How To Understand Online Distribution

How To Understand Online Distribution
In its long history, the music industry hasn't always adapted quickly to technological change; in recent years, few words have rocked the music industry harder than "Napster" and "file sharing." As an early glimpse at downloadable music, Napster (and other "peer to peer" file sharing servers) provided music fans with their first real taste of freedom from traditional forms of music distribution. Online music alternatives are no longer seen as threats to traditional distribution; consumers can now choose between buying traditional CDs through an online retailer like Amazon.ca, or shop at digital music providers like Puretracks or iTunes.

Welcome to the Jungle
As part of the Seattle-based Amazon.com corporation, Amazon.ca is the big-box of online music stores in Canada, granting anyone with a credit card and patience access to millions of CDs. Having expanded from their online bookstore in 1998, Amazon's "e-commerce technology" enables customers to order virtually any music CD or DVD commercially available. Their highly competitive pricing for major label product stems from deals with large labels, but pricing on their independent catalogue forces hipsters to question allegiance to their favourite local retailer. Amazon also features a "marketplace" for smaller distributors and independent sellers who offer product at varying new and used prices. The site's industry dominance was strengthened by a 2003 alliance with HMV.com; Amazon.ca now "powers" the retailer's online presence. "This is a great win for HMV customers," said Chris Walker, then President of HMV North America. "E-commerce acts as an additional virtual store to HMV's 100 physical store portfolio, increasing our reach and adding value to the store chain as a customer research tool."

Gettin' Digi with It
If CDs are the dinosaurs of the music industry, digital downloading is the ice age. Although obviously international in its breadth — one factor that has complicated regulation of this emerging technology — Puretracks.com is the first Canadian, PC-based digital download server. Boasting a catalogue of over 700,000 songs from all five major record labels and a growing list of independents, Puretracks has enabled music fans to search and download music in supposedly high quality Windows Media format from 79 cents a song. Though Puretracks does offer conventional CDs for sale, users can choose to download a song or an entire album. "Unlike traditional retail, distribution opportunities for Puretracks are not limited by shelf space or other physical components," explains Puretracks co-founder Alistair Mitchell. "We're capable of storing an unlimited amount of music, giving all independent artists and labels the opportunity to sell their music online." One initial drawback to Puretracks seems to be their indie catalogue — you won't have as much luck finding Oshawa-bred country punks Cuff the Duke as you might Halifax singer-songwriter Joel Plaskett, but Puretracks does have an indie-friendly mandate. "We're always on the search for more labels to sign up, as well as emerging artists," Mitchell says. "If you're an unsigned artist, we'd ask you to contact our partner Indie Pool (www.indiepool.com), who can help make sure your music makes it into our store."

iPod Is My Co-Pilot
If there is a clear leader in digital downloading, it's Apple's iTunes. Available for both PC and Mac users, iTunes offers users access to over one million songs (100,000 of which are from independent artists) for 99 cents each. But greater than this is the success Apple has had with a click-to-headphones marketing strategy that links its digital downloads through the store to the iTunes digital jukebox program and on to portable iMacs and increasingly dominant handheld iPods. Since tunes purchased through the iTunes online store generally only work with an iTunes player, consumers remain in an Apple-flavoured digital music world. "Can you say monopoly?" jokes Zunior.com's Dave Ullrich. "Apple have been very smart and lucky to control this ‘first point of contact' with digital music consumers. All the others are now battling a clear market leader."

The Future of Music
Despite initial resistance in the form of lawsuits and legislation, the music industry is starting to adapt. When iTunes launched in Canada in December, it was greeted with open arms. "It's fantastic to welcome iTunes to the Canadian market," exclaimed Steve Kane, President of Warner Music Canada. "The digital space represents huge growth potential. With more providers coming on board, Canadians will have even greater choice about how they buy the music they love." Looking beyond its present form, Dave Ullrich sees digital downloading becoming the dominant format in music. "Streaming/subscription forms of digital music will become more common as wireless access becomes more common for music appliances of all sorts," he speculates. "You'll pay for music once and then listen to it in any number of ways, many of which can be accessed from virtually anywhere. Albums will be sold digitally and will include videos, ebooks, Flash animations, and probably even holograms. Similar to the way they say the future of the CD is the DVD (i.e., bundle music and video) the future of the MP3 will be ‘digital album bundles.'" What is certain is that the technological future of the music industry — perhaps more than at any time in its history — will be shaped by the demands of its consumers. While the industry braces itself for new trends to reveal themselves, music fans can take heart in the knowledge that the next wave of technology is in their hands.



Frequently Asked Questions

Are these downloads really high quality?
In a piece on iTunes for The New York Times last July, Randall Stross pointed out that Apple has not really been called into question for the rate of compression of their song files, which is exponentially higher than that of actual CDs. The bit rate at which music is digitally sampled for CDs is 1,378 kilobits per second, whereas the bit rate for iTunes is 128. "[This] is so low," according to Stross, "that when played side by side against the original, the difference is audible not only to audio enthusiasts, but to mortals with ordinary hearing." What does this mean? If you're burning your iTunes downloads to a CD and you play it in your home stereo, you've lost a lot of fidelity and it will sound like crap next to the original. Stross quotes a contributing editor at Stereophile stating "128 is like an eight-track," but Apple spokesman Derick Mains defends the company by suggesting that 128 provides good music quality, "especially when used in iPods." If 128 kbps is the bare minimum, it's hardly saying anything to suggest that Puretracks is bettering iTunes in offering Windows Media Files at 192 kbps. Though their small size makes these song files attractive to consumers, their sonic make-up is inherently obsolete.

Can't people download songs for free?
According to Ullrich, digital music providers who charge their users for songs will always have to compete with free file-sharing networks such as limewire, kazaa, and bit torrents. "Take software," he offers as an example. "How easy is it to get a copy of Windows XP for free? Very easy. Microsoft still competes with free, and they make tons of money because they sell to people that buy software (i.e., businesses, schools, families, etc.). They don't sell to people that don't buy software (i.e., students, kids, economically disadvantaged). My advice to the record biz is to compete with free."

What about artwork?
The lack of artwork and liner notes in digital music is a common reason given by those who prefer buying CDs to downloading albums. While a label like Zunior.com offers consumers a choice to download an album's artwork along with its songs, neither iTunes nor Puretracks provide such an option. Puretracks does give its users the option to order the original and completely packaged CD but then, so does your favourite record store, and you can take it home right away.