Tuesday, April 28, 2009

The Big Music Rip Off

Music, and especially the downloading there of, has been much in the news of late. iTunes have dropped DRM (at last), and yet Nokia have launched their South African Store with DRM front and centre!

The guys behind The Pirate Bay were taken to court, found guilty and sentenced to 1 year in jail each. Of course it'll be years before they actually go to jail, as they've appealed the outcome, and in the meantime it's business as usual.

The record labels continue with their 'big stick' method of dealing with illegal downloading, but as quickly as they close down one avenue another one opens. They're fighting a losing battle.

I'm not usually on the side of illegal activity, but I really feel nothing for the big labels. They were greedy, and that greed is what's coming back to bite them now.


To explain I have to go back to the early '80's. I had just left school and was in my first job. At the end of every month I would buy a new LP, for which I would pay the princely sum of R18, or maybe R22 for an import.

Then along came CD's. They were great, and everyone started replacing their vinyl collections with the new media, but suddenly we were paying R65. We were told it was the cost of the shiny new discs, but in reality we now know that CD's are cheap to produce. So what had happened? The record labels used the popularity and demand for CD's to push up their profit margins. And for 20 years they have reaped the profits, and raped the consumer!

If we take the price of a CD today, it's about R150. That's a 230% increase. If we apply that to the R18 we were paying for vinyl, it comes to R41,50. That's what we should be paying! No wonder people are stealing music!

So along came MP3's and Napster and people jumped at the chance for free music because they were tired of being ripped off. Now the damage has been done; we have a whole generation that doesn't believe in paying for music.

Sure iTunes have made a success of selling music online, and now that they've dropped DRM they offer a viable, legal alternative (except in SA, where they're bogged down with all the red tape), but their pricing still sucks, The record labels are still being greedy, and expect the profits they were making in the '80's. Well, here's a newsflash: those days are over; it's time to look for a new business model.
In 1st World countries where there is cheap, always on, uncapped bandwidth, there is a new threat: internet streaming. Last.fm, Pandora, MySpace Music and many, many others are the future. The big labels have made it so difficult to actually own the music in the form the people want, they're starting to give up. Why own music when you can live stream straight from the internet? Some people think of this as internet radio. It's not. You can create your own playlists, share them with friends, and listen to them on your PC at home, or your iPhone wherever there's an internet connection.

Of course, big music is all over this too, and many sites have been closed down, but for each one, two new ones open up. The sites mentioned above are all legal, with agreements with the labels in place, for now, and it remains to be seen if these companies can turn a profit while paying exorbitant per play royalties. Last.fm recently introduced a charge for some countries (SA included), and Pandora is not available at all in SA. MySpace is OK, if you can put up with all the ads.

There is another alternative though; The Sixtyone is a great place to discover music. Any artist can add their songs, and listeners can rate each song, creating a natural order, as well as adding a social context. Best of all, it's free!