Fun_People Archive
19 May
Napster debate

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From: Peter Langston <psl>
Date: Fri, 19 May 100 14:23:11 -0700
To: Fun_People
Precedence: bulk
Subject: Napster debate

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Forwarded-by: Joe Weihe <joeweihe@home.com>
From: mcuban@broadcast.com (Mark Cuban)
Subject: Re: [WC] How Popular is Napster?

I love this napster debate because it is so meaningless. Napster is not
the slightest problem for anyone. There are so many different ways to get
digital copies of content from point a to b. Or from multipoint to
multipoint.

The real issue is the battle by music labels to maintain business models
the way they are. You see the record labels have one HUGE Problem. They
dont generate demand for their artists. Radio stations generate 80 plus
percent of the demand, the artists themselves pretty much generate the
rest. The net generates a miniscule amount of demand for artists and maybe
the labels generate the rest.

Since the record labels don't generate demand, all they can do is control
physical aspects of fullfillment of demand. They can create the masters,
then  CDs/Tapes, forecast demand, ship product, take returns, pay endcap
and markdown money to retailers creating the mutual dependency with
retailers and most importantly, control the dollars distributed with money
exchanged at each step, including how much the artists get.

If you look at the typical CD from a popular artist, they make make $1 or
$2 per CD sold. The label makes the same or a little more . Usually. Given
that an artist typically never releases more than 1 CD per year, and people
usually only buy one of any given CD for about $15,  the best of the best
artists make about $2 per person per year. Thats about what, 16 plus cents
per month per fan. Not very much.

Now does anyone out there think there might be a better way for an artist
to make more than 16-20 cents per month from its fans ? I certainly do.
Remove all the physical aspect of music and video , and make it so that
rather than buying a single or a CD, artists deliver music in a manner that
maximizes their revenues/profits and optimizes the amount of content that
consumers receive.

No downloaded singles. No downloaded 10 song groups called CDs. Its going
to be all that you can eat.  Instead of paying $15 bucks for a CD from your
favorite band, you pay $15 per year TO your favorite band, and they allow
you to download 100% of the music they create now , from their libraries,
and to new music for as long as you subscribe. The artists make incredibly
more amounts of money. They can release music they want, when they want,
for whatever reason they way. They can cut side deals with the radio
stations that say no ascap/bmi/Riaa fees when you play my music if you give
my website url (smart bands will have their Urls be their names like
Davidbowie.com, etc)Just play it so I can sell more subscribers and make
tons more money.

Napster gives a glimpse of the future to record companies and scares the
hell out of them. They arent afraid of the piracy issues. Piracy is just
a great thing to get covered in the press and scare the artists with. They
are afraid of the control issues. Their business models are going to be
blown up over the next few years and there really isnt anything they can
do to stop it except pull out the old FUD factor game, and that is just a
short term game.

Mark Cuban
co-founder broadcast.com
formerly of Y!

© 2000 Peter Langston