When the labels filed a $1.65 trillion lawsuit, it sounded a lot like Donald Trump’s claim this week that “he’s worth many billions,” in other words: ridiculous.
The thing that really shocks me is that this pretty much had G-R-E-E-D written all over it. To ask for $1.65 trillion is greedy. But what is more emblematic of the labels’ greed is that their greed did not allow them to think of creating their own Napster, allowing Shawn Fanning and Sean Parker to create Napster and serve over 50M users… Napster was somewhat pioneering for what it did with a P2P (peer to peer) architecture. Of course, with AllofMP3.com - the Russian based music site - the element of pioneering is that they simply charge based on bandwidth. According to Wikipedia:
Unlike some US-based music stores such as Apple’s iTunes Music Store, AllOfMP3 charges for the volume of data downloaded, not for individual songs. As of August 13, 2006, the basic price for downloaded music is $0.03 per megabyte, increased from the previous $0.02 per megabyte set on January 15, 2005. As a basis of comparison, a typical four-minute, 128 kbit/s song downloaded from the iTunes Music Store would cost $0.99, whereas this same song at the same bitrate would cost $0.12 to download at AllofMP3.com.
This price is often reduced by a complicated system of discounts based on cumulative usage, promotions, and type of payment. These discounts can reduce the effective price of downloads by up to one third of the original cost.
They remove the nonsense of media and simply charge for the cost of goods sold. Can you imagine if publishers sold books strictly based on the cost of paper, ink and added a basic markup instead of the myriad of voodoo variables that goes into the pricing of a book?
The point is: AllofMP3.com is a simple but intuitive pricing models that the labels could have pushed themselves, since their cost of delivering music online really would have been driven by bandwidth costs. Instead, their reluctance to get with the times highlights their greed more than their reaction to fear: to sue ALLofMP3.com.
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