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We are in the mobile game; the further east you go in the world, the more it becomes mobile. If you go to Asia and Japan, it's a very mobile environment. You're not seeing the whole picture if you just look at the American landscape.
Some of (the singles will be) ad supported; there will be lots of variations.
That sounds like it would be kind of annoying, actually, if you had to hear an ad before your music.
Munns: I'm sure your dad told you that there's no such thing as a free lunch. If you want to get the music for free, you're going to pay for it somehow, even if it's (with) your time. My view is: I want to try more. But the consumer is going to decide in the end. The power lies with the consumer, and they're going to either accept some of these or not. And we don't know what they are, so I want to be in all of them.
You know, in the physical world, which is still the majority of our business, we have seven or eight accounts in most countries that account for 80 percent of our business. These are physical accounts--Wal-Mart, Tesco--in 50 countries. Let's call it 400 accounts. We already have 400 accounts in the digital space. Three years, four years from now we might have 3,000 or 4,000, when everybody who's connected to a computer can in theory be a retailer of music.
So you could have fan sites selling music and things like that?
Munns: You know, Coca-Cola's ambition is to replace all of their vending machines with machines that take credit cards, but you know that that means? That means it's connected to a computer. And if it's connected to a computer, it can send stuff both ways. So it could dispense music.
Music will be ubiquitous, really, in the real sense of the word. At the Consumer Electronics Show, there was a gas pump that had a USB port.
What do you think of Microsoft's plan to give record companies a cut of Zune sales?
Munns: They've decided to take a royalty on the player and spread it around the industry. They have a seamless model, downloads through subscriptions, with portable subscription and so on. You get paid differently depending on?how the music is consumed.
Do you think others might follow their lead?
Munns: Yeah, I think it worked particularly for Microsoft because they're in a closed environment, but it's another way of getting paid for your content.
When it comes to piracy, often I'll hear there's an age factor to it, i.e. someone between the age of say 12 and 22 will pirate more music than somebody older. Is that the case?
Munns: Actually, there's some evidence emerging that the young teenager, the pre-teen and the early teenager who've grown up in the last three or four years with their parents being much more aware, realize that it's wrong to steal music, even if you think you can't get caught. The (older) teenagers (and those) in their early 20s (are) where the big block is. And then as people get older, it's a pain in the ass (to find pirated music).
People come out of college and university and get a job and get a bit more money, and then it's like, go to Walmart.com or iTunes. So what we're seeing is that, despite the increase in broadband, which we would think would drive (pirated peer-to-peer) traffic a bit more, the traffic actually is pretty flat. The heavy users are probably using it more than they used to, but the number of households actually engaging in illegal file-sharing is not really growing, certainly not growing like broadband is growing.
These are American numbers, but that's what we're starting to see now.
I think a lot people think that because a music file isn't physical, it isn't stealing. And they think: Well, it's 99 cents, what's the big deal?
Munns: A newspaper is pretty disposable: You read it, throw it in the bin, you pay your 50 cents. OK, it's a physical product, but it's the most disposable of them all.
By the way, how is it different now to build an artist? Back in the '70s, a hit would come out like Led Zeppelin and the record companies would say, "OK, go get me some heavy metal bands with no shirts."
Munns: Back in the early '70s, you put a single out, and then you worked it. Maybe three weeks later Radio 1 added it or Radio 3 in Holland, and a few weeks later maybe it became a hit.