What about if I started a computer retail business and got the excellent idea of using no staff but just put the stuff on a truck, place it in the middle of the city and ask people to take what they want and pay by putting their money in the register themselves. And it wouldn't work, instead some people would just take the stuff without paying.
Would you then support or blame me?
To me that's where the music industry is right now. People are stealing their products, basically because the industry has put their products on the market, without security guards.
But ethically, shouldn't people pay for the products they know somebody else has produced?
Well, that depends on whether people really perceive the products as - products.
In the early nineties when the CD was introduced something peculiar happened. The new format was charged about 50 - 100 per cent above vinyl records, eventhough the increase in production cost didn't come close to that. The duplication of a CD actually is a lot cheaper.
That means the value of the music is still at the most only 50 - 66 per cent of what a CD costs. Then retail mark ups, distribution costs, production of CDs and covers would make up at least 50 per cent of that remaining price. Leaving the same margin for the music companies, a CD for $20 would then retail for $5 distributed on the Internet. That means about 30-50 cents per tune. Not 99.
But the most important lesson from the early nineties increase is not that actual cost transparency. It's the proof that that the music industry never has sold music at all. They have sold convenience. Convenience to play music whenever we want to, convenience to play it where we want, how many times we want. How else would they be able to increase the price with as much as 100 per cent for the same music. Because the CD offered more convenience.
That convenience is exactly what people using filesharing programs don't need anymore. Some of us do. To me the CD is still very practical as I am not that technologically savvy. If my computer breaks down (which happened recently) or my Ipod gets stolen (which also happened recently), I still have access to my music. That is also the reason why I am still buying CDs. But there is a whole new generation now growing up that never will be used to that convenience, and those are the ones the industry risks to loose forever.
What the music industry needs to understand is that these young people, and others who know to use filesharing software don't think they steal music. Because music has always been free. It plays on the radio, on TV, in nightclubs. We have since the early seventies been able to share it among friends and record it for our own use. Music is free. It's in the air for Christ's sake. What we can pay for is the convenience to save it, distribute it to our different devices and lend it to our friends.
So what should the music industry do? Of course what they always have been good at. Offer convenience:
- Don't just let us rent the music (as when it's downloaded and fixed on only one computer) - help people continue buidling the optimal music library
- Release new music more frequently and give subscribers acces to versions they otherwise wouldn't have had
- Add more material to CDs and DVDs such as exclusive invitations to concerts, movies, interaction with the stars, collectables etc
But, they should never blame the customer. Because the customer basically like the convenience they have been offered. But now the industry haven't kept up with time. And until they do, and while they drag the small people in to the courts, we will just detest them.
When will the download music business really tip? I'll say pretty soon. And it will happen as the CD market will totally collapse.
