I’m currently reading The Future of Music by David Kusek and Gern Leonhard as I’m extremely fascinated by the digital music space. I dabbled in the digital music downloading space back in 2001 when Dynamify Records setup our own indie-distribution label and provided forth our own payment systems and DRM. After 6 months running Dynamify Records as a distribution only service, we shut it down due internal re-organization.
So, I’m back taking a look at the space and see many applications for it. Growing up, we had Hotwire, Morpheus, Kazaa, eDonkey, EasyNews, and many other P2P and usenet programs that allowed the very simple downloading of whatever type of file you can imagine.
Today, some of these services still exist, but organizations like the RIAA are going after users with lawsuits if they are illegally downloading owned IP. In the music industry, this is a very big deal as Britney Spears and Eminem have publicly said that illegal downloading is wrong – whereas, The Greatful Dead and Franz Ferdinand have publicly said it’s beneficial for the bands.
One of the points the book brings up is that content is not king. Anyone has access to content. Kusek and Leonhard argue that the customer is King Kong and service is Godzilla. Interesting notion.
ITunes is successful because it has the hardware and software that allows for the distribution of media efficiently. Services like Rhapsody and Napster don’t have the same simple process as Apple for downloading and storing on a portable media consumption device and thus are runners up to iTunes. When you own both the hardware (iPod) and software (iTunes), you can become a lot more effective in the distribution of your music than just owning one end of the value chain.
It’s my belief that iTunes will convert to a hybrid payment model that will include subscription and pay-per-download to compete with Napster and all of the other subscription services. It is not cost beneficial to fill up your ipod with $10,000 worth of AAC files. Way too expensive. I’d be one of the first subscribers to their catalog if they would offer a subscription service…why not? It’s coming….
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