....Look at it from the perspective of the music consumer. Since Snapster would have only a quarter the revenue of the system it replaces, that means consumers would be getting more music for less money. And as Snapster owners, which they would have to be by definition, consumers would benefit from the many Snapster stock splits it would take to reach 60 million beneficial owners, and then the increase in stock price beyond that. This is more benefit than these same people ever got from the record companies. And since Snapster would quickly become the most broadly traded stock of all, this transfer of wealth would have a broad benefit.
....What is more problematic is what Snapster, as essentially a repository of oldies, would do to further grow its business and maintain earnings growth. This is the same question as asking what Microsoft will do after the age of the PC is over. The company could diversify and go into other businesses. It could extend the concept of a mutual fund even further and strictly manage its excess profits as investments. Or it could find some way to plow the money back into the music business, which I think would be best, but I can't see exactly how it would be done. Still, it is a good idea.
Hmm, I am pretty hopeless with finance, but as he says, the real problem is how to assure the continued flow of new music. I very much enjoy the calculated ruthlessness of the scheme, however.
Article comments
1 - Craig Lyndall
Cringely is always on the cutting edge. I love his articles. If you ever get a chance to see the special he did for PBS on the PC wars called "Triumph of the Nerds", be sure to check it out. It is a little cheesy in spots, but you won't find a more complete analysis of Apple vs. Microsoft and the inception of the PC industry.
2 - Al Barger
By rights, this sounds absolutely straight up. It can't fail.
Well, it might. Basically the RIAA needs to find a judge to just make up something. It might not be even vaguely legitimate. Why couldn't a million people co-own a CD?
Never, however, underestimate the power of lawyers and bureaucrats to just arbitrarily make crap up.
3 - Craig Lyndall
They also have this crazy ability to take completely unrelated things and apply them to new things. Like when they apply 75 year old laws about electricity and toasters to the internet. I love that stuff.
4 - Mark Saleski
i especially loved this line:
"The second reason I am doing this is because I don't like the current situation in the recording industry where power is concentrated in the hands of executives who are doing all they can to stop the rotation of the Earth."
nice.
5 - Eric Olsen
I still want to see creators get paid, though, and am not sure where that money comes from in this system.
6 - Greg Tingle
The worst (and best) aspect of blogs, is that anything can get published! : )
Rgds
Greg Tingle
Media Man Australia
http://www.mediaman.com.au
http://mediamanau.blogspot.com