Why Google Should Buy The Recording Industry

Rumours about Google's music service have been swirling for a while now, but they certainly seem to be reaching a new stage with stories like this:

The latest rumor to emerge from the Google campus is that the company's much anticipated music service is just about at the end of their rope with the major label licensing process. A source close to the negotiations characterizes the search giant as "disgusted" with the labels, so much so that they are seriously considering following Amazon's lead and launching their music cloud service without label licenses. I'm told that, though very remote and my guess is that it would never come to this, Google may go so far as to shut down the music service project altogether.

When there are rumours that you're about to give up on a project, you know it must be real.

But what really caught my attention was the following paragraph and its final, throwaway line:

I'm told that this is when the idea of launching without licenses came up. Google may be starting to think that if the industry weren't going to sue Amazon, then why would they take on Google? After all, who needs whom the most in this scenario? Could you even wrap your brain around the legal costs? As a source pointed out to me, "Larry, Serge and Eric could buy the entire music industry with their personal money."

The fact that this is literally true tells us something that is often overlooked: the music industry is economically quite small and unimportant compared to the computer industry. And yet somehow -- through honed lobbying and old boy networks -- it wields a disproportionate power that enables it to block innovative ideas that the online world wants to try.

On a rational basis, the music industry's concerns would be dwarfed by those of the computer world, which is not just far larger, but vastly more important in strategic terms. But instead, the former gets to make all kinds of hyperbolic claims about the alleged "damage" inflicted by piracy on its income, even though these simply don't stand up to analysis.

But that throwaway comment also raises another interesting idea: how about if Google *did* buy the music industry? That would solve its licensing problems at a stroke. Of course, the anti-trust authorities around the world would definitely have something to say about this, so it might be necessary to tweak the idea a little.

How about if a consortium of leading Internet companies -- Google, Microsoft, Yahoo, Baidu, Amazon etc. -- jointly bought the entire music industry, and promised to license its content to anyone on a non-discriminatory basis?

At the very least, the idea ought to send a shiver down the spine of the fat-cats currently running the record labels, and encourage them to stop whining so much just in case they make the thought of firing them all too attractive to the people whose lives they are currently making an utter misery....

Cross-posted from Open...

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Katharine Towne Malia Jones Jennifer ODell Jenny McCarthy Zooey Deschanel