Record Industry Finds New Ways to Screw Themselves

Record Industry Finds New Ways to Screw Themselves

I’m a music geek. I got my first record (and record player) when I was 7 years old (it was Billy Squier’s “Don’t Say No” in case you were interested). After that came the rise of the cassette tape, then CDs and now we’re waist deep in the digital music era. One of the complaints I’ve heard from record labels since the dawn of the Napster age was that the quality of digital music is atrocious. How could anyone choose to listen to a 128kbps encoded music file when they could have the full uncompressed 16-bit audio of a compact disc?

Today, I read an article over at CNN talking about the next step in digital music and the move to lossless, uncompressed offerings. Apple, who controls 66% of the digital music marketplace is working behind the scenes with labels to increase the audio quality of their catalog. My first thought was was positive – finally, someone is doing something to bring the fidelity of the music we’re purchasing in 2011 up to the same standards we had in 1986. Then I kept reading and I knew it was going to be about the same thing it always is for the record labels: money.

Apparently the impetus behind this new quest for better audio quality doesn’t come from a noble place of artistic vision and consumer value, it comes from the labels seeking another way to squeeze more money out of it’s drastically disappearing customer base. The current logic is that you could continue to buy compressed audio files from iTunes at the current prices of between $.99 and $1.29 per track OR you could pay more for an uncompressed version of the track.

So what’s my problem with this?

Let’s plug this model into the auto industry – although you could apply this theory to nearly anything. Imagine if BMW had a line of cars that were mechanically sound and reliable. They ran the way they should and performed as you would expect a car of that caliber to perform. Now imagine they offered the same line of cars but with a much cheaper price tag. The only caveat is that those cheaper versions were intentionally crippled to not be as reliable or run as smoothly. Would that make much sense as a marketing strategy? Of course not. BMW’s customers would never stand for that.

With this new proposed model of uncompressed audio, the music industry would be asking you to pay a higher price for the “added value” of hearing the recording the way you should have in the first place. Essentially, they are asking you to pay a premium to hear audio in the same quality it was available in back in 1986.

Now I know some of you are going to say “but Scott, BMW does charge a premium for more options and a more amenities on their vehicles. How is what the music industry’s doing any different?”

I’m glad you asked.

First off, BMW starts with a solid, technically tuned product then adds to it. They charge more by adding value in the way of options and features that consumers are willing to pay more for. By comparison, the music industry is starting with a technically inferior product and proposing that you pay more to hear music in the way they should have been offering it – and have been offering it in CD format since the mid 1980’s. Instead, if labels want to charge a premium, then add premium content. Try including extra tracks, outtakes, acoustic and live versions of songs and video clips. Fans have already shown they will pay extra for a “deluxe” version of an album with these extras. Determine pricing based around the type and quantity of content, not by the technical quality of the digital file.

Revenue for recorded music in North America has essentially stagnated at about $12.5 billion since 2006. That’s good news in my view. While not growing the way the labels would surely like, it means that they’ve stopped the bleeding. But if they’re going to win back music lovers, they need to stop acting like world owes them something and start respecting the consumer. In addition to getting a handle on the technology that will improve the quality of digital music, they need to revisit their archaic and nonsensical pricing structure.

I know it’s hip to bash record labels. Hell, they’re such an easy target. But understand that I am a music fan through and through. I buy lots of music and I’m happy to pay for it – just give it to me at a price that make sense in a type of audio quality that at least matches that first Billy Squier record (which by the way I still have). Is that too much to ask?

I’d love to get your thoughts on this. Is my thinking sound?

  • Jacob Clausen

    Unless I can hear a significant difference in sound quality, I’ll stick with the basic prices. Good article Scott.

    • Jacob,

      I think you’re right – most people won’t be able to tell the difference. The problem is also that we’re investing in our music collections for the future. As sound technology advances we don’t want to be buying Beatles albums again in 20 years because the digital version we bought today are inferior to what they should have been.

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  • I don’t care that this article is a year old.  After deciding to pay extra for a WAV digital album, which isn’t available on Bandcamp (they seem to be one of few outlets who don’t charge for doing absolutely nothing to a file format),  I became incensed and searched for a bit more insight than my own assumptions.  It seems that my assumptions are right.  Record labels love to blame other people for their own failings, but when they operate via unfair business models and hardware/software restrictions, then they should not need to scratch their heads about poor sales.

    If there was a considerable amount of an effort and a strain on resources required to distribute lossless music (even then, FLAC and Ogg Vorbis are compressed), such as heavy use of a distributor’s bandwidth, then I might understand.  However, these ludicrous pricing models are imposed by record labels, who surely wouldn’t need to worry about that sort of thing.  It’s pathetic and I will try to vote with my wallet by buying music from sites who are forced to do this.  Hopefully, others will become aware of how awful this is and do the same.