010101010101 Music and Content - Part I

Hi...

last week I had a great debate with my superfriend "TechnoMan", around digital music and content. I want to open and summarize the discussion here. Since it's a pretty big subject, this is the first of a series of three postings (we could do also a prequel/sequel, like Star Wars, if you find it interesting...;)

The Debate - as it happened - in Brief
Over a nice dinner, "TechnoMan" started to talk about how he now has a huge library of digital songs. Since he's using Emule, Azureus, etc. music is just one click away and...free. He can use his music on his iPod, laptop etc. anywhere he wants, and use, share, manage the music as he wishes.

A Coronita in my hand, I reply that I think what is saying is an euphemism for stealing music, and I tell him that I don't think it's really so cool to steal music from the artists that make it. The difference between stealing a CD in a store and "downloading" music for free over the internet is that in a store there are anti-theft systems, guards and so on, plus they will have a physical proof that you actually took something without paying.

"TechnoMan" reply is twofold: first, the world of content is changing, and we are moving from a phisical world to a digital world. The music industry better provides an alternative to paying €20 for a CD, and does this quickly, if it wants to survive. Second, the intention of people who use Emule etc. is not to undermine the artists who produce the music, by to cut the "middle-man" out of the process. Most of the €20 paid for a CD goes to distributors, marketing the artist, Sony etc. The portion that goes to the artist is minimal.

I replied by saying that, although I agree with the fact that €20 is an excessive price for a CD, I also believe that it's not only money that goes to evil marketing and advertising, but is money that goes out to fill the "transactional costs" implicit in the fact that on one side we have a huge demand for music and content, and on the other we have a big, fragmented offer (the artists) and somehow the two have to meet. This is what the role of music distribution is about and is not so evil after all. They are companies, and they have to make a profit.

"TechnoMan" quickly said that the Internet was doing exactly that funtion: in a very democratic way, people and artists are able to meet in a virtual space. Unknown artists with a good product can meet wide audiences, and are actually happy if their music is discovered and spread to many people. Plus, he said he would not mind paying a small price for the music, provided it would go directly to the artists.

My reaction to that was to think about the meaning of "democracy", and I believe that very few people actually can say they have an iPod, a fast internet connection a cool computer and so and so forth. Most people are either struggling with old PCs and narrowband connectivity, or worse, for some the entry barrier of internet and computing is too high. Secondly, even if there is one person buying digital music, there are 100s or 1000s that download music illegally.

This is my version of what happened during the debate. I welcome comments (specially from "TechnoMan", to ensure that the representation of what was said is fair).

In the next two postings I would like to address the many topics and ideas deriving from the debate, which also directly relate to the subject of this blog, since my company develops and sells digital content for wireless phones. Examples of topics/issues:

What should the music and content industry do?
Is it possible to imagine a business models that satisfies all parties?
How to pay the artists?
How to prevent theft?
How to reward innovation?
What is moral and what is not in downloading and using digital music and content?
...

Let me know what you think...

Ciao
Elius