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How will the music industry business model change with high resolution downloads?

 

If one can pay a one time fee to download a high resolution .flac file that's equivalent to the original master onto their PC, make as many copies as they like to send to friends, or perhaps even sell on the black market, how will the music industry sustain itself?

 

My concern is artists and recording producers will simply stop making new music albums if the profit margin becomes to small to make a fair profit.

 

Len

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The assumption here is that high resolution downloads will be any more abused than any other. I think the opposite is true. People who have enough money to buy equipment good enough to benefit from high resolution have the least motive to steal music, since they can afford to buy it.

 

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Distribution is all of a sudden a whole lot easier. The big labels will be less valuable to musicians, except for straight promotion. Musicians have always been at odds with them anyway. So I think you will see more musicians setting up their own download sites or use others like HD Tracks and eventually "Itunes for audiophiles". A nice opportunity is for software developers to come up with a canned distribution site to market to musicians. A musician gets the software, fires up its download site, loads the music and starts collecting money. I think promotion then becomes the key. How do you drive people to your download site.

 

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I just did a quick search on "beatles flac download", and the first site listed was - you guessed it - thepiratebay. That was followed by several other torrent sites. The only way we'll see legal hi-rez downloads of popular music (really popular as in U2, Dire Staits, Pink Floyd or Beatles) is if it's wrapped with DRM. I doubt this is ever gonna happen.

 

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First I had to stop eating super-sized-bacon-cheese-double-patty-sliders, then I had to buy a Prius, then I had to save a puppy running around in the street, then I had to let the guy in at the freeway ramp. Now you expect me to stop stealing music? WTF???

 

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With all due respect and based on the responses so far, I don’t think many people have thought this high resolution download business model through very well. I’ll be very surprised if high resolution downloads even reach the selection SACD’s have afforded and even that has not been very good. There’s currently over 6600 SACD’s listed on SACD.net and only 10% of that number of high resolution downloads on HDTracks.

 

I don't believe musicians or producers are going to simply take the word of music lovers that proclaim they will never "copy" high resolution music because they can afford retail prices. I also don't think their going to spend signficant sums of money on recordings only to promote concerts. And why in the world would a group of musicians expend significant effort and money to produce a recording that has the potential of being copied rather than paid for?

 

IMO the music industry will never allow the potential to wholesale copy their music master files onto DVD’s or USB flash drives to be given away to friends or sold on the black market!

 

But I could be wrong - we'll see.

 

Len

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I was also trying to ask and answer the same question to myself.

 

the answer part is not easy, especially when you do not know how the industry works currently.

 

I also think just selling full-rez files for anybody to copy is probably not what the artists or recorders want to do.

 

may be a type of pay per play system can be developed, whereby the files are stored locally but playback is paid (but that sounds unattractive to consumers - certainly to me).

 

or a cloud based solution where hi-rez files are streamed (but this will need lots of bandwidth and may be difficult to make portable)

 

so, I am very frustrated. such a nice thing (good music at high qualilty) seems to be jsut about around and yet we do not get it!

 

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I certainly share your frustration because I haven't found many people willing to address this subject seriously. I'm not really interested in RBCD quality music downloads. And without a realistic revenue stream solution I'm afraid high resolution downloads will never become a reality.

 

I'd be willing to use any reasonable system that would result in most music being available via high resolution downloads - "pay for listen" or a streaming (if the bandwidth would support it) business model. NetFlix is beginning to use a similar business model for films which must use a similar bandwidth. Perhaps a monthly fee to belong to a high resolution music download service could be another option.

 

Perhaps your "pay for listen" idea could be expanded if the music industry could develop a method of allowing users to buy a play back license that would accompany the download high resolution file but couldn't be copied or transmitted. The license file would have to accompany the music file on each client server to allow playback. In the 21st century there must be someway for technology to solve this problem without corrupting the actual music file such as past anti-theft systems have purportedly done.

 

Len

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Most DRM systems will support the "pay for listen" model you suggest in which content many be downloaded once and payment is required for each play. Each playback system, however, must provide support for at least one DRM technology (e.g. PlayReady, Widevine, etc.). PCs or Macs with external DACs could provide DRM support through the host computer. Networked players, however, would have to implement DRM on each player. The only networked players I'm aware of with such support are A/V receivers.

 

Decryption of protected content will require a bit of computational horsepower, but that requirement is minimal and should have no impact on the quality of playback. There's also the issue that the content license may prohibit playback of content over a digital port (e.g. S/PDIF). There wouldn't be much point to a vendor going through the expense and effort of wrapping their content in DRM if it could be easily captured in its pristine, unprotected, format.

 

The Digital Entertainment Content Ecosystem (DECE) is a consortium of hardware and software vendors working toward a DRM system which would allow content from any source to be played on any device owned by the content purchaser. This system would eliminate the current issue with DRM that content may only be played on devices supporting the DRM system that was used to encrypt the content.

 

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DRM is not viable. It will always be cracked. BluRay was recently blown open, according to reports, and that had a relatively sophisticated approach. It's a truism to say that DRM will always be cracked, because the data exists and is readable. Previous DRM efforts really pissed people off, there are still CDs of mine that are a pain to rip, and which I couldn't rip and listen to on my own hifi until relatively recently. DRM will always mean inconvenience, at best, and that is incentive enough for cracking.

 

I don't buy the arguments raised here about HQ not being made available without DRM. They aren't made available at all, at the moment! Apart from a growing number of excellent pioneers, that is. The majors are not gaining anything from failing to release this stuff.

 

I'm not presenting any answers here, but I am certain the DRM is not the way to go. It will lead to a retrenchment to old industry vs pirates positions, which industry would not win.

 

ZZ

 

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For popular music, I think that it's a case of horse & stable door. There may be some kind of business model in subscription streaming services, and an even more limited one in premium box sets with extras. But basically I think the only realistic approach is for musicians to play live and treat recorded music as the (essential) marketing to build an audience. I know it's a little corny, but if you turn things on their head then the internet has given music a potential global distribution system for minimal cost, and frankly if the music industry can't find a way to make this work... Well, as already pointed out, maybe a music industry is not needed in it's current form.

 

However, the question was about high resolution and personally I think this is a somewhat different, niche market. I can't see any form of drm being acceptable given that the audience for high res wants to be able to transcode formats and use different software players according to what they think works best for them. Equally I have some doubts about high resolution streaming which would most likely be locked to a software player. Also a pay-per-play model might make some sense for tv and movies where even a favorite film or show will only be watched a handful of times, but a favorite song could quite easily be played tens or hundreds of times - not very tempting from the consumers point of view.

 

I'm also not convinced that the high resolution download business is somehow being held back due to rampant piracy of the material. It's not difficult to find mp3s and youtube videos of contemporary music, but a 24/192 classical concert? Perhaps there just isn't a vast amount of recorded material yet? Perhaps the high res 'master tapes' that we hope are out there were always intended to be downsampled on final mastering, the higher resolution giving the engineers some room for making adjustments without too much degradation?

 

As for the assumption that many potential buyers of drm-free high res music will inevitably prefer to obtain it free instead of paying a fair price: Many of us do buy goods ethically and in fact pay a premium for it - think about fairtrade coffee or furniture from recycled wood / managed forests, for example. The point being that we believe that buying such goods means the farmers get a fair share of the profit and/or the environment is better served... And the same question goes out to any music industry moguls. Fairtrade music, anyone? "No artists were harmed in the production of this recording"

 

Apologies for my cynicism. I do think it's fair for a wide variety of talented artists to be able to make a living from their work, but I'm not so sure that the industry's obsession with drm will help achieve this goal.

 

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Whether it is a lowly MP3 or the higher 24/192, DXD or DSD, it does not matter. What you describe is illegal and cannot be prevented except by legal enforcement against a minority since the majority are in compliance with the law. And this is not peculiar to music. The same is true of the movie industry where is is easy for anyone to rip DVDs or Blu-ray movies and make unlimited copies. There is no technology that cannot be hacked or bypassed.

 

The irony is that the folks who care most about quality and higher resolutions are likely to be in compliance with the law. The folks who do not care about quality are much more likely to steal or buy bootleg of whatever you have to offer.

 

I happen to feel that though the high-end audiophile market is small, the profit to get the highest quality music is high. I was just reading a thread on Audio Asylum where the poster was raving about the Sonny Rollins Vol 2 SACD. I found the SACD on Amazon for $33, the CD version for $9 and a used CD for $3. The LP version is available from Acoustic Sounds for $85. No doubt the $33 SACD or $85 LP are sonically superior for the ultimate connoisseur. But the $3 used CD for the budget conscious cheapskate is a great value for excellent music.

 

Only an audiophile would care about music format. To the mass market, MP3 quality, CD quality, DVD-A or SACD quality are all the same. The audiophile market is too small to make any significant difference for the music industry to hold back on releasing higher resolution files. Only an audiophile would believe that he or she needs to re-purchase music that they already have just because it is of higher resolution. Of course almost every reader of this website is an audiophile. But the law of diminishing returns is true even for audiophiles and once they have something good enough like 24/176.4 or DSD, they too will be disinterested in buying the same music in a higher format. As an audiophile my opinion is that the record companies have one shot in selling me their best at a fair price. I am interest in the best for a reasonable price, whether their best is a CD, 24/176.4 file, a DXD file or a 180g 45rpm LP. Beyond that and except for a few format comparisons my focus is new music - something new and not what I already have.

 

I believe the business model for music and high-end audio needs to change. Those who offer excellent products for reasonable prices will reap good profits. Those who don't will be bypassed and their profits will decline.

 

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that cause me to be very wary of embracing music downloads. I love to listen to music, but if the sound reproduction is mainly loud and compressed I find it uninvolving and fatiguing. And while I know the recording and mastering process is the key element in sound quality, I've embraced SACD's because all else being equal they sound more open and natural. So I'll only be interested in high resolution downloads as an alternative if the selection is much wider than SACD.

 

It appears from this discussion my only hope is SACD's will remain a niche market like LP's (too much maintenance). But unfortunately SACD's don't offer a wide selection either, and companies like Analogue Productions and Mobile Fidelity appear to be releasing old material rather than contemporary artists.

 

It's sad commentary in the 21st century the best we can do with music are niche products. So I'll be standing on the sidelines waiting to see where this music download revolution is ultimately going. Currently I don't see that being in my interests.

 

 

 

Len

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