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To: Ausdauer who wrote (11803)	6/7/2000 3:28:00 AM
From: Doren	Read Replies (3) \| Respond to of 60323

Ausdauer, The digital recording industry is going through the same paradigm shift that all other industries are going through. Musicians can buy extremely sophisticated keyboards, drum machines etc for very little money, $2k-10K. To illustrate: NIN (Nine Inch Nails) is a rock band that can fill large stadiums. Their latest CD (a 2 CD set) was digitally recorded and mixed using Mac G4s and ProTool mixing setups in Trent Reznors home. I believe other members also have similar setups and they trade files back and forth. You could set up a system like this for about 10K. A good Mic will cost in the 2-25K range. Pretty cheap. I'm guessing that this album will probably sell 20M+ copies at roughly $18 retail. A smaller band can get by with considerably less. Production costs of CDs are trivially cheap, probably less than $1.00 per CD including art design and package. Even the smallest artists can afford to produce their own. Distribution has always been the bottleneck. Artist sign with distributors not producers. When I worked at Tower they had a beef with the return policy of the 6 distributors. (There are only 5 now I think.) Tower tried to boycott the distributor. Even though Tower was the #1 or #2 retailer in the world they lost and gave in. Think about distribution. We had 100,000 different records. (Except for guys like Michael Jackson) How do you get one copy of Asmus Tietchens into one store? You have salesmen who visit stores weekly, laborously counting product and ordering small quantities of CDs for thousands and thousands of large and small retailers world wide. The salesmen figure out how many of each CD each store sold and needs. Then boxes have to be hand loaded with one or two of each of hundreds of different CDs, delivered and hand racked. Extremely labor intensive. It'll be all over in 5 years. On college campuses its pretty much all over now. The video business will follow. The driving force behind the business has vacillated back and forth between singles and albums. Dabblers like singles, collectors like singles, albums, and oddities (like remix singles). There is a roughly equal amount of each customer. I'm one of the latter and had at one point 10,000 albums and I've got friends with far more. Musicians are people with extreme enough love for what they do that they'd do it for free if they had to, CDs will go away but music won't. For some musicians idea of making music for money is repugnant. The Greatful Dead actually encouraged fans who taped ALL their concerts, setting up areas for tapers and in some cases letting tapers tap into the mixing board. The Dead were the largest live concert grossers (or near the top) for at least 20 years. I'm going back packing soon. The idea of taking an MP3 player hardly larger than an AAA battery is very attractive. The idea that I can get one with Flash Disks makes it far more attractive.