Monday, July 28, 2008

Cure for RIAA disease?

Y Combinator, a bi-annual startup camp, recently published some startup ideas that they want to hear from the next wave of applications. The first stated problem..

"1. A cure for the disease of which the RIAA is a symptom.
Something is broken when Sony and Universal are suing children. Actually, at least two things are broken: the software that file sharers use, and the record labels' business model. The current situation can't be the final answer. And what happened with music is now happening with movies. When the dust settles in 20 years, what will this world look like? What components of it could you start building now?

The answer may be far afield. The answer for the music industry, for example, is probably to give up insisting on payment for recorded music and focus on licensing and live shows. But what happens to movies? Do they morph into games?"

(Welcome to America! It's the only country that considers suing anyone legitimate.)

Paul Graham is right on about the broken system, but we can't blame the music labels for suing music download population at massive scale. But I still blame them for not being able to adapt their existing business model to the digital age. I don't advocate violating copyrights nor endorse any form of illegal downloads. Let's just be honest here. Ever since peer-to-peer downloads surfaced, the music industry failed to suppress the emergence of online music sharing.... I mean illegal ones at least.

The whole music industry ecosystem is overly complicated and hard to make any dramatic changes. Yet, the music labels need to realize that the system is broken and embrace new business model.

True Anthem just closed funding from angel investors. Maybe they should've applied for Y Combinators. Is this the answer to the music industry?