Why iTunes Won't Stop File Sharing

from the well,-duh... dept

The title of this one is pretty obvious, of course, but Apple is pitching iTunes as if it will get people to stop file sharing, but plenty of people are skeptical, including the folks at BigChampagne, who track file sharing usage. They say that iTunes downloads are a very tiny drop in the bucket compared to the among of music sharing on Kazaa. While Apple is hoping to sell 100 million songs on iTunes by next April, at any one time, there are an average of 700 million files being shared on Kazaa - with the majority of them being music. They describe things like iTunes as a "niche" or "premium" market. They don't say that it won't be successful, but all the rhetoric about it wiping out file sharing is just a lot of talk. Ever since iTunes launched, I've wondered what so special about it. While it does make getting legal downloadable music easier, it completely misses the benefits of music sharing across a distributed network (at both ends of the system). It's well designed and it's nice that it's there, but it's anything but revolutionary. The only way to stop file sharing from being a "problem" is to embrace it and figure out a way to use it to the industry's advantage, rather than fighting against it.

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  1. identicon
    CryBaby, 21 Oct 2003 @ 5:08pm

    Re: No Subject Given

    An ex-director of marketing for Warner Bros. who I recently worked with on a project stated explicitly that the old way of business in the music industry is indeed dying, and fast. Their business model relies on a tight vertical monopoly of A&R, production, promotion and distribution. That control is slipping out from under them via file sharing, internet radio and PC-based recording studios, and there really isn't a whole hell of a lot they can do about it.

    While your position is logical and well stated, I think you are making a fundamental mistake in assuming that the music industry has a choice vis a vis accepting file sharing as part of their business model. The truth is that many of the services they offer are quickly being supplanted by far more efficient mechanisms, as I mentioned above.

    As far as the effects of a capitalist economy are concerned, if your business can't compete with cheaper, more efficient and more attractive ways of offering the same service or product, well, then you're out of business. It happens all the time and I don't see why the major labels are any exception. It's important to remember that record labels are not really the source of the product they sell. They do not make music (although they admittedly own quite a bit of music which does and will continue for some time to give them deep resources). Besides, using capitalist theory to defend the music labels is disingenuous. Remember that these companies have been found guilty (to the tune of about $500 million) of deliberately circumventing the natural path of a free capitalist economy via the MAP pricing scam.

    If you break it down, they really only provide one service that cannot be easily replaced by superior technology-based solutions (e.g. production, "manufacturing", and distribution) or equally effective independent service providers (e.g. lawyers, accountants and producers in the musical sense) at this time. Namely, promotion on a mass scale. The only reason they can provide promotional services superior to the competition (i.e. independent labels and artists) is because they have more money to spend. They do not own the means to promote, they simply have the financial dominance to squeeze out others' access to promotional service providers (e.g. MTV, radio, magazines, etc.), and that financial dominance will disappear as their traditional sources of revenue dry up.

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