Los Angeles, Firefly Studios.
In an office in the administrative district, Edgar Bronfman, CEO of Seagram Group, and Doug Morrison, CEO of Universal Music, are sitting with Eric around a machine that looks like a bank teller machine, listening carefully An engineer from Firefly Electronics explained the purpose of this machine.
The 'bank teller machine' in front of me is actually a digital music sales terminal, and Firefly Electronics named it a 'mini music store'.
This machine was also an unexpected surprise that Firefly Electronics brought to Eric when Eric attended the Firefly Electronics Annual Conference a few days ago.
Because Eric only approved the research and development plan for the digital music sales terminal equipment submitted by Firefly Electronics in the second half of last year, and it has been less than a year since then. Moreover, because of the original time and space, Eric had never heard of a digital music sales terminal similar to a vending machine, so he didn't pay much attention to this plan.
But a few days ago, Eric was a little surprised when he saw the prototype produced by Firefly Electronics.
Because this machine completely uses the capacitive touch technology solution developed by Firefly Electronics. The whole machine does not have any physical buttons and is all operated by touch screen. Moreover, the internal chip and operating system are also independently developed by Firefly Electronics based on the company's accumulated tablet technology.
Moreover, the results of Firefly Electronics' market prospect research on the 'Mini Music Store' also made Eric pay more attention to this machine.
Historically, the popularity of MP3 players should have been around 2005, when Apple opened the access of IPod players to Microsoft's Windows operating system, which resulted in the explosive growth of the MP3 player market.
At that time, the popularity of the Internet in Western society was enough to support users to download digital music to MP3 players through their personal computers.
But now, the number of Internet users in the world is less than 200 million, most of which are concentrated in North America with a total population of only about 300 million, and the total number of Internet users of the other 5.7 billion people in the world is less than 100 million. Such a scale of Internet users is far from being able to support the explosive growth of digital music players.
Actually it is.
Last year, the second-generation Fireflyer player was released in North America and Europe at the same time. Although at the beginning, the shipments of Fireflyer players in European countries were comparable to those in North America, but in the next few months, due to the limitations of personal computers and Internet users, The shipment of Fireflyer players in the European region has slowed down significantly. In the whole year of 1998, among the 19.7 million units of the second-generation Fireflyer shipped throughout the year, only 7.7 million units were sold in Europe, which has twice the population of North America, and the remaining 12 million units were still absorbed by North America.
The most important reason for this is that a large number of European consumers do not have a convenient channel to copy or download music to Fireflyer players, thus greatly inhibiting their desire to buy digital music players.
Although stimulated by the wave of new technology in North America, countries all over the world are sparing no effort to invest in their own information industry, but it is obviously impossible for Firefly Electronics to wait for the entire market to improve the basic hardware facilities in this area. The channel of digital music has become an urgent matter for Firefly Electronics.
It is foreseeable that even if it is launched now, within a few years, with the further popularization of personal computers and the Internet, mini music stores will gradually be eliminated like public phone booths. However, as long as such a digital music store from Firefly Electronics With the popularization of sales terminals, there is no doubt that the Fireflyer player of Firefly Electronics will gain a market advantage that other digital music player manufacturers will never be able to match.
However, the biggest difficulty in promoting this device is music copyright.
After all, Firefly Electronics can privately allow or even encourage users to crack the Fireflyer player in order to download free music through pirated CDs or pirated websites, but this matter is absolutely impossible to put on the table.
Therefore, this digital music sales terminal can only sell genuine digital music content through the Yahoo Music Store.
Although in the past two years, the scale of music copyrights owned by the Yahoo Digital Music Store has been expanding, but the five major record companies in the world still have very little authorization for the Yahoo Digital Music Store. The problem, if this device wants to be promoted on a large scale, there will undoubtedly be many obstacles.
in the office.
After listening to the engineers of Firefly Electronics explain in detail a series of music purchase processes such as user login, selection, and payment, Doug Morrison, CEO of Universal Music, first said: "There is another very important question. I just saw that you are The purchase is made through a Yahoo electronic account, but what if it is a passerby user who does not have a Yahoo electronic account?"
"Mr. Morrison, we also have a solution for this," said the engineer of Firefly Electronics. "Look, here, there is also a point card purchase option. In our plan, a large part of this equipment will be placed In downtown areas such as supermarkets and subway stations, users only need to buy a point card at a nearby store, and use the temporary account password given on the point card to purchase music. The basic principle is the same as that of a prepaid phone card.”
Doug Morrison nodded, and glanced at Edgar Bronfman next to him without any trace. Although he didn't show any special expression on the surface, in fact, Doug Morrison had already Surprised beyond words.
The promotion speed of the Fireflyer player has already caught traditional portable music player manufacturers and several major record companies by surprise. Doug Morrison has a keen premonition that once the digital music sales terminal in front of him is widely popularized, it will definitely More thoroughly subvert the existing pattern of the entire recording industry.
On the other hand, with the two powerful platforms of Fireflyer player and digital music store, Firefly Electronics' influence on the entire recording industry will also expand without limit.
At this time, the first thought in Doug Morrison's mind was that Universal Music must either reach an extremely close and in-depth cooperative relationship with Firefly Electronics in order to gain a more favorable position in the upcoming new industrial structure. Or, resolutely resist the plan of Firefly Electronics, and do everything possible to maintain the original order of the record industry.
Moreover, from the perspective of an excellent professional manager, Doug Morrison is actually more inclined to the former.
With the rise of the Internet industry, the entire recording industry was impacted by Internet pirated music last year, resulting in a decline in overall performance. It is already doomed that this industry will undergo earth-shaking changes. At this time, sticking to the rules will only lead you into the abyss.
Although from the media to record companies, there is no shortage of voices criticizing Fireflyer players for promoting piracy. But Doug Morrison is clear that the popularity of Fireflyer players has had far less impact on piracy than the media has generally described.
The impact on the recording industry is ultimately due to the rise of the Internet industry. Most pirate users currently prefer to download free music resources from music websites, and then copy them to CD discs for playback on traditional music players. According to statistics, in 1998, in North America alone, the sales of blank CD discs exceeded 130 million, equivalent to more than five times the sales of Fireflyer players.
The cost of a blank CD is even less than $1, compared to an average of $20 for a genuine record. Moreover, there is no way to curb piracy in this area. At this time, the Fireflyer player, widely criticized by the industry as an accomplice to pirated music, is precisely a platform that can transfer Internet digital music from pirated to formal channels.
However, although he already had a series of calculations in his heart, it was impossible for Doug Morrison to make a decision in this regard alone. Everything still depends on the thoughts of the boss, Edgar Bronfman.
Beside Doug Morrison, Edgar Bronfman did not raise any doubts, pretended to think about it for a moment, and then asked Eric who was opposite: "Eric, how many units does Firefly Electronics plan to release?" Is this machine on the market?"
When Doug Morrison heard Edgar Bronfman's words, he immediately felt the urge to cover his forehead.
What kind of problem is this? How many machines Firefly Electronics will launch, does it have anything to do with Universal for the time being? We should be more concerned about how Firefly Electronics intends to cooperate with Universal Music!
Eric was very patient, and replied with a smile: "For the first batch of 10,000 units, we will focus on installation and testing in Europe. If the effect is good, the scale of launch will be rapidly expanded."
Although he felt that this question should not be asked, Doug Morrison began to think quickly when he heard Eric Williams' answer.
Ten thousand units.
This number is definitely not too much, or even too little.
It's just that in an international metropolis like London, England, with a population of six to seven million, if you want to complete coverage, 500 machines may not be enough.
Moreover, in Doug Morrison's view, such digital music sales terminals should pay more attention to second- and third-tier cities.
Because personal computers and the Internet are often very popular in first-tier cities, second- and third-tier cities also have sufficient consumption capacity for digital music players, but they may not necessarily have enough hardware and software facilities to obtain online music resources. Throughout Europe, there are still thousands of cities, large and small, which excludes the lower towns. Thousands of cities, 10,000 machines, each city may not be able to allocate ten machines, and there may not be as many bank teller machines in these cities.
Of course, these are not issues that Universal Music should consider, at least not for the time being.
Seeing that Edgar Bronfman was still talking, worried that he would ask some irrelevant questions, and even make himself passive, he hesitated for a while, but Doug Morrison rushed to speak: "Eric, We all know your intention of showing this machine to everyone, so why don't you tell us your thoughts?"
Eric nodded, gestured towards the nearby sofa, took the two of them to sit down on the sofa, ordered the secretary to bring coffee, and said: "Ed, Doug, we all know that the current situation of the record industry is not the same as The past has been different. It’s like the time when Hollywood encountered television and VCRs. At that time, the entire industry was on the verge of an enemy, trying to prevent TV stations and VCRs from encroaching on the interests of the Hollywood film industry. The two sides had a stalemate for a long time In the end, Hollywood was forced to choose to cooperate when it found that it was absolutely impossible to organize each other. But in the end, the facts proved that instead of harming the interests of Hollywood, the TV stations and VCRs allowed Hollywood film companies to obtain additional income channels. At present, the situation encountered by the recording industry is exactly the same as that of Hollywood back then, but it is even more severe, because the popularity of the Internet far exceeds that of televisions and VCRs, and the cost of digitally pirated music is much lower than that of movies. , one server is enough to cause hundreds of thousands of pirated music to spread on the Internet. Therefore, you don’t have much time to hesitate, once you miss the opportunity to establish a formal digital music sales platform, which will lead to people becoming more and more accustomed to the Internet Free music, and the recording industry is at an end."
The corners of his eyes twitched a few times, and Doug Morrison interrupted: "Eric, you are scaremongering."
"Is it alarmist? Just look at the sales decline in the recording industry last year." Eric shrugged and said, "So, what I mean is that we should reach a cooperation as soon as possible to realize the formalization of the Internet digital music industry. Only in this way can the entire industry be saved before the entire recording industry collapses."
Edgar Bronfman also said at this time: "Eric, let's talk about your cooperation plan."
"Of course," Eric nodded, and said, "Actually, the current sales model of the Yahoo Music Store is the cooperation plan I want to give. Universal Music will put its music resources into the Yahoo Music Store, and the two parties will share a ratio of 3." Seven points, of course, you are 70%. In addition, if you insist, Universal Music and Firefly Records can take a three-month window period, and the newly released record will be exclusive to the physical record for three months, and then the full release will be released. After three months, the digital records will be sold separately."
"Eric, if these are the only conditions you offer," Edgar Bronfman continued, "I don't think we need to talk anymore."
"Actually, today I just want to introduce to you two the mini music store just developed by Firefly Electronics," Eric said with a smile: "We can discuss the specific cooperation plan and whether Universal Music has other requirements. Of course, our physical music store plan will not be delayed because of this. Firefly Electronics plans to officially announce this plan when the third-generation Fireflyer player is released in April, and promote the implementation at the same time. Of course, if we can reach a cooperation before then intention, then I believe it will benefit both of us."