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December 16, 2011

May the farce be with you

Filed under: Apple,Music Industry,Technology — Peter Arnold

RAMESES IIWall Street Journal reporter Jeffrey Trachtenberg’s article this week on e-book pricing is a depressing reminder that Karl Marx was right: History does repeat itself, first as tragedy and then as farce.  Trachtenberg’s focus is on the inflated pricing structure creeping into e-book pricing but if you change the topic from books to music, his article could probably have appeared in 1998.

To put this in perspective, here’s a thought worth at least passing consideration: How did the music industry, with all its entrenched legal and financial heft among the major labels during the 1980s and 1990s, manage to be dominated by a computer company?  Call it arrogance in the sense that the guiding philosophy for too long involved a refusal to give consumers what they were clamoring for.  Meanwhile, the only pro-active strategy seemed to be launching lawsuits against tweens and grannies.

Remember Liquid Audio?  No?  OK, here goes: It started in the mid-1990s as a music download service and had the potential to succeed, driving home broadband adoption in the process.  Reportedly Steve Jobs nosed around the company early on, considering purchasing it as a way to jumpstart Apple’s nascent moves into the music industry.

But Liquid Audio never caught on because (gee, this is shocking) it could never secure sufficient licensing agreements with the music labels.  Meanwhile, even as two-hour movies on DVD were selling everywhere for $14, the music industry kept insisting that this same price was reasonable for a 45-minute audio disc with perhaps eight songs – in other words, the same product as Elvis Presley’s 1956 Christmas Album albeit in a more technologically sophisticated format.

Back to e-Books.  With the music industry’s pricing arrogance serving as a case study in how to anger consumers, the publishing conglomerate has a serious need for entry level marketing help.  This story has been told before and the ending is inevitable:

Round the decay
Of that colossal wreck, boundless and bare
The lone and level sands stretch far away
.