Technology Futures

I was looking for a CD the other day, and was surprised to find that it cost $19. The music industry has been crying in its beer for years now, claiming CD sales are down because of grandmothers and 10 year old girls downloading pirated copies of music.

Meanwhile, over at the Apple iTunes store, I can buy the very same album for $10, with some mild restrictions on how I can use it. So while the music companies have legal competition (with themselves, since they get most of the money passing through the iTunes store) with legal music downloads, their response to that competition is to raise CD prices to all time highs.

What is wrong with this picture? Any rational business, faced with competition, looks for ways to reduce costs and compete. But instead, the music industry seems to have a death wish. With CD sales down, their thinking is, apparently, "We'll show them--if our thieving, pirated-minded customers won't buy CDs, we'll teach them a lesson by making CDs even more expensive than ever!"

With the cost of producing a CD at most about a dollar, it's hard to imagine that CDs can't be sold for less than an $18 markup. And in fact, you can find lots of music CDs at online stores (mostly older stuff) for well under $10.

We're watching the death of an industry, and it is slow suicide. People love music, and are very willing to pay for quality; there is a role for the music companies. But those same companies are refusing to adjust to a new market reality.

There is a lesson here for communities as well. If your leaders refuse to adjust to new market opportunities, continue to chase old, Manufacturing Economy businesses, and insist on steering the economic ship of the community onto the iceberg, everyone loses.

The world and our local/national/global notions of "the economy" have been changing ever since the first person bought some clay pots in exchange for two sheep. The idea that we can somehow stop the world and keep our communities just the way they were forty years ago is slow suicide, and it is the community itself that will die.

We can't stop change and growth--we can only manage it.

Engadget has some pictures from a design competition sponsored by Microsoft. The company wanted industrial designers to think about what personal and office computers might look like in the future.

Some of the designs are interesting, and suggest that what we call a "desk" may change dramatically as displays get larger and we spend more time (if that's possible) connected.

But some of the designs are just goofy, like the computer that looks like plant, and, well, something that also apparently doubles as a vase for flowers. I'm just not sure I want to be pouring water into a vase that also holds all my business data or the family baby pictures.

And the first design, as Engadget points out, may make Microsoft happy but otherwise makes no sense at all. It is a computer that looks like a shelf of books, and you add content by plugging big, bulky square things into the "bookshelf." It forces you into buying music and videos in a format Microsoft and the music/video/TV industry loves, but your computer keeps getting bigger and bigger and bigger as your music/video collection expands.

Real Networks president Rob Glaser stated in a recent interview, "Most users that are filling their iPods are still doing it through piracy."

This is the same line that the music industry uses. I have never understood the marketing value of claiming that all your existing and future customers are crooks. And these companies usually go farther and whine that these crook customers "...just don't get it." Where "get it" means they won't buy their stuff.

What has been happening to the music world for the past two years seems quite clear to me. Customers are voting with their pocketbooks, and what that "vote" says is that there is a clear preference for owning music as opposed to renting it month by month.

Glaser, in the interview, talks at length about what good deal renting music is, but his examples are trumped up and compare apples to oranges. It does not take a rocket scientist to figure out that you can buy a song for ninety-nine cents from iTunes or spend $15 for a CD and play it for the rest of your natural life without ever spending another nickle.

On the other hand, renting by the month is an extraordinarily bad deal.

Let's suppose I want to start a record collection of the equivalent of 100 CDs, or about 1000 songs. The lifetime cost (say forty years of listening pleasure) of buying the music is $1000. The lifetime cost of renting the same 100 CDs is $7,200. And you can't give the music/CDs to someone else when you pass on. So you spend $7,200 and have no equity. Zip, zero, nada. If you spend $1,500, you own 1,000 songs.

This is not hard to figure out. Real's deceptive pitch centers in part around the fiction of "unlimited access" to music, with a lot of happy talk about the wide variety of music you can listen to.

But the fiction here is that we all tend to have very specific tastes. I don't care how much rap music Real offers for rent--I'm not going to be listening to it, ever.

The market is speaking, and what it is saying is that we want to own our music and media. A similar fight is going on with movies. The studios and music industry want to discard the ownership model completely and make all media be based on a rental model. Bizarrely, many in Congress agree. Right now, many of our elected representatives are trying to make it illegal to tape or record anything, and proposed legislation would require consumer electronics manufacturers to build in expensive circuits that would make it difficult to tape anything--from a TV, from a radio, from any kind of media player (e.g. CD, DVD, tape, etc.).

Supposedly all this is necessary to keep the music and movie industries from going out of business from all those bad "pirates." Meanwhile, Apple has sold (as in, people PAID for) a billion songs, more or less. If we are all pirates, who is buying all that music?

Actually, VoIP phones have been around for a while, but they have been relatively obscure and/or clunky. Vonage offers an adapter box that plugs into your computer, and then lets you plug any "normal" phone into it. An easy way to continue using a plain old telephone, but you end up with yet another box, power adapter, and cables to further clutter up your workspace.

The Ipevo Free-1 phone is certified to work with Skype, one of the more popular free VoIP services, and is dead simple. The cord has a USB connector on it. You plug that into your computer or USB hub, fire up your VoIP software, and talk.

I'm looking for a slim, lightweight handset that I can use for travel. At night, I could fire up my laptop, connect to the Internet via the hotel broadband connection, and make calls from my office phone number, retrieve messages, and work the phone as if I was in the office.