Monday, February 07, 2005

Thanks to Napster To Go's superbowl media blast, the music business question of the moment is Owning vs. Renting music. This is a sadly misleading rhetorical structure. Neither party in this argument, iTunes nor Napster (and by proxy Microsoft's Janus platform), provides rentals or sells ownership of recordings in the traditional sense.

Ownership of music recordings, whether by design or accident, has traditionally supplied complete portability. What you could do with your copy of a recording was only limited by available technology and fair use laws. I could play my 45s on any record player. LPs could be copied to tape for use in the car. CDs can be (infamously) ripped to mp3s for use on any digital player. By contrast iTunes songs only work on iPods. I can't play the songs I purchased from them on my sports music player or my digital jukebox. The only paid service of note that offers real ownership is eMusic.

If Napster offered true rental access to music we would only pay for the time we listen to the song. Traditional rental models have to contend with a simple fact: If one person rents an item (book, apartment, video), then another person cannot rent that same item. This is why they keep multiple copies of popular items and they charge you for the time that you have possession of the item regardless of whether you were using it that whole time. Traditional rental business solve the problems of *scarcity*. In the case of digital music however, there are unlimited copies of a song available and so the only duration of economic consequence is when a song is actually being listened to. I would be generous to say that what Napster is really offering is rental of their entire catalog, but the model still doesn't account for the fact that most of the time I don't use any of their catalog.

Let's assume for a moment that iTunes tracks worked on all digital music players and Napster charged per listen, then which model, owning or renting, makes more sense? Even putting aside the competition of legally free music (like at my company's website,, neither model is compelling. The service I want is a rent-to-own model. Such a service would have no monthly fee and I could pull over an unlimited number of tracks to a limited number of devices that track how many times I listen to it. Each listen costs me X cents, but counts toward purchase of the track. Any time I make up the difference between the amount I've paid in rentals and the ownership price of the track, the track gets converted to a form with complete fair use portability.

1 comment:

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