Rx for Music Industry: Seek Out the Old Geezers
By HARRY SHEARER
Here's a business model with a future: sue your customers. That's what, as of this month, the recorded-music industry has been doing. It filed suit against four college students involved in Internet file-sharing (in which compressed "files" of music are swapped, Napster-style), asking for billions of dollars in damages. Yes, billions. Interestingly enough, the Bush administration, known to be opposed to frivolous lawsuits and in favor of tort reform, has weighed in on the side of the industry. Let's go after those students. That's where the money is.
This strategy would suggest that lawsuits against computer makers and the manufacturers of modems (and, for that matter, the little cables that connect your computer to the phone line) are in the offing. A calmer voice from the back row of a Business 101 course might well offer this suggestion to the industry: stop seeking as your customers the people most likely to steal from you.
The record business is clearly in a slump. The value of all music product shipments decreased from $14.3 billion in 2000 to $13.7 billion in 2001, according to figures released by the industry's trade association. This was not a one-year drop, either; it continues a recent trend. (A cautionary note: these figures are based on sales to stores and not on sales directly to consumers.)
The industry line has been that file-sharing caused these declines. Others point to the fact that boomers may have finally bought, on CD, copies of all the music they had already purchased on vinyl. And Andreas Schmidt, of the music giant Bertlesmann, said the unsayable: "We didn't put that much good stuff out."
Nobody, let's remember, twisted the arms of the record and movie industries into focusing their product and their marketing muscle almost single-mindedly (if that's not being too generous) on people in their teens and early 20's.
They seemed like a great market: easily persuaded, with the free time and the free-floating enthusiasm to see films repeatedly and line up at midnight for sneak releases of "hot" new recordings.
As events have proved, there is one crucial problem with this demographic cohort: it has much more time than money. And, if these music lovers are enrolled at a university, they probably also have access to a superfast Internet connection, which makes the usually cumbersome process of downloading music files as easy as checking your e-mail.
Many people over the age of 25 have been moaning for years, correctly, that nobody is putting out records for them. These people have families, church and community meetings to attend, golf to play and cooking to do. They have careers and disposable incomes. All this makes them far more likely to opt for the convenience of stopping by the record store than trying to figure out how to work Kazaa or Gnutella or any of the other strangely named avenues of Internet commerce avoidance.
Will people older than 25 actually buy music? Obviously. Just consider the niche audiences for re-released oldies — swing or rock. And as recently as the 50's, there was a huge adult market for something called pop music.
Arif Mardin, the producer of the hit CD by Norah Jones, said of these customers the night the disc won three Grammys, "They don't know how to download, so they go to the store and buy the record."
Sure enough, the next week, the CD was No. 1, selling half a million copies, and registering the biggest post-Grammy spike in recorded-music history.
So, before the record companies sue any more college sophomores, or go back to Congress for more legislation allowing more intrusion into the nation's private Internet behavior, perhaps they should just tweak their product and marketing strategy, and aim at the people who have at their disposal more money than time.
