OK, in short the hypothetical savant posted was one for a band that has their first contract. Thus, the corps. have alot at risk that the money they put into the act will likely never be returned. Given this common occurrence, it only seems fair that for the risk they put into startup acts, that there is some opportunity for them to profit from the possible success of the group. Etc....we all know where this is going so I'll terminate discussion. The sad reality though is that the bands that do make hits off their first release usually never get to see their new contractual leverage blossom, since their leverage will have evaporated by the time it comes to renegotiate a contract. Today's market is field with sophomoric failures and one hit wonders....almost reminds me of the early 80s.
It's interesting to note that the very story you refer to suggests that the music industry is waiting on a standard that I put forth here....DVD. I have espoused my reasons for this belief in a previous post.
"Understandably, established music companies want to avoid the pain of adopting new commercial models which may displace some of their existing business. However, the Internet is demonstrating its power to force change on even the most entrenched industries."
Hmmmm, the conclusionary statement is highly debatable. The internet has been great for companies to pump the price of their stocks, but so far other than "internet" itself, I haven't seen many changes. In fact, if you are without a computer today, you can go on your merry life just as you had before the internet became popular. The internet has become an addition....not a revolution. It may bring about a revolution in some areas, but it has yet to do so....the world is not wired as much as us "techies" would like everyone to think. I think when looking at internet related issues, people sometimes forget about the world around them and eliminate that which has existed for so long and is so well engrained in our everyday lives. The internet is not an isolated world as most stories would lead you to believe.
Digital distribution will have an impact. But it may not be as large as some think. If anything, it is likely to remove the non-essential middlemen. And they hardly are what is the primary costs in transactions.
"Digital distribution is inevitable, the net will see to that. Embracing it today would open the doors sooner to new types of products delivered much more cost efficiently and provide music lovers with true alternatives where there are none today"
Yadayadayada....the internet will save your life, take care of your kids, etc....I'm waiting for the internet to build me a new pc right in my own home....haven't found a device yet to do it. Changing distribution measures will create new products to allow the new distribution....that is about all it will do. Yes, that has a huge impact on business (and thus, many argue this technological revolution has moved this economy). But again, those are business products, not consumer products. Businesses feed and eat off of other businesses without directly impacting the consumer market for a good (yea, I know, all of us here have 3 or 4 routers at home along with ATM switches, 14 computers, etc....sarcasm). Overall, this technilogical revolution has impacted business greatly. This, overall, affects the consumer in lower costs and quicker to market products (efficiencies). But, strictly speaking, it doesn't necessarily follow that it will create new products....maybe new forms of products. This could of course change, but it will not be anytime soon....again, pipeline limitations being the primary bottleneck in making this transition. But alas, I'm no longer discussing digital distribution....I'm discussing the more general "digital" existence.
There is one key argument to be made (which actually goes against part of my previous argument). This factor is the ease of entry. Ease of entry will lessen the contractual leverage of the corporate entity. Plenty of reasons for this but I will not expand. There are still costs involved so it will still not be the "utopian" that all out there believe it will be.
The bottom line here is that there is no efficient digital distribution at the moment. So all the well-wishers are merely speculating on a future occurrence. Rather than speculate, I have presented thoroughly the great number of challenges that lie ahead. I have also presented arguments for why digital distribution will not bring about the great consumer saving advantages that one may think it will.
"Internet music will succeed because it allows anyone the ability to purchase any number of songs from an album without having to purchase the Album. That alone changes distribution. It also has a big impact on the distribution of royalties."
This is a huge assumption. While it may be true now, it may not last. At last recall, there were no means of me obtaining a single song from a popular album without either buying a cd single, buying the album, or downloading an MP3 someone else has made. If you are an artist and could sell 1 song for $2 as cheaply as sell 10 songs for $5, which would you choose. More than likely, you've already produced the 10 songs, and a $3 difference is remedial. As such, you're likely to sell the 10 songs for $5. And, you cannot argue that cd singles do such as they are more than merely one song. They are a means of marketting the cd which contains 1 popular release with a few extra songs. Furthermore, the price differential is more signficiant between a cd single and a cd ($5 vs. $12....maybe percentage wise, but the consumer uses more than percentages to determine what is a significant price difference....ie. $2 vs. $1 is 2x as much but is a negligible price difference if the quantity purcahsed is 1. But $1000 vs. $2000 is an equivalent price difference but is a substantial one when considering that the item is a television). There is also a pricing issue involved with your statement. More than likely, by the time you purchase 3 or 4 songs off the cd, you might as well have purchased the cd....consider the pricing of cd singles vs. an entire cd. As such, the idea that you can buy just any song off a cd is merely speculative and is not likely to occur. If it does occur, it will be no more of an economic alternatie than what is already present today (except you may be able to choose which song you want to purchase). Maybe Kerry can expand on how this impacts the distribution of royalties except in the cases of soundtracks where various artists perform.
Although Elizabeth makes a good point regarding the consumer freedom such a proposition makes, it none the less is limited by the economics I have discussed above. There are of course good counter-arguments why an artist may allow such, but I will let others interested present them.
Chris
|
