Back to School: Music's Been Caught Stealing

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Jane's Addiction released "Been Caught Stealing" on the album Ritual de lo Habitual in August 1990, when I was still in college (ouch). I really loved that song, although I never actually owned that album. Of course, when it comes to music, "been caught stealing" seems to have far more serious implications with college kids these days, and the way it looks, just about everybody's been stealing at least a little when it comes to digital distribution.

I'm pretty sure college kids aren't that much different now than then -- often broke and scraping together pocket change for beer runs, and sometimes finding more time for listening to music than they have cash to buy it. Of course, there are also big changes: Finding new music could be difficult back in my days of vinyl, tape, and brick-and-mortar retailers, especially if you were into alternative music. And yes, kids, we used to "dub" albums for one another using cassette tapes. That probably sounds like the equivalent to rubbing two sticks together to ignite Burning Man, but you do what you can with what you've got.

Kids can now find any music they want just by firing up Amazon.com (Nasdaq: AMZN  ) or Apple's (Nasdaq: AAPL  ) iTunes. Some musicians offer their music directly to fans through their websites. To say that the advent of the digital format has been a great thing for artists is an understatement. However, the convenience and speed of digital piracy has traditional big music labels running scared -- and using heavy-handed tactics that punish collegiate fans through the RIAA, the organization that represents entertainment industry biggies like Sony BMG, Warner Music Group (NYSE: WMG  ) , EMI, and Vivendi's (NYSE: V  ) Universal Music.

And of course, the carrying capacity of Apple's iPod makes the Sony (NYSE: SNE  ) Walkman from my own youth look like a purse-snatching mugger compared with a jewel thief. The iPod makes it easy to carry one's entire music collection everywhere -- and for many people, that music collection just might contain a fair chunk of ill-gotten tunes. That's why Microsoft's (Nasdaq: MSFT  ) Steve Ballmer flew off the handle and accused all iPod users of being music thieves several years ago, Apple's "Don't steal music" stance notwithstanding.

The music industry may be terrified, but it could "think different" itself (like Nettwerk seems to do) and make current trends work in its own favor. College students may be notorious pirates, but they're also voracious music fans, and I doubt that's changed since I was young. Make a fan of a college kid and a band may have a fan (and customer) for life. For example, many of the albums I taped from friends when I was younger I bought outright in later years. And of course, exposure is the first step in making a fan to begin with. The Internet and digital distribution make it possible to open up far larger markets for more artists than ever before -- it's the Long Tail at work.

Music industry giants may be terrified of all the changes, but regardless, digital music sales have burgeoned over recent years. In July, Nielsen SoundScan said digital track sales increased by 49% (although album sales weakened considerably). Market researchers expect digital sales to increase; Strategy Analytics expects digital music sales to increase 62% in 2007 to $2.7 billion, and sees sales increasing to $6.6 billion by 2011, for example. Come on, the kids are all right -- and in a couple years, it'll probably be these same kids who do a huge part in determining which companies and services sink or swim as the music industry continues to evolve.


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