The internet was unleashed to the public in the early 90’s, the MP3 format was put into circulation in 1995, and by 1999 we had file sharing “services” like Napster that allowed people to anonymously share and trade as many MP3’s as they could store. Everyone could have their own jukebox holding more than any light-up music box in a bar could dream of!
Bootlegging was rampant, and record labels (along with many artists) struck back with lawsuits and ill-fated attempts to copy-protect the legally purchased music files. This DRM -Digital Rights Management- further angered music consumers as it seemed to only punish those that legally purchased music.
While Napster lost it’s battle and was eventually shut down, the value of music represented the war and it lost badly. Some have blamed the CD format for bringing this devaluation on, either based on sound quality or more than likely because a vinyl record holds ~40 minutes of music while the CD holds 60+ minutes. Some consumers believed that artists and labels had upped the amount of filler or substandard material on each release and were inflating costs.
Labels also started to leave 2-3 years between releasing 20 track CDs, whereas vinyl albums were more frequently released and had a shorter run-time. They also featured more packaging goodies like artwork, posters, and readable liner notes. This led to fans connecting strongly with the artist and growing with them in more organic fashion.
If you wait 3 years for a new release the artist is not making trends, they are playing catch up and trying to find their fans again. Also, the retail price of CD’s also never really dropped until free MP3 files were available online.
The CD marketplace ultimately did not please the consumer as much as the vinyl marketplace so alternatives were sought. The internet walked right into that void. This mirrored what was happening in other medias, as all content was devalued and many expectations of free content still persist. The internet generation likes to believe that information is free and music was now just another form of information once it was in data form.
Apple Inc. correctly saw this
disaster upheaval as a huge business opportunity and began building the iTunes with an iPod/iPhone/iPad juggernaut.
There were a few MP3 players available before the iPod was released late in 2001, but an entire ecosystem of a simple player with easy loading and a music store for buying legal files was a hit in the marketplace.
Apple was using MP3 music as their wedge into this new mobile world, and they would push it with full force.
Apple set the price at $.99 per song with a reasonable $.59 going to the content owner, so many that felt guilty about illegal MP3’s bought music from Apple. We all had iPods and soon iPhones or other smart phones full of MP3’s, and Apple moved into the lead in the music industry, almost a quasi-record label due to their massive distribution network.
While the 30/70 money split between Apple and content owners seemed fair, the losses throughout the music industry were still dramatic. MP3’s have no physical item, no credits, no lyrics, no posters, require no physical music stores, no warehouses, no packaging, no shipping, no shelf for storage – it’s just a datafile stored with millions more on servers. It’s delivered to music fans’ hard drives with a postage-stamp sized cover jpeg.
Laptops could make MP3 files and servers could distribute them. The retail music industry didn’t make it to it’s 100th birthday.
Before Apple started selling MP3 devices they were a niche company and nearly bankrupt. 18 years later they are the most successful company on the planet by many accounts. Don’t underestimate the market forces following the latest convenience.