Former Record Label Exec Ethan Kaplan: Duh, Of Course More File Sharing Leads To More Sales
from the your-product-isn't-diamonds-mined-from-a-secret-mythical-land dept
We recently posted an interesting study talking about how greater file sharing of leaked albums had a specific (if small) causal impact that resulted in higher sales. I thought it was an interesting area of research, though one where a lot more work needs to be done. Following that, however, there was an interesting exchange on Twitter, mainly by former Warner Music exec Ethan Kaplan, who didn’t seem to think the concept was controversial at all — and instead that it was obvious. As he stated:
Let me simplify this answer: YES IT LEADS TO MORE SALES. DEMAND = DEMAND W/ $$$$$$ IF PRODUCT GOOD.
He then expanded on that idea (edited slightly to de-Twitterize):
Simplified further: MUSIC BUSINESS (RECORDED): your product isn’t diamonds mined from a secret mythical land.
And beyond broadband/napster/whatever, what hurt you the most is PEOPLE FIGURED THAT OUT. Cynicism caught up with you.
You can see the complete exchange on Storify (embedded below) as per Ethan’s command. Ethan, as always, is a perceptive observer (and never afraid to share his opinions) of one of the key reasons why the recording (not music) industry has had so much difficulty over the past few years. The industry was focused on something that they pretended was scarce when it was not — misunderstanding the supply curve. Add to that, the fact that they misunderstood how file sharing represented pent up demand, and they astoundingly got both sides of the supply-demand curve wrong. It’s hard to build a successful business when you do that.
Of course, all of this makes me wonder how Ethan lasted in his role at Warner for as long as he did. It must feel good to be free… Though, I stand by my assertion from 2008, that if Warner had put Ethan in charge, that company would be doing a lot better today.