Wednesday, April 29, 2009

Downlifting and Pandora

In the 2000s, music piracy (now called downlifting) was the number one issue facing the music industry. It was so pervasive that ordinary people became criminals en masse. We all knew that downlifting was stealing, but many of us felt that the music industry was already stealing from us at the rate of $20 per CD (that's compact disc, not certificate of deposit).

From an economic perspective, we should have seen this coming. Two factors made a showdown between music executives and Internet pirates inevitable:
  1. Existing forms of music were basically files stored on awkwardly shaped discs. As memory cards became smaller and bandwidth became faster, it made less sense for people to carry around CDs. Companies came out with iPods and other portable music players (the Walkman, anyone?) -- understandably, consumers ate these up. This was precisely where the market was going.
  2. These new forms of digital storage were much less secure from theft. In electronic file format, music became easy to copy and easy to distribute. Quite literally, the only remaining obstacle to owning our favorite song was our sense of morality. Those with fewer scruples from downlifting had more songs in their collections.

These new innovations made music non-excludable from those who don't pay. The word non-excludable sounds like a good thing, but it is terrible for the good's sellers, and therefore, for the good's buyers. Why's that? If nothing was done about the emerging non-excludability of music, no one would ever want to pay for music. If no one wants to pay for music, why would anyone make music?

Internet radio gives an interesting model for dealing with non-paying customers in the music industry. Internet radio's solution? Don't charge a listener when you can charge an advertiser. Radio and television stations figured this out long ago. In these industries, the secret to success is to expand your audience and charge advertisers for air time.

Loads of Internet radio stations are out there, but my favorite is Pandora. Pandora began in 2000 with the "Music Genome Project," an attempt to systematically match aspects of songs and genres of music to one another. This mapping of the terrain of similar songs allows Pandora to be a general use music station that adpats to what the listener likes to hear.

Your Pandora experience starts with telling Pandora what artist or song you would like to hear. With this information, Pandora plays a range of songs with similar tonality, rhythm, and musicality. I am not familiar with all of the aspects of songs, but Pandora definitely has it down. 99.9 percent of the time, I am very happy with the songs that Pandora plays. For the other 0.1 percent of songs, just click "I don't like it" and Pandora won't play that song ever again.

Two words of caution:

  1. Pandora is not an outlet to play specific songs you want to hear. Pandora will start a radio station that plays that song and more, but you cannot rig Pandora to just keep repeating the same song.
  2. Pandora relies on your feedback to improve the mix of music it feeds to your personalized station. If you don't provide feedback, Pandora will eventually stop playing music. The price you pay for personalized music is just sporadic, periodic feedback. And, the result is a better listening experience.

On the other hand, I would never learn the names of the music artists if it were not for Pandora. Also, Pandora has exposed me to new music that I really enjoy: I have become a fan of Jim Brickman because of Pandora, and that would not have happened otherwise. So, I say give Pandora a try. At the very least, it will be music to your ears!

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