Victor Keegan, writing in the Guardian, wonders how the music industry can’t get with the program and figure out how to make money in a digital era. Read the full story here.
Of course they are making money–just not as much as they think they should be making. According to the artilcle, music industry profits were up last year.
Here is an excerpt:
So where is the damage? The music industry is like no other. It is a spectrum ranging from constantly broadcast free music (including internet radio where you can search for a favourite track being played live) to albums bought in shops. If you buy a Nokia Xpress Comes With Music phone (for under £130) you can download up to 4,000 tracks legally. Does anyone need more? Spotify enables you to hear streamed music of your choice with occasional adverts, free and legally. This is easier than sorting through thousands of peer-to-peer tracks downloaded to your desktop. Last.fm does something similar and Apple’s iTunes paved the way, proving that people will pay for affordable music that is easy to download.
Have you noticed something about these companies? None of them came from the music industry. While the industry was suing customers to preserve the status quo, it took outsiders to create mechanisms to ensure paid-for music has a viable future. If music had created its own payments system with prices reflecting the zero cost of extra tracks it could have seized control of the creative revolution. It has certainly spawned millions of freeloaders, but also people who buy new tracks after hearing pirated versions and lots like me who started buying music again after a long absence because it is so easy. As people increasingly listen to music on their mobile devices where, unlike the web, there is a built-in payments system, the problem of pirated tracks should diminish.
(This is actually consistent with the sociological theory of the “marginal man“: That innovations are most likely to come from persons new to a field, either coming from outside it or at the beginning of their careers, because they are not locked into the perspectives of the accepted points of view. It has been persons from outside the music industry who have figured ways to profit from music in the digital era.)
As I have pointed out before, the industry’s figures about how much money they should be making are highly suspect and seem to be based on the assumption that all those folks who downloaded a music (or video) file would have, in the absence of download capability, actually paid money for it.
Frankly, I consider that assumption highly suspect. People will take for free what they would never consider paying for. (That’s one reason I have lots more ballpoint pens than I could ever use.)