Musicians routinely sign away their souls to record labels for a shot at stardom. Now tech companies are falling for the same ploy with Facebook.
Facebook approached digital music companies and invited them to be part of their music effort. To participate, companies had to agree to turn off non-Facebook signups — relegating themselves to a barnacle on the USS Facebook. Spotify and MOG succumbed. Others like Slacker, Rdio and Rhapsody resisted.
By agreeing to turn over their user data, these companies give Facebook complete control over their business. Facebook owns the user, not the music company. Facebook can demand changes anytime or demand a monetary payoff. This is not theory — Facebook did this to Zynga when they extorted 30% of all their revenues.
Just as the musician is enamored by prospects of stardom, the tech CEO fantasizes about becoming the next Zynga. The reality is they have committed their future to a deal they can never escape.
--MR
