The Playlist: What's Wrong With Digital Music Stores?

Wouldn't you buy more music if the prices always looked like this?
Wouldn't you buy more music if the prices always looked like this?
RealNetworks went all Crazy Larry on us recently, kicking off a limited-time promotion in which it sold tracks for the insane price of 49 cents per song at its Real Player Music Store. Competitors hover at 88 to 99 cents per tune. Why the fire sale? Real's trying to drum up sales at its music store, and consequently help promote its Harmony software, which lets you play tracks from the store on portable players using a number of different digital rights management schemes.

That pricing won't last, of course, because Real's basically selling tracks at a loss. I'll be sad to see it go. Whatever your opinion of Real, you have to agree that this deal (high-quality, 192-kilobits-per-second AAC files; $5 albums; broad compatibility) looks much more like the type of music store we want than anything else out there.

Digital music has come a long way in the past year, but it still has light years to go. This month I'm discussing some of the problems that need to be addressed.

Prices Are Too High

Tracks and albums already cost too much for what you get, yet I keep hearing about how record labels want to raise licensing fees, which translates into higher prices on selected albums or songs at online stores. Here's a news flash: Digital music should cost less than it does. It's a product with no manufacturing costs. No warehousing. No physical distribution network. And I'd imagine that the server and bandwidth charges are offset by the fact that digital music stores don't have to maintain retail locations. ('s cheaper for a reason, after all.)

When CDs came out, they quickly began to cost less to manufacture than tapes. They sold for higher prices, but people still bought them because the product had improved. CDs offer superior sound quality that doesn't deteriorate over time. That's the way this is supposed to work--products get better over time, not worse.

So how about a quick comparison here? A CD costs $12 to $18, has pristine audio quality, and lets you take your music anywhere (barring copy protection, of course). Pay $10 to download that same album, and you've immediately dropped the sound quality and placed a bunch of restrictions on what you can and can't do with your music.

Real claims it sold over a million songs in one week at the promotional rates, so it's obvious that consumers see low prices as a huge incentive. Digital music is already a low-margin business because of high licensing fees, which make up most of the cost of a track. That isn't likely to change until record labels lower their fees.

Sound Quality Varies

If digital music is ever going to replace CDs as a distribution medium, Real's 192-kbps files should be the minimum quality, not the luxury that they are today. The 128-kbps that files most online stores sell now are fine, I suppose--if you always listen to music in the car or while you're jogging. But if you're like me, you like to sit down and use your good stereo equipment from time to time.

Last month, I joined a group of fellow PC World editors on a field trip to the house of one of our more audiophile-oriented peers. There we ran an audio test for a story in the first issue of Digital World, in which we listened to a slate of compressed and CD-quality files on high-end equipment to see if discerning ears could detect a difference.

The big surprise was how well AAC performed. Most of those 192-kbps files were indistinguishable from files that used lossless compression. And not just to my ears--in the audience we had an acoustical engineer from NHT (Now Hear This), in Benicia, California, and the owner of Audio High, a high-end stereo store in Mountain View, California. But we found that as you drop below 192 kbps, the difference in quality becomes noticeable pretty quickly.

As I mentioned way back in my first column, I don't like the idea of buying new music twice: Paying $10 for the download, plus $15 for the CD doesn't work for me. Dropping the download price to $5 per album makes that more palatable--but what I want is to avoid the situation altogether. I'd gladly pay CD prices for downloaded albums if I could store the files stored in a lossless compression format that lets me burn and re-rip as I want. Now, if only someone would sell them to me.

Compatibility Shouldn't Be an Issue

Online music stores should take a lesson from the launch of movies on DVD. That format owes much of its success to a unified approach from the beginning. No VHS vs. Beta to slow things down; just a single format that worked right the first time.

When I'm buying a CD, I don't have to think about whether discs bought at Tower Records will work with my Denon CD player. That's not so in the digital music world, where the audio player you buy determines where you can shop for music.

This whole thing with multiple digital rights management formats just isn't working. Whether you agree with Real's methods or not, you have to commend it for at least trying to address this problem. At some point either one format will become the winner, or software like Real's Harmony will need to bridge the gap. I just hope it happens sooner rather than later.

What Do You Think?

Sadly, those are just my main gripes abut the current state of digital music. I could go on about this for hours. Tell me what you want fixed and I'll run some of the best suggestions in my next column.

Quick Hits

Microsoft's New Music Store: Microsoft recently launched a preview of its digital music store. MSN Music is accessible through Windows Media Player 10 or Internet Explorer, and offers over a million tracks in WMA format. Songs are encoded at variable bit rates of between 160 and 256 kbps, so downloads should be relatively high quality. If you're already an MSN user, you'll start seeing a lots of integration. Search MSN for Radiohead, for example, and one of the results will likely be a link to MSN Music. You'll also be able to easily buy songs you hear on MSN Radio.

In Heavy Rotation

New Tunes From a New Pornographer: A.C. Newman, famous as the frontman for the band The New Pornographers, has a disc out called The Slow Wonder that's probably the best pop album I've heard in three years. The only problem: At just over 30 minutes, it's way too short. I want more!

Eric Dahl can't wait for The Wrens to come to town. To comment or ask a question, send him an e-mail.

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