I say no.

Here’s why.

The flat rate would be essentially a universal internet user tax that would pay for all downloaded music.  That’s how I understand it.  There’s probably a thousand different variations, but that’s the basis.

One big problem is the people who don’t get their music online.  They subsidize the rest.  Why should I pay for Jonny’s 183 GB worth of music?  I only have 500 MB!

Another problem I see is that the music industry is essentially capping itself.  If the tax is say $2 per internet user, that only pays for 2 songs per internet connection.  If the average user downloads (or just listens) to more than that per whatever time period we use, then the industry loses money.  As a business model, you want to be paid for what you do.  It’s bad if you’re not compensated as much as you should.  If I continued to do that in say, a bakery, then I would go under.

Now, subscription based services seem fine to me, but they’re especially useful for people who do buy/use a lot of music.  If you’re going to buy 12 issues per year of some magazine, why not buy a subscription for the year and save some money?  But for the person who only buys 1 or 2 copies over the year, the subscription isn’t worth it.  They’ll pay less because they skipped the subcription.

By collecting the music fee, you take away that option for higher usage, and essentially make everyone pay a subscription fee.  It’s like charging someone $20 to walk in a record store saying “Take what you want.”  If you heard that, you’d go a pick out 20 or 30 CDs.  At $15 per CD, the store just lost money!

And the silly thing is, the music industry has been giving away free songs for years.  It’s called radio.  In fact, they’ve paid people to play music on the radio!  Now you’re telling me that they can’t figure out a way to monetize digital music other than by universally charging internet users?

Personally, I think things like Spotify or Pandora or YouTube are on the right track.  Free music is the ultimate end of the digital revolution.  It’s too easy to copy songs digitally and give them away for anyone to truly stop it now.  YouTube is like radio MTV.  Pandora is internet radio.  Spotify is more like a new breed of music, combining social media aspects with radio.  The trick is finding ways to create value in free music.

I don’t have an easy answer.  But I do know that by giving enough away for free, you generate interest that will probably lead to sales.  Charging a flat rate seems to be reaching to far, and I think there has to be a better way.

Any thoughts?

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Case in point: the music industry.  We’ve always sold physical copies and been able to control their copying to our liking.  That’s how we’ll approach digital transmissions.  Result: RIAA as attack dog, proper digital legislation is not around, and the consumers are leaving.

Case in point: the church.  We’ve always done service this way, with these songs, at these times.  Why change to anything else?  Result: churches are losing members and not reaching out to a new generation of believers.

Obviously there is more to both of the points above, and I’m really, really oversimplifying things.

But here’s the point: If we are to survive in a new age, we need to reevaluate our methods.

This is, again, not to say that old methods are bad.  I don’t believe physical copies of music will ever truly dissappear.  There will always be some people (probably like me) who like to have a CD, an album, a whatever of their favorite band.  And churches have always (I think) sung songs together as a group.  They probably always will.  But in order to survive and remain viable, we must always reevaluate the methods to see if they are still optimal.  If you find that your current methods are falling behind, then you must adapt.  There is no other option.  Your choices are change and grow, or remain and die. 

Changing your methods can be hard.  If it wasn’t, we’d all be doing it constantly.  But we cannot end up looking back saying “If only we had changed.”  If we do, we’ll end up trying to sell papers to people who don’t need them anymore because they get the news online.  Or on their iPhone or BlackBerry.  Or on the next cool toy.  If you do successfully change (especially before the rest), you will be prepared for the future.

Just watch out for the next big shift, so you don’t get caught behind the rest!

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Here we are in a virtual world.  Digital music, virtual games, ebooks, online dating.  Pandora’s Box is opened, and we can never go back on the digital world.  Not that we want to.  However, as evidenced in declining music and book sales, the value of a real product is diminishing.  It’s too easy to find free products online that compete with going to a brick and mortar store (or even buying through online stores).  So how does one create value?  Here’s one idea.

Catching up on eveything, I stumbled across this article about vinyl record sales increasing.  I chuckled to myself, then I read this:

“They [13 to 24 year olds] were brought up on virtual everything. Their games were on the computer or on the TV. Their music was in a box,” he [Steven Sheldon] said. “I think they also do recognize the difference in sound, but I think holding that 12-by-12 piece of art and holding that record in their hand is creating the buzz.”

The light went on in my head, again.

To add value to your product in a digital age, you need to add something real.  Something intangible and scarce.  That is what people want to have.

As music inches closer to becoming free, we all need to add something to the experience.  Watching your favorite band live is an irreplacable experience.  That night will never happen again, and you were a part of the history of the band.  Being a part of an exclusive fan club for your favorite artist is another experience.  As a member, you can be up to date on inside information.  The artist communicates with this group in a special way.  You have access to special products and/or offers that others do not.

This is the new music business.  Finding ways to connect with others.  Finding something to give your consumers something that no one else can.  Consumers today can see through the ads.  “Look at this, it’s the best ever!” doesn’t work anymore.  Why is it the best?  The best for whom?  How does it compare to alternatives?  If you can offer something that is real and authentic, then the right people will find you.  That is why vinyl records are selling again.  Most consumers don’t have them.  They create some exclusivity to your brand.  This is what you want.

Find a way for your brand to add real value.  You just might come up with something big.

Posted via web from On Life, Stories, and Music