DVD-Audio, the Internet, and Those Pesky Downloads

Last Month, music labels, distributors, and retailers met in Las Vegas for the 41st annual National Association of Recording Merchandisers convention to wrestle with several new issues wrought by the digital age. NARM Chairperson Rachelle Friedman set the tone for the event when she stated in the keynote address that "for the music industry, the 21st century and the impact of the Internet have already thrust themselves upon us."

DVD-Audio took center stage for much of the event, with several demonstrations and seminars geared toward informing the industry about what it is and what it is not. Friedman commented that "I applaud [RIAA President] Hillary Rosen's plea to the hardware manufacturers earlier this week to find a way to resolve the differences between the two competing versions of DVD-Audio. A format war is no way to introduce a new technology, as we all should know from history."

Jordon Rost, of Warner Music Group, said that "DVD[-Audio] completes the multimedia convergence of DVD-Video and DVD-ROM into a single high-quality disc system. It offers the next-generation music format." Rost went on to assure retailers weary of Internet downloads that "with a disc capacity of 4.7 Gigabytes, DVD-Audio is a bricks-and-mortar format." Rost also predicts that the introduction of DVD-Audio will drive sales in higher-end audio equipment for both the home and the car. Regarding copyright protection, he reveals that one "CD-quality" copy will be allowed from a DVD-Audio disc, which will be encrypted to prevent any high-resolution copies.

During the closing session of the event, Rachelle Friedman went on to lay out the common misconceptions about the Internet held by the industry. "The availablity, in digitized form, of any content---music, software, movies, and books---is already becoming a major factor. Some are afraid that stores could soon become dinosaurs. Others seem to think that the Internet is magic . . . that anyone and everyone could become a player in our business. Neither of these extremes reflects reality." Her list of misconceptions included that it is cheap and easy to start up a successful Internet music business, that Internet retailing will replace mail-order and retail shopping, and that Internet companies don't need good customer service.

Friedman also feels that digital downloads are not the Achilles' heel of the established music business, but instead are "simply another configuration of music that can be stocked on a website. And like any other new product on the shelves, I need to learn all I can about it to effectively merchandise and market it." She went on to say that "when people don't know the facts about a technology, or what the strategy behind it is, human nature is inclined to fear the worst. The worst for retailers is e-commerce without retailers. The worst for labels is e-commerce without labels."