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TK's MORNING BUZZ: Pay Downloading Is an Entirely Different Beast Than Free Downloading

6 Dec, 2000 By: Thomas K. Arnold

The announcement last week that several major studios are actively working on digital downloading of movies via the Internet struck fear into the hearts of video retailers. Here is a concept that is so painless, so effortless, that it threatens to revolutionize the industry, to the detriment of traditional brick-and-mortar retailers.

But my earlier statements that such a process is still years way from becoming reality are underscored by a conversation I had today with Russ Solomon, the crusty founder of Tower Records and Video who the night before was inducted into the Video Hall of Fame.

On the music side, digital downloading is already here, since it takes a lot less time and hard drive space to download a song than it does a feature-length movie with audio and video elements.

And yet Solomon says the impact on his business has been nil, and he expects it to stay that way well into the future.

Pay downloading is an entirely different beast than free downloading, Solomon says. He's found that if consumers have to pay roughly the same cost to download an album as they do to buy one, they will invariably stick with the pre-recorded album they buy at stores.

Once an album is downloaded onto a computer, it still has to be burned onto a CD for the average Joe to enjoy it at his leisure. And that's a time-consuming and expensive proposition, particularly when a ready-made CD is easily purchased at a record store or through an online dealer.

Tower's Web site sells up to 10,000 CDs a day, while yesterday's sales tally for downloaded albums amounted to a grand total of three.

It's not practical, it's not cost-efficient and, besides, the consumer doesn't get the digital original, with pristine sound quality packaging.

At most, digital downloading will be "ancillary" to packaged music, Solomon maintains, with the vast majority of consumers opting to buy packaged CDs even when the process is simplified and the average home computer is fast enough to download an entire album in a matter of seconds.

Just to be on the safe side, Tower offers consumers the choice to buy digitally downloaded albums right alongside CDs and audiocassettes on its Web site, and has even installed kiosks in two stores in Berkeley and Los Angeles, California, where consumers can download albums over the Internet.

But neither venture is making much money, and Solomon doesn't see that changing. Accordingly, he's far from worried about the impact of digitally downloadable music on Tower's video business.

"I just don't see it happening," he says.

Comments? Contact TK directly at:TKArnold@aol.com

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