The countdown for the extinction of CDs is about to begin (from: Mark Cuban)
http://www.blogmaverick.com/entry/1234000000038844/
So Im on the Mavs latest roadtrip. Im walking through a mall with my Ipod cranking away. I had already decided thatI wanted to pick up the soundtrack to KillBill to get the Woohoo song from the 5678s. Then i realized, I didnt have away to deal with a CD.
My laptop I carry doesnt need a dvd or cd player because i carry everything important on anexternal hard drive that I just connect to my desktop or laptop. It has movies, tv shows and music, along with mybusiness files and applications I need. Means i can travel very, very light, and if my laptop ever busts, ijust connect my 160gb drive to a computer at the hotel and Im set.
So here I was, wanting to buy music to listen to and workout to that day , but I couldnt.
I realize that I could have gone to Itunes and just gotten that 1 song, but it doesnt sit right with me to belimited on how and where I can use music I download. I realize I could go online and download the song for free, but Iwont do that. Thats stealing. Its wrong.
Thats not to say I wont ever download for free. If i had already owned the CD and just wanted it to play and it wasa matter of availability, I definitely would have downloaded it for free. I will also download music to sample it, butI wont keep it. I will buy the CD or erase the song.
I still like to buy CDs. Or at least I did up until today. I liked the idea of taking a chance and seeing if thereis more music I like. I liked having the disc, so i always have a copy , incase i have to clean up a hard drive to makeroom for more stuff, or to convert to a new file format.
Then it occured to me, that I havent used my CD Player, portable or at home in a long, long time. That Irarely, if ever saw anyone walking around with a portable CD player any more. They have all been replaced by MP3players. If everyone is switching to MP3 players, whether they are Ipods, in phones, in PDAs, in cars, whatever, thenthat means that everyone is going to have to go through a multistep process in order to get the music from where or howthey buy it, to the place they want it.
Thats not good for the people selling music. Particularly retail stores. Think about it. Apple has done such a greatjob of selling us on why we should store our musically digitally, that every one is either doing it, or on theirway to doing it. Which means that 90 pct or more of music being sold is currently being sold on a physical formatthat the segment of the music buying public that spends the most amount of money on music doesnt want. THey are beingsold CDs. They want to listen to their music from hard drives or flash drives. Thats a problem.
That got me thinking about how music is being sold, and how it might be sold in the future
MP3 players are changing peoples listening habits. We dont carry folders filled with CDs anymore. We carry ourlibrary in our MP3 players. We dont listen to CDs. We listen to playlists that we adjust all the time. We dont burn CDsanymore, its too time consuming. We copy all our music to our MP3 players so its all available at our fingertips.
All of our music in a single device. Available to us where ever we are, for whenever we want it. Music how we wantit, when we want it. Easy and breezy. Thats how we want to consume music.
Thats not how we are being sold music.
To buy music these days, I have to make all kinds of choices.If i want to buy downloads from the net, its liketrying to figure out which mortgate to take out on a house. Now because of the cost, but because of all the rules andregulations. Do I want to limit myself to 5 computers. Do i want to always keep my subscription live. Do I want tostore the music in a proprietary format that only a couple devices can use. Those are all tough decisions tomake when the only thing I know with certainty is that the device Im using as an MP3 player today, is NOT going to bethe device Im going to be using 18 months from now. There will be players that have more features, or iwill consolidate multiple products into a single device. I may be using my phone, my PSP orPDA or something other device for my music.
Which brings me back to CDs. At least until the music industry goes to DVD Audio or copy protected CDs, I know thatwith the CD, I have control over my music. I can make my own personal copies (which I realize was illegal to do, untilthe RIAA lawyer told the Supreme Court last week it was all Ok with the RIAA now). I can put them in apple format formy IPod, Sony format for my new digital walkman or PSP, MicroSoft format for my PC, or whatever else comes along.
Thats the only good reason to own a CD. To deal with the hassles that you know will come from having to dealwith all the different formats that MP3 players will support in coming years.
Thats not a good sign for the music business or the current retail CD business.
It is a great opportunity for someone to start selling music to consumers, where they want it, how they want it.
There is absolutely no reason I shouldnt have been able to buy the song or CD i wanted from the FYE record store Iwas standing in side of , IPod in hand, ready to buy. If only I could just connect the thing and download thesongs.
For less than 10k dollars, it would be EASY to put together a multi-terrabyte hard drive based multi-user kiosk thatpretty much holds every song ever published. A screen to enter credit card information, swipe a debit card, enter amember number or call for assistance to handle a cash transaction, a couple USB ports, and wireless connectionsupport to transfer the music, and you are in business. Check the music I want. From kiosk hard drive to my MP3 playerat speeds that could easily do 400mbs. That beats the hell out of 250k if Im lucky real throughput at home. It will belike going to the store to get digital prints from the camera is. Self Service, fast and easy
Loss leaders like Walmart and Best Buy can cut their music square footage by 90 pct and sell more music at lowerprices. Their inventory carrying costs will go to zero. If someone wants the CD, they can go home and burn it afterdocking their MP3 player to their PC. Believe or not, the labels will make more money this way because they will makethese big boys committ to minimum guarantees at levels they are at now, and all that money after the artist cut, willgo to the bottomline.
EVerything about the economics makes absolutely perfect sense for the music labels, the retailer and thecustomer.
The only question is who will be the first label to crack and offer this and how soon will it be. Of course thecynics will say that this wont ever happen, but Im not buying it. Its too much cash up front for the labels to say noto. It also makes too much business sense.
When it happens, the music industry will EXPLODE and sales and profits will go through theroof.
Why ? Because stores can be smaller, physical inventories minimal to non existent, and an entire segment of middleinfrastructure on both the label and retailer side for ordering, delivering, warehousing, duplicating, returning, andforecasting of product can be eliminated.
Most importantly. that money can be spent to develop, market and promote music so that more and more people canexperience it, and also, just in case hell freezes over, be used to lower the price of music to consumers
Once that first label, or the first organized group of indies goes purely digital at retail, then the countdown forthe extinction of the CD begins. T-minus 5 years from that first day, and your CDs will be sitting right next to theLPs your dad and mom collected when they were kids.
Until then, if im a band selling on my own, im carrying a laptop to every show , and charging 5 bucks to drop a showon an IPod. Call it concertpodding.
If Im an indie record store, Im making sure that all music from the labels you support is available for direct toplayer. Im offering every song as Ipod or MP3 player ready to anyone who walks in the door with their Ipod and wants toleave listening to the music.
Its money in the bank
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