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Friday, November 25, 2005

Magic 8 Ball, where is this going??

This is an interesting article about a potential future for the music\entertainment industry. I don't fully understand it though. If they sell me the rights to music or a movie, what does that mean exactly? I'm free to use it on all my devices, access it at all times until I die, 'share' it - so says the article. It all seems very confusing.

In a way, it also sounds like a way they might really nail someone for distributing songs online. There's sure to be something included in the 'rights' they are selling which prohibits mass distribution online or otherwise. I wonder if the penalty for breaching that agreement would somehow be much more severe then the fines currently imposed on those caught distributing music online.

Although the music companies get about 70 percent of what Apple collects, the margins are still miserable compared with those for CDs. That’s because the CD is a bundled sale: one high price for a bundle of songs. Of course, you can buy whole albums on iTunes as well, but you don’t have to -- and that’s what’s breaking the business model for the music companies. “The old economics on a CD worked,” Roever explains, “because people were buying bundles. The new economics are 10 times worse.” Since technology broke the old CD bundle, Roever now wants to use his technology to help the media companies create entirely new bundles.

Fox and Sony BMG are already experimenting with Navio’s technology, which acts as the back-end digital plumbing that keeps track of all the rights, delivers files in the proper format to the proper device, and even provides Flash-based Web storefronts, thus allowing any site to become an online store. In return, Navio takes a 15 percent cut, on average.