Astonishing news (see here or here) that Apple’s new online music store has sold over 1 million songs already. This, despite the relatively small percentage of personal computer users owning Macs and even fewer with broadband and Mac OS X, much less a nifty iPod to play the tunes on.
Even though the record industry probably has plenty of reason to sweat about digital reproduction and distribution of music, clearly they’ve been shortsighted in this transition period. For one thing, they’ve been too quick to blame file swapping for all of their problems, even though others loom larger for the near term. As the Globe article points out, the industry benefited from consumers’ conversion of CDs to vinyl, a boost that wasn’t sustainable. For another thing, the industry doesn’t seem in the least interested in figuring out how to be successful in online music sales. A rearguard defense will not work. Prognosticating the future is hazardous, but I’ll venture anyway: ultimately online music will be a profitable enterprise, split between several submarkets:
1) More upmarket consumers willing to pay in exchange for convenience, quality and most importantly some remnant of “aura.” Aura is Walter Benjamin term describing the physical presence that art works had before mass reproducibility and as such does not strictly apply to mass media. However, the mass reproducibility of music (or film or photography) has not taken away consumers’ desire for the specialness of the art object - packaging, cover art, lyric sheets, some mark of the artist. The success of record companies may well depend on their ability to market something other than the music proper to convince consumers to pay.
2) Back catalog consumers eager to find out of print titles. Admittedly, this crowd is not the big-bucks mass-market singles-buyers that the RIAA is worried about. But they should take advantage of the one benefit of online sales - once invested in, it takes less upfront cost to distribute and get revenue from back catalog items. Niche-distribution is thus made easier and should be an obvious direction for the industry - they’re not getting anything currently off of out-of-print titles, but folks on eBay are. Why not offer fans something, gain gratitude from them and make some money in the process?
3)Artists willing to give away their music for the chance at fame. Ultimately, online distribution may change the economics of artist development among the companies, freeing them of some of the upfront costs of carrying bands not likely to break through.
Apple consumers may not be typical, already having shown their willingness to pay more for premium product and personal sense of brand identificaiton. Still, it doesn’t take a weatherman…
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