Why Google and music labels don’t get along

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It’s no surprise to Robert Levine that Google Inc. is having a difficult time making inroads with the major music companies.

Levine, a former executive editor of Billboard magazine, diagnosed it simply: ‘They have oppositional aims. And they come from completely different cultures. The combination is a recipe for antagonism.’

The title of Levine’s recent book, ‘Free Ride: How Digital Parasites Are Destroying the Culture Business and How the Culture Business Can Fight Back,’ gives readers a clue as to where he’s coming from. In it, Levine argues that media companies, from news organizations to entertainment studios, were taken for a ride -- a free ride -- by technology sirens who sold them the line that on the Internet, ‘information wants to be free.’

Levine, who lives in Berlin, is scheduled to give a talk Tuesday at USC’s Annenberg School for Communication & Journalism on the subject of Google and how the Silicon Valley technology giant ‘benefits from the work of others.’

We spoke with him more narrowly on Google’s 18-month, thus-far-unsuccessful effort to work with music companies to secure the licenses for storing, selling and streaming songs through its myriad of Web services. An edited version of the conversation follows.

Why hasn’t Google been able to get the music licenses it wants?

Levine: Labels are essentially suppliers, and Google wants to be a distributor. The labels want a high price. Google wants a low price. They have oppositional aims. That’s just capitalism.

Fair enough. But isn’t there also a cultural dissonance?

The labels are essentially in the business of investing in intellectual property. Goggle is entranced by the possibilities of technology. They’re into the idea of making stuff as widely available as they can. But they get caught up in the transmission of information, and they tend to forget how much it costs to create that information. It costs very little to transmit a song over the Internet. But it costs a lot to create it.

What about YouTube, which Google owns? There’s a ton of content on YouTube that’s produced very cheaply by users. And yet, it’s a very big business.

If you look at the top 10 videos of all time on YouTube, eight out of 10 are professionally produced music videos. It shows you how important professional content can be. That’s why Google wants to do deals with the labels.

Major music companies have been criticized for not being forward thinking enough and not innovating new business models. If so, aren’t some of their financial problems of their own making?

People ask me, ‘Aren’t the labels just being stupid?’ The answer is, sometimes yes. But greedy and stupid people still have rights. Take my book, for example. If you think I am greedy and stupid, it doesn’t mean you can download my book illegally. It’s still stealing, no matter what you think of me.

Does that necessarily mean Google should be held responsible for the piracy that goes on? It’s not as if Google equals the Internet and can control everything that happens on it.

People talk about the Internet as though it sprang full grown from the brow of Zeus, and it is what it is. It shouldn’t be regulated. I don’t believe in technology determinism. Some say, if left to their own devices, people will essentially do good. In my view, people who believe that usually get mugged. You still need laws that defend your rights.

OK, bottom line: Will Google eventually succeed with the labels?

The question is how do their interests coincide? Google needs great content. The labels are in this weird position because they are peasants who are also kingmakers. They play an important role in deciding which Internet companies dominate in the next 20 years. At some point, both will realize that there is a great deal of money to be had. All of a sudden, you will see them getting along very well.

-- Alex Pham
Twitter.com/alexpham