More Money Than Time

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: "the terminal of Geoff Goodfellow" <geoff () iconia com>
Date: Sun, 27 Apr 2003 12:09:59 +0200
To: "Dave E-mail Pamphleteer Farber" <farber () cis upenn edu>
Subject: More Money Than Time

Rx for Music Industry: Seek Out the Old Geezers

By HARRY SHEARER
The New York Times

Here's a business model with a future: sue your customers. That's what, as
of this month, the recorded-music industry has been doing. It filed suit
against four college students involved in Internet file-sharing (in which
compressed "files" of music are swapped, Napster-style), asking for billions
of dollars in damages. Yes, billions. Interestingly enough, the Bush
administration, known to be opposed to frivolous lawsuits and in favor of
tort reform, has weighed in on the side of the industry. Let's go after
those students. That's where the money is.

This strategy would suggest that lawsuits against computer makers and the
manufacturers of modems (and, for that matter, the little cables that
connect your computer to the phone line) are in the offing. A calmer voice
from the back row of a Business 101 course might well offer this suggestion
to the industry: stop seeking as your customers the people most likely to
steal from you.

The record business is clearly in a slump. The value of all music product
shipments decreased from $14.3 billion in 2000 to $13.7 billion in 2001,
according to figures released by the industry's trade association. This was
not a one-year drop, either; it continues a recent trend. (A cautionary
note: these figures are based on sales to stores and not on sales directly
to consumers.)

The industry line has been that file-sharing caused these declines. Others
point to the fact that boomers may have finally bought, on CD, copies of all
the music they had already purchased on vinyl. And Andreas Schmidt, of the
music giant Bertlesmann, said the unsayable: "We didn't put that much good
stuff out."

Nobody, let's remember, twisted the arms of the record and movie industries
into focusing their product and their marketing muscle almost
single-mindedly (if that's not being too generous) on people in their teens
and early 20's.

They seemed like a great market: easily persuaded, with the free time and
the free-floating enthusiasm to see films repeatedly and line up at midnight
for sneak releases of "hot" new recordings.

As events have proved, there is one crucial problem with this demographic
cohort: it has much more time than money. And, if these music lovers are
enrolled at a university, they probably also have access to a superfast
Internet connection, which makes the usually cumbersome process of
downloading music files as easy as checking your e-mail.

Many people over the age of 25 have been moaning for years, correctly, that
nobody is putting out records for them. These people have families, church
and community meetings to attend, golf to play and cooking to do. They have
careers and disposable incomes. All this makes them far more likely to opt
for the convenience of stopping by the record store than trying to figure
out how to work Kazaa or Gnutella or any of the other strangely named
avenues of Internet commerce avoidance.

Will people older than 25 actually buy music? Obviously. Just consider the
niche audiences for re-released oldies — swing or rock. And as recently as
the 50's, there was a huge adult market for something called pop music.

Arif Mardin, the producer of the hit CD by Norah Jones, said of these
customers the night the disc won three Grammys, "They don't know how to
download, so they go to the store and buy the record."

Sure enough, the next week, the CD was No. 1, selling half a million copies,
and registering the biggest post-Grammy spike in recorded-music history.

So, before the record companies sue any more college sophomores, or go back
to Congress for more legislation allowing more intrusion into the nation's
private Internet behavior, perhaps they should just tweak their product and
marketing strategy, and aim at the people who have at their disposal more
money than time.

Harry Shearer, the host of the weekly radio show, "Le Show," appears in the
new film "A Mighty Wind," for which he co-wrote some of the songs.

http://www.nytimes.com/2003/04/27/weekinreview/27SHEA.html

=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-=-
geoff.goodfellow () iconia com * Prague - CZ * telephone +420 603 706 558
"success is getting what you want & happiness is wanting what you get"
http://www.nytimes.com/library/tech/99/01/biztech/articles/17drop.html
http://www.tapsns.com/members-bio/geoff-goodfellow.shtml



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