Stringer Bell and the Music Industry

by zunguzungu

I don’t have an MBA, but just watching Stringer Bell take business classes on The Wire gave me the savvy necessary to see why charging for thirty second samples is a real stupid thing for the music industry to consider doing.

As the good Mr. Animal notes, judiciously and with great restraint:

“I wonder if these staggering jackasses have any clue as to how much money they’ll actually lose if such fees were to be instituted? I can’t tell you how many times over the course of my life I’ve purchased music that I wouldn’t have otherwise purchased because I was able to preview songs and liked them. I’ve done it on iTunes with the uber-annoying 30-second preview, and I’ve done it countless times in music stores like Virgin and Tower, where you used to be able to stand at a station and listen to a CD to see if it was worth a shit. I can honestly say that I’ve spent at least $1000-$2000 on music that I wouldn’t have spent otherwise for no other reason than because I previewed something I was unfamiliar with and liked it. AND I’M JUST ONE PERSON!”

This seems right to me. But it also occurs to me that the music industry’s thinking is clearly a logic of monopoly capitalism: “Since we have a monopoly on a product,” they reason, “if you want to buy it, you have to buy it from us.” And then, they think “since you can only buy it from us, we can charge whatever we want for it.” They are delighted with this.

The problem, however, is that their perspective, afflicted as it is with the particular pathology of people whose reliance on economic statistics immunizes them from having to think  about consumers as people, blinds them to the elasticity of demand: they act as if there is a fixed amount of music that consumers need to buy, that consumers budget a certain amount for music and then go out and spend it. This is possible, I suspect, because they don’t think of consumers as humans, but rather as possessors of money, as simply a resource to be tapped in search of their own profits. The purpose of the consumer — as signaled by the very name — is to consume.

In the real world, however, demand for music is elastic: if people are convinced that the music is good, they might buy it. Fail to convince them and they won’t. This makes music, for instance, different than heroin. And if these people weren’t kissing their own colons, they might realize this, and their thoughts might follow these steps:

1. Giving away music samples does very little to degrade demand for the product itself, since no one listens to thirty second samples for entertainment.

2. Instead, they listen to those samples to determine whether or not they want to buy music they’ve never heard.

3. And since the price structure for music is high enough to preclude much experimentation with music you’ve never heard, the only way people are going to find out what they like (and what they therefore demand) is if they are able to sample it for free.

4. Consumer demand, in other words, is not only not adversely affected by giving away bits of it, it’s actually directly consequent on giving something away for free

As Animal points out, therefore, music executives are very, very stupid for not realizing this. Yet why are they stupid in this particular way? Why might they have wsuch basic contempt for their customers as to fail to understand that they not only have options but that by treating consumers like mindless music-addicts, they are shooting themselves in the foot? It’s cause they’re bringing that corner bullshit all up in here: