Was Napster a partner or an enemy?<\/p>\n
CD sales were down 32% from the comparable week last year.\u00c2\u00a0 Was this foreseeable?<\/p>\n
The world started to change in 1995, when AOL took hold.\u00c2\u00a0 Think back to that time.\u00c2\u00a0 People who had previously been afraid of computers, who saw no need for them, were trooping down to big box office stores to buy machines, just to be able to PLAY!\u00c2\u00a0 Oh, they might not have needed a spreadsheet, didn’t even want to employ word processing software, but they wanted to talk to their buddies, after all, communication is human nature.<\/p>\n
And then came broadband.\u00c2\u00a0 Which infiltrated colleges\/universities just before the turn of the millennium.\u00c2\u00a0 File-trading started at schools of higher education because students had the pipe.\u00c2\u00a0 But, not long thereafter, the public wanted and got the pipe too.\u00c2\u00a0 To the point where it is said 80% of Americans now surf the Web at high speed.\u00c2\u00a0 And this high speed begat YouTube, for without it the service doesn’t work.<\/p>\n
Were these hidden phenomena?\u00c2\u00a0 Was someone researching in a lab, out of the sight of the general public?\u00c2\u00a0 No.\u00c2\u00a0 But nobody in the music business cared to pay attention, they were riding fat on profits of expensive CDs of vapid acts sold via MTV.<\/p>\n
And it was these shitty acts with only one good track per album that provided the true tipping point.\u00c2\u00a0 People could now steal the music, and they felt justified in doing so.<\/p>\n
People shouldn’t steal (technically copyright infringement in this case).\u00c2\u00a0 And music shouldn’t be free.\u00c2\u00a0 But has the landscape changed so much that a return to the old paradigm is impossible?<\/p>\n
Suddenly, not only your next door neighbor is a friend, but everybody you go to high school with, personages in foreign countries oceans away.\u00c2\u00a0 Look at MySpace, or Facebook.\u00c2\u00a0 Do you think they could be held back?\u00c2\u00a0 Do you think you can tell high school seniors that they shouldn’t be able to learn about their new college classmates online?\u00c2\u00a0 Do you think that will fly?\u00c2\u00a0 Of course not.<\/p>\n
These are the conditions within which we find ourselves.\u00c2\u00a0 Does it make any difference that DVDs have region codes if Europe is right next to the United States online?\u00c2\u00a0 And, if you build region codes into files, will they sustain?\u00c2\u00a0 Or will a group of hackers, akin to those who built Linux and other open source software, break any protection scheme immediately?\u00c2\u00a0 And, even if the law in one country prohibits this activity, is that the case in the rest of the world?<\/p>\n
I was sitting in the Sherman Oaks library reading "Time" when I came across a quote from Thomas Friedman’s "The World Is Flat".\u00c2\u00a0 I’m not that big a fan.\u00c2\u00a0 I tend to skip over Tom’s editorials in the "New York Times".\u00c2\u00a0 But this paragraph was so prescient, so insightful, that I checked out his book, and was riveted.<\/p>\n
Oh, it’s not like "The Secret".\u00c2\u00a0 It’s not small and thin, easily digestible.\u00c2\u00a0 It verges on being a tome.\u00c2\u00a0 But within its covers is a complete explanation of how today’s world works.\u00c2\u00a0 Not only in business, but politically, both nationally and internationally.<\/p>\n
Napster was the best thing that ever happened to the music industry.\u00c2\u00a0 It was not an enemy, but a savior.\u00c2\u00a0 Sure, it had to be determined that as initially structured it was a haven of copyright infringement, but after that was established, it had to be monetized.\u00c2\u00a0 Instead it was killed.\u00c2\u00a0 Along with every other site\/software that wanted to distribute music via the Web.<\/p>\n
As stated previously, people had the computers.\u00c2\u00a0 And ultimately the broadband.\u00c2\u00a0 And now even the storage device, the iPod.\u00c2\u00a0 This convergence of conditions created a demand for cheap, plentiful music files.\u00c2\u00a0 But did the labels see this need and fill it?\u00c2\u00a0 No, they tried to ignore it.\u00c2\u00a0 Pissed off that the game had been changed without their involvement, the major label cartel behaved like terrorists.\u00c2\u00a0 Blowing up the lives of their customers via lawsuits.\u00c2\u00a0 Rather than admit that its customer base had moved on, and try to service that base, the labels felt humiliated, and pounced.\u00c2\u00a0 To no real effect.\u00c2\u00a0 Just like the 9\/11 bombers didn’t stop commerce, but were only a nuisance.<\/p>\n
That’s what Friedman’s prescription for the Arab world is.\u00c2\u00a0 A discussion of ideas, a building of infrastructure, a bringing of these countries into the modern world.\u00c2\u00a0 But he believes their religious policies are holding these nations back.\u00c2\u00a0 Just like the flawed beliefs of the major labels are holding them back.<\/p>\n
In the new flat world, everybody’s a partner, it’s a horizontal structure as opposed to a vertical one.\u00c2\u00a0 The labels should be in partnership with Silicon Valley.\u00c2\u00a0 They certainly should be negotiating the best price, as Dell does with its suppliers, but they should also be pressing for GREATER efficiencies, and further abilities.\u00c2\u00a0 There should be collaboration between the labels and the techies.\u00c2\u00a0 Instead, Steve Jobs is the enemy.\u00c2\u00a0 I ask you, what if there was no iTunes Store?\u00c2\u00a0 Do you foresee any other digital sales?\u00c2\u00a0 No, Steve did the labels a favor.\u00c2\u00a0 Albeit a minor one, since it doesn’t speak to a changed universe, wherein people can acquire, and DESIRE, a vast quantity of music at a low price.<\/p>\n
Napster reached a fever pitch, both in users and press, seven years ago.\u00c2\u00a0 I ask you, what progress has been made since?\u00c2\u00a0 In distributing music utilizing new technologies in a way people want to consume it.\u00c2\u00a0 Sure, Apple is delivering ownership, but with DRM and onerous prices.\u00c2\u00a0 Who’s selling unprotected tracks in quantity at low prices?\u00c2\u00a0 That’s what the public wants, that’s what they’re acquiring, for free now.\u00c2\u00a0 And how many people scared away from P2P would sign on and trade, become music fans, if the RIAA ENCOURAGED this behavior as opposed to lambasting it?<\/p>\n
You can’t believe conventional wisdom, the songwriters testifying in Congress, all those in the food chain who decry innovation.\u00c2\u00a0 The examples in Friedman’s book are mind-boggling.\u00c2\u00a0 Republicans writing more regulations to keep jobs in the U.S. so they can win elections.\u00c2\u00a0 Going AGAINST their party charter, and COSTING their constituents more money.\u00c2\u00a0 Yes, there’s been more b.s. slung in the music battle than truth, but the truth wins in the end, people have not stopped trading files and CD sales have gone through the floor.<\/p>\n
It’s a changed world.\u00c2\u00a0 And the world will keep changing.\u00c2\u00a0 If the old players don’t get up to speed it’s not the worst problem, new entrepreneurs will find a way to create a new business.\u00c2\u00a0 But the old players are a drag on the system, they’re lumbering giants inhibiting legitimate progress.<\/p>\n
The days of dictation are done.\u00c2\u00a0 The labels and their MTV and terrestrial radio cohorts are no longer all-powerful.\u00c2\u00a0 If a record sucks, people won’t buy it.\u00c2\u00a0 They know that it sucks from Web word of mouth, from hearing the tunes online, DOWNLOADING THEM BEFORE THEY’RE FOR SALE!\u00c2\u00a0 The solution is not to try to inhibit the exchange of information, but to deliver higher quality product that the audience raves about as opposed to decries.\u00c2\u00a0 Oh, it’s tougher.\u00c2\u00a0 Then again, it’s tougher being IBM in a changed world.<\/p>\n
We’re all in it together now.\u00c2\u00a0 A lot of the acts have learned this.\u00c2\u00a0 Rather than play stars, they post on their Websites, they interact with fans as equals.\u00c2\u00a0 Only when the label sees itself as equal to the consumer, only when the label sees the coder as a friend who can add to the value chain, will progress be made.\u00c2\u00a0 The customer with tech tools has created a new, more efficient supply chain.\u00c2\u00a0 That cuts out fat and costs.\u00c2\u00a0 They’re doing the music business a favor.\u00c2\u00a0 They’re not the enemy, but their savior.\u00c2\u00a0 Then again, the pressure to constantly innovate, to ride the wave of change, is tough for old players inured to old systems.\u00c2\u00a0 <\/p>\n
Sure, at the end of the day, it’s about hits, great songs.\u00c2\u00a0 But really, have their been that many of these recently?\u00c2\u00a0 And has the definition of a hit changed?\u00c2\u00a0 Is it still something you can cut a snippet out of that will play well in terrestrial radio call-out research, or is it something that a listener will download off the Web and play over and over again like "Stairway To Heaven" or "Bohemian Rhapsody" that may NEVER get mainstream airplay?<\/p>\n
Building stars is a changed business.\u00c2\u00a0 What a star is is different.\u00c2\u00a0 The system has changed the art.\u00c2\u00a0 But looking at the usual suspects purveying the old mantras giving lip service to new technology, you’d think otherwise.<\/p>\n
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