Music like Water
 In their recent book, The
Future of Music: Manifesto for the Digital Music Revolution, David Kusek (a dean at
the Berklee College of Music) and Gerd Leonhard (a music-industry veteran) describe an
idea they call "music like water." The main idea is that consumers and the music
industry should begin to think of digital music delivery as akin to utilities such as
water and electricity. Instead of worrying about record sales and units sold, record
companies should be thinking in a new way about providing music as a profitable service.
Just as the water company delivers water to your house for a nominal fee along with some
charge for the amount you use, music companies should be doing this with their vast
libraries via your computer.
There are good reasons for taking this idea seriously.
Digital copying via downloads, hard-drive swapping, CD recorders, etc., is a reality that
music companies must acknowledge. No matter what measures they take to corral it now,
people will continue to copy music. The music companies’ aggressive stance against
this has done more, I think, to antagonize consumers than to help their own bottom lines.
People copy music not because they want to steal or don’t want the artists to get
paid, but because CD prices are too high. On a recent trip to Borders, I noticed that
several CDs by major artists were priced at $18.99, which makes them more expensive than
other kinds of entertainment, such as DVDs. True, you should be able to charge what you
want to dispense with your property, but if you exceed a decent ratio of price to value
and there is a simple way open to everyone to circumvent your rights, you can expect those
rights to be circumvented.
Consider a similar case having to do with waste management.
If a town stops collecting old car tires or starts charging to do so, you’ll notice a
lot more car tires on the side of the road because people don’t want the hassle of
getting rid of them properly or paying for it. It would be better for the town to charge
everyone a nominal fee and just collect the tires. Sure, people do wrong by throwing tires
on the side of the road, but the choice is between setting up elaborate traps to catch the
few violators and coming up with a plan that avoids the problem altogether. Similarly, the
Recording Industry Association of America can either prosecute heavy downloaders at great
expense to themselves and the wrongdoers, or restructure themselves so that the problem
disappears. But music companies will say that high prices are the only way that they can
make a profit on the music. This is untrue.
In a recent podcast, Gerd Leonhard pointed out that only
two out of every ten people in the US purchase music in any form. If we assume that
the music companies are correct in saying that they can make a profit only by charging
ungodly prices, it would seem that this is because they are leaving 80% of the population
out of the equation. What they should be striving for is to have 80% of the people buying
music; this would allow them to charge less per unit of music sold instead of going after
conspicuous downloaders.
It seems to me that if music companies charged a flat rate
of $20 a month -- a figure based on the monthly fees charged by satellite radio stations,
a service similar in some regards -- they would widen their market share for the simple
reason that it would no longer be worth people’s time to download from peer-to-peer
networks with no quality control, or to swap hard drives or USB drives with friends. It
would be easier to just go to your computer and get what you want through the legitimate
service.
Kusek and Leonhard have many more interesting things to
say; I recommend the book to those interested in music as a business and those interested
in what the future might hold. Their observations about how such a system might affect
artists seem very good, but at times I’m uneasy reading about music as a business.
Perhaps I’m too much of a romantic, but I like to talk about music in aesthetic
terms, not economic ones.
I’m not sold on the idea of buying into music
services. My main concern is that if the main distribution of music goes to a digital
download system, companies are likely to sacrifice quality for speed. If only 20% of the
people now purchase music, it’s an even smaller number who care about the quality of
the music’s reproduction. And if the new system does bring more people to the
music-buying fold, it’s likely that they will not initially be interested in
high-quality reproduction.
Another concern I have is for small, independent record
labels. It seems unlikely that small companies could offer competitive pricing on their
own, which will put them under pressure to license their music to bigger companies for
download. This would seem to put small companies at an even bigger disadvantage than they
are now. Right now, if someone goes shopping for a CD, that buyer may or may not choose a
record on an independent label. If the industry moves to music services, then those labels
will be hard-pressed to compete with, say, Sony’s music catalog.
If I were a hi-fi company right now, my main concern would
be trying to figure out how to survive in the world of digital music. If most people use
their computers for music and just download it to an iPod, then these manufacturers are
fighting an uphill battle. Not only will people not realize that their music doesn’t
sound as good as it should, but they may be unwilling to pay for equipment that is able to
provide high-quality reproduction. These problems aren’t unsolvable, but companies
have not had to face them in the past, and they may tax smaller companies’ limited
resources.
One way to show what quality sound reproduction is like is
to offer a system at a reasonable price that can deliver quality beyond what the average
Best Buy or Circuit City customer expects. In that regard, the Onix all-in-one system that
we review this month is a shining example of high-quality construction married to great
sound for a decent price. If more people could hear and appreciate it, I bet more people
would care about the quality of music reproduction in their homes.
I hope I’m Chicken Little crying that the sky is
falling, but I think there’s real reason for those of us who cherish music and
quality sound reproduction to be wary of digital services. Audiophiles are already a small
minority among music buyers. If the music industry begins to focus its energies on getting
the attention of the non-music-buying public, we’ll likely become an even smaller
percentage of their customer base.
…Eric D. Hetherington
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