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I’ve always been fond of screwing with people during brainstorming meetings by proposing things that are “conceptually sarcastic” (if that makes any sense) and this led a past co-worker to suggest that I should consider a career in the “Department of Fake Ideas.” This actually sounded pretty awesome to me and I continue to look for just such an opportunity (unsuccessfully, so far!) In any case, I came across this David Ogilvy quote today in a PowerPoint deck on YouTube marketing & it gives me hope that somewhere out there, there is a place for all my brain crack to find some kind of expression:

The best ideas come as jokes. Make your thinking as funny as possible.

Damn Straight! Now, if I can just figure out the right venue for my other dream job: CIO (which stands for Chief Internet Operator =).

Well seeing as how my last post on innovation in music distribution has worked out so well for people like Last.fm & Pandora, I thought I’d post up another good idea here in the hopes that somebody will take care of the hard bits for me.

Here’s the thing… Music distribution has traditionally been a slave to the medium (45s, LPs, cassettes, CDs, etc.) and the “Big Music” business has put a lot of time & effort into optimizing their revenue model for whatever the current mode of distribution is. They love/hate changing formats, because it gives them the opportunity to re-sell music in their catalog to the same listeners over and over and over again, while at the same time making it easier and easier for those same listeners to re-distribute music themselves, as well as for new distributors (indie labels, etc.) to erode the “big” guys’ market share.

One thing that’s been relatively consistent since the days of the LP however, is the “bundling” of individual tracks into “albums” or whatever. Doing this allows distributors to multiply their profits considerably, since the marginal increase in cost between producing a 45 record or (CD Single) and a full-length album is minimal but the difference in retail cost is quite a bit larger (I don’t have any statistics to prove this, but I’d be pretty fucking amazed if it wasn’t true). Even in cases where music isn’t listened to in an “album” format, there is usually some other type of bundling context (concert, radio station, mixtape) and it’s this tendency towards placing individual songs in some larger context that is at the heart of what I’m going to propose.

So anyway, with the rise of MP3 compression and online distribution, there has been a pretty sharp downward correction in the market for full-length albums. Listeners are now able to acquire the “hit songs” they want as single-track downloads, via legitimate channels (iTunes/Amazon) and otherwise (Napster/AudioGalaxy/SoulSeek/BitTorrent). Record companies are understandably pissed, since this puts a pretty big hole in the middle of their profit-multiplication scheme, but it seems to me like they’re concentrating much too hard  on the finger and consequently missing out on all the heavenly glory.

Here’s what they should do:

1. Quit re-selling the same music to people over and over and over again. This may have been great while it lasted, but it’s *over* now and it’s not coming back.
2. Instead, sell unlimited licenses for individual songs which can be applied to as many formats as the listener wants
3. Make it trivially easy to build multiple contexts around these individual songs
4. Give away the contexts for free

So for instance, let’s say I want to purchase the album Led Zeppelin III. The “context” is obviously free in this case, since it’s just a tracklist, and so what I’m really purchasing would be an unlimited license for each of the 10 songs on the record. If each one costs $0.50 then I’m out $5.00 for the whole thing.

Later, I’m watching School of Rock and I decide I really like the soundtrack. I’m ready to drop another $5.00 to make this purchase except… What’s this?! I already *own* an unlimited license for “Immigrant Song” and so the soundtrack only costs $4.50. Nice!

Now if you only think things through this far, it sounds like a pretty raw deal for the record company. Whereas they would have previously made $10 they’ve now only made $9.50 and the more of these unlimited song licenses they sell, the worse it’s going to get!

However, consider another type of context, the mixtape. Now, let’s say I am a guy who listens to a lot of weird indie-rock and it occurs to me that I know a lot of great bands and songs that might be really appealing to the type of person who likes The Shins or The Coldplays or whatever. But what am I supposed to do with this knowledge? Go work in a record store and chat about it with my fellow record store clerks? Well maybe that used to be viable, but I forget… what the fuck is a record store? I haven’t seen too many of them around lately. Instead, let’s say I post a really sweet mixtape on the internet. It starts off with Vampire Weekend and goes on a crazy musical journey (perhaps including Journey?) that ends up with 3 tracks in a row by The Stranglers because, fuck it, The Stranglers are fuckin’ awesome!

Now if, as it turns out, you already happen to own unlimited licenses for 75% of the tracks in my mix, then maybe you’ll be willing to throw down $3.00 to “complete the context” even though you’ve never even heard of The Stranglers before. Maybe you’ll be willing to make a *lot* of contextually-driven purchases. Maybe, every time you listen to any individual song, you could be presented with a list of additional contexts (i.e. “You seem to be enjoying this Bob Dylan song, perhaps you’d like to hear it in the context of a live concert, as a cover version on another band’s album, as part of a soundtrack, mixtape, etc.”) and depending on how your existing song/license collection happens to intersect with each of these contexts, your cost to complete them could be anywhere between “full-price-minus-fifty-cents” and zero.

Maybe our (natural?) preference towards experienceing music as part of a larger context would actually drive a significant number of people to purchase even *more* music than they would have via traditional album sales. Maybe users would just set up a daily music “budget” of $5 or $6 that could be used to automatically acquire licenses for songs presented in passive contexts (i.e. online radio) and when this budget ran out their music software could just revert to playing songs already in their library.

Or maybe not…

Anyway, that’s all I’ve got for now. Readers are encouraged to point out that I’ve basically just re-hashed the concepts presented in The Long Tail, or that a subscription-based model is really much more progressive, or that things are just fine the way they are and I should keep my theories on “the music business” to myself and let the all the highly-paid ecommerce consultants with Master’s degrees in iSynergy and eMonetization take care of things. All I know is that broadband gets faster every year and any day now it’s going to be fucking *trivial* to move big chunks of compressed audio (and video) around. And I’m not talking “post-it-on-yousendit-and-mail-a-link” or “break-it-up-into-chunks-and-post-it-on-YouTube” trivial, I mean like IMing-your-friend-a-URL trivial.

So, I’m just saying… if *I* was sitting on top of a mountain of soft assets, the value of which was asymptotically approaching zero… I’d be worried.

I was reading some Wikipedia on the iPod Touch last night and came across an interesting essay written by John Locke in 1691 which I was mainly too tired to really dig into then (and entirely too busy to deal with now). However, I was still awake enough to find the whole thing somewhat intriguing. Determining just *how* interesting it is will be left entirely up to the reader.

Locke was writing in opposition to the Government’s plan to cut the interest rate from 6 to 4 percent and he identifies a number of thought-provoking ideas on why maybe this would be a bad idea. The crux of it is simply that it is beyond the power of any Government to regulate the rate at which money is lent and so the main consequence of attempting to do so is to (and I quote):

It will mightily encrease the Advantage of Bankers and Scriveners, and other such expert Brokers: Who skilled in the Arts of putting out Money according to the true and natural Value, which the present State of Trade, Money and Debts, shall always raise Interest to, they will infallibly get, what the true Value of Interest shall be, above the Legal.

Furthermore:

I fear I may reckon it as one of the probable Consequences of such a Law, That it is likely to cause great Perjury in the Nation…where ways will be found out to receive Money upon other Pretences than for Use, to evade the Rule and Rigour of the Law: And there will be secret Trusts and Collusions amongst Men, that though they may be suspected, can never be proved without their own Confession … Faith and Truth, especially in all Occasions of attesting it upon the solemn Appeal to Heaven by an Oath, is the great Bond of Society: This it becomes the Wisdom of Magistrates carefully to support, and render as sacred and awful in the Minds of the People as they can. But if ever Frequency of Oaths shall make them be looked on as Formalities of Law, or the Custom of straining of Truth (which Mens Swearing in their own Cases is apt to lead them to) has once dipt Men in Perjury, and the Guilt with the Temptation has spread it self very wide, and made it almost fashionable in some Cases, it will be impossible for the Society (these Bonds being dissolved) to subsist: All must break in Pieces, and run to Confusion.

Which, after reading it a couple times (it took me 3 tries), is pretty fucking brilliant and seems to me like a great rebuttal not only to Government involvement in the financial system but also to the last 100 or so years of US drug policy as well. Anyway, the whole thing is pretty neatly summed up in one of the greatest-ever episodes of South Park, but I just thought it was neat to see that it was already sort of a solved problem in the 17th century. Oh well, at any rate I guess it was a pretty good last 300 years for the Bankers & Scriveners!