These 50-Year-Old Uncool Music Executives Just Don't Get It
Let me state up front that I believe artists and record companies ought to be paid for their music. If there wasn't a profit in it, there wouldn't be any music. But suing your customers in order to scare them into paying for your overpriced product isn't the right answer.
Part of the problem, of course, is that the powers that be in the Recording Industry of America are a bunch of uncool 50-year-old men with a monopoly they are desperately trying to hold onto. It's a monopoly they have abused to sell exorbitantly priced CDs to teenagers and 20-somethings who don't have enough cash to pay $16 or more for a CD of 12 songs.
Instead of responding with a viable alternative to the disruption created by Napster, Kazaa, Grokster and other Internet file-sharing programs, these monopolists believe the best method is to sue anyone they can to stop teenagers from ripping them off. In the end, the only ones who will be happy are the lawyers.
Music companies are distributors whose distribution mechanism is out of date.
Remember, music companies don't create music. They don't have adoring fans. The trouble is, the distribution system they have in place is no longer the cheapest, most efficient method of getting the music from the studio to the consumer's player.
Two weeks ago I moved my oldest daughter into her college dorm. When I moved myself into college more years ago than I like to remember, the biggest and most important item in my room was my stereo system. I didn't see a single serious stereo system going into the dorms two weeks ago, but virtually every student had a PC.
There are a number of more responsible ways to respond to all this. Instead of suing its customers in order to create a new revenue stream, the music industry ought to embrace technology and be the best at using it to drive more volume. What these companies ought to do is hire a solution provider to build and manage a top-grade pay-per-song system at a price level that is attractive to its core audience,teenagers.
Didn't the film industry go through a similar crisis in the 1970s when VCRs were all the rage? Back then the discussion was about how customers were bootlegging movies rather than forking over the $60 to $100 the movie companies were charging for their videos. The correct answer to that problem wasn't to fight the technology; it was to drive the price down to a level where all of us bought lots of movies.
Why is it that I can buy a DVD-formatted movie with all sorts of special additional footage and features a few months after it has been in the theater for less than it costs to buy a music CD? That movie, by the way, cost Hollywood $50 million just to film, far more than it costs a music company to produce a music CD.
It's because Hollywood figured out that embracing the technology was a way to expand its market and customer base. It was so successful at it that most of us have gone out and purchased oversized entertainment centers to house DVD and video collections that now take up more room than the television.
You have to ask: Why has Apple Computer's iTunes music library been so successful in a very short period of time?
If the music companies don't wake up fast, some enterprising new music label will come to market without any distribution chain other than the Internet. That new label will let you listen before you buy and purchase single songs for $1 or less. Artists and customers alike will flock to this new label, and then all those uncool 50-year-olds are going to be out of work.
Make something happen. I can be reached at (516) 562-7812 or via e-mail at [email protected].