Music Industry Drops Ball

According to the New York Times, Apple is headed for a showdown with the music industry over the price of downloading a song using iTunes.

Apple CEO Steve Jobs wants to keep it at 99¢ while the music industry is anxious to sell top hits for $1.49, or 50% higher than current prices. If the music industry wants to drive consumers, particularly younger ones, back to Kazaa, BitTorrent and other P2P services, higher prices are an excellent way to do it. The music industry's bid for higher prices is a strange strategic gambit given online music sales seem to be gaining momentum while there appears to be a growing shift away from "stealing" music using Kazaa, et al. Then again, the music industry has continually fumbled the online ball every since Napster appeared on the scene in 1999.

Whether it's being slow to selling songs online or using lawsuits and court action to go after downloaders, the music industry's strategy to corral downloading has been, at best, incoherent. It still amazes me, for example, that music.com hasn't been adopted by the music industry as the place online to explore and buy music. The Web site, owned by Los Angeles-based MDC Partners LLC, lets people search for 16.2 million songs but it only has 49K members. If the music industry is looking for a constructive way to embrace consumers, they should check out Pandora, which is developing an online recommendation/guidance service to help people discover new music.

An off-shoot of the Music Genome Project, the service has its faults but it's a huge step in the right direction to get people excited about new music, which is getting more difficult to do as goliaths such as Clear Channel commoditize the radio industry. Pandora is just coming out of beta and will apparently cost $36 a year or $3 a month, which is a small cost for a cool service.

REF: ME

Article Author: Mark Evans

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