It's All Geek To Me - April 6th 2005

Can't you still steal all the music you want? by Ross Lasley Recently Amy and I went down to my Father's winter home – The Jolly Roger Travel Park in the Florida Keys. We camped right on the ocean and Amy was kind of surprised at the degree to which her “comfort queen husband” (admittedly a fair description of this geek) did not complain too much about the lack of amenities. We had a grand old time – fishing , visiting Key West, and talking a bunch. I love having technology discussions with my Father as he consistently asks seemingly simple questions that always make me think. This trip – in seeing Amy's super cool iPod Mini – it was: “Can't you still steal all the music you want? Why would anyone pay a dollar to Apple?”

Well – basically – yes – you can still download all the free music you want. No matter what any judge does, that will continue to be true; but, it is more of a pain than it used to be, and the pay services are getting better all the time.

Napster still does exist, but is no longer the program you think it is – more on them in a bit.

The program that is in the news lately is Grokster, the main “vs” in the MGM case. It's a decent program, but it's worth the $30 to make it ad-free.

My personal favorite is LimeWire, a neat program with a very clean and elegant interface. Their pro version is $18.88 – and basically it offers better search results and faster download speeds for the money.

Imesh is another program gaining popularity, as it connects to multiple file sharing networks. Everyone has a favorite, and good old download.com has a
nice list of what is popular.

Then there are the paid programs – iTunes has become my favorite. This is a great free player. You do not need an ipod to use it, but of course it has been designed to work with the best portable music device there is. Music costs a buck – and it is very convenient. I never have to worry about download quality, bum files, or any trouble with the resulting file – which is why I spend the ninety-nine cents. When I get the music, it is properly described (album, artist, genre, year), saving me time when I don't have to edit the file info.

Another strategy is being employed by Napster - they are using a subscription based model and they let you download all you want. For $15 a month you subscribe to a library of a million or so tracks. I think these folks have the right idea in that they are changing the way in which music is sold.

It might be ten or twenty years, but long term, the fact is that the record companies are screwed. The business model is fundamentally flawed. They will go the way of the buggy whip manufacturer, no question about it. At one time the “services” they offered artists were important and couldn't be replicated – distribution to music stores and promotion. Today, the web easily does both things and more.

The big dirty secret of the recording industry – in my opinion – is that the artists mostly get an infinitesimal revenue share. Allright – maybe not a big secret, but certainly something people don't talk about much when discussing this issue. The model on this is Prince (yes I know he has some symbol but it isn't on my keyboard) and his choice to sell his music directly to his fans through the musicology music store.
Albums are $7.77 for members and somehow I suspect our friend Prince has multiplied the amount of money going into his pocket dramatically with each sold album.

In my lifetime, CDs are the best example of obvious label greed – I am old enough to remember when CDs didn't exist – albums were sold primarily on tape and were $7 to $10. Then came CDs – and a new album was $16 andthis price was justified based on the “high-tech” nature of CDs. The thing of it is that a blank CD (a piece of plastic with no moving parts) was always cheaper than a blank tape, and even when they became the dominant form the prices never went back to the “kid's weekly allowance” range. A new album today costs twenty bucks or so, and even when you do the inflation math from the 1980's you'll find that labels basically doubled the price of music – do you think the artists suddenly started getting twice as much?

The problematic party in the online music issue is not the artist – it makes perfect sense that they want to be paid, and they should be. The problem is with the labels – not just greedy, but sticking their head in the sand and pretending what they do isn't doomed inevitably.

Apple Tiger
by Josiah Cole

There's a lesson to be learned from Apple and how they price and release their OS updates and versions. As a computer geek and a PC/Windows user I always laughed when Mac users were treated to yet another point release from Apple that was going to cost them the full price of $130. I thought, “Don't I have it good with Windows XP and my free updates and service packs”.

However, after recently seeing a summary article on Longhorn, MS's new OS due in the next couple of years, I realized how not only ingenious it was for Apple to take this approach financially, it also is better for users in the long run and creates a happier customer base.

Let me explain. It's been almost 5 years since Windows XP was released, and since then we've seen service packs and security updates, but no major pay-to-play updates from Microsoft. This is good for Windows users as their investment of a few hundred dollars in 2001 has lasted several years. MS has done their job and XP dominates the desktop world, so there is definitely something wise to their model and pricing scheme.

Apple on the other hand has released 3 (Tiger 10.4 will make 4) major updates to OS X since March 24th 2001, and has charged $130 for each one. As a Windows user I looked at this and said “what a rip off”, but after looking at the latest details surrounding Longhorn, and the pending release of yet another point update to OS X called Tiger, I realized that Apple seems to have it right.

Not only did they set up a model whereby they make substantially more per user in OS updates/releases than MS, they also have given their customers four substantial OS updates that have added new features, new software, new security enhancements and bug fixes. This has helped their image with both the tech press and geeks, two groups that average users look to when making OS/platform decisions.

Let me say before I go any further that, overall, Windows users have been very happy with XP (minus the virus/worm issues of the last couple of years), so it's not like they're starving for new features or feel they lack something substantial that OS X users have. In fact, it's probably still swaying in favor of Windows if for no other reason than the sheer bulk of software available (third party mostly). The point is that Apple not only has maximized their revenue by releasing “small” updates to their OS at full price, but also created an atmosphere among the customer base that Apple is constantly innovating and addressing the evolving needs of their customers.

Apple has a long way to go before actually showing up even as a small blip on the MS empire radar, but I think they've developed the right model to expand their market share substantially and build valuable relationships with existing and new users. If MS doesn't change the way they sell their OS's, they'll be hit with a crude awakening when their next “major” release fails to gain the ground that the successful launch of Windows 95 did. Competitors are appearing in their rear-view mirror and I don't believe they can expect to stay ahead waiting 4-5 years between each “major” release. Apple and Linux competitors may be making slow gains, but those baby steps add up quickly, especially in the absence of competition from MS over a 5-6 year period.