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<nettime> Music Labels Tap Downloading Networks
Sverko, Adriano on Wed, 26 Nov 2003 19:23:21 +0100 (CET)

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<nettime> Music Labels Tap Downloading Networks

I am interested in hearing, in this forum, some thoughts on a few related
topics That nobody in the media business has discussed in any of the
business Publications I bury my head in, as follows:
a)  There is a resistance to CDs because anything worth a damn is damn
expensive. Perhaps this is not known in the US, but in my travels,
anything that is current, particularly in Hip Hop industry, costs at least
20 USD for one CD. And sometimes can be as high as 25 USD. I am talking
about Japan, UK, Central Europe, Scandinavia. That includes huge markup
from the small shops selling them to kids, who make great consumers, since
some of the expenses adults have are being absorbed by their parents (car,
loft/apartment rents). It also includes higher taxes.

The only sensible pricing strategy I have seen thus far is in Russia.
Similar to China, it is a bootleg region. Thus, I was actually able to
find a legal CD of Bjork's for about 8 or 9 USD. Plus, it was cool giving
it to my wife and having her check out her favorite artist with cyrillic
characters. The trick to reducing bootlegging and music downloading (if it
is indeed killing profits for artists and record labels), is to make
things cheaper in poorer markets. The gap between a free download or 3 USD
bootleg and a 25 USD official copy must be narrowed.

In business, when a market is matured, product offerings approach the
price of zero. It is natural for leading companies to react.
Consolidation. Going offshore. Software, leather goods, furniture,
textiles, story is same everywhere. There are great places to manufacture
goods, such as CDs. Slovenia, Czech Republic and Hungary are examples.
Even in Hungary I know a guy who builds holograms that are put onto
software boxes and other technology-related products. If CDs were mass
produced (which I am sure they are) in these countries, then distribution
costs and manuf costs are lower. Thus pricing should reflect that. But it
does not. Recent history (market economies in central and eastern europe,
a region that is spanning well over 200 million consumers), surely is
helping major distribution companies profit margins. But surely they won't
tell you about that when they are at the steps of courtrooms fighting the
likes of napster in WTO-entrenched countries.

b)  Everyone in media is crying for the labels and the artists. Why is no
one promoting the clever entrepreneurs, some of them artists, who are
using the technology fairly and ARE INDEED helping promote new talent and
giving them a chance to publicize themselves. For example, I like Prince's
music, more or less. But I like even more his balls. He only sells online.
Who is the company delivering his music via Internet?

I want to contact them. I want to offer them to Rap and Rock artists that
I meet when I am in Warsaw, Prague, Budapest, Zagreb, Belgrade. Why is
this information never reported on? (This is partly rhetorical, probably
has something to do with labels being part of same media groups as Disney,
Capital, CNN, etc.)

c)  When will we see the day of a global distribution company that is not
UK or US owned? Or, at least, one distribution company owned by an African
American? Any research on this? I was hoping that Wu Tang Clan would be
first. They are business-oriented and had huge "street authority" up until
a few years ago.
Adriano Sverko 
(Business Hoodie)

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