Stiffelman Weighs In

Gary Stiffelman:

Sometimes it seems like you are on Apple’s payroll. Every idea other than iPod is regularly condemned by you, whether its a company deciding to reject Apple’s monopolistic pricing and rigid distribution model, or efforts to explore new models that in any way differ from the iTunes model. I love how you propounded the Razor blade model, yet you fail to see how Apple turned it on its ear, making money from selling razors while barely breaking even selling the blades. Since only the revenue from the blades is shared with the labels and artists, it is critical that the model be fixed.

Your feigned support for subsidized P2P is ludicrious because you know that the labels will never sanction a model that allows people to download whatever they want for a fixed price, yet fails to monoitor usage and pay the owners ratably. Such a system rips off the artists worse that any label has ever ever tried. If you don’t somehow allocate the income proportionately to the use, and the use isn’t randomized like radio, then the artists are being screwed. Subscriptions are fair because the same process that ensures that a user’s subscription is up to date also reports on usage so that the revenue equitably can be shared.

Imagine if your idea were accepted: A consumer pays ten bucks for a free month of p2p and downloads 10,000 albums. Then he stops paying, keeps his 10,000 albums of music, and laughs as the labels all go out of business.

Your condemnation of subscriptions is also premised on a belief that people want permanent physical possession of their music. You then inexplicably argue in favor of sanctioned p2p to achieve this goal, yet a digital file is a digital file…ones and zeros. Whether you buy it or rent is is irrelevant to the distinction. We rent our cable TV service, we rent our electricity and phone service, we rent our apartments and we lease our cars. Indeed anything we borrow to own is, essentially, ours only so long as we make the payments.

You argue that people won’t pay to rent their music today…"maybe someday" you concede. Twenty or thirty years ago no one thought we would be paying for TV, but more people probably pay for TV access than ever watched for free. And it didnt take very long to change.

If "someday" is ever going to arrive, then we must begin now. Changing how people consume anything is difficult, but, for heaven’s sake, we BUY water now. Someone like you probably wrote that we’d never live with that model either, yet it has succeeded gloriously. Indeed, there was probably an Lefsetz back in the age of the Wright Brothers arguing that if man were meant to fly, he would have wings, and arguing that electricity will never replace gas lighting. Perhaps an ancestor of yours was arguing against the wheel…I can imaging the blog: "feet good, wheel bad".

Its time to begin supporting the only model that can possibly replace the income that the labels and artists need in order to survive the current crisis. Do your homework. Understand better how the subscription model can work, then open your mind to a practical future.

This is a read-only blog. E-mail comments directly to Bob.