Monday, November 28, 2005

Why hard drives aren't pre-loaded with music

Mark Cuban posts about why hard drives aren’t pre-loaded with music.  Specifically he points to the Harry Fox Agency, which he describes as “. . . so out of step with the times it’s holding an entire industry back.”  How can one company do this?  Cuban explains:

How expensive is it to “pay the Harry Fox Piper ?” From their website

“The current statutory mechanical royalty rate is $.085 (8.5 cents) per song per unit for recordings of compositions up to five minutes (5:00) in length.”

Thats a lot of money. Do the math. How many songs can you pre load on a 30gbs or 60gbs IPod. How many as those hard drives grow and grow.

At 8.5 cents ea.  Thats big, big dollars. Per Ipod. Which is exactly why you cant buy MP3/Ipod devices preloaded with music. Its obscenely expensive.

At $0.085 per song, it would be insanely expensive to even pre-load an iPod Shuffle.  Here’s what Cuban suggests:

Why not do it the right way. Since units like the Ipod can track usage, just set a very simple reporting mechanism. Its being done for subscription services. Downloads are tracked. Listening is tracked. Why not apply it to mobile devices ? If the user has privacy concerns, they wont buy the unit with this feature.

. . . why not finally put DRM to a use that actually benefits consumers ? If that song stays on the hard drive 5 days and is listened to more than 5 times during any period, then Harry Fox can collect on it.  It wouldn't be 8.5 cents. Thats a ridiculous number of course when there could be thousands of songs on a hard drive. People who just kept the songs on the hard drive could end up costing the distributor thousands of dollars per Ipod as hard drives grow.  But just like the subscription services have worked things out, there is no reason why Harry Fox cant come in to the 21st century and realize that their beneficiaries will make more money by making it easier for music lovers to consume music.

It also takes away some of the incentive for users to troll illegal download sites. ITunes and the other music sites could easily download music overnight and let the users have fun with it.

Wake up with a 1k new songs on your IPod every day, week or month. Pick and choose what you want. Keep what you like, delete the rest. If you don't want to delete, we will remind you that you will be charged for them and we will hit your credit card for them.

Imagine if you could have your device pre-loaded the first Monday of the month with the top 40 played songs from your favorite radio station and you could pick and choose with track to keep.  Of course, this screws up Harry Fox’s business model, but who really cares about that besides Harry Fox?


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