Five Reasons Why Buying Music is Headed for the History Books

The collapse of the traditional music industry has been well documented.  The Virgin MegaStore just closed for good in Union Square and the Tower Records franchise that was once a vibrant hub for music is gone from the landscape.  The number of CDs sold is at an all-time low and I am willing to bet if you eliminated all sales of CDs to anyone over 30 the figures would be staggeringly low.

Sure, for the moment, there is still a brisk business in the sale of legal digital downloads.  iTunes and Amazon both seem to be making some reasonable coin on the practice.  Still, it is hard to imagine that this will last much longer.

Here are five reasons why buying music is headed for the history books:

1) The legacy of Napster – Napster, in its original incarnation, was our first taste of how easy, fun and beneficial it was to be able to share your entire music collection with other people all over the world and have the chance to share the music libraries of those very same folks.  Sure, the free aspect was cool, but the best part was the endless selection and immediate accessibility.  Napster taught us that music did not have to be locked down on physical formats or hidden behind DRM.

2) The Return of “Radio” – Sure, traditional, terrestrial radio may not be a threat to record sales, but the world of webcasters combined with the fact that all those traditional stations are available online means that there are an endless stream of free listening options that combine the ability to refine genres with the chance to discover new music.  From Pandora to Last.FM to the basic “radio” options embedded in iTunes, it’s easier than ever to simply tune in, sit back and enjoy.

3) The iPhone (and its brethren) – Nearly every major music webcaster now has an iPhone application that will stream content to you anywhere you can get a signal.  This is not limited to WiFi zones but most will deliver content of 3G and even Edge.  This means that unless you spend a lot of time underground (like I do in the NYC subways) you never have to disconnect from the flow.  Why cart around 10,000 songs when you can just press the Slacker icon and gain access to over 1,000,000 tunes.

4) Songza et. al. – For those not familiar with the site, Songza.com is a music search site that scours the web (mostly YouTube, actually) for recordings of any song or artist you enter into the search box.  This solves the, “I wanna hear the song right now” problem that you face with Pandora and the like.  Whether the major labels and RIAA like it, just about every song and artist I can come up with results in a successful search on Songza.  The point is, legal or otherwise, every song is out there somewhere already, making it tough to convince me why I should pay to buy it.

5) The Generation Gap – Try this: find any kid under the age of 15 and ask them what was the last album they bought.  Chances are, there is no last album.  In fact, studies in the UK have shown that kids are  buying less music online but they are not replacing that with some kind of piracy – they’re just not downloading music to “own” for free or for a fee.  What’s the point of buying music when it is already out there to be heard?

Can Print Be the Next Vinyl?

One of the more interesting trends in the music world is the “return” of the vinyl LP.  While sales of CD’s continue to fall in the face of digital downloads, vinyl LP sales continue to rise:

Consumers purchased 1.88 million new vinyl LPs in 2008, an 89 percent increase over 2007 and the highest sales volume recorded in the 17-year history of Nielsen SoundScan. Further, in good news for some physical retailers, two out of three vinyls LPs were purchased at independent record stores.    LINK

There are a number of reasons for this, but the most obvious is that the LP is a tangible object that can’t be easily reproduced and can only be shared through a physical, real-world exchange.  For true fans, the LP is a sort of badge of fandom, proof of just how much you love the band.  Compared to a digital download or a CD, the LP is a crafted thing, complete with large-scale artwork and often other inserts.

While it isn’t likely that LP sales will eclipse digital downloads anytime soon, it is also highly unlikely that the LP market will be undercut by piracy.

Could these same factors be a forecaster for the future of printed books and newspapers?  It is hard to imagine that these items, so easily digitized, will be able to maintain their current position on top of the mountain and we are already seeing the rapid decline of the newspaper business.

In the cases of both newspapers and books, it might be that their only hope in surviving over the long-term is to invest in elements that can truly not be pirated.  As David Eggars points out in a recent Salon interview:

I think newspapers shouldn’t try to compete directly with the Web, and should do what they can do better, which may be long-form journalism and using photos and art, and making connections with large-form graphics and really enhancing the tactile experience of paper. You know, including a full-color comic section, for example, which of course was standard in newspapers years ago, when you’d have a full broadsheet Winsor McCay comic. So we’ll have a big, full-color comic section, and we’re also trying to emphasize what younger readers are looking for, what directly appeals to them.     LINK

Now, I am not saying that comics section will save newspapers, but the point is to make the object something desirable to possess in physical form.

For the moment, we are going to see traditional publishers fight futilely to maintain the status quo but the ground is quickly falling away beneath them and it is going to take some innovative thinking about the value of printed matter to keep them in the game.

Michael Jackson SELLS 2.6 Million Digital Downloads

I’ve never really given much value to the absurd figures thrown around by the RIAA when it comes to revenue lost due to piracy.  Aside from being based on guesses and estimates, it always fails to take into account revenue generated due to the same piracy (increased sales for concerts, etc).

Most importantly, with iTunes going DRM-free and the general accessibility of legally accessible music on the rise, I just don’t believe that piracy is the real problem at all.

One good example of this is:

…based on preliminary sales numbers from Nielsen SoundScan, 2.6 million Michael Jackson (his work with Jackson 5 and the Jacksons included) digital downloads were sold in just one week.   LINK

Yup, even though Michael Jackson’s music is readily available on all the major torrent sites, it looks like most people just went ahead and paid to download the music.

Why? Well, first, they knew exactly what they were getting. Unlike trying out a new band and wishing you didn’t need to plunk down the better part of $20 just to check them out, everyone buying Michael Jackson tunes did so with full knowledge.  Second, they wanted it immediately and the truth is that, for the vast majority of computer users, the intricacies of bittorrent are just too complicated.

So, while I am sure plenty of people downloaded themselves some free Jackson this past week, it doesn’t look like they are going to bring down the whole system.

Big Ripoff – Digital Media WAY Overpriced

Here’s what confuses me: How can a publisher charge the same price for a digital copy of a book that requires no printing, binding or significant  distribution costs as they do for an actual hardcopy of the book?  The same thing  goes for the music industy.  The cost of pop music has not dropped at all with digital downloads even though a massive cost element is no longer present.

While I understand the desire to keep up your profit margin imagine how many more copies of a book might be sold digitially if it was priced like at impulse-buy levels.  People buy iPhone apps all the time at 99-cents just to try them out.  Imagine how many new “copies” of backtitles no longer even available in most bookstores could suddenly become profit-drivers for publishers.

Potential digital-book readers aren’t going to shell out $10-$20 for most eBooks but I think thousands would a buck-a-book to, say, get handful of old Stephen King title’s on their iPhone.

I believe one way to profit in the digital age is to take advantage of the massive numbers of potential customers.  With no hard cost associated with e-publishing a book, it is just a matter of sell A LOT of copies at a low price.

Just think aloud…

Good related post on this at Futurismic

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