EU and iTS

Once again, the EU bureaucracy showed how far they are from economic realities. After last year’s fiasco about the software patents (dubbed “how to screw small companies and independant developers, BIG TIME“), they now ask Apple to relinquish their market segmentation of Europe, so that any EU citizen can buy from any EU store.

Do users want that? Hell yeah! Having access to TV shows that haven’t even aired here, music catalogs of unpublished artists, for the same price everywhere? My customer’s eyes water from sheer gratitude!

Is it possible? Doubtful. There are two major factors to take into account : chronology and revenues.

Chronology helps generating a demand : hype surrounding a series, or a band makes expectations rise. If you launch the media on every market simultaneously, it means putting a lot of money at first and then waiting for audience. When you launch it separately in time, you can tune the marketing campaigns, and pull prices up, because availability is scarce.

Just as regions for DVDs allow companies to keep an artificial high price on movies, countries within Europe wish to get their share of profits from the entertainment business. Back in the old days, the country-organized distribution markets made sense : since you had to manufacture disks and stuff, distributing an album or a movie cost a lot of money. In turn, the governments awarded exclusivity of this or that distributor for an artist on their soil, in exchange for a fee. And here, in France, there’s an artist safety net, which takes the form of a “piracy tax”. Every time you buy a blank media (including hard drives and CDs), a percentage of the price goes to the SACEM (Authors, Creators, and Producers of Music, loosely translated, and extended over time to include all kind of multimedia counterparts), to make sure everyone gets some money, even if they suffer from piracy.

Good or bad, that’s our system. Now imagine a pan-european iTunes Store. I buy (legally) a song. Apple makes sure the distributor and the artists get their share, etc. I burn it to a CD (which is my absolute right). I have to pay a tax on it, that will go to their french counterparts. But they didn’t sell anything. They get the scraps. Now imagine the me, living in a country where there’s no piracy tax. He gets his music as legal as mine, but cheaper. Hey, that’s not fair! I don’t want to pay my tax, there’s no need, since most of the big companies (and their 90% share of the global catalog) are not even selling their stuff in my country. Should we shell that too? Then small companies that rely on this help will die out. No more local lad backed up by a small label, it’s not worth it. They will all go where the rest of the industry is. The Uniculture nightmare.

The “hard” distribution will remain for some time. CDs and DVDs and vinyls and cassettes, and others of their kind, will still have to be produced and distributed for a few years, or a few decades. But with the Internet growth and the ease of distribution it provides, no doubt the software will take over pretty soon. When finally it’s more natural to get (legally) the music that way than buying this plastic disks that take so much space and take so long to arrive, no one will need the big companies’ capital anymore.

Anyone with a bit of sense, a computer, and a label that doesn’t even have a real office, will be able to sell their music online, they won’t need the vast sums of money the big companies put into marketing and promotion. On one hand, an easier and cheaper way to produce contents, on the other hand no money invested in these home made projects. The big companies will push their artists with all their might, and the hombrew subculture will live on the fringes. Which side will win? Honestly, I have no idea. I really appreciate the community-driven projects, and I like a lot of “lower profile” artists (such as Amélie les Crayons), but I’ve seen the effects of the PopIdol-esque marketing campaigns, and their impact on the radio tunes we hear. Indie work is generally better, because it’s coming from the guts of everyone involved, but corporate lobbying has a much larger control.

But let’s get back to the key highlight of this (much) diverted post. Can the EU Parliament force Apple to have a european store? Since Apple had to negotiate within each country for the distribution rights, with countries and distributors, the question becomes “Can the EU Parliament force countries to relinquish their control over entertainment, and can the EU Parliament force the distributors to relinquish their monopolies?”

If they can do that, I just can’t wait to see unified prices in the whole Europe, unified VAT, unified tax laws, unified laws (come to that), in short, a European Union. So far it has only been a partial success. I wish for a complete success, just like most of my generation. I just don’t see it happening anytime soon.

  

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