Big Music’s Way-Way Factor
p2pnet.net News:- More than anything, “labels want to see the iPod become interoperable with music services other than iTunes” and “It’s a monologue with them,” a label executive who asked not to be identified says. “They pretty much say, ‘This is what we want to do,’ and if you disagree with them you’re an idiot. It’s like dealing with a cult.”
The above is from a Reuters/Billboard story that goes on, “Apple’s successful combination of sexy design and elegant usability has propelled the iPod to the top of the digital music market as the undisputed king. Every move Apple makes these days results in victory. As the rest of the flash-player market floundered, Apple took over the category in a day with the release of the iPod Shuffle. It turned podcasting from a cool-sounding technology that nobody used to a legitimate format …”
That podcasting was a “cool-sounding technology nobody used” is, of course, rubbish. But that today, “Apple commands 80 percent of the MP3 player market and 75 percent of online music sales” is inarguable, although, “many believe Apple’s reign will last only another 12-18 months before the playing field levels out”.
“Privately, record company executives say they can’t wait,” the item goes on. “Not because they want to see Apple stumble but because a less dominant Apple means a more robust market for digital music. The company by itself cannot bring digital music to account for 25 percent of all music sales, as labels hope it will by 2009.”
“Apple points to the 500 million tracks downloaded on iTunes to date as a milestone,” says Reuters/Billboard. “But dividing that figure by the more than 20 million iPods sold indicates that each iPod owner has bought an average of fewer than 30 songs from iTunes. Piper Jaffray estimates that only nine tracks are bought per month per iPod user.”
‘Don’t amount to anything’
One needs to include download statistics from the p2p networks for an accurate picture of what’s going on in the real world of online music, as opposed to the heavily skewed and distorted image created by the cartels and relayed by the mainstream media as though it’s based on credible information from credible sources.
The truth is: the corporate online music services aren’t even noticeable in online music events.
Compare the 500,000 million Apple downloads (which don’t necessarily amount to total sales) accrued since 2003 to the fact that well over a billion files are shared online every month. In July, 2005, alone, in the US an average of 6,872,768 people were logged intio the p2pnetworks at the same time. Globally, the number was 9,496,203, says p2p research firm BigChampagne.
And here, hot off the presses, are BigChampagne’s numbers for August so far:
For the US, up to and including yesterday (August 21), 6,790,567. Against that, the figure for August, 2003, was 2,630,960, and for the whole of August, 2004, it was 4,549,801.
Globally, an average of 9,439,513 people were logged onto the p2p networks simultaneously up to and including August 21, 2005. In August, 2003, it was 3,847,565, and in August last year, 6,822,312, says BigChampagne.
And yet Big Music continues to claim, and the mainstream media continue to repeat, that its sue ‘em all marketing campaign is resulting in “significant” reductions in the number of people who are sharing files with each other.
Moreover, the way in which the cartels continually refer to iTunes as an example of what’s possible for the so far virtually non-existent coprporate music services is in and of itself something of an innacuracy.
iTunes isn’t a dedicated music service, and nor was it ever meant to be. It started out as a loss-leader for iPod and although it’s now making money, it’s doubtful if current sales do very much more than cover the many and various costs. It would be educational to see the figures stacked against downloads from the p2p networks. Because even at 500 million, they clearly don’t amount to much. And one should remember that Apple started the count as far back as 2003.
Meanwhile, music lovers in their hundreds of millions use commercial and non-commercial peer-to-peer file sharing applications to acquire mp3s, condensed tracks derived from music that’s already been bought and paid for via CD and DVD sales.
Mp3s are no use for hi-fidelity home systems, but they’re fine for low-end, lo-fi reproduction on mobile players.
But this doesn’t mean sales are being lost. A shared file is a shared file, not a stolen one. There’s no money invovled and nor are people who use the p2p applications criminals, as the members of the Big Four music cartel, EMI, Sony BMG, WMG and UMG (who themselves have repeatedly been found guilty of cheating their contracted artists) charge.
‘Non-MP3 world’
Hundreds of millions of music lovers delight in sharing with each other, but that doesn’t mean they’ve stopped buying CDs and DVDs. To the contrary, business in that area has never been so good as people continue to buy their important music from retail outlets, just as they’ve always done and always will do - until the Big Music cartel wakes up and switches its attention from trying to sue former ‘consumers’ into buying releases and starts seriously examining ways to use new and emerging p2p technologies to supplement, if not replace, physical product.
“The mass market still is entrenched in a non-MP3 world,” Piper Jaffray senior research analyst Gene Munster is quoted as saying. “Until that changes, there’s just too few iPods out there to move the needle for the overall music industry.”
However, iPods are not, of course, the key, or anything like it.
“Some people at labels are acting like all this is over because Apple has it,” the story has Gartner’s Mike McGuire sayibg.
But, “There’s a whole lot of green field out there. Guys, 98 percent of music purchases (are) still coming from somewhere other than online.”
Flexible pricing
The grass may indeed be green, but the Way-Way Factor is stopping people from purchasing mp3s from the corporate services.
- Price (way, way too high)
- Quality (way, way too low)
- What’s available (way, way too limited).
“Label sources say Apple stubbornly disregards their suggestions for drawing in new digital music customers,” the story states. “They say they would like more flexibility on track pricing and promotions. But more than anything, labels want to see the iPod become interoperable with music services other than iTunes.”
For flexible pricing, you need flexible wholesale rates which currently start at 65 cents per track and go up. And we’re told the members of the Big Four record label cartel would like to see them go even higher, to $1.25 cents per and beyond.
If Apple indeed has only 12-18 months of market dominance left, “Anticipated [new] developments include a music subscription service and subsequent advertising blitz from MSN Music, the long-anticipated relaunch of the Sony Connect store, several new MP3 devices and the introduction of mobile music services from several wireless carriers,” says the Reuters/Billboard piece, adding.
“No one assumes Apple will go without a fight. It is expected to introduce a video-capable iPod in September and finally unveil its iTunes-compatible mobile phone with Motorola. It is also rumored to be working on a subscription service with the help of a former Xbox Live executive.
” ‘They have shown, based on prior performance, that they have the capability to remake themselves,’ McGuire says. ‘They have the flexibility to seize opportunities as they’re presented’.”
Jon Newton - p2pnet
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See:-
Reuters/Billboard - Digital competitors ready to take bite out of Apple, August 21, 2005
August 22nd, 2005 at 8:38 pm
the way-way factor, you gotta love it. thats what its all about in a nutshell
August 22nd, 2005 at 8:57 pm
The Big Music Way-Way Factor has a solid precedent in history. They know what they are doing.
“Repeat a lie a thousand times and it becomes the truth …”
Dr Joseph Goebbels,
Propaganda Minister of the Third Reich.
August 22nd, 2005 at 9:51 pm
Big Music is now scurrying to gain some sort of profit from digital downloading. Because profit is Big Music’s sole responsibility, they have continually proven that they will lie, cheat, and sue.
Big Music currently has one goal: to modify behavior. They can achieve this by two means: spreading fear and peer pressure. In order to spread fear, they sue the “average Joe” knowing full well that the “average Joe” could never go up against Big Music and that any lawyer will advise Joe to settle immediately.
In order to facilitate peer pressure, they will advertise using models (not an “average joe” type individual, who, as evidenced by the targets of the lawsuits, is both Big Music’s customer and anti-consumer) and they will lie by exaggerating the effects of the lawsuits. The strongest facilitator of peer pressure is cheating (AKA payola) since they are fully aware that many listeners will not seek out the music they’ve managed to keep financially buried.
“But, we know all of this so what’s your point?”
By using these tactics, Big Music is digging its own grave. It is presenting a veil of effectiveness, which is, essentially, comforting to current file sharers. “My daily torrent site/P2P client has not been shut down, and, since they’ve been so effective, I guess I’m okay!” The tactics are also forcing our computer generation to be more careful: DC++ currently allows encryption. P2P clients and torrent sites are no longer flagrantly advertised across the net. Many, if not all, are located in markets where Big Music does not particularly value consumers. Many file sharers have learned to avoid Sharman Networks and have opted for lesser advertised networks. This shift and forced carefulness has confronted consumers with lesser known and sue-worthy musicians.
Those file sharers who are not “careful” and continue to download and share across the big networks continue to download and share across the big networks. Perhaps they are as comforted by the effective ineffectiveness of the current Big Music campaign as are the “off-the-radar” sharers.
Perhaps the difference lies in how each group values music. File sharers value the distinctive art of music and the entertainment it brings them. Big Music values music as much as it can suck the profit from a melody.
At some level, all consumers know this and I feel that, at some level, we, as file sharers, resent it. If it wants to be successful against the digital plunderers and thieves, Big Music will need to change its image and its strategies. A plunderer and thief cannot characterize all “average Joes” as plunderers and thieves and expect them to sympathize with “cry me a river” news releases.
August 22nd, 2005 at 9:54 pm
“Repeat a lie a thousand times and it becomes the truth …”
That’s the Goebbels Drip Drip Effect [http://p2pnet.net/story/1153].
It’s a little different to the Way-Way Factor, but there are points of definite similarity, particularly with respect to the unctuous, self-serving statements which have a look of honest fidelity about them. Then you tap them and they ring about as true as a cracked bell.
Cheers
August 22nd, 2005 at 10:29 pm
“Mp3s are no use for hi-fidelity home systems, but they’re fine for low-end, lo-fi reproduction on mobile players.”
Who is stating this opinion? This may be true for crummy files they sell at iTunes and Napster etc… and the typical 128kb MP3s that many people seem to be stuck on. It does not have to be that way. I gave an MP3 I encoded to an audiophile buddy of mine to directly A/B with his original CD. It was made with the LAME MP3 encoder using the “alt preset standard” setting. He said he could pick out VERY minor differences only during the most complicated sections of the piece but could not honestly say the MP3 sounded worse than the CD on his big expensive home system. IMHO properly made MP3s and GOOD SOUND CARDS very nearly equal CD audio quality.
In defense of the article’s point you cannot “legitimately” buy files encoded in this manner. For that matter you cannot purchase cartel music in the MP3 format at all. It’s DRM-ed iTunes or .wma files, period.
August 22nd, 2005 at 10:38 pm
Guess the “Way Way Factor” itself was a bit of a moving target for my addled brain. The only consistant thread I could pick out were the industry’s constant lies & distortions of fact. Thus the perhaps slightly misapplied Joeseph quote…
August 22nd, 2005 at 11:36 pm
— IMHO properly made MP3s and GOOD SOUND CARDS very nearly equal CD audio quality. —
: ) … but I think you’ll find purists will still maintain you have to have a REAL CD/DVD, or one of those big, shiny, round black things, for quality hi-fi.
But the labels could, if they wanted to, use existing technology to produce really good downloads. They could then sell them at really good prices and make really good money in the process.
But why bother when you can have so much fun trying to sue your customers into buying junk, at the same time keeping all those starving lawyers in gainful employment. Right?
heh
Cheers!
August 23rd, 2005 at 5:08 pm
“In defense of the article’s point you cannot “legitimately” buy files encoded in this manner.”
I hate to be accused of being a schill for someone, but you ought to check out emusic.com. It’s mostly indie artists, but the files are vbr mp3s at rates I’ve seen peak over 200kbps. The sound quality is consistently high, and obviously there’s no DRM.
August 24th, 2005 at 9:29 am
Somehow we the public are supposed to have sympathy for an industry rife with dirty deals, bad morals, and a lack of concern for anything around them but money. The cartels have constantly painted downloading as the cheif problem causing massive layoffs across the spectrum.
What they have blithely not mentioned is that the very act of going to on-line distribution is one main cause of the layoffs. Very few middlemen are needed to distribute electronically.
Another minor point they fail to admit is that the sweetheart deals for sales to the chains are basically what killed the mom and pop stores across the nation. The sales picture changed to where the chains were the major outlets of music across the nation. No mom and pop could compete at equal prices. In doing so the shelf space allowed for cds and music dropped. Less offerings equal less sales. No one in their right mind is going back for 10 copyies of the same album.
Another little factor not acknowledged is that with the electronic distribution is that the middle man cost is eliminated. So is album cover art. No where does the customer see any reflection of the savings in the cost of the work.
When you add that DRM has eliminated first sale doctrine and fair use at the same time, you get a product more resembling renting than buying. No where is this reflected in the cost of the product.
For a couple of years now, the cartels have been trying to convince the public that on line sales is going strong and everyone is doing it and you should too. I am sure that is their hearts desire that it take off. However, digital downloading is long on promise and short on delievery. Plagued by everything from format incompatibility to poor quality, they have yet to make it worth the buck. In my mind it isn’t worth the buck at any quality, nor in any format with the DRM included. Since DRM acts to limit your use of the song, to increase the repeat sale; (to replace the very slow need of replacing a cd with a rather fast way of making sure it is once again subject to being lost through various means) it is no bargain at any price. Much less selling it at 128 bit rate and claiming near cd quality.
I am sure that the cartels would like Apple to open its compatibility to where everyone could compete with Apple with its own patents. Apple would be stupid to do so. Customers are stupid to deal with only ACC formats too.
So tell me; What is attractive with digital downloans as they exist today? Honestly, I can’t think of one single reason to pay and a whole bunch of reasons not to deal with them. Indies are far more reasonable and customer friendly and the cartels don’t get it or won’t get it.
August 24th, 2005 at 10:03 pm
You are correct sir. The original post was directed exclusively at “cartel” product. Perhaps that point was not made clear enough.
August 26th, 2005 at 3:09 am
I have $50 speakers. I don’t care about the loss on a 128 to 256 Kbps MP3 derived from the original source. It all sounds close enough to me, unless some ass overdrove it or made it less than 44.1 kHz sample rate, or MONO. Ugh.