The Evolution of Digital Music, Part II

Perhaps the most disappointing music-related news in the last week was that Universal Music Group (UMG) is looking to launch their own music service, dubbed Total Music, to rival iTunes. Not that rivalling iTunes is a bad thing; I'm all for a little competition, especially since Apple set the bar so high.

What bothers me is the attitude of Universal going into this. Jean-Bernard Levy, the CEO of Vivendi Universal SA (UMG's parent company), has expressed his displeasure with Apple's contract, in which Universal takes a mere 29 cents for every 99-cent track sold.

I'm trying to understand -- why is this bad, exactly? I haven't been able to put my hands on a definitive source, but I'm pretty sure that labels get just a little over a third of the retail price of a CD anyway. Factor in the relative cheapness of producing downloadable music (you don't have to manufacture and ship bits of plastic and metal for every song sold), and that 30% take seems pretty fair.

So really, it's not the principle of the thing, it's the money. Not that that's inherently bad -- companies do try to make money, after all -- but it seems to me that Universal's main concern that they just aren't raking in enough of it. Why else would they come up with a scheme like offering "free" music that's actually subsidized by a slight bump in audio player prices? (And would this mean that people who have other players wouldn't be able to use Total Music?)

The Total Music plan is, plain and simple, a cash grab. Look at it this way: Right now, very little of the music I buy comes from the Universal or any of the another major music labels. And yet if Total Music were running, part of the cost of the MP3 player I bought this week would go to them. (I knew Microsoft shouldn't have encouraged them.) What Universal's looking for is a means of guaranteed income, regardless of whether their product is in demand or not. It's a system designed to be entirely in their favor, with little consideration for the consumer. I guess they've forgotten that their business was built on creating things that people like.

You know, I'm not a huge fan of SpiralFrog's execution ("free" shouldn't mean "free until you stop visiting"), but their premise is a bit more honest. If Universal's music becomes less popular, they (presumably) get a small share of the ad revenue. Compensation is tied to performance; the happier customers are, the better they do.

The music industry needs to come up with new ideas to survive; I not only get that, I encourage it. But their ideas need to be really innovative and consider the needs and wants of tech-savvy audience they're courting. It's the 21st century, and audience approval is still an arbiter of success more than ever -- if anything, music producers and distributors should know that. Now if only they'd actually use that expertise.