Place Elasticity

I walk 10 blocks to work and back everyday I am not travelling. It’s usually a nice walk unless it’s pouring rain. I’ve taken to listening to my iPod lately instead of yacking on my cell phone. It makes me a bit less productive, but I feel better when I get to work or get home.

Lately, it seems that everyone on the street has an iPod. I am serious. Today I made a point to count the percentage of adults I passed that were listening to an iPod (or some other digital music player). It was about 50%. That’s huge.

That exercise reminded me of the scene in Kurt Andersen’s Turn of the Century where the lead character walks around NYC counting people on the street for an entirely different reason. If you read the book, you’ll know what I’m talking about.

Anyway, back to the point of my post. I learned in business school about price elasticity. The idea is simple. The lower something costs, the more it’s used. Clearly music is experiencing the same effect. Digital music is often free and the result is most people have a lot more music on their iPods than they ever had in their CD collections.

But I think there’s something else more fundamental going on. We are seeing place elasticity. People can listen to their iPods everywhere. It’s not just walking down 5th Avenue. It’s in their car with the iTrip. My friend Dr. Dana listens to her iPod in her hotel room with her cool little portable speakers. Mario Batali uses an iPod to power the music in all of his restaurants. And as a result, we are experiencing an explosion of music listening that is possibly more impactful than what happened when radio first made music portable.

#VC & Technology