Lent For Promotional Use Only

"Lent for Promotional Use Only. Any Sale or Unauthorized Transfer is Prohibited and Void. Subject to Return Upon Demand by Owner. Acceptance of This Record Constitutes Agreement to the Above."

I always wondered about this statement. Did simply stamping it on a record or CD make it true? Can a record company really claim ownership of something forever just by putting a stamp on it that says it's theirs? Turns out, not so much. From the LA Times:

A Ninth Circuit appeals panel sided with consumer advocates today, upholding a lower court's ruling that a record company couldn't block the resale of used CDs just by marking them as "not for sale."

The case was brought by Universal Music Group against someone who was selling promo CDs on eBay, but the ruling is also good news for used record store owners who no longer have to worry that a rep from UMG is going to show up at their shop to "reclaim" a bunch of promo LPs and CDs. And I can rest a little easier knowing that my white-label promo copy of Richard Lloyd's Alchemy really does belong to me, despite what the stamp says.

2010 Music Industry Numbers

The recently released official 2010 music sales numbers have been released, and they continue to paint a picture of a music industry in serious decline. Overall album sales (including digital downloads) are down 12.7% overall. Digital album sales are up 13%, but that is not nearly enough to offset the 19% decline in physical album sales. Meanwhile digital track sales are up a paltry 1%.

Vinyl enthusiasts will likely crow about the massive "vinyl revival" underway due to a 14% rise in LP sales, but with 2.8 million LPs sold, this number still represents less than 1% of all albums sold in 2010. Vinyl remains nothing more than a niche product, and it in no way represents a solution to the music industry's current struggles. Anyone who tells you otherwise is delusional (and this is coming from someone with a collection of over 3,000 LPs).

So what is the solution? For that matter, what is the problem? Most in the music industry will be quick to point to illegal downloads. I suspect they are at least partly right, but the overall picture is more complicated. Illegal downloads have merely contributed to the widespread perception that the music industry no longer produces a product that is worth paying for. Failure to invest in catalog artists in favor of flavor-of-the-moment fluff has also contributed to this perception as well. When a product has a shelf life of two minutes, it's hard to convince people to pay for it.

I will be the first to admit that I do not know how to solve the problems currently facing the music industry. I do, however, think the equation is pretty simple. If the music industry wants to beat illegal downloads, they have to offer consumers something that is more convenient.

If you look at the history of recorded music, convenience has been the driving factor in every major technological or format shift starting with consumers adopting 78s over Edison cylinders, Columbia's 12" LPs over RCA's 7" 45s, compact cassettes over LPs, CDs over cassettes and LPs, and downloads over CDs. In each of these cases, price and sound quality were inevitably secondary to the drive toward greater convenience. Music industry execs need to stop thinking about how to get people to pay for downloads and start seriously considering what they can offer consumers that is more convenient.

One thing that would be more convenient than downloads (as I have suggested in the past) is a cloud based model where consumers pay a monthly subscription fee to access a virtually unlimited amount of music from a variety of devices. There may be other solutions as well. But what the music industry collectively needs to wrap its head around is that fact that if their industry is going to survive (and I don't think that is a given) downloads cannot be the end game. Inevitably something will supplant downloads, and it would be wise to think about what that something will be and (just as importantly) how to make money off it.