Distribution online: Dawn of a new era

Every now and then you get a glimmer of good news. Today’s is regarding online information distribution: I’m seeing the first signs that the music industry is finally getting its collective head around the idea that new technologies require new business models.

Some history: Readers of this column will recall that I strongly oppose the Recording Industry Association of America’s (RIAA) misguided efforts to protect copyrights by forcing telcos to divulge the identity of music downloaders. In the year since my first column on the topic, the RIAA has won some high-profile legal battles against music downloaders – yet music downloads have reach an all-time high.

To avoid the inevitable flame-mail, let me be clear. I support the right to intellectual property protection. I have to. As a coder, an analyst and someone whose friends include programmers, artists and musicians, I’d have no income and no social life in a world without intellectual property protection.

What I don’t support is giant corporations using tedious, expensive legal battles in an ultimately futile attempt to hold back the spread of technology that can, in the long run, add great value to them and to their customers (that also explains my distaste for the RBOCs, but that’s another column). In short: Suing your customers is stupid. Suing your customers when the technology exists to offer them enhanced services is beyond stupid – it’s brain-dead.

So what’s the good news? First, that music companies finally are getting the message that today’s content-delivery systems aren’t working. Advertiser-supported content is slowly but surely losing ground to pay-to-listen delivery models. Clear Channel Communications, the No. 1 radio station owner in the U.S., recently announced that it’s reducing the amount of advertising per hour on its stations (from approximately 24 minutes to approximately 12).

That’s because nobody’s listening any more. A Canadian study found a drop of 25% in radio-listening time by Canadian teens (said one, “[On the radio] there are too many commercials . . . with the computer, you can download whatever you want, and you don’t have to listen to what you don’t want.”).

Duh. Has anyone noticed that subscribers to satellite radio stations (XM and Sirius) have doubled since the start of the year? XM now claims more than 2 million subscribers, and Sirius has more than 500,000 – watch for those numbers to grow.

And more to the point, online music services have taken off. Microsoft is said to be planning an online music service to compete with Apple’s iTunes as early as this month. Music industry experts predict that as much as one-third of all music will be delivered via the ‘Net in a few years, and already are pronouncing the death of CDs.

Bottom line: The inevitable will happen. All the lawsuits in the world can’t save the RIAA from online distribution models. With a little bit of luck, other information-distribution industries will follow suit – creating a world in which content creators, consumers and distributors all win.