I don’t know that retailer costs would disappear entirely. Even with existing internet stores, certain percentages are consumed by the retailer.

Of all the changes present, the manufacturers are the ones that will be completely obsolete. Those folks need to find a different line of work, and fast.

The areas that should get more attention, or a larger percentage, IMO, would be marketing and A & R. W/ all the options now available to the general, internet-wielding public, how they hear of the music, and how it is marketed will be a huge difference-maker. A & R dedication will be needed to help develop specific music markets. As w/ any shift in business model, certain characteristics will be prevalent. For years, major labels were an oligopoly- the market is now shifting to a near-pure competition state. A & R will play a crucial role in determining niche markets for smaller labels, and how that label develops a loyal fanbase by consistently delivering quality, accurately-grouped music is crucial.

However, if this discussion is about “major” labels, it is moot, because their existence is waining, and their survival in this new-found market is impossible.

Great reading all the posts, though.

It is also my understanding that US governments are “providing” computer and internet access through libraries and similar locations where computers and connections can be pooled for economic benefit. Since this doesn’t satisfy you, I think this wiould be a good that is underproduced.

I happen to live in a rural part of North Carolina that doesn’t have high speed internet access, other than through satellite hook-ups (if those are still around, I haven’t looked), since companies don’t believe they can make enough of a profit laying that much line for so few people. The local governments (county, towns, etc.) are looking to subsidize a fiber optic line through the area so that we aren’t left completely behind. That may fall under the kind of program that you’re looking for. If so, it’s not an unusual problem.

Another program that makes you wonder about the need are government-run Wi-Fi networks. Parks and sections of downtown Greensboro (NC) have free access to a Wi-Fi network paid for by the city. Of course, that means it’s not truly free (where did the city get the money?), and it means that only people with laptops and Wi-Fi cards actually get to use the service. Other cities have similar programs.

This bothers people who would prefer the city use tax money to help out the poor, but (in Greensboro’s case) I think the service makes some sense because it is meant to attract yuppies and high-tech businesses (and their tax dollars). I haven’t seen the balance sheet involved, so I don’t know if this is a loss-leader or a reasonable idea. That’s probably not the kind of program you were wondering about, but it is a “no-cost internet connection,” although it requires the kind of equipment poorer people wouldn’t have.

I am looking at if from a very narrow perspective… as a librarian. As a consumer, it sounds great to me.

I hope the price of CDs will stay the same, or will drop if this model of distribution is adopted.

Is there a movement to put computers into the hands of everyone, and to provide extremely cheap, or no cost, internet connections? We have enough of an information divide as it is. The more services we provide by the internet, the more we widen the gulf between the poor and everyone else.

There are a number of slices of the pie that are ripe for redistribution. For example, what is overhead? Isn’t A&R the same as Recording artist? Regardless, this will create interesting discussion within the recording industry and shortly thereafter within the movie industry.

Today a CD costs something like 75 cents to mass-produce (the packaging costs more than that). The rest of the $13 or $15 your library pays goes to somebody’s profit (about half to the store you buy it from). Let’s assume that online distribution of music leads to reduced CD manufacturing (so that the same fixed costs are spread among fewer CDs), and ends up doubling the cost of CD manufacturing (so it $1.50 to make each CD).

If large numbers of people get their music online, will record companies dare to double the price of CDs in order to get back that extra 75 cents? One reason people aren’t buying as many CDs today is that a movie on DVD costs the same as a handful of decent songs on a CD. Doubling the price of CDs would simply price them out of the market. Record companies aren’t used to thinking this way, because they aren’t used to competition, but I’m sure they’ll wake up some day.

So, it seems to me that companies will instead lower their prices in the face of competition, and find ways to cut costs and accept smaller profit margins. Eventually the price of a CD will be no more than what the average consumer is willing to spend on a blank CD plus a markup for burning the music. Distributors won’t be out in the cold, by the way, since blank CDs are profitably distributed through the same channels as music CDs.

Collin’s idea of using USB sticks is (in my opinion) brilliant. As long as patrons without computers exist, however, somebody will think of a way to make money off them by selling CDs, and your library will be able to find those CDs.

Can USB sticks be locked so that the information on them won’t be erased or altered?

Time spent on burning cds is usually just time spent on putting a blank disc in the burner, and clicking a couple of buttons.

However, I can imagine that that is still a lot of time.

Perhaps another option would be to lend USB memory sticks with music on them to your patrons.

I’m a librarian for a medium sized public library, and I’m trying to envision what this would look like for us. If we were to continue buying “hard copies” wouldn’t the price rise if fewer CDs are manufactured in the traditional manor? Or, and I may be answering my own question here, would the library be required to buy a CD burner and burn their own CDs. If the cost if sufficiently less, then I can see some advantage. If the price isn’t sufficiently less, however, staff time spent in burning CDs may end up costing us more.

Secondly, how would this scenario work with those who can’t afford to have computers and an internet hook-up. We get quite a few patrons in our library that can’t afford their own computer, or, we get some of those who just are not technologically savvy and don’t wish to learn how to use one. It seems to me that they are potentially being left out in the cold? Thanks. robert

In your example, it’s the IT people who will replace the record companies. In that case, the record companies will have to transform themselves into IT people. Some of this transformation is underway, but not much, as far as I can tell.

I found it remarkable that Metallica is bringing out registrations of their concerts as MP3 and FLACs as produced nightly by the band’s own sound engineers. It seems to me that if they offer this as a service to other bands, the record companies might be in a whole lot more trouble than those record companies think they are in now with file sharing.

After all, a band might just decide to bring out a recording of a particularly good show as their next CD, rather than go into the studios. A lot of bands feel they perform better in front of an audience.