Cover Page '97






Last year it was just the first try; this year it's a tradition. If you ever wondered what would replace the New Music Seminar as the leading annual music business convention in the U.S., Jupiter Communications' may be the one, in a few years. Addressing the convergence of New Music and New Technology, this is the convention that will trace the impact of online, interactive and other technological advances on the music business over the impending evolution of the next several years. It's in a high-growth mode now, and as the online segment of the music business grows, this convention will be sure to grow along with it.

Liquid Audio was prominent at the expo this year, presenting a complete system for downloading music, much like the system introduced by Eurodat last year. In fact, this technology had it's first actual consumer launch during the convention itself, through N2K's "e_mod" system. That's right, if you purchase a CD-R (recordable CD-ROM) drive, a few blank CD-Rs and register yourself at Music Boulevard, you can download music right onto a CD at home, either a full album at a time, or even track by track to create a custom "album" song by song.

If you trust it on your hard disk, you don't even need the CD, but you can't copy it for anyone else, without divulging extremely personal information in your player, such as Social Security Number and other identifiers used to verify the purchases. It will take a huge amount of time through a modem (more manageable via T1 and higher), but if the title you want is not in stock locally, this is still faster than mail order by a long shot. In the broadband world, this will be quick and painless (well, one hopes it will; skeptics may still raise their eyebrows until the telcos or cable companies or someone else gets their act together).

The final panel of the convention was a spirited roundtable discussion on piracy that pitted itinerant electronic freedom fighter John Perry Barlow against representatives from NARAS, BMI, RIAA and Billboard on the topic of just what will piracy do to the economic structure of the music business in the online era. Barlow's position is similar to Esther Dyson, claiming that recorded music as a product is doomed, due to easy duplicability of digital data. He sees revenue coming only from live appearances (and perhaps merchandizing) in the future, to the complete exclusion of recorded "product" (destined for promotional use only) and the death of intellectual property itself (aside from, perhaps, brands and trademarks).

Strange that nobody mentioned Eurodat or Liquid Audio (well, until this writer presented the point in the Q&A session following the debate). Barlow claims that online media destroy the "tangibility of the physical product" however these technologies are demonstrations that the equivalence of that tangibility can be recreated using sophisticated encryption schemes linked to format-specific playback drivers that would be licensed freely to playback device manufacturers (beginning, of course, with PCs).

In another respect, however, Barlow is right on the money when he alludes to major changes coming to the structure of promotion and distribution in the music business. "The artist formerly known as Prince" has even begun to market his new albums exclusively through his own web site (N.Y.Times, Saturday, July 26, p.11); perhaps a glimpse of things to come for prominent acts that need no extra brand-building. Combine that with more robust music selection/recommendation features offered by some online catalogs such as Tunes Network, and the light is beginning to appear at the end of the tunnel.

-- Dan Krimm, 7/97

Addendum, 2001:

It's becoming clear that digital rights management, especially including encryption schemes, is not entirely effective, and is more of a danger to fair use than it is useful for creating a business model. Once decrypted for playback, and especially once converted to an analog signal, the music will be able to be recaptured/re-recorded, and re-digitized for unencrypted transmission.

A better model, now that personalization is developing, is a service where the value is in the agregation and personalized service, rather than trying to lock up something that is inherently ephemeral. The carrot, not the stick, is ultimately more effective, and providing an overall experience of music that cannot be extracted from the system, the way the raw content can be, will ultimately be better solution.

Barlow is right that the recorded-music-as-product model is on its last legs, but the recorded-music-as-service model still seems hopeful at this point. We'd be in bad shape if recorded music could not generate revenue on its own merits.