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February 23, 2010

It's better to reliquish control; Kulash gets it. Why doesn't EMI?

Interesting op-ed in the New York Times by OK Go singer Damian Kulash. Kulash notes that his band acted in violation of their record contract when they posted their famous treadmills video on YouTube and he gets stuck into EMI for having the lack of vision to subsequently make it impossible to do the same in future.

It's a very simple proposition from a technical point of view: EMI got nothing for all those views when the video was originally released. Now they get a royalty every time an EMI video is watched on YouTube. The problem for OK Go is that the aspect of YouTube's service that made it so powerful - that control of the video was given to the fans by the "embedding" feature - has been disabled. This reduces fans' ability to share they video with other people who like it, since it has to be watched on the YouTube site.

Kulash very bravely and sensibly does the numbers on this, noting that when the embedding feature was turned off, views sank to about a tenth of their previous rate: from about 10,000 a day to about 1000. He estimates that EMI has grossed "a little over $5400" in the six months before the article was written. Contrast that with the benefits of giving the video away: 700 shows on five continents and one Grammy in three years. One of the rare releases that's in the black before the next release is made.

Factor in the disappointment and disenchantment of fans who loved the original specifically because it was free and easy to share, and you have a major promotion problem on your hands. Kulash clearly understands this but the EMI folks clearly do not. I feel for him.

This is the pointy end of the harsh reality of the new media environment. It's the part that people who are used to operating in an old-media environment, including media luminaries like Rupert Murdoch, simply don't get: you can no longer control people's access to digital content and it's harmful to your brand if you try. Making a living in this environment is about being a part of something rather than owning everything (pdf, 141KB).

When it comes to protecting a band's intellectual property, YES, there is a reason to ensure that other people don't exploit it and that if they make money from it you get a slice of the action. But NO, there's no point stopping people from doing what they want with it as individuals, and you can seriously hamper your relationship with people if you try. Most obviously, if people don't know that your video or MP3 exists they will not tell anyone else about it ...

In fact, Corey Smith's experience at this point was that when he stopped giving his free MP3s away, his sales via iTunes went DOWN. This is a regular occurrence. My mate Brad used to answer the FAQ "Why should I buy your music when I can download it for free?" with "I don't know but people do." EMI might earn MORE royalties if they allowed embedding of the video! But, of course, that would mean giving up control ...

In summary, well done EMI for coming to a sharing arrangement with a company that is making money from providing your content to the public - that's far more constructive than suing fans. But smacks across the head for having the stupidity to try and control the ways in which people can access and/or use that content. You're only harming yourselves ... and the band.

Posted by Hughie at February 23, 2010 7:59 AM

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