Tuesday, October 23, 2007

How not to sell music

Once again, the music industry demonstrates that it has no clue what to do when it comes to handling digital music. They are now selling music on USB sticks instead of as CDs, hoping to replace the ailing single format. To do this, they are replacing a £2.99 format with a £4.99 format. If this would work, it would mean that customer would be swimming in USB-sticks with no apparent use, since the music would be transfered to a storage disk for easy access as soon as you bring it home, just like a CD gets ripped once and then archived in the basement.

Not only is it idiotic from an environment to make customers buy electronics they don't need more than once, it is also idiotic from the music industry's survival perspectice to try to replace a dying format with another one that is more expensive.

A digital music track costs next to nothing to store since they are only bits on a disk. Customers expect the price for digital music to be significantly lower than the old formats where records had to be pressed, covers printed, albums distributed, store inventory kept, and so on. Today, the only thing that is needed to market music is a web site where you can buy mp3s online, and the costs for "producing" an mp3 like this are of course infinitesimal compared to old-style records. The natural thing would be for prices to reflect this. If they don't, customers will move over to getting their music via illegal downloads which are already easily available and cheap. It's as simple as that. The music industry has to add value to an existing service that is free. The only way I can see that happening is for them to drop prices to about $1/album or $.1/track and providing fast, rock-solid downloads with no customer-unfriendly DRM.

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