SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology
EDIG 0.00010000.0%Mar 20 5:00 PM EST

 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Savant who wrote (2293)2/9/1999 10:59:00 PM
From: chris431  Read Replies (2) of 18366
 
Now that's early adoption (re:player from Japan)!

I do not believe that having the ability to control your music also means you have the ability to market your product. A central power to organize products for the consumer and advertise to the consumer is an important aspect of any products dissipation. This task becomes even more important the more substitutes are presented to the market. Imagine now if you were to remove the cd's off the shelf at the store, threw them on a web page, and told to go fetch some music that you would like. While you the consumer could do that, at great expense, the artists would also be distributing their music at great expense....lack of exposure. Indeed, websites would come along and help us categorize the many releases into categories but again, the artist would be the ones injured. No, the average artist may not. But, the artists that would meet mass appeal may become injured as there is no central party to dissimenate information and advertising about the group. I'm sure as of right now there are plenty of bands/singers, etc. out there that an individual would enjoy if they knew about them, yet they do not. And this is with millions and millions of dollars being spent on introducing the consumer to what is available. Remove this money (and yes, it costs money to advertise....remember those web sites who will categorize music for us....probably will not be done for long for free and if done for free will be far more inadequate than the system we currently have) and your swimming in a market full of unknowns. I recently heard the number of new albums released yearly and it was tremendous. Release those out on the web and the consumer will end up being aware of alot less than what we now are.

One may argue that there are plenty forms of advertising that are free for musicians with the predominant form being radio. But radio is not free. A song is rarely just stumbled upon. How many songs do you hear that aren't already connected to a corporate entity? Very few (except for local shows that some radio stations do). Is this because corporations prevent radio stations from playing independent music. While the argument can be made that in some cases they have, for the most part they haven't. Instead, the radio is dependent on an organizing firm....a firm that will tell them what is new, what they discovered that their listeners may like, etc.

If you're following my rambling, you'll understand that the primary problem here is an information transaction problem. Information is infinite but each individuals ability to organize it is very limited. As such, in any rational market, you have entities that attempt to do such a task. As much as I blasted corporate entities in my last post, they do serve a very important function.

We each know what types of music we like. And I'm sure many of us are good at picking what will be popular before it ever becomes popular (a "trend-setter" per se). But, how many of us would have ever been able to discover that one song that first suggested to them that "hey, this is some good music....I like it and I bet alot of people will." I pride myself on how often I'm accurate in listening to a song for the first time and picking out the ones which end up becoming very popular. Yet, for the most part, I would have never been able to suggest these songs/groups to other people b/c I would have never heard them. Why? Because I do not have 16 hour days to go about and find out what sounds good and what doesn't. I pay someone to do that and it's called Sony, EMI, Geffen, etc. So, by the time I hear a song that I think many others would like, many others have as well b/c of the current distribution system which exists b/c their is profit in it for the organizing entity. B/C many others have heard the song, now many more will hear the song from the initial recommendation. B/C there are so many numerically, the process does not take too long before a song/album is before the public at large. If you were to substitute this commercial outlet with a smaller base of listeners (which would occur), the end result is that fewer people hear song A and it took those people much longer to discover it (kind of a linear function....I think....sorry, my specialty is not math).

A simple question to ask yourself is how much time online do you spend doing something music related (ie. searching for new music)? Probably next to none. Would that amount of time improve if online distribution was greater? Probably not, we only have so much time in the day. This further suggests that fewer acts would be discovered by a large enough audience that would allow those acts to make a living from their music. As such, the musician who does become popular online now has an even greater incentive to once again sign there name on the dotted line with those evil corporate entites so that there audience can be that much greater....remember, musicians like to make alot of money too. This freedom may give the artist some contractual leverage but that is debatable simply b/c the corporate entity now has an even greater incentive to bind any act they "create" to stricter terms in the contract (you don't want to "create" an act only for them to leave you an album later so they can distribute their music online and receive all profit). The end result may be even stricter contracts in the favor of the corporation.

Enough rambling on this point....the point being that there is a severe problem with organizing a large amount of information and as such we pay others to do it for us (it's economics). Given that the organizers of information are more likely to reach a larger audience than less capitalized organizers, those creating the music will seek that organization which will give them the largest exposure. As such, your back at your old structure level in regards to music distribution. As such, I don't buy the argument that musicians will now "for the first time ever" have a shot at controlling their own destiny. Not only have the had that opportunity in the past, they have....and they choose a central organization to do such. This is exemplified by the studios we now see ran by musicians or ex-musicians (including Death Row (Dr. Dre. and company), and Maverick (Madonna). It is important to remember that while this example is still under the "media" regime of middlemen, etc. the existence of record companies are no longer necessarily about pure distribution (ie. printing the material, getting it to the stores, etc.). If it were so, we would not see as many independent's proliferating as we do (since they have less capital). It is about marketting the material (and independents are capable of doing such on a smaller level at startup and a greater level once they have a couple hits....TVT Records is a good example in the Industrial music sector, esp. after being the initial company for Nine Inch Nails and KMFDM). Small or large, they both have the same primary characteristics and purposes....organizing acts and marketting it to the public....and none of them do it for free. So, whether you have an organizer with it's headquarters on land, or one in cyberspace, you still have a corporate entity that will demand from the artist some profit and some control.

Elimination of the middleman is not that important of a factor in the distribution of music. In fact, if you look at the prices of the middlemen, you will find that they are often set by the non-middlemen. A class action was filed against the record companies a few years back over price setting for the middlemen ("Best Buy, you must sell this CD at X.XX. If you do not, we may have to cut back supply"). If this is so, removing the middlemen will not affect price b/c the middlemen weren't setting the price in the first place (if the middlemen were setting the minimum price, you would have an argument, but b/c the primary producer (record company) was setting the price above the minimum of the middlement, removing the middlemen would have no effect but to shift profit). As facts and history now stand, the proposition that removing the middleman will bring down costs in the MUSIC INDUSTRY is more than likely false.

The powers that be will not introduce an online distribution system until it has complete power over that distribution. As such, MP3 in it's current form will not be a commercial success (although it may be a public success....people love free things). When will an online format be viable? I think I stated it in my last past (higher quality hard copy that is protected, followed by an online release of the same quality....from there the corps can transition to online only if they so choose....again the problem is with the economics of substitution. The corporations must insure that there is no other substitution for that online format (as of now, we have the better quality CD, the better quality DVD audio to look forward to, and free MP3 that I can convert from a CD (and probably DVD although it will be reduced to CD quality).

"There a lot of great musicians out there that a fellow could download for free, and probably always will be."
I am assuming that the musicians you are referring to are those not connected to a corporate entity. Given this (if it is an incorrect assumption or not), how many of those artists do you listen to?

It will be a little different once the switch occurs. I think the hype "is happening faster than most thought would be possible" but I think the transition is not near. Remember, there is still a large part of the population who do not have computers and some in the population who still do not know how to program their VCR (this was stated in case you wanted to suggest a set top box that takes care of downloading music and placing it on a disc, etc. Such devices will be available, but probably not as soon as many think). And, the quality of audio delivered the traditional way is only getting better and larger (DVD audio, idea of having all music be surround sound, etc.) This will only make it tougher for online distribution. Until the pipeline is ready and the compression techniques are improved to be equitable what we can purchase, there is no way the mass consumer is going to complicate their lives so that they can receive less quality through a more complicated means.

There are major hurdles that need to be made....and simple handheld download device isn't going to cure them.

Chris
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext