Thursday, November 12, 2009

Stevie 99 Part Two

The following is based on the opinions of one Veronica Fever, and is not necessarily representative of those of any Cedar staff members or, in fact, anyone else I know.

It is hard being an idealist.

If you are one, you know: your candidate wins, so you expect the promised change you can believe in. You fall in love and you're sure this time your heart won't end up squoze in a vise. For me, it's continually believing there will yet be a savior for the music business. At least I'm clear-eyed enough to see it will never be Steve Jobs.

As a music-store operator, Jobs is a dandy iPod and Mac designer and marketer. The iTunes store is surely one of the most overrated sites on the web. Yes, it is a 'success story' of sorts, but only as a seller to people who pretty much know what they want going in. The site itself is cluttered and lifeless, and it lacks two major components in what should be expected from a leader who would help the industry claw out of its pit: community and innovation.

Community. Where are the peers, the tastemakers, the music-lover next door? Where is the incentive to explore? Where are the recommendations you want to follow, the opinions you want to believe? OK, fair enough: the entire web is chockablock with all that, and iTunes is a point of destination. Tower Records filled that role ten years ago. Where are they now?

This isn't talked about a lot, but the digital music commerce growth curve is slowing, and it ain't because the business is mature. Two-thirds of people who buy music still buy CDs exclusively, only fewer of them. Where is the incentive for those people to get in to the game? After the hurdles of ripping all their CDs and mastering their vexing playback gizmos, then what? Paying 99 cents or $1.29 for tracks condensed to a fraction of their original (already condensed) file-size?

(Time for a shred of fairness here. While I see the price as too high, the major labels see it as too low. In the cases of big-name artists, neither is Apple's fault. Pricing innovation won't come without revisiting some of the fixed costs attached to getting a song to market. I would only suggest that if a 10-track CD could be produced, manufactured, packaged, shelved, shipped, received, shelved again, and sold for $10, surely there is some cost wiggle-room with unpackaged binary data.)

(Hard to stay on the rails here; please bear with. Can my ears detect the difference between a CD WAV (or lossless) file and a 320 rip? Not readily, no. Can I tell between 320 and 192? You bet. It's all to do with ambient space. That's a big deal for some, and a psychological factor for others. If we allow that 192 has been a sweet spot between sound quality and player storage capacity, let's also allow that 192 is an inferior product to a WAV file.)

This brings us lurching to the second point: innovation. At the time, uniform per-track pricing seemed novel when Steve Jobs insisted on this concession from distribution and label mavens who fought the idea hammer and tongs. And as much as I wanted to disagree with many of these boobs masquerading as trading partners, they seemed to have a point. The internet was a gigantic petri dish for experiments in retail...why not try anything and everything? My belief, which admittedly morphed quite a bit over time, was that individual song pricing could be based on a number of factors, e.g. fixed costs, popularity, and bandwidth usage. For instance, 'Hey Jude' ripped to 320 would naturally retail for much more than, say, 'Wild Honey Pie' at 128. Also, you could blend in subjective pricing factors such as essentially giving away baby band tracks to start and then adjusting according to popularity.

Yes, all of that would have been a real chore to implement and administer in the beginning, but what about now? Where is the innovation? We're seeing some of that elsewhere...but not in the iTunes store. They would seem to have little reason for such effort, because they're the runaway leader who benefits from masterful integration with the deservedly popular iPod. So. Apple has no incentive to innovate and acts accordingly.

99 cents or $1.29. For what, again? A condensed slice of ephemera? Yeah, that's fine here and there. Say you're sitting in a Starbucks and you're talking with friends about the TV show 'Lie To Me.' Someone says they like the opening credits theme song, so you do a Google, find out it's 'Brand New Day' by Ryan Star, hop onto iTunes, purchase, and bam, you're all listening to it. Very cool.

But take a longer view. If you lost your entire music collection in the same flood that took Toad's ID, what would you do? If you're me and you lost all 49,577 tracks, you won't be spending fifty large at iTunes to replace 'em all with inferior rips and with no incentives to buy big.

See, that's the thing. Where are the pricing models that encourage exploration and bulk buying? In the world I imagine, I could go somewhere and commit to buying, say, Steve Earle's entire oeuvre for, I dunno, sixty bucks. Or a whole 'if you like' 50-track playlist for twenty. How about a Costco model: Pay a membership fee and then buy in bulk the music available from participating artists and labels. And let's not forget the sliding pricing scale. OK, so supply-and-demand doesn't exist in the digital world, but artist development still does. Get artists out there at 20 cents a track and adjust upwards if the grassroots catch fire. And, of course, there is always the all-you-can-eat on-demand music buffet. The subscription model is still in play; apparently Spotify is meeting with resistance in procuring content for its free, ad-driven on-demand service, and MySpace is looking at moving to a pay model from its (currently) free streaming service.

Oh, and why isn't Apple offering an on-demand service? Presumably because they fear cannibalization of its own prematurely peaking music sales. But also because Mr. Jobs claims that people want to own music, not rent it.

Actually, most folks believe that, and it's a reason why the movie studios will still have sources of reliable revenue for longer than the music industry did: people are cool with not owning the movies they stream because they're used to the rental model. Music admittedly does have a higher hurdle there. But all revenue streams must be considered, even if that means hammering away at music-lovers' traditional expectations of ownership. Piracy is rampant, and all too available: do it once and it's real easy to do it again. The industry must combat it in two ways: keep swinging the Whac-a-Mole mallet, while figuring out how to compete with free.

Me? 99 cents or $1.29 per track is a last resort, and if I deploy it I'll do it at Amazon, where one can be immersed in community if desired, find that all available tracks are ripped to 256kb and on sale for 99 cents, and have their purchased tracks passed through a downloader that adds 'em to their iTunes library automatically.

But before I even go there, I'll check out eMusic (wide array of indie-label tracks that average out to about 40 cents per, depending on the package a subscriber chooses), Amie Street (much smaller indie selection but with pricing based on the afore-mentioned popularity sliding scale), or I'll see if the desired music is available on a $3 used Amazon Marketplace CD, which I can then rip and resell.

99 cents or $1.29 is a convenience price, and the iTunes store is a giant, virtual, music 7-11. Convenience is a compelling motivator for the shopper on the go. But it ain't enough to fuel digital music sales growth that is unaccountably sputtering.


As an au courant music critic of the highest order, I like to keep up with what the kids are into. The following is gonna be a big hit, I can tell:

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