The battle between the Recording Industry Association of America and file-sharing companies, like the now-defunct Napster and the new-kid-on-the-block Kazaa, has recently heated up again.
I've weighed in on the issue of mp3 file sharing before, and I don't want to sound like a broken record, but come on!
Record Industry has asserted the cause of declining sales has been the massive increase in mp3 file sharing. Let's ignore for a moment the glaring fact that sales are declining in almost all areas of the consumer market and assume file sharing is the one and only cause of dropping album sales.
If this is the case, then Record Industry still has only one group to blame: themselves. If this sounds kind of contradictory, let me try and elucidate my point by fumbling through a very elementary look at competition.
Capitalism is such an interesting entity to behold. Adam Smith described the economy as an entity that could live entirely on its own-a living, breathing animal that obeyed the same rules Darwin set out for evolution: adapt or die.
It's not absurd to look at capitalism in terms of Darwinism. In Darwin's model, if an animal was not adapting to its surroundings, it would be eaten. In Smith's world, if a company wasn't constantly streamlining its production, they would be made obsolete by companies that were.
What is unique about capitalism is it's not nature that decides whether a company lives or dies; it's us, the consumers. We choose the products we think best suit our needs and consumption habits-and those products we don't like end up extinct (or at least bankrupt). The process ensures consumers that they will end up with the best possible product.
Common sense would dictate the record industry would then want to sign bands that create the best music. This isn't the case, however. The problem with bands that are actually talented and actually have songwriting abilities is they take a great deal of time to turn out material. And time, as any record executive would tell you, is money, baby. It's just not efficient to have a band or artist put out an album once every couple of years. What makes more money: a Britney Spears album every year or a good one every three years?
Right now, you should be wondering, "Well, if the albums she puts out are not that great, why do people buy them?" Like I said before, competition breeds a more efficient product, right?
Let's look back at Darwin for a minute. What's interesting about evolution is that being the fittest does not always mean being the "strongest." That's a common misconception about evolution. Sometimes it's not beneficial to an animal to be the fastest or the strongest. Look at the do-do bird. It evolved to be fat and slow. The only reason it became extinct was because it was an animal that was foreign to its natural habitat.
Sometimes an animal adapts a particular feature that helps it survive-an extra long neck to reach foliage, a change in body color to blend in with surroundings or flowering plants developing toxins to combat insects. In all these cases, the animal adapted in order to comply with nature. Since in business, the consumer is the incarnation of nature, how does the record industry adapt in order to comply with our tastes? How does the record industry keep you buying albums when the quality is not what it could be?
You have to give the industry credit here. Instead of adapting to its surroundings, it has made its surroundings adapt to it. The industry realized that it's not necessary to have a great album to sell records; all you need is one good song.
Ever since rock 'n' roll took on a radio-friendly format, the focus of the music industry has been on creating a "hit single." Who cares if the whole album is good when you can sell people a record based on how much they like just one song? This is efficiency in the finest. Spend a year focusing on writing one or two singles, and hire some monkey to write fluff songs to fill up the rest of the album. This way, you can put out an album every year and maximize your profits.
You could argue that if someone just wanted a CD for a single, then they could just buy the single CD. But the problem with this is what if you buy the single and then the band puts out another hit single in the next month? Then you have to either buy the next single and spend as much as you would have on the whole CD, or you can just buy the CD and end up spending even more money. Either way, the industry has a lot of your cash for just one or two songs. Basically, the industry's reliance on the "hit single" was a flawless formula.
This whole system was working perfectly until September 1999 when Napster spread through college campuses like a plague of locusts. And soon after, it spread to music listeners all over the world. Suddenly and without warning, people were able to simply download that "hit single" with the click of a mouse-and worst of all, it was free! Napster burst onto the scene just like a foreign animal in an unnatural setting-and this animal had teeth. On its heels, RIAA was forced to use its first natural defense against unnatural animals: copyright laws.
Napster was unable to defend itself and died off, but its species would not be so easily defeated. Like the zebra herd evading the lion, there is safety in numbers. The lion may be able to catch the zebra that strays too far from the herd, but it can't possibly catch the whole pack.
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