RE: [h2o-discuss] Re: SDMI

[John Wilbanks <wilbanks@cyber.law.harvard.edu>]

I'd like to respond to the first question, even though I know some of
these themes have come out on slashdot.

SDMI is something that only the large, established labels will really
latch onto, IMO.  If you're the flavor-of-the-month teenage vocal band,
then the overall value of your recording is more closely tied to the
number of copies out there (and the value in real cash probably moves
sraight to the record label for most acts).  

The Backstreet Boys set an all-time, world-wide record for album sales
in a week with their newest release.  The album sales probably track
pretty closely with the merchandise sales -- if JoeAOL buys his
ten-year-old daughter a copy of the CD she's been bugging about, and
while in the store she notices the posters, tshirts, bumperstickers, and
teen magazines featuring the band and wants them too.  That's collateral
money that wouldn't flow to the companies if I had been able to download
the mp3s, expand to wav and burn a CD to calm the craving.   

Now, if we're not talking about the big sellers in pop radio and
MTV-driven sales, I think that the value of the recording is probably
*improved* by the number of recordings out there, paid or no.  Phish
grosses tens of millions each year without even a sniff at the top 20
albums chart, mainstream press coverage or a hit single.  How?  They
give away the music.  Tapers dominate a section at each show, running
microphone rigs into digital recorders, and the tapes are traded far
andwide, with the only rule being "thou shalt not profit from trading".

If the artist decides to make her music available online using mp3
compression, SDMI is meaningless to that artist.  Only industry labels
will distribute the music this way, and as artists' contracts expire,
they can take their music straight to the fanbase (see
<http://www.public-enemy.com/> for a taste of the future).  

I think we'll see a split between the large companies, who will remain
wedded to SDMI and the large fanbase who would prefer the ease and
security of a $5 SDMI download, and the smaller labels/individual
artists exploiting the distribution channels of the internet to *create*
a fanbase which will in turn support the artists' attempts to make money
(via tour, merchandise, or even purchase of sanctioned for-sale
recordings).  Dedicated fans make money for artists -- record sales make
money for record companies.  That's why you see a flurry of industry
activities to protect sales, and a flurry of artists embracing a
technology that connects them to the fans.

jtw


-----Original Message-----
From: jproctor@oit.umass.edu [mailto:jproctor@oit.umass.edu]
Sent: Friday, July 09, 1999 9:08 AM
To: h2o-discuss@eon.law.harvard.edu
Cc: charles@iconstructs.com
Subject: [h2o-discuss] Re: SDMI
 

>So, I'll ask a couple direct questions to the list.  First, does anyone
>else agree that the overall value of a recording, that is, its
potential
>to generate positive cash flow, may in fact be independent of how many
>copies of it exist or how much they cost?  And if we do agree, what can
we
>do to try to convince the music industry that they're wasting time and
>money by trying to modify the old methods that worked for atoms so that
>they might be relevant to bits?