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July 14, 2010

The industy is dead! Long live the industry! (Won’t someone think of the children!?!)

Since I touched on the subject of media transition touched on briefly in my post about going mobile friendly, I think this is a good chance to highlight some historical hysteria regarding entrenched business models collapsing to be replaced by new ones.

Let’s specifically look at the history of music distribution over the last 100 years.

Going into the 1900’s piano rolls and sheet music were the predominant methods of music distribution. Granted there were also broadsides, but those were considered a medium for the working class and were typically lyric sheets with no music score, commonly notated with statements like ” sung to the tune of -fill in the blank- “.

Even in a time where the average worker earned around $600 a year, 25-60 cents for a copy of sheet music was a premium purchase for many. That said, sheet music was big business and when the phonograph came around, sheet music publishers saw the new medium as a threat and fought tooth and nail to kill the medium. “Oh! We can’t let this happen”, “This will destroy the traditional family gathering in song”, “nobody will learn to play music”, “someone think of the children”, etc…

But, the reality on the ground was that pianos are expensive both to purchase and maintain. On the other hand, phonographs are cheaper to produce, cheaper to maintain, easier to operate and you didn’t have to be able to play music to enjoy them. In the end music producers actually sold more copies of music because they now had a larger audience and the companies that adopted to the new business model profited greatly.

Most sheet music publishers failed to adopt the medium hardly failed to die. Granted some of the fears were well founded, the days of the families gathering around a piano to sing together for leisure were lost (if they truly were all that common to begin with). But sheet music is still produced and sold in most music stores. Granted these days it’s mostly piano and guitar based, but, those are the popular instruments for people learning to play music so it only makes sense.

Let’s roll ahead to the next big jump to radio. When radio hit the scene phonograph publishers went crazy. “Oh! We can’t let this happen”, “People will quit buying music when then can get it for free over the radio”, “This will make it impossible for musicians (sic, publishers) to get paid for their work”, etc…

On the contrary to most concerns, radio actually increased sales for two reasons. People were exposed to a larger variety of music and they like the convenience of listing to a song on-demand so naturally they went out to buy their favorite songs in order to have them available to listen to. Publishers that added value to their product saw even better profits (e.g., B-Sides) among core fans.

Then over then next 60 years not much changed aside from improvements in recording and distribution. Granted there were fights over the introduction of cassette tapes and fears that people would just copy music instead of buying it. The same thing happened with CD based music. But don’t forget it’s always been a steady lowering of the bar of the cost of entry into the world of listening to music contrasted against the publishers desires to maximize profits from that same music. Also, people on the whole will more often than not pay for something when they feel it is being sold at a value they perceive as fair. Don’t believe me? Ask Trent Reznor (of the band Nine Inch Nail) or for another example in a different entertainment industry, ask the video game publisher Stardock. Both have spoken out at length about the success of this business model to their sales.

Since the who knows how long the common perception (supported by much anecdotal evidence and statements from artists) is that artists get paid little if nothing for their work when they publish music through a publisher and that publishers takes all of the profit from sales. The big money for the artists more often than not is in concerts and live performances and endorsements. A popular song will generate larger ticket sales and everyone wins (hopefully). This situation set the scale for next big crisis for publishers. The Internet combined with the modern computer.

In the mid-to-late 90’s the barrier of cost related to copying and sharing music finally broke down and anyone with a computer and internet connection suddenly found a plethora of methods to acquire music to listen for free (sometimes pirated, sometimes not) that weren’t available before. And the net result? Sales increased! What’s that? That doesn’t make any sense. The music publishers told us that people stealing music was loosing them money. Wrong. People downloading music was gaining them customers. The money they were supposedly loosing was based on estimates of “if every single downloaded song on the Internet had instead been purchased we would have profited this much”.

… publishers used the same logic with radio by the way.

The reality was that people who used to be pigeonholed to a particular music style suddenly had a inexpensive way to explore new music that they might not have been willing to pay for (on the risk that they might not like it). When they discovered a new artists or new genre they enjoyed, they then frequently went down to the record store to find more of that music to purchase. You had punk rockers buy classical music and country lovers buying speed metal.

But the industry could only focus on the “lost sales” not factoring in that these weren’t really lost sales. Anecdotal evidence from the time indicates that were more like samples. To compare, yes, we know there is always going to be the guy who lives off samples at the grocery store for dinner, but most people actually buy their food and the samples are good because they primarily encourage regular customers to try things they never tried before. The guy living off of them is a cost of business.

I always said at the time that music companies should have jumped on this immediately and put their entire catalogs online at 56kbps bit-rate (radio quality), with an easy click to purchase the higher quality version priced as a convenience item. They would have made a killing, but instead they decided to fight their customers (and still do). Effectively deciding to sue anyone who eats a square of cheese at the deli counter without buying the whole wedge.

When asked years later why they pursued this course of action, one executive answered that they were so scared of the changes happening and knew that they didn’t have a clue about what was going on that they feared everyone was out to rob them and that even the consultants couldn’t be trusted. So they fell back on the only tool they could trust, their lawyers.

Sadly this fight is still playing out even to this day but in the last year some significant changes have happened that probably mark the end for some of the large publishers in this space. The barrier of entry for recording equipment has vanished and a lot of bands, frustrated with publishers and finding greater profitability by simply going solo on the Internet is increasing. When you strip away all of the fluff YouTube is now the largest publisher of music on the Internet at this time. So large that other publishers now effectively turn their content over to them just to get exposure for their artists.

The more things change the more they stay the same. Business is always evolving and those that learn and adopt quickly are well positioned to profit from their observation skills. Others are destined to dig in their heels and ultimately become a footnote to history.

….some references that helped in the creation of this article are listed below.

  • Media-Morphosis: How the Internet Will Devour, Transform, or Destroy Your Favorite Medium: http://www.internetevolution.com/document.asp?doc_id=171555&
  • http://www.econlib.org/library/Enc1/WagesandWorkingConditions.html
  • http://www.bls.gov/opub/cwc/cm20030124ar03p1.htm
  • Perspective: Radio/photograph was going to destroy print: http://web.mit.edu/comm-forum/papers/murphy.html
  • Sheetmusic and broadsides…: http://popmusic.mtsu.edu/dbtw-wpd/textbase/broad/broadside_ex.htm and http://www.phonobooks.com/BirthRec.htm
  • http://cultureandcommunication.org/deadmedia/index.php/The_Victrola
  • Radio was going to destroy the records: http://en.wikipedia.org/wiki/History_of_radio#Legal_issues_with_radio (although the Internet distributed music has revolutionized the way records are sold, it still hasn’t destroyed them)

July 4, 2009

Lost frames of reference… Part 3: you put the phone where?

Filed under: General,Historical Rant,Technology Rant — Tags: , , , , — Bryan @ 10:37 am

Since we’re on a roll talking about telephone technology let’s branch out.

The most obscure phone device that more people have seen than used is the acoustic coupler. Did you see the movies WarGames or TRON (boy talk about dated references eh)? These days, these are probably the most likely place people will see an Acoustic coupler in action. Back when you had to lease your phone from the Ma Bell and when most people still had rotary dial phones (instead of Touch Tone based phone systems) someone figured out a bright idea for how to connect two computers together over a phone line.

The acoustic coupler was a device that most commonly plugged into the serial port on your computer and would convert the data sent to it into audio tones. It would then pulse those tones over the phone line where the recipient computer would record the tones and turn then back into data to be processed (in many ways it analogous to data storage via audio cassette tape on early computers, but that’s a whole other subject). You would dial the phone manually and tell the person on the other end to put their receiver on their coupler and set their computer to receive. Then you put your handset on your coupler. Once the computers were connected you would start data transmission.

After the AT&T/Bell break up I mentioned previously, people eventually had the ability to plug any device other than a Bell telephone into the phone network. From there you saw modems that you just plugged the phone line directly into. These modems would also be able to issue the dialing tones to initiate a call and would be able to monitor the line for a ring in order to provide an unsupervised answer (this led to the dawn of home computer run Bulletin Board Systems). The last progression was to move the modem directly into the computer as a board that plugged into a slot. Less and less people are using modems now with the spread of broadband internet services. Although in very remote locations where the only communication is a old style telephone landlines, some people still use modern acoustic couplers that run off the USB port. As cell phone tethering becomes more prevalent though this too shall likely pass.

Another soon to be lost piece of one common phone technology are RF based Beepers and Pagers and eventually their cellular technology based cousins. Before everyone had cellphones, someone working in a job that had to be on call might carry a beeper. Initially beepers were tied to an operator, and then to a voice-mail system. Someone would call you and leave a message. Your beeper would buzz/beep. You would call your operator or voice-mail system and retrieve your message.

The first major upgrade of these featured a small display on the beeper that would display the phone number of the caller.

Following that, pagers got to the point where the display would show any number that the caller punched in so you could send a message that included other numbers that represented agreed to code number systems which allowed you to get the gist without having to call the voice mail.

The last generation I’ve seen most commonly used supported texting/SMS services like you would have on your cell phone.

Beepers used to be expensive and common in nearly all professions but from personal experience for IT workers in the 90’s having to carry a beeper for their employer was more of a curse than a benefit. It may have been this way in other industries as well for all I know. The curse being that you had no excuse for missing that alert at 2am when the server actually crashed.

One reality scenario here was:

  1. Your employer thought their systems were so important that they needed a 24/7 baby sitter.
  2. But they were too cheep to actually pay staff to sit in a data center around the clock to monitor for problems.
  3. So now you get lovely false alarm beeps waking you at 3am when the random Windows server reboots unexpectedly.

Additionally, for a number of years having a beeper (just like early cell phones) was used as a status symbol for the rich and famous to help make sure they looked important even if they never used it.

Some good extra reading if you’re up to it:


Or, jump back to Part 1 or Part 2

Related posts

June 19, 2009

Lost frames of reference… Part 2: I can’t talk now, I’m expecting a call

Filed under: General,Historical Rant — Tags: , , , , — Bryan @ 2:14 am

When AT&T was forced to break up in the early 80’s one of the side effects was that they had to allow other companies to provide long distance service.

Since AT&T and all of the Bell companies still owned the physical infrastructure (although ownership was now split up by region), part of the deal was that they had to sell access to third parties. New companies such as MetroPhone, Sprint and MCI came into existence to meet that challenge. Eventually Sprint and MCI worked to lay their own copper, fiber and/or satellite infrastructure for handling calls between cities so that they wouldn’t have to carry their calls over AT&T hardware.

Initially to use these services you would call a local or 1-800 number (called an extender). You would punch in a customer account number and then the phone number you wished to call and it would connect you through.

Additionally, many large companies and universities had their electronic switchboards setup so that if you dialed into a specific number and punched in a code, you would be connected to that locations trunk line (aka, business party line) for an outbound call on the companies preferred long distance carrier.

As you might imagine these system were ripe for exploit and if you were clever enough you might have gotten away without paying a single long distance call in the mid to late 80’s.

One really big problem of early automation came about from businesses putting up automated dial-up services. For a period of time in the late 80’s and early 90’s you had to be sure that you had completely logged out a phone system first before you hung-up the line as the system might not detect your disconnect quick enough before another call came in. The net result would be the next caller could carry on with your phone session. Voice mail systems were the biggest problem spot for this issue since they were some of the earliest, fully automated phone utilities in common use.

A few more idiosyncrasies to note specifically about person to person calling was the lack of Caller ID. Until the advent of Caller ID people had no way of knowing who was calling. So, if you were trying to avoid someone you just wouldn’t pick up the phone. Then, you hoped you didn’t miss anything important. Yikes! If you were extra worried about missing that call from your best friend though you would tell them “Ring once, then hang up and call back so I know it’s you.” Or use some other kind of predetermined ring pattern.

Another odd behavior from the years prior to Call Waiting. If you were expecting a call you had better keep the line clear so that the other person didn’t get a busy signal (a corollary to that is if you didn’t want someone to know you were home you would stay off the phone as well). Call waiting was also a bane to modem users as the chime that alerted you that another call was pending would disrupt the modem and force it to hang-up your connection. Some phone companies eventually offered the ability to punch in a code prior to dialing that would disable call waiting for the duration of the call.

Wow, what a pain in the butt now that I think about it.

More next time…

Or, jump back to Part 1

June 13, 2009

Lost frames of reference… Part 1: reach out and touch someone.

Filed under: General,Historical Rant — Tags: , , , , , — Bryan @ 10:55 am

Here in the U.S. we have officially converted to digital broadcast and most stations (with the exception of low-watt operations) have turned off the broadcast of a signal that some have kept running for over 50 years. This got me to thinking about frame of reference and forgotten methods of communications.

Let’s talk about the telephone. To start with originally you didn’t own your own phone. Phones were leased from AT&T or one of the regional Bell operations until around 1982 when AT&T/Bell was forced to break-up as a monopoly.

In the early days of the Telephone you couldn’t actually dial direct, you had to speak with a switchboard operator for assistance. Have you ever seen the old phone that is simply an ear cup, a funnel to talk into, a bell on the top and a rotary crank on the side? Well to use this kind of phone you would pick up the earpiece (receiver) and crank the phone to send an electrical signal down the line to alert the operator that you wished her (men generally weren’t operators originally) attention. She would plug a headset cable into a jack that was bound to your residence to see what you needed. If you wanted to be connected to another local phone user she would disconnect with you, connect her headset to the other local users phone and ring that remote phone by sending an electrical pulse down the line. If the remote user picked up she would let you know that you are being connected and then run a patch cable between the two ports on the switchboard connecting the lines. That connection would remain open until she pulled the wire out (eventually switchboard had little lights on them to indicate active current so the operator could close the line when you were done).

In addition to the local switchboard operator, there were hub operators above them than handled trans-local calls. The same at the National level and even Internationally. Depending on the location and era there would be even more granularity. When you wanted to make a long distance call in the 50’s you hoped that the recipient was there to answer the phone because your local operator just spent an hour working with who-knows how many other operators requesting patch links between who-knows how many switchboards just for you to be connected.

Another lost aspect of early phone network distribution came in the guise of Party Lines (not the kind of “party” you’re thinking, it’s more like “the party to which your dialing is not available”), where you would share a trunk line with a number of other users. This also allowed you to share the cost making phone service more economical for early users. Typically you were sharing with your immediate neighbors. Party lines worked great for outbound calls but not so hot on inbound so you would have assigned ring patterns to listen for to know if the call was for you or someone else which solved the problem well enough. FWIW, you could eavesdrop on others calls if you were sneaky about it. A modern analogy would be an office where there is single shared outbound phone line but individuals call each others desks separate of that line using an on-site electronic switchboard.

Eventually automated switching came about which allowed direct local dialing but for many years long distance (especially International calls) still might have required an operator to patch your call through on a switchboard (physically and the electronically).

In fact it was the early electronic systems that some of the first phone hackers (called phone phreaks) exploited to do their work since everything was controlled by one company (AT&T) the system was a trust based network. If you layered onto that social engineering practices you could get up to no end of mischief.

Another bit of phone fun you could have during the early 70’s was to pickup your phone and dial your own number then quickly hang up. The latency in the early automated switchboards was enough that the automated switchboard wouldn’t issue a disconnect in time to stop the connect command and the system would attempt to connect the call to your now hung-up line (which of course would ring since it was disconnected!). When you picked it up you would have a dead line. Great fun for pranking friends and family.

Did you know that in the very early days of Touch-Tone dialing, AT&T distributed little song books that showed you how to play out popular songs on the key pad. The idea was to encourage adoption, but it was also great fun for calling friends and punching out Beatles tunes.

Can you imagine having to use phones like this? Check back for more soon…

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