Monday, December 17, 2007

Seems simple to me.

In an article titled "iPods Win, Record Labels Lose, Study Says" at the Red Herring web site,author Ken Schacter quoted David Card, vice president and research director at Jupiter Research as saying “The key message is that if you’re in the music business, particularly the record business, you have to be in different businesses”.

The problems the record business is having with song sharing caused by the explosion of iPod and other MP3 players seems to me to have a simple solution. In fact it’s not really a solution, its a return to the way music used to be sold. I’m old enough to remember 45 RPM records. “In the day” music was sold by-the-song, or rather two songs at at time, one on each side of the record for about a buck a record.

Of course a buck was one hours work at that time so maybe a song should be worth about $2.50 in todays market, roughly half the minimum hourly wage. Elvis Presley may cost more than Elvis Costello, or maybe it’s the other way around by now. I’m too old to know who is Hip, Slick, and Cool any more.

I learned at my daddy’s knee that you can sell one unit at $1,000,000 or a million units at $1.00 and the gross is the same. With the ease of “sharing” songs now, the record companies are faced with a simple choice 1) fight sharing and spend a lot of money to not stop it, or 2) charge a small fee and get a lot of money on many transactions.

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