The Future of Music Consumption

I've been thinking a lot of about music consumption over the last few years and have come to a conclusion about what I think will happen.  If you look around now people are primarily accessing music digitally - either through a mobile media player or online.  I want to look back to see where we've come from, how we got here and where we're going with this.  This may even be helpful to some people who aren't familiar with the current ways to access music and may not be doing what's best for them.  


I was going to start with a history of recorded music and how things progressed through different types of formats and onto what we use today...but I'm not a historian and am not qualified to get into those details without doing a lot of research on it.  We all know that the media used to carry music have evolved over the years...no news there.  


Many people may not know the business model that's existed in the music business for years.  The changes we're experiencing now are having major effects on this business model so it's worth a few sentences.  To put it in a most basic model, when you buy a CD the money from that purchase is split among all the groups that made it happen.  The store gets a cut, the distributor does, the record company gets a BIG cut, and then the songwriters get about 9 cents per song.


In the 1990s the advent of Napster and other file sharing services created easy ways for people to access music without paying for it.  This pretty much destroyed the business model for everyone listed above.  This is stealing, no two ways about it.  I admit that I used Kazaa while it was available and found a LOT of music that I never would have found outside of being able to "demo" pretty much anything in the world.  If we're being honest with ourselves we know that a lot of bands were discovered by fans through file sharing and while they weren't compensated for their works, their fan bases grew very quickly, so it wasn't ALL bad.


I think it's a fair analogy to say file sharing was a bit like Noah's flood.  The music business was pretty broken anyway, and some parts of the team were grossly overcompensated while others were barely paid for their work.  Breaking the music business allowed it to start over again, and led the creators to take charge of their product again, determining for themselves how it would be made, distributed and sold.


Radiohead made major waves a few years ago with their record In Rainbows that they recorded themselves (with their own money), and released digitally and allowed buyers to name their own price.  I paid about $5 for it.  Radiohead had been getting weird and I didn't want to shell out a lot for something that I may not like.  Many artists are now taking Radiohead's idea and doing EVERYTHING themselves.  They aren't allowing buyers to pay whatever they want, but they're in control again.  Radiohead have admitted they are selling FAR LESS records than they were with major label support, but also that they're making FAR MORE money per record sold than before.  It's a win/win for them because they're abandoning a system that benefitted the system more than themselves and now they're in control and can operate how they want to.  


Many bands I listen to now aren't signed with major labels, or even with labels at all.  They're getting loans or using their own money to record and distributing their music digitally.  They're having to ask the question: How do we want to get our product to the public, and what do we expect in return?  This article has comments from Trent Reznor regarding his feelings about creating, the value of his creations and being compensated for them.  Artists ARE having to tour to survive since the revenue stream from record sales has shrunk.  To increase their profits on the road many of them have taken to creating their own merchandise too - DIY is back en force once again.  


As consumers we're asking ourselves a question too: How do I want to access music and what do I expect to pay for it?  I asked some friends how they get music and the overwhelming answer was iTunes.  With this service you're paying around $1 per song and can transfer it to your iPod/iPhone and a limited number of computers.  And with iTunes you download songs from the iTunes music store onto your computer's hard drive or your media player.


It goes without saying that CDs are still sold in stores.  While your actual "rights" with a CD are supposed to be limited to personal use this is the format that allows the most freedom.  You can rip it onto your computer, and unlimited other computers, upload files to sharing sites, email the files, burn onto CDs, and load them onto media players.  Some of these things aren't technically within a user's "rights", but most people don't know that and don't care.  


Subscription services allow a user to pay a fee and allow certain uses of its media.  With Zune I pay $16 per month and download files from Zune Marketplace to my computer's hard drive, and can load the media files on up to three Zune or Windows Phone devices.  This is the perfect solution for me as a hardcore audiophile.  I'm able to pay what is a VERY reasonable monthly fee and get all the music I want.  Frankly, if I had to pay iTunes rates I would have to either curb my appetite or end up spending far too much of my income on music.  And don't tell the people at Microsoft, but I'd be willing to pay double per month for my current subscription since I'm getting THAT much value out of it...SSSHHH!


Lastly, you can still steal your music through the few file sharing sites that remain due to loopholes in the legal system that allow their existence.  Again, I admit that I did use Kazaa for awhile, but after working in the music industry and seeing how stealing music affects people who create for a living I can't call it anything but theft and piracy.  The ONLY time I'll consider searching for a free download is when something is out of print and simply can't be bought anymore.  If there's no one to be compensated from a purchase, then no harm no foul, right?...right?  Maybe, maybe not.  Take a look at this chart to see how creators are compensated when their works are accessed through some of the services we use today.


I think if we look at what's happening digitally we'll see the future of music consumption.  Our computers' hard drives are getting bigger and cheaper.  I'm noticing that storage capacities on our media players have NOT been increasing to match our computers...and they really can't be expected to.  Early generations of Zunes, iPods and other media players used spinning drives, and their capacities did eventually get to be over 200GB, which is a TON of music.  If you know anything about hard drives you know that a full hard drive is a slow hard drive...and also that they're fragile.  Media players now are using flash storage.  It's very durable, accessed faster and has no moving parts, but capacities aren't as big and larger capacities are MUCH more expensive.  


So, media player capacities aren't really growing anymore, but our network speeds and bandwidths ARE.  I believe we're marching down a road that will lead us to the CLOUD being the norm when it comes to music.  Why do we need to store all of these files and take up all this space on our computers, phones and media players when we can access them in the cloud instantly and play them back flawlessly?  Well, right now we can't.  We're not there yet but we're going there.  The future of music consumption will be with various cloud providers actually housing the music files and charging us a fee to access them.  Some of these services today are Spotify, Zune Marketplace, iTunes and Google music.  They're not perfect yet but we're on our way, and I'm looking forward to it.  

 I love what Spotify has done by allowing users to take their music experience to the cloud and access their "personal" experience anywhere they can get a connection.  However, the mobile experience isn't yet to the point where I'm willing to abandon my Zune Marketplace and loading songs via subscription to my phone.  Network speeds and bandwidth still need to grow more, but the future of music consumption and accessibility looks clearly linked to cloud services accesses through extremely fast networks.  I'm just hopeful the costs for users will continue to remain reasonable AND that creators can be paid fairly.  

More Windows Phone Musings

A month or so ago I wrote a post about what's going right and wrong for Windows Phone, and it focused mostly on ways that I think Microsoft is blowing it when they actually do have something killer to offer.  This is CES week in Las Vegas, a time when makers of tech gadgets launch new products or simply promote what they already have.  In the last post I also mentioned that Nokia was going to be launching new Windows Phone handsets and would be the biggest hardware partner supporting the OS.  My first good cell phone was by Nokia.  While they've been out of the mobile scene in the U.S. they're still a major player worldwide.  This will end up being a good move for both Microsoft and Nokia.  The handsets already launched in Europe are very popular and the handsets launching in the U.S. are receiving positive reviews.

So now for some post-CES happenings commentary.  I've read a lot of articles saying that the Nokia Lumia 900 and HTC Titan II, both of which will be on AT&T, stole the show in the mobility category.  Admittedly, I'm getting this from blogs and Twitter posts from writers who are supportive of the Windows Phone platform, but I do see the excitement there.  I also see this as an opportunity that simply can't be missed.  There are killer devices out for Android and the iPhone 4S is pretty awesome (I must admit).  So what's the barrier to really making this thing happen?

Carriers.  Carriers rule the world in mobile.  Yes, the iPhone thrived for years exclusively with AT&T.  When it launched it was a revolutionary product that was supported by unending marketing.  They could afford to place all emphasis with one carrier, and frankly still could today.  

This week a Sprint executive told PC Magazine they were disappointed in Windows Phone sales on their network and aren't that excited to offer another handset...that maybe they'd think about it in August/September.  This is getting lots of backlash from Sprint customers and has even led to a petition being launched to make Sprint aware that its customers would like more choice.  It shouldn't be news to anyone that Sprint's sales of their ONLY Windows Phone device has been disappointing.  Their offering is the HTC Arrive, a heavy handset with a slideout physical keyboard and a screen that tilts up at an angle when slid out.  I've been with Sprint for over 15 years and jumped at the chance to get a Windows Phone on their network.  I have zero use for the physical keyboard which makes the phone far too heavy and bulky...would much prefer a body style like a Samsung Focus S or HTC Titan, both of which boast a larger screen but weigh less than my phone.  And both of which are more traditional form factors that users are looking for these days.  I settled for this oddball, heavy handset because I wanted to use the Windows Phone OS, but users who are simply shopping won't be so forgiving - so again, Sprint shouldn't act surprised that sales are low for this handset.  

After reading blogs and articles and comments on those articles it's clear that people are passionate about their phones.  These aren't just phones anymore.  We're using them all day, every day for just about any task you can imagine.  It's my link to my social networks, my family, my news, sports teams, maps, music, recipes, games, books and more.  We're all constantly looking at our phones for a reason - because there's always something going on there or something to do there.  I saw video of people who were passionate about their current phones trying out Windows Phone, or even competing with it in Ben the PC Guy's #smokedbywindowsphone challenges.  People came away truly impressed at the style and speed demonstrated in the platform...and the few that won the challenge walked away with $100.  

To reiterate the closing of my last post, I'd like to see more carriers offering multiple handsets running Windows Phone.  Personally, I don't see light at the end of the tunnel with Sprint and plan to jump to AT&T since they are showing commitment to the platform, AND are launching phones that will work on their LTE network.  I love everything my phone does, but am tired of this heavy, bulky device...looking forward to the Lumia 900 or Titan II.

I get music at the buffet. Where do you get yours?

Let's take it back a few years.  I'm a major audiophile.  Back when I bought CDs I had a LOT of them.  I'm sure other people had more, but I had more than my share.  I'm the guy that bought the biggest case possible and kept it next to me in my car.  When file sharing came into play I took advantage of it and used Kazaa to find a LOT of good, new music I wouldn't have found otherwise.  An audiophile's dream!  I bought lots of blank CDs and got a car stereo that played them in "data mode" so I could fit several hundred songs on a single disc...AWESOME, right?  


But it was illegal - CRAP!  Here I was, a guy who worked IN the music business downloading music in a manner that was robbing artists and writers of royalties they should be earning.  Time for a change.  An aside - As bad as file sharing was, lots of good bands probably gained exposure through it.  I found Thrice and Thursday and many others from file sharing.  So while bands and performers are making less on royalties, they probably stand a better chance of being found now - and most of them are using the internet to their advantage.  Record companies aren't serving much purpose now aside from being an outlet for distribution.  Many bands now are recording and distributing themselves (since stores aren't as necessary) and are selling less units but making far more per unit than they would otherwise.  I guess this is a discussion for another time.  


I eventually went to work for Dell and my first MP3 player was a Dell DJ.  It was clunky and clumsy, but it did everything it needed to do - AND, I was able to use the MusicMatch subscription service from Yahoo with it.  So now I could get virtually all the music I wanted and just had to pay a small monthly fee.  And life was good.  Now, while I had my (very uncool) Dell DJ everyone else was getting iPods and they were EVERYWHERE (and still are).  But I still felt like I had found a better way.  With an iPod you have to either buy songs or albums on iTunes, upload them from a CD you bought or download them illegally.  There is no subscription service.  So while an iPod user pays $10 and gets 10 songs I pay $10 and get hundreds or thousands or however many songs I want.  #winning.  


I was fine with having the uncool device because it satisfied my need to carry all my music with me everywhere.  I eventually moved on to an 80GB Zune and could really carry a ton of music around.  Here's what's golden about it.  With the Zune Pass I pay $15/month for unlimited music...and I can load that music onto THREE Zune players - WHAT!?!?!?!  Crazy good deal.  Both of my kids have Zunes and we all have all the music we want for $15/month.  AND for that $15 I can take 10 songs/month and convert them to be DRM free so I can load them on another kind of device or burn to a CD, etc - WHAT!?!?!?!  Another crazy good part of the deal!  

Now I have a Windows Phone which integrates Zune into its OS, which is super slick and I'll be writing more about it soon.  I still use the Zune Pass and my phone is pretty full of music.  Unfortunately the capacity is only 16GB, so I can hold about 1000 songs along with everything else that's on the phone.  


The Zune app does everything other apps do, which makes me wonder why more people aren't on board.  I have a "Pandora" like feature called Smart DJ, and I can use it on computers and on the phone when I'm out.  I can download a song straight into the phone when I'm out using the Zune Pass.  Also, the new Bing search has a "Shazam" like feature that will listen to a song, identify it, then give me the option to download it with my Zune Pass - goodbye Shazam.  


It's tough being a Zune guy in an iPod world, but I'm happy with it because I feel like I'm getting everything and more that an iPod person can get and paying WAY less for it.  I have the feeling that because Microsoft hasn't done good enough a job promoting and educating about their product, people are siding with other platforms because they don't know about the alternatives.  Same thing with Windows Phone, which I'll touch on later.


So what am I even trying to accomplish here?  Do I want people to convert?  If it would make them enjoy their music experience more - yeah.  


Because Microsoft has done such a bad job promoting they've abandoned the Zune hardware product, which is unfortunate because it really does work well.  Thankfully they've thrown all the focus on Zune into Windows Phone which is beginning to take off world-wide, mostly outside the U.S. right now.  And it's VERY rare that I'll look for something in the Zune marketplace and not be able to find it.  They're doing a good job of keeping catalogs up to date, even with very obscure and new artists on very small record labels.  


I guess I just want people to know there's another alternative to the products and song store that everyone seems to be using.  Bummer it's too late for the hardware part of the product.  Hopefully they can get it right with Windows Phone because it's keeping this audiophile's appetite satisfied.