This month, SoundScan released year-end figures showing album sales increased 4 percent in 2000 from the previous year, to an all-time high of 785.1 million units. It was the best year in the industrys history.
Free-music lovers uttered cries of disbelief. They cited this as evidence that the recording industry was horribly, possibly immorally, misguided in its plot to strangle poor little Napster. "Where are the CD sales that have been lost to Napster?" they screamed. "Napster is actually good for the record industry if they werent too stupid to see it. But instead of embracing this great marketing tool, theyre just cheesing off their loyal fans."
Napster is playing to this line of thinking masterfully. It doesnt talk about pirating files anymore. Now its position is: Sample music on Napster, then buy the CD. The latest version of its file-filching software has a button linking to CDnow Online, the online retailer owned by Bertelsmann.
Through this whole imbroglio, music industry executives have been demonized as shortsighted, greedy little green-faced golems, jealously guarding their stash of ill-gotten musical gems. They dont "get" the Internet.
But its the recording industry that has the long-range vision. Music companies see a day when digital music players are as ubiquitous as CD players. Once that happens, CD sales will sink if every song ever recorded is available for free on the Internet.
Recently, I downloaded U2s new album in its entirety from Napster, which I burned onto a CD. Whats to persuade me to purchase the actual shrink-wrapped disc? Liner notes? Not really. A guilty conscience? Yeah, sure.
So heres the rough sketch of Shawn Fannings business model: Please, folks, be kind enough to leave something in the tip jar on your way out. That would be totally cool.