27 September 02004

Paying for music in the next decade

The very interesting text of a talk by Andrew Orlowski of The Register projects the problems and opportunities for the music business in the next ten years.

The main problems are that attempts to restrict music distribution through Digital Rights Management are destined to remain very 'leaky'. The opportunities are that record companies will still own the rights to a commodity — if music can be called that — which will always be in demand. Part of the solution is to find a revenue stream for units of consumption that cannot reliably be counted: Orlowski proposes a flat fee model as a solution.

Gratifyingly several of the conclusions are similar to ones I've posted here before. Here are the key points as I see them.

The era of ubiquitous access to more or less whatever music you want is coming.

Orlowski points out that the new music devices anticipate this implicitly. He sees the Bug — digital radio with pause, rewind and record capability — as one harbinger of the future, and anticipates that radios like this will soon have a hard disk built in for storage.

The capacity of an iPod invites its owners to fill it with thousands of songs. Those owners who don't already own hundreds of CDs to feed their iPod will find other ways, and the iTunes Music Store is only one of the options — an expensive one. Orlowski writes:

It costs £10,000 [sic, presumably intended to be $] to fill an iPod today. Some of us might have spent something like that over the years on music, you're thinking. But if you're 25, and most of your music has been free, then the psychology is very different: an iPod is an empty beer glass waiting to be filled. Why else can it hold so much music? In five years' time, iPods will fill themselves, like a TiVO, 24 hours a day.

As I covered here ten days ago, this is already beginning to happen now. Though in this context Orlowski is not thinking about storing radio programming as much as file sharing:

On the bus, your iPod will be a personal, short range radio station. Click the "What am I listening to?" menu. Tune in to everyone else's iPod. Like what you hear? Then record it! … Today's biggest iPod, with 802.11 WLAN, could fill itself up in half an hour. These speeds and these disks are increasing every year, as you know.

The projections of social behaviour are questionable — I listen to an iPod on the bus to block out what fellow travellers are listening to, not to share it — but the technological principle of massive storage topped up or refreshed by wireless links seems almost inescapable.

Forecasts of the end of the album as a meaningful unit may be premature, or at least it may end up being replaced by a different kind of 'bundle' of music. To quote Orlowski directly again,

The world works on bundles: a newspaper is a bundle of stories; a TV channel is a bundle of programs; a satellite channel is a bundle of TV channels; economically the world only works through bundles. The stuff you don't want pays for the stuff you do. There are sound actuarial reasons for this. It works. And artistically, we wouldn't have had The Beatles or Joy Division without the bundle.

Will we pay for music through a public licence fee or tax?

He says the record industry should stop trying to prevent file sharing and instead should lobby to raise some money from somewhere to compensate for the public good of access to music. This money could be raised as "a tax, it could be a fee on your phone bill, it could be a broadband tax, it could be an hifi or iPod tax". Orlowski's response to possible objections to this proposal sound very similar to BBC arguments for keeping the licence fee:

Q: I never listen to music. Why should I pay for it? - A: I don't have a car or children, but I pay for your schools and roads. Knowing roads and schools are there is an incentive to join you. It's a public good, so you might want to start enjoying music now.

This is a similar kind of argument to the one I made in saying that online radio is the model for listening to music in the future. There I envisaged re-inventing a kind of BBC service, funded through a licence fee, for pooling all the licensing and rights issues for a whole country or economic region, and then providing on-demand access to all the music the citizens could ask for.

But we all know that licence fees are increasingly contentious even in circumstances where there are longstanding precedents. And governments have previously avoided intervening in the market anarchy of the music industry.

Other related postings on this site:

Posted by David Jennings in section(s) Future of Music, Music and Multimedia on 27 September 02004 | TrackBack
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