Unsprung Media

This post is a follow up to my last post titled The Wrong Trousers where I described substitution as a far greater challenge to the music industry than sharing/replication. 

The Substitution Dilemma 
The iPod giveth, and the iPod taketh away. The digital music technology that enables your music to be effortlessly substituted for music created by someone else is the same technology that enables someone else’s music to be effortlessly substituted for yours.

Searching For Another Emotive Spike
I’ve had this quote (below) from Karla Starr’s excellent article titled 22,000 Songs And Nothing To Listen To rolling around in my head for months.

“My iPod is like a remote control or a slot machine, flicking through 500 songs, searching for another emotive spike.  I now find myself getting bored, even in the middle of songs, because I can. The paradox of spending so much time changing songs, trying to find one that you like—without giving it time, meanwhile thinking about what else you could be listening to—is that you wind up attached to none of them.”

I can’t find any hard research on behavioral patterns of digital music consumers.  However, when someone gets around to it, I bet you’ll find “emotive spike hunting” right up there with “playlisting” and “shuffling”.  

New Technology - New Behavior Patterns
Within a couple of years one billion people will have tens of thousands of songs at their fingertips; accessible through mobile phones and iPodish devices.  Think about the new behavior patterns:

• Emotive Spike Hunting - just explained.
• Playlisting - building playlists for personal consumption and sharing.
• Shuffling - random generation from an endless list(s) of songs you have control over.
• Button Pushing - Endless fast-forwarding and reversing - because you can.
• Recommending - Machine to human and human-to-human.
• Sharing - effortlessly sharing because it’s finally acceptable.

It’s all Substitution
All these new (easier to do now than ever) behavior patterns add up to what I am going to call the Substitution Challenge.  There are so many great songs in the world, and it’s going to be so easy to skim, skip and linearly or randomly churn through thousands of songs.  It makes me wonder how much of this activity, over any given interval of spare time, will displace what was once spent on passive listening?

Substitution and Economics  
In a competitive market, where products can be easily substituted, prices get pushed down to marginal cost; thus practically eliminating the ability to generate a profit.  MP3 players (and the Internet) are the new radio (my favorite line) and every artist wants to be on the radio.  Where record labels pay to place songs on the radio today, it makes sense that artists will certainly continue to offer songs for free in exchange for placement in the new “radio” tomorrow.  Unfortunately, those that are selling songs have to compete with those that are trying so hard to get on the “radio”.  And, as the first line in this paragraph says - where products can be easily substituted (see behavior patterns above), prices get pushed down to marginal cost; thus practically eliminating the ability to generate a profit.

The Substitution Solution
If you have some time watch this video by Barry Schwartz titled The Paradox of Choice - Why More Is Less.  My solution will be forthcoming.  There are two challenges that have to be dealt with simultaneously; the first challenge is the Lack-of-Margin-Challenge (in a .99 cent sale) and the second challenge is the Substitution Challenge described here.  The solution(s) to these challenges are intertwined.

Start Here - Practically Indisputable Economics:
In a competitive market, where products can be easily COPIED, prices get pushed down to marginal cost; thus practically eliminating the ability to generate a profit; therefore the solution is to create products or features that can't be simply REPLICATED.

And Then The Music Industry Said:
In a competitive market, where products can be easily COPIED, prices get pushed down to marginal cost; thus practically eliminating the ability to generate a profit; therefore the solution is to stop people from REPLICATING our products.

But, Someone Put The Wrong Statement In The Play Book.  It Should Have Read:
In a competitive market, where products can be easily SUBSTITUTED, prices get pushed down to marginal cost; thus practically eliminating the ability to generate a profit; therefore the solution is... (a post covering this is in the works).

Common Sense Says - Rule Out This Option:
In a competitive market, where products can be easily SUBSTITUTED, prices get pushed down to marginal cost; thus practically eliminating the ability to generate a profit; therefore the solution is to stop people from SUBSTITUTING our products.

Substitution Is a Bigger Problem Than Replication
At this point in time, given the adoption of MP3 players (including cell phones), broadband Internet, Internet everywhere, video game consoles and the pending media recommendation tsunami - substitution of one song instead of another is a far bigger challenge than replication; that is, if you don't have the right strategy... 

Continue to the follow up post on substitution. 

 

 

Was I crazy when I said that the music industry is going to become a data driven industry just like the automotive recycling industry?  Does anyone at EMI read this blog?  EMI hired the data guy from Google to be the President of Digital Music (for EMI) this week.  Looking for a record deal?  Improve your data to get on the radar.  Did I mention that I wanted this job?   (SEO - Song Engine Optimization) 

Last week the social networking site Bebo sold to AOL for $850,000,000.   Count up the number of social networking sites and digital music businesses that have been built upon or around artists, music and music fans.  Bebo isn't all about music, but music helped build Bebo.  Just look what music has done for Apple.

Collectively, artists and their fans have the power to rapidly build billion dollar businesses.  

Within 12 Months
Some social networking / music site is going to step up to the plate and make a blanket deal with artists that pulls artists in and pays them real money for every bit of upside they create.  The deal will be hot enough to convince artists to motivate their fans to buy into the proposition, and at the expense of other alternatives in the marketplace.

Within 12 Months
On another front, Apple, Amazon, Microsoft, or some similar company will end the practice of extracting percentages from labels and artists.  The deal will sway artists to push the platform that offers the best deal to artists.  Like dominos, competitors will have to follow suite. 

Both of these scenarios will include all artists; not just artists signed to labels.  These are two scenarios where you will finally see the "long tail" working for you and your wallet.

Music is a powerful force.  Paying to gather that force and to keep it from competitors is on the horizon.  Let the bidding begin.

Is this wishful thinking? 

 

I am taking the advice I give to Brand Together.  You will be able to find new articles I post on Music Think Tank.  I am flattered to be part of such a great group of people.   

 

I just now rediscovered Kyra Reed's blog through TuneCore's news letter and the new TuneCore blog.  I was on Kyra's site a long time ago and somehow I had forgotten about it (translate - lost the RSS feed when converting to Google Reader).  Readers of this blog will like Kyra's blog.  TuneCore is my favorite Music 2.0 company.  Nice to see TuneCore is using a blog to talk to the community they are a part of.  Great move and good advice for all artists...