An Alternative Story about the Success of Digital Music

Many consider digital music a success. But, looking back at the history of an older music technology – the CD – should make us pause. The CD was invented in 1982 and made its market debut the same year with Billy Joel’s album 52nd Street. It was adopted quickly and in 1987 surpassed the sales of vinyl records. Digital music, on the hand, suffered a different fate

Digital music technology was invented in the early 1980s.  Several advances enhanced its marketability. The latest steps occurred in 1998 when Napster added the distribution advantage through file sharing and a fully functional MP3 player allowing portability was released. But, surprisingly, a decade later, the latest available music sales statistics show that in 2008 CD sales still compromised 77.8% of music sales, while digital music sales comprised only 12.8%.

This delayed adoption of digital music is perplexing given the overwhelming advantages of digital music over CDs. One factor that doubtless affected the sales of digital music is downloading from file sharing networks. But, I would like to offer another explanation. I believe that copyright enforcement particularly through technological measures — use of digital rights management systems (DRM) – played a role in delaying the adoption of digital music.  DRM limit interoperability between digital music devices and music tracks. For example, Apple, the owner of the leading digital music device iPod, refused to license its Fairplay DRM system to competitors. The result was that music purchased from iTunes and protected by Fairplay could only be played on iPods and other Apple devices. Surveys showed that DRM’s effect on interoperability frustrated consumers digital music experience and that consumers were more likely to purchase digital music if DRMs will be removed.

This story about the delayed adoption of digital music is not commonly told. But, it is an important story to tell for two reasons. First, those objecting to copyright enforcement argue that lawsuits against file sharing systems, such as Napster or Grokster, inhibit innovation in dissemination technologies.  But, they fail to address the policy argument of the dissemination failure of digital music technology itself.

Secondly, and even more importantly, by focusing on the adoption failure the parties to the digital music copyright disputes could find common ground. Both could benefit from accelerated adoption of digital music. Clearly, individuals who do not use digital music fail to benefit from the immediacy of downloading, the ability to choose individual songs and general convenience of digital music. But, the music industry could also benefit from a rise in the sales of digital music. Digital music allows direct selling resulting in savings on storage and mobilization of physical products.  It does not involve physical copies so music providers do not end up with redundant copies of CDs. Music providers can also benefit from the flexibility of providing consumers with the option to buy specific songs — this lets them cater to a broader range of tastes and expand their sales. And finally. digital music allows instant delivery – again allowing expansion of sales through profiting from impulse buys.

There are good reasons then to consider the delayed adoption of digital music. For a more complete description of this alternative story, see here.

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3 Responses

  1. Of course, it might have something to do with the fact that I used to buy most of my digital music through a company which promised me the perpetual right to listen to it anywhere I accessed a computer, just by logging into my account. Only to have most of the music I’d purchased access to deleted when the recording industry took the company over after a lawsuit. Not illegal music, mind you, just small groups that didn’t have contracts with the recording industry…

    I like CDs because they’re physical, somebody can’t press a button somewhere and make them self-destruct. Yet.

  2. A.J. Sutter says:

    Small point: CDs are digital music. What you mean is electronically distributed music, and especially single-song electronic distribution (SSED).

    Your notion of “overwhelming advantages” depends very much on perspective. Consumer choice is not the only pertinent social value, nor necessarily the highest one. From an artist’s perspective, the ability to create an album is lost with SSED. Another cultural loss is cover art and liner notes/inserts. Some consumers will also feel this loss, as well as the loss in sound quality from the use of compression (.mp3 &c) beyond that already used in CDs. While some readers might be tempted to say that market response is constitutive of artistic or cultural value, that would seem to be very thin ice for law professors, and indeed for professors of most sorts.

    BTW iTunes is also geographically restricted. Most tunes by, say, French or German artists are available only on the local versions of iTunes — but you can’t download from there unless you have a French or German credit card, respectively. There aren’t any such restrictions with buying CDs from French or German Amazon or other vendors. And if you want to hear music from Malaysia, Indonesia or many other less wealthy countries, to say nothing of many older Western classical recordings, CDs may be your only realistic option.

  3. Janice says:

    Carrying on from this topic, The Music Void’s Editor and Founder Jakomi Mathews has written an interesting article on whether or not the Evolution of Digital Media Survey Points to Consumer Rejection of Subscription Services in the UK.

    http://bit.ly/alqdBy

    He states that when it comes to the progression from physical to digital ownership of media, the UK population is far from being ‘Space Age’. A large number of people are staying faithful to the “old school” method of owning music and films, thus abandoning digital. It’s well worth a read!