Wednesday, July 27, 2011

Paying the Piper for Online Music

One thing consequence of moving music to the cloud, fewer of us will own music. That is a fundamental change in how anyone in their post-teen years looks music ownership.

Not too many years ago, though eons in the internet age, most people thought that when they bought an album (or collection of songs), they mostly could do what they pleased with the tunes. Listen to music, make tapes for their friends, lend the album so their friends could make tapes; I think you get the picture.

Then came Napster and digital music. Followed by the RIAA and of course the lawsuits.

There is no need to rehash that drama, except to say that it spawned iTunes and the iPod, which made Apple famously wealthy. For the sake of brevity, I have skipped a few steps, but that's the way it happened.

As a consequence of Napster and iTunes, we no longer needed to own the physical album. When consumers gave away that right, they gave away the right to own the music. So, you can listen to your music, but you can't give it away.

Moreover, it's going to cost more. Apple has already raised prices on its most popular tunes. As the current pre-teen crowd grows older, we will have a generation of kids who have always bought music online. Once they get locked into a service, price increases will follow. Look at Netflix most recent price increase. When you have a monopoly, you get to tell people how much they need to pay the piper.

You don't believe me. Check out this HBR blog:

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