Friday, October 24, 2003

Doing the back of the envelope calculation shows that a very well run online store doing about 50 million tracks a year and selling them for $1 each can make about $5 to $10 million a year if they don't spend anything on advertising and if they are well run. It should get a little better with size, but going to 15% margins is probably impossible - and that assumes regular CDs don't come down in price. There's an interesting contrast here with commercial academic publishing. The big players there have gone electronic early, with pricing, licensing, and bundling policies designed to protect and increase their already considerable margins. What they have that the music majors don't is a tight hold on the market by virtue of owning the most prestigious titles and imprints, which are integral to academic rankings. Led by theoretical physicists, the academic community — the equivalent of artists — trying to break the oligopoly with open access archives and journals. It will be a long process because the academic community cannot just take its information-access $$$ somewhere else. Music consumers can use their money to support other kinds of activity instead. it would be interesting to figure out how much disposable income and attention that used to go into media consumption (records, movies, TV) is now going instead into one-to-one or many-to-many communication (cellphone, IM, text messaging, chat rooms, blogs, Harry Potter fan sites, ...). My kids certainly spend much more time communicating instead of listening/watching than I did. I have little teenager pressure to have cable TV, but fast net access is a highly prized privilege. 10:10:18 AM

It's been unseasonably warm and dry out West. No October fresh tracks this season for my Western ski brethren. The steady high pressure responsible for that reminds me of the steady high work pressure that keeps me from writing here. Creating an introductory CS class from scratch sucks up all available writing time, except for today when an usually long meeting ended early. 9:51:48 AM