Saturday, August 09, 2003

The RIAA wants to make us think that mp3 files are to blame for the recent rapid decline in CD sales, and feels that by suing the people who happen to have these files on the computer, somehow they'll put a stop to copying, trading, and "sharing."

And maybe they're right.

I, for one, have stopped. It's not worth a legal battle just so I can download that disco hit from the 70s I was too embarrassed to buy.

But what the RIAA has failed to realize is that their problems are not the rise of CD burners, MP3 players, and p2p networks. What's led to the RIAA's members hard times is a series of incredibly stupid decisions coupled with intense greed.

CDs are almost 20 years old. The little silver discs were heralded as a revolution for their flawless sound. When the first players hit, CDs were hard to come by. The manufacturing process was expensive, with most discs made in Japan in clean rooms and many discs rejected for each one allowed to leave the plant. The record industry acted accordingly, pricing discs as much as 7 or 8 dollars more than a vinyl LP or cassette.

Of course, many of us fell in love with the shiny things. Over the course of time since I got my first player in 88 and now, I'd say I've amassed 1 to 2 thousand of the shiny buggers, all purchased legitimately. In those 15 years, I've watched as the industry has released some artist's catalogs once, twice, three times and more. I know that at least three versions of the Who's Tommy have been out (I owned them) and that many other artists have had seemingly more compilations than they had songs. As the production went up, obviously, the costs of production went down. Because CDs enabled record companies to reissue many catalog artists, they saw their fortunes skyrocket as many people did what I did, rebuying their old LPs, cassettes, 8 tracks, and even their early CDs. Since the costs of making and promoting these catalog albums was almost nil, these discs were almost pure profit.

Throughout the 90s, the record industry began doing something almost unheard of. It began ignoring profitable established artists looking for the next big thing, either in the form of "alternative" music or beautiful young male and female artists who gave good cover, but often made disposable pop. Many people, like me, stopped buying CDs, because, quite frankly, little interesting music was coming out on the major labels.

Enter CD burners and MP3s. There is no doubt in my mind that this has hurt the industry. But the effects of this have been because the industry was too stubborn or stupid to respond. What exactly were people downloading rather than buying. Yes, I'm sure there were lots of trades of songs by people like me, looking for that obscure live tune, or that classic one hit wonder that you've never been able to find on CD. But I don't think we were the ones giving them fits. Instead, the computer savvy and music savvy teens of today are looking at the sheer bulk of CD product that's being issued, realizing it makes no sense to pay $18.99 for a CD when all you like is the hit, and trading the hell out of those files. The record companies need only look at the sales of the 500 different WOW collections to know that in the disposible pop world they've created, nobody wants an album anymore unless it's by K-tel.

What the RIAA should have done is realized that it was putting out crap. It also should have realized that there were many of us out there who weren't buying the Justin Timberlakes of the world, but who would download an MP3 or 2 of an artist we'd only recently heard and wind up buying the whole album legitimately. In fact, I would venture to say that while the RIAA probably hasn't rung up stellar sales for the teenybopper and cRap artists that they thought would hit it big, they've probably far exceeded expectations on any number of less promoted artists who have seen their work traded over the internet. Perhaps if the record companies had learned the lessons of the movie companies (who learned to survive both videotape and DVD by adapting their philosophies) and just embraced MP3, they could have seen sales skyrocket while their costs plummeted.

Do I think the recording industry will die? No. Do I think that the RIAA will ultimately be successful in their lawsuits? No. I think eventually it will be determined that a song you've purchased is yours to do with what you want in the privacy of your own home and that merely placing the song on a publicly accessible harddrive is no more illegal than a library buying a copy of a book and placing it on a shelf where others can read it without paying for it. I also think that smaller record companies will begin eating the RIAA's lunch, providing more entertaining music to more people for less money than ever before. All I know is that I wouldn't want to be the idiot who's been advising the RIAA for all the money in the world. Time will tell that this course of action was about the most ill advised they could have taken.

Tuesday, August 05, 2003

Maybe it's just me, but I'm getting tired of academia, dorky business gurus, and anyone with a pulse pushing their own business theories that fly in the face of common sense. My hope is to share my observations about business, companies I like, companies I don't, the ridiculous books and beliefs that seem to drive the underconfident CEOs to creating the latest Dilbert Company.