There is lots of talk about the losses in CD revenue due to p2p sharing. There is lots of talk about the exploding digital music market (that’s a phrase I like to use when talking to investors), and now there is talk from industry executives about needing to get the revenue flowing from consumers in the digital music space. And when these types of discussionshappen, recently they revolve around DRM. And DRM of course is a major problem and near and dear to my heart. But I think there is a second looming problem that people in general are not discussing (with maybe the exception of the long-tail crowd): overall lack of licensed music. Current estimates put the total number of unique copyrighted tracks on p2p networks at around 25 million. Now let’s assume that represents 25% of ALL recorded music. If all that music were digitized and made available on-line, we’d have 100 million unique tracks from which to satisfy all our musical needs. Right now there are only 2 million tracks available. And I think that hinders digital sales (in addition to DRM issues). The answer: license as much music as possible as quickly as possible. For EMI et al., to reach into that back catalog and get licenses going. But here is the issue: the major labels don’t have much of an incentive to do so. The 80 of the 80/20 rule of their sales come from current music sold to 15-25 year olds. The rest is not really valuable. Don’t waste the money on the licenses, theyu think the ROI is just not there for them. Of course, that might just be because shelf space costs money and production costs money, and there does not seem to be a large enough return. But I think it’s wrong. Yes, I am a fan of long-tail thinking, but even less sophisticated is this: people want lots of different types of music and they are willing to pay (particularly older demographics). And at least in the case of rVibe, we can give it to them and be profitable. I have always said that we would be happy to subsidize and facilitate back catalog licensing (of course we’d want some exclusive rights for a period of time), and I feel that way more than ever. I would love to sell all that ‘old’ music, I really really would. And doing so - I think that would not only solve issues with declining sales, but also facilitate a true conversion to digitial distribution.

Originally published on WordPress on March 03, 2007. Migrated to this blog on May 29, 2025.