Drewbot

The chart the record industry doesn’t want you to see.

I’ve long argued that piracy and free-flowing digital music hurt the record industry (the four major labels) not by directly stealing revenues, but by breaking the record industry’s monopoly on music discovery.

Pre-Napster, sharing music was practiced only by a small percentage of the audience. For most of the music consuming population, the only way to stumble upon a new artist was through an industry controlled channel: a radio station under payola-driven management or MTV and VH1, whom both had to cater to similar pressures.

Non-industry influence occurred only on the edges, amongst the hard-core who set up shop in college radio stations and indie record stores. These pockets were strongly tied their local geography, held in place by either the walls of the shop or the power of their university-funded broadcast antenna. The quality of the music they championed may have been convincing, but the scale of their influence couldn’t put a dent in the industry’s stranglehold on the channels of distribution.

The death of the record industry (as we knew it) was kicked off by Napster, yes, but more credit should be given to the CD burner. Napster was constrained by the bandwidth of dial-up, which was the flavor of the time. I remember setting a handful of tracks to download, going to dinner, then returning to listen to the one or two that completed.

The burned CD, however, was such an efficient device for sharing that it changed the game. The few with DSL or cable could pass-along their booty and the influencers that bothered to venture to indie shops could share their style.

The industry’s drop in profit, shown in the chart above, is due to the demise of their control of the channels of sharing. Keeping their power required mass spending, but rewarded them with huge payouts. As the sharing of music moved into media beyond their reach but with enough scale/portability to matter, they were stuck with the same huge expenses and a dwindling return. Bandwidth grew to a point where digital music made sense, and digital sales eviscerated their margins.

Once Apple opens the iTunes Store to the individual artists themselves, the market reinvention will be complete. And not a moment too soon.

This is how you own the digital music category: iTunes has the lowest average price per transaction, but almost 3 times the purchase frequency per month.

How might this insight apply to gaming, video, and journalism?

Click through for more info. (Via Mint)

I bought a tape last night for $3, from the band that opened for Big Business. Fittingly, they sounded like 1993, despite their drummer’s skills. Nothing special.

But I figured this was probably the last time I would ever have the opportunity to buy a tape outside of a gas station in the middle of nowhere.

More Google Maps nerdery: Jay-Z’s “Empire State of Mind” mapped. (Via Fast Company)

Easily the best deal on the internet. If I didn’t already own all these albums (two in two formats) I would snap this up on the spot. Apple Lossless or FLAC format, $35 for the finest 3+ hours of music you’re likely to find online.