Digital Audio Insider -- the economics of music and other digital content

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Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

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April 26, 2007

Interview with Jim Donio of NARM
by David Harrell
Next week, I'll be at the Digital NARM conference, a portion of the annual convention of the National Association of Recording Merchandisers.

Last week, I spoke with NARM president Jim Donio. He shared some of his thoughts about where we're heading in terms of digital kiosks, DRM, and the longevity of the physical CD:

The RIAA numbers that came out this (last) week -- better, worse, or pretty much what you had expected?

Pretty much what we had expected. Sometimes the Soundscan and RIAA and our numbers are slightly off -- units vs. dollars and such. But there were no dramatic surprises. There's much more discussion about the first quarter of '07 at this point.

I wanted to ask about retail delivery of digital content -- Disc-Go's a sponsor of the Digital NARM. What's it going to take for consumers to embrace this model? Last year you mentioned kiosks and "other digital delivery methods" for stores. Can you elaborate?

It's been a slow progression because of all the other issues -- economic issues -- going on. If we were not in such a challenging period in terms of physical sales...

It's certainly a harbinger for the future in terms of migrating the business, but a considerable investment is involved. There are not enough (kiosks) in place to really judge, we really are still in the beta phase. Consumers who have experienced them have liked them and there's an opportunity here, but retailers have to believe there's future here.

Most of the companies involved in that area are participating in various forms at the conference. I still believe there's an opportunity there, which is why companies are continuing in this area.

continue reading "Interview with Jim Donio of NARM"

Note: Jim also discussed the concept of the kiosk as a "filling station" for portable players, but at this point my typing skills weren't keeping up with the conversation. It looks like Disc-Go will be demonstrating its direct-to-portable-device capability at NARM.

In your opening address at last year's NARM conference, you called for the adoption of compatible DRM standards. Are we any closer, and in light of the recent EMI/Apple decision, are we instead moving to a world without DRM?

You know, I would say the jury is looking at that in terms of what's going to happen. That announcement certainly casts a whole new perspective.

NARM is part of the Coral Consortium, which is a couple of dozen companies examining the potential of creating a DRM standard.

So we're going along parallel paths. Not everyone is on board (with ditching DRM), only one of the four (major labels). Of course you've got the Indie labels going DRM free with eMusic. All these efforts will continue forward and the marketplace will ultimately decided what the end of the story's going to be, and when it's going to end.

In terms of NARM, we still feel that the consumer experience is what's important. We want to bring the digital into the store and make it seamless and make them want to come back to it and try new things.

Any thoughts on where we going to be five years from now -- CDs vs. digital files?

I don't have a crystal ball, wish I did! So many people are speculating erroneously that we'll reach 100/0 (digital vs. physical).

It may not be the same physical disc but I think we'll always have physical product, maybe some combination of audio and video.

People love to shop in stores and the stores are going to change, but the notion that we'll reach 100% digital -- and that none of it will be in a physical store -- I don't see that happening.

Thanks Jim!


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