Over 250 Million Served
July 13th marked the 100 million song download mark. On August 14th the catalog reached 1 million songs. On October 14th it hit 150 million downloads. By October 27th the EU store was launched. On December 17th, music fans had purchased and downloaded more than 200 million songs from the the site. Today at the NAMM convention, Steve Jobs announced that Apple had served a quarter billion songs.
According to the Financial Times this morning, the second highest ranking contender for the heavyweight music industry title sales championship is former scourge of copyrights, scoundrel of the Web, turned NASDAQ-listed good guy, Napster, now with Chris Gorog at the helm replacing bad boy Shawn Fanning. Gorog just sold off Roxio, another former object of RIAA litigation, to Sonic Solutions to bankroll the $90 million for a possible move into movie downloads. Speculation that Apple, too, has its sites on adding feature film downloads to the iTunes store by rumor mill monger Robert X. Cringely has been made public.
The IFPI just released preliminary results citing a total of 200 million downloads for the US and Europe combined from all music sites online in 2004. That would mean cowboys Napster and Apple had the whole market, while the music label’s own sites had quite nothing to show for the year’s efforts. Some one surely must be playing with numbers again…
We Won’t Grow Up Redux
Toshi Doi took the podium with Bill Gates several times in the late 1980’s on behalf of multimedia CD-ROM applications, and each appearance was a marvel in showmanship from the typically reserved corps of Japanese engineers. He was an eloquent and convincing spokesman. His facility with humor in a foreign language reminded you of the Dutch. No wonder the Sony-Philips partnership has remained strong for 25 years, both able to laugh with and at American consumers. Sony’s corporate website has an excellent account of Ohga, Doi, Idea and the others involved with the launch of the CD from the Sony side. “Nakajima, Miyaoka, (Toshi) Doi and Tsurushima continued to prepare for the product launch in October 1982. At the same time, Ohga, Michael P. Schulhof of Sony Corporation of America, Akira Suzuki head of Sony’s DAD Promotion Department, and representatives of Philips gave numerous presentations to record companies and musical groups around the world in order to make the CD an internationally accepted standard.”
“However, while visually attractive, the small, sparkling silver CD that was to replace the black vinyl record was viewed as a threat. The reaction of the record industry was strong, and opinion wavered between support and condemnation. For Ohga, it was as if he was being treated as an enemy of the record industry.” [Sony and CBS Records had a joint venture at the time] “When he and others spoke in favor of the CD saying, The CD will become the next generation medium in the audio industry. Let’s go with it, those who opposed it responded, We’ve taken so much trouble to develop standards for the LP, we’re satisfied with it. Don’t make us spend money on this new medium. Don’t give us what we don’t need.”
What We Need is Some Fresh Air
I generally am suspicious of population sample surveys, whether expert or consumer, and greatly prefer analyzing cold, hard, census data culled from total capture of actual sales at some point in the distribution chain. Anything from manufacturer’s shipments to distributor’s sales, if the universe is defined, deficiencies can be corrected, and the truth can be known. Having said that, I have never found any reason to doubt the balance of the Pew Foundation’s Internet and the American Life Project research. They have a non-profit charter and make full disclosure of the data and methodology to allow anyone using the results to be satisfied the results are unbiased and the conclusions supported by the results.
If you have a quarter hour, you owe it to yourself to read Mary Madden’s recent study on the opinions of musicians themselves regarding copyright protection. The Pew study on musicians and the Internet is nothing short of a wake-up call for everyone in content creation and delivery.
Just a few highlights to whet your appetite for this most satisfying report.
Out of a staggering 32 million artists in the USA by their own account, 10 million Americans get some kind of compensation for their creations and performances. Creative commons, indeed!
More artists use the internet than the general population.
Of all musicians, 87% use the Internet to promote their craft, give away samples of their music, and connect with their fans.
A full 72% say they make more money on account of this. Many would like to bypass the established music distribution system using the Internet.
Although they are split down the middle whether it should be legal to download music without paying for it, the majority do not think it is a threat to their livelihoods, rather, it is a threat to “the purveyors of art more than the creators”.
Although the RIAA makes a big deal appealing to our conscience about how devastating P2P file sharing is to the musician, 60% of actual, real-life musicians surveyed say they do not expect the RIAA legal actions to benefit them at all. Nada. Zero. Zip.
And at the same time, perhaps unaware that it’s constituency thinks it is futile, the American Federation of Musicians strongly supports legal deterrants to copyright laws and is working side by side with the RIAA on stronger legislation. This money would be better spent lobbying the government to give artists incentives to use new technology to reach the public with their art.
The IFPI, MPAA and BSA, whose constituency does want them to lobby government for copyright protection, all cite the business losses of pirated software as the product of the purchase price and the number of copies, assuming everyone would buy the product if getting it free were not an option, but this is for lack of another way to size the activity, and not to be considered actual losses. These groups need to concentrate on real pirates, who resell copyrighted content without paying for it legally.
You Know I’d Go Back There Tomorrow
Free Man in Paris was written by Joni Mitchell in 1975, the decade record sales tripled. Looking back on record sales in the mid-70s and record sales thirty years later, even after the debatable damage done by illegal file sharing, the recorded music industry is vastly larger and more profitable beyond any expectations specifically on account of the successful leverage of new technology.
Furthermore, content companies are confronting a new media technology no differently than they did in 1982. The recording industry managed to kill off DAT and DVD-Audio, but in retrospect, it only managed to hurt itself and the musicians it claimed to defend. By spending their time and energy and profit suing customers who like to download music rather than bending over backwards to give them legal product at attractive prices, the damage continues eroding the consumer’s desire to buy music.
Granted, it is comfortable doing things the same way, but viewing new technology as a threat because it forces change in the way of doing business is not good business. The market is moving, embracing new technology. Consumers and creative artists alike enthusiastically embrace new technology; they will find a way to connect with or without established distribution channels, and that kind of change is not kind to the old regime.
Prices for CDs have not come down except for inflation adjustments since they were introduced, despite that the tools of production and the manufacturing costs are a small fraction of what they were at the initial commercialization. At a dollar a download, with no costs to remix recordings or manufacture, package, warehouse, and distribute them, there is even more industry wealth generated.
In general the content industries have benefited economically from new media, and yet too many act defensively rather than offensively. It is time to turn this around.
First, to fight piracy, the content businesses need to focus on professional pirates. Replication factory certification such as the IRMA initiative is a bit like closing the barn door after the horse is out, but it is a step in the right direction. Licenses for replication equipment, both large and small scale, should carry mandatory auditing of the operations of all customers. Period. All illegal internet wholesale distributors should be shut down. Legislation and litigation directed at prohibiting sharing of content between known parties where money is not exchanged is regressive and self-defeating. The more people are interested in content, the better.
Secondly, there has to be something beyond a one-high-priced medium model. People with low incomes and in developing countries cannot afford to pay the same prices as middle and upper income consumers. Dropping prices to as much as one third or one quarter of their current levels for MP3 quality sound must be considered. Then raising the production bar with recordings, movies, games, and multimedia that have features, quality levels, and bonus material not available with todays media enable the industry to pick up some extra disposable income from those who have it.
Third, the content creation and distribution industry needs to get off its heels and on its toes when it comes to new technology. It needs to work with manufacturers to make new technology a win-win, anticipating how they can use it and making plans to invest when the opportunity presents itself. They need to arrive at a copy protection scheme that works to reduce wholesale piracy but does not inhibit the consumption of the content or penalize the consumer for enjoying it, for example, by reordering, transferring, or copying it for his own pleasure.
The cycles of digital media are inevitable and obvious. Fighting them is rather silly. Having fun with them is far preferrable.
posted by julia b schwerinÂ