I’ve been meaning to post this great piece from the NY Times (for a login/password, use bugmenot) about Rick Rubin’s latest venture: co-head of Columbia Records. The article covers, among other topics, Rubin’s views on the music industry and, essentially, his endorsement of a proposal on how to “save” it with a subscription-based business model. The basic premise is that customers would pay a monthly fee for access to a downloadable catalogue of music. However, in order for this model to be efficient, all the major labels must form a partnership and agree on a number of critical issues such as pricing, cost allocation, profit sharing, etc. Even if a miracle of this magnitude takes place, I’m not too sure a subscription-based model would even pan out simply because, for the past several years, downloading music for free has permeated American culture to the point where a fan’s first instinct when wanting to hear new music is not to buy it from the local retail store or to check it out on iTunes but to search online for a way to get the product for free. At this point, I don’t know if anything can stop or even deter the bootlegging of music online. Link
“Columbia is stuck in the dark ages. I have great confidence that we will have the best record company in the industry, but the reality is, in today’s world, we might have the best dinosaur. Until a new model is agreed upon and rolling, we can be the best at the existing paradigm, but until the paradigm shifts, it’s going to be a declining business. This model is done.”
To combat the devastating impact of file sharing, he, like others in the music business (Doug Morris and Jimmy Iovine at Universal, for instance), says that the future of the industry is a subscription model, much like paid cable on a television set. “You would subscribe to music…you’d pay, say, $19.95 a month, and the music will come anywhere you’d like. In this new world, there will be a virtual library that will be accessible from your car, from your cellphone, from your computer, from your television. Anywhere. The iPod will be obsolete, but there would be a Walkman-like device you could plug into speakers at home. You’ll say, ‘Today I want to listen to … Simon and Garfunkel,’ and there they are. The service can have demos, bootlegs, concerts, whatever context the artist wants to put out. And once that model is put into place, the industry will grow 10 times the size it is now.”
“Either all the record companies will get together or the industry will fall apart and someone like Microsoft will come in and buy one of the companies at wholesale and do what needs to be done. The future technology companies will either wait for the record companies to smarten up, or they’ll let them sink until they can buy them for 10 cents on the dollar and own the whole thing.”
