This is Celia Hirschman with On the Beat for KCRW.
Industries hit by sea changes in the marketplace take years to recover ground, and if the titans of that industry ignore the changing market, the result can be downright devastating.
Finally, the record industry is flooded with new music business models. Here's a brief recap of just some of the latest developments at the major labels in the last few months:
In October 2007, Universal Music, the largest of the major label conglomerates announced they were creating a digital service called Total Music. The service would provide phone manufacturers with unlimited access to their music catalogs. Customers could buy telephones that featured the value added service, and seamlessly download millions of popular songs at no additional fee. The cost of the service would be invisibly added to the cost of the phone, but the revenue for the service would go directly to the label and artist.
Universal immediately got Sony BMG on board with their project, and was looking to have EMI and Warners come in as well. Total Music was created to stem the tide of illegal peer-to-peer downloading.
Within four months of the launch announcement, the Justice Department came knocking, to investigate allegations of antitrust among the labels. In short, some anti trust laws prohibit joint ventures from forming if they could eliminate competition in the marketplace. Total Music's future is unclear.
But meanwhile, at the end of 2007, telephone-hardware manufacture; Nokia announced they'd be offering their own 'All You Can Eat' style music service with some of their phones. Nokia is scheduled to launch this promotion in the second half of 2008. It's titled ‘Comes with Music,' and the service already has EMI & Universal Music catalog on board.
And not to be outplayed, Apple just announced they were in negotiations with all four major label conglomerates to develop their own ‘All You Can Eat' subscription model for music. It's quite an about-face from the 99-cent-per-song model they've held onto for so long, but clearly the label's and consumers' interest is changing.
At SXSW this year, music consultant Jim Griffin presented an entirely different model for digital music. Griffin proposed having broadband users pay for the music they download through a fee, bundled onto their monthly Internet bill. The music would cost pennies on the dollar; discussions were at $5 a month. It would allow consumers to upload, download and share music without restriction. Better still, from the pool of monies collected by the ISP's, artists, labels and rights holders would be compensated for their work.
This is my favorite approach to acquiring music. With over one billion tracks currently traded illegally every month, a reasonable solution is needed to offer access and pricing to meet demand.
Regardless of which model actually succeeds, one thing is very clear. The way we acquire music is going to change. Consumers can look forward to lower prices and labels can look forward to more music discovery by consumers. The take away here is more music for far less money equals more money, more appreciation and more artist development.
A win-win for everyone.
This is Celia Hirschman with On the Beat for KCRW.