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Tech threat to the music industry

In response to the April 3 Perspectives column by Greg Blonder, "Free content: Why not?":

I agree that the writing seems to be on the wall in that the current music industry business model seems to be at a disconnect with universally available digital transports (MP3 players, the Internet, CD-Rs and so on). I like the idea of bundling music with physical products. In many ways, it is analogous to bundling software as an incentive to buy hardware.

When you think about it, music could be very useful in this capacity, especially for "lifestyle-oriented" products, such as cars or clothing. Music is often used to reinforce particular images of lifestyle, so from a marketing perspective the bundle of music and product would really be a sale of a particular lifestyle image, with the physical product being the income generator.

However, I think that these developments present a more fundamental challenge to the music industry. Namely, they upset the very notion of a scarcity-based model. Currently the music industry is based around expensive promotions of a few superstar artists at a time. This model is a direct result of promotion through broadcast media channels. There are extremely limited channels available, so the artists must sell in very large amounts, and there may only be a few artists out there at a time.

When music distribution is network-based, the scarcity disappears. In fact a lot of the apparatus that comprises the current music industry becomes unnecessary. It is merely a matter of the music creators (artists) connecting to the music consumers (listeners). Now, this could lead to confusion and information overload, but we have actually developed technologies to deal with this--collaborative filtering, combined with search engines (read: Google).

In order to survive, the music industry must seriously re-evaluate the added value it brings to the music supply chain. I believe that its current position as a musical "arbitrator of quality" is in jeopardy in the near future.

Anyway, interesting article. Keep on writing.

Loren Davie
New York, NY