Shaking Up An Industry

I bought a new toy this week. It’s one of those new pieces of technology that causes a sizable shake-up and has the potential to change an entire industry. No it’s not a Grand Cherokee.

I bought this little gadget called a Rio, made by Diamond Multimedia Systems. It looks like a Walkman, only smaller. It has 32MB of memory in it, and the basic idea is that you can download songs into it from your computer, using the popular MP3 format. You can produce the sound files from your own CDs, or download approved music from the Internet. Then you can take the unit with you and listen to whatever music you’ve stored on it.

Sounds cool, huh? But remember — with every piece of new technology comes change.

The first thing that struck me about the Rio was the potential for widespread abuse of copyright. After all, if the format catches on, the next logical step for the less-than-scrupulous is to exchange MP3s illegally. But if someone can develop a foolproof way to prevent this from happening, think of all the possibilities for the music biz .

1. A huge industry could form around the sale and distribution of MP3s. Music retailers could be threatened. Heck, even the relatively new online music retailers would be threatened. Would Billboard have to count MP3 downloads along with album sales to determine the Top 100?
2. Unsigned bands could distribute their material over the Internet. Who needs a record deal? Maybe a couple years down the road, a nice web site and promotional campaign will be enough to sell an unsigned artist’s material. What could this do to the recording industry? If portable MP3 players catch on, someone could conceivably start a virtual record label with little more than a couple of computers and the requisite bandwidth.
3. One would never have to worry again about scratched CDs or that cheap tape deck in the car that eats cassettes. ‘Nuf said.
4. What could this do for other businesses in the pre-recorded media business? It could make books on tape obsolete. What about when video capabilities are added? You could have a Blockbuster Video store on your home computer. Or maybe an enterprising educational institution could have a downloadable series of lectures.

These are just the potential ramifications I can think of on my own. I’m sure the loyal readers of ClickZ can think of more.

Then again, maybe no one will get used to downloading music from a computer. Maybe the format will bomb. Or maybe this little Rio will go the way of the Newton and be ridiculed in Doonesbury every day for a month. Who knows?

In any case, I think the Rio’s mere presence has great potential to change the way the music biz operates. And for that reason alone, I think you all should go out and buy one. There’s nothing like a monster paradigm shift to get everyone’s blood pumping again. (Heh heh.)