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Tuesday 12 February 2002

Music Industry Headed Down The Tubes

This should come as no surprise to anyone paying even a little bit of attention over the past few years, but it’s official: The music industry’s attempts to replace Napster and other pirate services with legitimate music downloads have failed.

Now, this should have been obvious. It was obvious to anyone who was not required, by virtue of employment bya member of the RIAA, to ignore reality.

The record companies — and, for that matter, all the other large vendors of so-called “intellectual property” are in the manufacturing business, but they don’t want to believe it.

Record companies have been important and profitable because, for the eighty years or so, most music has been disseminated via recordings, and because those recordings required a large capital investment to produce in large quantities.

As long as you needed a large factory and specialized machinery to produce these recordings, the record companies contributed something valuable: manufacturing capacity. Until very recently, this manufacturing capability was very important in the distribution of music. Bootleg records existed, but these were almost exclusively things that the record companies could or would not, for one reason or other, manufacture and sell. Nobody in the United States would have dreamed of buying (or producing in large numbers) a pirate edition of, say, Nirvana’s Nevermind in 1992. Even though a pirate doesn’t pay royalties, there’s no way he could have churned out LPs or CDs in quantity at a low enough price to make a profit. The record companies had a natural advantage.

Now, though, the record companies have a natural disadvantage. Since “manufacturing” and distribution of music now costs essentially zero, they no longer add any value to the transaction. Record companies as we now know them are obsolete, and will disappear within a relatively short time.

And yet the record companies quite naturally are interested in their own survival. Trouble is, they’re trying to survive as fish while the seas dry up: at the moment, they’d all rather die than change into something that can survive. The ones who manage to grow feet and lungs will be able to survive in their new environment. The ones who stick to fins and gills, and who insist that the seas aren’t drying up, and whose sole strategy to refill the seas (that aren’t drying up) is to hire bucket-brigades of lawyers, will die.

Posted by tino at 01:18 12.02.02
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