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  Reply # 361990 2-Aug-2010 22:28
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Technology has turned scarcity and abundance on it's head, digitally you can make infinite copy's of music for no marginal cost (extra cost of production per unit).  If there is an infinite supply of a good you have basically no hope of charging for it (economics 101 supply and demand).

Most bands make the majority of their money from touring and performing live now. A live performance in our town is a rare event and a scarce good.  
Very little money is made from track and album sales and it will decline further.

Do you realize in 2009 Metallica made $22 million from touring and $1.6 million from album and track sales (USD)! 

Many artists have realized why not give away their "recorded" music away and create as large of a legion of fans as possible. This enables you to fill larger stadiums and charge more for live tickets.

This is happening everywhere (newspapers/news, tv, movies, music etc) where the digital age has reduced the marginal cost of production of additional units of things to zero.

The good thing about abundance though is that is creates other new scarcities, technology renders old business models obsolete and new ones are created.

People and groups who depend on these old business models for their livelihood are trying there best to lobby, bribe and legislate to protect them.  It's going to be interesting to see how this turns out.


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  Reply # 362341 3-Aug-2010 13:39
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Ragnor, you've done a far better job of explaining what I was trying to say after not enough sleep and a wine ;)

The 'record company' business model is dead, but as you say they're not going without a fight. I'm not saying there's not money to be made by big business in the entertainment industry, there'll be plenty - but it's now about adding value, distribution etc, not the licensing and production of a physical product. They adapt, or they die.

 
 
 
 


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  Reply # 362362 3-Aug-2010 13:59
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smac: Ragnor, you've done a far better job of explaining what I was trying to say after not enough sleep and a wine ;)

The 'record company' business model is dead, but as you say they're not going without a fight. I'm not saying there's not money to be made by big business in the entertainment industry, there'll be plenty - but it's now about adding value, distribution etc, not the licensing and production of a physical product. They adapt, or they die.


It's more than dead... the old model is practically imploding:

http://recordingindustryvspeople.blogspot.com/2010/07/ha-ha-ha-ha-ha-riaa-paid-its-lawyers.html

That to me doesn't look like a sustainable way to protect your business model.

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