A Fireside Chat With Producer John Snyder
So the point of that is that when people are given more choices, more things are sold. The record business has been engaging in the bait and switch game for too long now. They bait you with a single on the radio that they paid three hundred thousand dollars to get on the radio and then they switch it when you go to the record store and want to buy it. Then you have to buy an eighteen dollar thing that you don't want and can't afford.
Also, the record companies just settled a price fixing suit saying that they conspired to inflate prices. So are they surprised that people don't want to pay that inflated price that they conspired to fix? You can't have it both ways. On top of that, you have AOL, who is betting the farm on broadband distribution and they own Warner Bros. music. So Warner Bros. is complaining about people downloading their records when their boss company is providing the service that allows that to happen. So the people who run Time Warner, they know this.
Sony has a similar sort of conflict. They share the patent with the CD. There were five hundred million blank CDs sold last year. A high percentage of those are going to put downloaded music on. They are also a major manufacturer of CD write-able drives. That is how the music is being put on the CDs. So you can't have it both ways. That is the conflict that companies are going through. You have divisions of Sony suing other divisions of Sony. It is craziness out there.
FJ: With current trends prevailing, will the music industry be able to sustain itself in ten years?
JS: Only if they embrace the internet. The future of music is the internet. They are not going to continue to sell this out of date medium called the CD. That is a done deal. It is just a matter of time. The way it should be is that ISP should pay a service, they should be taxed just like radio stations and TV stations are taxed by BMI as a levy and they pay into that pool and the publishers and writers get paid. ISP should pay just like a radio station pays.
On top of that, the major companies should agree among themselves with publishers, writers, and artists to a service that people can go to and have whatever they want for a set $9.95 a month. If you were able to get whatever you wanted, anytime day or night for $9.95 or even $19.95, you might consider it. Especially if there was a service connected to it that you could go to and say that you are having a party and want a James Brown record that never sits down and they recommend twelve songs and you pay five dollars for it. That is a good deal and everybody's happy.
They have to adapt to the internet and they are not doing it. They are trying. EMI just started an online service in Europe that shows promise because it is not restricted and it is reasonable fee. Sony is charging $1.49 a track. There is nobody that is going to do that. You can't charge too much. If they had cooped Napster in the first place and charged ten cents a song, they would be billions of dollars ahead of the game. But instead, they shut it down. So record companies are not rational and they are not too advanced in technology.
My CDs are encoded with MP3s. I want you to trade my songs. I also encode the website, so go to the website and make a contribution to PayPal. You use the music, give us a dollar. Give us whatever you want and if you don't want to do that, buy something and here is what we are selling you. We are going to give you a four hour DVD and a CD and it is going to be less money than a CD that the majors are charging. You get more for less.
Amazon has its biggest quarter last year by increasing their product line to include clothes and cutting shipping costs. More service, less cost and it worked. The record business needs to look at those kinds of models. I think what is really going to happen is they are going to become software companies and I think an example of that is Apple and their talks with Universal to buy Universal music. Here comes a computer company that is going to buy content because they want to use it on the internet and in their MP3 players.
FJ: It is not as if music execs are these eighty year olds, a foot in the grave, some of these cats are younger than I am. One would think they would be hip to the internet by now.
JS: I don't think that they are really internet guys. I think most of them still have their secretaries print out their emails. I don't really think that they are technology savvy. It is the 20 year-olds that is the full blown computer generation. The 35 year-olds are a little late to the game and they have to pick that up.
It is like teaching French to a 3 year-old. It is a lot easier than teaching it to a 50 year-old. The kids that grew up with it, they don't think about it any other way. If you are still reading a newspaper, you're analog. My kid wouldn't touch a newspaper, but he reads more news than I do. It is going to change when the generation changes.