5 Years After Launch of iPod, Music Industry Tries MP3

Subtitle: What the RIAA Can Learn from "Them Pesky Kids"

In an amazing act of ingenuity, daring and trend-setting acuity, the Music industry is starting to experiment with... wait for it... selling MP3s online direct to consumers.

Yes, the same industry that wants to sue little old ladies for downloading MP3s over the Internet are now taking a half-decade-too-late crack at actually selling MP3s to consumers. This incredible use of brainpower, aside from being over 5 years too late, is yet another indication of the rapid series of nails being placed in the coffin of traditional music publishing and purchasing. In an article published in the Mercury News (speaking of industries heading downhill fast) it appears as if some of the online storefronts, such as Yahoo! Music are all but forcing major labels to reconsider their perpetual aversion to online distribution of music. EMI spokesman Adam Grossberg indicated that the company is looking at a number of different ways of delivering digital music in 2007, saying "We're very open-minded about experimenting". How daring! Of course, Mr. Grossberg declined to say whether the company would actually test selling in the MP3 format this coming year. Perhaps they are considering something more progressive such as mail order or in-home LP-lathe machines.

Let's consider a few industry statistics and statements (yes, I know, lies, darn lies...)

• Ged Doherty, the UK head of Sony BMG said that CD sales would drop 50% in just 3 years. The digital music sales will grow 25% per year and that will not offset the decline in CD sales leaving the industry 30% behind in terms of revenues by 2010. "We have to reinvent… we are running our businesses like it is 1982" said Mr Doherty.
• Global legal digital music sales rose 106% to $945m (which is 11% of the total recorded music market and twice as much as at the end of 2005).
• The US music market has one of the biggest figures for digital music share (18%). In other countries this figure is: South Korea (51%), Japan (11%), Italy (9%), UK (8%), Germany (5%) and France (5%).
• In the US digital sales increased by 84%.
• Global music sales are down 4% (and are now $8.4bn in trade values, or $13.7bn at the retail level). In 2005, the sales declined by 3%.
• Revenues from sales of music in physical formats declined 10% (compared to the 6.7% decline in whole 2005.)

Interestingly regarding the above, Mr Doherty said the current situation was "stupid" while Mike Smith, managing director of Columbia Records UK, predicted that the rights management regime would be gone within a year.

Good riddance. Thank you, drive through.

What can we gather from all of this? Nothing, really. The record industry has been running it's particular flavor of extortion-ridden business practices far too long to begin making optimistic predictions now. Here are some things that, while a refreshing change, would be very surprising indeed to see coming from a dinosaur industry in love with itself and entrenched in decades-old business practices:

• Streamline marketing budgets and slash CD prices. No one should pay more than $8.99 for a CD
• Get into the business of direct-marketing MP3 files to consumers. Make it affordable and cut out the middle man - or support the middle-man and stop insisting on ridiculous DRM security measures which make it difficult to use your products.
• Work more closely with radio, cable, and satellite providers to discover new markets and distribution channels for your products.
• For goodness sake stop whining and telling us all how poor you are.
• Also, ceasing lawsuits on your customers might also be a nifty idea for conserving this PR nightmare you call a business.

Now for a very easy-to-implement and "so-obvious-you-people-must-be-idiots" idea. Stop complaining about how unprotected the CD format is and use a format that is more protected and has been around for more than decade: DVD and DTS. In the current environment of high definition and multimedia, why on earth should people pay $13 or more for a disc that only has stereo audio? Ridiculous.

You may not want to produce multi-million dollar music videos for every track on an album, but putting some HD cameras in the studios and recording the studio process for inclusion as a video track on DVD is a no-brainer. Studios also need to begin forcing recording engineers to produce surround sound mixes.

Stop compressing the heck out of your tracks. They sound like crap and the radio stations can do this for you. If you MUST compress them, do it as a separate mix and don't include this on CDs or DVDs.

This isn't brain surgery people. Only the RIAA thinks that a CD can compete with a multi-track surround sound 4-hour DVD that sells for $15 at Wal-mart. Get a clue. Start making DVDs and obsolete the CD, and thus your problem. And DTS? No one can do much with that format and DVDs are much more difficult for Joe consumer to "rip, mix and burn" than CD. By default you wil have given yourself one more layer of protection. Determined to stick with audio-only? Where were you when DVD-Audio and SACD were coming to market? Those formats are both still fairly secure.

Want more? Get on the HD-DVD bandwagon. Now you're talking about tracks that are already DRM-protected and charging $20 will compete very well with a $35 movie.

Or you can continue to try pimping $15 CDs to consumers who are rapidly tiring of your products.

But what do I know?