What The RIAA Needs To Do

The RIAA is screwing up the music business.  Their hatred of Napster has led to a jihad on free mp3s that is slowly but surely killing the music business.  The major labels will continue to merge, consolidate, and put out increasingly irrelevant music.

Something needs to change and this is what needs to happen. The RIAA needs to drop its fight against free mp3s.  They need to accept that music sold online needs to be as portable as music sold offline is.

I mean how stupid is it to continue to sell CDs with no copy protection on them but to DRM the hell out of online music.  It’s forcing people like me who consume all of our music online to buy our music encased in plastic! It’s dumb, anti-consumer, and it has to stop.

The RIAA needs to accept that some proportion of their customer base will consume pirated music. They need to just eat that as the cost of doing business. 

They need to focus on the majority of music consumers who will pay for music, but want a better deal, and want the music portable so they can play it wherever they want.

The RIAA needs to stop playing into Apple’s hand.  As long as the music industry insists on DRM’d music, they are letting Apple hold onto a near monopoly on music sold online.  Because if you want to play music you’ve bought online on your iPod, you have to buy it at iTunes.

The market needs choice and innovation. Selling clean mp3s online, like you sell them offline is the way to achieve this. Then everyone can compete with iTunes on a level playing field.

Take Rhapsody and eMusic.  These two services are really close to what the market needs.  Merge them and you’ve got a killer offering. 

For $14.99/month I get 50 downloads on eMusic without DRM.  But they don’t have enough music in their library.  I struggle to buy 50 downloads a month from eMusic but easily purchase 10 CDs a month at Amazon.

For $9.99/month, I get to listen to Rhapsody’s entire music library which is extensive, as good as iTunes I think.  There isn’t a day that goes by that I don’t listen to Rhapsody.

If you merged the two services, combined their libraries, charged $19.99/month, got unlimited streaming (which you have now on Rhapsody) and got 50 DRM free downloads per month (with the ability to roll over the unused downloads), you’d have a killer service.

Music lovers want to listen to a lot of music and own the music they really love. They want to put the music they buy wherever they want; their iPod, their laptop, their desktop, their phone, a USB memory stick, whatever.

So get rid of DRM, make music truly portable, level the playing field for the online sale of music, and let innovative services like Rhapsody and eMusic give the customers what they really want.

My dream service (merging Rhapsody and eMusic) may not be everyone’s dream service.

But iTunes is nobody’s dream service except Apple’s.

The RIAA doesn’t know it, but they are slowly killing the music business. They need to stop playing defense and start playing offense.  Napster isn’t the enemy anymore.  Apple is.  Wake up people.

#VC & Technology