Record Industry Tries To Save Itself By Distributing Online Content On A CD - InformationWeek

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9/10/2007
01:01 PM
Stephen Wellman
Stephen Wellman
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Record Industry Tries To Save Itself By Distributing Online Content On A CD

Welcome to another edition of the unintentional irony files. Today's target, the record industry. Their special new idea? The ringle.

Welcome to another edition of the unintentional irony files. Today's target, the record industry. Their special new idea? The ringle.What's a ringle, you may ask? It's the latest brain burp from the recording industry, you know, the industry that stubbornly refuses to learn how to evolve its business model? Yeah, that one.

Anyway, the ringle is a combination of content offerings in one package: a popular song track, a remix, an older track from the same artist, and a ringtone. All sold on one CD. That's a right, a CD. You know, it's sort of like an 8-track, but it's round and silver. Your great grandparents used to listen to them.

Not surprisingly, bloggers have been less than receptive to the ringle. One blogger has dubbed it the "Edsel" of the recording industry. Frankly, I prefer to think of it as the "Bad Idea Jeans" of the recording industry, but to each their own.

What the ringle demonstrates is that after nearly eight years of non-stop disintermediation by the Web, the recoding industry still has no desire to actually try to evolve its business model. Instead, record companies are trying to re-arrange the deck chairs on the Titantic.

Blogger Bob Lefsetz has some interesting ideas on how the record industry might start thinking about, you know, new business models:

Oh, I guess it's a problem if you believe that the CD must rule forever. But those same execs who feel this way are MARRIED to their giant plasma and LCD TVs. And they don't get just three channels, but HUNDREDS! Why should music be forced to live in the past?

I'm not saying every fan has 40,000 tracks. Just that more people have more music than ever before. And they want to take it with them. And they're not averse to paying for it, AS LONG AS THE PRICE IS REASONABLE!

It's like mobile phones. Imagine if EVERY call was a buck. How many would be made?

Imagine a twelve year old, asking for a phone. NO SARAH, you can't have one! You're gonna bankrupt us! And, if Sarah is LENT one for a sleepover, her parents will spend five minutes telling her NOT TO USE IT! That it's for EMERGENCIES ONLY!

God, the mobile business would be a fraction of what it is now. It would be like…1988. Where the labels are comfortable. Jimmy Iovine can afford dollar a minute mobile calls. He would tell people just to get richer, like him, so they can afford them too!

While Bob's thoughts here apply to the iPod, I think they apply equally to the ringle. Bob is right, people actually want music, they want lots and lots of music. That isn't the problem. The problem is that today's technology enables consumers to listen to more music than ever. In fact, we can listen to music all the time, thanks the iPod and other mobile MP3 players, cell phones with built-in MP3 players, and the inclusion of digital music on almost every notebook and desktop PC on the planet. But the current pricing model that the music industry is addicted to is built for a world where people don't have nearly ubiquitous access to music players. It's built for the world of the phonograph, not the world of digital music.

The key is to push the music industry forward to come up with pricing that allows people to actually afford all of the music that they have the technology to listen to. The industry needs to figure out a way to charge very little for music but sell loads more of it than it currently does. While I think iTunes is a step in this direction, I think it's too expensive.

And frankly, the ringle is not the right step in the right direction. It's a step backwards. Maybe it's a series of steps backwards.

What do you think? Can the music industry evolve? Or will it die while someone else in addition to Apple figures out how to sell music online and make money?

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