Duh. We've only been saying this for 2+ years: reduce the price of digital music and they will come. The online music downoad services are competing with free - no matter how many people the RIAA sues, free is not going to go away. BUT there are real COSTS to file sharing: spyware, corrupted files, unreliable titling, spoofed files (thanks RIAA), questionable karma, etc.
Steven Levy spots an apt analogy:
- As residents of the Gulf Coast were reminded last week, there's no turning away nature. You can't pass a law that snuffs a hurricane at the border. You can't sue it. You've got to understand it, and make the right plans to deal with it. Technology generates its own form of nature, a set of conditions that enforce an artificial, yet equally unstoppable, reality. With the Internet, fast computers, cheap storage and high bandwidth, it's now just a fact that digital files—be they documents, images or Hoobastank tunes—can be sped through the ether with ease, a phenomenon no easier to halt than a storm surge.
That's why it's so fascinating to watch the music industry's efforts to claim some high ground in its fight against piracy. For the longest time, the labels viewed digital music as something that could hurt them with hurricane force but made no efforts to adjust to this new reality, let alone exploit it. Finally, they were persuaded to license their works to online music sellers. Apple's iTunes Store, which sells songs for 99 cents a shot, became a template for a mini-industry that clearly represents the future of music. Microsoft opened its own long-awaited online outlet earlier this month. And just last week Yahoo dropped $160 million to buy Musicmatch and its store.
This summer provided a clue to further harnessing the force of digital nature. For three weeks, Real Networks tried to lure new customers by slashing prices to 49 cents a song and $4.99 per album. Since Real paid the full royalty load to the labels (almost 70 cents a tune), the company lost money on every transaction. CEO Rob Glaser says that the company did get new customers, but here's the real news: Real sold six times as much music and took in three times as much money.
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Article comments
1 - Lono
Eric, I don't even think they want our input. How long has it been since Napster, 6 or 7 years? Who advises these people, the petroleum industry? I am already working to move way from all CDs and use a server system in my house. Problem is, nothing is compatible yet with my stereo... or my buddy's stereo.
The music industry is still (regretfully) to be treated as the enemy. Remember about two years ago, Universal said they were going to release ALL new CDs at a maximum price to the consumer of $12? I remember, because I actually wrote a whole editorial on why we should use that day to all go buy CDs. I wanted to send the music industry a strong and positive sign that we too were willing to negotiate. They backed down and didn't offer that price, and they are still reaping the punishment.
2 - Eric Olsen
there is no question there is still all kinds of fumbling, backsliding, wishful thinking and just plain stupidity, but I also think the digital genie is out of the bottle, and they know it, and they are going to have to accomodate. It's the delays and missteps along the way that are infuriating.