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Music biz lacks plan to replace dying CD

By MIKE HIMOWITZ|January 24, 2008

Among veteran digital music fans, it's hard to generate much sympathy for the recording industry.

For years the record producers battled to keep digital music out of the hands of listeners - not just pirates, but legitimate users who were willing to pay for it. At the same time, the industry engaged in a conspiracy to fix the price of its CDs at the retail level, conduct that was outrageous on two counts.

First, it increased the average price of a CD to something approaching $18 when the price of every other form of electronic entertainment was decreasing. Second, it forced customers to buy an inferior product - a dozen bad songs - to get what they wanted: the two or three songs on any album that were worth hearing.


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The public responded by stealing the music it liked, song-by-song, through online file-sharing sites and peer-to-peer networks. That cost the record labels billions in lost sales. And it's still going on, shamefully I think, because the industry is finally selling music online at reasonable prices - and increasingly without copy protection.

The question is where the record industry - and its customers - go from here. It's increasingly obvious that the CD is a dying medium. Artists and producers have to come up with a new scheme for creating and distributing music. And we, as customers, have to be willing to pay a fair price for it.

In other words, it's time to start over.

Consider this: Apple announced last week that it had sold 4 billion legitimate tunes through its iTunes online store - a remarkable figure for a marketing technology that wasn't widely available until a few years ago. But it was still a drop in the bucket compared with illegal file-trading - which some sources have estimated as high as 50 billion tunes.

The Chicago Tribune reported last week that overall music sales were down 14 percent in 2007, the seventh yearly decline in a row. The major record labels are panicking - laying off thousands of workers, thinning out their stables of artists and suing thousands of their potential customers in a losing effort to stop Internet trafficking in their songs.

Sales of CDs in particular were down 19 percent, and big-box retailers were making plans to scale back the floor space they devote to the medium. So the industry's traditional unit of sales and artistic effort - the CD album - looks like a goner.

The real problem for the music industry is that there's nothing to replace it yet.

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