Thursday, September 28, 2006

If Illegal Downloading Ended Today, Would the Record Biz Still Be In Trouble?

Yes, the biz would still be in trouble.

(As Bob Lefsetz says every other day) When Napster was at its peak, so was the music industry.

After this peak, the music industry cut their artist rosters by 20% or more and release 20% fewer titles per year than during their peak. More indie titles are being released, but the good filter that used to exist in the music industry is gone, and the indie titles don't have appropriate marketing muscle to be brought to the next level of sales.

They seemingly target those within their organization with any knowledge of music. I agree that the quality of releases has rapidly deteriorated. The live concert business shows what music can sell, and the record industry hasn't responded.

The music industry sues its best customers! Their own intelligence tells them that (and this has been true since the days of cassette taping) the people who buy the most blank media and download the most (traded or paid-for) buy the most music. You may use apocryphal stories of your nephew in college to deny this, but the record companies know this.

Yes, people do buy what they can get for free! Air, water, dirt, bibles...arguments that a marketer can not compete against free are wrong, and self-hating.

Slowly, the technology, availability, and pricing structure for music downloads is righting itself. With the introduction of the CD, we basically killed the singles market that generated the album market, but downloads are the cornerstone of a new singles market. Terrestrial radio has gone back to limited playlists of the golden era of '60s Top 40 radio (tight playlists didn't spontaneously germinate in the '00s), but with the Internet, satellite radio, etc., we have more opportunity than ever to hear new music - it's just a media and a market in transition.

Tuesday, September 05, 2006

Labor Day, a Day Late, Still Relevant

This is for my dad.

He grew up in the midwest during the Great Depression, to factory-worker parents. He joined the US Navy at the tail-end of WWII, training in the Pacific Northwest and being shipped-out to Guam to support the training for the invasion of Tokyo (as mindful as we all need to be about the use of nuclear weapons, I'm glad that invasion never happened). After the war, he trained in Electronics at the Great Lakes school under the GI Bill, got a job near his parents, met my mom and got married, and worked for Ma Bell for forty years until his retirement.

All the while, he was a member of the Communications Workers of America. He was able to afford a small house in a decent neighborhood in a small Indiana city. We never wanted for food or shelter. We took occasional driving vacations. We saw our dad home for dinner most every night. We had free phone service! The local family doctor took care of our needs - we could afford him, and medical insurance covered the big things.

Now, at 78, he has had a stroke. He has lost some mobility because his hearing and sight have been impaired, but he is still all there. He is past his time for vacations, but he is home for evey meal. He has a $30 copay for medical care, but the big things are still taken care of by the same medical insurance he has always had. He still gets a discount on phone service! He retired with a modest lump-sum pension, which is largely intact after 20 years (after appreciating greatly during the '90s).

My mom survives by taking care of him and putting up with him - I'm not sure of the ratio here. She worked out of the home when I and my brother got to high school, not because she had to but because she liked the work and the extra money, and she continued to work until a few years ago.

This is a world I don't really know. Despite my dedication and perseverence, I haven't known stability from my employers. My medical insurance gets stinkier and stinkier with each year, and (I don't blame them) my current employer may drop this. I haven't received a Cost of Living raise since I started this job, despite successful performance. I can't afford to buy the cheapest home in the city where I live (granted, it's a pretty expensive city). With two teenage boys, I can see that I won't be able to afford to pay directly for their college educations.

We are in the midst of a vast social experiment. Most families need two working parents to have the income, adjusted for inflation, that our parents had, yet the currently politically correct view is that current political policy is family friendly. Unions, like liberals, have been demonized, and a gullible minority of Americans have bought into this enough to move an Electoral College majority, plainly against the self-interest of these voters. My father is alive today and enjoying his life as best he can largely because the union was there to support him while he worked. Can you remember a time when your phone service was a better value and more reliable than the '50s and '60s? Of course not. You can say the same thing about American-made cars, appliances, etc.

Toyota is opening a factory soon in San Antonio, TX; as the US Big Three are closing plants and destroying workers' lives (while fattening shareholders, board members, and C-level execs), Toyota has apparently figured-out which cars Americans want to buy and how to make them here without a unionized labor force. If we stop demonizing unions and just fix what's wrong with management and investment, the high cost of US labor will lessen as a factor in our global economy.

We just want to be able to afford to pay our doctor, our dentist, and our college. We want to be able to afford an appropriate house in a relatively safe, clean, quiet neighborhood, close to our work. We don't need a fancy single-payer medical care system, as we do not need luxury medical care 100% paid by our employer. We just want some security, so that we can afford our piece of the pie and don't lose the chance because our boss or the board of directors needs a second European vacation or German car this year.

No matter how we spin the current economy, for most of us it is a weak recovery from a recession. Two things stand out: real estate, where indeed some people have been lifted from rent-to-own but most growth has been in second and third homes, and consumer spending, which will certainly end as more people slip off the unemployment edge or get Wal-Marted into a part time job with no benefits. When this is gone, this weak recovery combined with welfare for the wealty and this hideous war in Iraq might combine to give us the Bush Depression.

We can fix this by ending this war on the middle class. Make taxes fair - close all loopholes for corporations and the wealthy, and then everyone can get a break. Remove the middlemen from business! HMOs suck money from consumers and doctors with no added benefit to us - removing this blight alone could right the course of the staggering increases in healthcare costs.

My Day-after-Labor-Day toast is to unions, and what they have done to make our country strong, prosperous, and safe.