon

Classical case of people having no idea what is happening in the real world.

The danger is not that people create more than one locker, that they might give their lockers away or download the music (which they themself have put there in the first place)

The danger is that foraging digital music becomes acceptable social behaviour (this has pretty much happened already, at least in the segment of young people) and that it become more difficult to get the stuff legally than illegally.

They can't beat the system on price, the action is socially acceptable (or at least not seen as worse than say, driving 5 miles over the limit) which mean that convenience is the only thing left to compete on.

Fortunately iTunes shows that it can be done, so why don't they?

A bit of perspective. A decade ago, I occasionally participated in ongoing negotiations with the labels to license music for what became a well known subscription service.

In retrospect, I believe the labels (and the entertainment industry in general) are master negotiators and outclass 95%+ of the people I see doing bizdev / licensing on the silicon valley side. The negotiations I was familiar with went on for years, and often focused on minute trivia or sudden left field issues. Looking back, I'm pretty sure many of these things were simple delaying tactics, though that was far from clear at the time. The industry was developing a number of their own solutions (several of which would never see the light of day) and had more or less picked a leading industry platform that was a bit farther behind the first wave. Much of the rest ended up as simple pricing leverage, each DRM or anti-piracy or marketing requirement ending up being used simply to nickel and dime the negotiations to death.

In the end, when one major competitor came close to launch negotiations across the industry suddenly became much easier. Another consideration is the industry's significant inclination to punish people who they felt worked against them - and Mr. Roberts most certainly fits in this category.

There are a number of ways to interpret all of this, but I wouldn't suggest that these demands should be taken at face value.

In this light, I think Amazon's approach of "ask for forgiveness" makes a ton of sense. Especially if you assume that terms of these licenses will become much easier and rather standardized once a major competitor launches in this space.

The ridiculousness of their demands is impressive but I found Sony to be the most amusing of them all. Sony worries that users will visit each others houses and download MP3 collections from their clouds. Honestly, if I visited someone in their house, I could simply copy the mp3 files from my laptop.

In a digital download world, what is it that a record company brings to the party? I have always thought that record companies, like book publishers and newspapers, were likely to become extinct because direct delivery is a better way of distribution. To what extent is all the posturing really about trying to extend the lifetime of a cash cow?