I'm pretty much just piling on at this point, posting twice in one day about how for CD and DVD, we can see the end of the sidewalk from here, but I really liked Scott's comment on his blog, Wasatch Economics about the underlying motivation behind the record companies' resistance to change:
The system for getting music to listeners has rendered the CD distribution system completely obsolete, in my view. The music industry incumbents are resisting this, of course. To me, the biggest source of resistance from the music industry lies in two areas. One is that their investment in CD-production facilities have been fully amortized and so the marginal cost of producing CD's is trivial. Protecting those CD profit margins is at the top of their list. I would venture that the CD-duplication plants are essentially worth scrap value at this point, except for marginal revenue from CD production. The second source is the traditional system where A & R people would spend tons of money on throwing promotional parties, expense account meals, payola and so forth. These people don't want to see their gravy train derailed.
Can anyone be more concise than that?
Wednesday, March 21, 2007
More on the demise of hardcopy content
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1 comment:
This comment belongs in the "It's worse than that; he's DEAD Jim!" category.
I was recently in Edmonton for the Van Morrison concert at Rexall Place - and it was a fine, fine show. I decided as I was in a jurisdiction free from provincial sales tax I would spend some dollars on some music. Although I did make some purchases, I was stymied when I tried to purchase both older Morrison catalogue items and some of the newest stuff around - ok go's newest Oh No (buy it - listen to it - love it - these are your orders).
I visited 3 retailers in 4 days and struggled to give them my money. If sales are way off it may be because there's nothing on the shelves to buy. Well not exactly nothing. There were about 9,000,000 copies of the newest Pussycat Dolls and Justin Timberlake offerings.
I tell you, shopping in modern music stores is like standing knee deep in a river and dying of thirst.
I did find one gem though - no thanks to the "music industry". If you like "roots" music then rush out - wait, forget that - go online and pick up a copy of JJ Cale & Eric Clapton - The Road to Escondido. Trust me this is one of the best new recordings I've heard in years.
Man, I hope rock 'n' roll can survive the music business.
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