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