The true economic value of Ashlee Simpson
I'm going to write a piece that may offend some people very close to me. I say what I'm about to say not to dash any dreams, but to dissect an important issue facing us all: Why does Ashlee Simpson exist?
Yes, because her parents did it...
I mean: Why is she in the spotlight? At all? Clearly this is not the best entertainment talent in the land. So why would the music industry seize upon and invest in her? Are they blind to the brilliant and talented others that are out there? Do they actually think this girl is entertaining?
No, they think they can use her to sell albums.
The reason for Ashlee is because the music industry isn't about selling music. It's about selling records. They don't sell music, they sell things. They sell music storage containers.
And this is the fundamental problem the industry faces right now: They had a viable business selling containers as long as the containers were the best way to distribute music, and as long as the technology required to produce the containers and place music inside them was expensive to own and operate. As long as records, tapes and CDs require production technology so expensive that only a corporation dedicated to large scale use of the technology can afford it, then the music companies have a way to make money and a reason to exist. They controlled the means of producing the means of distributing music.
Customers thought they were buying music. And they were. But they were also paying for the music storage and distribution system represented by the container, and not just the music inside of it. So the big question is: What's the value of the container and the container-based distribution system, and what's the value of the music?
Hint: In Elizabethan England, actors and minstrels were the carnival folk of the modern era. If your daughter were trying to decide between whoring and being a minstrel, you'd really not know which way to steer her. Ok, I may exaggerate. But just a little.
But in the modern era, musicians and actors are the secret ingredient. An empty entertainment container isn't worth very much. You spend what on a blank CD? 25 to 50 cents? Musicians are valuable to music companies insofar as the musicians create demand for access to music distributed through the distribution system the music companies have created. Musicians create demand for music in containers.
But what if the music didn't have to come in containers? Then we'd start to see two new markets develop: A market for the music itself, and a market for music storage containers. And I'd be very surprised if music is as valuable as it seems to have been in recent economic history. Why? 1) Minstrels 2) Monopolies: There was a lot of monopoly in the old system, and where there’s a monopoly, there’s price gouging. Monopolies charge what they can get away with.
So what’s happening in the new market?
There are new music container companies (iPod), and they’re doing well. The neat thing about the new music container companies: They just sell containers, not music.
And the new music companies sell just music, not the container. I continue to question whether this is actually a viable business: Why pay when the same thing is available for free? I think the future for music is that music files are given away to generate demand for performances, the exact opposite of the recent past. The reason is simple: You can’t control access to the files, you can control access to performances. Charge for what you can control, harness the thing you can’t control.
Of course, this means the days of mega bucks for popular performers is over. I think it also means that old music industry is toast, that the media machine that creates demand for crappy music will die, and that only truly appealing music will rise to the surface. We’ll get better music, heretofore unknown artists will get recognized and paid (though not mega bucks), and consumers will get more for less. Freeing up cash flow to be re-deployed elsewhere in the economy. Ushering in a new era of prosperity. Yay.
So musicians: Embrace the new business model. Give away the album; sell tickets to the concert. You’ll get famous faster, will spark an economic boom that benefits us all, and most importantly, you’ll hasten the demise of Ashlee Simpson, who is currently more famous than you are, with only 1/100th the talent. Hate Ashlee. Free the music…
Yes, because her parents did it...
I mean: Why is she in the spotlight? At all? Clearly this is not the best entertainment talent in the land. So why would the music industry seize upon and invest in her? Are they blind to the brilliant and talented others that are out there? Do they actually think this girl is entertaining?
No, they think they can use her to sell albums.
The reason for Ashlee is because the music industry isn't about selling music. It's about selling records. They don't sell music, they sell things. They sell music storage containers.
And this is the fundamental problem the industry faces right now: They had a viable business selling containers as long as the containers were the best way to distribute music, and as long as the technology required to produce the containers and place music inside them was expensive to own and operate. As long as records, tapes and CDs require production technology so expensive that only a corporation dedicated to large scale use of the technology can afford it, then the music companies have a way to make money and a reason to exist. They controlled the means of producing the means of distributing music.
Customers thought they were buying music. And they were. But they were also paying for the music storage and distribution system represented by the container, and not just the music inside of it. So the big question is: What's the value of the container and the container-based distribution system, and what's the value of the music?
Hint: In Elizabethan England, actors and minstrels were the carnival folk of the modern era. If your daughter were trying to decide between whoring and being a minstrel, you'd really not know which way to steer her. Ok, I may exaggerate. But just a little.
But in the modern era, musicians and actors are the secret ingredient. An empty entertainment container isn't worth very much. You spend what on a blank CD? 25 to 50 cents? Musicians are valuable to music companies insofar as the musicians create demand for access to music distributed through the distribution system the music companies have created. Musicians create demand for music in containers.
But what if the music didn't have to come in containers? Then we'd start to see two new markets develop: A market for the music itself, and a market for music storage containers. And I'd be very surprised if music is as valuable as it seems to have been in recent economic history. Why? 1) Minstrels 2) Monopolies: There was a lot of monopoly in the old system, and where there’s a monopoly, there’s price gouging. Monopolies charge what they can get away with.
So what’s happening in the new market?
There are new music container companies (iPod), and they’re doing well. The neat thing about the new music container companies: They just sell containers, not music.
And the new music companies sell just music, not the container. I continue to question whether this is actually a viable business: Why pay when the same thing is available for free? I think the future for music is that music files are given away to generate demand for performances, the exact opposite of the recent past. The reason is simple: You can’t control access to the files, you can control access to performances. Charge for what you can control, harness the thing you can’t control.
Of course, this means the days of mega bucks for popular performers is over. I think it also means that old music industry is toast, that the media machine that creates demand for crappy music will die, and that only truly appealing music will rise to the surface. We’ll get better music, heretofore unknown artists will get recognized and paid (though not mega bucks), and consumers will get more for less. Freeing up cash flow to be re-deployed elsewhere in the economy. Ushering in a new era of prosperity. Yay.
So musicians: Embrace the new business model. Give away the album; sell tickets to the concert. You’ll get famous faster, will spark an economic boom that benefits us all, and most importantly, you’ll hasten the demise of Ashlee Simpson, who is currently more famous than you are, with only 1/100th the talent. Hate Ashlee. Free the music…
posted by Kenneth at 5:15 PM
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