Wednesday, October 01, 2008

record this..

Leo posted about the threat of the iTunes store shutting down. I was thinking about the whole deal. Here is my point of view..
When the record companies were losing there collective asses to illegal downloads, they did not know what to do. They could not figure out a solution, so they just sued NAPSTER. Everyone said not to do it, but that is all that RIAA knows how to do. They screwed themselves in doing so. Now they have NO control because they spread it out all over the world. Along comes Apple and says that they will do the work to set up the HUGE servers needed to handle selling billions of songs. They will do what they do best and make it easy and fun to download songs when nobody else could do it. Now that over FIVE BILLION songs have been SOLD, the record labels are not happy. They want more. They were happy with the setup when they thought they were going to go out of business. They wanted to control the price a few years back. They thought that a flat $.99/ song was great when they were getting $00/song.
So instead of fighting the movement, why don't they just jump on board? I am talking about doing away with CD's. The number one seller of music in the USA is a computer company called Apple. Screw the CD's. Look at how much money they spend making them. Shipping them. Shipping them back when they don't sell. Shipping them back to the store again to be sold at a cheap rate. Mary used to work for Handleman Co. They supply CD's to Wall-world (formerly the largest seller of music) and Kmart and the likes. She used to drive a company car to stores and unpack CD's that were shipped there and put them on the racks. Handleman's stock has dropped like a rock (see the graphic) over the last five years.

They tried to do digital downloads but they could not figure out how to make it work and they eventually dropped it.
There are consumers who can't figure out how to download music. Fortunately those same people don't really buy very much music. The vast majority of all music is purchased by young people. How many 14 year old kids don't have an iPod or iPod wanna-be? How many of them don't know how to download a song? There are some folks (chime in here, Stove) that just like to have thousands of CD's. I can appreciate that. I like collections. But if somebody likes music that much and has that wide of a variety of taste, do you think they will stop buying music because they are stubborn? There are people that still want to listen to LP's. They hate CD's. Did that stop the record lables from changing over? No. They still had control over what was shipped to the stores. They got to re-sell the same damn songs all over again on CD's. That was all good. But now the control freaks known as RIAA are cranky.
Let it go. Handleman was a huge corporation and they are going under. Let them go. Close the plants that make CD's. Thousands of people on the payroll. Let them go. Embrace the technology. Save the money it takes to print CD’s in different languages. A few people won’t get it. The kazillion dollars you saved will more then offset those few people who can’t figure it out.
Just my take on it.


stove said...

Chiming in.

But the problem is that there are still a vast number of people without computers. CDs are still important. Plus, I would bet that less than 5% of all people who buy digital music online never back up their purchases, so when their drive in their $200 Dell goes belly up, they also lose the hundreds or thousands of dollars worth of music that was on it.

There are also those who don't like the lossy compression that's used with almost all purchasable music files. These are usually the same people who still buy vinyl and will gladly pay extra for the lossless CD if they had the choice between CD and mp3.

It doesn't matter how small the percentage is of consumers who prefer CD over mp3. The need is still quite large.

Leo said...

Apple should tell the record companies to go to hell. What are they going to do if they lose Apple's revenue stream? Call their bluff.

Record companies are over as far as the old business model goes. I don't know why they haven't set up their own sites. It's just stupidity.