Tuesday, August 30, 2005

Which Finger are they Pointing?

Media companies really aren't getting it. The Proof (NYTimes.com Registration Required) continues to roll in.

I'll admit my views on this subject seem a bit radical. But I think it's imporant to analyze why exactly we accept that media has a right to control content, simply because they always have and they tell us that they have this right. There are two sides to this argument and I tend to focus on the loosing battle of the theoretical basis, and this is because fundamentally most people (and to some degree myself included) believe that people who create content have a right to control that content. I realize that record companies spend a lot of money to produce, distribute, and promote music. I don't think that I have a right to copy that music for free, but I do think that record companies have completely abused there position as content providers. I do NOT think that a CD should cost $20. I also do not think that record companies deserve unrestricted rights to capitalize music. But there is also a functional argument: that in a world of digital everything, suing everyone who copies a music file, just like they copy a text file, generates a lot of ill will. My biggest complaint about media companies is that they had showed no interest in moving to an internet distribution channel until after Napster showed the enormous interest of music via download. I know these guys are playing it safe, but if they want us as customers, they need to carry their weight as service providers. Sure, they CAN sit back and say "that's not fair, that's mine", but I respond much better to people out there saying "look what I can offer you". Those are the places I want to put my dollars, and my attention for that matter.

I look at my relationship with iTunes more as a service relationship than a goods relationship. Before iTunes, I had almost completely stopped buying music. As mentioned above the price seemed excessive to me, especially after several experiences of spending $15 or more dollars to discover that the single I liked was the only worthwhile song on an entire album. A few times a year I would spend money on a select group of artists that I felt I could trust to deliver an album of worthwhile music. However, iTunes does 2 things right: they make it easy for me to find and purchase music that I like in the right amounts (singles only), and they charge what I consider a fair price in return for the convenience of having the music I want download to my computer with no hassles. The musician delivers the goods, iTunes delivers the mechanism, they both receive revenue for the transaction, and the record company receives a cut because I cannot cut them out of the deal, plus the important thing is that I'm happy with what I receive for what I provide.

Why do I choose to pay for my music rather than download it for free? Is it because it is illegal? Actually no, it's because it's a pain in the butt. I have to spend hours of my time searching for the stuff I want, downloading what may or may not be the song I asked for, and opening my computer up to spyware and viruses. iTunes saves all those headaches, at a fair price. I only purchase a few tracks per month and the number has been steadly decreasing since I acquired some of my long lost favorites. However, with the current model I still find that iTunes is the best way to get music that I am willing to purchase.

Another thing that has decreased my desire to purchase music lately is my increasing consumption of podcasts. Things like The Gillmor Gang capture my attention more than the latest single. And to top it all off, they are FREE! Podcasters realize that to compete for your attention, paying for content becomes a hurdle rather than a revenue stream. Or to put it differently, pick any price you want and multiply it by zero customers and you get the same revenue as if you take zero dollars and multiply it by any number of customers. What's the difference between these two equations? The number of people you can reach, the viewpoints that you can advance, the way you can change the world one listener at a time is only in the second equation.

So, for those who don't have a NYTimes login, the short version is that the record companies are pushing to increase the price of popular songs on iTunes. This is a great way to go out of business! IF I decide to purchase any more music (remember I said I practically stopped buying CDs, I'm a fickle consumer), I will divide the amount I'm willing to spend by the price of songs. The revenue is flat and the amount of music I have is less, which makes me less likely to continue my end of the relationship, so eventually even that number declines. Corporate thinking at it's finest.

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