I don't think most of the majors really want digital music sales to succeed so i don't think they are trying to find ways to make it work. Physical cd & record sales are still the bulk of the business and I don't see that changing in a major way while the Majors are still the major source for recorded music from top selling music artists. If a few huge acts self-released with no major impact to their sales, I think you'd start seeing the majors become less and less important and other more innovative business models taking form. But until this happens, I don't see anything changing much.

As far as Itunes and it "failing miserably", I doubt Itunes even at its most successful is anything but a rounding error in Apple's bottom line. I view it as more a business which exists to strengthen the IPOD as the dominant mp3 player brand while providing some additional revenue. It probably is fairly successful when judged that way.

I've said before that I would never pay to download a song.

If I'm spending the money, I'm getting the tangible qualities along with the music itself.

If I'm spending the money, I'm getting music in a format that can't be wiped out by an errant power surge.

I don't yet trust digital-only storage of music unless I had four separate backup copies of everything. And I don't trust CD-Rs because they frequently won't play properly on some CD players (my car, especially). Until they come up with more durable electronic storage media, I will remain a Luddite in this regard.

I really think some of you are a catastrophic hard drive crash away from losing your entire music collection. In that regard, how long do you think it will be before insurance companies start pushing the idea of "data insurance" on the general public?

I'm only a Luddite because I'm on a '98 Gateway P.C. of shit.

This week there's a 25-hundred dollar Mac arriving and I plan on getting all digismart.

Yes... and yes.

As a one-man microcosm (that's going to be my new DJ namenow that I think of it), I was in the habit of purchasing $9.99 albums from iTunes for records that had convinced me of their worth, for artists that had a proven track record, or for things I could only find there. That came to a screeching halt with the introduction of DRM. I haven't purchased anything from iTunes in months as a result, and the numbers seem to indicate that I'm not the only one.

= DUM

That's fine, that just means they'll lose control even more quickly.



A lot of people have brought this up in response to this article, but it doesn't matter to me what the impact is for Apple, but what the impact is on the attempt to preserve per-album and per-track payment in the digital environment. It's a demonstration of what we knew all along: you can't do it. On the other hand, there is ample evidence that you can't easily keep your music from becoming digitized and shared. So from these two premises, I feel comfortable drawing the conclusion that forces are driving toward a fundamental (but of course not immediate) change in the pricing and delivery of music.

Been waiting for this for a while. Having a hard copy of everything is nice if you're a collector, like a lot of the people on this board. But a lot of people just want to listen to the music they want, when they want to. They don't care if they have everything stored on a drive or if it's on some server out in the cyberspace.

Having 80g of music in my pocket is cool, but to have a smaller, lighter wireless player with access to conceivably every song ever released would blow my mind.

And cars that fly.

YES. My home PC is a 97 Gateway piece of shit! It's amazing that these things will even run this long.

I'll be getting a new desktop in February after the new processors and Vista come out. Looked into iMacs, but I don't think I can afford a decent one.

The problem with per track and per album pricing is that I tunes is priced too high. You have a whole generation of young people that is in denial that they are stealing when they download for free and resist the idea that they should pay anything for digital music and then others that are willing to pay something but want a significant discount if all they get is mp3's and not a physical product. There simply isn't any common ground in pricing between supply and demand for digital sales to really take off.

I think though that as long as the majors own the rights to the most popular music, you are going to see decreased physical sales result in a stronger push towards stiffer penalties and enforcement of the law rather than new pricing models. And as the economic harm done to them increases, their case for stronger penalties will be compelling.

The fact that you'd like a different pricing model doesn't mean its going to happen. If the artists themselves start viewing the majors as dinosaurs and stop signing with them, you might see change. Until then, I don't think you are going to see anything change in approach.

I wonder how much money is saved by not having the entire physical product chain...?

I have a book by one of the economists at Veronis Shuler (an entertainment focused Investment Bank) which is a little old but breaks down the various costs up and down the value chain of producing, marketing and distibuting a record.

I don't remember the numbers....I should check when I get home. But conceptually, you could eliminate the manufacturing costs and the cost of shipping the product only. I would suspect that etailers would require less incremental profit on each sale because their fixed costs and inventory holding costs would be much lower so labels might own a higher % of the retail price. Still though, if a reasonable price point would be say $4-6/album, I don't think you can lower costs significantly to make digital sales attractive to labels when compared to the sale of physical product.

You also have to consider that if digital sales were to really displace the sale of physical cds, most of the record stores would go under. And who iare their biggest creditors? That's right -- its the major labels. They really have little incentive to try to move towards a viable digital model.

It's also unrealistic to think that there would be any real savings by shipping drastically fewer cd's... because a decent % of buyers will still want the cd's, so they have to be produced and shipped. Thus, no gain... just a channel that doesn't pay for itself.

The lesson is...never try.

Hollywood has got to be watching the changes in the music industry in complete terror. It's only a matter of a few years before the ever-growing computer memory capacities make it as easy to illegally copy video as it is now to copy audio.

It's one thing for record companies to start losing sales on a record they maybe spent a couple hundred thousand on, but studios losing revenue on something that cost tens of millions of dollars is going to change the film business in drastic ways.

Googlenomics , Itunes and Zune

Mark Cuban speculates on what might happen to the Online Music Industry if Google entered the fray, or if Microsoft used the Zune coupled with Google-type strategy to put a dent in ITMS & iPod sales.