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Thread started 07/29/03 7:05pm

Red

This week's Lefsetz Letter

by Bob Lefsetz

The Subpoenas

Okay, you're suing the peeps. What am I gonna do NOW??
I'm just gonna bite the bullet. Give up stealing. And PURCHASE CDS!

Oh really? Let's see. I've got two thousand songs on my computer. The equivalent of two hundred albums. Now I'm just gonna go to the store and lay out THREE THOUSAND DOLLARS???

Think about it. The average CD has ten tracks. Average price is fifteen bucks. All that material I stole, that I got free, is worth THREE THOUSAND DOLLARS according to the RIAA. They want their MONEY!

Only one problem. I'm a poor college student. I don't HAVE that kind of bread. Couldn't lay it out even if I wanted to. So, am I gonna go without? Well, not completely.
Oh, so you're going to BUY CDs! Are you KIDDING ME?

It's not like EVERYBODY in the dorm gave up buying music. I'll just find someone who's got what I want and I'll rip it. I won't have as many tracks, but I'll be out the same amount of money...zero.

This is a recipe for RIAA VICTORY??

Historically, college students have been poor. Except for the abnormal run-up in the economy in the nineties, students lived on a BUDGET! If they DID have jobs, they had limited spending money. After all, tuition and room and board costs a FORTUNE!

You'd think the RIAA would know this. Its members having GONE to college. Well, not all of them. And maybe that's the rub. It seems that the RIAA companies know nothing about BUSINESS!

Yes, business. Make no mistake, these subpoenas are not about MORALITY! Don't make me break out in hysterics. Suddenly the record companies want to teach young 'uns life lessons? No fucking way. They just want their MONEY! They're in business for their MONEY! That's ALL they care about. The question is, is this a good way to GET IT!!

The RIAA companies can go on and on how music is a good value. How it's not overpriced, but actually UNDERPRICED! Only one problem... The companies' main customers have LIMITED BUDGETS!

Not only college students. But high school students too. JUNIOR HIGH AND GRADE SCHOOL STUDENTS! How much of an allowance do you think they're GETTING!!

Oh, but you say that doesn't matter. Now they're not paying AT ALL!

As stated above, I question that. For, if that were truly so, sales wouldn't be off by less than ten percent, but over FIFTY PERCENT! So, it appears people WILL pay for music. When THEY deem it a good value. But is the present paradigm the best way to EXTRACT said sums from the peeps??

What if we could get EVERYBODY to pay? Absolutely EVERYBODY! But how can we ACHIEVE this you ask?
By lowering the price.

Obviously, based on the number of MP3s students possess, they WANT the music. They just can't pay the going freight. Isn't there a way to allow them to GET their music, yet CHARGE THEM FOR IT??

Absolutely.

A ten dollar music charge per college student per semester.
EVERYBODY'S got ten dollars. Hell, make it FIFTY! And, charge EVERYBODY! Leave the histrionics behind. Just say we've got to charge EVERYBODY in order to be fair. That's what the STUDENTS understand and you don't. FAIRNESS! Pay your money and you can download to your heart's content.

That nerd who hasn't bought a CD in YEARS? HE'S gonna pay. He'll have NO CHOICE!

Like college students are gonna bitch. Are you KIDDING ME??
College tuition is not NEGOTIABLE! Universities set the price and if you want to attend, you PAY IT! At elite universities they don't even BREAK THE PRICE DOWN! You just pay a COMPREHENSIVE FEE! Students won't even SEE the music trading fee.

THAT should be the goal here. To try to allow people to have what they want, but CHARGE them for it. As opposed to labeling them thieves and ending up with enemies who won't buy the product ON PURPOSE!

Oh, don't talk to me about the movie companies. About the slippery slope. Music IS NOT movies. Each movie is sui generis. One of a kind. Whereas recording acts have CAREERS! SO, people are going to WANT subscriptions for the new stuff of their heroes, AND get invested in NEW ACTS' careers.

You buy the "Road To Perdition" DVD, that's it. Oh, occasionally there's a sequel, but it's a rare one that's better than the first. Whereas most musical acts DEVELOP! (At least in the old days, before the labels wanted instant cash and invested in two-dimensional figureheads.)

THINK OF THE EXPLOSION IN BUSINESS! Suddenly people are going to be fans of that many more ACTS! And, the threshold to discovering these acts will be SO low that labels won't be dependent on MTV and radio to exhibit their wares. WHY NOT check out something new.

Hell, this is what has been going on for FOUR YEARS! Everybody knows it but the RIAA companies. The RIAA companies are flogging the same overhyped overpriced tripe in the SAME EXACT WAY! It's like it's STILL 1982. When TWO DECADES have gone by.

Unlike visual entertainment, music doesn't demand your total attention, doesn't take up a lot of time, a little is NEVER enough!

We're on the verge of a music EXPLOSION! If the RIAA would GET OUT OF THE WAY! It's utterly astounding.

I know why the label execs don't understand. Because they don't download. The music they listen to THEY get for free. Or, the company pays for it. Or, they're SO handsomely compensated, they don't FEEL the cost, unlike the average consumer. But, if these execs could get in the shoes of the CUSTOMER, they'd be able to see the BREAKTHROUGH! The REVOLUTION!

The labels want to EVISCERATE the revolution. Just have you buy tracks online that are equivalent to CDs. Same aliquot price, but with LESS usability. That's patently INSANE!!
Turn music into a commodity. That EVERYBODY pays for. Spread costs over HUNDREDS OF MILLIONS of Americans instead of the very few who buy more than one CD a year.

It's like the labels are fighting to protect handpicking of cotton, when Eli Whitney has invented the cotton gin. Suddenly, as a result of industrialization, the cost of cotton WENT DOWN! And everybody could afford it and it became UBIQUITOUS!

Same deal in music. Distribution cost has gone to almost zero. More people can possess more music at a lower unit cost. This is a BAD THING? Do the math!!
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