Nothing irks me more than to see a Time Warner pitchman come on my TV to talk about all the money they’re “saving” me over satellite. Please. I’m currently spending more than $150 a month on my cable service, and that doesn’t count the $120 a month I pay for business class Internet service from Warner Cable.

The New York Times described my dilemma exactly when  it interviewed a 27-year-old actor who’s using a new service called Boxee that allows users to bypass the cable company and get the channels they want through a direct Internet connection to their TV. “Most people my age would like to just pay for the channels they want, but cable refuses to give us that option,” he told the reporter.

Not just his age. Us 49-year-olds balk just as much.

Once you unchain TV shows from the cable gatekeeper, you’re opening Pandora’s box — just as you are when you allow studios to sell directly to cell phone users and bypass the carriers. Don’t be surprised if cable companies try to sue Boxee and others like them out of existence to maintain their lucrative oligopoly.

But in the long run, hopefully those efforts will fall short. Content, as they say, wants to be free. And as somebody who pays through the nose for a product controlled by those cable and satellite oligopolies, it can’t come a moment too soon.

Posted under Michael's Blog

When I picked up today’s morning latte at Starbucks, I also picked up a free iTunes download of Brandi Carlile’s Turpentine.

From Oct. 2 through Nov. 7, Starbucks is handing out 1.5 million "Song of the Day" cards, including Carlile, Bob Dylan, Joni Mitchell and many others. Not surprisingly, you can also download the entire albums — at a cost.

Starbucks is also demo’ing the future of the music business.

As retail music sales continue to decline, record companies and artists will become increasingly open to the idea of packaging their products as add-ons to other products — coffee, perfumes, groceries, anything.

And just as websites turn free customers into paid subscribers by first offering them free content, artists and labels will need to give away free songs to entice customers to buy.  

This is a concept I’ve heard repeatedly ridiculed by music industry executives as cannibalizing CD sales and destroying the "value" — whatever that is — of their artists.

That’s silly. The ultimate value of artists lies in how much people enjoy their work; people will always be willing to pay for something once they decide they love it.

Starbucks, which gives customers free tastes of new coffees, knows all abou that. Hopefully, the music industry will also take the hint.

See Also

• Starbucks to offer free iTunes Song of the Day
• Complete artist lineup for the Starbucks/iTunes giveaway
• Dave Goldberg to Record Labels: No DRM, Please

Posted under Uncategorized

So Steve Jobs gets his way and http://www.emi.com becomes the first major label to ditch copy-protection software. Other record labels are expected follow suit. Music fans will get to burn as many tracks as they want and get the added bonus of near-CD quality sound files. Paid music downloads soar. And everyone wins.

Well, yes. Except for the "everyone wins" part.

Apple certainly wins. It sells a lot more iPods. Fans win. But music labels only lose less.

If you’re an amoral fan who has a choice between paying for a pristine, 256kps, copy-protection-free file from iTunes or downloading it for free from your favorite pirate site or friend’s computer, what are you going to do?

You’ll do what 1 billion illegal song downloads a month say you’re going to do. You’re not going to pay.

Sure, some people will pay. I will. Maybe you will, too. Probably more people in the world will pay.  But most people won’t.

Which means that the "sea change" in music buying habits that some media outlets are already predicting isn’t going to happen. Or at least, not enough to stem the steady erosion in the music industry’s business.

The sea change has already occurred. Fans realize they don’t need to pay for albums.  There’s no going back.

The real sea change will occur when record labels — not Apple — come up with a fundamentally new paradigm for monetizing music. I detailed a few pet ideas in last week’s column, "When Will They Ever Learn?"  I may be wrong about my ideas. But I’ll bet you it’s not going to be "pay per download" that rescues the record industry, either.

See Also

• EMI, Apple strike deal to sell songs online free from copying restrictions

Posted under Uncategorized

The music industry’s woes come from an inability to learn painful lessons

Last week’s news that CD sales for the first three months of the year had plunged 20% over a year earlier — far overshadowing gains in digital downloads — underscores how little the music business has learned over the last few painful years.

Collectors’ editions aside, CDs are a dying business. And paid digital downloads, in my opinion, will never make up for the loss in CD business. A majority of people will always favor unlimited free (illegal) downloads over paying for music-by-the-song.

But that doesn’t mean the music industry is any danger of going away. It simply means that many music executives are refusing to accept the obvious.

Music wants to be free. So make it free. Or to be more exact, a loss leader.

People don’t want to pay for a single download. But they could easily be persuaded (as focus groups at our conferences attest) for a service that would give them instant access to any music, any time, on any device.  If, as I’ve argued before, 50 million families could be persuaded to invest $20 a month for that that right, you’d come close to equalling the entire recorded music industry’s annual sales.

And lest you think that’s impossible, the cable industry convinces those same families to pay a lot more for its product — which plays only on TVs.

People won’t pay? Then let advertisers pay. Embed ads for BMWs on classical music sites, let GM bankroll U2’s next album. and let Google embed ads on mobile music sites.

But music profits wouldn’t stop there. Preload a cellphone with 1,000 of a kid’s favorite songs and you’d better believe she will pick it over a competitor’s phone. How much is that worth in licensing fees to Cingular or Verizon? Or, for that matter, any maker of the more than 1 billion music-enabled cellphones in the world?

Stream any song a consumer desires over a broadband connection, and how much is that worth to AOL or Comcast?

As it turns out, nearly everything consumers do — from driving cars to clothes shopping– seems to go better with music. And nearly all of it can be monetized.

When will the music business stop its fixation on cranking out CDs and suing people, and get down to the serious business of making money?

 

See Also

• RIAA music sales statistics
• Apples’ Jobs Calls for DRM-Free Music (CNet)
• Sales of Music, Long in Decline, Plunge Sharply (WSJ)

Posted under Uncategorized