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The Essential Guide to IT Transformation

Enter Salesman

For those of you averse to such hyperbolic language, don't fear. The Future of Music has below average utopian garble for a technology book, especially one with "future" in the title.

Instead, you find a lot of concrete goodies. Why do the authors believe CD sales have declined?

"(The) reasons include the significantly reduced number of retail outlets that carry CDs, the by-and-large non-competitive pricing of CDs and digital singles, the labels' unwillingness to experiment and develop really different artists, and the many competing forms of entertainment that exert magnetic power over the disposable dollars of the consumers, including video games, wireless services, and DVDs.

"And, let's not forget to mention that we have finally reached the end of that glorious replacement cycle of vinyl-to-CD that the industry has happily gorged itself on for the past fifteen to twenty years."

So what can musicians do to make money without huge CD sales?

Today, the artist gets 8 percent of the average CD sale with the label taking 49 percent, the retailer taking 30 percent, manufacturing taking 8 percent and shipping taking 5 percent. In this world, labels back a limited number of artists with huge ad campaigns, hoping that one or two acts will sell millions upon millions of CDs and cover losses for all the other acts. In this world, you see the number of record shops and songs dwindle. Wal-Mart now owns the majority of the US CD market and sells a few titles at a loss to bring people into its stores.

In the new model, the artist takes on a bigger role. New artists can float one or two songs on P2P networks or their web sites to see what gets attention. They don't have to pay a record label huge upfront costs for promotion or for recording an entire album. The artists will be required to build up a fan base over time by playing live shows instead of hoping they have the right look for their MTV video.

Bands will be able to sell "premium" content such as web casts of them recording an album or live chats with fans. They will get far more than 8 percent per album sale by moving songs via the web. And, they will be receiving their fair share of the licensing pool - a fairer share than exists today as it's much easier to track digital sales and P2P activity than what bars, radio stations and elevators play.

"Music wants to be mobile and moveable; this has been a sticking point with music fans all along," the authors write. "If we define mobility as the ability to access music from anywhere anytime, as the ability to take it with you without undue burden, and as the ability to exchange music with others, we have the very definition of digital music. The only way this can move is up!"

Instead of looking at P2P users as dissatisfied, disgruntled customers and trying to make life better for them, the record labels saw criminals harming their bottom line. They chose to sue their customers and to lock down already digitized and wild music. The Future of Music explains why this was the worst of all possible reactions and why the record labels simply can't win this fight. ®

Bootnote

* Such a plan could break out as follows according to the authors: "If 50 percent of the world's active Internet users would pay only $2 per month, the industry would collect $500 million per month - $6 billion per year - a whopping 20 percent of the current revenues from CD sales. Other calculations based on a sliding scale might work equally well, where people in developed nations paid $3-4 per month, and other emerging economies paying $1 or $0.50 or $0.25 per month to create a pool of money. And that would just be the beginning."

The Future of Music

Rating

90%

Pros

A solid look at how the music industry is healthy even if the music business is not. One of the best takes today on what a "pool of music" could mean to the artists, record labels and consumers.

Cons

The utopian language can be a turn off. In addition, the academic tone of the book leaves the readers wanting more concretes, although few specific points on how compulsory licensing might work are available due to the labels' reticence to discuss the subject. A good read but certainly not a great read.

Price

You can find US, UK and international sellers here. It's about $12.

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