Saturday, November 8, 2008

Music Downloading - A Missed Opportunity

Our lives are saturated with music. To be removed from it takes a conscious effort on our part. The recording industry has a reliable product to sell and an inexhaustible demand for it, so why are they up in arms over the illegal downloading of music on the internet? The record companies, a de facto monopoly, want to provide music on their terms. Compact discs offer excellent sound quality in a compact medium. Consumers pay up to twenty dollars to own a disc containing two or three songs they want, and six or more that they have never heard. Digital music players have created a market for downloaded music. These new technologies have made it possible for consumers to pay only for the individual songs they want and exclude the songs they do not want. By turning a deaf ear to their customers, record companies are losing business to illegal downloading instead of creating a market for legally downloaded music. Their claims regarding intellectual property rights are valid, but they have chosen to ignore a business opportunity by downplaying the emergence of the internet as a marketing tool and distribution apparatus for their product.

The failure of record companies to embrace the internet is bad business. Consumers drive the market in business, and the market adapts to their changing needs. These are the basic realities of business. Music consumers are no different. Young adults, the largest consumers of music, are technologically savvy. They use computers regularly and navigate the internet with ease. They are aware of new technologies and eager to use them to customize their environment. Dating, studying, communicating, and shopping are activities that take place online. If record companies want to continue to provide a product to these customers, they must listen to their industry analysts and “must give music fans more ways to buy their music online” (Evangelista ¶4). Many people feel sympathetic with Bill Thompson who emphatically states “I’m not going to buy any more CDs until there’s a decent online music service that lets me get the music I want” (Thompson ¶11). These customers have made it clear that they want music in a downloadable format. Record companies would be wise to rake in the profits by making it available on their websites. Instead, they are forcing customers to find a different supplier or an illegal alternative.

Record companies have historically been slow to embrace new technology. According to Janice Ian;
The music industry had exactly the same response to the advent of reel-to-reel home tape recorders, cassettes, DATs, minidisks, VHS, BETA, music videos (”Why buy the record when you can tape it?”), MTV, and a host of other technological advances designed to make the consumer’s life easier and better. I know because I was there. (Ian ¶19).
Downloaded music eliminates shipping, storage, and distribution costs. “The cross-marketing opportunities are unbelievable. It’s instantaneous, costs are minimal, shipping non-existent…a staggering vehicle for higher earnings and lower costs.” (Ian ¶42). Music is stored on a computer instead of warehouses and stockrooms. Record companies would receive immediate payment with no middle man. They would also have a clear picture of what their customers enjoy. Consumers would be able to have the quality music they want at a more reasonable price. This sounds like a business no-brainer, but the record companies still fight downloading because they cannot control it.

The internet is the instrument of the information revolution. It is an incredible tool. It cannot be ignored. It is not going away. The internet is too porous to be contained or policed effectively. Its nature forces individuals, businesses and governments to examine issues heretofore unnecessary. It has changed the way we communicate, the way we socialize, the way we get information and the way we shop. It has changed the way companies do business. The record companies must decide whether they are in business to make a profit, or to make a point about intellectual property. If they continue to focus only on prosecuting illegal downloaders, they might win the battle, but they will lose the war. If they accept online music downloading as the future of their industry, they can begin to take positive steps toward larger profits and a larger market share. And that is good business. (Works Cited available on request)

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