(BQ) Part 2 book "Digital culture industry - A history of digital distribution" has contents: Hacking the market, new media gatekeepers, a history of digital distribution. | 7 Hacking the Market If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for CocaCola? There you go. That’s what happened to the record business. (Doug Morris, CEO of Universal Music Group, quoted in Mnookin, 2007) Keeping it in the family When Michael Robertson was looking to promote his idea of selling music as MP3s via his new venture , he found the labels to be cold to the idea. They were disinterested, seeing little benefit in these low-quality compressed audio files. When Napster sought licensing, a similar situation occurred: told by the courts that they required a license to operate, they found the price set to be unattainably high and eventually liquidated whilst their only industry ally, BMG, was punished with liability for Napster’s actions and their eventual consumption into Vivendi. When Niklas Zennström and Janus Friis’ arranged meetings with music and film licensing groups in the US they found themselves not in negotiations as arranged but at the receiving end of accusations and threats. During the rise of media’s digital distribution, the media industry was out of the loop and intended to stay there, a decision which at the time, made perfect sense. The shift from cassette and vinyl to CD had been a sustaining boon at a time when profits were dropping. The CD, an insider innovation 132 Hacking the Market 133 from Sony Corporation, revitalised the recording industry, which had found vinyl’s price to have reached a market low at $. Consumers had become comfortable with the price and any more was considered to be profiteering. However, the CD, sold under the banner of its clean digital sound and novelty of the new, meant that the standard price could be set at $ with consumers willing to pay a premium for the format. Though the labels sold CDs under the banner of high-quality digital sound, what brought the customers flocking were the new capacities of the CD. They were robust, .
