Fred Wilson, A VC, has some very interesting things to say about music. Something Important is On the Horizon in the Music Business. He may be right, our musical culture may be embracing the web as a system for streaming access and not for file-based distribution (Apple has won that war and the big music publishers are unhappy about that). I am not so sure about his espousal of the ‘Radio Station’ as the new/new thing, with the consequence that “Everyone who wants to be a radio station will be one”.
But his manifesto has a convincing ring:
Here’s what we need. We need someone to create an easy to search streamable library of all the recorded music in the world. We need to be able to grab a track and embed it on our blog. We need to be able to see how many people played it. We need others to be able to crawl these user pages with the embedded music and create algorithms based on who posted it, how often it was played, and how often it was reblogged and linked to. The services that do all of that need to be able to play the music that flows out of these social algorithms in the same way. This all has to be licensed and legal and it has to result in money flowing to the artists…
It surely doesnt follow that books must go the same way as music. On the other hand, that could happen. You could rattle through the same litany of requirements for books, as he does for music and it makes a lot of sense. The system has to be legal and it has to result in money flowing to the artists, and I would add that it has to be ‘open’ in the sense that anyone can become an artist, a publisher, or a librarian. Open also in the sense that the system will not be owned by a monopolist.
There is a good deal of anxiety amongst book publishers that Amazon with its 30 Billion $ market cap is going to be the books/printed matter monopolist. Much handwringing recently about the seemingly obscure issue of Amazon insisting on a proprietary and monopolistic source for the supply of POD books (print on demand), from its subsidiary company BookSurge. Outrage from WritersWeekly, marxist analysis from PersonaNonData, and a useful review of the various forms of lock-in that Amazon could be aiming at from ToolsOfChange.
But Andrew Savikas in his ToC posting does not point out that playing for lock-in is tricky, it is always potentially 2-way. It can have the effect of tying a business to a losing strategy. You may end up being Sony with Blu-ray, or you may end up being Sony with Betamax. If I were an Amazon shareholder (I am not) I would be worried that the real strength of that business (in logistics and physical warehouses) is going to be a source of complacency and weakness in the digital world. Its other conspicuous strengths — scale and customer service — will certainly be crucial. What if Kindle and BookSurge are losers, more Betamax than Blu-ray? If you really cared about the longtail in books would you not be embracing all the Print On Demand suppliers? Henry Blodget voices similar doubts, and yesterday’s New York Times has an article ‘Amazon Accelerates its Move to Digital’, which suggests that Amazon knows that it has its work cut out.
One of their managers (Steven Kessel in overall charge of digital strategy) reckons that it may take 5 to 7 years to build their digital businesses to maturity. But the lock-in (or co-relative lock-out) will happen sooner than that. Amazon will know within the next 18 months whether or not they are going to win big in digital print and digital music. It is by no means a foregone conclusion.