Saturday, April 30, 2005

Test Of The Dash Blog Widget

If this works, I am going to be pretty happy.

I just installed a new Widget from Apple's Widget download page, called Dash Blog. The claim is that I can use this little window in Dashboard, on my OS X 10.4 Tiger equipped Mac, to quickly add posts here to the Technically True blog.

We'll see.

If true, I will be in love. And, the content quotient here should skyrocket.

Update June 11th: Yep. DashBlog is terrific. It's changed (and hugely simplified) the way I approach my blog. It works 100% reliably. And, I 100% reccommend it to any other Blogger system user!

Thursday, April 07, 2005

DRM Hearing Not The Only Apple No-Show

Much has been written the past couple of days about Apple's absence from a congressional hearing on the idea of legislating only one "approved" DRM scheme for web music downloads, and Apple's failure to appear there. Instead of beating that same drum, I want to make a few comments about another recent event Apple chose to miss.

This past Tuesday, April 5th, a large conference was held in Nashville, Tennessee with the announced intent of bringing together leaders from the digital music technology world with leaders of the music industry. Called the "Digital Summit 2005," the event was very professionally promoted, and was hosted at Belmont University, one of the nation's leading music industry business colleges. I attended, so, this is a first-hand report.

No Discussion. Just Commercials.

The day started with an encouraging welcome speech by Nashville's mayor, Bill Purcell. But, the next portion of the program told the tale of what would be the norm for the remainder of the day. The first segment was a half-hour commercial for MSN Music, delivered with artificial enthusiasm by Ms. Sarah Lefko, MSN Music Product Manager. While about 400 music industry attendees (who had paid $150 apiece to be there) sat in the bleachers, Ms. Lefko simply sat and sang the praises of Microsoft's unsuccessful music download service. At the end of her promo, the floor was opened to questions. The only question from the audience was, "Will songs from MSN Music play on my Dell DJ?"

The rest of the day was filled with small panels talking about music and wireless technologies from the stage, or other individual speakers, delivering self-serving commercials similarly to Ms. Lesko. There were execs from a variety of second tier tech operations (Liquid Digital, Virgin Digital, MusicNet, and others...), and, Napster's Chris Gorog highlighted the afternoon with his own 50-minute commercial about the amazingness of Napster. No substantive audience interaction took place all day. And, the 'luminaries' who comprised the expert panels and gave the various speeches were all wisked away side-stage, never bothering to mingle with the paying attendees.

What A Wasted Opportunity

I glanced at a lot of the name badges being worn by attendees through the course of the day. The promoters succeeded: The place was full of real, high level music company management and execs. And, by lunch break, most of them were simply looking tired of the entire charade. Many simply left.

There were iPods and iPod shuffles in plentitude. But, with no Apple representation there, the messages from the stage rang hollow, all day. It was obvious that the crowd was wondering, "Who are these people, and why should we care what they say?" I know that was the question in my mind.

So, a rare gathering of tech and music leaders has come and gone, with no real conversation among the parties, and no new information presented from the stage. And, no Apple.

Lunch was okay. So, perhaps the $150 wasn't a total waste. But, even so, I will not be going to the 2006 version of "Digital Summit." I can pick up lunch at McDonalds for $6.00.

Digital Music: Fixing The Problems (Part 2)

Yesterday, I posed the question, "Just what is the benefit to the record labels, two-years after having listened to and adopted Steve Jobs' technology cure?" Today, I'll look at the answer.

I'll drop my bomb, first, instead of contriving some sort of suspenseful writing method. And, here it is. Steve walked a cure around the music industry a couple of years ago to a problem that existed nowhere but in the paranoid minds of the record label executives. The supposed problem was that freely distributed electronic song files were undermining sales of CD's. That has never been the case, and is still not the case. So, the entire iTunes/iPod "solution," as well as the remaining digital rights managed download service "solutions" are completely specious, at best. And, at worst, their existence has made the real problems facing the record industry even more difficult to solve.

The Real Music Industry Problem

I will ask you to take a few minutes and read a report prepared by a spinoff group of the Stanford Research Institute, from July, 2002. Not only is this a terrifically rational exposition of the state of music industry sales, it happens to correspond pretty well to the very time that Steve Jobs was about to undertake his famous "lap around the music industry."

Finished reading that report? Good... now we can talk.

Digging To The Root

It should be clear to any student of the music industry's success with CD sales over the past 20-years that the main factors driving down CD music sales have actually been (A) shifting demographics in the buyer base, and (B) other forms of entertainment media. Against those two huge factors, the minor blip that may or may not have resulted from the emergence of online music file sharing is insignificant.

Over the past decade, music buyers have gotten older, and, DVD movies have appeared on the market. The DVD format first appeared in 1999, and, the DVD movie market began to blossom in 2000 and 2001, with both sales and rentals of DVD movies kicking into high gear during that period.

Here is a telling snapshot of the video sales and rental industry from July, 2002, that is not only indicative of information that Steve Jobs also then had available. But, it is also, again, contemporary with his planning for his walk around the music industry. Video sales and rentals were burgeoning. And, 2001 was the first year that the DVD outsold the venerable VHS tape.

People only have a certain portion of their income that they are willing to spend on personal entertainment. And, it is to that slice of a person's wallet that all forms of entertainment media must compete with one another. It is clear that the DVD movie has brought some incredible pressure to bear on the music CD, over the past several years.

One last piece of data I want to share is about the game console market's performance during this same time period. Recall the music sales figures showing a decline in younger buyers over the past five years? It seems that much of that wallet slice of purchases has been shifting from CDs to games among these younger buyers. They have not "disappeared." They are just spending more money on games, and less money on CDs.

The root of the record labels' problem in sustaining revenue growth over the past few years has much more to do with increasing competition from movies and games than from any lost sales to online song downloads. Steve Jobs knew this when he went and pitched the music industry on his iTunes plan. But, he also knew that the lure of an easy, quick fix will always sell more quickly than a complex plan involving hard work and major change. So, he succeeded in leveraging the fear then widespread in the record label offices into a quick deal to launch iTunes.

That's The Problem. What's The Solution?

In part three of this series, I will offer a few real solutions to the real problems facing the major record labels. And, as I suggested in part one, much of that material can be drawn directly form the very media successes that are pressuring CD sales: movies and games.

In summary, the problem with flat CD music sales is not a technology problem, and, it is certainly not a problem created by internet music downloads. It is a simple problem of increasing competition from other entertainment media for those scarce consumer dollars. For the record industry to win back customers, it is going to have to face the real enemy in this scenario, and get to work on making a CD purchase more attractive than a DVD or game cartridge purchase. In my next installment, I'll look at some ways to do that.

Tuesday, April 05, 2005

Digital Music: Fixing The Problems (Part 1)

Anybody with a sense of human nature knows that people tend to suggest solutions to problems that are from their own perspective, and, are from their own selfish best interest. A gardener will recommend that you need more landscaping. A plastic surgeon will suggest a slight nose job, "to improve your profile." A tire shop will notice worn treads quicker than anybody else... Can you say, "New tires wouldn't hurt, ma'am."?

My point?

When the music industry went seeking solutions to their fears about the impact digital music distribution would have on their revenue, they turned to technology companies for those answers. Tech companies recommended tech answers.

What if the music industry had asked for a business solution, instead of a technology solution. What answers would that question reveal? What if the "problem" of potential lost revenue from digital music isn't a tech issue at all, but is a business issue?

The Root Of The Digital Music Problem

Music industry leaders made a mistake 2-years ago. They actually started listening to Steve Jobs. Mr. Jobs saw a group of industry executives perplexed by a problem, a problem that scared them because they had no convincing solutions. And, into that group of fear-motivated listeners, he carried a convincing, compelling answer, and carried it with evangelical ferver. It was a technology answer, because, technology is what Steve and Apple do for a living. But, it was also fools gold.

The iTunes Music Store and iPod have made a shiny first impression, with a glittering and mightily impressive early success. But, recall, that the iTunes Music Store was promoted to the music industry as the solution to their problem of losing revenue to digital music. Just how well has iTunes proven to be the answer to that problem?

Frankly, the iTunes Music Store, and the other legal download services have done nothing to solve the basic challenges that digital music presents to the music industry. This entire branch of commerce has been little more than a distraction from the real underlying issues raised by digital music. And, for two years, the music industry has sat in idle, rather than continue to seek fundamental answers to some very pressing questions.

While legal downloads are good for iTunes, MSN Music, Napster, and the rest, they do nothing to help the music industry solve the core problems created by digital music. P2P systems still exist. CD sales are still flat. Industry revenue is still flat. Where is that magic cure promised by Steve Jobs, during his famous lap around the music industry?

Fix The Business Model

Many of the answers to the music industry's digital music challenges can be found right across the street, within the movie industry. Surprisingly, the answers are business method answers, not technology answers.

In my next installment, I will discuss some of the basic, proven, solutions to declining revenue in a digital marketplace, and, how the music industry can not only stop revenue declines, but actually increase gross sales and profits by adopting them.