Some Quick Thoughts on the Music Business

Im a regular reader of Billboard and some other music related publications. Its not a fun read these days as total sales continue to fall and music companies alter their models to include every revenue source they can find.
A smart move of course, but what really needs to happen for the music industry to prosper ?

The first thing that dawned on me as I thought about this was simple, yet scary. I cant remember the last time I bought a CD Player of any kind, nor can i think of a reason why I would. Sure, my PCs have one, but its rare I use it for music. If the music industry is going to rebound, rather than trying to find ways to sell more CDs, they have to either find a reason for people to start buying CD players again, and I cant think of a single reason why anyone would, or the industry has to quickly as possible find a way to get rid of music CDs. Their ongoing dependency is creating an imbalance that drags them further away from turning their business around.

Thats not to say that selling digital downloads, or even worrying about the format of digital downloads ( DRM free, or not) is going to lead to a solution.

One of two things has got to happen. There has to be a new financial model that excites music consumers into spending more money on music, or there has to be a technological advance that creates a new experience with music.

I’ve always been a big believer in the DRM free music subscription model. Charge people an extra 5 dollars on their cable bill for DRM free, unlimited use music and the total money spent on music will grow and exceed net margin dollars currently earned by the music labels. There is no reason why each label cant be a “network” comparable to Turner, NBC Universal, HDNet, etc that gets paid by the subscriber by a distributor who then marks the cost up to consumers. Consumers get a simplified delivery of music, Labels and hopefully artists get more dollars put directly in their pockets. Its not good for the retail side of the business, but as long as CD players are dying, so will retail.

The 2nd option is to use technology to develop something out of left field. Im a big believer that music is not just entertainment, but a tool for people to describe themselves to those around them. We use music in our ringtones, on myspace pages, blasting through the windows of cars to let people know something about who we are. Technology is now in aposition to allow people to broadcast their personalities and positions about themselves as well as enhance music consumption.

We have evolved from boomboxes to walkmans to portable CD players to Ipods. Only the shoulder carried boombox made a statement. Today the one constant we all have and really the only place i have increased my spending on music playback is headphones. Some are wireless, some are fancy, some are earbuds. Maybe we need a range of new, completely differentiated devices that we just plug our earphones into

Im guessing and pulling things out of left field here, and these arent devices that I would ever invest in, but maybe we need simple, inexpensive playback devices that project what we are listening to ? Rather than updating our IPod hard drives, we just insert a simple flashdrive into any number of playback devices that are more an accesory to life than a dedicated music/video/phone device. These devices might mashup a skin that plays back on the exteriors of our MP3 players or phones or even blutooths animations to belt buckles or hats or a car hood ornament or any device or clothing we can integrate. WHy not have devices that are programmable or preprogammed to do any number of fun things that define who we are ,w ith the music being the perfect plug in complement ?

Maybe the way to change music isnt by changing the music formats, but by enabling new ways for us to say new things about ourselves using music as the foundation or catalyst ?

I dont know for sure. . However, I do know this: Trying to figure out new ways to sell music on CDs… That ain’t it.

The CD is dead. Long live music

131 thoughts on “Some Quick Thoughts on the Music Business

  1. thanks good blog and post

    Comment by newkon -

  2. I\’m convinced that people are listening to music more than ever these days, they\’re just not paying for it. That is, they are stealing music because technology has made it easy for them to steal.

    The problem of theft-friendly technology is compounded by the fact that CDs have been about $15 a piece since I started buying them 20 years ago.

    Comment by ol -

  3. Mr. Mark Cuban,
    This is off the subject of your latest blog but of equal or greater importance. Im writing to you to ask if you will take on a huge challenge and move towards expanding your empire, at the same time move into position not previously matched by any other in the sports world? The matter at hand, the imminent sale of the Chicago Cubs. Please save this historic franchise from some prehistoric, drab ownership who only see dollars and half-heartedly put a second rate product on the field hoping to rake in profits off of the few successes of the past. We need you! please respond! Of course if this is something you are interested in and you find yourself in need of any assistance, call on me. I dont really care for Air Traffic Control job in Las Vegas all that much. For all the CUB faithfull
    Anthony Borgert.

    Comment by Anthony Borgert -

  4. I don\’t know where to put this but are you going to buy the Cubs?

    Comment by Dog Bowl -

  5. good story

    http://www.dangeroushacker.kwikphp.com/

    Comment by Vlad -

  6. I see you have a good point in what you are trying to say here Marc. I totaly agree that the CD business is dead therefore we need to figure out a new way to sell music. Perhaps flashdrive is good solution but there also new copyright algorithms should be developed.

    Comment by Listen to music -

  7. When was the last time you put in a cd or album (or loaded a one album playlist in your ipod) and listened to it from beginning to end… even better… that you listened to over and over and over.

    Comment by Sohbet -

  8. Dear Listener,
    I am writing you today to extend a notification of opportunities at hand for everyone who cares about music and the artists who bleed on the microphones that share the common vulnerability we can all relate to. My slogan, Join the Revolution, can be mistaken for many things, including a meaningless way to draw in certain crowds and attract new potential audiences. But I wanted to share with you the reason behind such a statement and give you a chance to diminish any negative opinions pertaining to such an open ended idea.
    The music business is on the verge of change and it has been for quite some time. As we all know, the industry has recently gone through many stages of retraction from its usual methods and processes which have generated much discussion amongst the music and business communities. Since the digital platform has become the prominent medium for artists to connect to their fans, new ways of distribution, communication, advertising, and self-management have left the record companies in a query as to what happens next. Such services, up until now, have been the purpose of the major label and thus the motivation for making it as an artist. But because of the possibilities created by the internet and other digital mediums, artists can now accomplish their goals of spreading their music to the public on their own, thus leaving the major label useless. This new wave of modern music business is a great step in the industry. For so long, it has been inundated with poor business ethics and sleaze-ball tactics that give the business a bad name.
    Although it is an exciting time for everyone, it brings about new problems as well. Because of the increased accessibility of music, the market has become saturated with mediocrity and low standards. This has caused a problem for the artists who have genuine talent and are lost within the crowds of off-key performers with over-achieving tenacity. This brings us up to speed as to why you, the audience is so important in this new stage of the industrys evolution.
    As the growing concerns amount to monumental levels, it is now known that the music community wants change to occur. You, the listener, knows that there is something wrong with the way music has been presented to the public and have the power to change it. Join the Revolution was thought up as a way to reach out to my fans and show them that they are unique and possess the intelligence to know what is moral and good. That they are not blinded by the light being shined in their eyes by large corporations and standard ways of practice. That they are the ones that hold the fate of the music industry in their hands. We alone have the power to change the way music is displayed and communicated to the public. Now it is the time to stand up and express your opinions on what you believe is worth knowing, worth listening to, worth playing, and most importantly, worth changing.
    I invite you to conjure any opinions for or against my own. These words are merely an expression of myself both as an artist and music lover. I do not intend you to follow any protocol but to make your own. I also encourage you to research this movement in greater detail and discuss it with as many people as you can. Revolutions are hard to come by, they are far and few between. But circumstances as these are grounds for new ideas, new leaders, and new practices. Be apart of what is to come and know that you are what drive the artist and music to live. My thanks to all of you that listen to my music and support my movement and career. I hope to see all of you at the next show with a new head on your shoulders. Think. Love. Listen.

    Sincerely,
    Greg Vendetti

    Join the Revolution.

    http://www.myspace.com/gregvendetti

    Comment by Greg Vendetti -

  9. 10. Could not agree more, except to say I think that I think there will always be a small niche market of audiophiles who will invest in hard media formats.

    Comment by forum -

  10. Maybe I\’m getting old. I used to buy CD\’s on a weekly basis when I was in college. I enjoyed going through the booklet included and reading about the artist and the songs. Sometimes as a bonus the words of the songs would actually be included.

    I recently got an iPod nano. I spent hours loading in my CD\’s. I was so excited that I wouldn\’t have to worry about scratching them anymore. But now listening to music is a different experience. I don\’t sit and listen and flip through the booklet included with the CD. Now, music is just background music that I occasionally listen to while I\’m doing something else. I don\’t fully enjoy my music this way. Anyone else have some thoughts on your old CD\’s? I miss sitting around a big stack of CD\’s and rifling through them and not doing anything else.

    Sure, an iPod is handy. But something is missing to me.

    Comment by Lisa Gunther -

  11. Ahh….so many opinions..so little time…

    1. Hard formats are dieing..not dead..vinyl still sells in tiny quantities, audiophiles etc. People don\’t want to mess with carrying more junk, small is better, none is best.

    Wireless media everywhere with some sort of content filter is the eventual goal. It\’s everywhere when you want it. Leads to Marks point about headphones, although thats somewhat limiting also and doesn\’t address video.

    2. Music as a stand alone medium is past it\’s peak. In Mozarts day people, wealthy folk that is, saw a few performances a year. Now music is everywhere, music is background. Gone are the days of sitting down and listening to a complete 40-72 min. work. Who has the time or interest. I was a pro musician for 15 years and work in the highest end of the consumer electronics biz, (CEDIA) trust me, virtually no one cares about this. Few and far between are listening rooms, its all Ipods, digital radio, background speakers and theaters.

    Audio formats like SACD and better sound quality have failed, HDTV however is very successful. Folk such as Mark buy hard drive video servers for their movies such as Kaleidescape that can run from $20,000 to $120,000 to distribute movies across their home. (and because it has a really cool GUI). Music without video is WAY less important than in the 50\’s-80\’s.

    3. Being a music star is a marketing activity now. (probably always has been) Music is easy now…thousands of kids can play like Hendrix and Van Halen…how to even tune a guitar was a mystery in the 50\’s and early 60\’s. Garageband by apple does more than a full blown 70\’s recording studio…For FREE!

    4. Whats next??? who knows…more marketing of people and their cult of personality right?? I mean what self respecting Billionaire doesn\’t have their own reality show??? I bet Mark can play Smoke on the Water at least…lol…

    Comment by Bluez59 -

  12. 18 and 19 hit the nail on the head.

    Physical media is going nowhere. The paperless office has been a myth for over 40 years and people predicted back in 1979 that paper books would disappear by the 1990s.

    Downloaded files are to music what Ikea is to furniture. Yeah, they\’re cheap, easily accessible and great for students with little money, (just like cassette tapes were in the \’70s.) But when you truly love the music and want it in your life for the rest of your life, don\’t count on those little digital files being able to play when you\’re 80 years old.

    Vinyl sales have actually risen in the past two years because people are sick of the \”sterile\” experience of impersonal files. That\’s not to say that vinyl will make a huge comeback—it won\’t. But it says a lot about the human being\’s attachment to a physical object.

    Saying that vinyl and CDs are \”dead\” is denying reality.

    Comment by everycritic -

  13. The selling of individual tracks online has hurt the music industry the most, not piracy. I agree with #11 that good amounts of people tend to buy CD\’s for only a few songs and without any reverence for an album as a whole.

    Never before has it been possible for the consumer to pay only a dollar and still get their favorite song. Now thanks to iTunes they can, and quite simply, the music industry is losing money. iTunes has turned the music industry into a garage sale. Record companies dont need to adapt to anything. They just need to require iTunes to sell albums as a whole and stop them from selling tracks individually.

    The music industry needs to return to the business of selling albums. You dont see Hollywood selling hit action scenes or funny parts of movies separately do you? There is much more to an album than the individual tracks. The album art, flow of the songs, song order, mood changes, credits and even the band or artist\’s dedication blurb are all-important and meaningful to what makes an album a body of art. You can\’t blame consumers for overlooking those things when they have the opportunity to only download their two favorite songs and save $8.

    The music industry is cheapening the album by not valuing it as the body of art that it is. They are killing the album.

    That is why Indie music is where its at right now. Indie bands are about the music and not about banking on singles. I dont know how long its going to take record companies to understand that they need to value the art.

    Im in a local Dallas Indie band. We are pretty serious and plan to somehow play music for a living only because we love music, but the future of the music industry looks grim from an artists perspective.

    Mark, awesome post. I look forward to the day when my Ipod can sync up to my belt buckle or shoes via bluetooth.

    Comment by Jesse Fornear -

  14. A few thoughts, labels have destroyed music and are now wallowing in their own toilet. Instead of encouraging artists to grow, they they smother them flood the marked with imitators, and do everything in their power to insure the artists will not last long enough to renegotiate their contracts.

    As to the concept of subscription services and how artists would get paid, the answer is quite simple, the same way they already do. It\’s called performance royalties, basically the writer of the song get\’s paid everytime a song is played. Further more, you could treat it just like TV shows, successful shows make more money, period.

    Comment by Hemigod666 -

  15. Approaching the trouble with the music business from a purely distribution standpoint is another factor in the slow erosion of consumers.

    I wrote a post on my blog inspired by this article, check it out, let me know what you think.

    http://onesmallwindow.com/2007/05/03/where-is-the-badass-music/

    Cheers.

    Comment by Elvis D -

  16. you have some great ideas for helping the music industry. but you\’re missing the real point here man, people don\’t want a music INDUSTRY anymore.

    music sales are NOT as bad as they say they are. they neglect to mention how WELL independent record labels are doing right now.

    sure, the average jerk off has an ipod and downloads a few classic rock cds on kazaa every few months.

    if you want people to buy your music- you need to make a decent product. the major labels are anti-good music. they want something that will get someone\’s attention for a few weeks, recycle it, and sell it again. people are starting to realize this plan and now they are buying into more independent music.

    the only way to really get music sales up is to GET RID OF THE RIAA and stop the corruption in the music industry. get rid of all artists that are nothing more than an image- and start selling REAL MUSIC.

    why force someone to pay 20 dollars for shit made by a computer? why GUILT someone into paying 99 cents for SHITTY quality mp3s? it\’s insane.

    no one wants to buy the new red hot chili peppers cd or whatever band because people know THEY HAVE MADE PLENTY OF FUCKING MONEY OFF THAT BAND ALREADY. record labels need to spend more time finding MORE quality artists and less on how many records they sell with their 5 shitty artists that will ALWAYS sell- and the rip off one hit wonder bands.

    people want quality. and everyone else is going to just download anyways because you would have to be retarded to buy shitty music when you can hear it on the radio anyways.

    Comment by Brett G. -

  17. You know, I read just a few lines … and I know that new formats are bringing more quality, advantage.

    And it has no soul anymore… anything. Everything new is smaller and smaller, and I wonder when I get 60 years, shell I be able to switch my own TV on, or to listen to the music on the stereo (or whatever the name would be in year 2033).

    I can tell you\’re in with all the technology (of course:), and this is not a comment, it\’s just a conclusion…for myself and maybe a few people more on this techno-urban-high planet.

    Keep living.
    t.

    Comment by Tanja -

  18. Music is finally becoming a free marketplace. Record labels can no longer push mediocre music down our throats just because we want to buy the one or two good songs on the album. I\’d complain that we\’ve lost the art of putting together a really great album — something that was arranged carefully to work from beginning to end — but when did we ever have that. Name one recent record that works well as a single composition.

    Comment by A1 phone-y -

  19. hello to all who will read this. after all the comments i have seen about the cd being dead, which it is, cd sales are dead and have been dead for a long time. in my local wal-mart store, there is hardly anyone looking at or buying any cd\’s unless they are above 40 years old like i am. no one really said what the real reason why the cd is dead. so i will tell to. remember when napster was free?? how about the free downloads of limewire and bearshare that are still on the internet?? wimx was shut down in the spring of 2006 and fined big time for copyright violations. kazza is next in line. that was on the evening news just a few nights ago. if you use bearshare or limewire to download music and burn it on cd or put it on your ipod or phone, then you dont give a crap about the music industry. itunes does sell tracks for .99 cents a piece and that is a great prince. great job itunes for giving music away for free like other download services like limewire and bearshare. e-mail me at jc69star@yahoo.com anytime to chat about music. thanks everyone for your time.

    Comment by james hall -

  20. Hey Mark –

    What are your thoughts on this article: http://www.marketingvox.com/archives/2007/04/13/music-labels-want-subscription-itunes-service/

    Peace,
    ECC

    Comment by Erik -

  21. How bout a line of stylish wireless earphones that have a slot for inserting a memory card that contains mp3s? Then at retail outlets you can customize or buy albums on these memory cards..
    What do you think? You line em up and I\’ll shoot em down.

    Comment by Javier -

  22. I pre-ordered the new RUSH release on DVD. It is my first time to buy this format as I buy VERY few CD\’s. Does anyone think this is a good format? Interested in your comments Mark.

    Comment by Sean -

  23. Not only is the CD dying, but the iPod and other purely portable music players are dying along with them. I think Apple has figured this out with iPhone and will actually accelerate the death of these devices. Why is this? Well, as soon as my phone has a slot for a 4 GB flash drive and then eventually has a 60 GB hard drive I no longer need my iPod – my music and videos are now on my phone.

    Comment by eidifk -

  24. The CD is dead, and the DVD isn\’t long-lived either. Streaming, or on-demand, or downloadable is where most of this stuff is going. Who wants to buy a physical tape or disc when they want it stored on their computer, iPod, or on their car stereo. The car part is the only think keeping a lot of people buying music CDs.

    Comment by eeidd -

  25. The problem with the subscription model is not the labels, it\’s the writers and artists. If I pay $5/month for unlimited SonyBMG music and I can download any tracks DRM free, how does the copyright holder get compensated?

    I\’m sure there\’s a simple fee/download system but it\’ll be less than what they earn currently per unit.

    Comment by article -

  26. CD\’s of course are not fully dead because we have devices to play them on and so we can listen to the music available on the CDs we have. But the era of CDs is finishing as vinyles discs\’ era has finished some time ago.

    Comment by Karolina -

  27. The CD isn\’t dead yet, but it seems headed that way, which is unfortunate. I blame the record labels. The demise of the CD has everything to do with pricing.

    Sound quality on a CD — 320 kbps — is FAR superior to that available via digital formats, DRM free or not. That\’s why I still buy music that I really want on CD, and use emusic (vbr – avg 160 kbps), itunes (128 kbps) and rhapsody (128 kbps streaming) for everything else.

    Apple recently announced that \”EMI Musics entire digital catalog of music will be available for purchase DRM-free (without digital rights management) … at higher quality 256 kbps AAC encoding, resulting in audio quality indistinguishable from the original recording, for just $1.29 per song.\”

    That\’s not much of a bargain, though, when I can get variable bit rate tunes from emusic for about $.25 each — much better than itunes 128 kbps at $.99. But it still pales in comparison to CD, and when you do the math, a CD runs about $.99 per track.

    For example, I bought the latest by The Shins — $11 for 11 tracks and worth every cent. I bought the Chili Peppers \’Stadium Arcadium\” on sale — $10 for 20 tracks.

    I\’m convinced that people are listening to music more than ever these days, they\’re just not paying for it. That is, they are stealing music because technology has made it easy for them to steal.

    The problem of theft-friendly technology is compounded by the fact that CDs have been about $15 a piece since I started buying them 20 years ago.

    If CDs were priced at $10 each or, better still, $5 a piece, would people choose CDs over digital downloads? I think so.

    The record companies are just too greedy for their own good. Lower their prices and the sales will follow. If the CD dies, they have no one but themselves to blame.

    Comment by Dingo -

  28. This not meant to be ego-fodder…

    but I\’d venture to say that since Apple\’s Lisa and this guy from Cuba who gave us push content with broadcast.com there hasn\’t been a lot of innovation.Just others applying smaller, faster, new, improved stuff. Kinda like groundhog day running into Moore\’s Law.

    BTW, the baseball owners have skeleton\’s their closets. Some things are better for private e-mail/conversation. I\’d love to see Lou Pinella and Mark Cuban together. It would be like having Billy Martin twin-clones. Just kidding. Results matter and anyone who likes losing is probably going to be doing a lot of it…

    Charlie

    Comment by Charles Kelly -

  29. Hello, i am not writting to comment on anything said here. I just want to write to Mr. Cuban and ask him to please buy the Chicago Cubs. I have long admired him and seen what he has done with the Mavericks and know he can bring a winner to a team that us long suffering cub fans have longed for. I know hes a great bussiness man and also know he would make money hand over fist with the cubs and in return give us a bunch of rings. I\’m 48 and i ain\’t die\’in till the cubs win a world series. Mr. cuban, if you read this, please look into this and give us a chance. You want a street in your name?,,,, done. You want a statue?,,,, done. You want to be mayor?,,,,, Well it not we can always wack Daley, LOL. Just come to Chicago and make us a winner like you have with the mavs and the city is yours. For the love of man ! Its going on 100 years,,,,, HELP !!!!! Hope you take this serious Mr. Cuban, we need you. Thx, Bob Claus

    Comment by Bob Claus -

  30. In 2002 as a freshmen at The University of Michigan I wrote an essay proposing possible solutions to the increasingly crippled music busines model. Today I find my key points every bit as relevant….

    1) Couple digital media with physical objects of value. T shirts, posters, concert tickets, autographs, meet the artist events, lotteries, discounts, etc…People like collections. They like ownership.

    2) Improve the technology to improve the music experience. Take advantage of the fact that nearly everyone has 5.1 sound in their home and 5+ speakers in their car. Offer multi-channel music. Perhaps the labels should better cooperate with the electronics auto and perhaps cable / satellite companies.

    ADDITIONAL SIDE POINTS ON THE FLY…
    If the music industry follows Marks suggestion and begins distribution via cable, why shouldn\’t it be 5.1 surround audio?
    Subscription models distrupt one\’s ability to showcase their hard earned collection that required them to earn money and make specific purchases over time. Digital album art does not compare to one\’s physcial CD collection. Yes we love digital music, but we also like ownership.

    Comment by Zach -

  31. In 2002 as a freshmen at The University of Michigan I wrote an essay proposing possible solutions to the increasingly crippled music busines model. Today I find my key points every bit as relevant….

    1) Couple digital media with physical objects of value. T shirts, posters, concert tickets, autographs, meet the artist events, lotteries, discounts, etc…People like collections. They like ownership.

    2) Improve the technology to improve the music experience. Take advantage of the fact that nearly everyone has 5.1 sound in their home and 5+ speakers in their car. Offer multi-channel music. Perhaps the labels should better cooperate with the electronics auto and perhaps cable / satellite companies.

    ADDITIONAL SIDE POINTS ON THE FLY…
    If the music industry follows Marks suggestion and begins distribution via cable, why shouldn\’t it be 5.1 surround audio?
    Subscription models distrupt one\’s ability to showcase their hard earned collection that required them to earn money and make specific purchases over time. Digital album art does not compare to one\’s physcial CD collection. Yes we love digital music, but we also like ownership.

    Comment by Zach -

  32. When I have guests over at my place they\’d love to see my collection, what i listen to, not how many Gigs of digital music i have downloaded.

    Comment by web me -

  33. Hey Mark,

    I started the first worldwide system on Internet TV channels serving every city in the world. We have a staff of 7. It has income revenue plan. some people think i\’m nuts. what do you think. http://www.Theworldchannel1.com
    Jann

    Comment by jann scott -

  34. The CD isn\’t dead, but the conglomerate recording business IS. People are buying more cds than ever…to record WHAT THEY WANT, not the junk that the the record industry wants them to hear. The new business model for music is evolving into a system where you will pay for entertainment like you do for electricity. If business models can be created to support a business like radio, than they can be created in the digital age. The only reason a new business model hasn\’t been created is because old media didn\’t want to lose control of distribution–they don\’t want to deal with the myriad of interests involved, like the electronic manufacturers, ISPs, etc. The indie world, where over half the new music is created, and for the most where ALL of the new good music is created, will eventually work out a solution with the consumers and artists.

    Comment by DudeAsInCool -

  35. Good points Mark – the music industry is dropping the ball big time with regards to their new market place. Charging anywhere from $0.99 to $1.29 a song for downloads via iTunes is obscene! At a buck a song, a 20 song virtual CD is $20.00 – and yet the music company had no maufacturing costs to produce the CD jacket, no need to distribute the CD to a record store – and the customer initiated contact with the website! Until they \’get this\’ and change the pricing of songs accordingly, they are doomed to fail. Gotta love that \’greed factor\’.

    Comment by Michael -

  36. Preferably you\’d want to use DVD\’s, even though it can be hard to copywrite them. I find the best way to protect them is to just write them as if you would with any other CD. Anyone can crack into files these days regardless the quality of its protection. See here: http://www.bemoreattractivetoday.com/ If you will, you\’ll notice the difference soon enough. Or at least, I did.

    Comment by Bob -

  37. The music industry should copy Disney and each artist should issue an album for 2 years…then pull it off the market for 10 years. During that that time, there will be a premium to get copies of those songs, and the black market will hot!

    What?! Don\’t laugh. It\’s better than all your ideas!

    Bottom line is, and I said it before, the money will be made in the carrier/device technology, not the output product/the music file.

    Comment by actinite -

  38. Mark, I wondered what you think about a site like http://www.mog.com? I know the music companies are dying, but I promise you I am buying more music than ever. How? I find out about it from my friends at MOG and Multiply and ITunes, I have an EMusic subscription ($50 per month for 300 tracks, which I burn through every month), and I spend about that much on iTunes every month. So I\’m spending at least $1200 a year, conservatively. And I still buy CDs. But I do not buy a single thing played on the radio, and almost nothing promoted in record or bookstores. I like the MOG model. The record companies need to embrace the long tail, and offer different levels of pricing for downloads depending upon the quality you want. Audiophiles want high quality downloads; if you want them, pay for them.

    Comment by Michelle Tackabery -

  39. I like yer 2nd option*

    I want to bring a Flash-based Widget to Blogs + Websites that will allow Folks to create awesome Visual Slideshows of their Digital Photos accompanied by Music of their choosing*

    It would capitalize on the fact that People are using + deploying the Old Media ie: CD\’s & taking it with them + Sharing it with all their Friendz across Social Networks ala MySpace, Flickr, Facebook, Bebo etc.

    Of course in order to pull this off i need to lineup a Rebel Billionaire!!

    Let\’s get this BillyWarhol WashroomSeXXX World Tour on the Road*********

    Cheers Mark! Billy ;))

    Peace*

    Comment by Billy Warhol -

  40. What I find interesting is that, while the CD is dead, why are the top CDs ones being sold to the Youngest Consumers? Logically, these are the listeners who should be the most web savvy, but the most recent hit CDs are High School Musical and Kids Bop. How does this fit into the trend of decline in CD sales?

    Comment by Phil -

  41. As I stated earlier in comment 40, not only are CD\’s dead, but record labels should be dead as well. They are fighting to protect and maintain a market that no longer needs them for promotion. See the below example.

    http://www.thisislondon.co.uk/showbiz/article-23392052-details/Essex+songbird+is+Top+of+the+iPods+with+her+homemade+album/article.do

    Comment by Benjamin Steger -

  42. CDs are going to be something like vinyl today – it\’s not dead, but it has very limited uses.

    Comment by Sziget -

  43. We have evolved from boomboxes to walkmans to portable CD players to Ipods. Only the shoulder carried boombox made a statement.

    With the advent of the IPOD and other personal audio devices (PAD) the ability to make a statement has been removed. Which is a shame, as much as it may seem obnoxious at times, there is no better feeling than cranking your car stereo or your home theatre / stereo and the like. Why dont the PAD manufacturers (particularly Apple as they have the market share) design an IPOD that can:

    Allow the listener to broadcast (via Bluetooth or wireless) the Meta data of the music they are listening to, to other Ipods in the local area. The client can view what people are listening to via the little screen.
    Allow the listeners to again broadcast random snippets of the songs they are listening to. The client has the option of going into a listener mode in which if a fellow WiPod (I cant claim this name, damn) is broadcasting, they can get a snippet of the song, and also the contact details of the broadcaster (for instance icq #, msn, myspace address, email and the like). The user can then download this information to their PC and chase up the contacts if necessary. Who knows, maybe the WiPod could become a revolutionary dating tool.

    Am I smoking crack?

    Comment by Jonathon Bates -

  44. Your invitation to play LOST:

    http://www.lost.eu/20ac1

    Comment by Your invitation to play LOST: -

  45. I\’m sorry, but the CD is not dead. MP3\’s sound quality is inferior to that of CD\’s. Secondly, I like most of your opinions, but your lack of grammar and puncuation often make someone who is harsh on grammar, hard to get through–both sensibly and just literally.

    Comment by David -

  46. The Web has forced change in a lot of businesses. The music business is sort of like the canary in the coal mine…it\’s out in front, since music is such an easy medium to transport through the Web.

    Comment by maui -

  47. Happy Easter everyone!

    Regardless if your views about Easter are religious, spiritual or secular, please take the time to reflect about the message of peace and goodwill.

    Comment by Kind And Thoughtful -

  48. Thank you Jason and Loren. The CD is definately dead, and the music labels helped kill it. The musicians of old who cared more about their music and concerts rather than image and a couple singles are no longer. The record labels don\’t look for musicians, they look for the next MTV star (if you\’ve watched MTV in the last 10 years, they don\’t play music videos anymore!) So record labels are mad people are stealing music and people who used to buy CD\’s aren\’t anymore, its not a matter of technology, give us some decent musicians who can write a good album, not just 2 songs. Look at the Billboard top ten: Tim McGraw, Mims, the American Idol guy, are you kidding me! There isn\’t any technology in the world to fix this. Everything bad thats happening in the music industry, they deserve it.

    Comment by Eric -

  49. You didn\’t say how you listen to music if not on a CD Player?
    Maybe you did and I missed it. ipod? I don\’t have a player… totally need one… just too penny pinching to get one. I need a player/radio. So many times I am listening to something fantastic in the car (fyi old SUV with TAPE deck no CD\’s) and wish I could play it in my house. But being on a mac sometimes when I try to tune in online it frequently does not work… that might be more the operator (me) than the software. So, no radio or even sterio in my house.

    (Me, Struggling filmmaker working on finishing my first indie feature called FREE to a Good Home, it\’s a fictional story about animal rescue…http://www.fghmovie.com) that\’s who I am.

    I have lately gotten into itunes. And until this Christmas (gift to myself) I never had speakers. So, if I could not find it on itunes, recently I bought an whole Journey Album via itunes…That might \”date\” me a bit. But if I can\’t find it on itunes then I look on half.com to buy it as a CD. I bought two cd\’s so far. And what did I do? Put them into my itunes. And then the purpose of the cd is….????

    But… I totally do not get the whole ipod thing. First I was never a walkman-person. Just did not jive on music blasting that close to my ear… did not really like the effect of not knowing what was going on around me. And to have it in one ear… just did not sound right.

    Interesting.. on a TV show recently, can\’t remember which one, I think it was that new one October Road, the guy handed to another guy a CD and written on it in the insert shot were the words \”mixed tape\” I thought. Hum, are they still called mixed tape on a CD. Which is why I would love to have a radio cd player. And if I had a player I would probably play my own mixed \”tape/cd\’s\”.

    I never had any idea of how the music biz made money anyway…

    AND now… I have no idea of what I am talking about because I have gotten interrupted so many times from work and animal rescue (I am adopting two rescue puppies out today) … I have lost what point I was going to make.

    Ya know it is puppy/kitten season right now. So save a life and go adopt a puppy or kitten from the shelter… Or join the bottle feeder program they are all over the place. I promised my crew of FGH that I would not rescue until the film was completed… I am working on a fundraiser and have to update my website and myspace page etc etc… and rescuing is a distraction… maybe someone in Los Angeles, can jump in and take my place in the foster rescue world until I finish the film.

    Oh I remember one point… you said this
    >>but a tool for people to describe themselves to those around them. We use music in our ringtones, on myspace pages, blasting through the windows of cars to let people know something about who we are.

    Comment by Judy Crozier -

  50. 10 cent songs – then it is less hassle than getting free. We would buy exponentially more. Consume more at cheaper price.

    Comment by Buns and Chou Chou -

  51. Wow! A nice, top quality post from the Maverick. No ranting, no grandiose statements, just a terrific well-thought out opinion. I\’m speechless and hope that every post can be like this one.

    Comment by Ayal Rosenthal -

  52. See, to me, the problem with the music industry has become one of greed. The are not competitive, they are just charging what people I know agree is an outrages price for a new cd. You can buy a movie dvd cheaper than you can buy a new release cd.

    Comment by R. J. -

  53. Way off topic here, but I just saw that you might be interested in buying the Cubs. While you may not be officially commenting on the issue, I would just like to say, PLEASE. PLEASE PLEASE PLEASE PLEASE PLEASE. As a Cubs fan since the age of 6, I would feel so much better knowing the owner of the once-pitiful, now-formidable Mavericks was running things. And I promise Chicago would welcome you with open arms and open wallets (we are Cubs fans, after all). Please?

    Comment by Austin Wall -

  54. Mark

    My comment has little to do with your current topic of discussion. I would appreciate it if you could find the time to peruse my basketball blog. The URL is included with this comment.

    I admire your success and would relish the opportunity to discuss some personal ideas that I believe could revolutionize the impact of the sports blogosphere.

    Thanks

    http://community.foxsports.com/blogs/Hoffman

    Comment by Hoffman -

  55. I don\’t know.. all just bunch of crooks if you ask me.. just my 2 cents worth anyways.

    Everyday Weekender

    Comment by Everyday Weekender -

  56. Kind of off the topic… but you should buy the Cubs.

    Comment by Kevin -

  57. Emerging options for online content distribution are sure to change how many media & entertainment companies do business going forward.

    Anyhow, I thought I would take this chance to pass along an opportunity to have input into the development of this space. If you qualify as someone who makes decisions about distributing content online, Mercer Management Consulting will pay you $100 to complete an online survey about new options and business models content distribution. Visit http://survey.mercermc.com/digitaldistribution to get more info and begin the survey.

    Comment by Jason -

  58. In my opinion of course the drivers causing the dilemma exist within a few points or catalytic events;

    1. Integration of IT into our lifestyles, and the growth thereof
    2. Communication quickly becoming a commodity; this is evidenced by cheaper telecommunication devices, more aggressive pricing plans affecting a broader demographic, and better, more innovative communication devices coming to market
    3. Subsequently to point number 2, as industries commoditize, you see a sharp decrease in margins most of the time
    4. And now consider that the concept of the megastar is quickly fading and now there exist more sub-cultures than ever in our history its not like 20 years ago, when the entire nation tuned in to mega television shows like Dallas, or Cheers and stadiums were packed with mega music stars that stretched across a large demographic. Now you have a very fragmented demographic / market and are considered very lucky to go GOLD now compare that to the dollars it traditionally takes to break an artist on national scale.
    5. Music, very much becoming a means of communication, risks going the way of Voice there was a time not long ago when we all paid 25 cents per minute for long distance and an extra few dollars per month for features like call waiting.
    6. The consistent advent of new technologies and mediums pose a never ending threat to the business. Just today I entertained a group toying with an idea around a social networking site wherein users will host their own reality shows (video) and allow users to come back weekly for new shows posted.

    If you look at the above points in their entirety and then between the respective lines, you can draw some quick conclusions that point to a rapidly changing landscape from every perspective. I wonder what the majors (record labels) think about their future. We are quickly becoming a world wherein everyone is a star, actor, director, music producer think back to the time in the 1990s when companies were paying millions of dollars for the creation of a web presence something that now exist for free and out of the box options include dynamic driven options hmm. I think Cubans thoughts are accurate with regard to the concept of getting people a reason to buy a CD player it just will not be a CD player. It will be interesting to see this play out over the next 5 years.

    Comment by AROD -

  59. In the old days the major labels provided a valuable service. They funded the artists, weeding the good from the bad, they distributed cds and made music available to everyone, and they advertised and let everyone know what was available. However over time they became greedy and started overcharging for their services and giving the artist the short end of the stick.

    With the spread of blogs, e-mail, and searches music fans begin to spread the word themselves about good songs. When peer-to-peer networks came about we began to distribute files ourselves; why waste the time of burning a cd, packing shipping, storing, selling, buying, unwrapping, and playing a cd when at a fraction of the cost you can download it directly. With new services like Sellaband http://www.sellaband.com, Swarm of Angels http://www.swarmofangels.com, and The Strayform Exchange http://www.strayform.com artists and fans can now fund, distribute, and advertise without need of corporate middlemen. This is the wave of the future. Not a new gadget, but a new form of creation that empowers the consumer.

    Even bittorrent itself is seeking an ad supported download system http://torrentfreak.com/bittorrent-inc-introduces-ad-supported-downloads/. But I cannot believe that the revolution of file trading and the entertainment is destined to just be a new avenue for ad delivery.

    Comment by Brandt Cannici -

  60. The problem isn\’t their business model, ok… their business model isn\’t the whole problem. If you look at the number of releases per year, you\’ll see that the music industry is releasing far fewer albums than they used to. Upcoming new artists often get no promotion and their contracts are cancelled when their first album isn\’t a blockbuster.

    The corporate music industry is looking for the next big payoff and is much more interested in finding a clone of than on actually developing new talent.

    The music buying public (above the age of 12 or 13) isn\’t fooled. We won\’t buy the dreck they\’re releasing. I buy as much if not more music than I ever have, but in more and more cases, it\’s from independent artists off their websites. This is actually a good thing since the artist gets the lion\’s share of the profits in this case.

    The music industry in it\’s current form (RIAA and all) deserves the success they\’re having.

    pneil

    Comment by Patrick Neil -

  61. The CD may be DEAD, but the \”Virtual CD\” lives on! I guess my buddies came to the same conclusion : http://www.thevirtualcd.com

    Comment by Alphonse -

  62. cd\’s have been dying for a long time now. the last time i went to amoeba records in hollywood it was packed with 30 somethings, not teenagers or people in their 20\’s. if apple could release an ipod product that could suck down audio files over a wireless network that would present some pretty good features to the end user, especially as the networks get faster. iron maiden on demand. yeah!!!

    Comment by Jordan Blum -

  63. Mark,

    Brilliantly said and I agree 100%. Music companies should look at the big picture and what the industry will look like 5 – 10 years from now and beyond.

    Take a look at my company (Tornadostream) allow music lovers everywhere listening access to their favorite songs. As you mentioned, we describe ourselves with music. Tornadostream lets you tell people what music you love by streaming it from your blog or website.

    Thanks,
    Dan.

    Comment by Dan -

  64. I must be among the last of a dying breed. I still enjoy buying CDs. Opening the cellophane wrapper, wrestling with the sticker which seals the CD case close, then finally getting to the CD and the manufacturing small escaping for the first time… I think I may go buy a CD right now! It only goes to communicate something about me – which is the best point made by this post. There isn\’t enough time for me to read all of the posts, but Mark hit it right when he talked about music as self-expression. And for those of us not able to amek our own albums and our own expressions, we life vicariously through those who express our views and styles. i could care less about the plight of the music industry as long as I have the means toe shake my inner demons out through spastic and loud beats and and rythm filling the room and pouring over my soul.

    Comment by Trple B Honey -

  65. I think any model that forces users to take the good with the bad (i.e. Whole Music Albums, Cable Company non-ala carte packages) is dead.

    People want to be able to buy or subscribe to the exact piece of info or art that they want without shuffling through the crap.

    Give me my ala carte cable!

    Comment by Fractals -

  66. Great stuff.

    Reading your column, I thought to myself that I\’d gladly pay a monthly 5 bucks for unlimited mp3 downloads if the service was made available by my cable company. What\’s 60$/Y for all the music you can chew? Reflecting on this, I came to the conclusion that this 60 bucks is more than I\’ve spent for CDs in the past 3 years combined. Yet, I\’d be willing to shell it for a good quality no-hassle source. Food for thought.

    Comment by jfchabot -

  67. 24 – 23 – 22… some time to respond

    Comment by HERD -

  68. MC,
    Why don\’t you comment on your other investments?
    Or non – investments?
    That would be mighty useful,
    like Nash Steve?

    Comment by HERD -

  69. to Mark\’s point, i can\’t remember the last time i even bought a music CD, never mind a player. someone actually gave me a CD this past Christmas…first thing i did was put everything from the CD on my iPod. i haven\’t touched the CD since.

    i also warned that person that an iTunes giftcard may be more approriate this coming Christmas.

    there\’s gotta be a better way for the music industry to make money, just like there\’s gotta be a better way for the auto industry to create a dependable alternative to the gas-powered auto. the issue is, nobody at the top of the food chain right at this moment is gonna make friends, or get rich, by doing things drastically different.

    Comment by Glenn Laudenslager -

  70. The music industry can make a lot of money if they cut CD\’s. Also if labels make their own site to DL music that is cheaper than every other site they cut out the middle man

    Good points Mark, please beat the Suns.

    Comment by Kevin Clemente -

  71. To me, I don\’t think the format is as important as what I can do with my music.

    I would gladly pay a flat rate to be able to listen to my music anywhere (home, car, office, bus…), like I currently do for tv and Internet. I\’d want to be able to select an artist, album, style, or even a keyword or city (to find local artists) and have the device plan out a playlist for me. Imagine asking for songs that talk about the \’sun\’ on a rainy day? Another option that would be a must is that it would remember my likes and dislikes from anywhere. (a bit like what Pandora does)

    I figure that the artists\’ cut would depend on how many times their songs get played, but it could also be calculated by how many people voted that they liked them.

    Comment by Jo -

  72. When are you buying the Cubs?

    Comment by Omar -

  73. Why not lower the CD album price and market it as the BEST way to get high bit-rate, DRM-free, spyware-free, no worries of potential RIAA lawsuits music for one to rip to their MP3 player? Make people feel like your providing a solution that benefits them instead of ripping them off and you just might help stave off the inevitable while a business model alternative is still being figured out. If all else fail let the Tech companies buy out the majors and turn the labels focus back to artist development as music goes from profit center to cost center. The money made on the Internet from traffic, bandwidth, etc…is ultimately driven by quality content. Nobody, including the music fans wants to choose between a million singers and rappers with nothing separating the professional from the amateur

    Comment by Mitche Reisendorf -

  74. its all about packaging, lets make music stores look like ye old curiosity shops filled with obscure day of the dead TOOL altar box sets or perhaps RICK ROSS crack scales that open to reveal booklets, dvds, and limited edition nike dunks….expand the world of the artist and see the loot unfold.

    Comment by Trevor the Destroyer -

  75. Mr. Cuban,

    I have to say I agree that the use of the CD has fallen by the wayside, and lets be honest, if this ever actually gets to you, given the multitude of people who write and probably read your blog (I am new, and frankly, only came upon it because I am particularly interested in the Music Industry as a whole and how they plan to deal with this problem).

    However, I have to disagree with you that there is no way for the CD to make a comeback. There have been several artists who have made attempts at marketing their CD\’s in different ways, exhibit A. Beyonce Knowles released a Special edition CD for her \”B-day\” album. Though It bothers me as a consumer that artists might potentially hold back from releasing these other songs, I see where she was coming from.

    Beck released his cd \”Guero\” in a deluxe version as well, where it achieved Gold status (his highest album sales total ever) in 2005– after the cd began to die.

    Panic! At the Disco released, just last year, a deluxe version of their album complete with several items that went along with their Vaudeville theme.

    Do I feel that any album will ever achieve such global phenomenon as Oasis\’ \”(Whats the Story) Morning Glory?\”? Probably not, and part of that is due to the internet and the fact that anyone can get a cd after its release (and sometimes before, i.e. Fall Out Boy\’s Infinity on High) but at the same time, I don\’t feel that music now is as global as it has been in the past– there is no one defining genre of music that 19 million people can really identify with.

    As slanted of an opinion as that may be, I would like to bring up yet another opinion. Music, like you stated is more than just listening to the sounds and the words. As my mother stated, it elicits feelings of euphoria and deep sadness, excitement and boredom. At the same time, there is a large group of people who still find it important to purchase the physical cd– much like there is a culture that believes there is a more organic sound to a vynil recording. For people like me, I feel that the album art (the physical copy) is part of the art that is created by the artist, part of the message conveyed by the artists themselves.

    Perhaps a new medium for listening to music is necessary for the music industry to make a comeback, but look at what MusicToday is doing, they are putting money back into artists pockets (isn\’t that what many of these guys are in it for anyway?), but at this point, nothing can protect against a hard drive failure. there is no legal way to hack into our iPods to bring the music back afterwards. The physical copy of the Compact disc is the only way to do so, and for those of us who really cherish music and the artists intended portrayal for what it is, I say the cd lives on, perhaps the light is not as bright as it may once have been, but everything has its high points and eventually dies out in the end (internet boom?). I see where you are coming from, and I understand your sentiments, but if you ask me, as long as live music remains and passion for art remains, I think the artists will do just fine.

    Comment by Robby S. -

  76. Mark,
    I agree with some of your opinions, but I think you are missing a crucial part of the music industry: concerts. Obviously the industry needs to do-away with the compact disc model because its just not convient anymore. Why do I need to go to the record store, unless I\’m buying something vintage that has more value to me than just the music? I can use Itunes, I can download illegally. However, I worked as a booking agent for a few months and I came to a realization, you cannot steal the vibe that captures a concert. The industry needs to revamp its compensation style. Right now as I\’m sure you know, the labels pull most of the money from albums and artists make their money in concert revenue. I think the labels should concede more money in royalties and then take more of a cut in revenue from shows, merchandise etc. The Other idea and I that I think the labels should invest in to save the industry is instead of American Idol: Song writing Idol. (a version of which I own a patent to) Take all those unsigned bands on myspace, take them from purevolume and put them in the public eye. Let the people choose who they want to listen to and I think you\’ll find sales in albums will go up. People aren\’t exposed to enough good music. Thats what it comes down to.

    Comment by Ryan -

  77. The industry should embrace DVD Audio. They can inlude plenty of extras, and even DRM. The players have to get a lot smaller though.

    See: http://en.wikipedia.org/wiki/DVD-Audio

    Comment by Hashim -

  78. Mark, it looks like EMI is listening to you.

    Comment by Michael Ferris -

  79. There is one reason to continue buying CDs — for the real audio nuts who don\’t want lossy compression. Some music is available online with lossless, but it is nowhere near all music.

    Comment by D. from Weston, MA -

  80. This might be a stretch- but heres an idea Ive had- since music and movies are soooo easy to download now a days, the only way is to go along with the flow. movies are approxiamately 100 + mbs to download.. what if each song is stretched to the same size file of movies, that way not many people will be willing to download such huge files! A song usually consists of 2.5-5.0 mb\’s. I know it may sound like it cannot happen… but it definitely is a possibilty. yes- people will have to buy more hard drives (which have dropped in prices DRAMATICALLY), but it will spark the life of sales once again-and even better if cd\’s prices drop to below 10 dollars.

    Comment by philip -

  81. PART II: Is the music industry really hurting?

    Is the music industry REALLY suffering? I say no. I believe they are making more money now than ever. Is Rower Record hurting? Obviously. Are CDs dead? Maybe not yet, but they have two feet in the grave. Is the music industry hurting has much as they say they are? NO WAY. For every penny the lose to piracy they make a dollar from iTunes and royalties.

    Those guys are smart. They are lobbying in congress and lobbying to the public. They are crying wolf…sort of. They might be losing millions because of piracy, but they are making billions to make up for it. They want you, and more importantly Uncle Sam to think they are hurting. If they are hurting they can gain sympathy and get more laws in their favor. I argue for money that is rightfully theirs. You may not like it, but thats the way the world works.

    The music industry isnt going anywhere folks. The distribution channels are changing, CDs, DVDs, and even hard format video games are going to be gone SOON. But the music industry and pay-for-music will be here for a long time to come. They make billions and are just trying to figure out how to make trillions.

    They have stumbled, but they are learning, albeit slowly. Long live music, long live capitalism.

    Comment by Brad -

  82. PART I: Music ain\’t gonna be free
    This is a house of cards. I just read half a dozen posts that say \”people won\’t pay for music\” it\’s got to be free.

    If you really thing the best musicians in the world are the ones making all the money in the world you are sorely mistaken. A great musician doesnt always make great music. There is production, writers, promotion, etc. All that stuff costs money. You can have the best band in the world out there, but it still takes big money to make music for the masses. Garage bands have been able to make their own CDs for years and they have had the ability to distribute music electronically for nearly as long. Yet you dont hear of any garage bands with out a lable. Why? Because it still takes LOTS of money to turn out great, marketable, music.

    Which leads me to the comment about no need for record labels. There are some smart business savvy musicians out there…but very few really know how to distribute to the masses. There will always have to be some kind of middle man and middle men cost money. In theory its nice as consumers to have choice. But, there is a limit. We cant have an infinite number of choices. The fact is, we have to have someone narrow our selection for us. Do you really want to go to freemusic.com (made up name) and sift through the music of every garage band out there? It would take you days to find one or two good tracks. Are you really going to rely on consumer reviews and ratings to pick your music? Just got to any moving rating site (I like movies.yahoo.com). Have you ever tired to read through those? Its impossible love it, hate. And of those people never even sway the movie. Sounds good in theory, but it doesnt really work.

    There has got to be business behind music. And if we want good music we have to pay for it. The model is going to be turned on hits head, but sorry to say folks. We aint gonna have free music. If music were to be free, then there wouldn\’t be money to support the business side and you\’ll be stuck listening to under-produced garage bands that sound like the recorded their music in their garage.

    Comment by Brad -

  83. I think the CD can hold on a while longer simply due to the fact that not everyone has the bandwidth required to pull songs off the web. I do see something like going into a record store (hehe, showing my age) and picking from a list of songs from all sorts of artists and having the CD burned right then and there.

    Comment by Xytrex -

  84. MC, I like your forward thinking posts. I am a music fan and music maker. Times are changing for music fans and music makers. I can produce music for a fraction of the cost that I did 5 years ago. I can promote what I do on myspace and your favorite \’gootube\’ for free and anyone in the world with an internet connection can check it out. Technology should serve the \’soul\’, if it does it is on the right track.

    Comment by E.L. -

  85. Your post states a realization that many people had 5 to 6 years ago; specifically when Napster became popular. The answer is, there is no answer. You can\’t get people to buy music when they can get it for free with no consequences. The business of selling prepackaged music, in any form, is a bad long term investment. And you know what? I like it. Let\’s have a permanent revolution.

    Comment by McM -

  86. One of the biggest issues with the current state of the music business is the fact that the major record labels continue to operate in a 1950\’s business model.

    The totally missed the technological highway to digital media and, even today, simply do not understand how to incorporate it into their way of doing business.

    Their archaic method of promotion is even worse. They invest untold hundreds of thousands of dollars in discovering talent, recording them, and then promoting them to broadcast media (mostly radio) in hopes of airplay, listener acceptance and ultimately, sales. This worked fine 40 years ago. Today, the environment is drastically different from many fronts. Radio stations are corporatly owned and programmed often from regional or national offices. Opportunities for \”regional\” discoveries are almost impossible. Getting exposure from a national group by an undiscovered talent is even more difficult. Smaller market radio stations are often programmed by sattelite fed programmers like ABC, Jones Network, or others with a \”one-size fits all\” mentality.

    If the public knew how much money is LOST annually by record companies through this process they\’d be amazed. The only thing that drives it is the occasional (even more occasional by the day) breakthrough artist or group that exceeds all expectations and for a fleeting moment makes money to cover the ill-advised budgets of the record companies.

    Interestingly as well, few if any, record companies do little or no advance research on upcoming releases. It\’s amazing to think in this world of business that a company would simpy continue an effort which is essentially \”throw it out there and see if it fly\’s\”…but that is still what they do.
    One would think before they spend these thousands and thousands of dollars, they would do a simple focus group or callout or something to see what the public wants.

    Am I sad for the record companies? Absolutely not. Am I sad for artists and consumers who are the losers in all this? Absolutely yes.

    Why would A N Y O N E pay for music when you can still go on a variety of online sources and STEAL it? Sure they prosecute a few, but ask any college kid if they\’ve downloaded music and you will get your answer. Of course they have, often THOUSANDS of songs, and once obtained, they are theirs FOREVER in digital media that can be transferred within seconds to any current or future media playing device…not to mention…shared with anyone who asks.

    Much of the damage is done and is irretrievable.

    For new and future music, the industry must get off their ass and figure out a way to be part of this revolution instead of ignore it and stick their heads in the sand hoping it will go away.

    It hasn\’t – it won\’t.

    Comment by Steve Eberhart -

  87. although not completely dead- the cd is no doubt on the downswing. but i cant be the only one who checks in at best buy or wherever else to look at new music. i go by once a week just to check what they have on sale especially at best buy where they routinely have new releases for as little as $6.99.

    granted a lot of the cd\’s that are priced that low are from emerging artists, or those a little under the radar, but that is the kind of music that i am enjoying at this point in my life.

    i think you can also make the case that those emerging artists are the only ones who are reaping rewards at the cash register. modest mouse, the hold steady, augustana, etc are charting very very high becuase i think of the $9.99 or lower cd price.

    of course the big pop artists are going to continue to move a lot of units, but far fewer than they used to. gone are the days when a pop band like n sync can sell 2 million copies in a week. or eminem selling well over 1.5 million in the opening week.

    in the end i think that the decline of the cd is going to be good for music. no longer are we going to have labels signing flash in the pan artists who have one very popular song and the rest of the cd is crap because people wont buy it. they will buy the single on itunes and ignore the rest of the album. that does not lead to longevity of a music act and they will quickly go the way of the buffalo.

    lastly, i dont think that the cd will ever go completely away. i will still buy the cd\’s of my favorite bands (coldplay, dave matthews, pearl jam, etc) because i like to look at the pictures, liner notes, etc. i also like it for collection reasons. i think that it is cool to have every release by your favorite artists. and to have them physically is much more relevant than just files on your computer. for that reason i dont think cds will ever go completely away.

    music is also something a lot of collect- and all collections need to be physical in nature because no matter what we collect we like to show it off.

    Comment by kyle -

  88. The CD may be dead, but it\’s still my preferred way to buy music. Better audio quality than iTunes, and no DRM. I hope it at least sticks around like a zombie till I can download something at least as good.

    Comment by Dave M -

  89. I agree with Tyler…phones are the future.

    Comment by J Sandifer -

  90. The music industry is just that: an industry. The notion of producing great music is pretty much dead. It\’s all about moving units. For a long time the labels have been able to skate: people would buy all kinds of old crap from their childhood. It\’s good stuff that they still love but most people already have these collections filled and they don\’t need or want anymore. They also pretty clearly don\’t want the crap that\’s aired on the radio these days.

    This leaves two options: 1) non-DRM\’d music made available at HIGH quality (afterall, if I can just get the CD and get the music without DRM, why bother with anything else?), and/or 2) release a new high def music format. Sony already tried this route with SACD. It offered much better sound quality than regular CDs AND also provided 5.1 channel sound. The SACD version of the Dark Side of the Moon will blow you away. Unfortunately, it was a Sony proprietary format and as is always the case, Sony proprietary formats always fail. If consortium of companies could agree on a license free standard for this, it would sell. It would also sell new hardware. There are tons of people now with 5.1 music sound systems and if the labels offered these disks WITHOUT a \”I\’m a greedy a-hole surcharge\” (which is near impossible for the RIAA), they would make a TON of money. It\’s important that they go for the same price as regular CDs. It\’s also important that they don\’t have DRM. That would kill it.

    There are options but the RIAA will never go for them because it requires them to take a leap of fate and they only know how to hold onto the past.

    Comment by Sam -

  91. I\’ve pondered this question many times. I think the flash drive idea is good in theory, but until we have a universally excepted device that acts as a computer/TV/stereo, it will not work. However the subscription thing, which isn\’t a completely new idea, set off some light bulbs. I think the next big thing in music is non-distributive rights. In other words, we will have access to the music but we will not own it or be able to distribute it in any way. With that, the labels will have to be willing to give and take a little. Consumers give up the right to own and distribute, and the labels agree to more modest pricing (Which they will re-cope from not distributing CDs). I think the service provider format is particularly provocative. It would allow subscribers to create custom play lists and listen to whatever music they wanted. They would have no rights beyond that. I think there are companies doing just that with an internet model. Because of bandwidth issues, these companies have to make the streaming file size smaller, decreasing quality. Its really about a paradigm shift. People like tangibility, so it\’s also psychological. Most people like and use the digital music channels provided by their cable or satellite service provider because their TVs are usually hooked up to an elaborate speaker system/ entertainment center. In order for this format to work for personal music playback devices (i.e. iPod) it will take some more reliable/innovative content protecting programming. I would pay an extra 5$ a month on my cable bill for such a service.

    Comment by Andy P. -

  92. While you\’re concluding statement is 100%, the CD is dead, that is only half the story. What the record labels are fighting, and fail to realize, is that THEY are dinosaurs as well. Musicians no longer need music labels to promote themselves (only to run their tours). I\’m surprised you have not realized that there is virtually no use for a record label anymore. Related to this URL (

    ), this band\’s record label was doing nothing for them, they made this little video without the record labels knowledge and they became instantly famous (not a bad song either). Record labels contend that stealing from the big bands by downloading illegally hurts the little band and the record label\’s capital, which is used to find those bands. Well, in the new century, that capital is no longer necessary, bands can use myspace, and other sites to promote themselves. So, as we will all witness in the coming years as the record labels fight for their revenue, and thier lives, they are no longer necessary. The record label is dead.

    Comment by Benjamin Steger -

  93. You say:

    \”One of two things has got to happen. There has to be a new financial model that excites music consumers into spending more money on music, or there has to be a technological advance that creates a new experience with music.\”

    I\’d also add a third option: A new musical model, where the labels actually distribute music that excites listeners. Part of the problem here is that the labels got used to a megahit mentality and persist in thinking they can make a killing off of huge hits and repackaging back catalog. We\’re not in that era any more.

    Comment by Oren Sreebny -

  94. There is one area of music that is booming, and that is the \”live concert\” and the \”mega-tour\”. Those talents which basically have an in-elastic demand schedule – basically price does not respond to supply – are finding that going on the mega-tour by definition avoids piracy problems, evokes Mark\’s thoughts on \”letting people know who you are purpose\” in music in the most primary way along with a ritual of shared experience affirming group identity, and provide full franchise monetization.

    So I think along with what Mark said, the music delivery which swings into alignment with the live performance feel will dominate and supplant CD sales. Special one off DVD sets will start to be important in \”concept\” box sets will be important adornment for one\’s shelves, answering again, who am I. Production companies like \”Coming Home Studios\” will become important and, in some cases, replace the record labels.

    Look will become important again – which explains the resurgence of such acts like Prince or even Kiss.

    So, rather than a technological centric view, I think we should examine that the quality of the act will yield specific monetization of which the talent will realize – identify what form that monetization allows, and then consider our disctribution channels that either compliment or augment.

    Comment by George Robertson -

  95. I\’m suprised no one has commented on today\’s announcement from EMI and Apple ::

    \”EMI to sell entire music catalog without DRM, higher quality; Apple first to sell new downloads\”

    http://macdailynews.com/index.php/weblog/comments/13165/

    Comment by Scott L -

  96. Mark-

    What are your thoughts on the single vs. album issue. From the 1950\’s through early 1980\’s most pop songs were available as a single. The record co.\’s got smart and realized that they could make more $ when selling entire albums. This business model has been pretty consistent (except for a short time in the late 80\’s early 90\’s with tape singles) forcing the consumer to purchase the entire album for an artist. Only recently, with the widespread availability of downloadable singles, has this purchasing method been available to the consumer. This is bound to lead to a serious $ crunch for the record co\’s.

    When the \”best\” albums only have 4-5 marketable singles (at 99 cents a piece) the record co needs approx 3 people to purchase ALL 4-5 singles to equal the revenue from one album.

    One thought that I had (from a business perspective and NOT the consumer perspective) is to charge $3-$5 for new singles out less than one year. Price the on-line album at $10-12. In its current form, there is little incentive for a consumer to spend the money for the entire album when you can pick and choose ONLY the songs that you want

    Comment by Blaine Bizik -

  97. What are your thoughts on the single vs. album issue. From the 1950\’s through early 1980\’s most pop songs were available as a single. The record co.\’s got smart and realized that they could make more $ when selling entire albums. This business model has been pretty consistent (except for a short time in the late 80\’s early 90\’s with tape singles) forcing the consumer to purchase the entire album for an artist. Only recently, with the widespread availability of downloadable singles, has this purchasing method been available to the consumer. This is bound to lead to a serious $ crunch for the record co\’s.

    When the \”best\” albums only have 4-5 marketable singles (at 99 cents a piece) the record co needs approx 3 people to purchase ALL 4-5 singles to equal the revenue from one album.

    One thought that I had (from a business perspective and NOT the consumer perspective) is to charge $3-$5 for new singles out less than one year. Price the on-line album at $10-12. In its current form, there is little incentive for a consumer to spend the money for the entire album when you can pick and choose ONLY the songs that you want

    Comment by Blaine -

  98. The boombox made more of a statement than the ipod. Huh? I think you should rethink that. What piece of technology can you think of that makes more of a statement than an ipod. There are plenty of other less expensive while easy to use music devices. But the ipod is still king. Why? Because it makes a statement. It\’s cool.

    Comment by Scottt -

  99. Want to know the best way to get free CD-quality DRM-free music? Simple… Check out the CDs you want from your local library.

    Comment by Patrick Hillman -

  100. The labels have proven themselves poor stewards of the recording industry. They have reduced music to the status of a loss leader. In this day, labels are nothing more than ad agencies.
    The problem with subscription plans, at this time, is much like the situation on the publishing end and the way ASCAP collects performance royalties. It works on estimates of percentage of sales per artist. It\’s great if you are a huge artist but, nothing goes to the small artists.
    The future is in DPD whether it is MP3s or some other file format.
    If there were a truly level playing field (if true indies could really make a dent), there would be a lot more fresh music that consumers would be aware of and thus, the long tail theory could apply to music sales.
    There are two problems at present.
    1. An indie can not release a single song to Napster or ITunes; it has to be a full album and then go through a third party such as CDBaby. The DPD world is evolving as a single driven business rather than a full album market and indies are not allowed on the playground.
    2. There is no viable micro-purchase credit card portal option. If an artist wishes to sell downloads of single songs on his/her own website, the best they can do is PayPal and they charge 33 cents per purchase on a 99 cent download. This more than offsets the traditional cost of manufacturing per song and, without a doubt reduces the quality of music production. Obvious;y this would cut into any type of advertiising budget as well.

    If these two things could be rectified, it would offer more choice to consumers on their DPD purchases. Market data bears that this is the desire of the consumer. The percentage of physical CD sales to major artists is huge while, DPD sales are spread more evenly between big labels and lesser-knowns.

    Comment by Jack Pribek -

  101. I still buy and listen to whole albums (CDs). I hate compilations and single tracks. At this point I am mainly buying/listening to a less-than-popular niche — Progressive Rock, including a lot of obscure, imported stuff (like \’70s Italian prog). I\’m not paying more on my cable bill unless they can deliver this to me. Digital Downloads really aren\’t an option for this stuff. Vinyl never completely went away, CDs won\’t either.

    Don\’t buy the Cubs, buy the Pirates and/or Penguins…

    Comment by Llarry -

  102. Mark – Are you going to buy my Cubbies? PLEASE!?!?!?!?!?!?!

    Comment by Mike -

  103. My comment is unrelated, but I didn\’t know where to post it.

    Mark – Whats the chances that you\’ll be buying the Cubs now that they are officially for sale?

    Comment by Chad -

  104. Mark, I come from a different place on this topic. We all know that the demand for entertainment, in particular music has never been stronger, yet the business of music has never been weaker.

    The notion of promoting a CD is tied to a long standing product-centric business model one with controlled production / artists and channel distribution. We have all watched the commoditization of music through this model it has evolved from Art to product and now content. It is called content for a reason technology and technology platforms have made music readily available and an infinite commodity (this is a very hard reality for artists).

    Caging content within a technology platform (DRM) makes sense if youre married to monetizing a product. And unfortunately, this aging business model only encourages copyright enforcement as one of the last remaining sources of control.

    Old business models not only get hardening of the categories they inevitably are unable to cannibalize old product cash streams and transition to new revenue streams. The recording industry is trapped in this caretaker approach. The sadness for me is that it is taking down the artists with it.

    There is an opportunity to give this industry back to the artists. The tech industry has learned, better than any other industry, how to evolve business models in the wake of commoditization. I submit that there are richer revenue sources for artist in a services led model the industry cant see the forest for the trees.

    There are many fundamental changes that will occur when you approach the problem from a perspective of monetizing your fans versus monetizing your product the solution looks very different from where the industry stands today. The offering will change, the millennial generation will force copyright to copyleft format will not be an issue, artist agreements will change dramatically and the services model will have significant impact on other industry sectors.

    Comment by Scott -

  105. My dream is to have conveniently located and abundant locations (bookstores, eg) where I can take my removable micro storage thingy (thumbdrive eg) and have ALL music available for downloading from a local and very very fast network .. I\’ll pay per song and there will be no expiration .. that is my dream.

    Comment by Names -

  106. yeah – I do believe soon are the days where ; \”getting signed\” doesnt mean you produce 1 good CD, then drop out of sight forever.

    – thanks god, RB

    Comment by pallet jack -

  107. These big labels in the music industry are going to have to make some major changes to their business models. Artists have found that they don\’t need a big label to make these days, with how easy it is to market themselves online. With distribution companies like Nettwerk (Nettwerk.com) popping up, the need for a music label has almost disappeared. Artists can network with millions of people on MySpace alone. The music business has one major downfall working against them. They have been doing things the same way for so long that they make changes at a snails pace. They think suing people who are working against their model is the answer. What they need to do is break down the whole system and start from scratch.

    Comment by Chris Wilson -

  108. And lets go back to the \”Earth is Flat Model,\” while we are at it. Mark, stop trying to think of ways for the gatekeepers to keep skinning consumers for services that we don\’t need them for. the old models are dying and the new ones are coming without them. Let the people decide what they want without a layer of middlemen trying to control it. You love the whole control DYNAMIC…. but we don\’t and will fight you gatekeepers every step of the way.

    Comment by Rat -

  109. The majority of people under the age of 20 don\’t have credit cards. This is quite a large target market for the music industry obviously. So how does this group buy music online? By vouchers they buy in a store? Why? It\’s just an extra step, the kids could probably step into the same store and walk out with a CD instead of a voucher to buy some music via iTunes.

    Until the music industry figures out how it can sell online music to kids without credit cards it won\’t be able to kill off the CD. While most kids probably do download music, it\’s probably done illegally because A. they can save money and B. there is no simple way for them to buy online music. Was the iTunes voucher much of a success? I doubt it, at least not enough of a success to kill the CD yet.

    And this is why the CD will live, at least for the time being. There is still a large target market available to the CD, because of their inability to buy online music. The only alternative is to illegally download music, which is happening now.

    Comment by Lachlan -

  110. Buying music online is currently a worse experience than buying music in a store. Online downloads have DRM and sometimes no liner notes. The only reason to buy music online is convenience.

    Here are two ways the music industry can improve the experience:

    1)Attachments to Audio Files

    Online music stores can attach almost everything they want to downloads. Album or song purchases should be attached to tour schedules, artist stories and biographies, videos, games, screensavers, drawings, desktop backgrounds, coupons, anything of interest.

    2) Redefinition of Audio Files

    Songs files can be made for more than listening. Fans like to interact with their music. What if you could download a song file, and then sing karaoke with it, play the guitar solo from it in Guitar Hero, dance to it in DDR, create your own music video for it, remix it and resell your reproductions. All of these abilities in a single interface.

    Online music stores are slowly moving towards some of these improvements… they need hurry up.

    Comment by Jake Bialer -

  111. I don\’t know about the US, but here in Germany the trend among teenagers is to use their cellphone the way teenagers in the 80s used their boomboxes. Everyone who uses public transport here has seen (and is usually annoyed by) kids playing music on their phones in the subway or in busses. It started with ringtones, but now that cellphones have all the capabilities of MP3 players they can play complete songs. Main problem are the horrible speakers, which makes it sound really awful, but I guess the phone manufacturers are working on it. Or at least newer phones from Nokia now include things like \’stereo speakers\’ on their feature list.

    Comment by Tim Jansen -

  112. Not only is the CD dying, but the iPod and other purely portable music players are dying along with them. I think Apple has figured this out with iPhone and will actually accelerate the death of these devices. Why is this? Well, as soon as my phone has a slot for a 4 GB flash drive and then eventually has a 60 GB hard drive I no longer need my iPod – my music and videos are now on my phone.

    I recently added a 2 GB flash drive to phone, which holds 480 songs, roughly 24 hours of music if I fill that up. Sure, it\’s not every song in my library, but it\’s all the songs I\’m into at the moment. And most of my music is listened to on flights and I\’m rarely on a flight that lasts longer than 5 or 6 hours. The only thing I use my iPod for is the gym, and that\’s because I like the small size of the shuffle and I don\’t have an arm band for my phone.

    As for the music companies making money on music – make it DRM free. I don\’t know what revenue model they should use, but just do it. The only three places I buy my music are eMusic (DRM Free), AmieStreet (DRM Free), and iTunes (I have a crack for the DRM) because with these services I can move my music to my phone, computer, iPod, and mp3 disc player in my car.

    The second it becomes difficult for me to put the songs I want on these three devices, the second I don\’t buy the songs.

    Comment by Tyler -

  113. CDs are not dead just yet. I have an ipod but i still collect classic albums, you know the artists you\’d love to listen to over and over again, not the commercial albums being released nowadays.
    When I have guests over at my place they\’d love to see my collection, what i listen to, not how many Gigs of digital music i have downloaded.
    Creative album art also counts for alot – Common: Like water for chocolate, The Roots: Things Fall Apart, Talib Kweli: The beautiful Struggle etc

    Comment by shook_1 -

  114. \”The CD is dead.\” It may be, it may not be. I thought over the past few years that the record companies would market music on SD, Memory Sticks, Compact Flash or even thumb drives. They have yet to do so. Why? Beats me.

    One of the things I remember my father saying about CD\’s when they first came out is that cover art sucks, it was going to be too small for the bands to express themselves artistically compared to records. Try looking at Sjt Peppers album cover on a CD. Its kinda like the tiny cell phones, at some point small products become un-useable and easily misplaced.

    I believe the jewel case will be about as small as it gets when it comes to packaging. I miss going into Bills Records (moved away from Dallas) and looking at all the awesome album covers (ok, some not so awesome). But part of the deal with getting a record was the cover art as well as the music. Not so much any more.

    Another reason I believe the CD will remain is for concerts and live shows. How are you going to ask Roger Creager or Jason Boland or any band to sign a digital mp3 or a SD Card. Live shows are about the only time I buy a CD any more and that is just because I want to get the band to sign it and keep it as a memory.

    CD\’s & DVD\’s & Blurays, etc will remain because we are materialistic and want to show people that visit our homes our \”collections\” of stuff. It is not the same to show it on a computer screen, or HDTV linked to a computer because it is not as easy to quantify disc space as it is wall space. Maybe the media will change but at least I believe the jewel case is here to stay (I hope, for as much as I hate the bulky things).

    As for a new way for the record companies to sell players… look toward Apple and Archos.

    Comment by Nicolas -

  115. The CD is dead, and the DVD isn\’t long-lived either. Streaming, or on-demand, or downloadable is where most of this stuff is going. Who wants to buy a physical tape or disc when they want it stored on their computer, iPod, or on their car stereo. The car part is the only think keeping a lot of people buying music CDs.

    Comment by basketball -

  116. The problem that the music industry is having isn\’t just one thing… but I think Jason is onto the critical factor. Its not a technology issue. The music industry should be about producing great music.

    Have you seen this PBS Frontline report about the music business. http://www.pbs.org/wgbh/pages/frontline/shows/music/

    Comment by Loren -

  117. When was the last time you put in a cd or album (or loaded a one album playlist in your ipod) and listened to it from beginning to end… even better… that you listened to over and over and over.

    I miss \”great\” music and artists, ones that made me want to play the whole album over and over and over… What I get now are 30 bands and I like one song by each. No need to buy CDs. I agree CDs are done. Yes I know they are still a huge part of profits for bigger labels, but I\’ve been able to attract great artists, give them control and actually let them make money by doing what they love. It\’s not rocket science. Great music translate into sales.. some over time, some right away.

    In short, the crap music that is being thrown out has a major factor on slumping CD sales, too.

    Comment by Jason -

  118. Mark, fear is holding big time record industry execs from taking the leap into the \’cable subscription\’ model you suggested. Music industry profits are suffering, but as long as this affects every label then each of the execs has an excuse to offer their shareholders. The first one to take a huge leap into a subscription model will either be a huge success or a huge failure. If the first does succeed, the others will be able to jump right in and follow suit without anywhere near the risk of the first. Who will be the brave maverick that puts it all on the line?

    Comment by Spencer Ferguson -

  119. Hey Mark, I gotta say give me a break. I mean pirating to a certain extent should be illegal enforced but at the same time when I read : what really needs to happen for the music industry to prosper ?
    Does this mean that record companie CEO\’s are going to be on the skids and such? I dont think so. I think it just means they dont make as much as they used to . Its hard for a glutton of any kind to cut back until you realize, Hey Im ok. Greed is part of corporate america,granted but to say that these guys are taking it rough is like feeling sorry for Ford Motor Company after they ve been putting it to people for years with over pricing and legal ripoffs. Thank god for competition, I love to see greed it self. Thanks for the thoughts.

    Comment by Frankie from Lawnside -

  120. Well, the problem with music distribution is actually more complex than simply adding a fee to a cable subscription or to hope for something out of left-field. The music business still derives over 92% of its revenue from CD sales. The rest of the revenue comes from various licensing agreements and for-fee downloads. In a multi-billion dollar business, it is not easy to simply walk into one\’s shareholder\’s meeting and declare \”I\’m cutting the legs out from under our revenue stream\”.

    Furthermore, music piracy is a problem that cable bills or for-fee subscriptions simply cannot resolve. Piracy comes in two primary forms, from the predominantly young (without access to cable bills or interest in for-fee subscriptions, regardless of how tempting that may be) and from systematic piracy in foreign countries.

    The DRM model is good, only until you burn a song to CD, then you are free to copy it as many times as you wish.

    I think the model that seems to offer the most benefit to existing distribution channels (including the thousands of independent retailers) is direct to device distribution via retail outlets, over-the-air receivers with e-commerce capabilities and networked distribution via statellite radio, cable TV, etc.

    The first step in making music distribution more profitable is to recognize the changing format of music ownership, and take advantage of the reduction in physical distribution (and return) costs.

    Comment by kacz -

  121. The CD is first and foremost a bundling format, just like the LP before it and convenience formats like cassette and 8-track. If there were 2 good songs on a $10 CD, then the implicit price of each of those songs is $5 each, not $.99 like in the iTunes Store. One reason the industry is pushing this tale of woe with CD sales is to gain some leverage for negotiating with Apple and other online music retailers over pricing. I see the music industries\’ point and suspect that unbundling is the big revenue culprit. However, I disagree with a solution where they set prices of individual tracks. I would prefer that they set percentages and give the resellers the right to set prices and compete. Especially with competing DRM systems, it should be totally possible for store A to sell track A at $5 while store B sells it at $1 and both do just fine. Store B then realizes it\’s leaving money on the table and prices closer to $5. Follow soda prices in grocery stores to see how price insensitive many consumers are at these low price points. Call it the Desani model or the Starbucks model… The music industry needs to take something that can be had basically for free and figure out that they can put a premium price on it, make it cool, and people will buy it.

    Also, there\’s got to be money in mixes. For example, my favorite road trip music right now is the Nike + iPod mix from The Crystal Method. Followed closely by some of dj steveboy\’s podrunner podcasts. Yet the music I follow and know about is alternative and rock rather than techno and dance. But I\’d easily drop $10-$15 on a long format mix for the gym or the highway. Go figure.

    Comment by Brad Hutchings -

  122. Could not agree more, except to say I think that I think there will always be a small niche market of audiophiles who will invest in hard media formats.

    Comment by superdave -

  123. It\’s a simple issue for me – music propogated through viral marketing. It\’s social content. When it became clear in the 90s that the publishers of content were interested in the money and not the social impact or quality of their content, I stopped giving them my money and never will again. I don\’t care how cheap it gets. While the industries act as a vehicle for distilling quality that level of quality has dropped dramatically chasing dollars with sensationalism. Creativity is subjective and thanks to the Internet there is plenty of content to sort through that I don\’t have to pay for, that I don\’t have to line the pockets of an amoral narcissist looking to exploit consumers any way they can.

    What should the labels do? Isn\’t it obvious? Their value is in distilling quality – specifically working with untrained artists to help them polish their skills. Labels should be seen as clearing houses for quality. How can they make money off that? The masses. The masses will contniue to use services like iTunes and will look to labels as channels for for style or quality. Publishers are branded channels, loyalty to them will come in the form that fans have towards producers and content creators such as Robert Rodriguez and Tarantino. That\’s user generated content coming from users that succeeded comercially. George Lucas is another example, but he\’s exploitive even of his employees. Robert Rodriguez is the new Lucas.

    It\’s about the content, not the market, as soon as Publishers realize the market is just a wave they are riding and can\’t control in age of free media they can be more adept at seeing where it\’s taking them, not where they think they can take it. They need to follow the consumers, not corral them like cattle and feed them garbage because it\’s cheaper and makes them more money.

    What the labels need to understand is how to profit from maintaining a dialog with the consumers rather than a monolgue. The fact that Amercian Idol sells any music is a testament to that – and it\’s all garbage. My best idea follow suit with the buy once idea being played with. The idea is if I pay for a movie I get the DVD too. Why not extend that to music. Pay for a film, get the DVD/download and the soundtrack too. That would sure encourage me to spend money I\’m not spending now. Musicians would make money as a form of film marketing and licensing, which is all their music does for a film anyway. Soundtracks and collections are also a great way to distill quality. Otherwise I can\’t think of a music artist or label whose pockets I would want to line – they do not have my interests in mind, all I want is their content, not to sustain their culture exploiting existence so some marketing exec who created Brittany Spears can live in a 20 Million dollar house in Bel Air while I struggle just so I can listen to a track that I have heard so many times I have to own it because I can\’t get it out of my head.

    Comment by Jake Lockley -

  124. I already have enough CDs. I don\’t need to pay $5 a month for a service that I don\’t need to use. And if I want to listen to the \”radio,\” I\’ll tune into Luxuriamusic. Just remember that the piano roll industry also died. It\’s just a matter of how the beast mutates. Are you going to invest in a company that makes those old floppy discs?

    Another thing that killed the CD industry is that people can now buy DVDs. They\’re rather spend less money and get more entertainment value. Drop by a college dorm room. What\’s piled up on the dressers – DVDs. Kids would rather use Scarface as background music instead of Public Enemy.

    Also music industry is now nostalgia driven. What is the hot tour this summer? The Police. The teenage kid no longer needs to run down to the record store and buy even a greatest hits collection because they can easily take mom\’s old Police CDs, rip \’em and put them on their iPod. And mom gets to keep her CDs.

    Comment by Joe Corey -

  125. Hard copy format will be dead in 3 years. About the same time that digital 3D movies will be the theatre savior and most movies will be shot with 75% CGI. Not simply because it will be a much more awesome experience (it will be), but because it will be so much cheaper than location filming. It stuns me that so many people were surprised with the success of 300. Its a hint of whats to come. Want to read more about the tech thats coming? I talk much more about these coming techs in my blog (linked to my name below). Think digital, 3D, non-optical movie cameras (eg. infrared), \’performance capture\’, audience generated \’levels\’ or \’backgrounds\’ ala video level editing, integration of movies with MMORPGs. Think I am kidding? Think again. James Cameron has a $200,000,000 budget for Avatar to make you think again.

    So while the rapid advances in theatre/format tech sometimes sounds pessimistic, in my world I am truly excited by whats coming. Summer of 2009 to be precise…

    Getting back to CDs, oh yes they are long gone. The retail music industry will be shifting (or have shifted) to predominantly movies and videos.

    Comment by Jim Dorey -

  126. how about making music/media purchases time sensitive… ultimately are we not still operating within the basic principles of supply and demand? if i download that hot new release on day1 maybe i can save on purchase price…
    unfortunately this relies on drm?

    how about delayed drm… if i buy that hot new release on day1 it comes with no drm attached but four days/weeks later my rights are restricted.

    Comment by smudley -

  127. The record labels should get over the fact that a lot of people, especially in the younger age group, are not willing to pay for music anymore. If the labels want to survive, they will have to do it through ad-supported free download sites such as SpiralFrog. Suing fans does not help the labels\’ case with consumers.

    As for the artists, they should concentrate on concert sales, as well as merchandise. Overall, concert sales have gone up recently.

    One more thing to note:
    It has been shown that artists do not need the major record companies anymore. Many independent bands have used the internet to become famous.

    Comment by Boris -

  128. The problem with the subscription model is not the labels, it\’s the writers and artists. If I pay $5/month for unlimited SonyBMG music and I can download any tracks DRM free, how does the copyright holder get compensated?

    I\’m sure there\’s a simple fee/download system but it\’ll be less than what they earn currently per unit.

    Comment by Adam Cains -

  129. check out this nypost article about video game companies signing musicians

    http://www.nypost.com/seven/04012007/business/groovy_attack_business_damon_brown.htm

    Comment by tom -

  130. Finally, someone said it. \”CD\’s are dead.\” I hope I\’m the first to say, \”DVD\’s are dead.\” And I just don\’t mean DVD\’s as we know them today. I mean Blue Ray and HD DVD, as well. With the rapid rate of growth in data storage and transfer industryies, I don\’t see why there is any future in big box players of any sort. iTV seems so redundant to me already. My ZEN works like an iTV, yet I can carry it with me and watch or listen to anything I want, anytime I want, anywhere I want. Who needs these big boxes, CDs or DVD\’s? I\’m now watching movies from every major studio (not just Disney and some of Paramount\’s content)by downloading from Wal-mart, Unbox and tons of other sites, in this way. As a filmmaker and now a distributor, of sorts, I\’m helping other filmmakers grasp the concept that they can finally have some level of control over the content they create and that distribution is being turned up on its head. The DVD is dead. Long live movies.

    Comment by Linda Nelson -

  131. Very good points Mark. Flash harddrives with more storage and security with be the de facto standard for AV in the next few years.

    When the inevitable death of the CD (Music, Software and eveything else)_ comes along, how will hight street retailer cope with it?

    In my eyes its simple – the CD style cases with contain a 1 time unlock and download key along with artist/product booklet.

    The benefits: lowered production costs, increased customer purchasing data and less returns.🙂

    Comment by Shaun -

Comments are closed.