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U2 manager blasts telco pigopolists

Don't play the innocent with me

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Midem There's another kind of pigopolist, U2's manager Paul McGuinness said today: the giant network operator who profits from music, but doesn't give anything back. McGuinness used a keynote slot at the world's biggest music festival in Cannes today to call for network operators to pay musicians a slice of the pie.

McGuinness said operators have had their "snouts in the trough for too long".

Small ISPs, who can barely scratch a living reselling DSL, will choke at the suggestion. In the UK, operators barely make a profit reselling BT Openreach. And in the US, as we've reported before, small ISPs must retail their network service in competition with their Baby Bell wholesaler, which simply sells their service at a discount, cheaper than the wholesale price. Illegal? Not if it's a time-limited offer: just one that happens to be permanent.

Tough luck, reckons McGuinness. That point aside, the U2 boss was positive about technology, and urged the music business to recruit better staff, and develop a start-up mentality.

(Hopefully not a Web 2.0 mentality – they've got enough problems as it is, without the handicaps of poor scalability, low data integrity, and security holes that clueless AJAX coders bring with them).

McGuinness began by remind the audience that for a good while, U2 didn't make any money from live performances. This was a response to the notion that the music business should give up the idea of getting revenue from sound recordings, and sing for their supper.

"Network operators should take responsibility for the content they've profited on from years," he said.

He scorned the idea that the demand for the internet came from innocent activity.

"Kids won't pay $25 a month for broadband if they just want to share their photos, do their homework and email their friends."

Free music is the killer app for ISPs, he said, and operators who think otherwise are living in the past.

McGuinness had met Silicon Valley's tech entrepreneurs and discovered they just don't value creative material. He said that a lot of them, and the equity people who funded them, were old Deadheads who had been inspired by Abbie Hoffman's Steal This Book. He said:

"They were brilliantly innovative in finance and technology - and though they would pay lip service to 'Content is King' - what many of them instinctively realized was that in the digital age there were no mechanisms to police the traffic over the internet in that content, and that legislation would take many years to catch up with what was now possible online. And embedded deep down in the brilliance of those entrepreneurial, hippy values seems to be a disregard for the true value of music."

(It might be more complicated than that – here's another way of looking at it.).

He added:

"These tech guys think of themselves as political liberals and socially aware. They search constantly for the next 'killer app'. They conveniently forget that the real 'killer app' that many of their businesses are founded on is our clients' recorded music."

McGuinness had intervened from the audience on Saturday to ask Vivendi CEO Jean-Bernard Levy,, the boss of his record label's boss, why digital formats left audiophiles short-changed. He said he was part of the "lossless" movement, in favour of lossless compression formats such as FLAC, and repeated the call in his keynote.

The BPI said McGuinness's idea was long overdue. It wants ISPs to police their networks, with a three-stage termination process: written warning, suspension, then a ban.

It's a rare example of someone speaking with the entire music business behind him: composers, publishers, small labels all share the same sentiment – the others are simply more diplomatic.

Broadband profits

Two questions to chew on, then. Is he right? And will it fly?

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