Hacker News Reader

Comment by aston | Hacker News Reader

If I told you there was an e-commerce company without a profitable year in over a decade of existence despite federally-mandated price ceilings placed on their suppliers, you'd be incredulous. If I then added that the same company was lobbying in Washington to get the price ceiling lowered, the pitchforks would be out.

But then mention it's a company selling music, and people shrug, "Oh, well music should be free anyway... The artists should be happy they get anything."

View on HN

But then you told them that the suppliers used a cartel model to prevent true competition in the marketplace......

I'm not sure what you're saying here. Are you claiming that what's stopping the average artist from selling as many records as Justin Timberlake is collusion among the major record labels?

No, he's saying that what's stopping the average artist to get a high a royalty percentage as Justin Timberlake and stopping pandora from paying radically less for the music is collusion among the major record labels.

Not if the price ceiling were selectively enforced against only one type of radio station. In your analogy this would be the e-commerce company has to buy twinkies from their supplier at 8x the price everyone else pays by government mandate.

Why's the price matter? Any store that buys merchandise it can't sell at a profit is making a basic business mistake.

Separately, to your point about unfairness, I suspect that both radio and internet streaming prices are lower than what the market would set if the government didn't intervene.

Remember, copyright exists for the public good. Would radio still exist if it paid significantly more than current internet prices instead of less? Would that be preferable to the current situation?

If, simultaneously, congress removed the compulsory licensing radio had to pay (or, alternately, raised it to match Pandora's on a per-listener basis) and the FCC also removed restrictions around Payola, record labels big and small would probably be happy to subsidize the difference for radio stations because radio (unlike Pandora) is super-effective at advertising higher-revenue-generating products like local concerts and physical CDs.

Do you have a reference handy for your statement "radio is super-effective at advertising higher-revenue-generating products..."?

I don't necessarily doubt it is more effective for certain things, like local events (although Pandora could move that direction I suppose). I'm just wondering why radio would be so much more effective. Is it because they have so many more ads per hour of play, and radio "personalities" to shill local stuff?

If an e-commerce company and Walmart both paid federally-mandated price ceilings, except Walmart enjoyed a much lower ceiling, there may well be pitchforks. But not on the side that you seem to think.

Well, the suppliers may face a federally-mandated price ceiling, but they also have a federally-mandated monopoly on their own product (copyright).

It's not like you have a natural right to prevent people from copying your stuff - we grant that right as a society, subject to very definitive limitations.

The real issue here is piracy -- if Pandora didn't have to compete with free, they could raise their prices and this whole issue would go away. As long as piracy exists, the price of music will be driven down. You can't blame Pandora for that.

The copyright here is essentially nullified by the compulsory licensing. Without congress, Pandora would have to negotiate directly with the labels (see Spotify's much higher payouts and upfront licensing fees), and with congress, the labels can't even take their music away from Pandora if they don't like the price.

But without copyright, Pandora could simply copy the music and sell the service without paying any royalty at all. It's only by government fiat that Pandora has any costs, period. Copyright hasn't been nullified, it's just been altered.

Without congress, Pandora wouldn't have to negotiate with anyone at all, because there wouldn't be any copyright on the music to stop them.

You can argue that compulsory licensing is good or bad for artists/distributors/consumers in the long run, and it's an interesting debate. But it's not like there's some default natural right that is being violated here.

wait, who has gone a decade without a profitable year? because it's certainly not the music industry.

amazon.com?

Reply on news.ycombinator.com