Welcome
This is the weblog of three Technology and Policy students of the Eindhoven University of Technology. The blog is designed to discuss the topic of Legal downloading and it’s related policy issues.
Please feel free to comment!
Albert, Jurgen and Jos
Since distribution of music files has become more digital over the years, the music industry has lost revenues due to illegal filesharing. It is realized this trend has to be stopped.
There is a new approach: an extra tax on internet access, to be used to support legal downloading.
Unlike other taxing methods supporting the music industry, this one can’t be worked around and therefore has a high change of succeeding.
Wrap up policy recommendations
Research Question:
If the opportunity of legal downloading is offered, can it be made so attractive to end users that they abandon their illegal activities in order to solve the problems artists and the music industry are currently facing? Which technology policy measures should be considered in order to deal with this problem?
The recommendations of this research project are based on several actor opinions and attitudes towards the problem of illegal downloading. In order to get a clear picture of the problem at hand, we used both the multi level perspective model by Frank Geels and the Structure Conduct Performance Model. The policy recommendation addresses the problem of illegal downloading.
We think the government should intervene for several reasons:
- The government has an obligation to make sure the law is obeyed.
- The government is an independent actor.
- The government is powerful to enforce the intervention.
- The government already applies similar measures, but without success.
The policy intervention chosen can be regarded as an incremental one. Why incremental and not radical? Radical intervention has appeared to be very difficult. Examples are France were a radical intervention of legalizing file sharing was revoked by European legislation15. Incremental intervention is less difficult to implement.
Our intervention is an extension of already implemented Dutch policy, namely to compensate the lost revenues of record companies and artist by putting a tax on writable CDs and DVDs. The problem with these taxes is that they are evaded massively. For this reason we have chosen a policy that cannot be evaded, namely a tax on internet access.
The tax revenues are committed to the stimulation of legal downloading in order to create an appealing alternative for illegal downloading. Critical mass has not been reached yet when it comes to legal downloading. Downloaders have indicated they have problems with legal downloading for several reasons:
- Paying anonymously is impossible
- Limited content offering
- Poor audio quality differentiation
These issues can be addressed by are policy intervention plan, the policy focuses on lifting barriers of legal downloading, informing people about legal possibilities and as a consequence discourages illegal downloading.
By using our policy intervention the tax revenues don’t go directly to the music industry, but are used to address the problem of illegal downloading by offering an attractive legal alternative. Eventually record companies and artists will earn their money from fees generated by legal music downloads. We think this policy intervention is realistic, and therefore the answer to the research question is yes, with our intervention we could address the problem of illegal downloading.
Further research has to be performed to determine the exact tax level, and how long this intervention has to be applied in order to reach the critical mass .
For a complete analysis and elaboration of our policy intervention recommendations:
Best regards,
Albert, Jurgen and Jos
As mentioned, our scope is limited to the Dutch situation. In the Netherlands, world players (MSN, iTunes, eMusic and mp3tunes) are active as well, but a respectable lot of Dutch competitors, aiming for the Dutch market are present. A list of market players can be viewed at: market players
Since this is a dynamic, upcoming market, the shares are not available unfortunately.
Nevertheless, since this November, KPN claims to have become the market leader by means of it service: Music Stream, which is exploited by its subsidiaries Planet, XS4ALL and ‘Het Net’. You can ask yourself whether it is profitable for KPN to offer this legal downloading service, since this is offered by means of tying to related services, such as ISP, phone and digital television. For example, this service is available to everyone, yet members that have taken a subscription for internet access, receive a free music download voucher every month. By the way, this position is achieved because they offer two types of services. One offered a very cheap download of music that can not be copied to another device and only be listened on the PC for ten cents. These downloads have become unuseable, since record companies have retreated.
The differences between the several competitors is mainly on price, the music offered and payment methods. If you look at the amount of music offered there is a significant distance between the largest and the smallest (200.000 against 1.000.000 from iTunes) provider. For a comparing overview of competitors, you can look at:
overview
It’s hard to speak of timelags within this market because of the limited time span of the phenomenon of legal downloading. Yet we can state that iTunes clearly had a first mover advantage, since they have profited (and still do) from their former temporal monopoly.
In order to determine more specifically the competition within this market, the five forces model of Michael Porter porter five forces model would be very applicable. Nevertheless, our main focus is on how to stimulate the market to develop more. Since this market as a whole suffers from a large exogenous force, namely the illegal downloading, in essence the predecessor of legal downloading, we try to develop an intervention that copes with this problem. Therefore in order to stimulate the rise of the legal downloading market, the main social key issue to solved is the problem of illegal downloading.
The problem of illegal downloading is related to the way music is distributed. We investigate the problem of illegal downloading further by performing a socio-technical analysis with ‘music distribution’ as the patchwork of regimes.
Multi-level perspective model as an analytical tool (a small introduction for those of you who are not familiar with it)
The concept of a socio-technical regime is applied in the multi-level perspective model as described by Geels. The idea is that long-term technological change can be understood by making a distinction between several levels of which the regime is one. The regime level is defined by a rule-set for several actors and their social networks, embedded in artefacts and infrastructures.
Below and above the regime level niches and landscape can be distinguished. Niches are shielded places from which parts of the regime can be changed whereas the landscape contains external, hard to change factors that can influence both regime and niche level.
The multi-level perspective demonstrates that relations between the different levels can influence the direction a technology is going.
Regimes are considered to be stable. Therefore it is interesting to find out how they can be changed. This can take place at the regime level itself, from the niche level, from the landscape level and by a combination.
As said before, the regime to be investigated is music distribution. Since digitizing made it possible to make exact copies of original copyrighted material, the societal problem of illegal downloading and sharing of music files emerged.
In the beginning audio files were large. Distribution via the internet took a lot of time. This problem was solved in two ways: on the one hand broadband internet became a commodity good, on the other hand the sizes of files got reduced by the application of audio compression standards.
The last decade digital replication of music has become available for a large public. Audio compression standards have been improved, leading to smaller files which are easier to distribute, even via the internet. The internet itself has become a true alternative for conventional distribution methods because of the high degree of broadband penetration and by the fact access speeds are still being increased.
Description of relevant actors
In the current situation six relevant actor groups can be distinguished, as displayed in the next picture.
1 Music industry
This group is divided into artists, both established and new, record producers, conventional record stores and internet music stores.
2 Scientific community
In this group are the developers of audio compression standards.
3 File sharing facilitating companies
Examples KaZaa and usenet providers.
4 End users
Not only consumers but also professional like radio stations and organizers of music events.
5 Internet providers
Internet providers who offer an important part of the infrastructure were music distribution is based on nowadays.
6 Regulatory institutions
This group is divided into common regulators like the national government and the EU, and regulators especially for the music industry like BREIN, BIG and Buma Stemra.
The attitude of these actor groups, and even within these groups, towards the problem of illegal downloading and sharing of music, differs. To get a balanced view not only the attitude towards illegal downloading but also towards the alternative, legal downloading, is reviewed.
1 Music industry
Unknown artists want to become known. Both legal and illegal downloading offer a solution. Even legally offering your own music for free on a website is an option. Established artists, familiar with the amounts of money colleagues earned before illegal downloading existed, regard illegal downloading as a threat and support legal downloading. The same is valid for record producers: illegal downloading causes lost revenues, legal downloading does not. Managers of conventional record stores oppose any kind of downloading, companies offer legal downloading services are in favour of legal downloading but against illegal downloading.
2 Scientific community
Developers of audio compression standards have not done that to facilitate illegal downloading. The technology is offered, that is all. This actor group does not take a position towards the phenomenon of illegal downloading. Indirectly they developed an instrument for the emergence of illegal downloading. However, by the additional features of modern compression standards like Digital Rights Management (DRM) and digital watermarking they help the music industry to limit the consequences of this problem.
3 File sharing facilitating companies
Examples like KaZaa are officially against illegal behaviour.
You should share your holiday pictures via the internet, not copyrighted music files. Therefore this actor group favours legal downloading but its opinion on illegal downloading is not completely clear since many files distributed using their software is not legal.
4 End users
Professionals support legal downloading but give mixed signals about illegal downloading. An example is a national radio deejay, Giel Beelen, who publically promotes the use of file sharing software to acquire a particular song he just played. Consumers show a very diverse preferences, both for legal and illegal downloading. An ignorant group does not realize illegal downloading is wrong or that legal downloading exists. Rebellious consumers like to break the law and have the opinion artists make too much money. ‘What is the problem for the music industry if I download this song illegally? I would not have bought it otherwise’ is an often heard argument. A third group of consumers regards illegal downloading as stealing and is in favour of legal downloading.
5 Internet providers
As an important infrastructure supporting actor they favour legal downloading but tolerate illegal downloading by not closing down application-specific ports. The first provider taking such measures will undoubtedly lose customers who do not accept to be limited in their internet access.
6 Regulatory institutions
Here the attitude is clear, not only for common regulators but also those directly related to the music industry: illegal downloading should end immediately whereas legal downloading should be promoted.
An overview of the actor groups’ attitudes is shown in the next picture.
Multi-level perspective model applied to illegal downloading in order to analyse the music distribution regime
The digital music distribution regime has become dominant due to successful niche development. At this level several techniques can be found that facilitate music distribution. Niche aggregation occurred when the idea of data compression was transformed to audio compression using psycho acoustic models. The same period audio compression standards became known to the public, large scale penetration of broadband internet took off and file sharing software became available. In fact a completely new infrastructure for illegal downloading and sharing of music became available. Did people share their music with their local friends in the past, in the digital era sharing partners do not have to be known and can be anywhere in the country or even all over the world. Niche cumulation of audio compression standards, broadband internet and filesharing software caused digital music distribution to become dominant over the still existing conventional distribution methods. The corresponding multi-level perspective model of the situation anno 2006 looks like this:
The picture shows that illegal downloading can be targeted by aiming at one of the facilitating technologies: audio compression technologies (Digital Rights Management and Digital Watermarking), suing companies that offer file sharing software and last but not least the internet providers. This supports the article by professor William W. Fisher we posted earlier on this weblog (March 27, 2006).
If you consider the fact that the other two technologies (Digital Rights Management and file sharing software) are already being targeted, the idea of trying to influence the internet access deserves to be investigated in detail.
With the results from this analysis it is possible to develop a technology policy intervention that might be appropriate to solve the problem of illegal downloading.
Reference list
Raven, R.P.J.M. (2004), Protocol for regime analysis, Eindhoven, August 26, 2004
Geels, F.W. (2002), Technological transitions as evolutionary reconfiguration processes: a multi-level perspective and a case-study, Research Policy, 31, p. 1257-1274
Pinch, T.J, Bijker, W.E. (1987), The social construction of facts and artifacts: or how the sociology of science and the sociology of technology might benefit each other, in Bijker, W.E. Huges, T.P., Pinch, T.J. (Eds.), The social construction of technological systems: new directions in the sociology and history of technology, MIT Press, Cambridge, MA: 17-50
(This article is very interesting because some people already thought about a possible ‘business model’ in order to solve the problems of illegal downloading. Please read the article and feel free to comment! )
By Andrew Orlowski in San Francisco
Published Sunday 1st February 2004 12:06 GMT
Analysis Imagine a world where music and movies could be freely exchanged online, where artists are recompensed and the labels don’t lose a cent, and where 12-year old girls need not fear harboring an MP3 of their favorite TV show theme tune on their PC.
All that could be yours for less than the price of a subscription to Napster: for less than $6 a month. Harvard University Professor Terry Fisher has completed the first comprehensive examination of various alternative models and the one we outline here offers such tantalizing social benefits, that even the most jaded sceptic ought to pay attention. Professor Fisher belongs to the school of forensic sceptics rather than the school of wide-eyed techno-utopians, and he’s spent three years trying to make the sums add up. We think it’s worth a look, and we think you ought to take a look too. (To make his task even more difficult, Fisher’s license model also takes on the additional onerous task of compensating Hollywood, too).
How does it work? Let’s look at the sums: what level of compensation do the labels, studios and artists need to make it worthwhile?
Fisher actually lays his philosophical armory down for us to inspect at a very early stage, and it’s thus. Economies have had a lot of trouble with public goods that are ‘nonrivalrous’ – if you use it you’re not depriving someone from access – and ‘nonexcludable’ – it’s actually hard to make them exclusive. Examples of the latter include roads, defense, and culture. It’s a real danger that if no one pays, then nothing gets done: the roads crumble, the country becomes vulnerable, and aspiring pop stars give up their dreams of one day snorting cocaine from an expensive prostitute’s thighs.
But our flippant illustration of the final example is not entirely accidental. Many artists forsake fame for fame’s sake – but the beauty of alternative reward models is that there’s no disincentive for them to become popular, either. To cite an example, when we’ve discussed flat fees before, someone usually writes in with some anguish to complain how this would only reward Michael Jackson for being popular. But what’s wrong with that? There was a time when he was very popular, and deservedly so.
So let’s start at an accountant’s year zero.
Calculating lost revenue
In the year 2000, the record labels earned $7 billion on retail sales of $13 billion. For the sake of argument, let’s assume that in the first year 20 per cent of retail sales were lost to unlimited copying. That’s $1.4 billion, although they’d save $210 million in manufacturing costs, and approximately $145 million in mechanical royalties. That brings the compensation to $1.045 billion for the recordings royalties and $138 million for songwriters, plus an amount for lost radio-related royalties.
For the movie industry, calculating the potential loss is extremely difficult. Firstly it’s hard to estimate how much the industry earns now from DVD and VCR sales and rentals, and cable and satellite deals. And it’s even harder to gauge the loss from file swapping. Even with the advent of Bitorrent, downloads are slow, and few have the patience or resources to find value in them compared to the availability on offer at plentiful late night retail outlets. Fisher reckons five per cent, rather than twenty per cent for the music business, of a $10 billion industry, or $479 million.
So combined, that’s $1.677 billion to keep the RIAA and the MPAA happy.
But of course that’s not all it would cost: the model requires an organization to calculate and distribute the royalties, performing the duties of ASCAP or BMI today. ASCAP reported that its 1998 administrative overhead was 16 per cent, so Fisher generously estimates 20 per cent. (It’s pretty generous, as we’ll see, because the digital overheads may actually be much lower). This takes – and bear with us, because it also generously throws in a 10 per cent charge for inflation between 2000 and 2004 – the net result to $2.306 billion.
So who pays?
Raising the money
If it was implemented as a regressive poll tax, with 87 million household filing IRS returns, each household would pay a mere $27 extra a year: a little over $2 a month, or 51 cents a week. That’s half the price of a single iTunes Music Store song.
That’s the most efficient way, with the lowest overheads.
However, any kind of income tax increase is obviously a hard sell, especially in God and Gubbment-fearing America. And there are many sound objections. Why should the poor subsidize the rich? Why, notes Fisher (who clearly must remember the culture wars of the early 1990s), should a proportion of the population which finds the entertainment products blasphemous be asked to subsidize their creators? And why should Net-free households want to subsidize the broadband users who are actually taking advantage of the system?
Fisher then exhaustively discusses four other options: taxing the playback devices and/or burners, levies on the physical media, levies on the delivery service, such as Kazaa, or on the Internet access point (your ISP). The latter is by far the largest: spending on broadband in the US in 2004 is estimated to be $16.4 billion. By contrast, blank media sales generate $2 billion in revenue. In total, these four categories gross $20.248 billion. And so to get our $2.3 billion to compensate artists, studios and labels would require an 11 per cent hike.
But what if it fell entirely on broadband users? Some might find the figure surprising: excluding all of the other penny taxes we’ve just mentioned, the cost will be $6 per broadband user per month. Um, is that all? Well, actually, yes it is.
So what do consumers gain from suddenly being able to exchange music? It’s perhaps the most delicious question that’s ever been asked – and there are so many advantages to the free exchange of culture that we may have forgotten what they are.
Fisher puts it thus:
“Consumers would pay less for more entertainment.
Artists would be fairly compensated. The set of artists who made their creations available to the world at large – and consequently the range of entertainment products available to consumers – would increase.
Musicians would be less dependent on record companies, and film makers would be less dependent on studios, for the distribution of their creations.
Both consumers and artists would enjoy greater freedom to modify and redistribute audio and video recordings. Although the prices of consumer electronic equipment and broadband access would increase somewhat, demand for them would rise, thus benefiting the suppliers of those goods and services. Finally, society at large would benefit from a sharp reduction in litigation and other transaction costs.”
Is that enough? Well, there are two other benefits Professor Fisher doesn’t list. The high street music chainstore would find itself in competition with informal music distribution points – such as concert venues, clubs or coffee shops. Given the availability of cheap wireless playback hardware (phones or Bluepods) every cafxe9 or laundrette could become a ‘record store’.
The stores that survive would of necessity focus on their expertise and social relationships. It’s hard to see what would draw customers into a Virgin chainstore, but it’s easy to see an Aquarius Records (a feted specialist store in San Francisco’s Mission district continuing to draw a loyal following). Social spaces could be transformed. Nor does Fisher attempt to calculate the demand for Internet infrastructure which might result, with potentially huge macroeconomic benefits.
Divvying up the pot
So what’s the fairest way to divide the revenues? Professor Fisher points out that only a representative sample is required: the model need not involve Big Brother surveillance and aggregation of every song played. TV advertising buyers trust a system already: Neilsen’s ratings are calculated from only a few thousand households. And in any case, it’s doubtful any agency could afford the IT infrastructure required to aggregate such a vast data warehouse. However Fisher has a technical proposal which could simplify auditing enormously. He suggests that digital media carries embedded watermarks which would not restrict the playback of the song but would help auditors.
Fisher says that the “ballot stuffing” is the biggest technical hurdle.
“You can never eliminate but you can minimize the ballot stuffing problem,” he tells us. “This most promising solution is an automated sampling system that counts the frequency members of the sample play a song all the way through. It’s possible for artists to inflate the figure somewhat, to persuade family members to leave computers on 24×7, but that static is tolerable.”
The most significant disincentive to ballot stuffing is the model itself: most people would simply want the model to work. Unlike the current situation, where there’s a monetary advantage to be gained by breaking the system.
As for cross-border ‘leakage’ – Fisher says it is troubling from a fairness standpoint and this could limit its political appeal. “But it could work internationally especially when compared to a regime that leaks like crazy – the regime currently using illicit P2P.”
The simple idea is very powerful. Fisher identifies four constituencies necessary to accept the model: consumers, artists, device manufacturers and finally the intermediaries: the studios and labels. The model has huge advantages for three of the four. And what incentives, we asked, would the labels and studios have?
After hearing his presentations, Fisher says industry is intrigued but hardly feels impelled to jump. The biggest ‘carrot’ is that it would see its revenues guaranteed at 2000 levels. If it believes its own rhetoric, that could be a very powerful incentive indeed.
Aside from a fringe of partisans, consumers are likely to embrace it enthuasiastically. Several months into the infancy of DRM-locked music sales, the online stores are dwarfed by the quantity of peer to peer file swapping, which is again on the rise. Consumers will likely face two futures.
In one, the music industry succeeds in locking music sales through DRM restrictions on MP3s, and equally restricted CDs. It’s then at liberty to ‘reinvent’ itself, introducing such multi-sales opportunities we outlined here, and that Ross Anderson suggested in his TCPA FAQ: one-time plays, songs that only play on your birthday, graduated pricing models that charge a ‘premium’ for higher bit rates. Our favorite has already been suggested by the RIAA’s Cary Sherman: a locked iPod full of all the music you’ll ever need, which you can pay and unlock at your leisure. (It’s deliciously illustrative of the lobby group, which has made the cynical, and not entirely false calculation that most of the people in the world have the same record collection. Or one that varies only by such sufficient degrees that it can apply the logic of the battery farm.)
The other comes at a price, but a predictable and low price, and promises to see high street and the economy rejuvenated. That isn’t a hard choice for consumers to make, but it will need to be fought against entrenched lobbyists. Our thanks to Professor Fisher for his exhaustive research in making our choices clear.
Related Link
Professor William W. Fisher
Source:
http://www.theregister.co.uk/2004/02/01/free_legal_downloads/
refer date: March 27
The term ‘legal downloading’ implies that there’s also something like illegal downloading.
Illegal sharing or reproduction of music is a phenomenon already known for many decades. In the early days, people made copies of radio transmissions or vinyl records using taperecorders. These copies had one major disadvantage: the quality of the copy was worse than that of the original.
It changed after the compact disc was introduced in the 1980s: now music was available in a digital format and with the use of digital recorders, exact copies could be made.
The distribution of illegal digital copies emerged drastically when audio compression standards were introduced, which made audio files significantly smaller, and when broadband internet became a commodity good. Sharing of music in an illegal way became a piece of cake.
Although illegal sharing is often seen als stealing, enforcement of relevant laws has proven to be weak. The music industry faces revenue losses and is seeking ways to offer music legally. This way an alternative to illegal downloading should be offered.
But is legal downloading truly an alternative? Of course people have to pay for songs instead of downloading them for free, but this disadvantage is outweighed by the fact that the quality and the availability of the audio file can be guaranteed. Moreover, people don’t have to feel guilty anymore when they download a song, since they’ve paid for it.
So why don’t all music lovers embrace legal downloading? A major problem is the difference between buying a song in a shop or downloading it using the internet. A song on a conventional compact disc from a shop can be played on every player in your house or car, without for instance a time limit. That’s not the case when it comes to a song that has been downloaded: often it’s impossible to make a copy or even play it on other equipment. A popular argument against legal downloading is: “Although I’ve paid for the song, it still is not mine completely.”
And what about time limitation? There’s a real risk that Dutch people who paid for downloads using OD2, will not be able to play the songs after January 1, 2007.
http://www.webwereld.nl/articles/40070
The problem of illegal downloading is not recognized by everybody. Some organizations promote policies to offer all music files for free. On the other hand, the music industry desperately teams up with developers of audio compression standards to implement several ways of Digital Rights Management (DRM).
Often the Dutch government regards this problem as a national one, by putting an extra tax on empty data carriers like DVDR, not realizing empty CDs and DVDs can be bought easily in Germany for a fraction of the price in the Netherlands.
The topic of legal and illegal downloading of music, concerns different actors with many different objectives. We think it is a broad research subject for which it is interesting to find out to what degree technology policy can play a role. Many of the subjects already mentioned, will be elaborated upon in the near future on this weblog. You’re invited to join the discussion: please feel free to post your ideas.
Albert, Jurgen and Jos
We limit ourselves to downloading of music files. Involved actors are the music industry, artists, end users, music retailers, on-line music sellers, regulatory institutions (RIAA, Brein, BIG, Buma Stemra, NMa), filesharing software distributors (KaZaa), national governments and the EU.
Both artists and the music industry are confronted with lost revenues due to illegal downloading and copying of audio files because music lovers on the one hand consider cd’s in shops as being too expensive, on the other hand they like the ease of use of downloading music files via the internet.
If the opportunity of legal downloading is offered, can it be made so attractive to end users that they abandon their illegal activities in order to solve the problems artists and the music industry are currently facing? Which technology policy measures should be considered in order to deal with this problem?
The article we found in the SPITS! newspaper is very interesting because it discusses the policy of the music industry related to price increase. Music labels want more profit from legal downloading, increasing the pressure on the wholesale (OD2) that acts as a intermediate between download suppliers and music labels. People tend to wrongfully assume that this nonphysical product should be a lot cheaper, but music industry claims that this is not nessecarily the case.
We hereby see that music industry may have applied the principle of Predatory Pricing. First they seemed to have selled below cost price to gain market power and now they incrementally try to increase the prices.
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Grijpen, graaien, prijzen verhogen, geen initiatief tonen en achteraf klagen dat zoveel mensen illegaal muziek downloaden. Is dit werkelijk de werkwijze van ‘de muziekindustrie’, of slechts een favoriete klaagzang van onverbeterlijke downloadpiraten? De waarheid ligt ongetwijfeld ergens in het midden, maar platenmaatschappijen krijgen in ieder geval de schijn tegen door de stelselmatige verhoging van de tarieven voor muziekdownloads. In Nederland kan muziekgroothandel OD2, die levert aan onder meer MSN, Wanadoo en tiscali, inmiddels niet anders meer dan de hogere prijzen doorberekenen aan de afnemers van muziek.
Een aantal grote labels dringt al zo’n twee jaar aan op hogere prijzen voor hun muziek. Sony BMG en Universal waren daar geen voorstander van, omdat ze vreesden voor een toename van muziekpiraterij. EMI en Warner hulden zich in stilte. Niemand maakt er echter een geheim van dat de industrie op termijn de prijzen wel degelijk wil verhogen. Alleen het juiste moment moet nog gekozen worden. Wanneer is de markt rijp voor een prijsverhoging? Het lijkt er op dat die tijd nu is aangebroken. Woordvoerder Wouter Rutten van de overkoepelende brancheorganisatie van de entertainmentindustrie in Nederland (NVPI, Nederlandse Vereniging van Producenten en Importeurs van beelden geluidsdragers) geeft toe dat het beeld van graaiende platenmaatschappijen leeft bij de consument. Maar daar is volgens hem geen goede reden voor: “Ik snap dat gevoel niet en ik snap niet dat mensen er zo over denken. Men denkt dat online distributie goedkoper is dan fysieke distributie in winkels. Dat is niet noodzakelijkerwijze het geval. De prijsontwikkelingen nu zijn een logisch gevolg van commercixeble afwegingen van onze leden (de platenmaatschappijen, red.). Die experimenteren met economische modellen die het best passen bij het product en het verkoopkanaal.”
iTunes-dominantie
De platenmaatschappijen zijn in continu gesprek met Apple, die met de iTunes Music Store een marktaandeel van rond de 80 procent heeft op het gebied van muziekdownloads. Wanneer Apple het prijsmodel aanpast zal de rest snel volgen, zo is de redenering. Dat dit niet helemaal het geval is, bewijst MSN. Deze muziekwinkel van Microsoft heeft als eerste aanbieder aangekondigd volgende maand de prijzen van populaire songs te verhogen. Sommige hits – top-40 of top-50- materiaal – kosten dan geen E 0,99 meer, maar tussen de E 1,09 en E 1,49. Desgevraagd liet Wanadoo weten de prijzen binnenkort te zullen aanpassen. Dianne Potters, woordvoerster van de provider: “Medio april zal een deel van de songs in prijs dalen, het grootste deel in prijs gelijk blijven en ongeveer tien procent in prijs stijgen. Afhankelijk van releasedatum, genre en populariteit wordt dan de songprijs bepaald. De populairste nummers gaan bij ons E 0,10 tot E 0,20 omhoog.”
Kunstmatig laag
Volgens Wouter Rutten van de NVPI is de markt gewend geraakt aan het prijsmodel van marktleider iTunes. En dat prijsmodel – E 0,99 voor elke song – is volgens de platenindustrie niet langer realistisch. De prijs zou door iTunes kunstmatig laag gehouden worden. Rutten: “iTunes is in 2004 begonnen met dit prijsmodel, gebaseerd op extreem lage prijzen, om zo de eigen iPod-hardware te pushen. Omdat zij dominant zijn op de markt, volgt de rest. Op dit moment
vindt een herschikking plaats, omdat iedereen roept dat ze niets verdienen aan online muziek. Het is alleen maar gezond dat er nu dingen veranderen en dat er iets gedaan wordt aan de dominantie van iTunes.” Online muziekwinkels als MSN, Tiscali, Planet Music Stream, MTV Digital Download of Wanadoo verdienden aan muziekdownloads nauwelijks droog brood, dus ze ontkomen er nu niet aan om de prijsverhogingen door te berekenen. nen aan de consument. Dat stelt OD2 Nederland. OD2, dat een onderdeel is van het Amerikaanse Loudeye, is te beschouwen als tussenpersoon tussen de platenmaatschappijen en de providers die muziekdownloads willen aanbieden. OD2 is een groothandel van songs, de provider kan onder zijn eigen merknaam songs uit OD2′s catalogus aanbieden. Volgens woordvoerder Menno Wiegeraad van OD2 heeft het bedrijf prijsverhogingen tot nu toe kunnen uitstellen, maar wordt e situatie nu onhoudbaar. Volgens Wiegeraad hebben met name de grote labels de afgelopen tijd de prijzen stapsgewijs verhoogd en gedifferentieerd. De consument heeft daar niets van gemerkt, omdat OD2 de verhogingen niet doorgaf aan zijn klanten. De marges staan, zowel bij OD2 als bij de online winkels, gigantisch onder druk. Wiegeraad: “Elke paar jaar worden de contracten tussen de platenmaatschappijen en muziekgroothandels opnieuw onderhandeld. Elk label hanteert zijn eigen prijzen, maar de trend van de afgelopen jaren is toch dat de prijzen stelselmatig wat verhoogd en gedifferentieerd worden. Wij probeerden tot nu toe om de prijzen uniform en simpel te houden, maar dat is niet meer vol te houden. We hebben jarenlang genoegen genomen met heel kleine winstmarges en ook de online winkels hebben dat gedaan, om het legaal downloaden van muziek te promoten. We lijden nog steeds verlies en als we willen blijven bestaan als bedrijf, dan moeten de prijzen omhoog.” De prijsverhogingen leiden voornamelijk tot een stijging van de prijzen van recente nummers van populaire artiesten. MSN is de eerste muziekwinkel die de prijzen omhoog brengt, maar Wiegeraad denkt dat andere aanbieders snel zullen volgen. De meeste downloads blijven verkrijgbaar voor 0,99, de populaire hits gaan waarschijnlijk tussen de E 1,09 en E 1,49 kosten. Wiegeraad: “De prijsdifferentiatie van online muziek is eigenlijk helemaal niet gek. De markt is volwassen aan het worden en rijp voor een vergelijkbare tariefstructuur als in de traditionele winkels. Daar zie je ook prijsverschillen tussen nieuwe singles en ouder materiaal.”
Goedkoop streamen
Wiegeraad stelt dat het niet alleen maar kommer en kwel is. De muziek is online nog steeds stukken goedkoper dan het fysieke product en er staat een generatie nieuwe diensten voor de deur. Wiegeraad: “Bij Wanadoo en Tiscali
kun je nu voor een vast bedrag van respectievelijk E 7,99 en E 9,99 per maand onbeperkt muziek uit onze catalogus streamen naar je pc. Je kunt kiezen uit 1,2 miljoen tracks van ongeveer 70.000 artiesten en deze aantallen worden continu uitgebreid. Volgende maand komt ook MSN hiermee, ongeveer tegelijkertijd met de nieuwe prijzen. Later kun je deze dienst ook verwachten voor op de mobiele telefoon, zodat je ook onderweg altijd een keuze aan muzieknummers hebt. Het onbeperkt streamen van muziek voor een vast bedrag per maand zul je steeds vaker gaan zien als vervangende dienst voor het downloaden van losse nummers.”
Bron: SPITS! 14 maart 2006 (multimedia)
