Google Music Downloads To Go Ahead Without Sony Or Warner 220
An anonymous reader writes "Google has sent out press invitations to an event on Wednesday where it's expected they'll unveil their long-rumored Google Music download service. CNET reports that while Google already has an agreement in place with Universal, talks with Sony and Warner Music Group are still in progress, and won't be finished by the time Google Music launches. 'The negotiations between Google and the labels by and large have not gone well for either side. The labels are eager for a serious iTunes competitor to emerge and believe Google has the technological know-how, money, and Internet presence to give iTunes a run for its money. ... Yet, the company is once again launching a major part of its music service without acquiring licenses and this may serve to widen the rift between the company and some of the labels. '"
Re:Here's a chance to grab my money Google. (Score:5, Informative)
Warner Music is owned by a Russian oligarch (Score:5, Informative)
In the 1990s, Warner Music was the largest record company. Now they're third. Warner Music is owned by a Russian oligarch, Leonard Blavatnik, who bought it last July. If Google had wanted Warner Music, they could have bought it then. It sold for $3 billion (actually only $320 million in cash plus the assumption of debt) a few months ago.
Google probably doesn't want to own a record company. It would be a distraction.
Poor cost controls aren't my problem (Score:4, Informative)
It's not about the 4 megs, it's about the 99c/costs to produce the song, which presumably had at least $5,000 of studio overhead per album.
If the recording studio can't control their costs, that isn't my problem. While I don't pretend to be an expert in the music industry, I am actually a certified accountant and I'm quite comfortable saying that everything I've observed about that industry indicates they aren't very good at cost control. While there is a meaningful cost to the production of an album, the overhead is fixed and can be amortized over numerous projects. The labor to produce the record is also basically fixed. It's fairly similar to R&D in that once it goes to market there are no more costs, especially with digital distribution.
Most of the costs in a record label should be in sales and marketing (rather like a software firm actually). The actual product development is rather inexpensive - maybe 10-20% of the total costs. The real expense is in promotion (and formerly in distribution) so the labels haven't really needed to care much about cost control in the actual studio time because it is tiny by comparison. That doesn't mean though that I as the customer should be willing to pay for their inefficiency.
Ask yourself this. Are you really willing to pay the record companies the money it costs you to market a record to you? Are you really willing to pay some extravagant rate for studio time? Personally I have no interest at all in paying for their marketing budget or other production inefficiencies. I'm pretty confident that even at $0.99/song, the margins are pretty fat for the record companies given that the marginal cost of sales done digitally is a good approximation of zero.
Re:Warner Music is owned by a Russian oligarch (Score:5, Informative)
That is hardly the profile of an oligarch. Sounds more like an American who made it big. (http://en.wikipedia.org/wiki/Russian_oligarch).
Re:Here's a chance to grab my money Google. (Score:4, Informative)
At least in Finland, I cannot buy MP3 music from Amazon, from any of their stores (uk, de or any other).
Re:A comparison you're going to hate (Score:3, Informative)