Music Memory Cards

The big four record labels have come up with a new way to replace the CD.

You might want to sit down for this one.

Fingernail-sized memory cards that will hold an entire album, notes, cover art and allow for some personal storage by the consumer.

Some 449 million CDs were sold in 2007 -- a 19% percent drop from the previous year and a continuation of an almost constant eight year decline in sales. Fifty million were sold digitally (Nielsen) -- not enough to give the labels any comfort that they have found the modern day replacement for the decreasingly unpopular CD.

Of course the largest number of song downloads remain illegal -- a trend that continues in spite of the flawed strategy of lawsuits by the RIAA targeted against consumers.

So now, this so-called "slotMusic" format is the answer -- or so the labels think.

On the plus side almost everybody owns the player -- no need to buy a device as CDs required consumers to do. All it takes is a computer port so there is no upfront investment.

Another plus is what they tout as near CD quality sound -- that term "near CD quality" worries me, but let's give the labels the benefit of the doubt and agree that these new music memory cards sound better than compressed MP3 files.

Onto the problems:

1. The cards and dongles will be packaged in current CD packaging.

Not good. CDs are old. The memory card idea is being sold as new. Hello? What are you thinking? Next you're going to tell us that these new music memory cards will cost approximately the same as a CD.

2. The new music memory cards will cost approximately the same as a CD.

Told you. Major problem here. The music loving Gen Y public doesn't have to buy digital music. There are plenty of bit torrent sites from which they can feed their habit and load up their hard drives. There are also lots of ways to steal music. Why pay when you can get digital music for free. This concept is flawed because the premise -- that the majority of consumers will pay for digital music -- is incorrect.

3. There's no commitment to a major rollout of albums.

The labels had no problem making this epic announcement about music memory cards but they missed the opportunity to say all their current music will be issued on it and provide a date for when catalog material will be available. Looks like the labels are doing what we Jersey boys used to do at the shore -- cautiously put our foot into the water to avoid hypodermic needles and medical waste. In others words, it doesn't appear that the labels are showing the confidence to jump in. This could be HD radio all over again -- little content and no guarantee that the marketplace even wants memory cards.

4. Best Buy, Wal-Mart and European retailers are included.

Great. The road to recovery -- at least in the minds of label execs -- runs through the aisles of Wal-Mart. That's plain wrong. Music is a loss leader for big box stores -- it's the wrong place to hitch their stars. Russ Crupnick an entertainment industry analyst says the industry desperately needs a new reason for consumers to head back to the brick and mortar music stores. Forgive me here, but with all due respect, Wall Street analysts are the last people to know a trend or a solution to a problem. Remember satellite radio? They drove the price up until the satellites were launched. Sirius XM sells for under a $1 a share today. They loved consolidation. Today you can't sell a radio station for a decent multiple. You get the idea.

Hey, at least the record labels are trying, right?

Here's an idea that is more in tune to the next generation's needs. Make music memory cards available after concerts -- the audio (and maybe video) from that particular night's concert. Attend tomorrow, buy another one. Save the whole collection.

Better yet, make these small memory sticks look like cool things like guitars -- which is actually being done now.

Today's consumer is going to continue to steal music like it or not, but they'll buy what they want and cannot steal -- thus, the concert sticks of that night's show or other content that they would deem as special. A song is not special. They own, share and download lots of them -- no biggie.

What we have here on the part of the labels is a lack of understanding of generational media.

And until they get it, you'll continue to see ideas like the Zune media player, $15 dollar a month subscriptions for all-you-can eat schemes and ideas like music memory cards.

I give it a D.

Meet me back here next year -- same time, same station -- and let's see if they pulled it off.

Don't bet the ranch.

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