I love music. I’ve been a music fan all my life. So, back in 1999 when a 19 year-old Shawn Fanning created Napster I freaked. All of a sudden, here was this gigantic library of songs sitting there on the Internet for me to download as long as I wanted to sit, click and wait. Within a few weeks my music collection went from a couple of huge boxes of CDs and tapes to a hard drive of thousands of songs. I literally replaced all that plastic in a few days. It was amazing. Paradigm shift. Despite it’s greatness, Napster had a few major problems that spelled its ultimate doom. Firstly, sound quality was dicey. Second, it was a security risk. You were as likely to pull down a virus as you were Stairway to Heaven. Still, for me and many millions of other music fans it was worth the risk. The access was intoxicating.
Oh yeah, and it was illegal.
In 2000, band Metallica called foul and hired a team of lawyers to shut them down for copyright infringement. Turns out that musicians and their record companies didn’t want consumers getting their music for free. In a few months Napster was shut down and while it still exists as a pay service, it’s place as top-of-mind music resource is gone forever. The Napster idea was based on peer-to-peer access; a brief jailbreak prompted by one sharp kid that wanted what we all wanted – convenient access to valuable content. OK, yes it was illegal, but it rang a bell could not be un-rung, so to speak. That brief taste of freedom sparked the music industry to rethink their business model or die a slow death.
Then in 2000, Apple purchased a small music service called SoundJams and renamed it iTunes. The rest is history. For my purposes here, the most important thing iTunes did for the music industry is give them new life in the form of a price strategy. Because Napster gave you access to other music libraries on other PCs around the world, you just saw lists of songs. You no longer had to accept entire albums to buy music. iTunes works much the same way. You can buy an album for a one-click price, but people buy single tracks much more often – and $.99 is the accepted rate. So, for $1 per song, iTunes revolutionized the music industry by answering a most vital question. What is the consumer’s price threshold for a single song. Well, it’s a dollar. Apple gets a cut and so does the artist and label. It’s far cry from the days of $15 per album and a buy-it-all-of-nothing approach to selling music, but artists and their labels are still working.
Keep in mind that what brought this about was a kid with a lot of brains just wanting a way to get more music. A consumer starving for content.
Skip ahead to July of this year. Spotify is launched in the US. I downloaded it and I freaked all over again. For a mere $10 Spofity allows live streaming of any song you can imagine to your PC and/or smartphone. Let me put that another way. For $1o, you have access to nearly every piece of recorded music in history at your fingertips. I’m doing this now. I just typed in “Beethoven” and I’m now listening to his 8th symphony in F major. I just typed in “Tiny Tim” and now I’m listening to Tip Toe Thru The Tulips With Me. Ok, enough of that. You get the picture.
Spotify gives me unlimited access for a small fee. No, I can’t copy the music to my library or burn it to a CD, but who cares? It streams to my PC or phone whenever I call it up. Why do I need a hard copy? Spotify, the artist and label all get paid. Again, this is not the death of the music industry at all. It’s a shift in business model.
The point of all this is simple. The consumer has driven the once iron-clad music industry out of the shadows and into a new way of thinking and it wasn’t going to happen without Napster. Someone had to come along and toss a monkey wrench into the machine. The music industry was certainly not going to do this on their own. They were content with their comfortable, inwardly-focused model of distribution. Sound familiar?
So how different is our situation? How long is the real estate industry going to stay barricaded before someone throws in a monkey wrench and causes the mass-rethink necessary in the distribution process?
Don’t we already have our own Napster on the scene? Of course we do. There’s someone out there giving the consumer what they want and those among us (the national, state and local trade organizations, the national franchisers and local brokers and yes, MLS vendors) that see both threat and opportunity will prevail. We’re not doomed to die, we’re doomed to change. Why not death? Because much like the music industry, the product (the listing) has an origin that really, really matters. Zillow is a lot like Napster in that the content is readily available, but the quality of the content is a serious risk.
I just looked up my house on Zillow. It shows 1.5 baths. I have 2.5 and always have. Where did 1.5 baths come from? No idea. See?
Wouldn’t Napster have lasted much longer if they took music feeds directly from labels and began charging a small fee for the high-quality, non-corrupted songs?
As much as I wanted music, just having the music wasn’t enough. I wanted high-quality music from a source I trust. We all do.