I posted this on Yahoo, but since it didn't contain either an inflammatory statement or an outright lie, I guess it was ignored.
[From "Monday's" IBD]
Beat Goes On, Online Music Gains Sharply
By Doug Tsuruoka
Investor's Business Daily
Jason Olim's idea for selling music online crystallized when he was a 19-year-old college student. That's when he first heard the classic jazz album "Kind of Blue," by Miles Davis. Thrilled, Olim combed record stores for more of Davis' work. What he found was lousy customer service and limited selection at stores.
That inspired him to find a better way. In the basement of their parents' house in Ambler, Pa., Olim and twin brother Matthew launched online music seller CDnow Inc. in 1994. It bought rival N2K Inc. in March.
The brothers made a $14 profit their first month. Today, they have. about 1.6 million online customers and posted $98.5 million in revenue in 1998.
CDnow lets customers order CDs via its Web site. The CDs are delivered by mail. Olim says his company stocks 500,000 titles. The company also has begun legally downloading music off the Net for paying customers, as the industry wrestles with the issue of music illegally pirated off the Net.
Olim recently spoke with Investor's Business Daily about online music.
IBD: Will downloading music off the Net become popular?
Olim: Everything is complicated at first, but I believe digital downloads of music are poised to be extraordinarily popular. This is because of instant gratification. To want to hear something right now and the ability to have it right now has never existed before. It will be very popular compared with driving to the music store or waiting for something to be delivered by mail.
What are the biggest obstacles to selling music online?
Olim: It takes time for people to try it and discover they like it. It's a question of deciding to start buying online. It's a new thing, a very powerful thing.
IBD: What role is technology playing?
Olint As technology improves, consumer expectations go up. In the online music industry, we have to be as good with technology as McDonald's is in choosing sites for its ham-burger outlets. Technology is not what we do, but it's one of the most important tools we use.
For the consumer, the technology of buying music online will get much easier. Someday you will be able to just point, click and buy. All questions of downloading and listening will be transparent. You'll just listen to what you want to hear, without having to worry about the computer it's stored on.
IBO: How does that compare with how consumers download music today?
Olim: (Today) you have to be lucky enough to have all the software set up perfectly. If you have a glitch, it can be hard. You have to have audio cards and speakers. You have to have the right software.
IBD: How long will it take for music downloads to gain enough popularity to make an impact?
Olim: Perhaps two to three years. Critical mass in my mind is more than a million paying customers. Today there are perhaps only 50 that I know of. I don't think we're near the thousands yet.
This is different from the millions who download free music or steal music (by down-loading it) from illegal systems. The question is: When will (pirating be stopped)?
IBD: Some say MP3 software that compresses and decompresses digital music files, will be the standard for downloading music over the Web. (MP3 is being pushed by some record companies and tech companies such as IBM Corp.)
Olim: I think MP3 will be replaced by something of higher quality. There will be more choices for the consumer in terms of the technology used.
MP3 has drawbacks. It's just a piece of technology that shrinks sound files so they can be transmitted over the Net. It doesn't protect the music against piracy. The future of digital music downloading depends on the widespread use of secure digital music platforms. MP3 will be replaced or made a part of some form of secure digital music platform.
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