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Parallels & Lessons from the Microsoft Antitrust Case

Posted by Cliff Lazenby on Jan 12, 2010 | 0 Comments

Parallels & Lessons from the Microsoft Antitrust Case

Innovation or Mediocrity?

Leverage or Injustice?


* Bill Gates insists that Microsoft needs its autonomy because they need to further innovate the technology they have copied from other road-tested successes (Macintosh, Netscape).


* Record companies insist that artists need to live up a portion of their royalties because they need to innovate a 'new technology' called the compact disc.


* Bill Gates undeniably states that intertwining the IE Browser with the Windows operating system is simply the next step in the evolution of user interface — and besides, they don't really have a monopoly anyway.


* Record companies undeniably state that paying less than full rate for publishing and maintaining perpetual ownership of art that artists create and end up paying for is simply the way the industry norms have evolved — but if you want, they can throw in a few more dollar of recoupable tour support...


You might think it a stretch to draw parallels between a computer behemoth fighting big-gun government lawyers and record companies negotiating "fair deal[s] to provide an opportunity for musicians to create" (this was how a major label counselor articulated it to me once). The starkest analogy I see is that Microsoft and record companies have advantages that are profound and vastly imbalanced — and their respective positions have become impenetrable thru a gradually galvanizing veil of innocence. In addition, however, I encourage a 'heads up' about the Microsoft case as it his strong implications for artists and retailers — and, yes, even for record companies.


As an active Internet user and follower of the burgeoning information technology revolution, I am a little alarmed that people wonder why it matters whether Microsoft can bundle only their browser into the distribution outlet that they have cornered by claiming an 85% stake in the OS market. As an artist manager, I have been forever dumbfounded that artist rights that are basic, intuitive and commensurate to the value of their contribution are negotiated, leveraged and denied. And what is most alarming if you are not a record company is that there is not an opposition with formidable strength to counter-balance the corporate dominance, the way the Federal and State governments are going after Microsoft


A computer's operating system sets the tone for the desktop environment on a computer, by having an effective monopoly in that market (few people except Microsoft dispute the effect of their dominance) Microsoft controls how and what most people see when they initiate work on a computer. For many years the common contention has been that Microsoft was riot innovative at developing technology, but rather, adept at copying the functional and user-friendly superiority of the Mac OS. Microsoft has been incredibly adept at marketing their technology and maintaining built-in (and not inexpensive) needs for updates that lock in users to their brand and, through familiarity, create a default dependence on their products.


The browser sets the tone for the environment through which the user accesses the Internet. As the frequency and reliance on the Internet for information dispersal increases, browser monopoly means control of how people communicate, make trades, shop and distribute goods. By offering no choice on the desktop but to use the Microsoft browser to access the Internet. Bill Gates stands to have an awful lot of influence on not only commerce but thought. Whether you care about carving out your spot in the Internet retail marketplace or want to protect the integrity of your songs against being illegally sold and downloaded, it is certainly worrisome to think that Microsoft could control that much choice about how people behave.


Without outlining a laundry list of issues that record companies control that affect artists, managers, retailers, or most other industry participants that have to deal with major labels, it is clear that in most cases they dictate the terms of doing business and we are too splintered as a negotiating adversary to have any real choice. Whatever hope we have of advancing the retail market and maintaining innovation in how art is created, rests in our ability to strengthen by collective effort, as the MMF has tried to do in coalescing artist and manager interests.


At Microsoft's level of dominance, the antitrust case is not about whether they can innovate, it is whether they can control 'consumershare' or 'mindshare.' What's at stake as NARM, the MMF and others consider forging partnerships, is whether record companies will continue to control 'artistshare' — and that ain't good for anybody except them.

Cliff Lazenby manages Capitol's Thanks to Gravity and sits on the Executive Board of the Music Managers Forum (MMF).


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