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September 04, 2006

Disintegration and Aggregation in the Music Industry

There's a lot going on in the music industry right now and I don't raise this fact simply because WIRED made it the subject the cover of their September issue (which is worth reading even if those who follow the trends in music have been aware of the featured stories for some time now).

But there was one nugget from the issue that struck me as worth noting and it's because it's an idea that Lessig has and others have talked about before: voluntary collective licensing. Much like we have now have for radio, a fee of $5 would be tacked on to your monthly ISP fee to account for the music that you downloaded to cover the revenue lost by the record companies when you downloaded rather than bought music. We have this principle with radio stations and also on the purchase on blank tapes.

"Now the 18-year-old high school student heads the Association des Audionautes, an organization of 6,000 Web junkies that has made peer-to-peer file-sharing an issue in France's upcoming presidential election. Under a plan that would compensate artists through a surcharge on Internet service provider fees, the group aims to make France the first country to legalize file-sharing." (link)

This is timely because there of the industry-changing news last week that MySpace will start offering non-label bands and others the ability to sell non-DRM mp3 songs. I can't wait to read Lefsetz's response to this story.

Not only was there the MySpace news last week, but a few smaller music industry items that all contribute to the bigger picture-- the mainstream music industry is dying and the listeners/users/prosumers are becoming the driving force of recommending and picking new music for us. A little too much Web 2.0 you say, a little too much social-networking euphoria? Read this mini-case study (blatant Umair rip-off).

The New Tastemakers- NYT article on Pandora. Two choice quotes (emphasis added):

“You now have music fans that are completely enabled as editorial voices,” said Michael Nash, senior vice president for digital strategy and business development at Warner Music Group.

“The tools for programming are in the hands of consumers,” said Courtney Holt, executive vice president for digital music at MTV Networks’ Music and Logo Group... “Right now it almost feels like a fanzine culture, but it’s going to turn into mainstream culture. The consumer is looking for it.

But if fans become their own gatekeepers, the emerging question is what sort they will be. Will they use services like Pandora to refine their choices so narrowly that they close themselves off to new surprises? Or will they use the services to seek out mass shared experiences in an increasingly atomized music world?

There are two takeaways, discrete insights here. The first is more obvious, the users are in control of programming their own music choices and recommending those choices. The second is more nuanced and leverages part of Anderson's Long Tail principals. There is disintegration in music tastes as the variety and available options become easier to search and then re-aggregate in personal music preferences.

Music is becoming more fragmented because every consumer can make their own choices now but that act of creating your own personal music preferences will become mainstream culture. Pushing down the Long Tail depends on great search and discovery tools that don't just offer us unlimited choices, but offer us ways to make sense of all those choices in ways that still give us a sense of control.

The answer is not that people will become too narrowly focused (the MSM said this about customized news/RSS feed pages too) and lose the ability of musical surprises. I discover new music precisely through these aggregating servcices, Last.fm, The Hype Machine, and of course through personal recommendations (like I did for this movie and for this music), not in spite of these services.

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