Free music: Why not?
While the battle rages on, piling up legal fees and taking the joy out of music, a simpler solution is on the horizon. The best way to stem this tidal wave of thievery is to give the music away....
To understand how, we would do well to look at a very different industry, but one with surprising parallels to music: 19th-century fuel delivery. In the late 1800s, when a tenant sought to warm a cold apartment, she had to buy her own coal from passing coal wagons and then haul it in coal buckets up to her fourth-floor kitchen. This apparently straightforward transaction brought with it considerable challenges for wagon drivers. Theft was endemic. Stories abound of coal wagons stripped of half their load by street urchins before a first delivery could be made. Various solutions to improve security were proposed, including various patented coal locks. The ultimate solution, however, proved to be something quite different: a new distribution model that made coal theft irrelevant. It was called central heating. Coal distributors sold their product efficiently in one large delivery to apartment landlords, at the same time removing the incentive for individual tenants to steal. Landlords could pass a significant part of the savings on to tenants in their bill for monthly rent. Everyone benefited, even the families of the coal-stealing urchins.
Similarly, it is the power of low-cost distribution, combined with subsidised free services, that will save and transform the music business. Stealing will become equally irrelevant.
To understand how, consider these statistics: the U.S. music industry collects $12bn per year from CD sales to about 50 million active fans. That means each person spends an average of $250 per year to purchase around 15 albums a year. Now, $250 per year is a very interesting number. By next year $250 will buy an MP3 player with a 100GB disk. That disk will hold over 2,000 CDs....
With these economics, distributing music on flashy plastic disks one album at a time seems, well, like heating your kitchen with coal. And $250 is not too high a price for a marketer -- even those outside the music business -- to spend acquiring customers, especially those dedicated fans holding an ad-supported player in their hand 15 hours a day. Imagine the possibilities. Buy a new Kia? Get 1,000 albums with every car. Purchase a lifetime subscription to the Boston Symphony Orchestra? Receive an MP3 player with a library of the world's 2,000 most important classical music selections. Sign up for a new cellular contract? Get unlimited access to music from over 30,000 indie bands.
The economics are such that it would take only one leading company to break the music distribution mold. Among MP3 player makers, Apple, with its pioneering iPod and remnant counter-culture customers, is one possibility. Sony -- rumoured to earn more from player hardware than from its own music division -- is another. Or it might be a local brand in China, with less to lose.
A workable payment plan? But how will artists and their agents and lawyers get paid? This time we can turn for answers not to coal distribution, but to an industry much closer to musicians' homes: the American Society of Composers, Authors and Publishers. ASCAP licences, collects and redistributes music royalties from music performance venues (like radio stations, concert halls and so on) to the artists. It determines who gets paid what by polling these venues to see whose music gets played and how often....
And we consumers would finally have the freedom to play music where we want it, when we want it, how we want it. This is the future of music, if anyone is listening.
1:50:47 PM 
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