If Coca-Cola Came Out of Your Faucet...

december 1, 2007

I've always held that music label executives are idiots. There's an interesting article in this month's Wired which features Universal Music Group's CEO Doug Morris (who famously complained that MP3 players are "repositories for stolen music"). While I have no doubt that Morris was (notice past tense) a genius when it comes to cultivating musical talent, he really is a dim-wit when it comes to the digital age -- and I think it goes to show why in 2006, music sales have dropped off 10%. Here's one of the best quotes from Morris out of the article: "If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for Coca-Cola? There you go, that's what happened to the record business." (Wired, December 2007, page 206). Instead of the fanciful example as Morris gives, lets get back the reality (where apparently, most of us live). Water flows through the faucet in kitchens. Yet, the bottled water industry is an $11 billion industry. Are you reading that Morris? $11 billion (as in "b" not "m"). So, given this clear example that is grounded in reality, why is music sales dropping? Greed? "Our strategy is to have the people who create great music be paid properly," Morris says. "We need to protect the music. I know that." Stupidity? "There's no one in the record company that's a technologist," Morris explains. "That's a misconception writers make all the time, that the record industry missed this. They didn't. They just didn't know what to do. It's like if you were suddenly asked to operate on your dog to remove his kidney. What would you do?" (Uh, take the dog to the vet?) Inability to see that consumers go for what is convenient? People walking down the street on a hot day will stop at a 7-Eleven to buy a cold bottled water because it is convenient. People use MP3 players because it is convenient. When you lock up content with DRM and make that DRM compatible with only certain devices (iPods, Zunes, Plays-for-Almost-Sure, etc), that makes it inconvenient to the consumer -- and they don't buy. So, whatever the reason, it really does come down to the fact that music label executives are idiots living in the past.

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