On Tuesday, Don Henley, yes that Don Henley, wrote an opinion piece for the Washington Post called Killing the Music. While he’s certainly right that the music business is in trouble, I don’t think he truly understands why. I suppose he could be forgiven for getting it wrong. The music business certainly gets it wrong. From the article:
Music stores used to be magical places offering wide variety. Today the three largest music retailers are Best Buy, Wal-Mart and Target. In those stores shelf space is limited, making it harder for new artists to emerge. Even established artists are troubled by stores using music as a loss leader. Smaller, more personalized record stores are closing all over the country — some because of rampant P2P piracy but many others because of competition from department stores that traditionally have no connection whatsoever with artists.
Wal-Mart, et al did not kill independent record stores. Amazon and EBay’s half.com killed independent record stores, and they were aided and abetted by the record companies themselves. The prices they charge for new CDs are simply ludicrous. I had all but stopped buying new CDs more than ten years ago because in Chicago, I could always find what I wanted used. There was a huge market for used CDs there, and they were always sold by independent record stores. I had no reason at all to shop at Tower or Sound Warehouse, except to rent movies.
I never found a decent used store here. The stock was always a huge disappointment. I bought some things at Tower, but was horrified at how much I paid. I think this is what it’s like for folks who don’t live in a big city. Once I discovered half.com, I started buying records again and the selection was exponentially bigger than it had been at Reckless in Chicago. Amazon’s lack of a physical location has pushed down the margins on CDs to the point that they are a bit more reasonable new, but they also have people selling “used” that are actually selling new merchandise at an even cheaper price. This is also true for books.
When an industry blames it’s customers for it’s demise instead of it’s own crappy business model, you know they’ve reached the nadir. Piracy is not the huge problem the record companies make it out to be. Most piracy (not all, I know), and I think this is true for movies too, is committed by people who wouldn’t buy anyway. In some cases, it’s kids who don’t have credit cards and can’t buy from Amazon and Half. Systematic piracy operations occur when foreigners who can’t obtain media legally obtain it from pirates. I think this is most of the movie piracy, but that’s a discussion for another day.
P2P is the modern day equivalent of people who make tapes for their friends. The quality is similar, and no matter what you may read in the media, like making tapes, it takes time to find and download what you want. I know for a fact that some people download a few songs and then buy a used copy. When I can, I use iTunes to get the material because it’s much, much faster than messing about with LimeWire. This is the same set of steps I went through when friends made me tapes. The huge disadvantage for the record companies is that now, I don’t need physical proximity to get that tape. I don’t even need to know the person making it. I don’t need a physical record store at all, and the used stock is infinite. This is a huge change in the market place, and it’s one they have simply ignored in favor of whining about piracy.
So, how should they make money? I don’t know, and I don’t care. I’m the customer, and that’s not my problem. Some artists are going around them, and more power to them. It would be easier for them if the record companies would get the hell out of the way. Until the “industry” gets it’s collective head out of it’s collective ass, it certainly won’t figure it out.