Digital Music -- It's All About Money
When I posted the last parable, I had in mind the digital music industry. Whatever else you hear about this industry, keep in mind that it's all about the money. There are many groups that all want to get their piece of the pie.
- Consumers — Production and distribution costs have fallen. Pass the savings on to us. We want inexpensive (or free) music.
- Big record labels — Don't ruin our past profitable offerings. We'll take the status quo, thank you.
- Indy labels — Finally, more money for us?
- Superstar artists — We deserve to make millions. Don't ruin it for us.
- Artists — Pay us our share of royalties.
- Artists' agents — We get our share, too.
- Song writers &mdash Pay us our share of royalties.
- Music publishers — Pay us our share of royalties.
- Consumer electronics manufacturers — New products, new revenue streams.
- Digital Restrictions Management (DRM) technology providers — Pay us our patent royalties.
- Codec technology providers — Pay us our patent royalties.
- Operating system vendors — You need us. You must pay our tax. One day we'll own you.
- Online music sellers — We think there's profit in there for us.
- Politicians — Money talks.
In a steady state, the pie gets divided up. Perhaps some parties are not happy, but everyone gets his share. But when new technology comes along, the steady state gets shaken, it turns into a free-for-all grab. Eventually, we will get back to a steady state once again. But we won't get there until the fight over how the pie gets divided plays out.
Posted by Doug Sauder at May 26, 2005 07:03 AM