By Mike Dorf
There is a wonderful scene in Dan Kennedy's hilarious memoir of his brief stint as a middle manager in the record industry during its collapse--Rock On: An Office Power Ballad--in which Kennedy succinctly describes the problem facing the industry, even without the worry of free file sharing: With individual songs available on iTunes for 99 cents apiece, the record labels could no longer charge $15 for a CD with two songs that listeners wanted to buy and ten or so others that they had to buy to get those two.
That struck me as a trenchant analysis, until I started thinking about an earlier transition. In my youth, popular music came packaged mostly as albums: eventually as CDs but before that as vinyl LPs that spun at 33 and 1/3 rpm and played about 22 minutes per side. But not that much earlier, pop music typically came packaged as "singles"--a misnomer because each 45 rpm record had both an A-side, featuring the song listeners wanted to buy, and a B-side, featuring less popular songs. It was also a package, but one sold on much more favorable terms to the listener than the LP package that replaced it.
But here we have an apparent economic mystery. If listeners really only ever wanted the A side of a 45 or two of the twelve songs on an LP or CD, then they shouldn't have been willing to pay anything extra to get the B side or those ten worthless songs. Record companies should have been able to charge the monopoly price for the desired songs, whatever that was, without extracting a premium because they included additional unwanted songs. And yet, the very fact that the industry substantially shifted from 45s to LPs leads me to think that they were able to extract additional money for the additional songs.
That, in turn, leads me to think that those extra songs had some value to listeners. (LPs also had an obvious advantage relative to 45s and 78s for listeners of works of classical music and other genres that could fit on a single LP but required multiple disks in the other formats.) And indeed, LPs and 45s coexisted for quite a long time during which LP albums were sold as having value beyond the value of the individual songs they contained. And that was not simply a matter of marketing. There really are only a few great songs on Abbey Road (Come Together; Something; Here Comes the Sun), but the other songs work together to create a whole that is greater than the sum of its parts. The shuffle feature on an iPod may be very popular but something is lost in the shuffle.