||Network Effects: Stan Liebowitz and the MP3 Debate|
As someone who worked in music retail up until the 'break point', I can say that there are plenty of other factors that came to play, such as: retail pricing and MSRPs - margins on CDs just weren't as profitable as other mall stores' commodities, and the chains died or got consolidated. Warehouse retailers undercut prices and drove away sales, shutting down retail options to buy. And when you can get product A for $5 cheaper, why not? The warehouse buying experience is dismal, but is becoming the only option for live purchases. Once retail options waned, people went online to buy - and when they went online, and saw it for free, well, the choice was easy at that point. Still the same product, still instant gratification - all the things the consumers want.
That's not the labels' only crime, though: their lack of commitment to artists has truly created a decline in fresh, interesting music. I think that there have been about three CDs I've wanted to buy in the past four years; compare that to the dozens I used to buy yearly.
Ultimately, music is a product, and should be treated as such. If people don't want your product, you either make a better product, offer something extra, or otherwise market it differently. The music industry thinks it doesn't need to, that witch hunts are a better idea. Is this the Bill Gates School of Business or what?
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