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Recording industry will soon be the first medium to jump from the plane into “free-fall,” while other media watch. They’re next. 1/28/08

Posted by Steve Boriss in BusinessModels, RecordingIndustry.

Is the recording industry about to become the first all free, all digital, all Internet-delivered medium? It’s already happened, according to today’s Times of London, which announced a deal among new digital service Qtrax, advertisers, and recording companies. Not yet, says PC World, which claims negotiations continue. But, just as you can’t put toothpaste back in a tube, it seems all-but-inevitable given the sharp declines in recorded music sales, the ubiquitousness of illegally downloaded music, and a younger generation that refuses to believe they ought to pay for music.

When Big Music’s “free-fall” begins, with free music accelerating the fall in revenues, other media — newspapers, TV networks, Hollywood, videogames — will be squinting from above trying to figure out two things. Were they able to pull the ripcord before their profits crashed? And, if there was a soft landing, what does it look like down there? Perhaps Big Music will have landed in a better world, having cut-out all the powerful, corrupt, and money-grubbing middlemen in the distribution chain who are no longer needed. Maybe they won’t have to endure the egos and outrageous demands of some not-particularly-talented-talent who managed, somehow, to grab one of the few available slots for stars among the previously, artificially-limited number of channels. Maybe there’s even more money down there than there ever was, coming from multitudes of smaller, Google-type advertisers who could never previously afford Big Media’s cover charge. Watch carefully, other media — you’re next. And, you better jump soon. The plane you have been flying cannot land safely. And it will soon run out of fuel.


1. frankwolftown - 1/28/08

It won’t be ALL digital until they have a mac version for the people who want to subscribe for them. I’ve yet to make the jump to Itunes becuase I thought i could I could use Qtrax.

2. Keith Bertelsen - 1/29/08

Qtrax is actually having issues, as I understand it. Where I see the future of music is in things like Last.fm. They recently signed a deal for free streaming of any song from their library–but only three times. After that, you have to buy it. However, they also have a music recommendation system: type in any artist you like, and it’ll pull up a dozen more that are similar; you then can sample their music.

All ad-supported, and subscriber-supported. Not to mention linking to where you can buy the CD on Amazon–or the DRM-free mp3!

Big Music’s fall is going to be in fragmentation: EMI is already talking about leaving the RIAA. As the cost to produce and distribute music keeps dropping (for the cost of a computer and 50$ software, a garage band can sound almost as good as a five million dollar studio band), it empowers individuals to make their own music and strike their own deals. There will always be the big companies to help, but their stranglehold will soon be over–provided the government doesn’t prop them up.

You can already see this in movies, and Microsoft and Nintendo have acknowledged that it’s going to happen with video games.

One can only hope the news goes the same way: fragmentation of the market leads to competition, and leads to “progress in the sciences and useful arts”, as specified in the Constitution, not to mention the “freedom of the press” in the First Amendment.

3. Joe - 2/23/08

This has to do with the universal human inability to just “let go,” and by that I mean the industry doesn’t want to adapt to the new landscape. For a while their method was, continue dabbling in old practices that were successful at one time, but when things change, sue instead of adapt.

Right now we could all be driving electric cars, but that would ruin a heck of a lot of people’s business. Same with alternate sources of energy. Eventually things will change, but it’s unfortunate that the transition is taking longer than it should. Greed, that’s all.

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