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.

What's Going Right and Wrong for Windows Phone

I'm a fan of Windows Phone.  I could also be called an advocate, evangelist, whatever you want to call it of the platform.  This is why it's infuriating to me to see how Microsoft seems to be blowing it when they should be gaining more users, and in turn, fans like me.  


Going back to a prior post - I've been a Zune guy for the last few years.  As a pretty serious audiophile who's always on the hunt for new music it allows me to get all the music I want for $15/month.  It's a deal I can't beat and if I was an iPhone/iTunes user I'd be spending MUCH more money on downloads or downloading illegally - neither of which are options for me.  I was excited when the original Windows Phone 7 was finally released because Zune was integrated into the phone OS, so I could consolidate my phone and music player into one device.  Yes, this had already been done for a LONG time with iPhone, but it just wasn't an option for me.


Windows Phone launched just about a year ago, but only with AT&T and T-Mobile in the U.S.  A handset wasn't available to Sprint until last Spring, and to date there's only ONE handset available - a very good performing but bulky HTC Arrive.  I bought it for the OS and its features but could definitely do without the slideout physical keyboard which make the phone too big and heavy.  


So let's look at carrier count in the U.S. - 
AT&T: 4 devices
T-Mobile: 3 devices
Verizon and Sprint: 1 device each


If they want to be a serious player in the market they need to become more ubiquitous - they need to be everywhere so people actually consider it as an option when looking for a new phone.


Microsoft has entered a partnership with Nokia and most new Nokia handsets will now be Windows Phone based.  Nokia used to be a major player in the U.S., but has essentially been out of the market for a few years.  They're still a major player worldwide and the first Nokia handsets have launched overseas and from what I'm hearing are doing well in the marketplace.
Pretty sharp, right?

Nokia Lumia 710

Nokia Lumia 800

This leads me to what I'm seeing as another blown opportunity.  I think we're going to see a LOT of promotion soon for the first Nokia handset coming to the U.S.  It's the Nokia Lumia 710 with T-Mobile.  This is a pared down Windows Phone spec-wise and will be super cheap at $50.  They really want their first entry to be a "lite" version of the phone?  And with T-Mobile?  Nokia people have said they "plan" to be with every carrier - but now is the time to make this happen.  I'm hearing Sprint has no plans for a new handset any time soon since they're deeply committed to iPhone and are dumping a TON of resources into this new offering.


The ideal situation would be that we'd see the Nokia Lumia 800 offered on multiple carriers in the U.S. so that M'soft and Nokia could really begin a joint, heavy promotion and inundate the marketplace with handsets and get the product front of mind.  Today if you go to Best Buy or other retailers that sell phones you'll see 1 or maybe 2 offerings, and that just won't do.  We're coming out of the Christmas shopping season now.  I've been in a lot of stores and seen a lot of advertising and very little of it is for Windows Phone.  A definite missed opportunity.  A lot of people who were looking to refresh just did, and are now committed for 2 years in most cases.


My other gripes about the current offering are these - 


More Capacity - Current handsets only have 16GB of internal storage and most don't have room for expansion cards.  This is simple.  They need 32 and 64GB options to please media hungry users, which is most of us these days.  Back to the Lumia 710 - it only has 8GB of internal storage - 8GB!!!!


Common power/docking - If you have an iAnything you can get a wide array of accessories for it and most are compatible from one iProduct to the next.  Microsoft was getting this right with Zune for a time, but when Windows Phone launched docking went out window.  It's a major flaw to be missing this feature.  It would broaden appeal to both customers and to accessory makers, who as of now have to make completely different accessories for each model of handset.  


Marketing - I touched on this above - the phones need to be EVERYWHERE.  People need to see commercials, print ads, and see actual handsets in stores.  It won't be taken seriously until this happens.  Also, on the marketing topic - my wife and I went to a Windows Phone launch party in Nashville a few weeks ago.  It was at a trendy restaurant and we got free food and drinks and met some nice people.  The new phones were on display around the restaurant and some handsets were given away, but there was no real information given about the phones.  Frankly, most of the folks attending were already fans of the devices.  This was a lost opportunity since these parties were hosted in about 10 large cities nationwide. 


Fun stuff - The ability to easily download or customize ringtones still doesn't exist.  The game selection is big, but still not enough.  My wife recently got her first iPhone and it's been the hot device for the kids in our house due to its superior game catalog available.  There's still no ability to take a screenshot and send it to someone.  This is a SIMPLE task that should be a no brainer, but is currently only available to developers.  Unacceptable.


I'll quit being negative now.  Here's why people, should consider Windows Phone when shopping for a new handset: 


1. The interface is simple, attractive and fun.  It's based on Live Tiles that in many cases, will give the information you're looking for without you having to open an application.  I can tell who is updating their social networks, see temperatures, see who is trying to contact me, etc.  


2. Facebook and Twitter are integrated into the OS.  I no longer have to open both apps to see what's going on.  I look in my People Hub and I can see updates from both networks, and can also use it to see my interaction history with each of my contacts along with pull up pictures and information from THEIR Facebook pages.  


3.  Even if you've been purchasing and downloading from iTunes you're not going to have to leave your music behind.  It can all run on a Windows Phone and you can end up saving money by getting a Zune Pass and for $10-15/month having all the music you want loaded up on 3 computers and 3 mobile devices.  A complete win.  I can also use a Pandora like feature called Smart DJ from the Zune marketplace, and the Bing search can now listen to and identify a song, then take me to the marketplace so I can download it - and NOT have to pay $1 per song.  


 I like the Spotify app and have been using it some lately on my home PC, but would have to upgrade to a "Premium" subscription to use it on my phone.  So I'd essentially be paying for something I already have.  

4. Threaded messaging:  I can chat with a contact in Facebook Chat and move from there to SMS texting and the Windows Phone OS will keep the conversation in a single thread, as if nothing had changed. 


This is simply one of those "try it, and I think you'll like it" situations.  I guess I'm just wishing Microsoft and the carriers would do more to entice people to try it.  I don't have any stake in this whatsoever.  Well - I guess some stake.  When more people do move to Windows Phone there will be more developers working on more apps, which WILL create a better experience for me.  Right now in my house the iPhone (and frankly, the kids' new iPod Touches) are the hot new devices.  No one's asking to play with my phone - and that's where you could be doing better Microsoft - yes, I'm talking to you now!


You've finally got that killer product and you need to make it happen.  This isn't a piece of crap.  It doesn't suck.  Pull out ALL the stops.  Get ads in TV and print.  Get your phones in with all the retailers with the salespeople actually trained on the devices.  YOU know that Windows 8 is going to look like WinPhone's Metro interface.  Take advantage of that.  You DO have all the money in the world (ok, a lot of it).  Don't throw it around on a party where you don't tell me anything.  Get in our faces about it.  Droid is.  iPhone is.  You can too.  And you might just succeed!