Digital Home Thoughts: Record labels want a bigger cut of digital music profits

"The music industry is filled with creative types, and many seem to be wearing suits these days. Consider the latest idea from the business suite at Warner Music Group, which is rummaging like the rest of the industry for new sources of revenue: when search engines like Google formally launch their new video-search sites, Warner Music wants a cut of the cash the sites would reap from selling ads next to search results. So if you type in "Madonna''—a Warner act—at the Google Video site (now in its test phase), and the results are accompanied by ads, Warner wants a share of those ad dollars as well as payment for any Madonna videos that are streamed or sold, according to a senior Warner insider who wasn't authorized to speak on the record, adding that the label has approached Google about the idea. Warner Music declined official comment. A Google spokesman wouldn't comment on any talks with record labels, but did say the company believes music companies should profit from their content. Generally, "that's what we are working on,'' the spokesman said. "We are in the early stages now.""



I have seven words for the music industry: Don't bite the hand that feeds you. Jobs has curbed illegal downloading with iTunes, giving consumers an inexpensive and convenient option, and now consumers are actually paying for music videos! As it is, 60-70 cents of each 99 cent song on iTunes goes right to the labels. Why can't the record industry just be grateful they're getting any money at all? The other option (depressed CD sales and rampant illegal downloading) is far less attractive.