The Music Industry verses Reality

Posted: erik-hedin 27 February 2009

There is another trial going on in Stockholm over the illegal trading of music files over a file sharing network. I love watching the Music industry fight these battles without realizing the real reason for there revenue declines.

If we look 5-10 years back our buying habits were something like:

• Hear a song that you like. Buy Cd of 12 songs for the one song that you like. $15 dollars
• Now we just buy the song or two that we like from Itunes or Amazon $1.98. I feel so bad for the record labels… After all those golden years of getting ripped off by a closed controlled system of commerce.

Today Lara and I constantly listen to the internet radio stations that are available in Itunes. Over the course of the 12 months jointly we have bought maybe 12-15 songs and no cd’s.

Many large scale artists are also selling straight to the public via Amazon or Itunes while retaining a better margin of the sale. After a band has a name and is popular the music labels are not needed. A record label can help a small band market itself on a grand scale but at a great cost to the artist. Jack Johnson made the decision to create his own label rather than signing with one of the big ones. He is now retaining his profits and is really much better off.

The old music business model has been super-ceded by technology. No amount of litigation is going to change this fact. Look at the other archaic businesses that are gone. One that comes to mind is the long distance telephone company. We used to have to pay for every long distance call and if that call was a cross a border the rates were very high. Now you can use a calling card or a service like skype to call anywhere in the world for a few cents a minute. Do you see the old providers suing Skype or trying to shut down the internet?