Get A Clue

The news came out yesterday that major record labels will soon begin selling both albums and singles, with variable pricing, on USB flash drives. Read all about the finer points here.

The label’s reasoning for doing this is that statistics show that physical product still outsells digital by a wide margin. They think the CD format hasn’t evolved enough, that it’s not “cool” anymore, so this is their attempt to finally step into the 21st century and offer music in a format that people actually understand. They also think that people will pay $10 for these flash drives because in addition to the music, the consumer will also get ringtones, videos, and assorted other things that the labels consider goodies. The biggest upside of buying music on the flash drives though is that you actually get the drive itself, which you can use as a storage device separate from the music, and put on it whatever you’d like.

After reading about this, I had to really scratch my head. Are the major labels serious about this? In my opinion this is something that they should have been doing 3-4 years ago, whenever those flash drives first hit the market. At that point flash drives were new and “cool.” And apparently what’s cool is something the labels are concerned about. But years after the fact I don’t really find those small drives to be all that cool or practical.I’ve got a 350 gig drive hooked up to my laptop with tons of music, porn, and pro tool sessions on it. Why wouldn’t I just download the music and put it on there instead of having to plug in a flash drive, which ultimately ends up taking up 1 of the 2 USB slots on my powerbook. Those slots are at a premium, and sure I can plug it into my USB hub, but that’s kind of annoying. Do I really want to be annoyed for that extra content that’s available? And beyond that, isn’t that extra content going to be available in some capacity online after someone gets their hands on one of these USB drives and leaks the shit on the net, making the whole idea of buying the drive pointless in the first place? But I guess they could copy protect all that shit, even though that’ll open another can of worms (see: DRM controversy), and then we might be stuck with a situation where we have this content on the drive and we can’t get it off there. So every time we want to listen to the music we gotta go fishing for that drive. That’s one of the main reasons why CDs went out in the first place. Convenience. Who wants to go looking for that shit. Nobody. Just put it all in one playlist and call it a day.

Beyond just the sheer stupidity of launching another physical product when its clear that’s not the direction music or media is in heading in any capacity, how does this make sense from a business stand point? There’s obviously a set-up in place for records, tapes, and CDs to be made. The manufacturing, pressing, and distribution of these physical products has existed for quite some time. As has the financial structure by which everything needs to abide by in order for the system to make sense financially to the major labels. Where are they getting their hands on a gazillion flash drives from? Now i’m sure under the vast umbrella that is Vivendi Universal the parent company owns some smaller subsidiary that can manufacture these things, but it’s got to really exist at a cost that makes sense. I never really understood what the price point for a flash drive was considering the fact that they still sell for $30-40 dollars or more in big box retailers like Staples, but at other spots I go to people are just giving them away. I must have at least 25 flash drives just sitting in a box in my closet, and these are all drives that I just got by someone handing them to me. They had some shit on them that they wanted me to check out, and just like what will eventually happen if music is sold on them, i skipped checking out the drive and just went to the company website and got whatever i needed from there. Same could be done for music via a P2P network. Much more convenient and cheaper.

Again, besides the fact that the flash drive as a physical product seems like a dated idea, I think that the labels missed the ball at retail as well. Had they done this a few years ago, they’d have been able to justify selling music via these flash drives in places like Staples and CompUSA (does CompUSA even exist anymore?), opening up another spot for them to make money besides regular record stores and all-in-one media stores like Best Buy. Now retail with music is more than on the skids, with stores closing left and right, and retail in and of itself is beginning to really struggle with the weight of online shopping closing in on it. I myself can’t remember the last thing I bought in the store without first going online and pricing the fuck out of it before realizing the store was ripping me off.

I see physical product as being the #1 deterrent from the major labels actually getting back into the black. Soooooo much overhead can be eliminated if they just get away from that having to manufacture, ship, and then sell physical product. And as stated above, the market at retail for this type of shit is shrinking so much, so the upside is limited. They need to be thinking 5 steps ahead and be innovating rather than treading water and offering their products via other products and business models that are already well beyond dated. -Paul Cantor

  • t.w.i.

    Apparently, a paragraph is an old format too huh?

  • d-money

    first bitches!!!

  • http://xxlmag.com Billy X. Sunday

    Chuurch!

    I’m waiting for Universal and the Pentagon to team up and put that microchip in my temple that will hold my driver’s license, my health records and all of my mp3′s.

    They will call it the 9-11 chip.

  • P-Matik

    You gotta remember that you are dealing with jaded management that really would be better off if they asked their 10 year old kids what they should do to stay relevant.

  • Daesonesb

    At one time in my life, i wanted to work for a record company.

    But really. fuck that. Those dudes are idiots.

  • http://www.akirathedon.com AK D

    They’ve been doing that in the UK for a little while, to limited success. It’s hardly a growth market, is it? They’re giving these things away in supermarkets with Frosties right now.

    Dunno if you’ve got one of these in the US yet, but PlayLouder (playlouder.com)just launched a Broadband service here that allows you to legally download all the music you want, at no extra cost on top of your broadband fee (£18). They pay the record companies out of that, a bit like radio.

    They’ve been trying to get this off the ground since 2001, but the majors weren’t having it. Last month they suddenly realised it was a good idea. That’s six years of cash they’ve missed there, along with the mindset of a generation turned away from ever paying for a fucking NOISE…

    Billy, that chip is so in the works. Evil Iovine mentioned it (seemingly in jest, but evily enough to know it to be true) last time I saw him.

    DANG DANG DAAAAAAAAAAAAAAAAAAAAAAAANG!

  • Ryan

    I like it when they put out vinyl with the mp3′s downloadable for free (not that I can’t download shit for free anyways). I collect vinyl though, so I guess that wouldn’t work for most people since all they want is the music without the actual booklet and artwork.

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  • young beezy

    you know i’ve been thinking of a way to use music that i have on my external hard-drive in conjunction with my computer, car-stereo, and any other protable device i have. When is someone going to make a blue-tooth external “media-only” (music/video) hard-drive that can be used with a car-stereo that has bluetooth capability? and you’d be able to use it with your PC? You can use it with blue-tooth headphones, etc, etc… Now, that would be tight… Then the big labels can just sell digital music… That would definately shut-down the cd-manufacturers. lol then again, we still use DVD’s, right? The CD isn’t going anywhere… Atleast, not at the moment. I think i might be on to something with the blue-tooth hard-drive. Need to put that into aktion… lol, don’t steal my idea! HA HA HA…

  • Hotshzzo

    Very smart but they still need to sell the music on cd as well until another few years because not everyone has a computer. But this is deffinetly a smart decision and hopefully hiphop will be going up by 5000% in sales after this.

  • Da Kid

    what a dumb azz idea! At least I think so, being a album collector dis makes no sense, what kind of artwork can they put on a flash drive thing? I love albums not only for the music but for the artwork and the memories behind the artist, like Kanye’s Graduation album was dope az fuck because he was creative with the box, and Gnarls Barkley. Dis may sound good to people who dont give a fuck about all dis, but for the collector like myself this would fuck up everything and cause me to bootleg almost EVERYTHING that i was once willing to buy.

  • ruff huff

    yes.. i do enjoy having a cd better than just mp3′s… i like it when they got dvds with em and shit… g unit used to put dvds in all their cd’s… until tony yayo’s… hmm.. maybe there’s a connection?… haha jus playin but i like cd’s… but i think they should start putting music on dvd’d because they hold a lot more space and can have higher quality than a regular cd

  • http://www.justlyphe.com Just Lyphe

    Some great ideas here that just show how lazy we’ve become as humans (myself included)! The whole cd’s on dvd’s thing is a tanker. Too late. It’s the same as the whole flash drive thing, they’re so not cool anymore. Even if they could find a way for them to plug into mp3 players etc, it would just be too bulky, and good luck pluggin it into a car without breaking it by mistake while ur doin a hand snap….

    I am like the others above who loves the art work and believe they mean just as much to the album as the actual music, but let’s talk the future here:

    I’m surprised the comcasts and verizons of the game haven’t teamed up with the rhapsody’s etc to form a playlouder like they got in england. And the blue tooth drive idea’s genius. Zune’s already pretty much on that though, but put there definately twists that could make it worth while to make a run to DC, submit my patent application, and “ha ha, I’m headed to tha bank right now!” lol.

    Basically, put all the above together in one company (ie sell the net service, player, and subscription as a package), and i think u’ll shut down the game as we know it.

  • http://www.justlyphe.com Just Lyphe

    btw, just checked out playlouder’s website, and they definately need to step it up, don’t think i’d be trusting my cc info with a company that can’t even put together a decent, professional looking website, sorry.

  • Vicious Seiger

    Desperate, Desperate, Desperate. Selling music on a flash drive isn’t a bad Idea but it really doesn’t matter unless there is exclusive content worth having on it and of course price. I mean why would anyone want to physically (except me) buy these songs and albums on this format when you can download these albums from home. It just doesn’t make much sense. Why not just make the music cheaper on the formats already available.

  • THEGOD

    imagine you walk into a best buy to cop the new….Nas LP. and you get there and the music comes in the same case as once the casette formats with a flash drive in it. that would be insane like full circle. but digi is killin the buyers market because its NOT physical. you can lose physical things. digi can be cleared, rebooted and backed up if it becomes damaged or corrupted or even deleted. as for a cd… you lose that you ass out of 12 dollars. and have spent 24 if you really wanted that cd. see i copped all of Jay-Z cd’s for the love of the music but its a burden because after years of play the CD gets worned and the cases would eventually get damaged. and of course i need my hov intact so i’m back in the store coppin the same lp. i think i got atleast 3 copies of 5 of his cd’s the rest 2. thats alot of money spent if you add it all up (thank GOD for Steve Job). the main focus of this market move is the consumer. with out consumer satisfaction the product becomes dormant. what these labels should do is create a deal with iTunes so that ALL music content be sold through them. that way it slows down bootleg, it becomes more convienant to the consumer, and we all know internet is the best marketing tool (Soulja Boy / Joe Budden). just a thought…..and you would think companies would ask consumers what they would rather have or what can the company do to please us better. the sellers market is very insulting. they put shit out and just expect you to just buy it…WE HAVE MORE POWER THAN WE THINK…..

  • xtc

    flash drives ….. how lovely. HOW WILL I JAM TO IT IN MY FUCKIN CAR!

  • AZ40

    The thing is consumers are usually younger and savvier than the record execs. so we’ll always find a way to get it faster and cheaper.

  • IComeFromTheLandDownUnder

    two words ‘audio quality’
    a drive with the same capacity to store the audio at the same quality as on a CD costs alot more to manufacture than the compact disk…

    So audio quality would go to shit if the price of these new USB drive LPs were to be lower than conventional CDs…

    If an artist makes music worth purchasing (when was the last time that happened) i want the maximum audio quality

    I’ll buy my music digitally when the quality offered is better than that found on CDs