The Digital Media Manifesto



L. Chiariglione


Use case no. 05: Music distribution



1. Introduction

Purpose of this contribution is to consider the music distribution use case. The contribution is based on material contained in  03/07/24chiariglione01 and 03/07/29greenhall01.

This is a very simplified study, particularly as far as value chain players is concerned. It is hoped that other contributions will extend the analysis.

2. Description of the traditional use case

2.1 Traditional functions

The functions of traditional music distribution are

  1. Talent discovery
  2. Support to artists
  3. Recording
  4. Promotion of music items
  5. Distribution of records

2.2 Traditional value chain players

The traditional value chain players are:

  1. Support to artists rights
  2. Content Production
  3. Marketing
  4. Other promotions
  5. Distribution technology provision
  6. Distribution
  7. Retail
  8. Consumption devices
  9. Consumption

A typical allocation of the cost of a CD is

Printing 5%
Collecting societies 10%
Distribution 10%
Retailer 10%
Tax 20%
Record label (incl. artists) 45%

2.3 Technologies used in the traditional use case

Technologies employed in production and storage are quite sophisticated and today they are entirely digital.

Distribution technologies are Compact Cassette, Compact Disc and (smaller percentage) Minidisc. Other technologies play a marginal role.

2.4 Legislative framework of the traditional use case

Music used to be a largely unregulated field (with the possible exception of content censorship).

Most European countries grant consumers the right to make private copies. As a compensation for losses incurred by rights holders a levy is applied on blank recording media including, in some countries, recording equipment. In the United States the Audio Home Recording Act (AHRA) grants consumers the ability to make private copies of broadcast music. AHRA mandates that digital recording CE devices like DAT (IT devices are excluded) be equipped with a Serial Copy Management System (SCMS) allowing only one copy.

2.5 Business model of the traditional use case

The business model is similar to book publishing. Usually artists sign with a record label who promotes the artists, offers recording services, promotes and distributes the records through music shops. Independent promoters are radio and TV stations. Alternative channels are live concerts.

3. Description of the digital use case

Two models can be considered:

  1. distribution of clear text MP3 files
  2. distribution of protected music files

The first model tends to support a new channel to distribute music items from artists in the early phases. End users can acquire MP3 files of music items that they can use as freely as MP3 files created from their own CDs.

In the following only model 2. is further analysed.

3.1 Functions of the digital use case

The functions are

  1. Aggregators acquire the right to distribute music items from different sources
  2. Aggregators sell music items via the web
  3. End users acquire music items
  4. End users can perform the actions the aggregator supports (e.g. making a CD).

3.2 Value chain players in the digital use case

Value chain players are similar to the traditional case

  1. Support to artists rights
  2. Content Production
  3. Marketing
  4. Other promotions
  5. Distribution technology provision
  6. Distribution
  7. Retail
  8. Consumption devices
  9. Consumption

Clearly the enabling part is no. 5 "Distribution technology provision"

3.3 Technologies used in the digital use case

Technologies are:

  1. Web technologies
  2. Electronic payment
  3. Information technologies (PC etc.)
  4. New family of music players.

3.4 Cost/benefits for value chain players

Value chain players Cost Benefits
Support to artists rights    
Content Production    
Marketing   New marketing forms enabled
Other promotions   For new promotion channels
Distribution technology provision   DRM providers
Distribution Traditional retail must change Web-based retail enabled
Consumption devices   New consumption devices needed
Consumption May lose some traditional features New features acquired

3.5 Legislative framework of the digital use case

Currently no significant changes are under way.

3.6 Business model of the digital use case

Currently only the distribution portions of the value chain is affected, however, it is conceivable that other portios can be affected.

3.7 Difficulties of current deployments

Current deployment suffer from the fact that they rely on the PC as the means to acquire content. Usage within the PC is convenient but moving content to other devices is only possible for devices that support the same (DRM) technology.

4. Hurdles

Hurdles are largely those of

  1. Mapping of established rights to the DM space

    1. Rights such as "fair use"

    2. Rights pertaining to required/allowed playback device(s)

    3. Rights to privacy

  2. Interoperable DRM technologies

  3. DM access hurdles due to:

    1. user identification/information requirements

    2. having to configure devices to accept or use DM

  4. End user device hurdles

    1. separate devices, configurations or applications for the same type of content but from different service/distribution providers.

    2. Lack of support for transportability of content.

    3. Lack of support for the multi-device use of content.

5. Relations with other use cases

6. References