This seems all too familiar.
Google's decision to launch a cloud music locker without finalizing deals with the music industry illustrates just how large a gap remains between the music and tech communities.
Who's at fault for this divide? Who knows? The labels inevitably will shoulder the blame from a PR perspective, as they always do. But without knowing exactly what terms Google was offering, and what terms the labels countered with, it's impossible to know exactly who was being the unreasonable party.
But this isn't just a problem of numbers. It's a problem of culture.
For instance, the music industry--labels in particular--approach content-licensing deals from a business-first perspective, a "what's in it for us?" attitude that's focused on the bottom line. That's just business - any company looking to make a profit does it. Labels certainly enter into experimental deals, but some say they want to start seeing results in about three financial quarters or they walk away.
The tech community -- startups in particular -- look at things from a user-first perspective, a "what can we make it do?" attitude that's focused on creating the best experience. Developers balk if partners introduce the "distraction" of a business model or monetization plan too early in the development of a new service. Their focus is to perfect the user experience, then collect the data on how the service is being used, and then in the next iteration start introducing revenue streams based on what they've learned.
Another manifestation of this culture clash is how content is treated. One of the major rubs that reportedly scuttled the Google Music negotiations is that some labels were very concerned that songs acquired through piracy would be allowed into the locker. Some labels feel this lets Google and fans benefit from piracy. Google and other locker service providers take a different view--that allowing pirated content into the system allows the labels to monetize that content and may eventually drive music fans to pay for subscription-like music services.
This philosophical divide has been going on for years. It first led to the "ask forgiveness later" approach to digital music startups-where developers would populate their service with music found streaming elsewhere on the Web, or compiled from users' personal music libraries (think Imeem, Songza, etc). Then came the DMCA defense--where developers would let users post their own files and take down only what labels claim as infringing content (think Veoh, YouTube, etc.).
And now we have a new workaround--music lockers. Music fans have so much digital content collected over the years that companies like Amazon and Google are creating new music experiences around music people already own, rather than seeking licenses from labels to do it around music users want to discover.
It could be some time before these opposing cultural forces come to terms with each other. Either music revenues will drop so low that the industry will try literally anything to reverse the slide, or a new generation of music executives take over the senior management instill a new culture more aligned with that of the tech community.