{"id":2679,"date":"2010-02-10T12:50:45","date_gmt":"2010-02-10T20:50:45","guid":{"rendered":"http:\/\/lefsetz.com\/wordpress\/?p=2679"},"modified":"2010-02-10T12:50:45","modified_gmt":"2010-02-10T20:50:45","slug":"war","status":"publish","type":"post","link":"https:\/\/lefsetz.com\/wordpress\/2010\/02\/10\/war\/","title":{"rendered":"War"},"content":{"rendered":"

There’s a war going on in the music business and rights holders are afraid they’re going to lose.<\/p>\n

The public is clueless, it barely sees the battles while it steals music.\u00c2\u00a0 But the future is subscription, which doesn’t involve only music, but products ancillary thereto, maybe even completely virtual.<\/p>\n

If you’ve been following the Amazon\/Macmillan story you know that the whole e-book pricing system has been affected by the iPad.\u00c2\u00a0 There’s a shift to the agency model, wherein Apple gets 30% and renders the remaining 70% to publishers. Unlike Amazon, Apple doesn’t really care what price books are sold for, they’re in the hardware business.\u00c2\u00a0 In other words, they want to sell iPads.\u00c2\u00a0 Whereas Amazon wanted to sell e-books below cost to increase the company’s market share, hopefully into a dominant position.<\/p>\n

That game’s up.<\/p>\n

But the fascinating conclusion is that the winner is Apple.\u00c2\u00a0 You need an iPad to read that book.\u00c2\u00a0 You’re not going to buy a Kindle, certainly if the books cost the same, the Kindle just isn’t a good deal.\u00c2\u00a0 As long as e-books are not priced exorbitantly, Apple wins.\u00c2\u00a0 And the publishers, smiling triumphantly, don’t even know what hit them.<\/p>\n

What hit them?\u00c2\u00a0 Well, a writer can make the same 30\/70 deal directly with Amazon, the online merchant already announced that.\u00c2\u00a0 And with publishers signing fewer authors, conceding the landscape to upstarts, it appears to be just like the music business, wherein the major labels lost control.<\/p>\n

The labels feel they’ve lost control to Apple.\u00c2\u00a0 And they don’t want that to happen again.\u00c2\u00a0 So they’re fighting Spotify, not even knowing what this platform and other similar companies are selling.\u00c2\u00a0 They’re not selling music, that’s just the come on, they’re selling the accoutrements, not only concert tickets but social networking, they’re creating an ecosystem, that will rain down dollars.<\/p>\n

\n
There’s a fascinating story in today’s "Los Angeles Times" entitled "Free Online Games Moving Up A Level" (entitled "Digital Sales Poised As Game Changer" online)<\/a><\/div>\n<\/blockquote>\n

Two video game publishers are contrasted.\u00c2\u00a0 One that sells discs and another that gives the games away for free.\u00c2\u00a0 The seller of physical media went out of business.\u00c2\u00a0 The virtual goods company is thriving.<\/p>\n

Don’t think about this as giving away music for free.\u00c2\u00a0 Think bigger.\u00c2\u00a0 If you can get someone hooked, what else can you sell them?<\/p>\n

Start with a subscription.\u00c2\u00a0 To an online video game service.\u00c2\u00a0 Maybe $15 a month for World Of Warcraft.\u00c2\u00a0 That’s just like your ten dollar a month subscription to Spotify.\u00c2\u00a0 Or your five dollar a month subscription to MOG.<\/p>\n

But let’s start with Spotify.\u00c2\u00a0 In every market the company has launched, the service is free.\u00c2\u00a0 But if you want it on your mobile device, you’ve got to pay.\u00c2\u00a0 Not everybody wants this portability, but you’d be surprised how many do.\u00c2\u00a0 And will in the future. Because by paying the monthly fee, you don’t only get the ability to tote your tracks around, but knowledge of what your friends are listening to, access to the band, a first crack at concert tickets, maybe even virtual concerts.<\/p>\n

You start with free.\u00c2\u00a0 That’s the come on.\u00c2\u00a0 Just like with video games.\u00c2\u00a0 Then you sell bits and pieces, not music, but items ancillary to music, the ability to go to a party, maybe even virtual.\u00c2\u00a0 What works is unknown, but the first step is getting people hooked.\u00c2\u00a0 If you saw how much money is made in virtual items online, clothes for avatars, ability to unlock doors for exclusive access, you’d be stunned.\u00c2\u00a0 This barely exists for music, because rights holders are afraid.\u00c2\u00a0 They believe in selling physical music, an album at a time.\u00c2\u00a0 And they’re so busy protecting that model, they’re going out of business.\u00c2\u00a0 Hell, just ask EMI.\u00c2\u00a0 Instead of realizing it starts with the music, and instead of focusing on people stealing it, the question is how can you entice them to pay for it?<\/p>\n

Certainly not by castigating them for theft, by threatening them with prosecution for copyright infringement.\u00c2\u00a0 Instead, you entice people, giving them a free taste, just like a drug dealer, and then sell them everything surrounding the music.\u00c2\u00a0 You can’t steal an experience.\u00c2\u00a0 And if we make your life easier…<\/p>\n

That’s Apple’s plan.\u00c2\u00a0 To get you to overpay for what you didn’t even know you wanted.\u00c2\u00a0 In the future, it won’t be about owning music, it will be about being a member of the club, of the tribe.\u00c2\u00a0 With evidence of how long you’ve been a fan, what shows you’ve gone to, the number of times you’ve spun each and every track.\u00c2\u00a0 People will PAY to play in this arena, to publish evidence of their devotion, to compare and bond with others.<\/p>\n

This is the future.<\/p>\n

But the rights holders abhor the future.<\/p>\n

Techies, people of the age the labels have fired or never hired, know all this.\u00c2\u00a0 But they won’t get involved in music because they just can’t get the rights.<\/p>\n

The future of music will look nothing like it does today.\u00c2\u00a0 It won’t be about ownership, it will be about belonging.\u00c2\u00a0 You can play the video game at home, alone, or you can go online, where you’re a member of the club, connecting with millions. You’ve got to pay for this experience.\u00c2\u00a0 Which gamers do gladly.<\/p>\n

The future is imminent.\u00c2\u00a0 But only if the rights holders get out of the way.\u00c2\u00a0 Only if innovation is unlocked.\u00c2\u00a0 Copyright shouldn’t be abandoned, but it’s blocking the future.\u00c2\u00a0 Just like rap blew up by stealing old tracks, new music platforms will be built on sampling the wares of rights holders.\u00c2\u00a0 And like the owner of those old sampled records, the key is to say YES, to get on the bandwagon, to collect some of that new money.\u00c2\u00a0 Instead of arguing with Activision over Guitar Hero license rates as the franchise fades away and doesn’t radiate.\u00c2\u00a0 Stay two steps ahead.\u00c2\u00a0 Or face extinction.<\/p>\n

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There’s a war going on in the music business and rights holders are afraid they’re going to lose. The public is clueless, it barely sees the battles while it steals music.\u00c2\u00a0 But the future is subscription, which doesn’t involve only music, but products ancillary thereto, maybe even completely virtual. If you’ve been following the Amazon\/Macmillan […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[2],"tags":[],"class_list":["post-2679","post","type-post","status-publish","format-standard","hentry","category-music-business"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/s96vPs-war","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/2679","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/comments?post=2679"}],"version-history":[{"count":1,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/2679\/revisions"}],"predecessor-version":[{"id":2680,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/posts\/2679\/revisions\/2680"}],"wp:attachment":[{"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/media?parent=2679"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/categories?post=2679"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lefsetz.com\/wordpress\/wp-json\/wp\/v2\/tags?post=2679"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}