Rick Rubin, Subscription Music, and Failure
From a great profile of Rick Rubin—now installed as the co-head of Columbia Recrods—in the New York Times Magazine, by Lynn Hirshberg:
From Napster to the iPod, the music business has been wrong about how much it can dictate to its audience. "Steve Jobs understood Napster better than the record business did," David Geffen told me. "IPods made it easy for people to share music, and Apple took a big percentage of the business that once belonged to the record companies. The subscription model is the only way to save the music business. If music is easily available at a price of five or six dollars a month, then nobody will steal it."
It's worth a shot.
Rubin sees no other solution. "Either all the record companies will get together or the industry will fall apart and someone like Microsoft will come in and buy one of the companies at wholesale and do what needs to be done," he said. "The future technology companies will either wait for the record companies to smarten up, or they'll let them sink until they can buy them for 10 cents on the dollar and own the whole thing."
This seems likely.
Given the competition among record companies, the subscription model is bound to be tricky to organize and implement. One problem with iTunes is that, with some exceptions, all the songs are priced equally -- a Justin Timberlake smash costs the same as an Al Jolson classic. Since a listener would, ideally, pay more for a Top 10 hit, that egalitarian system costs record companies potential millions of dollars.
Oh boy.
Subscription models have their problems, including muddled users' rights, but their lack of a system that charges a premium for a popular artist—something that has never happened in the history of the record industry—is not one of them.
The Music Man [NYTimes.com]
the latest
latest episodes
thanks for a reasonable assessment of Rubin's comments.. Over at Crunchgear some asshole wrote a post yesterday about how since he didn't know who Rick Rubin was (and this dude writes about music tech?) then his comments where stupid.
"their lack of a system that charges a premium for a popular artist—something that has never happened in the history of the record industry—is not one of them."
I disagree. From the 60s til the 80s, those who purchased new albums often wound up paying more for new releases than for older records and CDs. Even now, new hit CDs fluctuate between very expensive and the most marked-down. Look at DVDs: When they first arrive, they are often more expensive than they are even 12 months later, when they're priced to move. I think fans are often willing to pay more to get the latest and greatest, while there are those who are willing to wait for prices to fall.
@Anonymous: Yeah, but that's just market forces at work. Almost every new DVD or CD that comes out comes out at the same price, then is discounted more slowly or quickly depending on demand. Even games, which vary much more than other media, tend to stabalize around per-platform price points. (Peter Piper picked...)
I guess I might feel differently if music companies said, "You know, a buck a song is about right. But we'd like to sell music even more cheaply if we want to get it out there." But you know that's not what they're talking about.
"Either all the record companies will get together or the industry will fall apart and someone like Microsoft will come in and buy one of the companies at wholesale and do what needs to be done"
Apparently, this isn't just speculation. I dont remember specifics, but a music industry insider gave me the heads up on Microsoft and Apple vying for competing major labels.
Wouldn't it be a shame if your access to certain music was based on what OS you are running?
Seems like he would like a music stock market, where titles are bought at fluctuatiing prices based on demand which could be very amusing to watch - see the latest teen pop song shoot up to several dollars and then drop down to a free giveaway
When you start spinning statements like this "it was considered worth noting that her album....dipped only 7 percent rather than falling by the usual double digits" I think the writing is well & truly on the wall.
The subscription model he proposes has been tried time & again with little success. It appears that customers like to own their media, whether video, audio or gaming.
The rest of the article is pretty much trodden old ground, Def Jam history & some contemporary color. Nowhere do I see an outstanding vision to save the music industry.
Doesn't cruising around LA & NYC looking for new offices seems a little like Nero's fiddling?
Why is it no one ever draws the appropriate conclusion regarding the record companies' desire for "popularity-based" price fixing? Let's go for it, I say! Follow the logic: The companies say fans should pay more for new, popular music, than for old, less-popular music. Sounds fair. Since the market price for a single song has been set, more or less, at 99 cents, that's obviously what fans expect to pay for new, popular music. By the companies' logic, older, less-popular songs should sell for *less* than 99 cents -- say, 50 cents for a song more than a year old, 25 cents for a real backlister, etc. But, really, if there's any logic at all to the multiple-price strategy, shouldn't the companies follow the retail strategy of the (few) remaining record stores and actually *discount* the newest albums to drive sales? Instead of crying foul over the very idea of multiple price levels, we should attack the concept at the root -- demand discounts off an already-absurdly-high per song price!
Amie Street works as a "music stock exchange" already for indie bands, changing prices based on popularity. No idea how it's working out, but it does exist.
Subscriptions suck always and everywhere. If the choice is between "subscription model" and "recording industry is doomed," well then, I guess the recording industry is pretty much screwed. But that's what any near-zero-marginal-cost industry deserves. No truly free market would ever tolerate that kind of authoritarian bullshit.
I always dream of a future where the artists make billions and the middlemen make $.02 per sale..
[that isn't necessarily on-topic, but it's what came to mind reading this and the comments..]
ETF’s trade more like stock does on different exchanges, and experience changes in price throughout each day of trading. Because it trades like a stock whose price fluctuates daily, an ETF does not have its net asset value calculated every day like a mutual fund does.