Friday, April 08, 2005

CD Extinction

Mark Cuban has a great post about the extinction of audio CDs  From the post:

MP3 players are changing peoples listening habits. We don’t carry folders filled with CDs anymore. We carry our library in our MP3 players. We don’t listen to CDs. We listen to playlists that we adjust all the time. We don’t burn CDs anymore, it’s too time consuming. We copy all our music to our MP3 players so it’s all available at our fingertips.

All of our music in a single device. Available to us wherever we are, for whenever we want it. Music how we want it, when we want it. Easy and breezy. That’s how we want to consume music.

That’s not how we are being sold music.

To buy music these days, I have to make all kinds of choices. If I want to buy downloads from the net, it’s like trying to figure out which mortgage to take out on a house. Now because of the cost, but because of all the rules and regulations. Do I want to limit myself to 5 computers. Do I want to always keep my subscription live. Do I want to store the music in a proprietary format that only a couple devices can use. Those are all tough decisions to make when the only thing I know with certainty is that the device I’m using as an MP3 player today, is NOT going to be the device I’m going to be using 18 months from now. There will be players that have more features, or I will consolidate multiple products into a single device. I may be using my phone, my PSP or PDA or something other device for my music.

Which brings me back to CDs. At least until the music industry goes to DVD Audio or copy protected CDs, I know that with the CD, I have control over my music. I can make my own personal copies (which I realize was illegal to do, until the RIAA lawyer told the Supreme Court last week it was all Ok with the RIAA now). I can put them in apple format for my IPod, Sony format for my new digital walkman or PSP, Microsoft format for my PC, or whatever else comes along.

That’s the only good reason to own a CD.  To deal with the hassles that you know will come from having to deal with all the different formats that MP3 players will support in coming years.

That’s not a good sign for the music business or the current retail CD business.

Specifically Cuban suggests that we should all be able to purchase music with the same lack of restrictions as a CD, but get the music directly onto our players.  Certainly with all the rumors circling about iPods with wireless connections, it seems that the major player in the portable music industry might be moving in this direction.  Furthermore, with Starbucks transitioning many of the stores to music environments, there may be a paradigm shift in what a “music store” actually looks like.  I’ve said it before, and I’ll say it again here: the biggest differentiating feature of download music stores will become (is) exclusive content.  I would expect to see that a lot of stores, brands, etc. that are sponsoring music tours begin to negotiate for rights to exclusive live tracks so that those tracks are available exclusively from the sponsor.

Some ideas that support the coming shift:

From this post on Reveries Magazine:

Having had a hit with the legendary Ray Charles, Starbucks is about to take things up a notch as the exclusive retailer of a new record by Antigone Rising

My post about the Starbucks pilot music store on 3rd Street Promenade in Santa Monica.

My post about Starbucks getting into the music store business.

What’s Next for Apple article on Business 2.0 detailing the wireless iPod.

My post on technology dominos.

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