The music industry has undergone almost countless shifts over time in its efforts to stay relevant and profitable. Tides have ebbed and flowed, raising the status of some – artists, distribution methods and media formats alike – and lowering that of others, and even having them switch places every now and again. Different eras have thus been marked by the rise and fall of popular acts who represent the styles and flows of the time, as well as different types of media through which music is sold – the long-playing record gave way to the cassette, which gave way to the compact disc, which in turn birthed various types of disc-based media that paved the way for fully digital distribution.
Digital distribution ushered in a whole new boom for music and even video, both of which were instantly made exponentially more compact and portable while simultaneously being of the same quality and sound fidelity as their forebears, if not better at times thanks to digital remastering. Suddenly it became more and more difficult to justify high prices for songs and albums from a buyer’s perspective, as the files were no longer typically placed on a tangible item to be sold and distributed. This seeming paradigm shift, in addition to the increased ease [and decreased expense] with which the music could be passed around instead of their suddenly-cumbersome predecessors, may have exacerbated the already-swift rise of peer-to-peer file sharing.
One of the big names making the rounds at the height of the peer-to-peer brouhaha is Kazaa, a Napster-like online file-sharing program that allowed users to download songs and video files of TV shows and films from peers who were online and had the files. The brainchild of European tech entrepreneurs Niklas Zennstrom and Janus Friis, Kazaa was quickly sued by various record companies and Hollywood studios, ending the peer-to-peer system’s run with litigation that led Kazaa to settle for tens of millions of dollars. By this time, Zennstorm and Friis had completed work on – and sold [for more than $3 billion, although they’ve since bought it back] – another company that would go on to Internet innovation, Skype.
Zennstrom and Friis could be said to have touched digital music well before the time was ripe for it. Friis certainly calls the previous time frame “way too early” for some of the innovations the digital music rush brought in, although he also acknowledges the demand was certainly there early on, as Kazaa was “used by an extreme number of people.” Now, these people are in luck as the pair has returned to digital music to launch a new startup called Rdio, which will charge $5 to $10 monthly for unlimited access to an immense catalog of songs from major record labels. This approach is a new, legal and paid implementation of the old idea of making plenty of tracks available to a user, and something currently used by Rhapsody and Best Buy’s Napster.
Friis remarked that he and Zennstrom had developed good relations with music industry execs over the long legal battles, akin to “[gaining] a certain respect for each other, through a good fight.” Indeed, Warner Music Group digital strategy VP Michael Nash commented that the pair had been forgiven their start in favor of working with them to find a new business model for the industry amid the decline of CD sales – ““We resolved the past… these guys are focused on the future.”
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