Record Labels Soften Stance on Podcasting

    January 3, 2007

When Podcasting burst onto the scene in 2004, the music industry hardly embraced the format with open arms. Sony BMG, however, has decided to cross the invisible line of demarcation and license its content for podcasting purposes.

Second only to the RIAA, major record labels have defined by digital content enthusiasts as prime enemy combatants in the war to soften restrictions on delivering music in online formats. Podcasting, in particular, has been a thorn in the side of the record companies for the past two years.

Jacqui Cheng at Ars Technica gives a great bit of background on the matter:

It’s no secret that the music industry has always been very much against any form of digital distribution that is not DRMed. Unprotected files of songs or podcasts with songs in them could be chopped out of the podcast and widely distributed via those nasty P2P networks, with no royalties paid back to the labels as they usually are in radio. The Internet, after all, is often viewed by the music industry as the Wild West in that regard.

With record labels, it comes down to the almighty dollar. Always looking for those lucrative royalties (which the artists themselves incidentally see very little), the labels go to extraordinary lengths to discourage any format which bucks the system in that regard.

Ethan Smith at the Wall Street Journal has more:

The other major hurdle facing podcasts has been the difficulty of figuring out how labels and artists should be paid. Many podcasts are free, like broadcast or Internet radio; but because of key differences between those media and podcasting, the performance rights royalties that are collected from broadcasters don’t apply to podcasts. Plus, given that many podcasters are do-it-yourselfers who give their content away, it isn’t even clear where those royalties might come from.

Times seem to be changing, however.

Sony BMG has agreed to deals with both Ford and Chrysler to license music for podcast distribution for one year, regardless of how many copies are downloaded. Ford and Chrysler will pay a flat fee to Sony BMG for this service.

A move like this could pave the way for other labels to finally get on board with the rest of us here in the 21st Century. Instead of trying to squelch the online music/podcast community, record labels should be embracing it with open arms and finding ways to work within the system to license content, rather than trying to make it a nightmare for everyone involved.

If record labels will wake up and smell the cappuccino, there is a whole new frontier of marketing and distribution possibilities at their fingertips.

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Joe is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.