Oh Look, Digital Downloads Aren't Saving The Music Industry
from the who-could-have-possibly-predicted-that... dept
About a year and a half ago, I gave a presentation at a music industry event, where one of the points I tried to make was that those who were betting on digital sales as a savior were making a fool's bet. However, many in the industry have been infatuated with this idea, even if the evidence always suggested that digital sales would only ever make up a small fraction of what CD sales used to bring in. Earlier this year, we warned that the growth rate was slowing, and now as we hit the end of the year, it's confirmed that while there's still some growth, it's slowed down dramatically. Betting on digital sales as the key business model for music is, and is going to remain, a mistake. There are lots of other opportunities to make money, but you have to think beyond just selling music.
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Exactly. Steve Jobs has admitted that iTunes is just a loss leader. They make their money selling hardware. They like iTunes because it keeps people hooked to their iPod/iPhone/iPad, but digital sales are meaningless to Apple's bottom line.
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Infinite goods don't lend themselves to profit for too long without something else added to make them seem worth a purchase.
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its any effort >__>
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That's the real reason downloaded songs aren't making as much money. People now buy the one, maybe two, songs they are interested in and leave the rest. Back in the good old CD days you had to buy all of them, or buy singles at silly prices.
How to fix this problem? Simple, make better music people actually want to listen to.
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REASON(S) note the "S"
1) singles replacing album sales
2) competition from other sources (games, tweeting, e-mail, social networking, blogging, etc)
3) digital never wears out and hence no need to repurchase (new tape, cd, 8 track)
4) no need to ever re purchase the song in a new format (33 rpm LP >>-> 8 track >>-> Cassette tape >>-> CD >>-> mp3 or FLAC = End Of Line)
5) They are in a customer service industry and they are not serving their customers.
6) Competition From New Artists (2-3 million of them all online competing for the same dollars)
7,8,9,10) etc
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You sell the device (physical, finite good) and use the ability to purchase singular songs (instead of whole albums, one of the angry points of music purchases from the 90's and 00's, for just a few songs) as an incentive to purchase the finite good.
I know it’s not 100% applicable to a business model, but it does demonstrate that giving customers a reason to buy an infinite good, bundled with a finite good that serves a purpose, is a valid and successful business model.
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"I know it's not 100% applicable to a music industry business model".
My bad.
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You have to wonder, without the piracy, would the digital sales concept work better?
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yes, people would just throw away their iPods if it wasn't for piracy, right?
Why, no one would ever even dream of actually purchasing a song.
ahahahahahahaha
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People don't need to pay you anything, but they will give money to people who they identify with.
That is why you can sell just about anything not just plastic discs and people will support those who are kind to them, now the "industry" that abomination will die, who wants to "buy"(rent is the right term here) anything from a schmuck that call you a thief, freeloader and thinks everybody owns him a lot of money?
I know I will never "buy"(rent is the right word) anything from those schmucks ever. They can cry, pound sand, bleed and I will not support them in any way or feel guilty about others "pirating" their supposedly important imaginary property.
You people believe the world cannot live without you, you are wrong, I don't need you, I don't want you and I will always celebrate when one of you goes under, that is how angry I am about this whole thing.
Want to have fun?
Track the begining of the lawsuits initiated by the RIAA and compare that to their sales, you will see a sharp drop at one point and if you look close enough you will see the date when they told everyone they would stop suing people and try to find proxies to do their dirty work.
That is why they are going under, piracy may or may not have had some adverse effects but nothing came close to the bad publicity they have and how people view them now. Nobody is buying because nobody loves them anymore is just that simple. You destroyed all good will and want money?
LoL
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People will still want what is most popular, and no one will find that at Jamendo.
Nobody is going to miss you either. Bye.
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Is not piracy that is hurting you dude.
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So, I just proved your assertion of people wanting what is most popular wrong. Thanks for playing tho.
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"You have to wonder, without the piracy, would the digital sales concept work better?"
Digital and "piracy" go hand in hand -- the very essence of digital is that information can be copied infinite times with negligible effort. In that sense, "digital sales" is an oxymoron as selling goes against the nature of digital.
If digital was more like the physical world, then physical world rules would apply: the publishers would manufacture a set number of copies, and each would be sold in a discrete transaction. However, when digital rules apply, as is actually the case, there is no way to constrain the copying to a central manufacturing location, thus selling copies becomes infeasible.
In other words, selling digital files is not a business model, because it's nigh impossible to stop people from making copies; you cannot sever piracy from digital, so instead sell other things that people will want to pay for.
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- If you don't happen to live in a small, pre-selected number of territories, it can be difficult, expensive or impossible to buy legal downloads - all due to regional licencing.
- DVDs of older TV shows, movies and even games are less attractive because licencing agreements haven't been renewed or have been blocked.
- Many new and innovative business models are being scuppered at the negotiation stage because the labels are asking far more than is realistically possible for music licences.
Now, we can say that they're better than they used to be, but let's face it, they're a decade behind where they should be at this point. Their successes with some types of downloads and some types of licence don't counteract the shortfall from their mistakes and wrong moves.
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Banks make billions(that's right billions) skimming cents from clients, why can't it work for music or video?
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The problem? emusic now does not allow you to download music again. Once their software says you downloaded a file, then in order to redownload it, you have to pay again.
emusic's software, which runs in a separate java window, is not known for its robustness, and quite often it will crash if you look at it funny. And files sometimes are corrupted during download, and other times the software will download a portion of the file, then something will go wrong and it will sit for twenty minutes before crashing. As a result, almost every time I downloaded music, I'd have to go back and redownload music which was corrupted or missing. But now, even though their software apparently knows whether something went wrong during the download or not, and makes the music available for redownload, it doesn't work. Out of the songs I was allocated this month, one CD crashed during download and I got 4 of 8 songs, and two other CDs had corrupted files. When I went to redownload them, only 3 songs on the CD that crashed were available, the other songs said I downloaded them properly. I complained, and essentially was ignored by emusic. I re-purchased the corrupted songs (paying twice for them,) and then cancelled the service. (For the record, I have never had problems with iTunes, but I am sure others do.)
Now I go to CDBaby and buy the CDs, since I get a piece of plastic I can use as a backup (for the record, I backed up all the songs I downloaded from emusic to CD,) and if something goes wrong, I can return the plastic to the vendor to get a new one (so long as the problem wasn't caused by me.)
Digital music sales is a fad, since it would work well if it wasn't for companies screwing themselves. emusic seemed to have a good system until they let RIAA dictate their policies to them in order to get more mainstream music (which I had very little interest in, since I was there mostly for the indie stuff to begin with.)
Considering I was originally with mp3.com before they got sued out of existence, and moved to emusic after they folded due to problems with the RIAA (not for their music sales, but because they got too reasonable and the RIAA didn't like it,) I wonder how long before emusic cannot break their stuff fast enough for the music industry and the RIAA sues them out of business. As far as I am concerned, the music industry still seems to want anything other than plastic to disappear...and they want plastic locked down so people cannot use it in ways the RIAA doesn't see fit for them to use it.
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I'll check them out, thanks.
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Who said the music industry needs saving,, apart from you Mike ???
BUT WAIT, there is NONE OF THAT.. The only thing in the music industry that is FAILING is Mikes comprehension of what is going on..
Mike why dont you write about things that are actually based in FACT ?????
Its amazing how you "just make shit up" I guess that is easier than using actual facts, or doing anything like research, or discovery..
So Mike you warned the music industry, I wonder why they did not take any notice of you,, HAHAHAHA, that is SOOOOO funny.
You should listen to yourself sometimes, who the hell do you think you are ??? (I warned the music industry.
I lost that final line too,, what a classic Mike bullshit statement.
There are lots of other opportunities to make money, but you have to think beyond just selling music.
WOW Mike you must be a freaking genius !!!!
So what you are telling the music industry, is that your sales of music is slowing, but there are lots of opportunities to make money, just dont do it in the music industry..
So what are you saying, that now there is no music industry ??
So the music industry can make money, just as long its not from producing or selling music..
(I guess you still want them to produce and create the music, so you can steal it and have it for free)..
I wonder if you would like it so much if the music industry just stopped making music.. you would be screwed
You are a classic Mike,, that statement should be put of on your grave stone..
I would be called "The comment from someone who does not have a clue"...
There are lots of other opportunities to make money, but you have to think beyond just selling music.
I guess for you mike, that there are lots of opportunities to make money, you just have to think beyone trying to 'claim' you are a journasist, or whatever you claims to be..
We all know the ONLY reason you are here is so you can make a few dollars, or as much as you can.. as quick as you can..
It's clear that you only motive for this is you're own personal gains... You dont appear to give a shit about anyone else, anything else, you're 'friends' your country, your industries, or anything...
But who cares, right Mike, as long as you have spare space for one more google add, and one more person willing to buy your paywall, or give you thousands of dollars so you can look at their business plan !!!..
It must be a great little money spinner Mike, you dont have to work at all, you just troll the internet for stories, and use good old cut and paste.. well cut and paste is easier than thinking or typing.. its quicker too, so you can make more money..
Its also nice you have a small dedicated group of people how will swallow every word you say, and call it icecream. they will defend you to the end..
But they will not think for a second, by themselves, they have you to think for them Mike..
You just tell them what to think, and off they go, like nice little sheep. happy in their ignorance..
Maybe they will buy another crystal ball of you mike, so they can see how you create you stories, by the carefull application of cut and paste, and linking your your previous artices, again created by cut and paste..
That still does not explain why you just make things up, except its easier than finding actual facts..
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Re: Who said the music industry needs saving,, apart from you Mike ???
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Re: Who said the music industry needs saving,,
You should try reading instead of rambling all the time, you might learn something (though it seems you know-it-all already).
If you just get drunk and like to rant in the comments here to stir shit up, that's cool. But, would you just let us all know? Thanks in advance.
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Re: Who said the music industry needs saving,, apart from you Mike ???
....
ya, he mad.
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Re: Who said the music industry needs saving,, apart from you Mike ???
"You talk as if the music industry, is in the process of failing, if we were to believe you, music labels are going out of business every day, there are major cutbacks for the big labels, hostile takeovers, companies declaring chapter 7 and so on..
BUT WAIT, there is NONE OF THAT"
No? How about this...
http://www.bloomberg.com/news/2010-12-12/terra-firma-may-lose-emi-control-by-christmas-sund ay-times-says.html
IMHO, I think that means Mike's "comprehension of what is going on" is dead on and based on fact. Says very little about your comprehension though.
One down... three to go.
"I wonder if you would like it so much if the music industry just stopped making music.."
This would be the best thing to happen to music since Beethoven. No more rap, mo more Justin Biebers or Lady Gagas. Only musicians with actual talent would survive, and there are plenty out there getting no notice because of the industry's influence of making sure only THEIR music gets heard. Artists could retain their copyrights and make more money in sales than possible now even selling at half the current rates, especially those that learn how to market themselves.
"But who cares, right Mike, as long as you have spare space for one more google add, and one more person willing to buy your paywall"
Proof that you're the dumbest one here. Is anyone else paying to be here?
Darryl, I hear there's going to be some nationwide auditions for a new TV series next fall called "Are You Smarter than a Preschooler?" Might be your one chance to make your family proud.
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Re: Who said the music industry needs saving,, apart from you Mike ???
BUT WAIT, there is NONE OF THAT..
You're joking, right?
http://www.hypebot.com/hypebot/2010/11/layoffs-continue-at-warner-bros-records.html
htt p://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/01/layoffs-hit-universal-music-group.html
http://www.billboard.biz/bbbiz/content_display/industry/news/e3i68c9747cd968ca8ddd6115114e11074c
http://routenote.com/blog/emi-restructuring-coming-in-a-few-weeks-expect-more-layoffs/
http://ww w.dailyfinance.com/story/credit/emi-may-attract-takeover-bids/19707074/
http://uk.reuters.com/art icle/idUKTRE6BB0XH20101212
Basically everything you claimed is not happening actually is happening.
But, to be clear, I've never said the music industry is failing. In fact, I've said the opposite. The music industry is doing great. What's failing is the *recording* industry -- and specifically the major labels.
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Re: Re: Who said the music industry needs saving,, apart from you Mike ???
I do think that what Mike is highlighting is that there is a definite change in the behavior of people.
It's going to be difficult to explain this one to Darryl, but let's give it a try.
The internet is an open communication platform. In order to use it, MOST people need to pay for a computer and some form of broadband.
Now here's the interesting bit. MOST people who have paid for something once, don't like to pay for what they perceive as the same thing, again.
The IP industry wants people to pay for things that lack a certain perceived value. The IP industry claims that "piracy" does TRILLIONS of dollars worth of damage and are basically saying that a large percentage of people using the web are criminals.
The more likely truth is that file sharing is not perceived as a criminal activity by most users, nor is the value digital music seen as the same as owning a CD.
Now this is the point where Darryl will probably whine about legality and the rights to make profit. No one is against that, but when dealing with infinite supply, you have to be creative if you want someone to buy.
Again Darryl will cry out, "but it's ILLEGAL!!!" Well that may be true, but you will have to face the fact that saying "it's illegal" paired with one or two people losing file sharing cases in court, is hardly a deterrent to a behavior shared by tens of MILLIONS.
Instead of trying to stop those tens of millions from doing what comes natural, the media companies should be trying to get them to spend $.05 per week or per month.
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Re: Re: Re: Who said the music industry needs saving,, apart from you Mike ???
Its only illeagl because it was lobbied for by the record labels ....
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Re: Who said the music industry needs saving,, apart from you Mike ???
Damn... I can't even pull pieces out of there to challenge.. it's all so... devoid of intellect.
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Re: Re: Who said the music industry needs saving,, apart from you Mike ???
It's so fucking worth it, though.
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RIAA & MPAA=MAFIAA
I no longer buy any form of music until the copyright madness get de-corrupted,which may be a very long time coming
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Hahaha
Mike never said ANY of those things in the article. It's like Darryl is in some sort of parallel dimension, but his comments are getting posted to this dimension's Techdirt. Darryl, please let us know how you perform this trans-dimensional commenting.
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Re: Hahaha
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I mean if no one is buying it, what's the point; maybe it's just not worth it to record anymore.
Wouldn't be difficult for an outsider to look at your statement and figure that is what you were infering.
I thought you IT types were supposed to be about progress...
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Of course not. I'm amazed at how you continue to blatantly misinterpret what I say. No wonder the bands you work with failed so badly.
The music is an excellent PROMOTIONAL tool. The music makes everything else that the musician does MORE VALUABLE.
I mean, I've only been saying it since the beginning of this blog, and you still have to pretend I've said something else? Stunning.
I mean if no one is buying it, what's the point; maybe it's just not worth it to record anymore.
Because it makes everything else you do more valuable. I've said it at least 100 times.
Wouldn't be difficult for an outsider to look at your statement and figure that is what you were infering.
Only if they could not actually comprehend basic English.
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Leave it to an IT guy to not understand that recorded music is often considered the fullest expression of a musician's vision.
Just a promotional tool? Recorded music is how most people appreciate an artist, far surpassing those that attend a show.
Or buy a t shirt.
You're not an artistic talent, Mike. Your posts about music are consistently examples of epic fail.
Maybe you should stick to playing with computers.
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If musician's are so visionary than why didn't they see all this coming?
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Hmmm...are you saying that people that save an entire year to go to a concert appreciate it less?
Are you saying that people that I saw slaving away at their job to travel to major concerts appreciated less?
Are you saying that Madonna and every other big name out there selling apparel, books, videos, perfumes, souvenirs and other stuff are not appreciated by fans?
You must be dumb, every fan I knew bought everything they could get their hands on, it doesn't matter what it is, it is not the music stupid is the connection, the real product is the artist himself and the various forms of expression that that can take form where music today is a vector(look it up what it means to be a vector) to reach people.
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I've no idea what the OP's point was, but I did want to mention this statement as part of the problem with musicians relying on live performance. In your statement you point out the obvious fact that concerts are mad expensive, and people save up for quite a while to see their favorite artist. But what about their second favorite? Or tenth favorite? The problem with most musicians relying solely live performance is that it puts an impossible burden on fans to support the craft. I can't possibly go see all the bands whose music I enjoy. I don't have the time or the money. But I can buy their music.
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But we're not talking about the expression of the vision; we're talking about building business around the expression of that vision.
Look at it this way and you'll see how the recorded music is a promotional tool...
1) I have a vision that I want to express musically
2) I record that vision to share with others
3) I give that recording of the vision to other so they want to see it
4) I now have an audience for my presentation of my vision.
I personally believe that I have gotten a much better sense and feeling of the artist's vision at a live performance than a recorded copy because I was there. I felt the emotion the artist wanted to evoke.
You can rant and rave about artists expressing themselves all you want... I'm going to keep hearing from artists crying out against these labels abusing their fans. And I'm going to keep experiencing these artists' visions on their terms, not the label's terms.
And let's keep that honest... every. single. step... the recording industry has made in this is to protect themselves... not the artist.
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If record labels were so bad, then the thousands and thousands of musicians that use them, wouldn't.
Neither you nor anyone else can argue your way out of the fact that recorded music is how most people enjoy music.
When you try to pretend it's only a promotional tool, it's just another transparent example of you trying to devalue it so you can rationalize how you rip it off.
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And what did I 'lie' about? Hmm? What in my post was a lie? The fact that I enjoy live music more than I enjoy recorded music? The fact that more than one artist has cried out against record labels? The fact that the recording industry is looking out for their own interests and not the artists? Which of that was a lie?
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Actually yes. Now listen very carefully.
(IMPORTANT STUFF)
The trends point to the cost of all DIGITAL media for the consumer going to ZERO over the next 10-15 years.
(END IMPORTANT STUFF)
Plan for it or perish.
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Everything will be free, huh?
Sure pal, whatever you say.
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Those who create and own the content will always have the upper hand.
You need to realize that the last 10 years were a blip in history, not the future.
The Wild West didn't last forever either.
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That doesn't seem that smart to me.
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You say that like the two things are mutually exclusive. This 'blip in history' is going to (and has) changed the way it all works. If it didn't, we wouldn't be having this conversation.
By the way, nice argument skills with the name-calling.
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Did you know that you can find all the songs on any new album as legit promotional music on artists websites.
"Those who create and own the content will always have the upper hand."
EMI-CitiCorp Lawsuit won by CitiCorp. CitiCorp now free to sell off EMI's music catalog. With the debt and financial problems at the remaining big 3 labels there is no way for them to buy the catalog. Google is the only one with the resources to purchase the catalog. It is highly unlikely they will. The contracts associated with the catalogs and the fact that artists can recover their copyrighted music makes it an unsound financial proposition.
What you will see is the cost of these catalogs shrinking over the next 10-15 years. Until, with the failure of the last label, they have no value.
"You need to realize that the last 10 years were a blip in history, not the future."
You actually need to realize that the reson the labels did so well over the past 30 years is product replacement, either by wear and replacement, or upgrade and replacement (vinyl -> 8 track -> Cassette -> CD -> CD ripped or purchased as a download). These 30 years were actually the glitch and everyone in the industry made money. That time has come to an end, there are no further formats for music.
"The Wild West didn't last forever either."
The wild west was a physically limited area, whereas the internet is constantly growing, changing, and expanding.
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If it helps you make more money, why are you so against it? I'm still really confused by your position.
Leave it to an IT guy to not understand that recorded music is often considered the fullest expression of a musician's vision.
Not an IT guy. And um, nothing I said means that the recorded version isn't the fullest expression of a musician's vision. It absolutely still can be that. In fact, that's even better, because it'll be more valuable and will help them make more money... by making other things valuable.
Just a promotional tool? Recorded music is how most people appreciate an artist, far surpassing those that attend a show.
Great. That doesn't change anything I said.
Or buy a t shirt.
Great. That doesn't change anything I said.
Not sure your point, other than that you don't seem to understand business at all.
You're not an artistic talent, Mike. Your posts about music are consistently examples of epic fail.
I love this. We're not talking about artistic talent. We're talking about business. You were the one complaining about money. If you want to focus on "art" focus on art. If you want to learn how to make money, come talk to me.
Maybe you should stick to playing with computers.
Heh. You're funny.
Next time, try understanding what I'm saying, so you don't look so clueless.
In the meantime, I'm scheduled to talk to three separate artists today who are making more money by listening to me. How have you helped artists today? By telling them to whine and complain some more?
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Hmm, I don't see Mike saying this, but I'm starting to warm up to that very idea. Not that bands shouldn't record their music, just that they shouldn't spend so much time, effort, emotion, and at the end: money on recording their music. I've been kicking around making and recording music in various forms for years now, both on and off labels, and I know that the recording process is hell on a band. I think it's safe to say that most musicians love having recorded something, not actually recording anything.
I think that if bands get over this rather modern notion of creating through the recording process and instead focus on capturing a performance, we would really see a shift in the musical landscape. I grew up on 80s underground punk, and I love the notion that bands like Husker Du would go on tour playing new stuff and only record albums after they had toured on the material. Next time they hit the road, it was to workshop music for the next album. It made the albums into documents of something you missed, rather than promo for something in the future. And it meant that the shows were always something new. (And as a bonus, since the songs were always new: NO POSERS at the show clamoring for their favorite "hit"!)
My current band is focusing on a recording process based around the idea of "Fast, Cheap, and Out of Control" (named after the Errol Morris doc, but not really related to that specific interpretation; I just really like the idea behind that phrase). Digital "tape" costs nothing, leave the reels running and record like madmen. Fuck up a take? Leave it in, people love the shit that makes us human. Or just rerecord it, or overdub, or manipulate the mistake into something... most of all, just get the damn songs recorded and get the hell out of the studio and onto the road.
Quality is moot. If the songs are good, and the audio on the album mix is rough, then you'll sound that much more awesome live. That's another point to consider: if people aren't paying for recordings, then why are we making them sound as good if not better than the live show? That's just bad business.
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With Apple showing the music industry how to sell music again and Netflix showing the movie industry how to get people to pay for movies again, I think it's pretty clear the "IT guys" are the innovators here teaching the content industry exactly HOW to progress.
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And they won't. Digital is the FINAL format. The back catalog resale business because of a new format is now dead. This is a HUGE reason for the decline in CD sales that the industry doesn't want to acknowledge. Endless copyright terms mean nothing in this day and age because with one purchase, you truly do own it forever. Other than the idiots who didn't just rip their Beatles CDs over the last decade is there really anybody buying 60's music mp3s?
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Re:
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Music Industry
and pop music are being pushed aside in favor of Hip hop
and rap.The 70s and 80s had decent music you could sing along with so did the 50s and 60s.This kind of thing has fallen
out of the picture.People have crap to download now.Tv and the radio are DEAD thanks to banners and advertisements!
Ive seen what was and what is now,honestly we had it better
growing up,no wonder America is failing NOW.
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