No Tears for Media Giants

The Government here is under a lot of pressure from media companies to put a lot of pressure on ISPs to stop file sharing downloads. At the same time, the High Court ruled against a pub landlady who used a foreign service to show Premier League football, rather than BSkyB, which has the exclusive right to show the matches in the UK.

I think there is a difference between using a camcorder in a cinema to get the scoop on the release of a film and downloading a telelvision programme that has already been shown. It’s a bit like the pub landlady, only with no cost implications for the viewer. The programme has already gone to air. It doesn’t cost the end user anything wherever they watch it. If companies want to maximise profits from advertisers, they need to broadcast simultaeously worldwide, rather than go from country to country in a piecemeal fashion.

When it comes to music downloads, I think there is a question as to whether it is mass larceny or mass revolt against the fleecing of the record companies. The record companies are complaining that they face ever-declining profits.

However, back in January 2006, “Sony BMG reported net income of $178 million on sales of $1.49 billion for the three months ended December 31 [2005].” Then this month Bloomberg reported on the BMG half of that partnership:

Bertelsmann AG, Europe’s largest media company, plans to boost revenue by about 50 percent over the next eight years as it expands the Arvato services unit and in countries including China and India.

Sales will exceed 30 billion euros ($44 billion) by 2015, Chief Executive Officer Designate Hartmut Ostrowski said in Berlin today. That’s similar to the revenue Time Warner Inc., the world’s largest media company, posted last year. Bertelsmann will have as much as 7 billion euros to invest in the next four to five years, he said.

Doesn’t your heart just weep for them when somebody shares music?

If they could get rid of all the P2P, think of how many more billions they could suck up. I can’t get Bertelsmann salary figures, but when smaller EMI was bought out this year, its chief executive got a very golden parachute:

According to the company’s report and accounts, Mr Nicoli will receive his salary of £788,000, plus £471,695 in benefits and £394,000 as half his annual bonus. Under the company’s options and share awards incentive scheme, his total payout rises to £3.3m.

And then there is all the law-breaking by companies putting illegal software on CDs and giving radio stations kickbacks for playing their music. Seems like the clean hands doctrine should apply if they are going to sue or try to have any of the P2P downloaders prosecuted. They are happy to bend or break the rules to maximise profits.

Artists who have previously benefited from the dirty record compaines are finding that they may actually have to work for a living. It won’t be enough to spend a couple of months recording and then sit back while the profits roll in. The one thing that can’t be reproduced is the live show. It can be bootlegged on the one hand and scalped on the other, but if people want to see a show they’ve got to pay at least the original ticket price to get a seat. That means artists may have to be better than their studio engineers and their miming skills. Otherwise it’s just people jumping around on stage while their record plays on really big speakers.

With BSkyB and Sentana just agreeing to pay £1.7 billion for three years (up from the previous £1.02 billion contract) of UK rights to Premier League football, it looks like some players can still command £50,000 a week or more to run up and down a field kicking a ball. That’s why Murdoch and Co don’t want Karen Murphy paying some other company much less than the Rip-off Britain price for satellite signal. If everyone decided that BSkyB is robbing them and used a European competitor, this could cut into BSkyB’s revenue, which was only £4.5 billion last year. Of course they are more than one-third owned by News Corporation which, excluding it’s BSkyB holdings, had revenue of £28.6 billion.

I would say my sympathy for media companies is waning in their fights against consumers. If consumers can fight back in a way that shakes up the industry and makes everything more accessible, maybe that isn’t such a bad thing.

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