Universal CEO Doug Morris makes an easy target for the blogosphere. This is the old-school record industry executive who called iPod owners thieves and wanted broad legal enforcement against piracy — enforcement that, in the end, seems to pale in comparison to the revenue generated by actually offering online sales. So, now that Morris has gone up against Wired, the blogosphere can easily see him as a dinosaur.
Universal’s CEO Once Called iPod Users Thieves. Now He’s Giving Songs Away. [Wired News]
But as artists, all of us face a fundamental problem: how do you put value on something that’s ephemeral? It’s an age-old issue that has faced musicians explaining to their parents why they don’t want a real job, and artists to their patrons when affixing a price tag. (And as we’ve seen from veteran software developers and the BanPiracy debate, software “artists” face the same challenge.) Sure, people love to talk piracy, because it’s easier to talk in those terms. Piracy is theft, theft is crime, and crime is bad — including making a mix tape for a friend. Or all music should be free, and never mind that artists need health insurance and rent money. They’re black and white extremes, entirely couched in moral/philosophical terms, neither of which contend with how to solve the actual real-world problem (at least, not if you stop there).
And then I came across this quote from Morris in the interview:
“Really, an album that someone worked on for two years — is that worth only $9, $10, when people pay two bucks for coffee in Starbucks?” Morris sighs. “People never really understand what’s happening to the artists … If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for Coca-Cola? There you go,” he says. “That’s what happened to the record business.”
Wait a minute… a liquid that comes out of your faucet for free, but is also sold, in bottles, at retail. How much would you be willing to pay? Hmmm… this sounds familiar.
It’s called water.
And how much are people willing to pay for the privilege of packaging, control over subtle variations of taste, and mobility? Quite a lot, as it happens. More than Coke. It’s not uncommon to see Coke for $1.50 at a grocery, and $2.00 or even $3.00 for water. In fact, Coke might have gone for the running water through the tap idea, as additional revenue and a way to increase consumers’ taste for the stuff.
Oh, yeah, and that tap that runs water music into your home for free … the radio? Not a new invention. None of these things is easy to monetize, mind you (ask your local public radio station during their pledge week), but it’s clear there are ways to make people see value.
If this isn’t a lesson for the music industry in the digital age, I don’t know what is. Find a way to increase consumer perception of value, even if the thing supposedly can be gotten readily. Find a way to sell the packaging, and find a way to make that purchase part of people’s daily routine. (And music, in case you haven’t noticed, is ubiquitous these days whether you touch a torrent server or not.) And maybe the bottled water people could teach us a thing or two.
As it happens, Universal’s digital music schemes seem to be a decent start strategically. They have two prongs: one, distribute music, DRM-free, in multiple stores, breaking up the Apple iTunes/iPod monopoly with music that can be bought and played everywhere. Two, provide subscription music, with DRM, for free, subsidized by hardware manufacturers. Now, if the subsidy makes business sense for manufacturers, I honestly don’t see anything wrong with that. Universal ransomed Microsoft over the Zune, which I personally found ridiculous, but now at least the hardware makers get something in return. And while DRM on music you’ve paid for, on subscription services it actually makes some sense. In fact, usually if you really grow attached to music and want to make it mobile, you’d then buy non-DRMed music. Problem solved.
The only really strange twist: a new breed of Apple iPod fanboys, who get their panties in a bunch over the idea of music being bought anywhere other than iTunes and played on anything other than iPod. (I miss the Mac fanboys who fought for you when IT wanted to install a Dell with Windows ’98 and Novell. Those were the days.)
Personally, I don’t see the problem. With DRM-free MP3s, any device can be a playback device — iPod included. And as far as subscriptions, if you don’t want them, ignore them and buy the MP3s. If you do want them, you can already play Rhapsody over the Web with a Mac and Linux. Firefox + Rhapsody + Linux works quite nicely, in fact. You can’t use them on mobile devices yet beyond Windows, but that seems like a fixable problem — a technological problem, particularly since these devices should in future connect directly to wifi or phone networks, not your computer.
But artists don’t have to worry about such things: you want your music everywhere. And if, in fact, Universal is a dinosaur, then the question is, can you find someone else who does know how make water thicker than Coke?
