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COVER STORY

Some Expert Picks of What Will Click

July 04, 1999

The music industry is poised to reinvent itself for the Internet era, and that has caused upheaval, excitement and anxiety. To mark the moment and discuss the future, Calendar assembled a round-table of some key industry voices: Gary Arnold, merchandising vice president for Best Buy; Jonathan Davis, lead singer of the rock band Korn; Mark Geiger, founder of Artist-Direct and a leading online advocate; Larry Kenswil, president of e-commerce and new technology for Universal Music Group, the world's largest music company; and Donald S. Passman, attorney and author of "All You Need to Know About the Music Business." The panel discussion was moderated for The Times by writers Steve Hochman, P.J. Huffstutter and Geoff Boucher. An extended transcript of the round-table is at http://www.calendarlive.com/internetmusic.

Question: Why should music fans be excited by the profound technology changes ahead?

Mark Geiger: Three things: No. 1, more choice in the way that they consume their music products and how to access to them. So it's not just an album with 12 songs for $13, now you have all these different ways to consume music. No. 2 is a direct connection to the artist. Throughout history, people want to go backstage, they want to meet people like Jonathan, they want to get his autograph, and part of that emotion is now somewhat possible through the Web. No. 3 is probably a reduction in price . . . the same way video rental is cheaper than going into the theater and pay-per-view. . . .

Gary Arnold: If you go down the road 10 years . . . , you go to a multimedia emporium, where there's a great experience and you're exposed to lots of different music, eclectically and serendipitously, and you stick in a device the way you gas up at a fuel pump.

Or you're sitting at home watching television and a music video comes on a broadcast channel and you push a button and say, "I want this," and it suddenly, miraculously appears. I think your music will be stored invisibly on a home storage device, and you'll be able to get your music by any means you want. You'll be able to get it by taking your portable device and loading up the music you want that day.

You'd be able to copy it onto something which would hold 50 hours of music or probably more by then, and then take it to your car and just have it in your car all the time.

Jonathan Davis: Something we started doing with [the] "Life Is Peachy" [album] was bringing in fans to our recording studio and they took a camera and [after the recording was posted on the Internet] you could virtually walk through and see every nook and cranny of the studio. The technology is going to get better and you're gonna actually be able to check us out in the studio. I'm just excited that there's more choices now, it's not just holding the CD and listening to it. You can go and actually interact with the band. Every night before I go to bed I talk to my fans [online].

Donald S. Passman: I also think it can only be good for the industry. In the short term there will be disruptions, because if you get the majors [the music industry's conglomerates] to move to something it's like turning a gigantic ship and there's a lot of vested interests. . . . None of us can really know what shape it's going to take, but there will be the opportunity to get as much information as you want--or more information about bands and artists than you've been able to get in the past--whenever you wanna get it.

It will undoubtedly grow the industry when it takes shape, but we're going to go through some rough seasons before we get there. . . . Anything that finds a new way to deliver music is going to enhance the industry ultimately. Whether it's going to supplant something or not, it remains to be seen. In the short term it's not gonna supplant CDs. In the long term it very well may and it probably will.

Q: How will pricing be affected by these new delivery methods?

Larry Kenswil: Music is by the hour the cheapest form of entertainment available to people. The price of a CD now in real dollars is unchanged from the price of a vinyl album in the late '60s, and the amount of music available on a CD is half again as long.

There isn't much price sensitivity. . . . Raising or lowering the price a couple of dollars on an album doesn't really affect its popularity all that much. What it affects is the amount of stocking you get in the stores. In reality, if an album is no good, it won't sell at any price, and if it's a huge hit, it will probably sell at higher prices.

So I don't really know that prices overall will change all that much. . . . The price someone is paying for the music itself really shouldn't be a factor of the delivery system at all, and it shouldn't be a factor of the storage. It should be a factor of what that music's worth to them. And I think musicians shouldn't particularly be in favor of the lowering overall of prices of music.

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