Felten on The Record Industry
Ed Felten has a great post today, asking “How Competitive Is the Record Industry?”
How can we tell whether the record industry is responding competitively to DRM? An interesting natural experiment is about to start. MP3Tunes, a new startup headed by serial entrepreneur Michael Robertson, is launching a new music service that sells songs in MP3 format. Will the major record companies license their catalogs for sale on MP3Tunes?
In a competitive market, they would license to MP3Tunes. There are surely some customers who are willing to pay for music but don’t want to accept the hassles of other online music services. MP3Tunes will extract revenue from these customers.