The Biggest Industry Mistakes Of The Digital Age - hypebot

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Old Record Guy

Audioholics should check their history - the Diamond Rio was available 5 years before the iPod. And Liquid Audio had a download store 6 years before iTunes, which was so good that Steve Jobs repeatedly tried to buy it from them. Apple were anything but the digital music pioneers they are portrayed to be - Rio, AT&T's A2B project, Liquid, MP3.com and others and the shoulders that iTunes stands upon. We fucked up because we didn't license these companies with our full catalogs despite their desperate pleadings...and when iTunes rolled in, there was a lot of pressure to license SOMEONE, because we were suing so many companies. We needed to counterbalance the suits by showing that we were licensing, lest it appear that we wouldn't license anyone. So the early guys got fucked, Apple gets all the credit, and once again, timing is everything.

Jobs perfected the model and had the best device, and managed to out-bully the majors, but they were not the first.

And on #2, again they are missing the point. Consumers didn't want a replacement physical good for CDs - we did tests with SACD and DVD Audio and the response was FEH. They couldn't hear a difference in sound quality, they didn't care about the "exclusive bonus content", and they didn't want to pay more. Physical media goods of all kinds - CDs, DVDs, newspapers, magazines, and yes, even Blu-Ray - have no future in societies where wireless access is widespread. Consumers will migrate to cloud offerings and access on demand. I think suggesting that TrueHD or DTS will be the savior of the physical music good is just about the dumbest, least likely thing I've heard all year.

The mistake with CDs was, and continues to be, the pricepoint. When consumers can download music for free, and buy blank discs for less than 50 cents each, it's really hard to justify an $18.99 pricepoint. If CDs were $5 for catalog, $8 for frontline, then there would be a lot more record stores around, and a lot more people buying CDs. But the industry keeps raising prices, that's all they know how to do, and those of us who still like a physical product raise our eyebrows when we pick up a 2 disc Ry Cooder Anthology at Borders with a $30 price tag on it.

I think we should start a more democratic Digital Music Hall Of Shame and also list all the factual inaccuracies, bad predictions and grammatical errors made by various websites, consulting firms, and journalists. And while we're at it, let's list a tally of the millions of investor dollars flushed down the drain by overhyped digital music companies with non-existent business models who met their ends long before any of the major labels.


Dan Foley

There are many examples of misappropriation of precedence - being the first to market with a really good idea or product is no guarantee of success. The old music industry adage of 'cream always rises to the top' is not necessarily true - marketing and timing determine which cream rises the furthest, and standing still is a sure way of being overtaken...

Lemmy

Old record guy, you are so wrong.

Pricing has never been an issue. If someone wants something, they will be it within a reasonable pricing point. Trust me, we have done tons of experimenting.

Music is not a pack of gum.

lemmy

The CD is the problem.

I was just in a Walmart meeting.Guess where all the music retail space is going?

It's going to the movie industry because dvd's are protected content and few steal this content.

Mark Cuban once said, if the music industry would adopt more of a DVD physical solution, it would be the solution.

Andrew

@Lemmy: I'm not sure what you mean when you say that DVDs are protected content? As opposed to CDs? How precisely would a "DVD physical solution" be the solution to the music industry?

Ictus75

I will not be getting into Blu-ray because it's lifespan will be so short. Why should I invest an a new format/new player when I can download HD movies from itunes, etc.? Physical product is on the way out! Maybe that's why Apple is not bothering with Blu-ray because they have looked past it to the near future.

The main problem now with physical CDs/DVDs is selection. How many retailers stock more than just the big hits anymore? I love CDs & DVDs, but if I can find what I want online and have it in seconds, why should I drive around to various stores to not find it?

Also, the CD/DVD disc is NOT the problem, the price is! If I can download it cheaper/free from home, why should I spend more money, gas, and time to buy it? Yes, music is not "a pack of gum", but the price is also artificially inflated for a CD. If CDs were cheaper, people would buy them instead of stealing them on the web.

Lemmy

"If CD's were cheaper, people would not steal."

You obviously don't know the facts. Ask anyone who is in the music biz, pricing does not have much of an impact on sales.

Those who steal will always steal.

Walmart continues to replace cd's with protected content like dvd's. It's a fact.

Also, the biggest selling item at Walmart is?

The banana. Don't laugh. It's true.

Sean K

Wow! The comments are better than the article.

Personal opinion from a recent Digital Media graduate with little true experience except for being a consumer. I hate not having the physical product. If cds were cheaper I would buy more. I hate going to a local record store and seeing a cd for 17.99 when BestBuy sells it for 9.99. Price matters. It creates so many feelings about a purchase and about the product.

I download and physically buy. It comes down to stores don't always have what I want when I want it. The net does. It's ashame that sites like Pandora and PirateBay have so many problems. They are enabling individuals to hear what they have not heard before. They turn people onto new music. When I hear something new through these, I typically, either buy the album or go see them live. Those who steal (music) will not always steal.

Jim

I'm still intrigued by the comment about DVDs being "protected content". I've ripped all my DVDs to a hard drive so I can watch them on my laptop when I travel. If I was of a mind (and I'm not) I could upload them for whoever wanted them. What are you talking about?
Vinyl records with download coupons are my purchases of choice, although I'd buy more new CDs if they were cheaper. I generally only buy ebayed CDs.

Lemmy

CD's have been $9.99 or less for a while now. It's not helping. I sometimes get them cheaper than digital.

DVD's are not DRM? Please guide me to Godfather boxset that's not protected?

Jim

No, DVDs are not DRM. A few are, but I've ripped around 30 DVDs with an easily available program with no problems at all.
And I'm in the UK where CDs have NEVER been anywhere near the equivalent of $9.99. Try £10 - £14

Justin Boland

"Ask anyone who is in the music biz, pricing does not have much of an impact on sales."

I'm young and slightly stupid, but based on the past 10 years I've been fumbling around the music biz, this sounds like the dumbest assertion I've read in 2009. Am I missing something?

wheatus

The Labels missed all the golden opportunities because they are arrogant old people who don't get it and never will. We should stop talking about them because they offer no useful information, or relevant ideas.

DSD, Direct Stream Digital (the raw SACD File format) is the format that can save the industry and currently we are the 1st and only band to offer DSD Downloads directly from our site for playback on the Playstation3.

Check it,
brendan b brown
wheatus.com

Old Record Guy

I honestly don't know where Lemmy gets his info, or how he formed his opinions on this subject, but as someone who worked in retail, at major labels and distribution companies for 20+ years, I don't believe his statement is at all accurate.

One anecdote on this subject:pricing and positioning were so important to labels that collectively they spent millions of dollars annually with retailers to SUBSIDIZE a lower price for hit product to create sales. If price didn't matter, why would labels actually pay retailers to charge consumers LESS? They knew lower prices encourages buying on product people want, labels wanted both sales and chart success, so they paid up, big time.

Of course, if you're talking about complete crap that nobody wants, it doesn't matter how low you price it, it won't sell.

There is a wide disparity between the perceived value of music amongst labels and consumers. A tiny portion of physical product at retail is under $10; take a walk thru the aisles of whatever music your local Best Buy or Borders still carries, the overwhelming majority of prices are $14.99 and above. The only people who still consider a CD to be a premium products are labels.

And Lemmy, apparently. CD's and bananas.

Old Record Guy

Hey Brendan, you guys were signed to Columbia and got dropped, right? Good to see you're still doing your thing and innovating. How are things on Long Island, anyway? Ever have breakfast at Tim's Shipwreck?

Can you tell us what it's like going direct to fan, how you manage the logistics, and why you think DSD is going to save the music industry?

wheatus

We were signed to Columbia. The "got dropped" part was a little bit more complicated than that. During a meeting where in Columbia exec 1 and Sony international exec 1 had just finished telling us they would not be releasing our 2nd record, after selling 1 million copies of our 1st, I said, "Well I think I should probably get a day job"...Columbia exec 1 lost his cool on me and said, "Well if that's how you feel about it you can have your damn record back and get out of here!"

We left Columbia with the masters of our 2nd record.

I have eaten at Tim's Shipwreck, you stalker you.

Going direct to fans is hard work, but nowhere near as hard as trying to deal with the quantum incompetence of major label employees. I spend 4 or 5 hours a day on line responding and conversing with members of different communities, some tech based, some gaming based, some music based.

Math VS Music....When a computer turns an analog sound wave into and MP3, AAC, AIFF or any other file format in the PCM domain (PCM=Pulse Code Modulation)...it has to literally decimate it....turn it into math and round off to the neatest decimal point. What you are left with is not the real thing...it cannot provide the listener with a visceral and emotional listening experience like that of vinyl, tape or DSD and anyone who tells you it's just as good is either lying, like the labels did when they falsely advertised CD as being better than vinyl, or ignorant.

You could cut to the chase by trying to answer this question...do you really think that the crap ass tinny sound of MP3 and AAC have NOTHING to do with the lag in music sales?

DSD stands for Direct Stream Digital...it never rounds off...it does not decimate the analog sound wave because it never switches from 1 to 0...instead it's always +1,-1...That is why it's resolution is 1 bit, 2.8Mhz and it sounds like Godzilla.

The crying shame in all of this is that the Playstaion3, among other affordable consumer units, is capable of DSD playback and DSD files can be mastered DRM Free and DOWNLOADED! I read an estimate that there are over 20 million PS3's out there. The PS3 community is smart, young and into music. Do I need to continue?

Read the detailed instructions for our site:

http://wheatus.com/download_dsd_frameset.html

Much DSD,
bbb
wheatus.com

PS..Old Record Guy...Anonymous posts are for record label people and cowards...come out come out whomever you are, Honesty now is the name of the star.

Jay

wow, great comments around here lately.

I for one prefer the physical product, simply because I find that I get more value out of it in terms of repeat listening. With files, I always find that I tend to give up on new things too soon. My favorite way to buy now is used CDs online, tons of choice that is easy to search and buy, fast shipping and cheap prices. I was in an HMV the other day killing time and was appalled; mostly DVDs now, and hardly any CD stock left. Just the greatest hits. How times have changed.

Most people I know do not lament the dissapearance of CDs...so I'm not even sure a lower price point would bring them back (even though I would be thrilled). People are used to having everything at their fingetips now, for free, anytime they want. When it comes down to it, consumers will obviously save their money for products they don't have that kind of access to and are forced to pay for...its just logical. The only way you will get people back into the traditional music economy is regulation and some sort of technological innovation which controls the wild west. Without that, its just swimming against the current so to speak.

Lemmy

Most peopld under 25 don't buy music, but mostly steal.

I am around them all day. I ask them why and they say:

"Then I would have no money to buy beer, movies, dvd's, etc."

Sad again. And the musicians are really the ones who suffer in the end.

lostcause

Hollywood is destined for the same fate as the major labels... lemmy got one thing right, people steal because they don't want to pay, simple as that. When large video files are easily downloaded,uploaded and emailed (only a matter of time) , the p2p sites will be filled with big-name movies, and everyone will rip on Hollywood like they have ripped the major labels...

music & audio

Thanks for the correction! I worked at Liquid. They had the best audio technology at the time, flexible DRM and e-commerce, a great player, an online store with a broad affiliate program, and SDKs and development partnerships with multiple portable device manufacturers, all pre-Napster. Broadband penetration wasn't there yet, but the main barrier at that time was the licensing of major label content. Liquid had a large catalog of major indie labels and many DIY pioneers. They had a great program for indies and some interesting B2B services as well.

Lemmy

You are dead wrong with Hollywood. They will not tolerate much and they are 10 times as smart as anyone in music.

Ask any music executive and they will tell you the film industry tactics will eventually lead to a solution to music piracy.

Film industry laughs and looks down at the music world. They laugh at music execs lifting copy-protection. They think music is a bunch of rappers and idiots, much the way the USA Gov't looks at music.

Sad, again.

wheatus

I think you are right about Hollywood to some degree...They make the music people look a bit ratty.

Physical, with the exception of localized vinyl pocket enclave economies, is well and truly over.

As far as The Executive Record Industry Culture is concerned, Zappa had it all down...when the hippies came into control with the arrogant assumption that they could make taste, that's when it all started downhill...Bring back the cigar chompers who said..."let's just put it all out there and see what sticks"

But the future of music is middle class. Those of us who came up that way don't have a problem with that...only the cunts who need millions to stay in the game are finding the new music economy to be a problem for them.....This collapse is posing the real question to us all: what are you in it for?

much middle class music,
brendan b brown
wheatus.com

Yannick, the GeneralEclectic

The computer companies have been eating up market share from other businesses ever since they came into being.
First, it was office equipment, like typewriters for example. Later, it was music. And now, it is retail.

What I don't like about that trend is that soon, doing anything might feel like sitting in the office at work. The standard interface needs to become less office-like.
Offline web readers with which you can take your e-books to bed are just the tip of the iceberg of what's to come.
When will audiophile home stereo systems go online?

Old Record Guy

Hmm, I wonder what Columbia exec lost his cool with you?

I remember people at the label saying something along the lines that your 2nd record was "stylistically different" and "not as strong" as your debut for the label, and that they didn't know what they'd be able to do with it. I also recall people saying "Wheatus is huge in Europe" so I'm surprised International took a pass at it.

I have to say, I couldn't disagree with you more in regards to sound quality being a key factor in the lag in music sales. It's part of the picture, but a minor factor. Kind of like pressing the call light to tell the flight attendant you didn't get your peanuts right before the plane crashes into the mountainside. Dude- NOBODY cares how great your record sounds if it SUCKS. And very few care how it sounds even if they love it, apparently. I doubt you could find a dozen teenager in the entire USA that would even bother to download a DSD file vs. an MP3. Your perceptions here, with all due respect, are massively out of touch with market realities. Make a great record, and be a greta live band. Nobody gives a shit about high quality downloads on the PS3 (which is a totally fucking failed console regardless.)

Re: me - I think anonymity allows people to be more open about their opinions and experiences in these kind of forums. If you want to get to know me, let's have Eggs Benny at Tim's, I'll buy. And just to be cleat, I didn't work for Columbia.

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