Want to Feel Bad For the Record Industry?
figure 1: UMG CEO Doug Morris as interpreted by artist Psillos
If you're looking read a sob story for the music industry, Wired has your ticket. They interviewed Universal CEO Doug Morris about his woes with iTunes and how to deal with the MP3 problem, and it's pretty revealing.
Universal in the process of starting a new subscription-based service called Total Music to replace iTunes (and Microsoft's Plays-For-Sure, and maybe Microsoft's other Zune marketplace too). The best part about that is he's looking to deliver yet another format. You have MP3s, you have iTunes' AACs, you have Windows Media's WMA, you have other myriad formats like OGG and FLAC, and then you'll have yet another choice.
figure 2: Mr. Non-Digital guy drinking with Mr. Internet Enabling Apple Board Member Digital Guy
Morris admits he's not a digital guy, but... wow. his response to the threat of iTunes doesn't make sense to me. He wants tech companies to foot the bill for at least the first few months, which I don't think will fly. They're just going to pass the added cost on to consumers, and after that the consumer is stuck with keeping things up. Would I need multiple subscriptions for multiple devices? If I do, that would suck. If I don't, it would still suck, since the tech companies would still build the cost of the unnecessary subscription into the retail price of their music player. And this is assuming they don't try to establish a 4th common format, mind you. Which they probably will, probably with the help of Microsoft (or worse, Real).
If they sell multiple versions with different music licensing -- one version more expensive and with a subscription, and one much less but without a subscription -- consumers get confused, have a negative experience with the platform, and return to iTunes (or Amazon MP3, or stealing music, or home taping, or whatever).
And if they get the tech makers to build in the cost a lifelong subscription into a device, what's to stop Apple from licensing that tech besides collusion? What would be my purpose to upgrade in music-playing hardware besides capacity? It doesn't look like it would be a good long-term deal for the tech giants either (let alone me), unless the tech giants have an elaborate plan for screwing over the record companies later.
Another part of his plan was to not renew the contract with iTunes, so they could reduce the number of songs and albums they'd sell on iTunes. Forcing customers to subscribe to a subscription service so he can escape the "golden handcuffs" of iTunes probably isn't going to fly especially well. The market has pretty much spoken for the iPod so far -- maybe something revolutionary will come along; maybe something won't. My best guess is that whatever replaces the iPod will still be made by Apple, but whatever. The music industry's next best hope is the Zune from Microsoft. Is that scary or what? Fleeing Apple for Microsoft is the very definition of "out of the frying pan, into the fire."
p>I dunno, it seems like this guy is dancing in quicksand. In other news, iTunes accounts for 22% of all music sold in the USA, and Amazon MP3 is also an excellent choice for online music. My line in the sand: if it's not iTunes or it's not MP3 or some similar open format, it's doomed. (photo via Getty, painting via Wired)