Man Masters Flight, and Music Goes Digital

Between the lawsuits against file-sharers and news of Radiohead’s digital-only album release, the digital distribution of music has become a big story. We recently hosted our own discussion on the issue here..

But for some people, this is very old news.

Take the case of Peter Alexander, an economist in Washington, D.C., who has been researching and writing about the music industry for more than a decade. In 1994, he published a paper in the Journal of Cultural Economics called “New Technology and Market Structure: Evidence from the Music Recording Industry.” The paper’s final section argued that “[b]ecause the products of the music recording industry are produced using digital sequences identical to those of computers, [a] distribution network might evolve as computer networks and digital information highways develop and deepen.”

But his editors weren’t exactly sold on the idea. As Alexander wrote to us:

Back in 1993, when I first submitted the article and wrote about the potential for digital distribution in the music industry, the editors fought me tooth and nail to leave the material out, since it was “merely speculative.” Moreover, my colleagues at the time laughed about the whole idea and called me Jules Verne. By the way, the Harvard Business Review (where I first submitted the paper) thought digital distribution was nonsense, and wouldn’t publish it. So I do give the Journal of Cultural Economics credit for doing so.

Looks like Alexander’s skeptics and Lord Kelvin had something in common.


scout29c

Lord Kelvin's quote was dated 1895. The Wright Brothers proved him wrong in 1903 with a motorized kite that was actually not heavier than a strong breeze. And here we are now going to the moon and flying willy-nilly all over the place.

A hundred years from now, will Alexander's critics be as wrong as Lord Kelvin is today?

Andrew Smith

Music has only been recorded (with some coherent fidelity) since the mid-early 20th century, and even now it still fails to attain the power of a live performance--that is, different sounds coming from different places, reverberating acoustically.

I'm not concerned about the music industry. If anything, this digitalization should increase the appetite for live performances. Maybe the CEOs can become stage managers.

Aside-- Radiohead increasing their fan base? Their concerts sell out in moments, then their tickets are scalped for appendages. They couldn't manage any more fans. The new album doesn't even touch Kid A or OK Computer anyway. It's not self-promotion, it's self-indulgence.

the other MB

The smart CEOs are already stage managers of sorts. What was everyone paying attention to -- or, I guess I should say, distracted by -- when Clear Channel and its ilk quietly acquired controlling interests in performance venues both national and international?

I don't know what journalistic ethics prohibited Mr. Alexander's editors from publishing his commentary if they thought it speculative, but I could certainly understand it -- if not necessarily approve -- if those editors believed that keeping their jobs was contingent on pleasing the CEOs of the media conglomerates for whom they worked, who wouldn't want their readers to know about Napster?

Come on, people. You read the Times. Follow the money.

Beerzie

What is absurd about all of this is that file sharing and Internet radio exposes people to a broader spectrum of music than they would ever get from radio, thus increasing demand. This is far a more robust marketing tool for record companies than regular or satellite's radio, and it just proves that the music industry is run by fools who are intent on nickel and diming the public rather than figuring out how to take advantage of the changes in technology.

misterb

This post makes me think about the future technologies that conservatives are poo-poo-ing as we write. In 1994, amongst those of us who knew about the Internet, Alexander's ideas were obvious - if anything we thought much more would be on the "information super-highway" than has in fact occurred. What we didn't see was how very much money would be at stake - we just saw cool technology.

So my predictions for denigrated technologies that will seem unremarkable in 13 years:
1) robotics - just as viable compression made digital music possible - applied multiprocessing will allow for robots to perform valuable work cheaply enough to be economic.

2) virtual communications - environmental pressures will reduce our ability to move 200 pounds of meat when we can instead move electrons.
When we look at how much of our worldwide economy is based on moving people, limiting ourselves to places we can visit by our feet will mean a huge shift in economic power. Now you see why the troglodytes hate Al Gore.

The dystopian flip side to these musings is that in other historic periods (let's say most of human history up to age of enlightenment), the Luddites have won. If Lord Kelvin had said in the Middle Ages that man cannot fly , he would have been correct because his goons would have made it so. We are in grave danger of letting the nay-sayers gain precedence again. The Renaissance in Florence lasted less time than the American post-War baby boom; they may have burned Savaronola, but they never regained their creativity.

Read more...

ambrose

Frank Zappa apparently foresaw the digital music age in an article written in 1983.

The page on Frank Zappa dot com has disappeared, sadly, but this guy quotes it at length:

http://soundslope.com/vocab/frank_zappa

.lermit

Not only the place, but the music, of some wannabe recorder is taken when you missplace music from where it should be - listened - to the hands of non-respondent distributors.

Makes for a good debate. If in your playlist.

marc-paul

what i find more interesting than the debate over on-line distribution is whether a respected publication like HBR ever learns lessons from rejecting 'speculative' material. i suppose this is an example of beta error (the 'false negative') and will always just be a fact of life but wouldn't a smart organization question themselves from time to time on whether they were being too cautious? i've long thought we a "devil's advocate" should be a required position in any company.

Antonio Galvan

Do you remember the time when we had to pay for an e-mail account? Home delivery? Spreadsheet and text processing software? We may not be noticing it, but we may be in front of some new business opportunities which are not related to buying or selling anything that we actually do.

AbeFable

Every other subject, the economist's say "let the markets guide the price. The invisible hand knows... It's supply and demand." But now within the music industry, they are crying foul...
Digital music = unlimited copies at almost no cost. Virtually unlimited supply and limited increase in demand, makes it so digital music should be virtually free. Which it is. Accessable to the masses, free, with a huge variety to choose from. Sounds great! Now, music is easier then ever to produce, record and distribute. The companies are scrambling to figure out a way to maintain centralized power & control. As possibly the oldest form of art and expression, and a major factor in the development of the human civilization, music should be free and accessible to all.

martin g

From Nikola Tesla's "My Inventions"-

"Technical Statement" ca. 1900
" The first 'World System' power plant can be put in operation in nine months. ...it is designed to serve for as many technical achievements as are possible without due expense. Among these the following may be mentioned:
1) The inter-connection of the existing telegraph exchanges all over the world
2) The establishment of a secret and non-interferable government telegraph service
3) The inter-connection of all the present telephone exchanges on the Globe
4) The universal distribution of general news, by telegraph or telephone, in connection with the press
5) The establishment of such a 'World System' of intelligence transmission for exclusive private use
6) The inter-connection and operation of all stock tickers of the world
7) The establishment of a 'World System' of musical distribution, etc
8) The universal registration of time by cheap clocks indicating the hour with astronomical precision and requiring no attention whatever
9) The world transmission of typed or handwritten characters, letters, checks, etc
10) The establishment of a universal marine service enabling the navigators of all ships to steer perfectly without compass, to determine the exact location, hour and speed, to prevent collisions and disasters, etc
11) The inauguration of a system of world printing on land and sea
12) The world reproduction of photographic pictures and all kinds of drawings or records"

While Tesla was here talking about the possible uses of his "radio transmission" power station he was in fact speculating about the possible uses of "electronic technology" in general.

Read more...

mao

I knew about the remark of Lord Kelvin, but it always sounded me as difficult to believe it as completely well reported. After all did not Lord Kelvin see birds (some kind of very efficient flying machine) flying at his time?

scout29c

Lord Kelvin's quote was dated 1895. The Wright Brothers proved him wrong in 1903 with a motorized kite that was actually not heavier than a strong breeze. And here we are now going to the moon and flying willy-nilly all over the place.

A hundred years from now, will Alexander's critics be as wrong as Lord Kelvin is today?

Andrew Smith

Music has only been recorded (with some coherent fidelity) since the mid-early 20th century, and even now it still fails to attain the power of a live performance--that is, different sounds coming from different places, reverberating acoustically.

I'm not concerned about the music industry. If anything, this digitalization should increase the appetite for live performances. Maybe the CEOs can become stage managers.

Aside-- Radiohead increasing their fan base? Their concerts sell out in moments, then their tickets are scalped for appendages. They couldn't manage any more fans. The new album doesn't even touch Kid A or OK Computer anyway. It's not self-promotion, it's self-indulgence.

the other MB

The smart CEOs are already stage managers of sorts. What was everyone paying attention to -- or, I guess I should say, distracted by -- when Clear Channel and its ilk quietly acquired controlling interests in performance venues both national and international?

I don't know what journalistic ethics prohibited Mr. Alexander's editors from publishing his commentary if they thought it speculative, but I could certainly understand it -- if not necessarily approve -- if those editors believed that keeping their jobs was contingent on pleasing the CEOs of the media conglomerates for whom they worked, who wouldn't want their readers to know about Napster?

Come on, people. You read the Times. Follow the money.

Beerzie

What is absurd about all of this is that file sharing and Internet radio exposes people to a broader spectrum of music than they would ever get from radio, thus increasing demand. This is far a more robust marketing tool for record companies than regular or satellite's radio, and it just proves that the music industry is run by fools who are intent on nickel and diming the public rather than figuring out how to take advantage of the changes in technology.

misterb

This post makes me think about the future technologies that conservatives are poo-poo-ing as we write. In 1994, amongst those of us who knew about the Internet, Alexander's ideas were obvious - if anything we thought much more would be on the "information super-highway" than has in fact occurred. What we didn't see was how very much money would be at stake - we just saw cool technology.

So my predictions for denigrated technologies that will seem unremarkable in 13 years:
1) robotics - just as viable compression made digital music possible - applied multiprocessing will allow for robots to perform valuable work cheaply enough to be economic.

2) virtual communications - environmental pressures will reduce our ability to move 200 pounds of meat when we can instead move electrons.
When we look at how much of our worldwide economy is based on moving people, limiting ourselves to places we can visit by our feet will mean a huge shift in economic power. Now you see why the troglodytes hate Al Gore.

The dystopian flip side to these musings is that in other historic periods (let's say most of human history up to age of enlightenment), the Luddites have won. If Lord Kelvin had said in the Middle Ages that man cannot fly , he would have been correct because his goons would have made it so. We are in grave danger of letting the nay-sayers gain precedence again. The Renaissance in Florence lasted less time than the American post-War baby boom; they may have burned Savaronola, but they never regained their creativity.

Read more...

ambrose

Frank Zappa apparently foresaw the digital music age in an article written in 1983.

The page on Frank Zappa dot com has disappeared, sadly, but this guy quotes it at length:

http://soundslope.com/vocab/frank_zappa

.lermit

Not only the place, but the music, of some wannabe recorder is taken when you missplace music from where it should be - listened - to the hands of non-respondent distributors.

Makes for a good debate. If in your playlist.

marc-paul

what i find more interesting than the debate over on-line distribution is whether a respected publication like HBR ever learns lessons from rejecting 'speculative' material. i suppose this is an example of beta error (the 'false negative') and will always just be a fact of life but wouldn't a smart organization question themselves from time to time on whether they were being too cautious? i've long thought we a "devil's advocate" should be a required position in any company.