Trying To Get To You

Monday, February 05, 2007

Step #2: Offer Choices

On Friday I wrote that I believe the first best step the record industry can take to turn their fortunes around is to publicly admit the mistakes they have made so far and to recommit to the consumer (and put their money where there mouth is by dropping all lawsuits against individual file sharers). Today I propose a very simple digital solution that is both technologically possible to offer, and gives the consumer, for the first time, an incredible amount of choice in how they purchase music digitally:

Offer music fans the same choices in how they buy digital music as they have in digitizing their own music collection.

For example: I use iTunes as my music player on my computer. When I rip a CD, I usually encode it as an MP3 at 192kpbs. However, if I go to “preferences,” then “advanced” and then “importing” on my iTunes menu, I can change the settings to whatever I want. I can encode a track as an AAC file, an MP3 file (all at various sound quaility), an AIFF file (Apple’s lossless codec) or a WAV file (CD quality audio). Great. But at the bottom of the menu, it says, “These settings do not apply for music bought at the iTunes music store.” So for the music I have on CD, I can digitize it however I wish, but if I buy a music file from iTunes, I have no choices in the matter. THIS MUST BE CHANGED! Offer music at any file format at any speed and then offer a variable pricing structure depending on the purchase. For example:

128kbps MP3 & AAC: 59 cents per track, $5.99 per album
192kbps MP3 & AAC: 69 cents per track, $6.99 per album
256kbps MP3 & AAC: 79 cents per track, $7.99 per album
320kbps MP3 & AAC: 89 cents per track, $8.99 per album
WAV & AIFF (CD Quality audio): 99 cents per track, $9.99 per album

Then there are potential add-ons to be bundled or offered: artwork (that could be printed to make a CD cover), video, etc., that potentially alter the price points.

This is not rocket science. It’s very simple. Offer the customer choice in what they can purchase, and value the choice accordingly instead of offering a restrictive, inferior product at a higher price than it should be. It's already available illegally, so the industry might as well offer it legally (and then double the resources and effort in going after the illegal music host sites). Such a service would be user-friendly, it would value products proportional to their quality and it would be the next and greatest step to bring music fans back to buying digital music legally.

(Note: I know that I have not addressed the subscription model here. I have not yet developed a well defined opinion about that model.)

This week: Obstacles to such a plan.


Anonymous said...

One problem- no one cares what type of files they download or encode. You are part of a group that might account for 5% of the digital music consumers who are aware of the option to encode with several file types.
A very small number of the demographic using itunes, or any other digital music service, as their main platform for purchasing music, would not be able to tell you the difference between file types. So unless or until music consumers understand what is being offered in your model you can't differentiate price points in hopes to sell more product or create a sense of value.

Ben Lazar said...

I think you're both absolutely correct and totally wrong. Yes, I am part of a small group that care about sound quality. But that 5% (as you call it) are the FIRST FANS, and the exact people the record industry wants loving their new digital service. They're the people who you want evangelizing; blogging about it, creating buzz and creating perception that the record industry has finally gotten it right! Doesn't every single media company care passionately about what the bloggers (who are almost always the hardcore fan) say about whatever product they're releasing? The mistake the record business has made has been trying to get the masses before getting the hardcore. Get the hardcore person first, and the masses will follow.

Anonymous said...

no DRM! that's the biggest obstacle of them all.
It's not about sound quality...yet. it's about convenience. I think consumers want to be able to go to whichever service they prefer, Rhapsody, itunes, Napster, Zune etc and download tracks and have them play on whichever portable device they own. LIKE THEIR CD's DO.

The only real format for that right now is MP3's.

Ben Lazar said...

It's (partly) about sound quality for early adapters. I can't stress that enough. Early adapters are key.

Anonymous said...

Early adapters are key. But I don't think that emphasizing sound quality while using different price points is a plan for continued growth of digital music for the masses. If anything it would confuse the already established consumers.

While hardcore fans are the lifeblood of music and parts of the industry, blogging and creating buzz does not magically make the general public respond. Very few people care about file types and I don't see that changing anytime soon.

Ben Lazar said...

I believe that consumers would be less "confused" with the possibility of different price points/file types than you think.

Again, if you continue to only allow one file type at iTunes, you are abandoning the early adapter consumer (that any business wants desperately) to various P2P and BitTorrent sites. To do that because you are afraid you might "confuse" people, I believe is folly of the highest magnitude.

Breaking it down, I believe it's a simple matter - offer as much choice in the puchase of digital music for the consumer as THEY ALREADY HAVE illegally.