After Googling this question a couple times, I thought I would make it easier to find the answer. The answer is yes, but not all songs. You can tell by the words “iTunes Plus” above the buy now button.

I found it particularly interesting that there was a button on the iTunes store homepage prompting me to “upgrade” to iTunes Plus. When I clicked it I was given the generous opportunity to buy the tracks AGAIN for a seemingly random price. For instance, I could upgrade the 12 tracks on A Perfect Circle‘s Mer de Noms for $3.56, the 12 tracks on Audioslave‘s Out of Exile for $3.00, and the 13 tracks on Matthew Good‘s Avalanche for $2.40. At first, I assumed this was the new variable pricing model, but each track on each album was listed for $0.99 cents. So go figure.

I love the idea of DRM-free music. I just bought Mudvayne‘s new album aptly titled The New Game, the first from iTunes since buying a vehicle with an MP3 player. However, it annoys me that I have to pay again to get the DRM taken off my existing purchases. Yes, I can strip the DRM myself, but that is a pain compared to just swiping the album via bittorrent.

I might go so far as to say it is a %110 free download, given the extremely open set of formats it which it is available:

• High-quality MP3s (87 mb) – encoded with LAME at V0, fully tagged.
• FLAC lossless (259 mb) – CD quality
• FLAC high definition 24/96 (942 mb) – better-than-CD-quality 24bit 96kHZ audio
• M4A apple lossless (263 mb) – CD quality – will play in itunes.
• High definition WAVE 24/96 (1.5 gb) – better-than-CD-quality 24bit 96kHz audio

To add to the modernity of this release, all the the bigger packages are distributed via torrents. Therefore, they only pay to transfer a tiny file from their servers. That’s hella-smart.

There is also the option to order the super-deluxe, collectors CD/DVD and vinyl editions. Now THAT is value.

Trent Reznor is the One-Man-Show (in the studio, at least) behind NIN and has consistently driven the crest of the wave for the music industry. They have released their last several albums as free downloads, and for the Year Zero publicity, placed easter eggs URLs around the Internet, each with clues about the album. Fans were encouraged to compile the whole story in the NIN wiki.

They have also made some of their singles available as Garageband projects and full 24/96 Pro-tools sessions for fans to remix. Being a pro-audio geek, that is insanely cool. Check out the remix of “Only” that I built with Pro Tools.

What about video you ask? What about UGC? What about mobile? How about the new fan content gallery, the iPhone game, and 400GB of HD concert footage to play with.

Perhaps they could use an online Mashup Tool for that?

Regardless of whether the digital distribution of music by online retailers results in a viable revenue generating model or not, their will be value in the “gathering, organizing, selecting, synthesizing and distributing [of] information.” The shift in value and power between these intermediaries is where the differences in these points of view begin to show. The Carlson School of Management sees value in online retailers in the qualification of content, but Dolfsma believes this role will be filled by online communities and other organizations that “simply [have] to become a reliable source of information providing information that can be trusted”.

A generally accepted opinion is that the market for physical music media will decline significantly in the future due to the Internet and compressed audio formats. In “The end of the CD as we know it”, Bakker forecasts a drop in CDs sales “is most likely irreversible”. In “The Move to Artist-Led Online Music Distribution”, the authors envision “obsolete” music stores that need new gimmicks and services to “enhance their customers experience [in order] to retain them”. None of the articles discuss new innovations in audio such as SACD and DVDA, music DVDs, multimedia content on enhanced CDs, bonus discs, collectors booklets and artwork or other value added incentives only available on physical media.

There is no doubt that the Internet is forcing the media industry and the laws that govern it to change. The history of the relationship between the media industry and technology has been well documented since the invention of the printing press by Johannes Gutenberg in 1455. Since then, the player piano, the phonograph, the radio, the VCR, the audio cassette, the CD and the MP3 have threatened to devastate the media industry. With each technological advancement, the media industry has kept up with legislation through litigation; plugging the holes in intellectual property law as they are created by innovation.

The Internet “has facilitated the most extensive and widespread climate of copyright infringement since the advent of copyright protection” (Langenderfer & Kop, 2004). Indeed, as Gutenberg’s invention changed the world, so has the Internet. How the industry will cope with this new climate remains to be seen. It is likely, however, that society will continue to provide an incentive for artists to create and their works will need to be gathered, organized, qualified and distributed. So intermediaries will always be required and since theirs is a valuable service, the economics of art will continue to exist but the power will shift back to the artists where it belongs.

How do we measure the success of artists without measuring the revenues of the major labels?

Are musicians better off now that they have unlimited free marketing? Yes.

Is the record label dead? No.

There is still a significant need for smart, agile and savvy music business people. Musicians will continue to need managers, A&R, producers and a marketing team just as any brand needs a creative agency to define the strategy for selling their widget.

Yes, I hate to say it, but musos are, from a certain point of view, an economic point of view, brands. Brands which have become exponentially more faceted. Years ago, a star could walk off the stage and leave a mysterious mist in his wake, his true personality and personal adventures available only within the vivid imagination of his adoring fans.

Now I can watch my favourite band getting shit-faced on the tour bus, heros beating their wives, and formerly luscious divas getting arrested for looking like crack-whores.

My point is that success in the music business is more than being a deadly guitarist or tortured lyrical soul. You have to be an attractive, charming, cooperative, patient, polite, articulate, ultra-talented workaholic with longevity to be primed for the big time.

The article is effective in explaining potential applications of digital technologies over the proposed market structure, however some important technologies are not explored. The cost benefits of the proliferation of digital technology are based on a particular view of the future marketplace that is dubious. The authors also make subjective and non-evidenced assumptions and generalizations regarding the consumer. These deficiencies suggest a value judgment of traditional actors in the value chain. Moreover, the articles conclusions lack practicality due to the addition of an effective IP Rights Enforcement Body in the value chain as a significant contingency on which the rest of the proposed market structure is based.

The target audience of this article is music industry strategists and they benefit from the use of practical examples that illustrate abstract business concepts within the context of emerging digital technologies. The absence of peer-to-peer networks in the proposed model however, is an allusion to the authors’ bias towards negating the controversial technology for the benefit of their intended readers. In their article “Application of P2P (Peer-to-Peer) Technology to Marketing” (2003), Kato and Yokoi argue that “peer-to-peer (P2P) networks are spreading, and their practical applications for the business scene are promising”.

Bockstedt et al, however state that “P2P file sharing has hurt artists and record labels”. This is, of course, not accompanied with a bibliographical reference and in fact, there is a wealth of evidence that suggests the contrary (Oberholzer & Strumpf, 2004). Peter S. Fader, Ph.D. reports “the available evidence provides overwhelming support for the contention that [file-sharing] is beneficial to the music industry.” As a result of this technological omission in this model, the marketing function in the value chain is underrepresented. The authors proclaim that “the Internet allows sampling of products using digital audio files…” but does not put forward the potential value of P2P. According to Sharman Networks (2005), KaZaA has been downloaded over 350,000,000 times and has a user base of up to four million at any given time, yet is not included even as a case-study example of the use of the Internet for marketing or a truly costless distribution model.

This approach suggests a bias towards major players in the traditional music market such as the major record labels and there trade groups who claim that illegal file sharing has adversely impacted the sales of CDs.

My next post will discuss Jesse, Bob and Fred’s take on the “Virtual Value Chain” and DRM.

“The Future of Music Business, Law and Technology: A Critical Analysis of
Related Articles on the Topic of Digital Music.”

Quite a mouthful.

The related articles mentioned in the title were all written within a short time frame (2000, 2004 and 2005), yet also within three significantly different climates. The first was written before the explosion of Napster, the second at the height of Napster Mania, and the third just as the iTunes Music Store was gaining momentum.

I have decided to revisit the topics discussed in these papers and to reflect on the last several years. I wrote the first version of this paper before many had heard of Facebook, MySpace or YouTube, and well before they sold for billions (Facebook pending…). New bits are in bold.

So here we go:

It is a popular notion that the future of the music business structure is unclear. Traditional copyright law does not allow for a frictionless model of information diffusion and companies that have, in the past, been based upon geographic boundaries are being forced to adopt new business models.

In order to create a practical vision of the future, several issues need to be examined. The history and evolution of current copyright law, its intended purpose and the effect of globalization on that institution is discussed in “How Will the Music Industry Weather the Globalization Storm?” by Wilfred Dolfsma (2000). Digital technology’s role in changing the way consumers experience music and the resulting shift in relative value within the music market structure is analysed in “The end of the CD as we know it… Shifting consumer behaviour and changing business models in the music industry” by Dr. Piet Bakker (2004). The article “The Move to Artist-Led Online Music Distribution: Explaining Structural Changes in the Digital Music Market”(2005), by The Carlson School of Management proposes a model of the future music value chain where litigation and the proliferation of a digital rights management system will maintain the status quo with respect to copyright and its benefactors.

(I’ve linked to the versions that were originally cited…)

All three of these articles introduce a vision of the music business where intermediaries, that is any system or stage between the producers of content and the consumer, will have new and different roles.

Dolfsma and the Carlson School of Management are polarized in their vision of copyrights role in the future, but their proposed model for intermediaries are both similar to Bakker’s.

Both “The end of the CD as we know it” and “The Move to Artist-Led Online Music Distribution” do not examine the effect of the potential for new value-added features contained in physical media.

Advances in audio technology, storage capacity and new media formats as potential sales drivers should be considered when predicting the future of the music industry market.

Today, we can see a wonderful combination of both digital distribution of music, and the traditional distribution of value-added physical media. The best example, in my opinion is Radiohead’s Rainbows record. Anyone reading this is probably aware of Radiohead’s “pay-what-you-want” digital strategy and their kick-ass physical project promotion.

There are a few bands that could pull off such a campaign without a label, but the vast majority of acts can still benefit greatly from the knowledge, experience and resources of a major record label.

Even though the points of view of the above authors are different, we can find similarities within their conclusions that display a reasonably realistic image of the future media industries.