RIAA: How to maximize your profits from online sales
Posted on Tue, 8 Aug 2006 in Technology
Last edited Tue, 8 Aug 2006
Last edited Tue, 8 Aug 2006
- Accept the fact that you will have to sell music online. Actually you already did that. Good job.
- Accept the fact that DRM will never work. Remember: once your DRM is
broken anywhere, it's broken everywhere. And it will be broken somewhere. If it's not
entirely obvious to you that any DRM can be reverse engineered, hire a programmer to explain it to you.
DRM will never stop people that are determined to infringe your copyright. It will only inconvenience and alienate your legitimate customers.
- Don't try to develop your own media formats. Use standard open formats so you product works everywhere.
- Put a database of your entire catalog online. Don't worry about the user interface. Just put all the metadata into xml and make it searchable, and provide a way to download the music for a fee.
- You don't need to worry about the interface because everyone else will do it for you. The open-source community will develop a itunes-like client just because they want one. Web startups will make a web-based interface just so they can sell ads.
- Don't charge too much. It doesn't take an economist to see that demand for online music is pretty elastic. Transaction are costs almost zero so the lower the price, the more music people will buy.
- Do it this way and you are in charge. You get to decide how much to charge for your product, not Apple. Your product will work on any player, not just the ipod. You get all the revenue from online sales, not the scraps from Apple's table.
- Do it this way and your customers will love you. Nobody likes being locked in by proprietary formats. People want their music to run on the player they choose, not the player that was chosen for them by you or Microsoft or Apple.