beats me…

Yep, its an absolute joke! Digital downloads are about instant gratification, making the customer leave their computer completely defeats the purpose.

Mmm, $12.99 too, I bet they’ll be popular!

Cynical, Greedy AND stupid. It makes me wonder who the idiots are that make up these corporate strategies and policies and why shareholders allow such idiocy. Ivory towers?

Wont be long now….

Honestly, it is probably a move to satiate its downstream supply chain members.

As a manufacturer and publisher, you want to try to keep your relations good with retailers etc that you partner with to push your product out the door.

I really don’t know what to say, this is completely baffling. If you’re going to go into a music store, you might as well come out with a nice DRM free CD for around the same price. I used to be in the music industry but got out purely for the reason that those in control were completely failing to grasp what direction the market was heading and it seems that they still don’t get it.

The scary thing is the print industry is making all the same mistakes. I speak to magazine and book publishers on a daily basis and they are looking for the similar DRM solutions to those which has caused the music industry so much trouble. As a result in the same way that artists are taking control so are writers, journalists and authors.

I could rant all day but I’m guessing you all agree.

I only buy DRM free music now. I had no idea how much crap I’ve bought from iTunes that are copy protected. What a waste.

But Sony takes the cake. They are the worst company when it comes to locking crap down.

I seriously hope they go out of business.

Surely that totally defeats the object of downloading if you have to go into the actual store everytime. Maybe going in as a one off to activatye it or something, but everytime?

You’ve got it spot on, they’ve set this experiement up to fail and will blame us (the consumers) for not wanting DRM free music based upon results of this trial.

Do it properly or dont do it at all Sony, surely your reputation on this matter has a lot to be desired without pulling stunts like this.

Duncan, your post might be valid from a consumer’s perspective. But if you take SonyBMG’s view into perspective it is not so stupid after all.

Embracing new sales channels (digital) can cause big problems with your existing ones (stores) which is dangerous when the biggest part of your sales still comes through them.

As much as this move doesn’t make sense for most end consumers, it is smart from SonyBMG to always involve their (still) biggest source of income (physical retailers). Of course, Sony BMG knows that this will not be a big hit with their end customers. But after all they will not lose a substantial amount of end consumer business because people are upset by actions like this. SonyBMG is not a B2C brand after all.

I like your articles. But sometimes a little less spontanoeus emotion and a little more depth wouldn’t hurt.

wait, I thought Amazon.com was the only one offering Song BMG mp3 downloads?

#9 is spot on.

Duncan, your myopia knows no bounds.

Janis (#9)
It defeats the whole purpose of digital downloads which is convenience, the convenience of being able to purchase what you want, when you want.

But if we take the Apple line which is kiddies don’t have credit cards and therefore we sell iTunes credits in stores (which I bought as gifts for some ppl this year) the key there is that it is a credit for the store. What Sony BMG is doing is offering a card that ties you into the album, no credit or what not, essentially you buy the album in the store, then go home and download it. It’s daft on not just a consumer level, but on a business level as well. Given the choice of an iTunes card with say $20 in credit or being forced to pick and buy a specific album (compared to freedom on iTunes, including single OR album), what do you think the majority of retail customers would chose? Worse still, consider the choice as a gift option? It’s designed to fail, Sony BMG aren’t dumb…well least I don’t think they’re this dumb. They want to prove that there’s no demand by DRM Free music by offering this half-arsed version of it.

On you way to the store to buy the downloads you could pop into your local music store and buy it on CD as well, just so you have a backup.

Sony have been digging themselves into a hole for many years now. Anyone remember back in 2005 Sony BMG introduced Extend Copy Protection (XCS). What a nightmare that was.

What a JOKE!

Good Sony.. Interesting methodology.. Is that patentable…

Duncan wrote: “They want to prove that there’s no demand by DRM Free music by offering this half-arsed version of it.”

No. You missed the point. They don’t want to prove anything. All they want to do is to secure rackspace in physical stores where still more than 80% of their profit comes from. Easy math.

Duncan @12,

Are you a professional amateur? Are you really that removed from the real business world that you don’t understand supply chain management, and obligations that manufacturers have to retailers.

You managed to completely miss #9’s point. What a surprise Duncan!

It is honestly starting to become laughable that every single post on TechCrunch that I find off the mark completely, I can rely on your name being attached to it literally 100% of the time.

Yay for consistency!

Cook (#19),

Duncan seems to be looking at it from the consumer’s point of view, in which case both the article and his comment make perfect sense.

Sure, physical CD sales still account for the majority of Sony’s sales, but that number is, and will continue to drop. Pleasing the traditional retailers might help Sony in the short term, but it will become more and more of a disadvantage for them. Which retailers do you think are going to be more successful at selling music in the long run (and the long run probably isn’t too far off): Apple and Amazon, or brick & mortar companies like Best Buy and Sam Goody?

It is amazing that this company is still in business. First, they get crushed in the portable music arena by Apple. Then, they lose their dominant market share in gaming to the 360 and the Wii. Next, they cannibalize the market for high def video by not settling the blu-ray v. hddvd war. Now this.

On another note, I do not see the supply chain argument as being valid here. The MP3 is a different medium for delivery than the CD. I do not think that big box retailers have the expectation that they will get a cut of this business (outside of their own online music stores, of course!). Furthermore, the only real responsibility Sony has is to its shareholders, and this is a horrible move for them.

Patrick, you are right - physical music distribution will be a niche market in the future. But visionary thinking doesn’t pay your employees salaries.

That’s hilarious.

Maybe they should just add a $1 surcharge to downloads and they can distribute that extra cash… not to the artists… but to the retailers who are losing business. But maybe that’s more of a job for government; wouldn’t want to leave such an important function to the private sector.

Patrick (#20)

I want true insight, not biased rhetoric.

The fact of the matter is, Duncan also made a conclusion as to the intention of Sony BMG, thus he is claiming to have some bit of insight with Sony BMG’s point of view.

An argument about what will be successful in the future is one thing, and one might even say that Sony BMG is off-base…but publishing garbage like Duncan just did, without mentioning the supply chain aspect is just irresponsible.

<<<It’s nearly like Sony BMG is setting this up to fail, so they can then go back to only selling DRM infested music whilst saying that there wasn’t demand for DRM free music because this experiment failed.
—

Fact of the matter is, there isn’t demand for crappy music, especially not w/ DRM. Maybe this is why music sales are falling year to year…..

Oh boy … they still do not get it. The pass is a replacement for the CD. They are still holding on to a physical asset concept.

E.T Cook
here’s supply-chain management 101 for you:
Digital downloads are about convenience, that means getting online and buying them. Not walking into a store and deciding to pick an album then and there then going home to download it. The music store/ physical point of sale for music is dying if not dead (look at the various record stores that have gone broke). SonyBMG can only be applying this insane sales strategy because they want it to fail, the only alternative is that they are so extremely stupid that they don’t deserve to be in business, but to be fair to you ET, I won’t rule that out

Yeah, real great move for the environment to guys! Who the frick thinks up this stuff?

D

There is a brilliant book “Black Vinyl, White Powder” written by Simon Napier-Bell, who predicted this whole scenario a decade ago….He also took Wham to China in the 70’s….

While those of you pointing out the channel/supply-chain aspects of this are correct about needing to avoid pissing off the big box retailers, I don’t think the added comment makes Duncan’s article (and main point) wrong…this is a stupid strategy. Companies all over (well beyond music) are grappling with the direct-to-consumer (where margins are better) vs. honor-thy-channel (where the bulk of sales are…today) issue. If you are an established brand, you can start selling online without completely blowing your channel (what is Best Buy going to do, quit carrying Sony artists? no way!). Many companies deal with this through pricing…something that would be much simpler than the goofy approach they came up with. for example, rather than make the price of an “album” (or credit to download it) $12.99 in the store…how about you set the price of downloading the content so that it is MORE EXPENSIVE online, i.e. CHEAPER to go into the store. This way, some people will pay for the convenience of downloading, but many others will still go into the stores to buy a CD to save a few bucks.

Wallah! The the channel may get a little upset (but not as upset as if Sony started selling online AND at a cheaper price than Best Buy), and Sony gets to start building their online channel in a way that makes sense.

Again, this is a common problem facing not just people that sell through Best Buy, but also Home Depot, Babies R Us, etc.

Burying their head in the sand, even if it preserves the relationship in the supply chain, is NOT the answer…

must-copy-itunes-model

Duncan hit it on the spot. Convenience is key.
No, we wil never pay whole albums again, sorry record labels.
Whatever we want, wherever we want it, at the goddamn price we consider fair enough.

tsk, tsk, get a clue, online movie rentals for $19.95 is not the way either.

Who in their right mind will travel an average of 10-15 minutes to their nearest big box tech store, wait in line and then drive back home, just to buy an album. Clearly someone was not thinking in this one. In the world of rush, rush, rush, they’re asking us to take 30-45 minutes of our time to buy an album? How ’bout this, buy the album on iTunes, put it on your iPod, and run on your treadmill for 15 minutes.

Keep in mind that Sony moves a lot of product other than music through the retailers in question. If Best Buy sees Sony undercutting its sales with DRM-free downloads, they may decide to convert some PS3 shelf-space to Wii and 360, or likewise consumer audio devices, TVs, etc. That’s a consideration that the other music companies don’t have to deal with.

It’s still half-arsed, anti-customer, doomed to fail, etc.; and given past behavior (wasn’t it Sony that put a rootkit on its music CDs?) they don’t deserve a millimeter of slack. But I do think Duncan is mistaken about the motives at work.

Duncan #27

Duncan, as usual, your mouth is just moving without addressing the main issue, the obligation that they have to their retailers.

You can certainly argue that their loyalty might be misappropriated, but then don’t surmise to know what they are thinking without addressing the most likely reasoning behind this move.

A business, is a business, is a business. Yes, I would venture to say that the recording industry really doesn’t grasp the concepts of the modern world, and the internet, but to say that they would pour money into an effort to purposely make it fail…that is just absurd Duncan. What would that prove? In the end, the market determines who the winner is…and it doesn’t have anything to do with “intentional failures” or anything as absurd as that.

You can say that they are hedging their bets in the wrong place, but you need to take the foil helmet off Duncan.

BTW, I’m glad your “lesson” on supply-chain management didn’t address the issue at all, you managed to just be a smart ass and that’s it. Of course digital downloads are more convenient, you are preaching to the choir in that regard, but that STILL has nothing to do with the good faith obligation they have to retailers.

Wow, Sony just doesn’t get it. Consumers do not and will not want this, right up there next to the Ringle (or Ringlet, or whatever it was called). Why the crap would I want to drive to a store, purchase something, drive home, and then download what I could have already gotten elsewhere (e.g iTunes)? I’m not sure I agree with Duncan that they are wanting this to fail, but you seriously have to wonder what upper management is thinking. Are they really that out of touch with consumers?

For $13 and a trip to the store, I can just get the CD and rip lossless DRM-free FLAC files if I want to. Sure, they’re stuck between retailer loyalty and consumer usability, but that doesn’t justify making it less convenient to purchase an inferior product than what they already offer.

this is an overall stupid gimmick by sony. anti-consumer in every way, which i don’t get!

how can any company that sells product, inconvenience their paying customers so much? i agree it’s probably a ploy to have the DRM sales fail, just to prove a point.

of course this is the same company that illegally installed root kits on their customers computers right?

on a side note, at the macworld keynote i’d like to see the option to ‘upgrade’ your purchased music to non-DRM music for free announced.

“Duncan, your post might be valid from a consumer’s perspective. But if you take SonyBMG’s view into perspective it is not so stupid after all.”

Uhh… companies exist to provide services to customers. Sony needs to get with the program…. as in yesterday.

The only perspective that MATTERS is the customers perspective.

It seems to be a poor marketing strategy. Internet is now commonly used as distribution platform but to compulsorily use both physical location and pervasive internet to get a album seems like a inefficient process, not to mention ineffective against other competing services. Looks like they are still trying to protect their existing retail markets too much and likely to endup backfire. Maybe that’s why it is called Sony, the one and only.

I wish Business 2.0 was still around so I could see the postmortem about this in 101 Dumbest Moments in Business of 2008.

SONY sure is stupid. Maybe I should visit a bank first every time I want to do my online banking too.

Does this mean I have to go to the post office to buy stamps before I send an email?

I have a couple of thoughts. I believe the day of the album is (sadly) past. Long ago, artists took care to master carefully flowing albums that were greater than the sum of their tracks when listened to as an album. It seems that these days, for the most part, albums are simply one (or two) good tracks surrounded by a lot of filler tracks pushed out the door to make a buck. There is a distinct lack of the careful album crafting that once prevailed. The future is (however sadly) in singles. This is why album sales are declining while single track downloads are rising by double-digit percentages every year.

I also feel that if the recording industry had a crystal ball that could magically see what everyone is really doing, they would suddenly realize the declines in their numbers have nearly nothing to do with an increase in piracy. I don’t even believe piracy has significantly increased. The few folks who are pirating digital content are the same few folks who would have made a cassette (or reel-to-reel) recording of their friend’s albums decades ago. Of course, the RIAA say the ease of downloading increases the likelihood of it happening. Personally, I think the few people too poor (or too bitter) to pop on iTunes to legally download a song are unlikely to have purchased the song anyway, so counting it as “lost revenue” is worse than mentally retarded.

In my own case, I’m tired of being treated like a criminal by the RIAA when I am a legal legitimate paying customer. I never illegally download content. I have always paid for it. So why should I be punished and my content crippled with DRM? Imagine going into a store to buy something and on your way out every customer receives a full cavity search because the store believes somebody MIGHT have shoplifted and they want to make sure they catch the crimial. Would you go back to that store again?

As a result of my bitterness toward the RIAA over their criminal treatment of loyal long-term customers, I had boycotted music purchases completely since the year 2000. I was buying CDs at a rate of 2 per week prior to that and had accumulated over 700. Since then, I have purchased zero CDs. I know I’m not alone in this boycott because I talk to people all the time that say they got sick of the RIAA and stopped buying music (or buy significantly less than they once did). If the RIAA wants to know where their declining revenues are really coming from, they should look in a mirror.

This past year, in moments of weakness I bought a total of 3 singles from iTunes. Why? They were DRM free and they were so easy to get that I couldn’t resist buying them. So, ease of downloading and lack of DRM got me to buy a few songs after 7 years of boycotting the RIAA and when I finally did buy again, I bought singles.

If they want to bring back customers they have lost, and attract new customers, that is the formula. Keep it easy, DRM free and allow the purchase of singles. Sony made a one -third effort at change, making it a guaranteed failure. IMHO, the RIAA members will continue losing revenue until they are all replaced by an Internet-based non-RIAA music publishing company who offers higher royalties to their artists while charging less per song due to their lower overhead and minimal cost of distribution. I can’t wait to start buying music from THAT company.

My view of the future is non-DRM, Internet-based distribution with mix-CD burn stations in retail outlets. You walk into Best Buy, pick up headphones at a kiosk, pick out a variety of songs, or even an album, press a button, and boom-it burns you a CD on printable media. It then prints a label on top listing the songs and the price and you take it to the register to pay for it. This would take care of the folks who want to hit a retail outlet every so often to get a “real CD” and the rest could just pop online to purchase. The beauty is the same back-end distribution could be used for both store and home purchases, reducing overall costs. None of this is new technology and it would return us to the era before the DRM fiasco, when buying and owning music was pleasurable.

Phil McThomas FTW!

My guess is that SOMEONE on their board gets it, and has been fighting long and hard to get through to the others…..and has had to reluctantly agree to allow the transition away from DRM to follow this route because it’s a win in that there is NO MORE DRM. Even if (when) the strategy fails, there’s no way anyone’s going to say….see? we should have stuck with DRM…..the person or group who has pushed for this is then going to be able to say…ok, let’s try OUR way now…..and consumers win. It’s just internal politics with an obviously stodgy and backward-thinking board.

Post 38: “Uhh… companies exist to provide services to customers. Sony needs to get with the program…. as in yesterday. The only perspective that MATTERS is the customers perspective.”

SonyBMG’s biggest customers are the physical retailers. Get it?

Is this any surprise from the people who brought you Rootkit?

This is an AWESOME idea Sony, for 5-8 years ago! Trying to push this *TODAY* is Not going to work.

Ya gotta love Japanese companies! Completely clueless…

E.T.Cook’s so passionate about his supply chain he must have his life dependent on it.

WTF!? You’re kidding right? I really can’t believe the stupidity of the music industry. No wonder people are stealing music and downloading it for free… Worst. Idea. Ever.

The good old ‘but’ strikes again. ill never ever buy music in my life. unless p2p gets wiped off of earth’s surface, but that’s like telling me that the sun will someday explode… as if i’d live to see that.

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