The Cloud-y Future

We've spent some energy on this blog debating the strengths and weakness of the Apple structure of music retail. But no matter how you feel about Mr. Jobs and iTunes, there's no denying that Apple is the single most important player in how music is currently consumed. So the news last week of Apple's acquisition of the music streaming service called lala.com certainly got the "industry watchers" attention, and re-fueled widespread speculation about what the future of music consumption will look like.

One of the more thoughtful pieces on the subject was published Tuesday in The New York Times, which promotes the idea that the primary future model of music consumption will be one where all music will live "in a cloud," and through some kind of subscription model, all of us music consumers will simply access whatever we want, whenever we want it, through the internet and/or through the wireless phone networks.

This is an idea that has been around for some time, and has been advanced in Europe with a service called Spotify, who have both a pay model and a free version (with advertising). The U.S. record labels have balked at the free version, so talks have stalled for getting Spotify going in the United States. And honestly, I've been skeptical about this idea, probably because I'm of the older generation who is still attached to the idea of "ownership" of an "object" as it relates to my music collection, even if that object is only an mp3 file.

But I'm becoming more convinced that this is indeed the future. For one thing, I've personally already made a big psychological transition, away from having shelves filled with objects representing my music collection, to a computer that contains it invisibly. Now I tend to agree with industry critic Bob Lefsetz, who recently compared CDs to the longbox packaging which used to be used to house them in stores. Instead of throwing away most of what you bought before playing your music, as was the case with longboxes, we're now left with a piece of garbage (the disc itself) once the CD has fulfilled its role as a temporary transport mechanism to bring the music files to your computer.

It's not a very big step, then, for me to forgo ownership of those invisible files on my computer in exchange for easy access to a virtually unlimited selection of music files that live somewhere in a "cloud." Won't people still demand ownership of their music? That's the big question for this model. No doubt some will, and there will continue to be a demand for the objects in some form. This will likely fuel an extension of the trends we're already seeing: special, deluxe packages, boxed sets, even LPs will continue to be issued, and exist as a "niche" market.

Ultimately, I believe there will be a coexistence of multiple models. It is widely speculated that the addition of lala's technology to iTunes will allow you to upload your existing iTunes music library to the cloud, enabling you to access it from any web-connected device, anywhere. Perhaps, then, you'll have the option of "buying" new music, which you can then access for free anytime, while also paying a subscription (or per-use fee) to access everything else. So, if through your subscription you discover something you feel you may be inclined to listen to again at any sort of frequency, you may be given some incentive to "buy" it, and then it joins your permanent library (for which you are not charged for listening). However the structure, it's not hard for me to envision some kind of model like this that I think is very appealing, and would be received enthusiastically by the general music consuming public. Sign me up!

But it's also not hard to see the hurdles and challenges that will make this kind of thing difficult to implement. The first will be the major record companies, who own that big chunk of critical catalog that is popular music history of the last 70 years or so, and who have proven themselves to be both clueless and obstructionist when it comes to any technological advancement and model transition. And another big one gets back to our previous blog discussion of value. How much is a song/album worth, and, with this model, should that value be pegged to how many times you play it?

If those hurdles are overcome, then there will be an exponential progression in the problem many already face with the increased access we already enjoy: if you can listen to virtually everything, how do you choose what to listen to? The importance of filters, tastemakers, and effective recommendation algorithms becomes even greater. I guess that would make music blogs more important?

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I'll be taking a family holiday to sun and beach beginning next week, so my next entry won't be until the 9th of January in the new year. I've never been into "Best Of" lists, so there will be none of that here. Overall, it's been a pretty extraordinary year for music. I feel honored to be a participant, in my own small way. I'll sign off for 2009 with but one of my favorite musical moments... and wish you all a pleasant holiday season!