September 07, 2003
iBling, and the State of the Music Biz

Welcome back to Donna who just returned from her move/wedding/trip!

Pholisters are calling it iBling, but today's NYTimes has a piece (Girls? Check. Cristal? Check. iPod? Check) on the iPod as the music video accessory du jour for the 50Cent crowd.

The iPod looks like it belongs in the video. As Microsoft has been cast in the role of Goliath in the personal computing wars, Macintosh has been playing David. And right now the stone in its slingshot is music.

And Donna points to Frank (and his dandy, newly redone blog) pointing to the Personal File-Sharing Amnesty Application Form:

"You Have (Check All That Apply):

Life Savings How Much ______
Seizable Assets Total Worth ______
No Understanding of the Law ______
Only a Vague Grasp of My Rights ______
A Proctologist ______
..."

And Ashlee Vance/The Register is laughing over the UMG CD price cut, but she does make the good point that:

The hilarity of the situation has gone unnoticed by most media outlets. They've portrayed Universal as a brave white knight taking a bold stand to try and correct a very wrong situation. File-traders have eroded the music labels' revenue stream.

...Be bold? Industry leader? That's where the joke begins.

As The Times points out, this is the first CD price cut since the media format came on the scene in the 1980's. Think about that for a minute. New format, volumes low, prices high. Ronald Reagan was president.

Since the 80's, the record labels' have seen CD sales surge. What do we mean by surge? Let's hop over to the Clinton years, when the CD was a well accepted, popular format and see.

In 1993, CD makers shipped 495 million units and brought in $6.5 billion, according to the RIAA (Recording Industry Association of America). By 2000, units had almost doubled to 942.5 million with $13.2 billion in revenue. That's quite a run.

The labels' performance was, no doubt, helped by a "promotional program" the FTC (Federal Trade Commission) likes to call price-fixing. The U.S. government found that the labels were collectively working to keep CD prices high, during these glorious boom years. Where was the white knight Universal then? Oh, right, probably price-fixing.

Laughing yet? If not, here you go.

"What we're trying to show people is that music is a good value, even if you have to pay for it," said Zach Horowitz, president of Universal Music, told The New York Times.

Well, yeah, it's a good value when you aren't artificially keeping the prices high. It's also a good value when basic laws of economics are followed. As demand for CDs sky-rocketed, the price would be expected to go down. Two decades and four presidents is a long time to wait for a single price cut. CD players certainly went down in cost.

Thank goodness someone at Universal finally went to a macroeconomics course. Give that person a raise for taking night classes at the local community college.

Business Week has an article (in a Dark Web! that I subscribe to, but for some reason cannot login to), about the Dark Net discussed here before:

Innovation in darknet technology is coming from many different directions. Independent developers are giving away freenet and invisibleNET, software that allows dissidents in countries where censorship exists to get information from the outside world and speak more freely among themselves. A free program called Waste, designed by America Online's Nullsoft division, showed up on the Web four months ago and is catching on among pirated-music dealers. BadBlue and Groove Networks Inc. are among the companies trying to make money from darknets. They sell collaboration software that permits a company to safely share sensitive documents or financial information with partners.

The idea is that people are moving to DarkNet music clubs to file share, and these will not be detectable by bots or the RIAA, defeating their current attempts to stop the filesharing of copyright protected work.

Finally, Saul Hansell/NYTimes talks about the efforts the music industry is going to to scare people from P2P systems, because of the shocking! amount of porn that children can get to there. Except he, and Ed Felten, point out that it's actually a minute part of what's available. See the chart:

07PORNch184.gif

...where you'll note the thin lines at the top of each bar that make up the porn content. Ed Felten reminds us that paper is also very, very dangerous.

Posted by Mary Hodder at September 07, 2003 04:03 PM