The hills are alive... with the price of music

Some time ago, I heard a radio program discuss the state of music distribution in the US. I don't remember the program, but it was probably on NPR.

On the program, a musician was bemoaning the state of the music market and the rampant piracy that infests our economy. They made a comment to the effect of "people have gotten used to music being free, and now they won't pay for it".

I disagree with that statement. Apple has shown a profitable business model with its iPods and iTunes products... and people pay for music.

I think that the artist (and the recording industry) has confused with "people paying what they think music is worth" and "people paying what the recording industry decides".

For years -- decades -- the recording industry decided the price of music. If you wanted the latest LP from Britney Spears, New Kids on the Block, Aerosmith, The Beatles, or Elvis Presley, you had to pay the price set at the local record store, which was a function of the price set by the RIAA. The recording industry had a monopoly on music. They were the place to go, and the only place to go. Even if you went to a different record store, you dealt with the RIAA.

With the internet and MP3 encoders, the music industry now has competition. People do not need to buy music at the price set by the RIAA. People can search the internet and find it for themselves.

Yet many people choose to buy their music through iTunes. Apple must be doing something right, to have success at selling music.

What the musicion on the radio program (and his fellow musicians, and the RIAA) fails to realize is that we now have a true market, and they cannot simply dictate the price. The days of arbitrarily and unilaterally setting a price for an album of songs (and selling the songs only as an album) are over. The market dictates the price, with buyers deciding to purchase from the legitimate sources or the illegitimate ones. The RIAA must compete with other sources.

Few companies like competition, except for the other guy. A monopoly is a nice, cozy arrangement and very profitable. But not always possible.