Rick Rubin, co-head of Columbia Records, appears to be nearly as clueless as the rest of those making up the old guard music cartels. Rubin thinks that subscriptions are the future. Just like most other clueless music label dinosaurs. At least Rubin understands that the music industry is dead, even if he doesn’t understand what will save it.
“Seemingly overnight, the entire industry is collapsing. Sales figures on top-selling CDs are about 30 percent lower than they were a year ago, and the usual remedies aren’t available. Since radio is no longer a place to push a single, record companies have turned to television and movies,” Lynn Hirschberg reports for The New York Times.
“‘Until very recently,’ Rubin told me over lunch at Hugo’s, a health-conscious restaurant in Hollywood, ‘there were a handful of channels in the music business that the gatekeepers controlled. They were radio, Tower Records, MTV, certain mainstream press like Rolling Stone. That’s how people found out about new things. Every record company in the industry was built to work that model. There was a time when if you had something that wasn’t so good, through muscle and lack of other choices, you could push that not very good product through those channels. And that’s how the music business functioned for 50 years. Well, the world has changed. And the industry has not,'” Hirschberg reports.
“Columbia is stuck in the dark ages. I have great confidence that we will have the best record company in the industry, but the reality is, in today’s world, we might have the best dinosaur. Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it’s going to be a declining business. This model is done,” Hirschberg reports.
“Rubin… says that the future of the industry is a subscription model, much like paid cable on a television set. “You would subscribe to music,” Rubin explained, as he settled on the velvet couch in his library. ‘You’d pay, say, $19.95 a month, and the music will come anywhere you’d like. In this new world, there will be a virtual library that will be accessible from your car, from your cellphone, from your computer, from your television. Anywhere. The iPod will be obsolete, but there would be a Walkman-like device you could plug into speakers at home… And once that model is put into place, the industry will grow 10 times the size it is now,'” Hirschberg reports.
“Rubin sees no other solution. ‘Either all the record companies will get together or the industry will fall apart and someone like Microsoft will come in and buy one of the companies at wholesale and do what needs to be done,’ he said,” Hirschberg reports.
Full endless article here.
As we explain fairly regularly, whenever clueless music industry types flounder about in the mainstream press: Business models that fly in the face of human nature are doomed to failure.
Human beings like to listen to favorite songs over and over. They like to own these songs, so that they can play them over and over. They do not want to pay someone an unending monthly rate in order to be allowed to hear their favorite songs.
1,000 excellent songs costs $990 (or $1290 for DRM-free, higher-quality EMI songs) for life, but to listen to them with a $19.95/month subscription plan for 10 years would cost $2394, for 20 years it’d be $4788, $7182 for 30 years, $9576 for 40 years, and so on – and that’s not even taking inflation into account! That subscription rate is going to increase over time, but once you buy a song, you own it for life at the price at which you purchased it — your deal gets better over time, not worse.
Now, for the limited amount of people for which a music subscription service would be welcome (those that can’t do basic math or who’ve been diagnosed with a terminal illness), we say, by all means, Apple should offer it – if it makes business sense (i.e. development and operational costs are less than profit potential).
Regardless of what happens, the fact remains: The labels want subscriptions to succeed because they dream of a recurring revenue stream, not because music consumers desire such a service. Just because subscriptions are what would preserve the old guard music cartels doesn’t mean subscriptions are the answer. Dinosaurs are extinct for a reason.
We can almost hear the greedy bastards in their music cartel boardrooms, “If only we could get them on subscription plans, if only we could get them on subscription plans…” Dreams of easy, constantly-flowing rivers of cash do not a successful business model make, but it’s no wonder that the music cartels dream of this model. It’s just so powerful that they can’t let it go and wake up. The subscription model is the rope that will hang these greedy bastards once and for all.
One more time: Business models that fly in the face of human nature are doomed to failure.
Now, for TV shows and movies, a subscription service makes perfect sense because it better fits human nature, matching the way people over the age of four consume those types of content than does outright purchasing. Not to mention, where do you store all of that content that you own, but are only going to watch once or twice? Most people can count the number of movies they’ve watched three or more times on their fingers.
We want to buy our music and subscribe to a TV shows and movies plan via Apple’s iTunes Store.
Rubin should stick to producing music, stop greedily dreaming of jukeboxes in the sky that continually rain down money into music cartel pockets, and figure out that it ain’t Microsoft that’s going to own the music business.