Downloads versus Access? Follow the Science AND the Money!

One of the big debates in music is whether the download is dead, killed by ubiquitous connectivity and streaming services. Certainly the expensive (>$0.5) download seems to have plateaued, and streaming revenue is growing strongly tempting new entrants who bring with them investment in better consumer experiences. The end game, goes the argument, is that the device you plug the earbuds into becomes a terminal, connected to choice and service such as the music fan has never before experienced.

Two things make me pause. The first is a nagging doubt that the mobile and wireless networks needed to deliver always on access really will live up to expectation in the near future. Telecoms seems to be in turmoil around the developed world, with companies facing huge investment decisions at a time when the traditional sources of profitable revenue are crumbling, cannibalised by feature substitutes carried over undifferentiated data. Regulation quite rightly favours innovation over protection, but has not yet addressed the funding of infrastructure when networks have been turned into a utility rather than a service. As for seamlessly transferring sessions between protocols and providers, well I am not holding my breath.

The second pause point is the astounding innovation in storage, seemingly in all configurations and target uses. The standard server hard drive now carries 4TB of data, with 6TB on the way and densities in labs promising as much as 60TB. The advanced science suggests that we are in the foothills; IBM posit that a mere 12 atoms are needed to store 1 bit of data, suggesting a 100 times increase in storage density. That may be some way off, but each month brings announcements about technical breakthroughs promising twice to ten times today’s densities.

In music only a very few tracks have enough genuine demand to justify providing a live connection either for a download or a stream, or the resulting torrent of reporting to share out the minute royalties generated. It’s easy to understand popularity in music as a pyramid of 3 multiplied by powers of 10. 3 tracks are screamingly hot, 30 in demand, 300 popular, and so on. Today the entire repertoire of drivetime radio would fit on a memory chip the size of a thumbnail, and as we know that selection changes so slowly it makes a real thumbnail look volatile. A square inch will soon be able to store 15,000 tracks – that is about 750 hours of music. We are less eclectic than we think; many of us turn off the radio if the DJ starts playing music we have not heard before.

What are the business drivers here? A catalogue owner would do much better to license a selection of back catalogue on a once only fee to be sold as a chip embedded in a device, enjoyed for a year or two, and then recycled or destroyed. New and popular music would naturally remain on a per use or per download tariff as it justifies the cost of multiple deliveries and all that royalty reporting, and could be managed in a more dynamic cache on the device. Music services could get adept at using network quiet time to refresh and pre-cache, giving the network owners a real reason to subsidise the bandwidth music uses off-peak in preference to expensive and contended peaktime data. The embedded library could have something akin to a firmware update from time to time, if necessary. Importantly it could be entirely locked to the hardware, meaning a effortful loopback to a recording device if anyone wanted to set it free.

The sell to the consumer would be relatively straight forward too. Buy a library of evergreen music for $50, and add all the latest chart hits for $25 per year if you want to, or buy a la carte if you prefer. At a wholesale rate of $40 music could be used as a sales incentive for just about any big ticket or recurring item. Remember this is back catalogue; I predict that the music rights owners would compete to get on the chip.

Having strong musical preferences and making playlists has always been a minority sport. The technology and the business drivers both say that in a few years we will be buying downloads in vast quantities, but not choosing them track by track. We might not be paying for them directly. The result will be a much more efficient market, and most important for us all, a certain amount of freedom from over-dependence on privacy invading clouds and undependable mobile networks.

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