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Music industry fears rise of NBN

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Gadgets on the go

Adam Turner is an award-winning Australian freelance technology journalist with a passion for gadgets and the "digital lounge room".

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Music ... how do you listen?

Music ... how do you listen?

A decade of war on its customers got the music industry nowhere, but now the internet is actually boosting sales.

The music industry has been through tough times in the last 15 years, although much of it was self-inflicted. It's hard to feel too sorry for a bunch of pig-headed, gucci-clad industry executives who were too arrogant and stubborn to see the writing on the wall.

They were told from the beginning that if you make it easier to buy music than to steal it, most people will do the right thing. Instead they stuck with heavy-handed legal tactics, draconian Digital Rights Management and underhanded trickery such as installing malicious software on people's computers (yes Sony, I'm looking at you).

To the industry's great surprise, treating customers like criminals didn't encourage them to buy more music from their local record store. Meanwhile the music industry was dragged kicking and screaming into the age of digital downloads -- eventually offering easy ways to buy music online as well as innovative new models such as subscription music services. The record companies deserve no credit for "leading the way", it's more that new-tech giants such as Apple seized the initiative and now have them over a barrel. You could say the same for most big players in pretty much every old-world content industry, former giants who failed to embrace the rise of the internet and are now being overrun by nimble new-world competitors.

Sony's Walkman was the iPod of the 1980s and 90s, but it was first up against the wall when the revolution came. Apple's fledgling music player only became the new Walkman because Sony's obsession with DRM crippled its digital music players. Sony made it all too complicated, in the belief that it was too powerful to fail, but people simply flocked to more convenient alternatives. Had Sony embraced change and played its cards right, it would be in Apple's shoes today.

Once the music industry stopped fighting the internet and actually embraced it, things started to turn around -- especially in Australia. Looking around the world, Australia is one of the few countries where digital music sales have managed to offset the drop in CD sales. In fact last year Australia experienced its first growth in overall music sales for three years -- a 4% increase on 2011 thanks to the digital music boom. We bought almost twice as many online tracks, while streaming music services more than doubled their figures.

Globally, music sales increased by 0.3% last year. It doesn't sound like much, but it's the first time sales figures have increased since 1999 -- the year Napster was born. A decade of war on its customers got the music industry nowhere. While piracy has taken its toll, the internet is finally helping the music industry fight back.

The latest sales figures look promising, but imagine how healthy the music industry might look today if all the money wasted on lawyers, DRM and other bastardry had been put towards cultivating legitimate online music services from day one.

As the National Broadband Network rolls out across the country, it's going to make music and video downloads more accessible to all Australians. It's time for the music industry to learn the lessons of the past decade and seize the initiative. But it seems you can't teach old gucci-clad dogs new tricks. 

"If more action isn't taken by the government and ISPs to curb piracy levels the NBN could have disastrous results for the local industry," according to a major report from the International Federation of the Phonographic Industry. "All Australian content industries" will suffer if pirates are allowed to run rampant on the NBN, added Dan Rosen -- CEO of Australian Recording Industry Association. 

It seems the internet is finally helping the music industry win back customers from piracy, yet when the industry looks at the NBN it still sees a threat rather than an opportunity. Expect the stubborn music industry to stick with its same old dirty tricks over the next few years, fighting against the internet with overpaid lawyers and shady backroom government deals.

Ramping up the war on its customers won't see people start buying more music. It's a war the music industry can't win, but it seems determined to die trying.

57 comments so far

  • The Internet, capital 'I'. It's a proper noun.

    The RIAA and its analogues around the world hate their consumers. See the court cases in America, some of which are still going after how many years? At least three.

    Commenter
    Mishoni
    Date and time
    March 01, 2013, 8:40AM
    • An interview on radio a guy talked about digital rights management, a music company would have a steady stream of income from replacement of scratched, damaged and worn cassettes tapes and vinyl records, when the CD arrived we used it in the home stereo, if we wanted to listen in the car or elsewhere we would need to remove it or buy another copy. What was unexpected with computers and the ability to copy and format shift perfect copies that never wore out and never needed replacement. The problem would be solved by DRM, each device you wanted to play music on you would need to have purchased a licence or copy of music to play on it, when the device broke or wore out you would lose the rights associated with it, this solved their problem as customers would need to purchase many copies of the same music.

      As to the NBN, I guess it would be about upload speeds, Fibre to the Node would get around 3mbs to 8mbs max, Fibre to the Home on the current fastest plan is 100/40mbs, then future upgraded to 1000/400mbs, I don't see the problem unless they are going to start selling a higher quality lossless format that have a huge file sizes, like going from DvD to Blu-ray

      Commenter
      Charles Foster Kane
      Date and time
      March 01, 2013, 3:47PM
    • As I said earlier, they're not customers if they're stealing the product. Customers pay for a product.

      Commenter
      Melchior
      Location
      Brooklyn
      Date and time
      March 02, 2013, 10:27AM
  • Interesting to see that in Australia we are moving forward with legal music sales. If only we didn't have outrageous price gouging by the people selling that music, it might really take off.

    I think one day business students will be studying the recording, music and film industries as a case study in how to get it all wrong.

    Commenter
    John G
    Location
    Sydney
    Date and time
    March 01, 2013, 8:47AM
    • I wonder if the music, publishing & media industries can challenge firms like Apple, Amazon, Samsung, etc as they have huge cash piles. Spotify,Soundcloud are just 2 music apps and they are integrated with Facebook also as search, social, apps, cloud, gestural, 3d printing & other technology have already integrated. There are real-time integrated search apps too both public & private that does it for GMail, Twitter, LinkedIN, Salesforce, Facebook, etc-posts & messages (Kurrently is the top public one while Hootsuite, Kitedesk & Greplin are the top private ones. Greplin does it for more apps & social networks while Kitedesk's the best as it integrates the search for different apps according to the time though if want the apps like Twitter, Facebook, etc separate for searching - use HootSuite which does it according to time for each app. Kitedesk & HootSuite go 1 step further than Greplin as can store & share attachments). Even Flash is being knocked out & has been by Apple (still used by some organisations). HTML5 is the alternative as Flash is a product that's outdated,keeps crashing plus keeps increasing the processing used by CPU of various devices. Flash isn't supported by Adobe on some of the devices. Apple, Google, etc also have publishing tools which have changed that industry as well. Technologies have been shifting everything for centuries and will continue to do so-more on this under the just ok & humble WordPress blog - 'Technologies including social networks changing industries, business models and lifestyles completely' where sources include videos,articles,etc taken from Harvard Business Review, etc (can be seen visually due to curation platforms and had done it through Storify). Traditional retail,manufacturing,sales,legal,admin,entertainment,blended learning,tradeshows, etc are outdated careers,fields (HuffingtonPost & CNN sources under the blog above) within next 5 to 10 years or so.

      Commenter
      rohitthomas1980
      Date and time
      March 01, 2013, 10:53AM
    • Actually, top business and technology schools including ones within Australia-USyd & the rest already teach that including the famous Borders example. So, we already have those as case studies at universities even over here.

      Commenter
      rohitthomas1980
      Date and time
      March 01, 2013, 10:59AM
    • Try Bandcamp, in which artists call the shots as to pricing, formats, credits (where credit is due), artwork....
      Remember: major labels represent only a fraction of great, radio-worthy music being made.

      Commenter
      Mastering Engineer
      Date and time
      March 01, 2013, 1:58PM
  • I wonder what the sales figures might have been like had they not STILL decided to treat their customers with contempt by forcing the local market to price content higher than elsewhere.

    Given the increase in sales I'd be very interested to see analysis on what the music industry managed to achieve by it's 30 cents per track premium (it's less per album?) that they added to offset the increased losses due to easier piracy. Doesn't the increase in sales suggest that that was effectively a bribe to allow DRM to be removed and, effectively, we've been paying a premium to address a risk that never really existed? Pirates continue to pirate and, from what I can see, I pay additional for my music to not share it like I didn't before. I'm glad I'm getting older and frankly can't be tossed about the need to buy much music anymore anyway. For those who didn't know, it's a scientific fact that music reached perfection in 1974.

    Commenter
    MikeB
    Date and time
    March 01, 2013, 8:58AM
    • Well Mike, I know that I stopped buying music in Australia...as did most of my friends. I am still on strike because: a) I'm sick of anti-competitive industry pricing. b) I can get it from the WWW much cheaper. I'd rather listen to current radio than line the pockets of thieves.
      Recently I tried to buy Game of Thrones on DVD...no retailer had it and our download charges are insane so a friend gave it to me on USB. "Piracy" like this has helped this series gain popularity, and if the sellers made their product available fairly then they could profit from this.
      The fact is that the Internet is great for consumers and artists but makes the middle-men who have exploited this industry redundant. they are just using the only powers they have (coercive legal threats) to keep the cash cow milking. The fact that government shave colluded with this "industry" to screw consumers and prevent a free market is most telling as to the state of our democracy. Typical pandering to a few at the cost of many.

      Commenter
      Andy
      Location
      Melb
      Date and time
      March 01, 2013, 1:07PM
  • It doesn't matter if it's ADSL/ ADSL2/ CABLE/ FIBRE OPTIC/ 3G / 4G or any type of G's what have you.... The internet must adapt to the new modern world of how the world accesses information. Music stores, Dvd stores are a history of last century along with video hire stores as well. Everything must be adapted to look appealing now online. There are opportunities to pick up the lost $$$ online to consumers by making revenue look good! There is great opportunity to harvest the income from main stream via producing legal ways to do it. Some out there have learned how to harvest it so users do pay again for their content. The human race is only going to do the opposite naturally of what they get told they CAN'T DO. It all has to do with reverse physiology, good marketing, catchy web pages. Right now the content online is competing against talents and everyone wants to be noticed. What this has done is allowed competitive marketing to be creative to grab peoples attention to view content. For example I switched on the TV yesterday and flipped through all the digital stations we have in Australia. Literally after 10mins I turned it off and thought I will use my wifi extenders to broadcast my paid viewing content via my cable connection to each screen in the house, to deliver super HD Quality of content allowing my family to view great and exciting content. Times have changed now, TV stations complain nobody watches anymore well thats because the secret is online. In only a few more years majority of it will be online. We have google glass around the corner about to knock down the phone market for example as well. Come on wake up !

    Commenter
    Branco
    Date and time
    March 01, 2013, 9:12AM

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