U2 Band Manager: ISPs, Music Industry Should Forge ‘Commercial Partnerships’

Says they must share revenues in a way that reflects what music is doing for them, and that Silicon Valley’s “liberal hippy values” is to blame for its inability to figure out how to create a system for paying for music.

Paul McGuinness, U2’s longtime band manager, gave a speech at a Music Matters confab in Hong Kong a few days ago criticizing ISPs around the globe for not doing more to combat the flow of copyrighted material on their networks.

He argues that they and others have been rewarded handsomely over the years at the music industry’s expense.

“Where has all the money gone?” he asks.

“The answer is that it has gone to corporations – cable operators, ISPs, device manufacturers, P2P software companies – companies that have used music to drive vast revenues from broadband subscriptions and from advertising. They would argue they have been neutral bystanders to the spectacular devaluation of music and the consequent turmoil in the music business; I don’t believe that is true – they turned their heads the other way, watched their subscriptions grow, and profited handsomely,” he adds.

McGuiness claims that 80% of all Internet traffic is P2P-related, an amazingly bloated figure that is more likely around 37% thanks to the exponential rise in video streaming services like YouTube and others. He uses this erroneous figure to then argue that a large amount of an ISP’s profits is thereby earned on the backs of the music industry whose profits have diminished as theirs have soared.

It stands to reason, in his mind, that ISPs should have a “…real commercial partnership with the music business in which they fairly share their revenues.”

“One way or another, ISPs and mobile operators are the business partners of the future for the recorded music business – but they are going to have to share the money in a way that reflects what music is doing for their business,” later says.

The “one way” is willingly, the other is legislatively it would seem from his insinuations.

Could anything be more disgusting? If each of the various types of copyright holders forged “commercial partnerships” with ISPs the Internet would be utterly recognizable. Rather than an “information superhighway” it’d be Main St, USA where billboards are plastered everywhere and overzealous beat cops watch your every move for signs of illegal behavior.

Probably the most boldest charge of all is leveled against the “…internet freethinking culture of California and Silicon Valley.” The very people and companies who have put the power of knowledge back into the hands of the people are singled out for their egalitarian ways.

“They are fantastic entrepreneurs, wonderful engineers,” he says. “Their passion for innovation and liberal hippy values in one sense sit very well with the creativity of the music business. But at a deeper level, there is a bigger problem and it’s one those brilliant minds never resolved: I’m talking about the problem of paying for music.”

Talk about blaming the wrong people.

Is it really the job of Silicon Valley’s best and brightest minds to figure out how the record biz could make money? The same industry that’s been ripping off artists and music fans alike since the inception of physical media? It’s laughable that they now cry foul, that it isn’t getting as much revenue as it should and guys like McGuiness now think it should get a cut of somebody else’s action.

I mean it shouldn’t take a Stanford MBA to realize the following: a) don’t sue your customers, b) physical albums are overpriced, c) focus on making good albums, not good profits, and most importantly d) It’s 2008 already, embrace digital distribution as your customers already have been since 1999.

“It’s hard to forget that these are the same corporations that perpetrated the old 50% CD royalty scam in the 80s and to this day still have contracts full of packaging deductions and breakages clauses,” McGuiness later says in his words.

My point exactly.

So why should we sit idly by and allow a PRIVATE BUSINESS, especially one with more than a 50 year history of ripping everybody off, including the artists it always claims to be most concerned with, become a gatekeeper of content on the Internet?

It was a gatekeeper before with physical media and and now it wants to reprise that role with digital media. That’s the real frightening thing here. Can you imagine an Internet where your ISP, in conjunction with record labels, examines and filters each and every song that flows across its network? It’s horrifying.

What happens when other private businesses – other copyright holders – want to get in on the revenue sharing game?

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