$0.10 per song is more like it

?I like big butts and I don?t know why??

You?ve probably seen those ads for the new Apple iMusic service, where the white guy is ?getting? jiggy wit it? about as well as Dan Ackroyd and Jim Belushi on last night?s Saturday Night Live, while legally listening to the Sir Mixalot wax eloquent about his preference for women with large derrieres on his iPod. At the end of the commercial, they tell you that it costs $0.99 to buy the song. Of course, it?s not an MP3, has DMR restrictions attached to it, and oh yeah, it?s a whole dollar.

This is simply too expensive. Some people will buy it, and apparently Apple has sold some 2 million songs already. But I get the sense that the way they came up with the price was that they took the $15 price of a CD, and roughly divided it by the number of songs on a disc. It won?t be long before people realize that this isn?t a price reduction at all. And it?s unlikely that the service will ever have popularity beyond Apple or iPod users, given the proprietary format that the songs are sold in.

I?m gonna tell you where things should go, and why. Because it looks as if the FCC might just get their act together in time to make streaming audio anywhere and everywhere a reality. And if they don?t, well, I?ll give you my prediction for that scenario as well.

Pricing is a bit like setting speed limits. If you set reasonable speed limits, most reasonable people will choose to follow them. If you set unreasonable limits, people choose to speed, willing to run the risk of getting caught. It was remarkable in Massachusetts when they raised the speed limits to 65 Mph, the state started complaining that their revenues from speeding tickets were down. They seemed to be of the opinion that people would continue speeding, no matter what the speed limit, because they just liked speeding. It?s a similar logic to what we hear from RIAA spokesmen, and even Lee Gomes of the WSJ. The argument they make is that students essentially like to steal, and won?t pay for what they get for free today, not even $0.10 per song. I disagree.

When VCRs first came out, movies were hard to come by on VHS. And when they first came out, they were priced entirely too high. I remember getting together with a neighbor to hook up our VCRs together and copy Monty Python and the Holy Grail. That?s because at the high price they were charging at the time, it was worth the effort. But as soon as Blockbuster started renting movies at $2 per night, all that effort was no longer worth it. What?s more, was that socially, it no longer became acceptable to approach people to copy movies from each other. Why? Because it?s only $2 to rent the damned thing, and why are you bothering me with this crap? Don?t be such a cheap ass!

Calzone had it right, when he said that at $1 per song, he?d carefully consider every purchase. But at $0.10 per song, he wouldn?t, and that?d be downright dangerous. He?d treat music like cell phone minutes, and just let the bill run up. In fact, he, as would most of us, would simply opt to pay a monthly fee for unlimited use, so long as the tools to help us find what we wanted came with it, and it was available everywhere we wanted to listen to music, at our homes, in our cars, at the gym, etc. Which brings me to what a real online music service should look like.

Let?s assume that the FCC gets their act together, and the bandwidth is available for always-on connectivity. People would buy an account on some aggregated music service, which would stream music to people wherever they were. Your cell phone would dub as streaming Walkman, and your car radio would stream MP3?s as well. Each of these devices would have a simple set of ?yes? and ?no? buttons so you can tell an intelligent engine what you like, so that it can show you music you?d never heard before. And then, using intelligent engines akin to what Amazon uses, you could build yourself a profile, so that over time, you?d only ever listen to what you like. Artists would get paid by the amount of ?yes? votes and requests for playtime they received. Mooches would be distained and socially ostracized for trying to steal, because the theft, at $0.10 per song, is so outrageously petty. And everyone would live happily ever after.

Now, if the FCC doesn?t get their act together, I still maintain that the only way to stop stealing is to lower the price to the point that it becomes embarrassing to ask a friend to collaborate in your petty theft. But the devices would be cool. I think you?ll start to see car radios, that can communicate with your computer via Wi-Fi and would store songs locally for playback. And your cell phone will drop into a cradle, and will be able to store a gig or so of songs as well. And the rating ability would still be there, but everything would synch when you got home, your preferences, etc.

Admittedly, the Apple deal is a decent baby step in the right direction. But if they don?t start moving more quickly, expect new online-only labels to crop up that do offer music at a reasonable price.


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