Too LIttle, Too Late: Accessing Music In An Ever Increasingly Networked World

Greg Kot of the Chicage Tribune had a nice re-cap on a SXSW panel that discussed the idea proposed by Jim Griffin to bundle a fee to monthly Internet access bills for users who choose to download music -- a la the cable/satellite-style of billing for premium channels (in this case, the premium is the privilege to download music). The money would be split among artists, labels or the appropriate music copyright holders. Kot summarizes:

His plan would create a live-and-let-live world in which peer-to-peer file sharing would co-exist with iTunes and other legitimate MP3 music stores. With an estimated 750 million people expected to be hooked into wireless broadband networks in Western Europe and the United States alone in the next decade, the potential revenue from licensing fees on Internet service providers could be substantial.
Yet such a forward-thinking plan might already be too little too late for the industry, McGill’s Pearlman said. A portable data base containing all the music ever recorded is imminent, he said. “Once this paradise of infinite storage is entered,” he said, “it will represent the end of all intellectual property rights.”

Too little too late indeed: assessing fees for downloads seems more of an interim/short-to-midterm solution that may be on its way out by the time the ink dries on the final termsheet. In a progressively networked world, the notion of downloading music will probably fade in favor other more efficient methods of music delivery and consumption. Why download it first if you can hear it right way? Infinite storage will just give way to unfettered, infinite access -- anytime, anywhere. With seamless network access, users won't really care whether they're downloading a song or streaming it, they'll just care that you can Search It Then Play It On-Demand.

While download versus streaming may become inconsequential for the consumer, royalty and licensing structures fundamentally differ since a download implies "ownership" or purchasing a copyrighted work, while streaming does not -- not to mention "tethered" downloads that subscription-based models provide and the added legalities of offering music "on-demand".

The problem with today's streaming model (mostly subscription-based models such as Rhapsody and Napster) is that all the factors that make the experience seamless and simpler than the download model of today is relatively premature:

• the ubiquity of Internet access has yet to reach critical mass (thus tying the user's music listening experience closely with a computer)
• a walled-garden experience with proprietary software media players restricts where, when and how the user can consume the music
• non-universal compatibility with popular hardware players (re: iPod)

In today's world, spending the time to download music is a small price to pay in order to gain the convenience to play the downloaded music any time, any where. But jump ahead a few years to a world where always-on Internet grants you access to music via your nearest available networked device, be it a a cell phone, laptop, Tivo, Playstation or Wii. Satellite radio offers a glimpse of how a single service can provide multiple ways of consuming music in a time-shifted and place-shifted future.

One would argue that as we approach infinite choice (re: infiite storage of songs), the traditional concepts of supply-and-demand economics change in the sense that the scarcity is no longer the "inventory", "supply" or "choices" of music to buy/listen, it's the consumer's attention that is now the scarcity. In a few years when an x-terabyte device can hold 60+ years of music the problem won't be how to store, or even own, the music, it's how you're going to choose what music deserves your listening time.

UPDATE: Warner Music Group has tapped industry veteran Jim Griffin to spearhead a controversial plan to bundle a monthly fee into consumers' internet-service bills for unlimited access to music.