Re: Does mp3 sharing genuinely hurt the recording industry?

Date: Thu, 17 Jul 2003 07:49:24 +1000
Newsgroups: rec.music.makers.songwriting,rec.music.hip-hop,alt.music,alt.music.mp3.winmx,alt.music.mp3
Size: 3,708 bytes

Kerry wrote:
> I've been following this thread for some time and I think the point is
> being missed. The legality of file sharing is irrelevant. It's a
> simple matter of supply and demand together with human nature. People
> like music and don't like spending money unnecessarily, technology
> provides a means to get free music so they will. As one roadblock
> after another is put up they simply adapt and find other methods.
> The average person could care less if it's legal or not, if they can
> get something for nothing they will. Fines and penalties have very
> marginal effect in getting people to obey laws they don't like. There
> are countless examples of this, speeding on the highway and illegal
> drug use to name just a few.
>
> As I said it's a simple matter of supply and demand. Like it or not
> the music industry needs to adapt to the new reality, some suggestions
> would be:
>
> • Provide an incentive to make people want to buy their product. For
> example tout the higher quality of their product compared to mp3's.
> Better sound quality, liner notes, artwork on jewel boxes, etc. There
> will always be a market segment that's willing to pay for quality.
>
> • Price their product to sell. This is economics 101. It takes time
> and effort to locate and download songs, time is worth money. I doubt
> most people would consider it worth their while to download large
> amounts of music it they could buy it at what they considered a fair
> price. Of course the industry would like to sell their product at
> higher prices but that's not the reality. There are many examples of
> industries having to adapt to price pressures and changes in
> technology, As a simple example when VCR's were first introduced they
> cost over a $1000, I'm sure the manufactures wish they could still
> sell them for that price.
>
> • Adjust their business model. Traditionally artiest toured to
> support their albums, perhaps it should now be considered the other
> way around.
>
> • Make up on volume what they lose in per unit profit. The music
> industry needs to realize that not all file sharing is bad for them.
> The only way most people know if they like a song is to hear it. File
> sharing is a great way to explore new artists and types of music a
> person may not be familiar with. File sharing can increase demand for
> high quality and fairly priced pre-packaged music.
>
> In summary as I said in the beginning of this note it really doesn't
> matter if file sharing is legal or illegal, right or wrong. Arguments
> can be made as to the merits of either side but it boils down to a
> pure lesson in economics. It's here, deal with it!
What do you think about a site by say Sonny or whoever that you paid a monthly
subscription for and then you just download whatever you like. As long as the
server could be secured. A record company with a roster of 100 artists with a
break even at 500K per record is $50 million. With say 2 million subscribers
the record company breaks even on production and promo at a years subscription
of $25 per person, if they want to earn a gross profit margin of 45 percent to
cover profit and overhead the need to charge $45.00 per year. At half a
dollar a CD 4.5 cents a song that's almost free music.
Or something along those lines. Make the servers fast make the mp3's High res
whack up a bit of video content, screen savers, wall paper, competitions etc.
etc. same old same old just a new town isn't it.
Cheers
Gary
-- --semper sume remedium casum--
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