High Resolution Download Business Model

lenwfl -- Tue, 10/26/2010 - 14:53

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?

Won't artists and recording producers simply stop making new music albums if the profit margin becomes to small to make a fair profit?

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 limited selection SACD’s have afforded. 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 they're going to spend significant sums of money producing albums only to promote concerts. And I doubt a group of musicians would expend significant effort and money to produce an album for direct distribution 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!

Sam -- Tue, 10/26/2010 - 18:12

How does apple iTunes work? Just like millions of people downloading garbage quality mp3 files. May be they can let a few remaining audiophiles download hi Rez. Besides how many friends do hi Rez listeners have? Lol jk. Downloading is how theworld is getting music and is surely in the future for the upcoming years. iTunes like people let us few audiophiles have some hi Rez before we die. Can't hear properly any way like in the old days. I wonder if it will happen in my lifetime. One can hope. Happy listening.

Steven Stone -- Wed, 10/27/2010 - 09:15

 Downloads are not the preferred business model for music sales.
 
Streaming is the future. CLoud computing and streaming will prevent copying becasue the end user will no longer have possession of any music files.
 
You can't copy what you don't have.
 
Simple?
 
What rez will streaming be? Your guess is as good as mine.

Steven Stone
Contributor to The Absolute Sound, EnjoytheMusic.com, Vintage Guitar Magazine, and other fine publications

vade@att.net -- Thu, 10/28/2010 - 10:06

Unless Internet speeds get a lot faster, I fear streaming will be limited to MP3-grade files. Those comprise the bulk of downloaded files today, and recalling the fate of SACD and DVD-A, I'm not holding my breath that we'll see a demand for higher-quality streamed files anytime soon.

Don't programs already exist that capture streaming music from Internet radio stations? Even if those program won't work with hi-rez files, I would expect programs that capture streamed hi-rez files to become available. A strictly streamed file process will be hard to enforce, even if we revert to (shudder), DRM. And DRM measures have been quickly cracked in the past.

Vade Forrester

lenwfl -- Wed, 10/27/2010 - 11:10

Thanks for your response. 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. NetFlix is beginning to use a similar business model for films which must use a similar bandwidth. I use that service but have found at times it results in re-buffering interruptions which are irritating.
 Rather than "streaming" each time you wish to listen perhaps the music industry could develop a method of allowing users to buy a play back license that would accompany the high resolution download but couldn't be copied. 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

ilxman99 -- Thu, 10/28/2010 - 13:39

With all due respect to the older demographic this mag seems to cater to, this "if we give you quality, you'll just steal it" argument is a load of crap to the younger crowd. When the music industry continually tries to get you to buy the same music over and over again--think classic rock on LP, cassette, CD, SACD/DVD-A, Bluray, etc.--then calls you a crook when you try to figure out which of the1 or 2 songs are worthwhile on the crappy $18.95 new albums they push out, we youngins (Gen X and younger) decided we like compiling "mixtapes" of the stuff we like instead. When years ago the same industry tried to secretly keep us from ripping our CDs and suing 11 yo kids for exploring music with friends over the Web, we decided the real crooks were the music industry suits.
Newsflash: We of the digital generation view music/movies as data. When a kid scratches up that Lion King DVD on the 3rd viewing, the suits want you to go buy it again--and again, and again, since the kids will want to see it about 100 times. We youngins say we paid for the data; we always back up our data for when (not "if") it's inevitably corrupted; and we are not crooks for doing so. Quite the contrary, Hollywood is the crook for preventing us from backing up our data under the phony "theft prevention" notion.
Moreover, note that Apple COMPUTER Company is the one who watched what we youngins were doing, realized we weren't crooks, then stepped in and created a market that the music suits said would never exist:  a profitable Web storefront to buy music. Then Internet Radio was born to institutionalize what we youngins had been cobbling together all along:  a way to explore new music and see what we wanted to buy (viz., songs, not albums full of crappy filler). Gosh, it seems to be working rather better than the shrill, mendacious music industry claimed it would.
While I am a strange duck--an audiophile under 50!--I am sick and tired of being routinely portrayed as a crook. We youngins routinely paid $50+ for console video games while we supposedly "stole" $15 CDs. Gee, you think that's because video game quality (immersive storylines, improved graphics, new products to draw in older players, etc) served the consumer while the music industry put out crappy $18.95 albums with 1 good 4-minute song? Note above how cavalier SS is about not being able to own your own music and stream it as you like across your lifestyle network. With all due respect, that's just the sort of maddening arrogance that is killing the music business! Why, why, why would I shell out money for music that I don't own and can't use as I please? If you keep purposely foiling our digital lifestyles, actively discouraging us from building music libraries as we see fit, and then call us crooks when we find ways to oversome your foolish obstacles to same, then we will continue to stay away in droves.
Lastly, how in the world would anyone assume people will start stealing hi-rez music when mp3 is so much easier? The only people interested in hi-rez are people who care about quality--not the folks wearing the white iPod earbuds or with plastic computer speakers on their desk. Guys, please get a clue. The Web isn't going away. Neither are people who love music and who would pay to OWN and enjoy it at high quality. So let's see: Sony comes up with SACD, then purposely makes it impossible to rip it to a computer (we youngins have been doing this for years), then sits back and waits for us youngins to embrace it and flood them with our money. Meanwhile, years late, the audiophile world realizes that ripping music can be a pretty nifty way to explore music, all the while castigating us young crooks for ruining the music business with our thievery.
SACD/DVD-A failed because we youngins refuse to embrace a business model that a) comes on a physical carrier; b) doesn't give us the all-digital, non-DRM  functionality we demand; c) doesn't give us the underlying immersive musical odyssey we crave; and d) generally treats us like criminal scum. I'd love to buy a music server/DAC with 24/192 and SACD decoding--but I won't. That's because the industry hasn't made the bulk of the best music available for download, and SACD will die out precisely because it refuses to embrace the digital reality at all. To end my diatribe: We youngins enjoy some music at mp3 level (the car, at the gym). But, really, we do like some music in all its glory on a real hifi. Give us quality the way we want it--the Web, folks--and we will buy it! Even it you think we're crooks, we'll trade the mp3's, not the hi-rez. Purposely withholding the best quality music is not the way to build the industry for the long term.

lenwfl -- Thu, 10/28/2010 - 15:09

I agree the music industry appears to have questionable motives based on the way music is produced and distributed. I also agree musical selection is limited with high resolution formats like SACD - I've read Sony charges an extremely high fee for their DSD license. So while I do have a lot of empathy for original recording artists (which I'm sure you don't include in your scum charge), I don't have the same for the recording industry distributors. But if what I've read is true the music industry has lost huge revenue due to piracy, particularly from black market distributors in foreign countries like Russia and China. This has to a disincentive to creativity and thus the continual stream of new music.
Therefore I don't think it's reasonable to demand the music industry provide the equivalent to music masters on the promise we audiophiles will always buy a legal copy. 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. If high resolution downloads never become a reality because consumers like you will never accept copy protection, and if SACD dies as you and others are suggesting, I'll have no other alternative than to go back to LP's. A sad commentary that in the 21st century the best we can do with high resolution music are niche products and the only lasting one may be a 100 year old technology. So I'll be standing on the sidelines waiting to see where this music download revolution takes us. For now I don't see it supporting my interests.

Len

Sam -- Thu, 10/28/2010 - 17:19

It's all about the money. Like all businesses in our free market Music industry wants to make as much money as possible from all over the world any way possible. While the crooks generally in other countries like china make mass illegal copies to make their own profits. The USA is the only place on plannet with tough copyright laws on anything books, music, videos and most of the money at full price charges is made from customers here like the above poster who feels cheated and tired of being accused of being a crook. The problem now is that from greed all the work is outsourced and they want us to buy these things at huge profit margins. But guess what us Americans have less and less jobs left to dump into the system. Do we need to look any further. Apple products designed in USA assembled in china. The general public will have to cough up the money to keep things going even if it's for crappy mp3 or useless one good song cd for $18. The buissnessmen need to maintain their salaries. The issue of service to music and art, hearing art in it's best form how the musician recorded in studio doesn't matter squat. It ALL about the money.

vade@att.net -- Fri, 10/29/2010 - 08:10

> Therefore I don't think it's reasonable to demand the music industry provide the equivalent to music masters on the promise we audiophiles will always buy a legal copy.
As Sam comments, it's all about the money. If HDTracks, Linn Records, and other online stores makes money from hi-rez downloads, others will start offering them. If it turns out to be unprofitable, the downloads will go away. How can we affect the situation? Buy hi-rez downloads from your favorite online store. Standing on the sideline, or limiting your purchases to dying hi-rez formats (hey, I have a lot of SACDs too) will not contribute to an enduring hi-rez format.
 
Vade Forrester

Sam -- Fri, 10/29/2010 - 08:34

Vade, the problem is that audiophiles who want to or who know about hi Rez are very few. They are also old and starting to die off. Downloads and computer audio is a relatively new thing. The future depends on the next generation iTunes/iPod users. Most of the money is made by mass market. And the sad thing is they don't care much at all. If there was a way to just overhaul cd and mp3 like VhS to DVD and now DVD to blue ray. From regular fat tv's to HD LCD and plasma tv's in the mass market only then massive amounts of money can be made. As we progress with everything in technology we keep going the other direction with audio. Mp3 is worse then cd and cd is bad enough. If people could sell crap to make a billion dollars they would do it. The mass market is what generates the maximum profits/revenue. The only way is to overhaul the current formats or somehow the general public wakes up. My guess is that hi Rez won't become a reality for atleast another 5 to 10 years or not at all. Another alternative is to sell high Rez cheaper then compressed formats since storage has become lots cheaper. The audiophiles are too small a number to make change. Otherwise DVD audio or sacd would have replaced cd. But they never got close to cd.

lenwfl -- Fri, 10/29/2010 - 08:45

I would be interested in knowing how current websites like HDTracks are gaining access even to the limited content they're making available as high resolution downloads. Are they including some type of copy protection in the high rez downloads? Is this just an attempt to build a client base with limited content until the music distributors can find a way to protect their product? Again I don't see how music distributors can afford to make licensed copies of what is essentially their music master file available when those files can simply be copied and sold on the black market. I'm disinclined to spend money building a music server and buying limited high rez content that at best may just become yet another niche product. Until I know much more about the viability of high rez downloads I'm staying on the sidelines. I made that mistake once before when I switched from LP's to RBCD's and until SACD's came along I was considering going back to LP's - even with the hassle.

Len

ilxman99 -- Fri, 10/29/2010 - 10:13

I apologize for my tone in the above posting--but I was ticked off because I had just read yet another article in another publication re the music industry blaming their woes on us thievin' youngins. I am an audiophile today because Jeff Joseph (yes, the speaker designer), during his days as a hifi store owner, spent some time with a poor student who had wandered in to check out...home theater equipment (back in the '90s). After I had been wowed with the HT stuff, convinced I would buy some (after I paid off the student loans!), Jeff came up to me and asked if I'd like to hear some music. I thought he meant playing some on the HT rig, but instead he brought me into another room and sat me down. He then proceeding to play some jazz. My jaw hit the floor about 3.7 seconds later. (If memory serves, it was Joseph RM-22 speakers, Cary amps, and I don't recall front end.) I simply didn't realize music could sound so real, so captivating.
Here's my point:  If the industry--Hollywood, hardware, retailers--could focus more on stoking demand by exposing us youngins to true quality, we will buy it. Yes, it took me some years and several moves before I finally took the audiophile plunge, but once I was exposed to true quality there was no way I was going to be satisfied with the boombox/computer speakers/iPod/Bose life cycle.
Finally, we must not conflate piracy and file sharing. Piracy is the very common practice of the Chinese CD/DVD mfg plant loading the legal discs onto the trucks thru the front door (heading to the West), and loading illegal discs onto the trucks out the back door (heading to the East). The downloading model actually eliminates that risk; it doesn't add any new piracy risk. Illegal file sharing is what the youngins do via the Web. But again I ask:  If 24/192 or 32/384 can't be distinguished from mp3's via iPod/white earbuds or plastic computer speakers , why would anyone trade a huge file (4 GB) for no gain? Of course, they'll just trade the mp3's. Purposely withholding your best product from your market because you find your customers contemptible--and yes, Gen X and Y rule the roost going forward, not the Boomers-- isn't the best way to build a business/industry for the long term.

lenwfl -- Fri, 10/29/2010 - 13:55

I agree with you the younger generation will largely dictate the marketplace. It's also encouraging to hear some of the younger generation appreciate the experience of well recorded and mixed music played back through a good audio system. I hope you're right the audio industry will agree high resolution files will not be pirated, and audiophiles won't file share high resolution files. And I truly do hope within the next couple of years most music will be available via high resolution downloads. But I'm not buying into this music server model until I see that happening. In the meantime I'll continue buying and enjoying SACD's.

Len

Sam -- Fri, 10/29/2010 - 10:30

LP's remain the best option so far.  I think in terms of sound quality it will or it has outlasted the RBCD.  The CD was always horrible even if convenient. The recent spike in LP sales is not because of sound quality......its because its so cool for the youngsters. Many use it on old mediocre turntables. The majority of sales is coming from compromised Itunes downloads.  If I had a big collection of LP's in 2010 and I wanted to hear the best sound quality with great and wide selection of music, I would be comfortable in investing in a state of the art LP/turntable setup. I would not spend upwords of 5 to 10K on High resolutiton players at this time and I certainly would not spend anything on a CD player that spins CD's(that includes an SACD player).  even without the Hirez a music server is far better option than the disk on the fly being decoded by the lazer while playing. (A music server is also the least of the hassles as long as you put uncompressed files on it and the second best option in terms of sound quality with largest music selection).  Hirez will be the ultimate thing but look how little and whats available.  I am even willing to pay $45 a title for the HRx recordings of keith johnson on reference recordings but look at what selection is available.... sad.

vade@att.net -- Fri, 10/29/2010 - 13:18

Len, as I understand it, HDTracks gets its files directly from the company that originally recorded them. There is no copy protection, so it's possible to make backup copies and to play the files wherever you like. I play the files I've gotten from HDTracks on a computer-based server, on a stand-alone server, and on my desktop computer. HDTracks' content seems to be fairly broad, though probably chosen to appeal to the serious music lover (you know, the over-50 audiophile)-I doubt you'll find any Lady Gaga. I think ilxman99 hits the nail on the head; those who are most inclined to trade illegal copies of an album probably would be interested in MP3-quality files that are small and fast to transmit, not huge multi-gigabyte hi-rez files that take forever to transmit and won't play on an iPod or most other portable players.
 
Vade Forrester

lenwfl -- Fri, 10/29/2010 - 14:09

Thanks for the thoughtful reply Vade. I do hope you're right and the music industry accepts that files equivalent to their music masters will not be pirated or liberally file swapped. But I'm not going to jump into the high resolution music download model until I see lots of new music material being offered in that format. SACD.net lists over 6600 SACD's produced so far and the last time I checked HDTracks offered only 10% of that number. But if I see the music industry is sincere about supporting high resolution downloads in a way that generates sufficient demand to sustain it in the long term, I'll most certainly adopt it. Len

Len

Sam -- Wed, 11/03/2010 - 11:05

Lady gaga should not even be in the music industry let alone hi Rez. They can use hers or Justin beiber downloads in high Rez instead of waterboarding to keep our country safe. Reminds me of MF shocked "who buys Justin timberlake on vinyl" lol

firedog -- Tue, 11/02/2010 - 09:52

 Note: Paul McCartney just released Band on the Run remastered in 24/96 (as well as other formats). It is even available with your choice of :
1. hi-res with light volume compression ("limited")
2. hi-res with no limiting

I got both versions. Very good sound. I prefer the unlimited.

This is a great step for audiophiles. Classic rock/pop being released in a true audiophile format, and even an acknowledgement that serious listeners don't want volume compression. 
Interested: go to http://paulmccartney.com 
I started another forum thread on this topic

ilxman99 -- Wed, 11/03/2010 - 10:06

Here's a quote from LP master extraordinaire Doug Sax (TAS 206):
Even though the LP is a technology I’m conversant and feel totally comfortable with, it’s pathetic that the best thing you can buy in 2010 is an LP—an artifact from the 1960s. For me, if I could go home and listen to a disc in 192kHz the way I hear it in the studio, you could keep your LPs.
Here's a more constructive suggestion re getting more hi-rez music out there: 1) Get it onto Blu-ray and get the high-end retailers to start reaching out to us youngins with SOTA demonstrations, say with hi-def video of concerts with 24/192 surround, or with SOTA headphones with 24/192 stereo; 2) Coordinate with the music houses to give 5 free 24/192 downloads with the purchase of speakers, headphones, etc. Then watch that small group of social network-connected youngins spread the gospel of hi-rez far and wide, which we will buy when the Boomers get a clue and offer it the way we like to buy our music., viz., online.
The video game market has adapted to online realities because they realize Gen X and younger rule the roost. It's high time the music business woke up and realized the same.

Atom Shop -- Thu, 11/18/2010 - 14:28

"...Coordinate with the music houses to give 5 free 24/192 downloads with the purchase of ....."
 
AMEN!!!!!

klimaudio -- Fri, 11/19/2010 - 00:37

 I actually like the "pay what you want" business model.  You can't stop people from pirating your music....why not just give it away.  That's what I do!
If you like it great, throw a few dollars my way...if you don't like it.....don't pay anything for it.  If you do like it and don't pay for it....well I guess you have to learn to live with yourself knowing that an artist released some music you enjoyed, and you don't care about the cost it takes to make music.
I'm just happy people listen to my music, and I hope they share it with their friends.
http://indietorrent.org/klim
Support independent artists that actually care about sound quality and are willing to offer hi-rez downloads.

 Free Hi-Res Surround Downloads of Electronic Music  indietorrent.org/klim

mjmonjure -- Mon, 02/27/2012 - 21:53

Sorry for posting to an old thread, but I could not resist the subject.
IMHO, anyone who has not boarded the digital train, will find CD/SACD selection slim pickins in coming years judging from video's Blockbuster vs. Netflix models.  For me, CD's are a use once and throw away (or recycle) and the only reason I buy them is because most of the (uncompressed) music that I prefer is not on HD Tracks.
At some point the only way to buy music will be digital download.  From this perspective HD tracks may be ahead of the curve on what will surely be a challange to Apple's DRM/Itunes/istore/imac, give me an ibreak ecosystem or other mass distribution outlets like Amazon.  I for one will not download anything, no matter who's selling it, if has DRM.  It's too much trouble keeping up with the mutiple iTunes accounts, which devices I can play them on, how man PC's are authorized, blah, blah, blah.  Apple has great products, I like what they sell, but for the whole iTunes/Store concept, they are kind of like the Borg, resistence is futile, NOT.
Those that want music that is 25 -100 years old probably already have it in physical format.  God bless you, see you in the next life.  For those that crave new stuff, the future, to me, looks peachy.  I hope the HD Tracks of the world proliferate and become plentiful.

TMAC -- Tue, 03/13/2012 - 12:32

I absolutely agree with you. Some time in the near future CD's will be non existent and HD Tracks is definitely leading the way when it comes to non DRM HI-Rez downloads. I for one definitely hate to see the music industry be affected by illegal downloads but I think part of the problem is the records labels and high level executives were to late to the party. Instead of embracing new technology like I don't know things like THE INTERNET they sat back and tried to stop it. If they would have re-thought there business models, maybe things might not have gotten so bad.

vade@att.net -- Tue, 03/13/2012 - 13:03

TMAC, I think CDs' demise will be a long time coming. There are still lots of people in rural areas who have dial-up Internet access. For them, downloading music files, even RB files, takes a long time. Then there are the technosaurs who just like to get a physical product for their purchase. Bottom line: CDs will continue to exist as long as there is a demand. Like LPs.
 
Vade Forrester

aysil -- Fri, 03/16/2012 - 08:29

Here is a link from Gilad's blog about the change in music industry:
http://blogs.linn.co.uk/giladt/2011/02/major-change-at-emi-warner-apple-...
Although I am not a Linn user, I like their position about advocating HiRes downloads:
http://blogs.linn.co.uk/giladt/2011/05/music-industry-set-to-embrace-stu...

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