Topic: The age of MP3
Does digital technology spell the end for the record industry as it is at present?
The "Threat" isn't so much digital technology as this gave the industry digital recording techniques and effects, MIDI, Mini Discs and Cds.
The "Threat" is MP3, and the way they can be distributed. MP3s are condensed audio files that can be passed on from one computer to another via the Internet using P2P (peer to peer) file sharing technology at no cost, other than the price of the Internet use for the time it takes to download. With the introduction of broadband Internet this can be almost instant.
If I download a track from Mr X in Chorley, I now have acquired that track and Mr X in Chorley still has his copy, hence the name file sharing. This means if I was to make one of my recordings available on the Internet, an infinite amount of people could download it and everybody could access it if they wished. All done without me having to spend any more money other than the cost of initially putting the recording on the net and keeping the my server logged on. (Although this might become unnecessary if enough people download it). With broadband working the way it does leaving my server on 24/7 would cost as much as leaving it on for 5 minutes a day.
This is all very inexpensive and buying music is very expensive so let's look at why buying music in the shops is so expensive.
The Q and A section of Radio One's One Life web site, when asked the question: "Why are CDs so expensive? Someone told me they only cost ?1 to produce." The answer they gave was: "...If you take a typical CD costing about ?15, 17.5% of that will go straight to the government to cover VAT.
The shop you buy it from will then take about a third of what remains, the distributor that delivered it to the shop gets a pound or so, and what remains mostly goes to the record company. A tiny amount - about 60 or 70p - goes to the copyright owner.
Most recording artists will get paid by their record company, although a savvy few retain copyright control over their music and can earn a bit more in the long term this way...".
This may give insight into why CDs can be expensive, but doesn't explain why prices in the UK are higher than other countries. This is due to exchange rates and anti-parallel buying measures, put in place by the record companies.
With other technologies such as videos and video games, parallel buying is prevented, by each territory having to use a different format of the same technology. For example, Video games in the Americas work on NTSC, in Europe they work on PAL and in Asia SECAM.
This means if I were to find that a computer game was much cheaper in America, buying it on import would be useless because the technology would be incompatible.
Now most CD players will play CDs from any region, so what the record industry does is to release special UK editions. These usually contain two or three bonus tracks, therefore eliminating any big scale parallel buying, and this keeps the price of CDs as high as possible.
This may be unfair, but perfectly legal. There have been cases brought against the record industry over them keeping prices, illegally, artificially high, as this article in the American newspaper USA Today explains.
"The five largest music companies and three of the USA's largest music retailers agreed Monday to pay $67.4 million and distribute $75.7 million in CDs to public and non-profit groups to settle a lawsuit led by New York and Florida over alleged price-fixing in the late 1990s.
Attorneys general in the two states, who were joined in the lawsuit by 39 other states, said that the industry kept consumer CD prices artificially high between 1995 and 2000 with a practice known as "minimum-advertised pricing" (MAP).
The settlement will go to all 50 states, based on population. Consumers may be able to seek compensation." - David Lieberman, USA TODAY
One argument the record industry uses to discourage illegal downloading is that it is immoral. But most people would say that the record industry isn't entirely moral itself. Which brings me to my survey.
My results show that most people download music from the internet and the majority of do it illegally and most of them think it is moral.
Reason given defending its morality included: "It cheap and if you don't know a band you can find a song by them", "IT'S FREE!" and "Because I like doing it and I want the music".
Although people who download music legally gave similar answers to the question, "What is the biggest advantage of download, in your opinion?" "Getting to listen to lots of bands that haven't quite made their big breaks yet" and "It is very affordable to pursue the material of a band or artist you have never heard of before, if you like them then they have a new fan and will make more money and if you don't you haven't wasted much money".
This suggests that Internet downloading is always used for similar reasons.
Arguments against included "It will ruin the independent record stores and selling individual tracks or downloading free rather than selling albums and singles will mean fewer bands will be able to tour".
Conclusion
Why spend so much money transporting hard copies, when you can send a digital copy down a wire to anywhere in the world almost instantly, for a fraction of the cost, that is so insignificant most people would considerate it free.
I can only conclude that the reasoning behind this, is that there is an unwillingness on the industry's part, to let go of revenues that they have become so reliant on. This unwillingness to change will ultimately lead to their downfall.
Although there will always be a demand for hard copies, particularly in the world of DJing, as the digital record industry comes into its own, the demand will become smaller and smaller, until the industry as it stands today, will become secondary to the digital record industry.
Posted by funkyrich
at 2:18 PM BST
