Digital Downloads
These are probably fighting words, but I do believe that Napster hurt CD sales back when it was widely used by people for downloading music illegally. This happened when I was in college, and as I remember, the bulk of the conversation I heard about it was people talking about how greedy the guys in Metallica were for publicly championing against Napster. Lars Ulrich spent a lot of time in the limelight claiming that their music being freely passed around on the Internet was hurting them as artists, since its distribution was both beyond their control and being done in a manner that didn't give them royalties.
The real problem, I think, is quite different: music industries ignored what people were saying. There are certain conveniences that went along with being able to illegally download music, like not having to walk to a music store, or being able to get only one or two songs off an album instead of committing money to the entire album. Ten years ago, music companies should have been creating places on the Internet where people could do this legally. You can now go on Amazon.com and buy almost any album as an MP3 download for slightly cheaper than having the actual album shipped to you; this is evidence that they're finally listening to customers. The fact that they didn't do this is the reason they've been losing money for the last decade.
I still think there's room for improvement. Ordering a CD might cost $13.99, while the MP3 download for that same album might be around $8.99 or $9.99. Why so much for MP3s? This implies that the packaging, which you don't get with a download, costs them four or five bucks. It doesn't, and we all know that. The reason that CDs were always 12 or 13 bucks was because of the carrying cost associated with it. Retailers have to pay to keep their inventory on hand, either in a warehouse or shelf space.
But we live in the era of the long tail. The carrying cost for Amazon.com to store music is virtually nothing; it's hard disk space and power consumption to keep the servers running, which, if spread out over all the music on a single server, is miniscule. The reason MP3 album downloads are so much is because the music industry is being greedy. They're fighting the extinction of the CD.
Imagine entire albums being purchasable for $2.99 or $3.99 as MP3 downloads. For that cheap, you could buy a new CD almost every day and not spend more than $100 in a month. I think I spend more on coffee in a month. At that price, you wouldn't have time to even listen to all of it, but I bet we'd still be buying tons of them just as a means of sampling new music that's out there. The more people buy stuff, the more they find that they like and the more they'll recommend to their friends. With sales on the Internet, it's all about achieving volume, isn't it? Lower the prices.
The real problem, I think, is quite different: music industries ignored what people were saying. There are certain conveniences that went along with being able to illegally download music, like not having to walk to a music store, or being able to get only one or two songs off an album instead of committing money to the entire album. Ten years ago, music companies should have been creating places on the Internet where people could do this legally. You can now go on Amazon.com and buy almost any album as an MP3 download for slightly cheaper than having the actual album shipped to you; this is evidence that they're finally listening to customers. The fact that they didn't do this is the reason they've been losing money for the last decade.
I still think there's room for improvement. Ordering a CD might cost $13.99, while the MP3 download for that same album might be around $8.99 or $9.99. Why so much for MP3s? This implies that the packaging, which you don't get with a download, costs them four or five bucks. It doesn't, and we all know that. The reason that CDs were always 12 or 13 bucks was because of the carrying cost associated with it. Retailers have to pay to keep their inventory on hand, either in a warehouse or shelf space.
But we live in the era of the long tail. The carrying cost for Amazon.com to store music is virtually nothing; it's hard disk space and power consumption to keep the servers running, which, if spread out over all the music on a single server, is miniscule. The reason MP3 album downloads are so much is because the music industry is being greedy. They're fighting the extinction of the CD.
Imagine entire albums being purchasable for $2.99 or $3.99 as MP3 downloads. For that cheap, you could buy a new CD almost every day and not spend more than $100 in a month. I think I spend more on coffee in a month. At that price, you wouldn't have time to even listen to all of it, but I bet we'd still be buying tons of them just as a means of sampling new music that's out there. The more people buy stuff, the more they find that they like and the more they'll recommend to their friends. With sales on the Internet, it's all about achieving volume, isn't it? Lower the prices.