The future of the music business…again

There has been quite a big of discussion about the music business lately. In particular the ongoing decline in CD sales. So i decided to revisit a blog post from April of 2005 entitled “The Countdown for the extinction of CDs is about to begin

I don’t think i said anything groundbreaking. I made the point that I no longer listened to music on CDs. That I had them on an Ipod when I listened. That it was difficult to deal with CDs in order to get to the music I wanted, when I wanted.

So here we are 2 years later and the media is full of articles about the seemingly never ending decline in CD sales and the inability of digital sales to close the gap. Can anyone be surprised ?

When was the last time you saw anyone listening to music on a CD Player ? At the gym ? No. At the Mall, maybe only some of the senior walkers at 9am. On downtown streets at lunch ? No.

Does anyone even know what percent of music is listened to via CD any longer ?

I would say the music industry has put itself in the position of being incredibly stupid. They are dependent on a format, the CD, that few people listen to. Although this is a guess, my guess is that the majority of CD purchases are then put in a PC and imported into an MP3 or other format for consumption on a mobile device. Few people buy a CD and just listen to it. Which means you can say goodbye to impulse buying of CDs.

We are in a market where, whether we like it or not, the music industry has tethered us to our PCs. The easiest way to buy, the easiest way to get the greatest utillity of their products is via the PC. Thats a HUGE, HUGE, HUGE mistake. Did i say that it was a huge mistake to make the PC an inevitable part of the music buying process.

Our ability to consume music has gotten incredibly easy over the past 25 years. From the walkman to the CD Walkman to the IPod, we have ditched the album (to the chagrin of milk crate manufacturers everywhere) and evolved to the point where an 80gb IPod has the capacity to carry every song we might imagine listening to over the course of our lifetime. So easy that it revived Apple and catapulted the company from an innovative niche PC marketer to a technology leader. So easy that we consume more music than ever before, yet total sales are in a tailspin.

Can the music industry be saved ? Yep. It would be so easy its scary. Make music available anywhere and everywhere.

How much music can be stored on 1TB of hard drive space ? All of it. How many people does it take to carry a 1TB drive ? My 3 year old daughter can do it.

I would find a manufacturer of cash machines, the ones you see in every bar, restaurant, mini-mart and retail outlet and work with them to reconfigure the machines so that they can hold a hard drive that can be updated with new songs via wired or wireless internet access and whose screen can offer a simple interface for people to select music. The consumer plugs in their SD card from their phone, or plugs the USB cable attached to the machine into their IPod or similar device and the music selected, downloaded and debited to the customers credit or debit card. Pay the machine host a commission, or a per transaction and everyone goes home happy.

Why wouldnt the music industry do this ? I understand the difficulty of getting an entire industry to do anything, particularly the music industry where the fault is always someone elses’. But this is a matter of survival and the solution is simple.

Not that there aren’t other issues, Its certainly not a simple process to connect your IPod to a random device and buy music. The future of the music industry depends on the negotation of a software update with Apple. It would be a simple, simple enhancement to ITunes software on every IPod. The software, when connected to one of these music dispensers would look for a unique ID and a number with a check digit. If it found a valid number, it would allow the one way transfer of music from the dispenser. Simple and easy…if Apple goes along. Which they should, because it wouldnt be a stretch to put an ITMS like interface on the dispenser, let people login with their Apple ID, and buy music that could be charged to the credit card on file with Apple.

None of this is rocket science. In fact, its easy. Music Kiosks have been proposed for years and years. Kiosks have been developed time and again. They haven’t worked because they have been over engineered and music labels haven’t made enough content available.

I hope the music industry has reached the point of desperation where now is the time.

Its time to recognize that its never been easier to listen to music and more people are doing just that than ever before.
The only difficult part of the music equation is buying it. Sitting in front of your PC works sometimes, but it isn’t optimal all the time. Where ever you see people listening to music, they should be able to buy and immediately listen to their new music. Why can’t the music industry get that we should be able to buy music when we want, where we want, in the format in which we consume it, on our IPods and comparable devices. Until that happens, total music sales will continue to decline and quckly.

106 thoughts on “The future of the music business…again

  1. The way the music business is going, I wouldn’t at all be surprised if this occured. Record labels are clearly on the decline–technology isn’t just going to go backwards and Cds aren’t suddenly going to go up in sales. It’s all uphill for the internet now. It is definitely a good direction for the musicians, as I think it gives them even more control over their music and careers.

    What you said does seem like the next step though. Soon enough we won’t even need our PCs to consume music. The industry is definitely in for continuous change in the years to come, and it’s for the better, I would think.

    Comment by Sarah -

  2. It is like everything else in the world, no one listens until it is in their face and hindsight is the only reliable tool to negotiate with.

    I have been telling people since 1996, freakin\’ 1996, EXACTLY what was going to occur and how it would happen! If you think the record industry is going to bend over and become \”obsolete\” and somehow impotent, think again! This is a repeat of what has happened throughout history in this business, and it is about to come full circle. I gave up on trying to help fools, closed my site (again, for the 4th year in a row)… Let them fall on their face.

    Myspace is set up to keep tabs on you… The indie musician. No other purpose for \”allowing\” you to pretend to sell product. If anyone here sells any real music anywhere on MySpace… Show us! I believe is all talk. Since you are there \”pretending\”, they can keep you out of their hair to sign who they want to sign. Another tactic to suppress your possible success. (if you are a musician, that is.) Fans don\’t see the difference, and maybe to them it does not matter as long as they keep getting music. They are the ONLY ones who can really have a voice in this. Musicians will NOT rise against the establishment on this… Historically, they never have.

    To the person who still loves CD\’s; I agree. MP3\’s are pure garbage and should be abolished! They served a purpose in the day, but times have changed. With broadband becoming more prevalent, why can we not sell compressed wave files with full dynamic quality? Because people will \”wait\” until record labels own that idea as well. It is \”monkey see, monkey do\” and no one is a pioneer these days. ITunes? Joke city! Another scam to trap market share from people who are convinced that they can only get their Ipods pumped at Apple\’s digital monopoly. Good scam mind you, but still a scam.

    I believe there is room for more than one \”industry\” in the musical realm. The issue is organizational in nature. Independents will not truly organize for fear of losing their identity. The truth is that their identity will be enhanced by a sincere and compassionate convergence of minds and resources.

    It is a mixed bag. Many artists are still romancing the idea of getting \”signed\”, the ones that are over that seem to be searching for some \”Holy Grail\”, yet when it is presented to them in an intelligent way, they balk! Every new person who comes on the scene touts they are they \”New Thing\”, when in reality, it is the same old garbage rehashed 50 ways from Sunday! People get tired of listening to people walk around talking about how they are gonna take the industry by storm, when in truth their dream is to sell out to Google.

    Distribution is the illusion that record conglomerates want you to keep believing. The need to facilitate intrinsic product no longer exists. As long as we keep thinking in the past, then our expectations remain stagnate. When one individual can take one MP3 file, put it on one hard drive, and serve it to 1 billion customers, there is NO OVERHEAD!

    That leaves us in a position to create the marketing strategies that have made giants like WalMart own the vast market share that they do today. Volume marketing is the solution to the independent dilemma of low volume sales proceeds. The record industry KNOWS this already, but they are gonna milk the cow for al she is worth, and once the cow kicks it, they will once again own this industry! At that stage it will be too late to do anything except follow the leader.

    I realize that this message is somewhat esoteric, and I apologize for the fact that I cannot just come out and say what needs to be said here. But I really implore each one of you to really think about what I am saying here, and get a hold of me if you feel that you can work on the solution. Take the example of Linux versus Microsoft as a model of what can be. Microsoft has threatened Linux with multiple lawsuits for supposed copyright infringement, all in the name of keeping them down and preventing them from being equal in the marketplace.

    If we independent musicians become complacent about developing our own marketing strategies, trademarks, and trade secrets, we will find ourselves a slave to the current regime for all time. It has happened before, and IT CAN happen again. Now is the only window of opportunity left.

    Yes, there is more opportunity for the musician then there ever has been, yes, we have made some small steps in the right direction; but it has to be more passionate than just talk.

    Comment by Aaron -

  3. I am a recording company who specializes in live venues. One thing to remember that CD quality is 16 bit at 44k. We can record at much higher data rates but must lower the quality to become compatible for CD players. What is heard in the studio does not sound as good on CD. With home theaters being the new thing to have and HD becomes the norm, Blue Ray will become a new media format for music. Record companies will still sell 10 tunes, but the quality will be amazing. The market will be broken down into IPOD listening and serious listening. If you like the quality of the sound of IPODs, I recommend that you buy an ear candle and clean out your canal. The difference is like AM versus FM radio. You will get what you pay for. When I am raking the yard or running on a treadmill, the IPOD is the way to go. When I want to get serious, I would listen to my entertainment system. The files will be so big that downloading them would be a hassle so sharing the music would be much more difficult. This is one of the main reasons for movies heading toward HD. Sony does not want to see the same fate for the movie industry as the recording industry.

    Comment by Mike Shirra -

  4. KELLY Clarkson has been biting her tongue as we\’ve reported on her fight with BMG/RCA boss Clive Davis. Clarkson insisted on recording her own songs on her third album, while Davis – mindful of needing hits – wanted her to sing tunes written by others. But in the August issue of Blender, Clarkson says she told Davis: \”I don\’t know you very well, and I am not a bull-[bleep]er. I get [that] you don\’t like the album. You\’re 80; you\’re not supposed to like my album.\” She also said: \”I literally got told to my face that it wouldn\’t sell more than 600,000 copies. And I got lied to. One reason I don\’t like working with people at the label is that they lie . . . If you\’re going with the flow and not fighting, that\’s settling. I can\’t take that. Life is just too short to be a pushover.\” But meanwhile, Clarkson fired her manager and cancelled her summer tour because of slack ticket sales.

    Leave it to the labels to kill what little is left of this business. Download don\’t lie!

    Comment by Mary Clemente -

  5. Mark:ManuelCuevas – The Rhinestone Rembrandt.Coffe Table Book: Creating a legacy for the most famous American you have never heard of. His clients include everyone from Salvador Dali to Madonna via US Presidents, Movie Stars and Country Music Aristocracy. Project initiated by M3 The Image Group, the NYC Agency.(Shooting throughout 2007.) Cambridge Jones is the snapper and I am looking for a publisher?

    Comment by Mary Clemente -

  6. Here\’s the real kicker! Sir Howard listen\’s to music on his iPod and has an iphone….and an apple computer….and will be out of the game because of his own igreed!

    Comment by Mary Clemente -

  7. MAYBE greed is good, as Gordon Gekko said in \”Wall Street,\” but no one likes to be called \”greedy.\” So foreheads flexed last Thursday in Sun Valley, Idaho, when Sony honcho Sir Howard Stringer used that word to describe Apple chairman Steve Jobs. Stringer was part of a panel at the Allen & Co. media mogul powwow with Barry Diller (IAC), Jeff Bezos (Amazon) and Sergey Brin (Google), discussing how technology has changed the way people get their entertainment and news. According to one audience member, Stringer said it\’s funny that Jobs accuses record companies of greed because they want to get paid for music downloads. Stringer said Jobs, who just launched the iPhone, is the \”greedy\” one because he wants a world where only he makes money. Moderator Anderson Cooper suddenly changed the subject, but Diller said, \”Anderson, you\’re missing something here, Howard Stringer just called Steve Jobs greedy.\” But when Cooper went back to Stringer, the Sony boss diplomatically backed off.

    The kettle calling the Pot Black! hahahahahah sour grapes!

    Comment by Mary Clemente -

  8. Mark: to quote my good friend and author Simon Napier-Bell who wrote Black Vinyl, White Powder, cd\’s are the new new vinyl.

    My business model was 80% music image development. I watched the majors go out of business by sitting there with their complete lack of technolgy savy and history of owning the music game. My quote \”Steve Jobs did to music what Bill Gates did to Software.\” Game over! They reaped what they sow.

    My two cents! I had to find a way to survive. I\’ll be watching them. The phone calls and emails that went unaswered and the lies told by the music employees. Revenge is a record best heard on the computer!

    Comment by Mary Clemente -

  9. I feel like the music industry has abandoned the true fans of their owned bands. It all comes down to the music, and the people that produce it, so if the labels aren\’t taking care of those who make it, the people who buy it will eventually disappear. Most record Labels have alot to learn still.

    Comment by Dodd -

  10. There are so many problems with the music industry! I developed a tool called EquestRadio.com and while artists love the idea, labels block it. I have the patent on the idea and what labels have tried talked about for years, I developed. Now they block artists from using it. CD sales are falling in some sectors in music but are very strong in others. I speak to labels, artists and others every week get rebuked almost immediately. Like my post on IPO\’s, people are scared to reach out and find new ways to accomplish their goals. This is leading to the downfall of music.

    I am taking this in two sections, label business and consumers.

    Label Business
    The very first thing that needs to happen in music today is quality control. Hip Hop is declining because their music is noise (lets be real, its garbage) with empty messages. At the height of Hip Hop and top selling artist of today, make a connection to the listen, has lyrical impact and has stayed true to the art that is Hip Hop.

    Labels need to clean out their artist rosters. Interscope has something like 65 artists they recognize on their website as label artists. What you don\’t see are the 170 artists they have paid but will never release an album. Is it really worth all the expense? NO! This is an Econ 150 basic, companies that leverage their money correctly will come out on top. For example, say Def Jam paid $1 million to sign 5 low level roster artists. What makes more sense; use $1 million to promote a popular artist with high demand or signing 5 new artists that history predicts 91% will be dropped from the label without releasing 1 song?

    Labels should realize by now, the market has changed and need to rethink the way they sign artists. This I have put a whole lot of thought into! If I owned a label, every contract would be incentive based. I know 15 artists right now, who could sell 200 each. Under my contract structure artists make more and labels net higher proceeds selling less albums.

    Consumers
    Labels need to become a self sustained machine again. Labels should own the platforms where music is being purchased.

    Again Econ 150 lesson #2, sell records at a lower price. For example, the demand for an album priced at $15 is 100k copies but the demand for the same album priced at $12 is 300k copies. The math is simple! You make 2.1 million more on a lower priced album. Don\’t be fooled people, no matter what they try and tell you, it is really that simple.

    Lower DL prices from $.99 to $.69. We are talking about volume. Own the platforms that service DL and make a larger percent of the revenue.

    Consumers want better packaged albums. If Def Jam put together something called say \”The ROC\” series, where two artists get together and make one album. You could release more content more often at a higher quality. Why? When an artist only has to make 6 quality tracks the product is better. When they are forced to come up with 14 or more tracks, you get a lot of filler music. Here is the kicker. Now you have two teams pushing one album, built on incentive based contracts, consumers get a better product at a better price, labels spend less to make more and artists are \”rewarded\” for their performance, not their potential.

    Comment by Jerry R. Reynolds -

  11. For musicians, the words \”music\” and \”business\” don\’t belong together in the same sentence. Major labels have literally ruined the art form. Greed killed the industry and die it should – and not soon enough. I still buy CD\’s, but I rarely listen to radio for much the same reason. Force to modify my tastes to that of those try to bolster sales for the flavor of the month. There is only so much bubblegum and ear porn I can stomach before needing a laxative. I am more supportive of bands doing it for themselves than I used to be. The media and technology is not as important to me as the content. I still have vinyl, cassettes, Minidisk (personal favorite), CD\’s, audio only DVD\’s – but refuse to buy an Ipod. I don\’t like compressed audio. I prefer high fidelty. The compression has gotten better over the years, but not good enough.

    Comment by lyndell -

  12. Wow. This souinds very much like the discussion about the future of real money and the increased usage of credit and debit cards. Poeple will just choose what is more convenient and CD\’s are NOT convenitent. They taker too much space and break easely.

    Comment by credit card owner -

  13. How about heading to a wi-fi hotspot, connecting your iPod to iTunes over the Internet via wi-fi, and purchasing your songs by clicking on your iPod menus? Then you bypass the Kiosk altogether. All you would need is an iPod.

    Comment by Todd -

  14. You make everything too complicated. Your future of music is actually the past. The future is an iPhone. With full internet capability and iTunes installed, you simply buy the tracks you want and download when near a WiFi area. And the future begins June 29. And it would not be that hard to imagine an iPod with no phone or internet capability, but includes a copy of iTunes with WiFi built in for purchases on the go.

    And Mark… it\’s iPod not IPod and it\’s iTunes not ITunes. A small insignificant thing, but it kills your credibility.

    Comment by Jay -

  15. The future of the music business is here and continues to change. What we will see more of is music distributed wirelessly to MP3 Players, IPods, vehicles and other PDA Devices. New technology will have built in software making it simple and user friendly to download music to a number of different hardware components, such as the ones mentioned above.

    I think music will be a bi-product of other products and services. Where the end-user (consumer) may not pay much if anything at all for music. They will pay for movies, videos, games, etc. The companies that make the movies, videos, games, etc. will license the music from the copyright owners creating increased revenue streams. This of course is music publishing.

    Those who control the content and distribution will ultimately generate the largest profits from music in the future. This is my humble opinion. May you continue to do well. Please visit my blogs on the music business at
    http://www.gojawar.blogspot.com
    http://www.atlantashowcase.blogspot.com
    http://www.mymusicconference.blogspot.com

    Comment by JaWar -

  16. Yeah, it would be great to download the song which I wanna to listen to whenever I want and to pay only for this song, not buying full album if I don\’t need it.

    Comment by GreenTea -

  17. Just some stream of conciousnees thoughts here….While I agree with you that CD\’s as a delivery medium and the business model of selling cd\’s is beyond dead at this point, that is not to say the music industry is dead. The music industry is more than just record labels. As a former and future publisher, publishers will always make money, regardless of what medium is used to get music into the hands of the consumer. And there are of course myriad more (and longer lived) avenues to exploit copyrights and earn a quantifiable return on them, whereas when a CD\’s sales life has run, very few can be further exploited.

    Frankly, when I hear people lament the decline of the CD, I don\’t get it. Distributors, labels and retailers are the only entities that actually make $$ on CD sales. Very, very few bands ever see $$ from record sales. That\’s why as a manager, you basically want your artists to be perpetually un-recouped. The only thing artists will lose if labels cease to exist is a source of start-up funding, ie: recording budgets, tour support, etc. Surely what is in effect just start-up cash can come from other avenues. Instead of ad-supported downloading, why not just sign a band to an ad firm directly, or use venture capitalists $$. Then use a label as a marketing parner that share in revenues.

    You certainly know a lot more about delivery and bandwith than I, but how do we get to the point where we can just download music to a handheld device out of thin air? Or at least via sattelite? A hanheld device that you can browse and download immediately? Isn\’t that the logical next step?

    Comment by Chris O -

  18. The following links show examples of artists funding there works using the Strayform process.

    http://www.strayform.com/Proposal/default.html?id=12

    http://www.strayform.com/Proposal/default.html?id=15

    Comment by Brandt Cannici -

  19. Mark,

    I think your right that music should be everywhere, but I find your distribution model unecassarly complex and unable to compete with current peer-to-peer systems. Let me propose an alternative.

    Move payment forward to as the artists are creating it. Artists create proposals for new works which consumers fund with micro-pledges

    This transforms consumers from passive recipients to active collaborators during the media creation process. This gives artists an enthusiastic funding source that is constantly renewing.

    Finished commissioned works are distributed publicly under a Creative Commons license, while the artists retain full commercial rights for general sale and use in commercials, film, television, etc.

    These two proposals provide good examples of the process.

    Comment by Brandt Cannici -

  20. Mark, don\’t be so narrow minded as to who is listening to cd\’s. Take youself away from the gym or country club and ride a subway or bus to see the other half of the digital divide that still use cd. And I still buy them for home use and ripping!
    Jimmy

    Comment by Jimmy CraicHead -

  21. Dear Mark,

    I am from Hong Kong, China. And I am a reader of your blog every day, and I am also one of the many fans of the Mavericks.

    I read your blog every day because I think that your ideas are always inspiring, although sometimes I do not totally agree with them.

    From your blog, I can see that you must be a person who likes reading. I wonder if you could let us know what books you read and are reading. Its even better if you can join an online bookshelf, update your readings and write some comments for those books. There is one called aNobii which I am using (http://www.anobii.com). Its quite convenient as you can just type in the ISBN code and then you can have the books on your shelf. It also provides a function which you can post it in your blog to let the readers know your reading interest.

    I sincerely look forward to your favourable reply.

    Best regards,

    Think_Thrice

    *P.S. I am so glad that you answer the questions in the Freakonomics Blog which makes me understand your thoughts more.;-)

    Comment by Think_Thrice -

  22. On demand is the only way forward – however this happens through Wi-fi / proximity based transfer.

    Music services such as Pandora which offers recommendations while you listen will give people the variety of genre while they listen to their favorite tracks – this can be in the home or mobile.

    In the UK you can dial 2580 on your mobile, you point it at the music you are hearing ( Starbucks, in the car from broadcast station or in a club or bar ) – it tags the track for you and adds to a personal playlist – this then links to purchasing options http://www.shazam.com/music/portal this extends the purchasing from POS and online to insitu – it also allows for opportunistic purchases which today are lost ( unles you are carrying the pen and paper mentioned in the other posts )

    What to do about the impulse purchase at POS though – CD\’s and DVD\’s still have there place here – maybe the use of RFID and bluetooth to trigger a transaction to deliver the content to my player at home / personal device instead of the physical media perhaps ?

    http://www.onehandshake.blogspot.com/

    Comment by trevor attridge -

  23. I can not believe I am about to write the following:

    I personally do believe Mr. Cuban\’s plan may be drastically flawed. Simple due to the fact, we do not all use ipods. Personally, I do not. Why limit it to ipod users? That is segregating a piece of the market which is to me, wasted profit. I mean if we go to a bank machine, at least in Canada, I can use it and it doesn\’t matter who my provider is. Same with my car, well if I had one, I can fill it with gas no matter what the make of my car is. I believe the same principle should be applied here, we should standardize these machines to be used with a variety of differing formats, not just ipods.

    It is very important to notice the ignorance I knowingly have posted with. I am assuming there is a technology difference between players, without having owned an IPOD. My knowledge is very limited, and I would welcome any feedback from someone who is more knowledgeable.

    All in all though, I do believe this is an excellent idea that many of us have pondered over the years. It is a perfecet example of an industry lagging behind technology, rathering than embracing it. In the end, they will only have themselves to blame.

    Comment by Jeremy Rutledge -

  24. yes,but you still think people will buy music. Music is now the
    same as water and electricty. Need water, turn on the tap. Need
    electricty, plug it in.Want music, its out there for the taking.
    For a band to make money, they gotta hit the road and play 200
    gigs a year!Like the old days. Hit records are just a way to sell tee-shirts,hats,key rings etc.
    Madonna made more money selling rags at H&M, then any of her cd\’s.
    Some bands can be clever. The Artic Monkeys gave away their music free for 2 years. Then they released ther cd, and it sold
    1 million copies in the first week!.
    Forget atm\’s,and pc\’s. The problem is what a song is worth.
    ITunes sells a song for 99 cents, in europe its $1.50.
    Still thats too expensive. When the price of a track comes down to 25 cents,
    people will buy it, just like a pack of gum or a single cig.
    The days of spending hours file shareing are over too. I remember buying a piece of bubble gum for a nickel. Soon come
    the time when We can buy a song for a quarter over the counter
    Thanks Mark for sharing your thoughts,
    MK

    Comment by Mark Kamins -

  25. So great, it\’s helpful for me

    Comment by wow power leveling -

  26. One place where these kiosks might make sense is within live venues (or, you know, just slightly outside of the venues, if a particular venue happens to be uncooperative, for whatever reason)… The best way to gain acceptance for a product like this might be to market it, initially, to the ARTISTS (who would share in the revenue from the sale of \”live\” recordings, immediately post-event).

    For those interested, suggest you look into a company called Immediatek (OTCBB: IMKI.OB), whose subsidiary (DiscLive.com) has both some direct experience (Pixies, George Clinton, Billy Idol, etc, etc) and, apparently, some intellectual property of its own, in this direction…

    Live Nation (NYSE: LYV, formerly owned by Clear Channel but divested/spun-off, due to a number of controversies), just had its patent – on live recording/production/distribution processes – invalidated, slightly less than 3 months ago, which seems like it may open up the field considerably for competition.

    Oh yes, the punchline: Mr. Cuban purchased roughly 95% of Immediatek last year, through Radical Holdings LLP, for around $3 million… Darin Divinia, who was formerly director of Network Ops at Yahoo! (Broadcast) has since been appointed to IMKI\’s board. Other tidbits of information available if you look closely, squint, and speculate a great deal…

    Disclosure: I own a few shares of IMKI.

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  28. Make music available anywhere and everywhere (in bold).

    This strikes me as the most complete advice you offer the music industry in your post.

    This line is an awful lot like the concept of The Celestial Jukebox offered by Jim Griffin (I first heard him describe the concept in 1999, but Im sure the term was coined many years earlier).

    However, I believe that your vision of the music everywhere storage-based solution would be transient at best.

    As long as the delivery of customized music bits is tethered to physical wires, the exercise is merely evolutionary, if not somewhat academic. For the true digital music REVOLUTION to occur, the delivery of music must transcend wires. Digital music will become wireless.

    Our TVs own our home.

    Our Computers own our office.

    But MUSIC, owns our car, the gym, the beach, the dog walk etc., but there aint no wires in any of those places.

    CDs (and all previous forms of music storage) merely act as buffers. Buffers are used to overcome supply inefficiencies. The hand-held Terabyte music player and the physical sync stations you envision would merely represent a better buffer system.

    Consider the analogy of batteries. Batteries are a buffer for electrical power. Now, imagine that electrical current could be beamed wireless to any part of the planet to your portable device and the power consumption be directly billed through your home electrical service provider at the usual rates. What would be the need for batteries?

    I would argue that music buffers are ultimately heading towards a similar fate as broadband wireless delivery matures.

    I can see a world in the future where broadband wireless delivery of customized music digital hops finds your cell phone (or iPhone ;-)), and the hops to you car stereo, your boom box on the beach, your friends home stereo system ,etc. With ubiquitous access to all music all the time, the need for storage (buffering) and syncing is eliminated.

    More importantly, the concept of music as a product will have completed its tiny blip on the radar and will return to its original nature of a service. I can see a Celestial Jukebox service offering both free (ad-supported a la FM radio, which frankly would absolutely kill the piracy motivations that exist today) or monthly subscription ($9 per month and no advertising) billed through your cell phone provider.

    When this happens, it will actually bring customers back to the marketplace that have not purchase a CD (or an album) in years, and the $40 Billion industry can find its true home in the $100+ Billion range.

    But these are just the rants of a bassoon player in his basement in Baltimore.

    SPF

    Comment by Sean Fenlon -

  29. iTunes is pretty nice and I do buy music there. However, it has a very limited selection and the sound quality is good not great. There is an alternative that involves CDs and works well if you can wait a couple of days: Buy the CD *used* on Amazon. Basically every CD sold new on Amazon is also sold used by individual resellers. Buy it that way, it costs 4-6 bucks. When it arrives, rip it at a high bit rate to your iTunes, then put the CD in the attic. Voila! It costs less and sounds better…

    Comment by Nick -

  30. Mark, you\’re halfway there. Try: music, here and now. Or, media here and now. This is happening today with sites like http://www.seeqpod.com or http://finetune.com or blogmusik.net – music in the \”clouds\”, just add wifi. Today I can access more music with that approach than iTunes or Yahoo Music has access to – anytime. Why do I need to store it at all?

    Comment by Mr. Cloud -

  31. I still by CDs, but I purchase them only if…

    1- the price is right — Best Buy runs weekly get-you-in-store specials where you can pick up a CD for >$10.

    2- the gratification is immediate — I\’m at a show where the band is selling CDs, usually $10-12.

    3- its the only media source — imports that are not available in the U.S. or CDs that are not available on iTunes as yet.

    Otherwise, its iTunes all the way. Oh, and CDs make a good backup for what you\’ve ripped into your iTunes library.

    Comment by Gene Wicker Jr -

  32. They\’ve learned nothing from their past mistakes, and it will ultimately be the undoing of at least a few of them.

    Comment by fjtpw -

  33. Wow,I wish I was your daughter! Just kidding..haha..:p

    Anyway, I think you\’re right. People now prefer MP3 players, and I love your suggestion,the cash machines thingy.. Imagine if there were like that in Walmart or Best Buy.. or even at Nordstrom while shopping..

    But you see, the music industry isn\’t only in America, they\’re in all parts of the world. Just in case you didn\’t know, some countries, I mean, most contries, still rely on CD players. They are those who are poor enough that they can\’t buy an iPod or a Creative mp3 player. I mean, most people in those countries can\’t, and they probably don\’t even know what an mp3 is. And in some countries however, piracy is an obvious reason why the music industry is declining. I actually think that they get the songs for free, instead of getting it from iTunes, where you\’ll pay for .99 for every song, they can get it from Limewire. It is a file sharing site, that enables you to get songs from people who uploaded their songs from their CDs, pirated or not.

    Actually the last CD that I bought was Red Hot Chili Peppers\’ Stadium Arcadium, it\’s about $10, but I don\’t regret buying the CD itself, because it\’s much more fun when you see the CD itself than just buy it form iTunes. I think the buying of CDs is aomehow related to psychological effect. And all I had to do is rip it from my iTunes and sync it to my iPod. Though I have to admit, my CD player hasn\’t been given much work lately.

    Well, we really don\’t have to worry about these things. Let\’s just see what happens as time passes by. I mean, people in the music industry should worry, after all, this is their business.

    Comment by kim -

  34. It\’s not just about the music. For some collectors it\’s about the packaging the extra cuts the limited editions the gold discs.
    And by the way Mark when is the last time a fan asked you to sign his IPOD? Life is not Black and White, what a hell of a dull world it would be if it was. Different strokes for different folks…and so on and so on and scooby dobe dobe….

    Comment by John Ballard -

  35. Mark: Aren\’t you already in this space, through your purchase last year of Immediatek (IMKI.OB)?

    Immediatek\’s subsidiary DiscLive seems to be in the live recording and/or distribution business – or at least headed quietly in that direction. I believe early last year that there was a piece on PRNewswire about a successful DiscLive live recording –> IPod test at a Billboard music conference… (shortly thereafter, Mr. Cuban purchased Immediatek for around $3 million, if memory serves…)

    I say put the kiosks in live venues… hit the vending machine on your way out of the arena to zap the show you just heard to your IPod… or hit the kiosk in the movie theater lobby to buy the soundtrack of the film you just watched… etc. I like it.

    Comment by little birdie -

  36. Hey Mark,
    Look at comment # 61. Video killled the radio star, technology killed the record business.
    on a different note, I bet you don\’t read blogs that don\’t have proper html code to space out paragraphs. ha ha! good luck in draft.

    Mister Jennings

    Comment by Jimmy Daniel -

  37. I am a music outsider Max. The format is not as dead as the music and the craft of songwriting. The music is in trouble when we need to be \”building groups\” and searching for talent via a contest on TV. Timbaland can\’t make everyone\’s record. Not that this can\’t be exciting and potentially produce some talented acts, but its like finding coal at the surface. We are literally listening to music filtered by 40 or 50 people that think alike.

    Comment by Garth -

  38. I\’m a music industry insider. The format is dead. Let\’s give the people what they want. Great affordable music, portability, and a memorable live fan experience.

    Comment by Max Gousse -

  39. i seem to be a magnet for the digital content/music business blogs. Ha!!!
    i am not sure if people read these blogs to make suggestions or to rant, but i normally post some idiotic fix. I care about this industry, but it isn\’t some small community of art. this industry is no longer about great albums, great art, great singles, gifted, entertaining, or anything remotely about \”excellence.\” this industry is about the share and the numbers. so, the remaining comments i have are \”hypathetical.\”
    the music industry has a problem that
    scales so wide… apple, sony, universal, time warner will never fix
    this problem music belongs to people wherever, and however they can get it.
    music is not supposed to be a media argument. what the music industry will overlook for eternity is the media and/or device will not impact in the longrun anything. the price and quality will. i bet if U2 released there next album on only a jumpdrive, two million people would buy it.
    media is always going to change mark. it is not that easy.
    i am sure 8 tracks freaked out the vinyl market and tapes freaked out the
    vinyl and 8-track market . the problem spins around the already
    extinct CD having too many \”buyers\” to retire, too many car
    manufactures including CD players as standard equipment and people who
    are technologically deprived wanting CD\’s.
    We want music mr. record mogul! get it to us at the same price (below $10.00) and in mult-formats.
    i think the numbers that need to be studied are the numbers of people
    like my pal who is VP at a major music corp who listens to CD\’s
    because he can\’t even get on a wireless connection. He is like too
    many people in the USA and worldwide who have their buying habits
    restrained by the innovation of devices and technology.
    So technology depends on us American\’s to be savy?? I can\’t wait until I can beam a
    song from my phone to someone within distance (whoops..), but this is not where the
    \”buying market\” is at the moment. The buying market is lost where to get the music they want and what to put it on to get all the bang for their buck. yes, music is not as good as it once was generally speaking…(another blog).
    I agree with you Markthe PC/Mac is a problem with the music industry.
    When a genius like Steve Jobs makes DRM a monopoly for iTunes, then all
    those who can\’t figure out iTunes from a five year old computer, just
    won\’t buy anything..anywhere.

    NextWe need live content. Live content is a diverse content stream for
    artist that DO have a good live set that can be recorded and sold. Not the
    live set from Pro Tools software off stage but an energetic performance
    captured.bands like The Killers, Hank jr., Widespread Panic, Coldplay, Kanye West.and so
    on. My personal collection of great albums is a mix of the classics,
    new albums and LIVE ALBUMS that give an alternative to the studio
    version. Live music sales is cheap to make and puts little strain on
    the artist.. (PROFIT) Labels forget that a fan of one band/artist with more
    than a single release would give 50% to 85% the cost of a studio album
    for a great live album.

    Last, what my future mother-law contributes to the revenue stream of the music industry is GONE! However, the short sighted music business
    has forgotten she spent money on CD\’s that now cost as much as $17.98.
    meanwhile her children rip them off of iTunes for $9.99. She might be a
    different generation, but she ain\’t spending twice as much for the same
    record her daughter got from iTunes. march on!

    Comment by # 68 Jimmy D -

  40. For a long time the argument among music purists was that MP3s and other compression formats didn\’t sound as good as vinyl and that they would never replace vinyl in certain markets like DJ performances. I think those times are changing. The pure audiophile is no longer a majority and people want their music now.

    I think the idea of music kiosks like ATMs could be a huge step in the music industry taking back their losses in CDs and not having to rely on Apple\’s iTunes or services like Rhapsody and Napster. I think the quote from \”Field of Dreams\” is appropriate here. If you build it, they will come. Someone just has to take the first step. I guarantee it won\’t be one of the major labels. That said, EMI is working with Apple now to offer some of the first DRM free music at a premium of $1.29 a song. The benefit here of course is you will no longer be strapped to using that music only on an iPod and for other services not solely on a PC…it\’s a step in the right direction.

    Comment by James Wilcox -

  41. With Apples recent iTunes + : DRM-free and 256 kbps (previously 128)
    we are another step closer. Can\’t wait to see the catalog grow.

    Hopefully the car audio manufacturers will get up to speed. (getting there)

    I agree with Mark Cuban most of my new CD\’s have been \”played\” once, unless it was in the car.

    Comment by Patrick Rankin -

  42. Once I replace my current car reciever with one that allows me to plug in a USB drive with mp3 files on it, then I will no longer need CDs. Well, that, and when ever I can download an album legally in mp3 format without having to pay a dollar a song and then hack out any DRM.

    Comment by mattf128 -

  43. Most cell phones are equipped with MP3 players, the ability to surf the Net and to download songs.
    When I run out of memory on my phone, I have an 120G Wolverine, and can transfer to this larger storage via any of 6 card slots. And while the Wolverine also has Mp3 capability….the sound quality is not magnificent…anyway…

    searching through song selections on the phone can be tedious if you don\’t have a keyboard, but it would be worse with only the buttons on an atm machine, you\’d have to reconfigure that part of an atm machine as well.

    BUT – Until very recently I worked for a company that sold software for Heterogeneouse Asyncronous Data Replication by the TB. http://www.netapp.com/products/enterprise-software/data-protection-software/replication-software/replicatorx.html
    …Technologically, keeping the MTM (Music Transfer Machine) up-to-date is viable. Getting people to use it…it\’s have to be both fast AND easy.

    Comment by shay -

  44. Bought an Ipod, trashed it … could not figure out how to put music in it … back to buying CD\’s

    Comment by karen barry -

  45. HOLOGRAM OR THREE DIMENSIONAL MINI PROJECTOR DISKS THAT
    SHOW THE
    ARTISTS VIDEO IS THE FUTURE CD\’S ARE AS GOOD AS DEAD ITS DVD OR BUST
    TILL THEN

    Comment by DEVON MALIK SCOTT (IHNDUST3 -

  46. Yeah, if I notice, not many people listen to CD anymore. For me, I mostly listen music from my PC.
    The Idea you said above about buying music from music machine is great. maybe it could be a new kind of business. could be better than buying coca cola from vending machine.

    Comment by Business Education -

  47. Wow.

    Too many people chime in regarding the music industry, its woes, and how it can be changed for the better. Why? Because we almost all listen to music…

    But it is not as simple as it seems.

    I would love to write about why 99.9% of the ideas thrown out here as answers would fail miserably, but I currently do not have the time.

    One thing to always remember when it comes to an industry – unless you are a professional within the specific industry and have plenty years of experience behind you… you can never know all that it takes to present a solution.

    I would never propose to tell Mark how to run an NBA franchise or how to better one with absolute certainty. Sure I could throw out ideas that I might think would solve certain problems, but it would be foolish of me to do so.

    Mark is hands on.

    I work in the music industry and have for over 15 years at the major label level. Less than 10% of all releases are profitable, and in effect, it\’s these recordings that finance all of the ones that are not.

    My personal track record is the exact opposite of that.

    I will never lose a label money… even in this present time of rapidly declining CD sales.

    Listening to music does not constitute the ability to solving the problems that the industry is currently encountering.

    Anyway, Mark… if you want to solve the industrys woes, one day, when you are ready… shoot me an email. We have corresponded about music (and this problem) in the past.

    Comment by Se7en -

  48. I think commentator Kyle hit the nail on the head to explaining the behavior of the record industry when he wrote:
    – - -
    \”There are only 2 reasons that the music company exists:

    1) Distribution of music
    2) Getting radio play

    Artists don\’t even need the music company for #1 now. Every band has a website, and every one of them can offer their albums for download easily.\”
    – - – - -

    The record labels are basically like any other fat and lazy ncumbents in an entrenched and formerly capital intensive industry. They have, for decades, been able to coast on the momentum of the past because the fact that their product was very expensive to produce had the effect of significantly limiting significant potential competitors. Thanks to today\’s wonderful technology, ANYONE on a shoe string budget can now produce and distribute recordings.

    This has left the mere promotion of music as the only remaining marketplace relevance that the RIAA labels still have – and that is ENTIRELY dependent on getting airplay on FM radio stations where there still exists vast lowest common denominator mass market audience concentrations. Promoting recordings to the decision makers at influential major market FM stations is one area of the music industry that is still very capital intensive and where the RIAA labels still have a significant advantage over independent labels and artists who self-produce. And that, incidentally is why the RIAA and its lapdogs at SoundExchange are so hell-bent on killing Internet radio and artificially pricing it to the point that, like FM, the only music that is economical to play is the lowest common denominator RIAA type music. Once people can easily pick up Internet stations in cars – well, in a world where there are tens of thousands of music stations to choose from, the overwhelming advantage that the major labels still have in terms of promoting music via airplay will be over.

    I think that is why the music industry has been so desperate to put the technological genie back in the bottle for so long. They realize that, in a digital world, ANYBODY can come along and effectively compete side by side with the entrenched incumbents. Thanks to the Internet, audiences are starting to discover new artists and niche genres that simply could not and did not exist on FM radio – and this will shatter the audience concentrations and mass markets with sheep-like tastes that the major labels depend on. The move from a mass market to a more specialized music market is, for the major labels, a death by a million pin pricks. It is the exact opposite of what we see going in retail with smaller operators being unable to compete with the efficiency and economies of scale of companies such as Wal-mart and Best Buy. In an increasingly specialized digital music world, a big clunky global conglomerate with expensive and bloated bureaucracies is at a major disadvantage when dealing with countless smaller operators who are much more in touch with their audiences and who frequently view recordings as a promotional loss leader and not as a source of revenue.

    My guess is the major record labels have been aware of the dangers they face in a digital world since the get-go. I don\’t think they are anti-technology as much as they fear having to deal with new and more nimble competitors. What they are is anti-competition. I think that is why they failed to jump on legal downloadable music a decade ago or on the sort of marketing that Mark proposes. Sure, they could distribute and sell music that way. But so can anyone else – and they can do so for a lot less money than the major labels. The problem for the major labels is with the endless choices available and with thousands of new artists and niche genres suddenly able to promote themselves via myspace, Internet radio and YouTube – well, why would anyone be especially inclined to buy their music from a major RIAA label verses the content put out by everyone else?

    The only thing that the major labels still have going for them is their legacy momentum in the marketplace which is dwindling by the day. And after their current attempts to destroy Internet radio for all but lowest common denominator FM type programing – stuff that I personally cannot stand to listen to – I look forward to their demise and cheer it on. I, for one, have zero desire to see the major labels saved – and once they are gone, I think we will see a remarkable renaissance in music both in terms of the quality and quantity of product and in terms of the entrepreneurial opportunities that are open to those who create and produce it.

    Comment by Dismuke -

  49. Another sign of the (non)industry: Canada\’s largest and most famous record store chain, Sam The Record Man closes the flagship store in Toronto at the end of June.

    Comment by Joel Cohen -

  50. The next big revolution in music is already starting to occur, it\’s just not immediately obvious. With the advent of the internet and the home PC, it has become not only possible, but downright stupid easy for a band to record, mix, publicize, and distribute their music without the aid of a major record label. What\’s going to happen is that more and more independent artists will release their music through services like the iTunes music store and MySpace, and put their content directly in the hands of their fans. My prediction is that the major record labels will soon find themselves extinct, as all the services that they provide can be just as easily provided by a decent PC, some software, and a high speed internet connection.

    Now, if someone wanted to take advantage of this growing trend, they might establish a business that would leverage the power of technology to help new and emerging artists get their music into the mainstream through the aforementioned services or through licensing deals (movie and TV soundtracks, commercials, etc.), and charge based on performance or as a reasonable percentage of the contract. That kind of business could easily attract a lot of young people, which would minimize the salary requirements, and give them valuable experience in the entertainment industry.

    Comment by Adam Licht -

  51. The music industry is doing just fine. While the CD is dead, digital downloads have really taken off. But people forget about the huge money maker that is the ringtone! They\’re making TONS of money on ringtones, which more than makes up for the lackluster CD sales..

    And then there is the whole concert industry, where the performers are making mad bank. The music industry wants to cash in on that lucrative business, and deals are already starting to happen.

    Comment by Trent -

  52. Shut Up with your stupid blogs about the Music Industry and the NBA Lottery. Things that should not concern you at this moment in time.

    And go and sign Kobe.

    Comment by TheShowMan -

  53. Interesting KIOSK platform on FOXNEWS.COM today from microsoft:

    http://www.foxnews.com/story/0,2933,276384,00.html

    Can you imagine a group of teenagers around a coffee table, each spilling their iPods onto the screen and then grabbing at each others\’ music?

    Comment by David-Plano -

  54. Remember way back when you wanted to bank and there were only human tellers that only worked \”bankers hours\”….oh yeah that was only ten years ago. What may be a good idea but \”too early for its time\” is not something that should be discarded and revisited five or ten years from now. In today\’s whirlwind society of technological advancements what may be an idea that is too early for its time likely needs to be revisited annually. The music industry certainly makes that case. There are two ways for the music industry to tip the scales back in their direction. One is to limit the distribution of the product with a solid strategy to extract a greater value or price (that offsets the reduced volume), or as Mark points out, increase and/or improve the availability of the supply. The music industry sits back passively and lets the middlemen (the retailers) take control of the marketplace. Yet another industry in a fast growing line where the manufacturers of the product have lost complete control over their industries future. Meanwhile the Apples, Rhapsodys, Amazons, Napsters, Real Networks are posting double digit and record sales numbers. To take Mark\’s thought one step further if the four major labels were smart they would seize this opportunity, prevent any one else from engaging in it (since they own the product) and GET TOGETHER and finally own and operate the ultimate distribution channel together.

    Comment by Bob Barbiere -

  55. the problem is simple. media companies think they are selling CDs or DVDs. Hell even the comic book world still thinks they just sell paper.

    What people have to realize (and what the digital age is forcing them to realize) is that they sell the content, not the medium. They aren\’t really media companies, they are content companies. CBS has it right in their commentary on last.fm – they are an \”audience\” company.

    If these industries would take half the money they waste on DRM (none of which actually prevents piracy, really DRM has done ZERO to deter piracy, just look at usenet / piratebay / etc) and actually spend it on new and interesting (i.e. not American Idol vetterd) artists, then maybe they\’d have a growing top line.

    Comment by bipit -

  56. I think you are totally wrong about CDs. I buy CDs because I want to listen to them in my high quality audio system at home. MP3\’s or other computer generated downloads will not sound as good, period. You basically are under the incorrect assumption that people aren\’t interested in audio quality & won\’t pay for that.
    Wrong Wrong Wrong

    Comment by Hershon -

  57. Sorry about the typo\’s… I get excited when I talk about this subject. Forgive my bad typing. But the message is the same.

    Comment by Indie Messiah (.com) -

  58. There is nothing important being said here.

    For 12 long years I have been sharing the light. Indie Artists think there is a \”Revolution\” and there is no revolution. But, they don\’t want to hear it, and they don\’t want to do anything about it.

    I saw the demise of the CD as far back as 1996. The technology was over 20 years old then, and there was no new upgrade capability left… No new news there.

    The record labels are squeezing your balls. They got so many people to believe that DRM was there solution, not they are backing off. Why? Because they have you convinced that you MUST download your music from the likes of Itunes, so that part of the job is finished.

    Internet radio. The RIAA has put the squeeze on Indie radio stations. Now, some attorney will call you if you own a music site, or radio station, and they will try to force you to pay royalties to any artist who holds an ASCAP/BMI card. They wanted to kill Indie radio. It won\’t work, but it is part of the big plan.

    The patent for MP3, MP4 (Itunes, is owned by corporate conglomerates. (In the case of Mp3, Fraunhoffer) Corporate wienies will attempt to buy that patent and close down any person selling Mp3 based music. It WILL happen!

    Software. Do you write music? Read the EULA (End Users License Agreement) on your software, i.e. Acid, Magix, Sonar, etc. Read really good, and be sober when you do. They have clauses in there that state that you can make music, but if you sell it, they \”could\” collect licensing fees for distribution. Read the damn thing.

    MySpace. Owned by the New York Times. It is a record label. They want you to post music so they can control it better. Garageband.com… Record Label, etc., etc.

    There is more, WAY more! But only the FANS can do anything about it. If you want FREEDOM, then DO SOMETHING! Quit walking over the cliff like sheep to slaughter!

    2 Years ago, SONY, the scammers that run American Idol, and EMI records, planted MALWARE, freaking MALWARE, on your CD\’s and on to your harddrive! Is it off of your computer? Most likely not. They got sued, in a hush-hush, palm greasing, lawsuit. But, fans were generally kept in the dark. There was no uprising, no revolution. That is what a revolution is! An uprising! Permanent change!

    I don\’t know if you are Indie artists, or fans, but it does not matter. If you want permanent change, YOU are the catalyst! Do you want FREEDOM, or do you want corporations dictating what you listen to and when, and on what device? What do you want?

    My new show, the Indie Messiah Show, will deal with this and a whole lot more. You want a revolution? I\’ll be Che\’ Guevara, and you join the revolutionary army… Let\’s do it!

    Viva, la\’ Revolution… http://indiemessiah.com

    Comment by Indie Messiah (.com) -

  59. Refer to the new Verizon phone where you can record music and purchase the song the phone hears through Verizon\’s \”Get It Now\” service. This is a good adaptation of a \’hear now – buy now\’ device.

    Comment by Eric -

  60. Why in the world would I want to walk into a 7-11 and stand in front of an ATM while I browse music? Are they going to have speakers outfitted on them too so I can get a preview before I buy?

    It\’s much easier to set at home in front of my computer and browse all I want without having to worry about the guy behind me wanting to take out 20 bucks.

    I like some of your ideas but this one is off the mark. No pun intended. :-)

    Comment by T thompson -

  61. Isn\’t it amazing that the record companies hold most
    all the important cards… that being the content,
    and they can\’t figure out how to get it to the consumer
    in an easy, and competitively priced environment? People
    are motivated to purchase the music, not the technology.
    If IPod had restricted access to music content, it would have
    been a bomb. Record companies have the content \”ace in
    the hole\” and they still can\’t figure it out how to use
    it to their own advantage. They made a very BAD decision
    with Apple, now they have to live with it. They could of
    had us ALL by the balls, but now… the consumer has
    the record industry by the balls.

    Comment by MediaBait -

  62. The immediate problems with the MP3 market are three-fold:
    1) the MP3 itself. I think there needs to be an option available to acquire (via download) BETTER then CD-quality audio, for a premium. If the average album runs $10 on iTunes, I have no problem paying 12 or 13 for something better than the 44.1/16 format of CD (no reason an iPod couldn\’t get a playback codec for SACD)
    2) As everyone here mentioned, DRM. At some point, when all the players in the music business are collecting unemployment, they\’ll finally understand a basic principal: music will be \”stolen\” for as long as they make it hard to deal with.
    3) Last but not least, and the one nobody talks about: CDs provide the comfort of an \”archival\” format. When my PC/hard drive/iPod takes a crap (as they will in the world of disposable electronics), you\’ll always have your CD copies.

    Comment by Matt -

  63. The CD has been losing to the DVD in consumer desires (not music DVDs). I used to buy close to 200 CDs a year for at least a decade. But in the past 5 years I might have bought a dozen CDs. Is it because I\’m a downloading fool? No. It\’s because I\’m \”full.\” I rarely hear anything that makes me say, \”I must own that!\” I like the new Feist, but that\’s it on the new shelf. I\’ve got all the rock bands i like. I\’ve got my Beach Boy, Beatles and Zep. I\’ve even got Falco\’s greatest hits. Not much for me to buy.

    On the other hand, my DVD collection has grown leaps. Just last week I picked up 5 TV show boxsets.

    Comment by Joe Corey -

  64. Yes, this is easy.

    Even easier in a controlled environment like Barnes and Noble, Borders..

    It is incredibly easy to serve up a library, customer orders, chooses format (wma, mp3, aac), docks their device (customer service rep can do this between mochas) enters an order id and downloads.

    Same order ID would be available online so if they don\’t have their device on them, they can still complete the sale.

    Here\’s where the danger lies.

    1. Majority of users do not know how to do anything ipod, sd card, phone, zune related outside of their home PC environment. So the sales process is slowed to a crawl.

    2. Virus would be easy to 1, grab all data and download, 2 kill all data.

    The record companies are dumb. THey only are concerned with the product and not the delivery. Their business is based on distribution, not direct to market. I\’d hate to spend money on R&D to create a product that can be sold to retailers without the consent of the RIAA and the record companies themselves.

    Unless you have deep pockets (hint to you Mr. Cuban) and can afford to put about $500K into this investment with the possibility that the idea never reaches the market.

    Comment by PSC -

  65. Mr. Cuban,

    I have two takes on your statements:

    a) Three years ago I too thought that this would be a great way to \”modernize\” the distribution of music & news information. I envisioned convenient stores harboring \”pods\” that would connect with our smartphone or ipod and transmit information at different costs depending on what information you wanted. This would allow the newspaper/music industry to benefit in two ways: a) perfectly price discriminate (through the lowering/rising of costs depending on the # of hits or downloads) and b) monitor the amount each article is read, and if need be cut costs (by fire writers).

    But now, three years later this idea seems \”old.\” Wireless technology allows for users to download media to handsets around the globe. The devices you suggest that work with immobile devices such as cash machines would never work and frankly not make sense. Why? Because now we have the ability to download media directly to our handsets wherever we may be. There simply would be no way for a company to regain such heavy fixed costs when these instruments would prove useful for at most another two more years.

    Fortunately, companies (Sprint leading the pack) are working hard on their new wireless technologies (for once, they might have something innovative since the PTT) that would have the ability to transmit information much faster that what we\’re seeing today. This technology would would patch up any issue of inconvenience we experience today when downloading music/news to our handsets wirelessly.

    Unfortunately, I\’m disagreeing with you here, Mark. Coming from a maverick like yourself, I must admit that I was thoroughly disappointed by these stale suggestions. Your foresight is now in question.

    Comment by Patrick LaValley -

  66. There are only 2 reasons that the music company exists:

    1) Distribution of music
    2) Getting radio play

    Artists don\’t even need the music company for #1 now. Every band has a website, and every one of them can offer their albums for download easily.

    As far as #2, I think that is the key to changing the music industry. There has to be some real investigation into how people get exposed to new music other than the radio. Obviously, the established artists don\’t even need this. I hear that Nine Inch Nails will be doing one final album for their record label. Then they will be independent. Once more big artists start doing this, there will have to be someone out there that wants to deliver the new, independent music to you. Conventional radio won\’t, at first, until there is competition who does. Then there will be no need for music companies at all.

    Comment by Keith -

  67. The reason the music business is losing money is not the death of the cd, but rather the death of the album. In the past, if you heard a song you liked on the radio you had to shell out $10+ bucks for the album and there was a decent chance you were only going to like a handful of songs. But you had to pay for the bad to get the good Now, if you hear a song you like you pay 99 cents. Basically, people have to buy at least 10 singles to cover the revenue the labels used to make off of one album and it aint happening.

    Comment by mark -

  68. There already is an industry for music kiosks.

    http://signifi.com/05a_QuickTunes.html

    I\’m guessing that the reason they haven\’t taken off is similar to what you\’ve been saying, the music industry just doesn\’t really support it.

    Comment by Kyle -

  69. One of the ATM kiosk companies is based literally right in Mark\’s backyard of Carrolton, Texas – http://www.tidel.com/index.asp

    WiFi kiosks are a nice interim solution, but I really think that it would be more efficient to use my cell phone as a point of purchase device that could discover what music was playing around me – whether it\’s in a Starbucks, in my car, at the movies or on TV. A small app would let me scroll through music that my device has \”heard\” or had the tune id broadcast to on a sub-audio channel and I could press \’buy\’ right there on the phone. My cell bill would be charged for each song individually, or it would be part of a minute/music package.

    The iPhone and it\’s clones are bound to have something close to this capability and will therefore grab a larger share of the consumer music purchasing pie.

    This would be especially hurtful to the retailers if my cell phone camera could take a picture of a CD\’s barcode and automatically download the album to my PC or device – legally through an electronic wallet application or illegally through a bittorrent site.

    Comment by Marc Nathan -

  70. CDs still have a niche. They\’re still my preferred format for purchase since they are 100% lossless; if I buy digital I\’m getting a lossy file containing maybe 10% of the digital information of the original. Then, I have to convert it to mp3 or ogg if I actually want to use it in my automobile, home stereo or my Linux computer. By then, of course, I\’m left with 10% of 10%, or 1%, and the file sounds like that old 8-track in your father\’s 1971 El Camino. So, buying iTunes tracks encoded at a pathetic 128 kbps just doesn\’t cut it.

    Additionally, most purchased music suffers leaves one vulnerable to vendor lock-in. If you have a different type of music player that doesn\’t support .m4b files (basically, anything that isn\’t an iPod) Americans have two choices: get an iPod or violate the DMCA. The same goes for Linux users (a class much more numerous than most believe).

    Kudos to the Grateful Dead for making their music available for purchase in FLAC, an open, lossless format. Too bad other music isn\’t widely available in this format.

    Comment by Joey Zasa -

  71. With so much access to music nowadays one has to not only question whether the CD format will ever rebound but if the concept of \”buying\” music in itself is heading towards extinction. The whole notion of purchasing music was to be able to play what you want when you want. Now that can be accomplished without paying for nothing but access (online connection, pc, portable storage) so paying for stand alone music starts to make little sense to the young crowd. If I spend 5 hours a day on My Space all the hit music is on the artist page for me to listen to on demand whenever I want and my circle of friends
    Will IM me any new music Im not up on or need for my I Pod. You have Last.fm, endless music blogs and message boards that leak the latest hits 20 minutes after the promotional department at the label email blasts it to their DJ list for feedback. It wouldnt be too bad if I only surfed the Internet for little bit then went to the real world but nowadays for the young kids the Internet IS their world so why purchase anything at all?

    With that being said the future points towards licensing with the cost of creation being the lost leader. The label of the future will be more of a partnership with the artist splitting profits in all possible revenue streams. The business will be completely niche out so instead of 100 superstars you will have 10,000 artists making just enough money to keep going as the business becomes further decentralized. For the rock acts the road will be the money savior because like someone said before thats something you cant bootleg. The problem is artist development must return to the forefront because nobodys coughing up big bucks to some garbage fly by act. Hip Hop never did well with shows but the CD format on a regional independent level will maintain the business and eventually flourish as the street album takes the blocks by storm. The Googles and Yahoos of the world can back emerging mini-labels with the cash and reach to create the new music stars.

    Comment by Mitch Reisendorf -

  72. CDs are what I use to collect autographs on – at live shows and festivals. This demonstrates to the musician (you remember, those nice people that do all the real work in the \’industry\’), that you cared enough about them to buy their album. Next, the CDs become my backup in case M\’R F\’Rs sucker-punch my system with a virus. CDs are also what musicians can inexpensively manufacture to promote themselves at live shows, etc.

    No matter what technological advances are made, musicians have the hardest road to victory than any other link in the \’industry\’. If the music industry really wanted to help musicians and/or fans, they would funnel more money into music education (at least Apple and MS do that). The music \’industry\’ has created their own problems and solutions – the fewer no-talents, clogging up the works with new-fangled deceptions and conditions, the better.

    Comment by saM FFL -

  73. > How much music can be stored on 1TB of hard drive space ?
    > All of it.

    Pshaw.

    All of Pearl Jams releases, fair enough.

    But all of Pearl Jams releases, in \”lossless\” format,
    would probably take about 1/2 TB in their own right:

    http://www.gracenote.com/music/search-adv.html?q=&qartist=pearl+jam&qdisc=&qtrack=&n=25&x=49&y=10
    http://en.wikipedia.org/wiki/Pearl_Jam_Official_Bootlegs

    The qualitative assumptions that seem to be behind both an
    assertion like the one above, and the typical \”holds (N),000
    songs\” are a great disservice to both the music listener,
    and to the music.

    I don\’t find any claim that of \”MP3\’s are/can be CD quality\”
    credible. I do think that MP3s can be of sufficient quality
    for much content, and many listening environments. But
    clearly, a sound argument can be made that \”CD Lossless\”
    is a more relevant success criteria; while other (Neil
    Young, for example) demonstrate that \”CD Quality\” is
    INADEQUATE for some listening experiences.

    Irrespective of the \”encoding/capacity\” aspects, this denies
    the vast ocean of how much music there is out there.
    – Gracenote/CDDB claims to have over (6) MILLION CDs
    indexed
    http://www.gracenote.com/music/index_old.html

    – This does not include the (40,000) concerts, and
    140,000 songs, available from ARCHIVE.ORG
    http://www.archive.org/index.php

    – … nor does it include the significant volume of
    content available in NON-CD format from artist sites,
    etc.

    – or even much of what is available in CD format
    from \”direct\”/\”alternate\” channels

    – It also does NOT include a great deal of legacy (vinyl,
    tape) content that hasn\’t yet \”made the jump\” to CD
    (but which can indeed be \”ripped\” with common
    equipment.

    On the other hand, if by \”all of it …\” you mean what is
    played YourLocalClearcastChannel, or American Idol … then
    nevermind …

    Comment by Sean Finn -

  74. If it is a band I really like I want to own the CD, I like to see the CD art and flip through the book inside. Immediately after that it is backed up onto my music drive,, re-backed up onto an external 500gb drive where copies of everything are stored, and then dropped into my iPod. The CD is placed on the CD rack never to be seen again.
    And since my iPod hooks into my living room entertainment system… I dont ever need the CD again.

    Comment by Kenn Burgess -

  75. My name is Jacob Rosen and I am an aspiring young sports statistician. It is not everyday that you hear those words come out of the mouth of a 16-year-old from Akron, Ohio, but I am an anomaly. I have been sending out weekly statistical reports from the world of sports for the past year and a half. I have been ranking teams from college football for three years, and the NBA and MLB for two years. My passion is sports and my love is numbers.

    Thus, it is only fitting that I would come across the most influential general manager in sport\’s blog. I am very impressed with the way statistics are implemented in the Dallas Mavericks organization and I credit a lot of that to your excellent entrepreneurship. While I am only 16 and have many more years of education in front of me before I can accomplish my dream of a being a general manager in sports, it would be an honor if you would e-mail me back.

    Just to know that somebody might be interested in a stat-whiz like me is a very encouraging thing. Just recently I started my own blog and it contains everything from my weekly e-mail report. I hope you enjoy!

    Comment by Jacob Rosen -

  76. I have an excellent idea that takes this a step further….but I can\’t share it here.

    Comment by EDub -

  77. my two cents:

    your point about music ubiquity and the dead cd format are duly noted. it should not be underestimated that music is being pirated – that the consumer has a choice in whether to buy a song(s) or to just download it/them for free. It\’s been my experience that when that situation exists – largely devoid of consequences (as i recall – the people getting in trouble are the uploaders/hosters – not really the downloaders) people are going to preferably choose the free option. so the format issue aside – the industry will still face an erosion in actual sales that belies the wide user base. The nature of the internet makes it such that they no longer can reliably depend on the sales of music as a method of business operation.

    The summer before I started college – I did web design for a law firm here in ny. one of the attys left to work for the WWE (wrestling) and we kept in touch. wrestling has an interesting model – they own IP rights for the \”characters\” in their performances. for example – dwayne \”the rock\” johnson is a character partly owned by the wwe. in order to use his wrestling fueled celebrity – wwe collects and is listed as producer on all the films he does (and presumably negotiates fees for the use of their IP). Record Labels – AFAIK – do not get IP rights on artists despite being integral in the development, sound, look, and general image of an artist. Record labels invest in the IP of artist X – but does not really benefit from the artist touring/movies/endorsements/etc. that would not exist without that capital investment and investment in the shaping of IP.

    I propose that music be FREE. Record labels get IP percentages on all artists across a wide range of potential revenue sources. So the label gets points on the justin timberlake mcdonald\’s commercial, and on 50 cent\’s vitamin water deal. they also get points on all shows and performances. also, record labels ACTIVELY develop live video content for television (MASH-UP shows for example – introduce new music on broadcast specials featuring collaborations with hot artists, etc.). then the record labels get into business of selling content to distribution systems and not to the public. this changes the industry – and the artists will work harder now than ever (having consulted for the music industry – artists work very hard) because their money will come from performances , endorsements, and content created for distribution… and the music they create will essentially be the honey attracting the dollars to them.

    it will change the kind of artists who get signed and who thrive as the focus will return to live performance and showmanship, etc.

    my solution solves everyone\’s problem.

    ancillary source of revenue will be product placement in the shows/concerts/etc.

    in my scheme, you want downloaders – in fact you can make downloading free and restrict hosting is all – i.e. you can\’t host my stuff but you can get it for free and tell your friends where to get it. Then you get accurate numbers of downloads and you get EYEBALLS. win/win b/c you now hit them with ads to further generate revenue. partner with google and have them foot the bandwidth – they seem eager to do so anyway. printing money all over again.

    Comment by blyx -

  78. Mark,

    I think you are dead on. There are many possibilities for a better way to sell music but the industry is to stupid to see the opportunity.

    I wrote this article on it quite a while ago

    http://www.comtechnews.net/ipod-mp3/the-music-industry-is-stupid

    Thanks for another great post!

    Comment by Jack Spirko -

  79. Nic\’s right. Sorry for wasting your time Mark. Funny how a little while after just after I posted that comment, I found myself in a strip mall parking lot and saw a car with one of those visor fold CD holders above the driver seat. So I thought (quietly to myself so as not to attract too much attention), \”hey, this is South Orange County, right near a high school, lunch time, trendy affluent people, I wonder if that\’s the only car with a visor full od CDs\” and walked two rows and counted 12 such cars. Imagine the time I could have saved if I had just read Nic\’s comment!

    Comment by Brad Hutchings -

  80. i failed the hyperlinking IQ test in your editor (sigh) here\’s the link to column I wrote in 1999:

    http://www.virtualrecordings.com/bottle.htm

    Comment by Robert Seidman -

  81. Marc, I want to bet the guy who said that Internet and Satellite radio is the future of music delivery $10,000 that he\’s wrong. Do you have a venue for doing that on this blog?!

    He may be right about internet as the delivery method, but it won\’t be because people subscribed to $10/mo internet radio streams.

    To be honest, I\’m happy with the current progress. I wrote this on 1/03/1999 and it took Steve Jobs over 8 years to agree with this in public… I think things WILL get faster from here though.

    Comment by Robert Seidman -

  82. Brad\’s comment about car stereos would make sense if it was impossible to play MP3 players in cars. But there are currently a multitude of options, especially with popular players like the iPod. Griffin has made a fortune selling iTrip FM transmitters to iPod owners. And for people who buy $400 MP3 players (and often nearly as expensive headphones), what is another $100 to get a car stereo with an AUX in port? Most CD players in cars only get used on the trip from the store to home when a new CD is bought. Then it is converted to a digital format and put away in storage. Car stereos won\’t save the CD, even for a little while.

    Comment by Nic Bell -

  83. CDs are still popular in cars, and have probably been displaced more in that setting by satellite radio than by iPods. The CD player is the centerpiece of the car stereo now, unless you look to specialized units. Alpine shipped its first head unit without a CD player just a month ago. Meanwhile, most of the OEM units are just starting to come standard with an analog input jack. No iPod or other MP3 controls on the head unit… I\’d say the market for CD-R media will be strong 5 years out, and CD sales will see a bottom supported by the installed base of automotive players. The old cassette format held on for a long time against CDs while vinyl went niche quickly in the early 90s. I suspect that had a lot to do with car stereos.

    Comment by Brad Hutchings -

  84. I dunno — the business of recorded music smells a lot like the business of sheet music 90 years ago. Music will live forever, but an industry built on selling recorded music won\’t.

    Kiosks are interesting but I would see those sales being incremental, not transformative. Allowing iPods and other devices to slurp up music from more than just their host PC is certainly a good idea though — as long as I can also get legitimately unprotected free music from my friends while I\’m at it. I\’m more likely to do that than dash to a kiosk when I get the impulse to buy some tune that\’s stuck in my head.

    Still, the business overall is in decline, and smart music companies are looking beyond recordings and getting revenue from the stuff you can\’t encode and share for free(yet) — concert tickets, t-shirts and merch, cool fetish-object packaging, and so on.

    It gets cheaper and cheaper every day to make a high-quality recording, if you keep your fancy furniture and cocaine budgets under control. So smart musicians (and their smart managers) are treating recorded music like a marketing expense, and know that if 10,000 people are downloading their tunes for free, that\’s 10,000 more people who might pay $15 to see them play live and buy their t-shirts and cleverly-packaged souvenir discs.

    The music industry has a long history of clinging to dead models for just a minute too long — they wanted radio dead for years before they noticed that it was a marketing tool that could sustain them for decades.

    Comment by Matt -

  85. All cool ideas…but finding music is still the key. So…where do you hear new music? Radio?..maybe..or shared from friends. Why not broadcast songs via RSS and enable simple 2-way RSS to download. So make a pandora like place for people to drop songs to you and/systemically match your tastes…listen and decide. Hardrives in ATM\’s? Who uses ATM\’s? With RSS you can \”listen\” to your radio-cast anywhere…sync up in case your going out of a wifi connection…XM is going down…Mark (no pun intended) my words.

    Comment by David Armstrong -

  86. Interesting commentary. Although consuming music does tether me to my PC, when I\’m at my PC is when I usually have time to browse and purchase music selections. When I\’m in a place that would have a music kiosk — like an ATM or a mall or the gym — I don\’t necessarily have the time to devote to browsing music selections. However, the gym is where I listen to my iPod, so if a turnkey solution was available there I\’m sure I would use it. I can see it now…droves of people cancelling gym memberships because all they do when they go there is download music. ;-)

    Comment by Glenn Laudenslager -

  87. Under the implosion of the \”album\” model for music sales there are some interesting developments.

    First, quality and valued music will always be so valued – acts such as Prince and U2 and The Stones are making even more money than before shed of their labels and via the live concert tour. The one area where music cannot be pirated or have any interaction with a PC is the area that is thriving – the mega tour.

    The channels of retail selling music has had an amazing but understandable upstart in Starbucks, with their \”notions\” selling of music at the point of purchase for your cafe latte. The problem is that the sheer brawn of 49,000 retail outlets can still only show 3 to 5 selections at a go.

    Finally, classical, operatic, and even jazz resists the computer download (baud speed just isnt there yet)and stays profitable in CD album form and multi-media DVD form. These classical music forms also translate well to VOD and HDTV as they are not as ambituous as the \”mega-tour\” presentation (very hard to capture The Stones tour experience on a TV screen – no matter how large) and yet the classical, operatic, and jazz music forms fit very nicely into the niche demographics backing much of VOD technology. Given the ability of VOD and with HDTV, what were only a few thousand per community oif audiophile callsical, jazz, and operatic buyers can now be organzied into a national and even international market of more thna enough size to generate profits. Especially whent hey are the only ones still paying top dollars for CDs. Just check out the huge success of the NY Met Opera simulcast in national movie houses of the occasional Saturday afternoon \”Live from the NY Metropolitan Opera\”

    Your local opera company may now have more worth than you think. What has been traditionally only philanthropic and local community service may now actually have very valuable content and form in libraries for the new international environment of music sales.

    Comment by Mac Robertson -

  88. Hi Mark,

    The music industry really needs to embrace technology, but not in the way that you suggest. Subscription based satellite and internet radio which automatically delivers content to the portable players is the future. The purpose of purchasing individual tracks allowed users to choose which tracks they want to hear. Subscription based players will pick up your listening preferences, automatically store the music tracks you\’re likely to download anyway and let the user skip tracks or allow users to return to them in the future. All for under $10/month.

    Slacker Radio http://www.slacker.com has been generating a lot of hype about this exact business model. However Apple or any other competitor could quite easily muscle in (Microsoft\’s Zune player anybody?). It\’s time that the music industry cultivates these technologies instead of pursuing their current methods of protection.

    Comment by Mike -

  89. I agree with the comment above, music isn\’t a grocery item and the appeal of the digital musical era hinges on the fact that the listener can control exactly what they\’re listening to. It\’s very personal and defies conventional marketing methods–much to the agony of the content providers.

    Because of identity theft, the consumer is protective of their log-in information and would, most likely, not enter it into a public kiosk.

    I\’m not certain that the music industry can be \”saved\” by restoring traditional purchasing methods or by employing new fangled ways of getting the public to improve sales.

    There is obviously an unprecedented level of interest in music–this is evident by the amount of people who vote for \”American Idol\” contestants each week and download mp3s of their performances.

    I believe that the IPhone and all its subsequent imitators will ultimately change the way people purchase music \”on the go\”. However, the fact remains that consumers prefer to shop online more than any other method and until the record companies invent attractive and affordable incentives to lure in customers (bonus tracks, pre-release material), traditional methods will prevail.

    Comment by Angelo J. Guglielmo, Jr. -

  90. Mark,

    The history of the American music industry is one of utter fear and rejection of format change and technology.

    They\’ve learned nothing from their past mistakes, and it will ultimately be the undoing of at least a few of them.

    Comment by Jeff D -

  91. I totally agree with your points Mark. I have already seen kiosks in the mall where they sell iPods from a vending machine, and there is a touch screen where you can purchase other gear. I think all they need is the ability to program an update for iTunes and you\’ll have all the mall kiddies flocking to get the latest Brittney Spears single right on their overpriced vending machine iPod. Brilliant idea, but the cost of the iPod itself still needs to come down.

    Comment by get a loan -

  92. I agree with the article and all points above. As long as the music industry still refuses to \”get with the times\” and rely on CDs they will be forever lagging behind and find themselves continually lagging in sales.

    Many other industries have figured out how to adapt to advancing technologies, yet the music industry continues to play stupid and lose sales while blaming music pirating and illegal downloads for the majority of their problems.

    Comment by MLS Jerseys -

  93. Hi Mark,

    The answer lays in the infrastructure of the internet – (wimax and 3g) – will inevitably become standards. Hopefully sooner rather than later. The solution to your post will come from an \’untethered\’ version of itunes (or something similar), whereby users download songs directly to their mp3 players (from anywhere.) Hence, solving the… \”I\’m listening to this song at Starbucks… how can I download it now?\”.

    Needless to say – bank machines offer a potential immediate solution – but they do not have the profitability architecture to maintain a competitive advantage.

    Cheers,

    Jesse

    Comment by Jesse Sternberg -

  94. Good points Mark. The real future is not devices and temporary storage media but in smart databasing, remote instantly accessible storage options, and systems for monitoring and billing for fair use individually and commercially.

    Soon the focus will be on personal agents that seek out music and use contemporary text, voice and sound search techniques to aggregate personal interests. Tell your robot you are having a Jetson\’s party and it programs the appropriate, cool stuff for atmosphere-ask the agent what song it is with the line\” picture yourself in a boat on a river\” and viola \”Day in the Life\” appears, etc.

    \”Record companies\” are already dead-content providers will handle audio content dispassionately and artist management and promotion will assume new dimensions. Pieces of plastic and particular gizmos are largely irrelevant-new models to keep track of traffic and routing will be more relevant and those folks who figure out where to equitably set up the toll booths will succeed and make money.

    Comment by Dick Deluxe -

  95. The music industry won\’t change any time soon. It\’s like me trying to convince IBM to open source all their software under the GPL. Everyone\’s going to have to adjust to the effects of digitization and digital distribution, it\’s just a matter of when, and who will eat their lunch in the meantime.

    Anyway, on to Mark\’s specific idea. It\’s not a bad one, and I\’d like to see the industry go further and simply continuously broadcast (e.g., network coding) music for local device storage–phone, home–on any/every kind of network where they can get a little bandwidth. I can then shop locally.

    I gather the major problem with this is DRM, i.e., how to lock the music until you purchase it? Are we always going to be stuck with central transaction servers?

    Feel free to shoot all this down…I look forward to comment comments.

    Best regards, Joe

    Comment by Joe Latone -

  96. Good thoughts Mark… today\’s ATMs are all high-speed IP connectivity and Windows interfaces, so what you propose is technically feasible. The challenge is the cost… ATMs are a loss-leader for banks, but banks must have them or they are conspicuous in their abscence. ISO ATMs make money in massive scale and through ridiculously high convenience charges. The song model will not accommodate this kind of pricing.

    Wireless and Wifi (and a wireless Ipod) is the answer here, but whatever the deployment method, everything you suggest is the direction it\’s going.

    Honestly, I will miss CDs. I happen to like the liner notes, stickers, etc. I think the declining business model for CDs is predicated on two things… more than just the advent of digital music.

    First, I think its the lack of quality content, both in the music and in the packaging. Put more content there (for a great example, look at what Beck has done with \’The Information\’) and people will show more interest.

    Second, the decline is also led by a misguided price point. Record companies are pricing CDs at margins to accommodate how much money they want to make, not charging what the market will bear for their product. If all CDs were $8.99 and had good liner content, alot of issues about digital theft would evaporate, because at the end of the day people are willing to pay for a good product at a fair price.

    Comment by HJ Mann -

  97. Top four ways the music industry will ruin your idea, even if they try to implement it:
    1) Low-quality MP3s, the the hope of selling it all over again to you at better quality compression
    2) No provision for re-downloading files that get lost
    3) DRM on the audio files that make it unattractive to purchase
    4) Lack of selection – only a portion of recordings will become available, so anyone not in the mainstream market will not find their music

    Only after they lose the battle will they regret the approach of holding tightly to the past instead of being a visionary as you suggest. I don\’t think that the music industry cares about meeting customer needs in order to increase revenues. They are much more interested in increasing their control of how and where content is used, so they can perpetually license it to people. As a result, both content owners and the public all lose.

    Comment by Bob Russell -

  98. that our was a typo and was supposed to be \”your\”. Not trying to claim rights to the idea Mark

    Comment by superdave -

  99. I have a slight modifcation to our idea

    You walk into the music store, find an album yo uwant, write down or take the piece of paper that has the bar code for the song or album. Walk to the counter with the code, and they either put it on your ipod or sell you a flash drive with the music on it. a 128 MB flash card will fit a full CD encoded at 192 Kbps and you can now get a flash drive that size for like 10 bucks.

    Comment by superdave -

  100. I used to work in the music industry back in the early to mid nineties and around 1995 the company I worked for started an ill-fated venture called 1-800-musicnow. Their slogan was \’you dial, you listen, you like, you buy\’.

    You called the above number and used push-button phone tones to listen through music selections and if you liked something you could order it (a CD) on the phone and it was shipped to you for 20 bucks. The company failed.

    I remember talking to my co-workers and all of us agreeing that the business model was doomed. Even though it was only the mid-nineties the writing was on the wall. The future was digital distribution of music and I thought for sure the music industry would re-tool and head that direction in a year or two. Boy was I wrong!

    12 years later they still don\’t get it.

    Comment by Kenneth -

  101. I buy CD\’s for 1 reason:
    I HATE HATE HATE HATE HATE dealing with DRM. I go through devices/computers like . It can be a pain to authorize/re-authorize/de-authorize my devices. I bought the freaking music, let me do what I want with it for personal consumptioin. I have tried MSN Music, Urge, etc. While the interface is simple, I dont have full access to all the music that I want. I needed a Beetles album (I think) and MSN Music did not have it. I assume this is a record label thing, licensing, etc. I ended up going to Best Buy and finding it there.

    I dont see a time that I would not by a CD given the opportunity.

    Peter

    Comment by peter -

  102. What a great idea! I can\’t tell you how often I have been sitting at Starbucks (or some other locally-owned coffee house) or standing in line somewhere listening to the music being piped in to entertain me and hopefully make me forget how long I\’ve been standing in line when I heard a great song (gone are the days of muzac (sp?), thank goodness). There is no way I will remember that song when I get home (getting older is sucking). I would LOVE to be able to plug in my iPod and download that tune right there while it is fresh on my mind.

    Chris\’s wifi idea (above) is a great one as well. I want it all.

    Comment by Jo Beth -

  103. I actually see a lot of people on the subway here in Boston using CD players.

    (not as many as I see using iPods, but easily 2-3 per day)

    of course, I also buy and listen to vinyl records when I am lucky enough to find something I like has come out on vinyl.

    Comment by Tape -

  104. There were 6 billion discs manufactured in North America in 2006. 48% DVD-video, 27% CD-audio, 18% CD-rom and the other 7% were either different DVD media or Blue Ray or HD. Believe it or not but my company still duplicates audio cassettes. There\’s still a market for the CD but we\’re probably done seeing the large run which may or may not cause the big boys to down size thus making my company a major player. That is what were banking on!

    Comment by scott machen -

  105. I have to agree with you. Remember when HMV music came here to Canada? (okay so maybe you\’re not from around these parts) Previously, A&B Sound was the big kahuna of CD sales here in Vancouver. Well, the big thing then was to go to HMV. HMV had these new listening stations (remote buttons and earphones plugged into a cd player). My friends and I would all head to HMV and listen to cds that interested us. If we liked the music, we\’d pretty much buy it right then and there. It didn\’t matter if HMV was more expensive than A&B Sound. It was purely the convenience and the \”hipness\” of buying from HMV.

    The next obvious step is the Mp3 format. Everyone uses it (except my old skool dad, he still has a tape player believe it or not). They should be selling the format at listening stations. The stations could me in the middle of the mall, at a music / cd / dvd store. Heck, it could be at a gas station if it were busy enough. Just the convenience of the format would make it an easy buy. A sales guru once told me that price is really 10% of the purchasing equation. What we invest into the purchase emotionally, equates for the rest.

    Since then, A&B Sound has go into bankruptcy and HMV has diversified into some other media (namely DVDs). A&B Sound was bought out by some big computer company. They are now fighting tooth and nail with some other box stores here (namely Best Buys, and Future Shop).

    Comment by Nelson -

  106. While the idea has merit, I think that most people take their music seriously enough that it requires some window-shopping time– something that would be incredibly frustrating when there is more than one person involved. If I know exactly what I wanted it would be a no-brainer.. but those times are few and far between. This isn\’t gasoline or milk.

    Wi-fi iPods would be a far easier approach. Enter your cc info in at home, find a hotspot by the pool and browse/buy all you want.

    Record companies should also look to evolve from producing albums to artist management.

    Comment by Chris -

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