Following the broadband money

Unfettered internet threatened at E>G8

with one comment

The unfettered freedom of the internet was looking doubtful last night following a heated debate on copyright protection in the online world (look for Plenary IV) at the E>G8 meeting in Paris.

John Perry Barlow, vice chairman of the Electronic Freedom Foundation, Jeff Jervis,  and Patrick Zelnik of Naive (the latter two from the floor), who largely represent the Young Turks of the digital economy, were up against the Old Guard of Bertelsmann, Fox Corp, Vivendi etc as well as France’s culture minister Frederich Mitterand.

You can read some of the quotable quotes from my Twitter feed (@IanGrant52), and it is probably fair to say that the best went to the Young Turks.

But the Old Guard made some good points too. Apparently record companies make money off only one in seven or eight artists, so it’s s risky business that consumes $5bn a year on the discovery and promotion of new talent. (To which Barlow, who wrote songs for the Grateful Dead, replied, “We are not getting our money’s worth.”)

I have one question that I’ve never heard addressed: finding and recording artists are sunk costs that record companies have to incur. The difference, and the basis of their argument for copyright protection, lies in the cost of distribution.

I would like someone to tell me how much it costs to press the CD (or vinyl record), package it, distribute it, and put it on a retailer’s shelf, and how much it costs to put the same content (i.e. the song) on a legal download website like Spotify? I suspect the margins from digital distribution are somewhat healthier than from physical distribution, and we know that sales volumes are skewed way in favour of digital.

I think having this information in the open will help clarify the debate .  If anyone is in possession of the actual figures, (even as a percentage of selling price) please feel free to post them here as a comment, or (for the shy ones) to email them to me at ianrbi at gmail dot com.


Written by Br0kenTeleph0n3

2011/05/25 at 11:51

Posted in Finance, Internet, Legal, News

Tagged with , ,

One Response

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  1. […] this follows the abortive eG8 meeting last year, where “new media” representatives crossed swords with advocates for harsh […]

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