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September 11, 2007

Record Exec States Obvious Truth, Greeted with Shock

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Posted by Alan Wexelblat

In a NY Times Sunday magazine article (that I won't link to because it's locked up behind a 'premium' wall) Rick Rubin finally admitted publicly what copyfighters have been saying for 8 or more years: the record industry's current business model is dead. *yawn*

So why is this getting all kinds of press coverage? Well, Rubin himself is pretty well known in the industry for a string of successes as a studio producer (e.g. Beastie Boys), a career-reviver (Johnny Cash), a record-label founder (Def Jam) and was recently named co-chairman of Columbia Records. He's also known to some as the producer of the infamous 12 Songs CD by Neil Diamond that contained Sony's rootkit.

As reported by many bloggers, Rubin's comments to the Times were unusually straightforward. He labeled the current business model "done" and the record companies as "dinosaurs." Yes, Rick, we know. Here, go listen to MC Lars already.

Sandoval's piece for CNET, and a similar analysis by Nate Anderson for ars, highlight Rubin's plan for subscription access to music anytime, anywhere. Sandoval mocks the concept, noting that prior attempts at this "jukebox in the sky" have failed. Anderson further notes that Rubin still doesn't understand the notion of grass-roots buzz, since he apparently feels that Columbia can hire college kids to create buzz. What they're missing is that there is already a free cloud out there, whose mission is to let you get to your content any time anywhere that you have a live net connection. Google, anyone?

I freely admit that I've drunk the Kool Aid here. I hate the idea that Google's going to claim to own content I've uploaded to them and that it's going to index that content and sell it to marketers. I'm not a huge fan of getting ads with my email. But I loathe attachments and their virus potential more. I hate the proliferation of memory sticks and ipods and not being able to figure out which bit of my stuff is on which box. If people want to send me documents I tell them to put it on Google docs and share it with me. I store a fair amount of my own stuff up in the cloud - it's gigs of free storage and I can get it anywhere, independent of the device I use to access the cloud. The infrastructure could trivially handle my music collection and stream it, too. It's just a matter of negotiating the right fee structures to pay for the storage and bandwidth costs.

Anderson is right that DRM issues would still need to be worked out, but I don't regard those as insurmountable. The base line here is that the music business has to compete with free and I don't think anyone has done a better job to date than Google at monetizing "free" email, storage, and downloading. Of course it's not really free but since I'm not forking out large numbers of visible dollars and since they've put a lot of effort into making the experience as easy as they can figure out it registers as free.

For much of the past few years of the Copyright Wars I've been arguing that the Cartel should look at the bottled water business for ideas on how to sell a product at a premium price when that product has to compete with free alternatives. Since they don't seem capable of that, maybe they'll be able to recognize that free is always relative and pick a form of free that is already showing tremendous success.

Comments (2) + TrackBacks (0) | Category: Big Thoughts


1. Mars on September 13, 2007 9:58 AM writes...

I do not see either the DRM issues as unsurmountable.I feel like they are as necessary as the driving laws: it bothers everybody but in the end it is all about respect. I have heard a lot about Entriq, which is the DRM system for MTV Network, 9thXchange and others, but I do not really see how it works.If anybody could explain...

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2. ERrtjhd on December 28, 2007 11:50 AM writes...

"I have heard a lot about Entriq, which is the DRM system for MTV Network, 9thXchange and others, but I do not really see how it works."

That's because it doesn't. "DRM that works" is like "perpetual motion machine" -- nutjobs are constantly trying to invent it, and occasionally announcing that they finally succeeded, but it never actually works as advertised.

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