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The CEO of the world’s largest music publisher is attempting to extract money from everyone who buys a digital music player.
Universal Music Group’s Chairman and CEO Doug Morris said of iPods and similar players, “These devices are just repositories for stolen music, and they all know it. So it’s time to get paid for it.”
By accusing everyone who bought a digital music player of piracy, Universal hopes to coerce manufacturers of these devices to pay a per-unit fee, a surcharge that is then passed on to the consumer. (Universal apparently figured out that running a profitable business is much easier without the burden of convincing customers that your product is worth buying.) That’s exactly what the music giant did with Microsoft, which now pays Universal for every Zune music player sold.
Now, Universal is targeting the iPod. And with 25% of the market, Universal has quite a bit of leverage against Apple. The company can threaten to pull all of its music from the iTunes Music Store unless Apple complies with a demand to impose a per-unit fee on all iPods. If successful, anyone who buys an iPod will be considered an assumed pirate, and Universal will receive money, regardless of whether any music from that label ever ends up on one of those iPods.
Is this really a road that music publishers want to go down? Aside from the obvious ill will it engenders from honest customers, such a move runs the risk of changing the purchasing calculations of people who own these devices. In effect, it legitimizes piracy in the minds of consumers.
If you’re an honest customer who purchases music today, your decision making may change if you know that record labels charge you simply for buying a music player. You’re already paying once up front—before you’ve even spent a dime to fill the device with music—so why pay again for the same thing when you want to download music? People will feel entitled to download whatever music they want, because they will know that they’ve already been billed for it.
Treating your customers like crooks is never a good way to encourage repeat business. And imposing a blanket music surcharge simply for buying a player is a surefire way to get people thinking that they’ve got a right to download music that they’ve already paid for.
If record labels wanted to ensure that paying customers today become pirates tomorrow, they couldn’t have designed a better way.
