Digital audio killed the industry. Why buy an album when you can
1. Use Napster
2. Use Limewire or Kazaa
3. Download from FTP trading sites
4. Torrent from Pirate Bay
5. Listen on YouTube
6. Listen on Spotify
Digital supply is effectively infinite so the price goes to zero. How to apply DRM to files ripped from a CD that can be compressed down to 3 MB?
There are other factors, like changes in youth culture and competition from other forms of entertainment, but digital audio + distribution completely transformed the music ecosystem. In the 1990s it was possible for talented, intelligent young people to start a band and pursue music as a career because the expected return was so much higher -- not only monetarily but in cultural cachet and the excitement of the local "scene". But all that has dried up. Labels aren't giving out big advances, nurturing unknown bands, or paying for million dollar albums any more, because they won't recoup the costs like they used to. Meanwhile potential talent got a job, went to college, or stayed home and played video games.
Once music lost its "goods-character", as Carl Menger would put it, all the upstream inputs -- like fancy, palatial recording studios -- withered away.
> Digital audio killed the industry. Why buy an album when you can...
As someone that jumped on the Napster and, to a lesser extent, Limewire and Kazaa bandwagon, their value for me wasn't so much that I could get something for free that cost money at the local record store, but it was stuff that couldn't get at all at my local record store.
That said, and much later on, the ability to legitimately listen to music on-demand via Spotify and its ilk pretty much ended my trips to the store.
The bands I love now are all ones that I discovered by downloading tracks. They weren't played on radio (or the songs that had airplay didn't really represent their catalog). I was a teenager with little ability to go to the store let alone afford to buy albums. I have no moral qualms about getting those tracks.
The experience of Napster, Limewire and Kazaa was pretty bad at the time. Plenty of songs were low quality, mislabeled, skipping, incomplete, or radio recordings with announcers talking over them, which was especially frustrating when it'd take 5 minutes to download a single song.
I was a teenager limited to summer job money, but I was happy to buy music on the iTunes store when it launched. I bought CDs as well, but my primary motivation for piracy was that record stores had a limited selection and often exorbitant prices (because the industry was engaged in price fixing^), and the record labels seemed to care more about stopping online music consumption and forcing people to buy CDs than actually providing a worthwhile paid service–their official channels were godawful, see PressPlay.
> all the upstream inputs -- like fancy, palatial recording studios
Digital audio from the listener end had its piece, but two other trends also converged:
- Digital audio from the producer end continued to advance and become cheaper. You can make pretty good recordings on a laptop with the appropriate sound interfaces now, if you have a decent soundproofed room. That is assuming your music isn't digital synth based. Studios are a thing of the past or what a person who likes to produce music calls their bedroom or basement.
- People started caring about the portability of music much more than the quality of it. That trend goes as far back as the Walkman. Regarding the quality, now no one cares if the SNR of your "recording studio" can accurately record all 20-20KHz band of a pindrop from 5 miles away at delta-sigma modulated 192Kbps. If it sounds good with headphones or a car stereo it's fine. This is why MP3 was successful despite its audio quality issues.
1. Use Napster 2. Use Limewire or Kazaa 3. Download from FTP trading sites 4. Torrent from Pirate Bay 5. Listen on YouTube 6. Listen on Spotify
Digital supply is effectively infinite so the price goes to zero. How to apply DRM to files ripped from a CD that can be compressed down to 3 MB?
There are other factors, like changes in youth culture and competition from other forms of entertainment, but digital audio + distribution completely transformed the music ecosystem. In the 1990s it was possible for talented, intelligent young people to start a band and pursue music as a career because the expected return was so much higher -- not only monetarily but in cultural cachet and the excitement of the local "scene". But all that has dried up. Labels aren't giving out big advances, nurturing unknown bands, or paying for million dollar albums any more, because they won't recoup the costs like they used to. Meanwhile potential talent got a job, went to college, or stayed home and played video games.
Once music lost its "goods-character", as Carl Menger would put it, all the upstream inputs -- like fancy, palatial recording studios -- withered away.