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A Tech-Econ Mashup with a Libertarian Flavor

Spotify vs. Pandora, and the Indecisive Listener

Tech geeks across the web have been wetting their collective pants in anticipation over the American release of Spotify. This up-and-coming free music-streaming service that blends the best of iTunes, iMeem, Grooveshark, Last.fm, Pandora, and all the other popular music services. I however, remain unconvinced.

I’m stuck on Pandora because I dislike having to mess around with playlists. I like typing in a name and just letting the machine do its thing. Granted, sometimes Pandora gives me very odd choices (like Hanson on a station seeded with the Rolling Stones and STP, what??), but usually I just enjoy the passive listening experience. If I don’t like a song, I hit “next,” and let the algorithm decide for me.

I guess my inclination towards Pandora says more about me than it does about music streaming apps. It’s just that…  playlists require a level of decisiveness that I just don’t have when it comes to the little things in life. I use the “shuffle” and “random” settings on every music player I’ve ever had. I’m a go-where-life-takes-you kind of person, I suppose.

Filed under: Computers and Software, Uncategorized, , , ,

FAIL: RIAA’s Legal Campaign

Techdirt reports that the EFF’s recent writeup of the RIAA’s legal efforts against file-sharers (dubbed the “Sue-Everyone” strategy) has been a near-total failure.

It started with suing technology providers. All that did was make more people aware of file sharing. When it succeeded in getting Napster shut down, plenty of others showed up that were much more difficult to shut down. So, then, the RIAA shifted to suing individuals accused of unauthorized sharing, claiming that it was an “education campaign” to teach people that unauthorized file sharing was illegal. All that’s done is turn many more people against the RIAA, while continuing to educate them that file sharing exists. In fact, many more people engage in file sharing now than five years ago when the campaign started. 

Wait just a minute… I’m skeptical that the RIAA’s efforts led to more piracy simply by making consumers aware that file-sharing exists. This weak point smells of intellectual or argumentative laziness. Guess what else is more common today than it was five years ago? High-speed internet access, mp3 players, multiple PCs per household, and digital media in general. But I digress…

So, effectively, the lawsuits haven’t worked (the RIAA has not had a full trial turn out in its favor yet). It’s turned public opinion massively against the RIAA and its associated record labels. It hasn’t done anything to slow down unauthorized file sharing, and may have actually helped promote it. About the only “success” of the strategy is that it’s turned into something of a cash generator for the RIAA, by frightening people, with strong legal language around flimsy evidence, into paying “presettlements” to avoid being sued.

Well, I do hate the RIAA. And I do know of a few people who’ve been frightened into using iTunes exclusively (or they may have been persuaded by the hipster-appeal of Apple’s iPod+iTunes ad campaign – so many colors to express your unique personality!). Regardless, the RIAA’s failure has little to do with it’s negative press, and much more to do with the current legal interpretation of intellectual property vs. fair use. While I’m no expert in IP law, I’m convinced that the changing music marketplace will lead to more opportunities for entrepreneurial musicians to find profits by adopting a new business model (a la Radiohead, although that’s certainly not the only model).

We’re entering a new age in entertainment that may not support monolithic organizations like the RIAA much longer. Soon enough, they’ll need musicians more than the musicians will need them. If you think it’s bad now, just imagine the amount of rent-seeking that will be going on then!

Filed under: Economics, Internet, Tech Biz, , , , ,

Musicians Pass on iTunes

An article in the WSJ today reports that the music industry is once again failing to adapt to the changing marketplace, as more musicians are bypassing Apple’s iTunes store, opting to sell their music on physical CDs instead. The economic rationale behind this decision: since the launch of iTunes in 2003, consumers have shifted towards purchasing single songs for 99 cents a pop, rather than buying entire albums that retail for $10 – $15 (unless purchased through Columbia House, which charges an additional arm, leg, or occasionally a first-born son). Music suppliers say they make higher profits by selling entire albums than by selling one or two individual songs.

“In so many ways it’s turned our business back into a singles business,” says Ken Levitan, Kid Rock’s manager. Mr. Levitan says the rise of iTunes is far from being a boon to the industry; instead, he calls it “part of the death knell of the music business.”

Death knell to the music business? The music industry has indeed seen steadily decreasing music sales since 2000, when Napster invaded college dorms across the country and created a vast, illegal marketplace for free copyrighted music. However, attacking iTunes as a cause of weak revenues hardly seems fitting. iTunes (especially when paired with the iPod) provides consumers with an extremely easy and legal way to download digital music, deterring many would-be pirates from obtaining music illegally. Would customers be willing to pay for an entire album if the single song they wanted wasn’t available on iTunes, or would they illegally download the song from Kazaa instead?

The more appalling part of this story, however, is that the some music execs would rather blame their customers for wanting the wrong product, rather than updating their business strategy and meeting their customers’ demand. Consumers have effectively stated their preferences loud and clear: they want individual songs, not entire albums. And why not? Is this not how music has been marketed for the last several decades? We’ve all had the experience of buying an album that’s had one or two radio hits, excitedly putting the disc in the boom box, and then realizing that the album, as a whole, totally sucks. A common strategy in the music biz seems to have been to sell hit songs surrounded by “filler” tracks, rather than good and marketable musicians capable of writing many good songs. If music fans only want one or two songs from an album, their expectation is likely to be that the rest of the trac ks won’t be worth the money. The music industry ought to contemplate the part they’ve played in shaping that expectation.

Techdirt and the Washington Post both feature opinions on the topic that are worth a read.

Filed under: Economics, Tech Biz, , , , , ,

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