iTunes, the Middleman People Want

For the sufficiently geeky or antisocial, the car buying experience is one of unmitigated unpleasantness. You stop to browse and you are unavoidably thrust into a conversation with a sales person. The smallest indication that a purchase may occur at some point inevitably results in the now standard “If I can get these numbers to X, can I earn your business?” The geek wonders why all the rigmarole is necessary. Why don’t automakers sell cars the same way bread makers sell bread? The prospect is enticing, imagine strolling onto the lot, firing up the complimentary car dolly and towing your choice of vehicle, with a giant UPC code on the side, to a self-check lane. The purchase could be completed with one less middleman, thereby saving the consumer the salesmen’s cut. The truth is far different, people want the middleman. A car is a huge purchase and the buyer wants a face to associate with the purchase. In that fashion, they have a go to person for questions and somewhere to assign blame.

Naturally, a car purchase is not a typical transaction, for lower priced goods getting the middle man out of the deal would seem to be much, much wiser. If one is buying a coffee maker or a box of paperclips, there really isn’t a need to have someone there to answer questions. The capacity of the coffee maker is likely stated on the box and the minutiae differentiating the quality of paperclips (do they have the little ribs? If so why? If not why not?) is something the mass hordes of paperclip buyers feel they can make it through this earthly trek without knowing.

Seemingly, in that case we’d be better off without the intermediary. Or would we? The most popular middleman for commerce of the mundane is Wal-Mart. While the floors may be grungy and the lighting reminiscent of a gray Seattle morning Wal Mart manages to sell shoddy merchandise at low, low prices. But Wal Mart also provides a valuable service in their middle man role. It offer consumers choice. You can get ridged or unridged paperclips, you can choose from a dozen different coffee makers, the variety of prepackaged, sliced, white bread is almost as astonishing as the lack of differences between said loaves. The direct from the manufacturer directly to the consumer model just doesn’t work well for manufactured goods.

But what of the case where the goods weren’t mass-produced, what if they were merely mass replicated? Naturally, digital music fits right into this definition. The current drill is as follows: Artist records music, labels promote music, stores and iTunes sell music. The stores and iTunes keep a little bit of the cash and send the rest to the labels. The labels keep a bunch of the dough and send a pittance to the arist.

Physical record stores provide a service; they store the physical CDs some monetary incentive is obviously owed. With the other middlemen, iTunes and the labels the case isn’t as clear. The labels argue that without them there would be no effective promotion for the artists music, and as promoters, they are essential. Which is an interesting concept, how would the world ever know about a new U2 album if the labels didn’t advertise, those guys are providing a valuable service to under exposed artists. On the other hand, it could be argued, more effectively, good artists make a living with or without massive label support. One recalls the tale of that nowhere group R.E.M., a surprise hit suddenly they were everywhere. It wasn’t the label that got them going, R.E.M. had made twelve albums before “The One I love” first enthralled listeners, then annoyed listeners and finally catapulted the group to fame. Well, if you count an appearance on Sesame Street as the ultimate arbiter of fame.

So, it is likely the case that the labels are very good at promoting what is already popular and forcing prepackaged, polished acts on the unsuspecting pubescent public but they aren’t nearly as adept at giving people what they actually want to hear. For that to happen, artists must promote themselves.

If the labels aren’t providing anything more that popularizing the already popular is that middleman people could do without? The answer is yes. When purchasing music people don’t care what the label the music was published by, they are after the songs.

If the labels are a superfluous middlemen, existing only to promote the most profitable acts then surely iTunes is just as extraneous. There is nothing to prevent the artist from selling directly to the consumer and the profits would go straight into the bank account of, say, Beck. Put differently, where is the consumer benefit?

Here the answer is clear. We see the Wal Mart model in play yet again. People simply don’t want to surf to 40 different sites to buy forty different singles. While the notion is prevalent that the popularity of Napster and LimeWire was predicated on the notion of valued goods for free the convenience aspect was every bit as strong a motivator.

The middleman, of course, doesn’t have to be iTunes. Any service that aggregates enough music with terms palatable to the consumer could be the defacto reseller. The selection the store provides, the time it saves and provides a feeling of security concerning the quality of the download adds up to one thing: As much as people abhor the concept of a middleman, they secretly want the assurance the middleman provides.