Slashdot Beats Me Up
My favorite comment so far from the Slashdot thread about my Herring article:
"And here I thought a double moral hazard would be an evening with the Hilton sisters".
This guy (Spoom) got exactly the point of my argument - the record industry's business model is dead.
"...The article talke about how customers can now simply go out and find their own music on the net, rather than rely on a brand to determine what is good music so they can sign them. Does anyone else think that that basically says it all? Labels are obsolete in their current form. What services do they provide, exactly?"
Surprisingly (maybe not), a lot of other people think I'm trying to somehow help the RIAA prop up the industry's dead business model.
So here's my reply to the thread so far, which might help explain my argument:
1)
Moral hazard does not mean the record industry has 'morals'. It's a technical term - like grep, or chmod. It means that one party in a contract can take hidden action - like your babysitter - because you can't effectively monitor or influence them.
2)
I'm arguing that the record industry should provide free music - not the other way around. Insurance is just another form of free music - whether you get reimbursed in money that you can spend on free music, or free MP3's, or free music vouchers.
3)
An efficient market is not a monopoly. An efficient market for music is what all of us really want: a place where we can pay as much for music as the value we derive from it. The problem we're all facing is that the market for music is inefficient - that the music industry can price-fix, gouge, shirk on it's contract, and earn more profits by exploiting such tactics.
4)
I'm not 'trying to give control to the RIAA'. In fact, it's the other way around. Read what DVD Jon has to say about buying into DRM - iTunes is nice, but by buying into it, you're also buying into DRM. I'm trying to argue that DRM sucks - and that entirely new business models are the only thing that will work - and iTunes is just the same old model wrapped in a nice interface. I'm trying to prove why the RIAA wants the game to stay the same - so it can keep selling the same old risky contract to all of us, in exchange for greater profits.
4.1) Not all MBA's are beancounters. Get over it.
Umair