The Demise of Gimme5, Seeqpod, File Sharing, and the Entire Music Industry

Explained for you by John C. Dvorak:

According to a study done by the BBI Norwegian School of Management, those who freely download music from file-sharing sites and elsewhere buy ten times more music (yes, they actually pay for it) than people who do not participate in file-sharing systems. In fact, the figure that the report cites for the amount spent by the file-sharing subculture is so high that the record industry doesn't believe it. Well, I sure do, mainly because of an observation I made back in the late 1990s. And I've harped on this observation ever since. This research just confirms my suspicions.

The simple fact is that during the Napster era—a period in which there was no significant musical movement that would trigger any excitement in the business—CD sales increased. As Napster got bigger, sales continued to increase. As Napster was shut down, you could see CD sales decline, and once they put the lid on open file-sharing, the industry went into a tailspin. I never believed this to be a coincidence.

The RIAA and the music industry in general blamed the tailspin on Napster and piracy, harping on the concept of "stealing." The overlooked fact in all this was that with the advent of national radio syndicates and the niche programming that began to flourish in the '90s, people were not easily introduced to new music. There were fewer ways to discover bands and music you liked so that you could go buy those CDs in the first place. This coincided with the demise of the disc jockey (a music nut who kept tabs on trends). The record industry was essentially doomed at this moment of change.

There used to be this neat music search engine called Seeqpod. I'd search for the title of a once-popular song, get a bunch of versions back, find the 5 best ones, and put them into a post with a little Flash player hosted by Seeqpod. Those posts eventually became the "Gimme5" category on this blog. And just like Dvorak said, I bought the music I liked on eMusic. And then the music industry shut down Seeqpod, and all the nifty little flash players went away. So now my Gimme5 category is like a ghost town. And that's the story.

Comments

[Fuzz Martin]

The music industry is run by some of the least business-minded people on the planet.

The new "Performance Tax" that the industry idiots are trying to push through (more info at: noperformancetax.org) is designed to tax local radio stations for playing music free to listeners. This is a $1.5 to $2.4B tax per year - on top of the rights fees that radio already pays. Radio promotes their, at no cost to the record labels, and now they want even more? Ridiculous. This will not bode well for the industry.

[Ronsonic]

This is no different from the old days when people would make compilation tapes on cassette and pass them around. That's how my friends and I learned about new music.

The real scandal of Napster is that at the time it was impossible to pay for a download. What sort of industry would make it easier to steal than buy. If I were a label exec of that era there would be blood in the marketing department.

[Bruce Oksol]

That is so correct. Examples:

1. I often see folks rave about a YouTube video, saying: a. thanks for posting; b. I never heard them before; c. I love them; d. I'm rushing out to buy the CD.

2. I surf YouTube looking for old and new music; I often find something I like; and, then I go to iTunes to buy a song. I do it all the time.

3. YouTube is one big advertisement for music. I watch sports on television. Every time a Budweiser commercial appears, I don't rush out and buy a beer. Every time a Nike commercial comes on, I don't buy a new set of shoes, but every so often I do, just like on YouTube -- every time I watch a video, I don't rush out and buy the CD, but every so often I do.

Yeah, shutting down music advertising, as it were, was really stupid.