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It's abundance not scarcity. There's never been so much music being created and listened to. What has happened though is the decline of the star system and the Short Head. All the interesting new music is buried down in the Fat Middle and Long Tail. This changes the game for the big music publishers. They're now in a volume of sources, algorithmic business not in a monopoly volume of product business. And their competition is also coming from artists doing all the production and distribution themselves. That puts the record companies into a very different role of being VC and Marketing consultants for artists and not owning them.
The value of music has dropped drastically. And it's not just P2P that has done this by undermining the price but also the supermarkets and online CD retailers. Music is just not worth $0.99 per track any more. (or £.0.79). However there's been no official test of how much price elasticity there is in online sales. There's really only 3 data points. Free P2P, AllOfMp3 and iTMS.
Free P2P is a misunderstanding. It's only free because you don't charge yourself for time and materials. There's significant pain in finding, downloading, tidying, renaming, re-tagging P2P music. Relief from that pain can be charged for.
So there may be a way out of this and that's for a retailer to build a site to copy the AllOfMp3 interface and pricing and then stuff it with every bit of audio that's ever been recorded. It's at least possible that selling 192Kb VBR MP3s with no DRM at $0.25 (£0.10) per track and $0.50 per track for lossless would make more money in total than the record companies currently make out of iTMS and Amazon.
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[ 29-Jan-08 3:47pm ] [ Music , MP3 ]