Jan 09
22
The Train has Left the Station
The Music Industry’s future was pre-determined 300 years
ago.
Louis XIV and his ultimate beheading resulting from the
Revolution has curious parallels to today’s file sharing activity and the
P2Pvolution.
The peasants rose in revolt against the high taxes and lack
of bread.
(And maybe because the early Ipods were self powered, but
not very portable.)
The phonautograph was the earliest known invention of a sound transcription device. (20 years before Edison) It was invented by Frenchman Édouard-LéonScott de Martinville and patented on March 25, 1857.
The French Revolution peasant uprising is to me reminiscent
of the milleniumites activities today.
I can hear the chant as they walk past my home from school:
“Down with the Music Industry, long live Kazaa……”
We all know what happened to the French revolution. It
failed. But the peasants learnt from their failure and their Russian cousins
were successful just a couple of hundred years later by declaring a “free” (United
Soviet Socialist
Republic) proletariat nation.
EDonkey arose out of the ashes of the guillotined Kazaa and
sprouted several offspring processes.
Whether the bourgeois Music Industry likes it or not, we have
built a proletariat world with music to sooth the savage beast.
And we all know, with savage beasts, occasionally one gets
taken and torn to shreds.
It reminds me of the quote from the Life of Brian “Oooooo
did you see that ? Another one of those Christians just got eaten by that Lion
(MGM).”
Keep the faith, boys and girls – the second coming is nigh……
And the Antichrist (RIAA) will be cleansed from the earth
with a flood of angels (Iphones, Imoko) and a few others. But before you rejoice,
I need to tell you that the peasants' revolt ultimately failed because when they
stormed the bastions of the French aristocracy, they found that the cupboards
were quickly emptied and with no-one to replenish them (all the peasants were
busy having a revolution) hunger, despondency and plague devastated the nation.
We need to buy some music or there will be no
reason for anyone to keep writing it.
At least I'm doing my patriotic duty. I have a secret weapon
that will continue to ensure my supply of music for many years to come: Aunty
Carol. And I know I can depend on Aunty Carol to buy those CD’s for everyone in
the family every Christmas for many years to come.
I hope that she doesn’t go insane when the CD’s are pulled
of the shelves because digital music sales have taken over.
What’s that? You will never pay for music, and nobody you
know will either ?
I think the die hards are wrong. We will very soon see
charging models based on free music and network costs only to pay for the
content on your phone.
Source: ARIA, RIAA, Tony Blair's Stats, BEA.
Please note the gradual rise between vinyl and casettes
followed by the meteoric rise of the CD’s and the almost vertical
rise of the digital media. Probably because of Ipod and MP3 player sales.
Worldwide Ipod Sales
(Excluding Ipods)
According to Forrester Researches Report last year entitled ‘End
of Music Industry as We Know It’
“Digital music sales will grow at a compound annual
growth rate of 23% over the next five years, reaching $4.8 billion in revenue
by 2012, but will fail to make up for the continuing steady decline in CD
sales, Forrester said. In 2012, CD sales will be reduced to just $3.8 billion,
according to its forecast.”
I have bad news for Forrester – We’re there already. Its all
in the way you do the numbers.
Wholesale or retail ? Corrections for distribution allowance
or no corrections.
What is a distribution allowance?
Basically the cost of shipping an $ 0.87 cent CD to the
retail store (About $3.20) including warehousing, logistics management,
shipping, freight forwarding, demurrage, customs, more freight, more
warehousing, couriers and retailer handling costs.
In other words, the music industry and Itunes might try to
convince you that a music track is worth $4.99. But you don’t need to go to
university for seven years to calculate that obviously its not. That was the
price of a single (one track) CD in 2002.
My guess is that we will pay for music on the basis of
minutes.
And it is you the consumer that will set the price.
That “Send” button, if judiciously used, will force the
different resellers to offer tiered pricing depending on the popularity of the
calalogue item. Exactly the same way that the Movie Industry bundles two old
movies with a new one on a single DVD for five bucks.
The more popular tracks will initially be $ 0.90 cents
reducing over time as they age in the catalogue.
It’s still free, you just pay a different way. Instead of
paying for DSL bandwidth, you pay AT&T/Vodaphone/Optus GPRS/WAP or minutes
for downloading your chosen music.
And why will people do it? Because it works. Because it’s
the EASY choice.
Just like today, File sharing is the easy choice.
So for the Music Industry – built on the premise that “But
we have to ship SOMETHING…..!” there will be some changes; some accountants
will move in over the next couple of years and whole lotta guys ‘n gals will be
leaving their distribution offices.
But for the geeks and the code writers, I see a bright
future in the Music Business.
You see there will need to be a music differentiator. HUH ?
Well, the Music Industry will finally realize that digital
is profitable.
So they will have to cut different quality recordings – 56
Kb 128 Kb, 192 Kb, 256 Kb and the really Rolls Royce stuff at 320 Kb. (In case
you missed it – the higher quality files take longer to download so cost more
minutes…..)
Is that it? Is that all they will do?
No… they will probably start to clean up the P2P file base
after all there’s real money in them
thar shared files..
After all – the shareholders of the music companies will
eventually work out that digital music sales are providing them with enormous
returns on their investments and it was all made possible by Napster popularity
suggesting a portable hardware device that Apple stole (err, borrowed)
the Ipod)
Now they will need some router jockeys to move their
listings up the search engines – and not necessarily Google – think: hum that tune – Gracenote. The technical job description is SEO but – here’s the
real twist. For the artificially intelligent search engine optimization
programs of the future that will run on your phone making sure that only songs
that you are likely to like will be offered to you….. – they will need access
to your computer music library. You know, the one that goes : /program files/Kazaa/my shared folder/
Extras.
Attached is an Excel spreadsheet with a table comparing the features
of 3 top selling phones in 2008 and a tab of links for further analysis.
Iphonecompare.xls
References: http://www.gracenote.com/business_solutions/mobileMusic/