Monday, June 30, 2003
  The Cocaine Kanutes of the Recording Industry

Is there a single person who thinks that the actions of the recording industry are anything short of total insanity? For decades the cocaine sniffing millionaires who run the music business have been waging a legal war on their customers. Soon they will have won, all their customers will be gone.

King Kanute like they have been fighting the digital tide, so far all legal attempts to provide a digital music solution have been stopped by lawsuits. The result is that digital music has moved underground. Kazaa is only a quasi-legal entity, certainly compared with Napster or MP3.com, which made easy targets for the lawyers. What will happen if the Cocaine Kanutes manage to stop internet file sharing by the current sue the user strategy; what will happen if they succeed?

Obviously the digital music business will go even farther underground. Right now a Gigabyte of disk storage costs less than a dollar, and holds the music of about 20 CDs. For $250 right now one can purchase a device which will hold the equivalent fo 5000 CDs. Many people with large record collections are doing this now, not as criminals, but because it is more convienient to have the music on disk than on thousands of CDs, and because it is a fun way to pursue a hobby. Right now people are ripping their music collections and putting them 10 CDs worth at a time onto writable CDs, and playing them on MP3 empowered boom boxes.

If reasonable legal means are not found, and very soon, for the distribution of digital music these trends will continue, and will become a black market activity. A writable DVD holds about 100 CDs worth of music. How much is that worth? The new Blue laser DVD, already on sale in Japan, holds about 500 CDs worth, how much is that worth? The cost to the "entrepreneur" of making these disks is next to nothing; a large fraction of college students can make, and are making, the ordinary DVDs today. The internet is by no means to only effective means of distribution for digital music, outside of the control of the record companies.

The key problem for the Cocaine Kanutes, and why they have been fighting this so hard, is that the digital revolution makes them obsolete. If you don't need records you don't need record stores, record factories, record companies, or record company executives. The artists and technicians who actually make the music and the recordings get only a few pennies on the sales dollar; this is an industry where the middle man is no longer necessary, like travel agents and stock brokers. The middleman's fees for music have been huge; 90% cost reductions to the end user may well happen. Sorry Apple, 99 cents per song just isn't going to cut it.

Unless a reasonable legal solution is found, such as an inexpensive subscription system which allows me to listen to whatever I want, whenever I want, the situation in five years will be something like this:

Blue laser DVDs containg 500 CD collections of well chosen music in a single genre will be widely available for about $30 each, with the typical $1000 PC having a terabyte of disk storage it will be possible to put several of these onto your PC/Home entertainment system. Essentially everyone who wants it will have personal access to nearly every record ever made.

The Cocaine Kanutes may have to give up their private jets. 
Wednesday, June 25, 2003
  Hello World! Welcome to KurtzWorld, the all you can eat webblog for those who have the password, and those interested in what they have to say. 
The World According to Kurtz

06/01/2003 - 07/01/2003 /

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