BUSINESSWEEK ONLINE : AUGUST 30, 1999 ISSUE
COVER STORY -- 21 IDEAS FOR THE 21ST CENTURY

Q&A: Music Will Become a Service, Not a Product


Jim Griffin is president and CEO of Cherry Lane Digital, a Los Angeles consultancy, and is the former director of technology for Geffen Records. Technology will change everything about the music business, he believes, from eliminating distribution to the way artists are compensated to what companies sell. He shared his vision of a world where music is interactive and personalized with Steven Brull, a correspondent in Business Week's Los Angeles bureau.

Q: What is your vision of the future of music distribution?
A: The future isn't about a change in distribution, it's about the atrophy of distribution itself. Instead of distributing things, we'll get access. It's a critical difference. The future isn't about downloading songs and burning CDs. It's about just-in-time customized delivery.

Q: How will artists be compensated?
A: Aggregating an audience will be key. Consumers could listen to free programming that's advertiser-supported. Or they could subscribe to channels with no commercials. A new economic model will evolve that is similar to the broadcast networks'. It assumes that the replication cost is zero. As with Seinfeld, if another million tune it, thereis no extra cost. NBC doesn't worry if you pirate Seinfeld, do they? [It will be like] radio and TV: The more you listen, the more value you get. This will also attack piracy by attacking the motivation for piracy.

Q: Presenting music as a service, like radio or TV, would seem to be less profitable than selling millions of CDs at $15 each.
A: Actually, this change will be positive for the music industry. It will be able to sell more things associated with music. But the actual sale of music as a product will make less sense. It will be a move from transaction-based push to flat-fee pull. Just as AOL has gone from selling you five minutes of access to a take-whatever-you-want model, music too will move to a flat-fee model.

Q: Will record companies turn into broadcasters? Or vice versa?
A: It's broadcast that's morphing. We used to think of NBC. Now there's MSNBC, CNBC, and so on. Broadcasters are broadening their base, and eventually there will be so many signals it will collapse down to one on my NBC. We'll program our own radio and TV stations.



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ONLINE ORIGINAL: Q&A: Music Will Become a Service, Not a Product

Links
Joshua McFadden's personal home page

Oberlin College's Technology in Music and Related Arts Program

Joshua McFadden's personal home page

Shoutcast.com

mp3Now.com

mp3.com

EMusic.com

Recording Industry Association of America



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