is: Why has the Record Industry not found a profitable solution for selling recorded music digitally?
They have the investment capital, one assumes, and certainly the incentive. They can hire tech wizards, design savants, brilliant project managers and marketing geniuses. And the costs of the experiment wouldn’t have to be unwieldly, once the expertise was on board. It would be computers, meetings, tech time. Lean and mean. Where is the evidence – the fits and starts – of an attempt to solve the fundamental problem?
If you look at a chronology from the last 2 years, the story told is this: Labels have consolidated, laid off employees, lost big name Artists to concert promoters, independence and big-box chain deals, broken down the value of MP3s by shedding DRM and by supporting price competition with iTunes, sued the shit out of file-sharers and watched their empire-building product, the Compact Disc, fall off a cliff along with the record stores that had represented them.
They are fighting for the value of a product that they’ve lost the power to define.
Problem 1: Defining value
CDs were great. 10, 12, 15 bucks. Something to unwrap, something to read, something to look at. Play it on your stereo, skip tracks with a button. Build a collection. Variety and uniformity. Undeniable ownership.
MP3s are great, too. Free, or 79 – 99 cents a song. Mercurial. Accessible. Tiny packets of core information that you can stream, share, blast, skip, shuffle, delete. You can horde them or chew ‘em up and spit ‘em out. Create a jukebox or a sanctuary. Define yourself or – at will – redefine yourself.
So why were CDs a business boom and MP3s a business bust?
Because CDs leveraged the product against the reproduction. The Industry defined and then fulfilled what consumer’s expected from the product they paid for. And if you got it without paying for it – a burned copy – you got something less. As a “unique consumer” – an individual who identifies with the products they purchase – there was a satisfaction in getting the product over the reproduction. A consumer satisfaction.
With MP3s, there is no leverage, no difference between what you pay for and what you claim. Paid-for MP3s don’t have a single valuable feature that free MP3s don’t. The only satisfaction is the “karma”. The failure of the Record Industry to define the value of their digital product is a failure of defining the product itself.
Problem 2: Defining the Product
What is it the Record Industry is selling us digitally? Compressed digital audio files, with or without album-cover artwork. A one-dimensional, feature-less, digital download. In what boardroom is this something people are excited about? Because in the great salon of the Internet, it’s a joke.
There are endless ways of defining the product. Create a template. Make some features customary. A lyric “sheet”. A PDF of album art. A “making of” documentary. An automatic podcast subscription. Exclusive tracks. These are all things people have tried – the question isn’t “are they valuable”, it’s “why aren’t they customary?” Easy, even passe, tools for defining the digital product should be defining the digital product. At least it’s something!
And it can go so much further than that. A new model can – and should – swallow the whole digital sea right now and shit it out as a package that does every single thing it can possibly do. Like what? You tell me! Social networks. Link aggregates. Video and audio remix material. Twitter. iPhone app. Updates. Message boards. Multimedia out the yin-yang. Build it all into and around the value of recorded music. And then sell the unique package.
Will it work? I don’t know. It hasn’t been tried. The people with the money and the incentive are the Labels and they have been too busy defending their badly-tattered pride to try anything proactive. Meanwhile, free digital music has come in one long tidal wave with no end in sight. We’re soaked. With MP3s, free as water. Which isn’t fair – at least they found a way to monetize fucking water!
At the end of the day, recorded music costs somebody money. If it’s Labels and Artists eating all the cost, it can not survive. They talk about the likely Japanification of the U.S. economy – the “long, gray suck” as Ian Welsh puts it – where a stratified society is locked in place – the established stars and the endless nobody’s – with no relief from the cycle of costly output and diminished returns. The Record Industry may prove to be the harbinger. They’ve already had years of “long, gray suck”, with only the Madonna’s, Jay-Z’s, Eagles, Radiohead’s triumphing – at the expense of the Labels, no less. Without a viable product for the future, the Record Industry will be, in effect, Japanified.
So why has the Record Industry failed to find a profitable solution for selling recorded music digitally?
Because they’re too stubborn and stodgy to face the tough choices head-on and use the technological tools that are there, shiny and modern, before them.
Industry Shambles
