Is iPod the new Betamax?
(Filed: 22/07/2004)
Neil McCormick reports on the battle over MP3 standards
Where have all the record companies gone? Twenty years ago, in 1984, there were more than a dozen internationally significant record companies (such as EMI, Warners, Atlantic, CBS, MCA, RCA, Polydor, Phonogram, A&M, Island, Virgin, Chrysalis and Asylum).
The iPod: are these expensive gadgets destined to wind up in car boot sales?
Next year, following the European Commission's approval of the proposed merger between Sony and BMG, there will be just four. And I wouldn't be surprised if, soon, that number were reduced further. With the new Sony/BMG and Universal Music Group controlling two thirds of new release sales between them, the remaining smaller majors (EMI and Warner Music Group) must be getting nervous about their future.
Ordinary music consumers might wonder how this affects them. After all, the music industry tends to be artist- rather than label-driven. And for all the wailing and gnashing of teeth about a crisis in the music business, there still seems to be as much music about as ever.
It is undoubtedly true that some of the most interesting music is forced to operate on survival budgets with the support of a beleaguered independent sector, without access to the marketing power of major labels. Yet, as long as creative people are compelled to express themselves through music, the discerning consumer can continue to seek out gems in the dust left behind by stampeding majors.
There is, however, another agenda in this new merger that could affect consumers quite significantly. There is currently no industry standard for downloadable MP3s. This means that, for instance, MP3s downloaded from Sony's Connect service can only be played on Sony's MP3 Walkman, and not on the more popular iPod (and vice versa).
Behind the scenes, the battle waging for commercial dominance is reminiscent of the early 1980s cut-throat competition to establish video standards between VHS and Betamax. And lest we forget, VHS won despite being technically inferior.
Although Apple has been the pioneer in the MP3 market, with Sony/BMG controlling 25 per cent of the music market it will be interesting to see whose digital distribution platforms will survive. Will all those expensive iPods we have been rushing out to buy wind up piled high in car-boot sales alongside Betamax video players and 8-track cassette machines?
