MSFT has one big problem. They don’t control the content the way they control the OS. Most all of the labels treat MSFT, appropriately, like a herd of mendacious reptiles. In fact, the labels recognize MSFT as a kindred, malevolent spirit. Yes, MSFT actually is in the novel situation of being forced to negotiate with a much nastier bunch of reptiles than themselves. (Imagine the spanish conquistadors getting off the boat and being met by Indians with helicopters and naplalm.) MSFT was successful in the technology sector because it was not a technology company - it was a ruthless law firm that got its hands on an operating system and knew how to exploit the moment it saw unfolding before it - the proliferation of general purposes computers. Engineering-driven companies like DEC would have - and did - adapt to the moment in very different ways. .

MSFT as skanky, opportunistic law firm is an old interpretive model for the company but it is relevant again as MSFT finds itself negotiating with the most litigious industry ever, an unimaginably whiny, hairtrigger mob of megalomaniacs that would make MSFT look like a Junior Achievement agricultural co-op. If MSFT, in typical skankatiousness, tries to screw over the labels, or pull a PlaysNoMore on them somehow, they will mightily regret it.

Couldn’t have happened to nicer guys.

Last year, the courts struck down the royalty tax on devices, such as iPods, saying that they could be used for more than just storing music. The tax on MP3 players was in the order of $20.

You have the right message in this blog, one that needs to be repeated over and over: if we pay a royalty tax to cover “stolen” music, then we gain the right to “steal” music — after all, the musician has received his royalty.

There is a similar royalty tax on libraries. The Canadian government collects $$$ from libraries to compensate authors, who are not receiving income each time their books are read.

The problem is, where does Canada’s royalty tax go? I wonder how much is kept by the recording companies and government buerocrats, and how much actually passes through to Canadian musicians — a topic the Canadian media has never examined. I’m a Canadian author, and I’ve ever received any cash from the tax on libraries.

There you go I said it and we all know it is mostly true though I am sure somewhere there is some honest record labels ..

Could you imagine if video game manufacturers had to pay game publishers because games could be pirated? Hard drive manufacturers paying movie/record industry because people could be downloading pirated media, gun makers responsible for deaths, man it’s unbelievable.

These industries have got look at legitimate ways to respond to the disruptions to their industry. Blackmail isn’t the answer.

I can’t believe that Microsoft voluntarily gave Universal $1 for each Zune. It is not in their corporate culture to voluntarily give away money; much less actually pay for what they want to steal.

My speculation on why the labels are not doing as well as they once were is that everyone has finished converting their record collection over to CD’s. In the days of vinyl you might buy the same album several times. You’d scratch or break your favorite album and have to replace it. Mass produced tapes would also require replacement as they degraded or broke. The CD, with its longevity, allowed everyone to purchase an album for the last time.

I suspect that the “boomers” and people over 35 are the last generation that actually had music collections. These collections actually mattered to the collectors. The music spoke to them. They wanted to preserve their collection and, as the labels published their libraries to CD, they were bought up en masse. This is the rise of profits the labels had in the late-80’s through the mid-90’s.

The ability to download music came about at the same time that most people had finished converting their collections to CD. The two were unrelated but the labels decided to blame their losses on piracy instead.

It’s in their genes to say that any playback device or medium that they did not invent is doing them harm. The tactic has worked so well in the past.

The problem with the labels not liking download services is that they only one to make them money is iTunes. All of the other services amount to true chump change. iTunes has generated over ONE BILLION dollars of PURE PROFIT for the labels. If you lump all of the other download services together do they even come close — NO!.

The labels are kicking themselves because they could not come up with a way to sell music online on their own. They resent that some other company gets a slice of the profits. This is inverse to the normal relationship that the labels have with other industries. The labels are used to free money — kickbacks — from computer media sales. The labels are envious that Apple has reversed the flow of money — even the small amount that Apple takes.

The music labels are historically predators. They prey on artists, they prey on the computer industry, they prey on their customers (RIAA lawsuits anyone?). The labels now want to prey on every digital music player made. Should we be surprised?