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  The Music Industry, Dinosaur soon to be extinct? 
  Nov 28, 2002, 09:30am EST 
By: Sander Sassen

The music industry as we know it is slowly fading into oblivion, although the big execs with all of the major record labels are trying hard to prevent this from happening, there’s not much they can do to stop it. Sure, the music industry is frantically lashing out at users of peer-to-peer networks and blames them for their decline in profits. Others however say that the slump in their sales are caused by the weak economy, the lack of truly new and innovative material and the fact that singles seems to have disappeared completely, forcing the customer to buy the whole album. But let’s not forget about competition from things like DVDs and video games too as people obviously have a much broader selection to choose from for roughly the same amount of money.

The problem with the music industry is that it sees the sharing of MP3s as the root of the problem. They often use the point of the increased volume of MP3's being traded as evidence of customer demand, a demand that was supposed to be filled by these people legitimately buying records. But really, all that that point proves is that people are always looking for the best deal; because if it’s free and easy to get a hold of they’d rather go with MP3s instead, rather than pay a price premium for an album of which they only like two songs. I think a far better way to judge demand and how people like to listen to their music is by looking at the sales of playback devices, just look at any electronics store nowadays and you’ll see what I’m referring to.

Remember the last time you saw a stereo department in one of these stores? They have just about disappeared to be replaced with a big screen TV and a whole range of different home theatre setups. Furthermore, many stores now carry a broader selection of TVs and multi-channel speaker systems than they ever carried CD players or stereo sets. And when was the last time you heard somebody ask about a high-end CD player with 20bit DACs and 256x oversampling, these things are now taken for granted and people have moved on to DVD players that are perfectly capable of playing back their old CDs. DVD-audio and Super-Audio is claimed to revitalize the sales of these devices, but I doubt that, as the content featured on these DVDs/CDs in not innovative enough to justify a significant investment in the playback device. And to be honest, it is only a matter of time before generic DVD players also enable playback of these formats, we've seen the same thing happen with MP3 and SVCD playback.

Even car-audio is changing, while a CD player was a luxury upgrade over a tape-deck a few years ago, today TV sets and DVD players are becoming standard options on more vehicles every day. Thus I think it's pretty obvious that people have moved on to a more visual experience, whenever they’re in their homes or on the road. Most of the equipment being sold for listening to music is for mobile use and otherwise the home theatre has pretty much replaced the stereo-set. So the trend seems to be that people listen to music on the go, for that purpose they’re not going to carry around a bag full of CD’s if a 256MB MP3 device will carry the same amount of music in a much smaller size. So I think it is pretty obvious that with this increased mobile use of music, portable music formats have become very popular. With copy protection schemes popping up left and right things will only start to look worse in terms of sales as people are not able to use them in any other than their original form, thus severely limiting people in the choice how and where to listen to their music. This is also why protection schemes will fail in the end, partly because they’ll be circumvented but mostly because people will move on to better things if they can’t transfer their music to their format of choice.

The only workable solution I see, and I already mentioned that in a previous column about this subject, is some form of subscription service that allows for paid music downloads in a variety of different formats. It also has to be affordable; you can’t charge the same amount of money for a song you download off the internet as you would charge for the single. And if you want to tap into the budgets that are left over after people spent most of their money on DVDs and video games, it has to be relatively inexpensive. The other requirement is that there has to be a very broad range of titles available, not just the golden oldies, but also the latest top-100 songs. This is simply to give the consumer a choice; download the music off of some peer-to-peer network and possibly get a file of lesser quality, or pay a small fee and get it straight from the source. If the selection is broad enough and the prices are affordable, or rather, cheap, people will at some point prefer official downloads over shady peer-to-peer networks, just because it is less hassle and the quality is better. I think it is time for the music industry to drop their current business model and move on to greener pastures which this approach would offer, they’re fighting a losing battle here and if they want to stay afloat they’d better adapt to what the consumer wants or be doomed to fade into oblivion. The very same music downloads that they're vigorously fighting today could very well be what prevents them from going out of business tomorrow.

Sander Sassen.


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Re: The Music Industry, Dinosaur soon to be extinct? William Andersson 3 replies Dec 02, 2002, 10:16am EST


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