OTHER TECH

That doesn't mean you can't have high-quality files on your computer. Hell, iTunes rips in lossless format if you so desire. But it appears that most people are satisfied with 128 AACs. At least for ripping. As for purchase...

Well, it's less about quality than the price. The price just isn't low enough. However you want to deliver the tracks, via individual purchase, subscription or P2P, people feel that the price is too high. You've got to be able to get more for less. Or else people will get tunes elsewhere. Maybe even via the black market on Russian sites, where they're about a dime a cut.

It's no use arguing. This isn't about philosophy. This isn't about purveyors establishing a price. This is about what the market will bear. The key is to make music so cheap and so easy to acquire it doesn't PAY to steal. Or, in the alternative, to monetize the stealing, at a LOW PRICE!

The Web has changed the playing field. Even Rupert Murdoch admits it (Murdoch tunes in to iPod generation). Why the record companies believe they're immune is beyond me.

They can whack off manufacturing costs immediately. And most distribution expenses too. They can SAVE money. There are ADVANTAGES to the new model. Look how a hit single can sell on iTunes. Just imagine, if price of acquisition were lower, maybe 20 MILLION PEOPLE WOULD PAY FOR AND OWN THE TRACK!

Granted, not for a buck.

But, if price is cheap enough, maybe 20 million people will own THOUSANDS of tracks.

The camera and newspaper companies woke up to reality. And gave up holding onto the past and entered the future. Every year CD sales go down. Do the labels think they can retard this trend? Do they think the miniscule sale of copy-protected tracks for a buck will replace lost revenue? A new business model is needed. The labels can either jump ahead of the consumer and corral him into something in the future or keep running behind him, railing that he's not buying the music in the format they want to sell it to him for at the price they desire.

Bob Lefsetz's column, "Lefsetz," will debut in S&V's May 2006 issue. If you'd like to subscribe to The Lefsetz Letter, go to www.lefsetz.com.

See the previous Lefsetz entry.

Back to Homepage What's New on S&V