You would have thought that Nokia's (check blog archives) Comes With Music was revolutionary enough. Sony Ericsson did and will be releasing a service along those lines in January 2009.
However, both of these services have a serious catch: DRM.
All of a sudden, Datz shows up with a new business model. Sure, only EMI and Warner have signed, but it is only a matter of time before Sony BMG and Universal strike a deal.
In a nutshell, 100 pounds, 1 year, unlimited download of DRM FREE music!!!
Steve... we have a situation...
http://news.bbc.co.uk/newsbeat/hi/technology/newsid_7699000/7699487.stm
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5 comments:
I can only feel like this is the beginning of the end. If economical history has taught us something is that bubbles always burst at the worst moment.
My fear is that this is a desperate move from the bigs that will affect the very foundations of the record industry, and will put it in a position that will make it hard, if at all possible, to survive in our industry.
Big thumbs down to these kind of quick fixes that will most probably affect very adversely our future.
I do not quite understand why you feel this is the end Giacomo. I personally do tend to believe this a new beginning. Sure the traditional structure of the industry as we know it is going to change, but who says change is bad?
Richard Branson sold the Virgin Megastore chain because he seems to have foreseen the metamorphosis that was to take place within the industry.
In effect, the four giants have acknowledged that the traditional and old methods need some updating in terms of business models and by signing such deals, more responsibility will be put in ISP's hands as the IFPI recommended...
Without going into much depth, it would look to me this business model will be based on the same model that started the mobile phone revolution 10+ years ago: offering free phones, and recouping expenses from "air use" fares.
As useful as this system proved, I see many potential problems with it, such as the fact that a debt based system is the only way to recoup this money, something that can only affect artists adversely.
Of course this is OK for back-catalog music, but can this system create enough revenue to help re-float an industry worth $29Bn and create potential for expansion?
Of course, all of this is assuming they will use the same system. As I have found no more data I can't say for sure. But still, it looks like the kind of business model where independent labels and artists will be utterly excluded, hence creating a potential monopoly. How are independents supposed to compete in a world where the powerful companies "give away" music that has been marketed so much more strongly?
Unless I am missing something (which is of course a possibility, as I've only yet read a few articles on the subject) it would seem like the primary objective of this new strategy is to stop illegal downloading. However, I pose the question: Where is money for royalties, recording expenses, marketing expenses, etc, come from?
From an artist's point of view, giving away music is the same no matter who does it: kazaa, Nokia or EMI.
Personally, I would feel safer knowing what kind of numbers they are using to asses their market performance ;)
For somebody who does not really wish to go into too much depth, you did not really save a lot in terms of word count :)
The new business model I was referring to does not limit itself to providing phones with access to music playback capabilities. As you have seen, Datz has released a USB key that will grant access to their database.
The idea is simply to offset the decrease of CD sales by adopting a different distribution channel: The net.
Will this mean the end of Record shops? Not necessarily, for I believe the consumer has many faces and purists who claim they can differentiate between a high quality MP3 and a CD will and cannot not be ignored by the industry.
Although, in my opinion, the music industry has understood that what was once known as merchandise, is to be turned into the ultimate source of revenue (i.e: wallpapers, ringtones, VIP access to websites, and so on...)
Mind you the greatest accomplishment of the new format is the illusion of cost free music. I have the firm belief that music cannot be free, for there simply too many entities involved. The financial aspect will be unchanged, there is a simple mobilization in terms of who will be getting the invoice.
As for independent labels and artists, they have adapted to the system in the past and I am convinced relevant strategies will be developed.
As for monopoly, when one talks about the music industry which companies have the authority to change it all? The monopoly has been here for a while...
Indeed, I cannot agree more with every single one of your points.
I guess considering myself more of a musician than a business man it is hard to admit to myself how much things are against small businesses and independent musicians.
A shame, but I guess that if you wanna beat them you gotta know the game ;)
Very interesting discussion and initiative, I am looking forward to read some more opinions from our fellow students and staff.
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