Entertainment options today – “Hey, Kid, Wanna buy a Record or a Video game?” (continued)

All this is to say that the modern consumer faces an unprecedented number of choices for his or her entertainment and media dollar. And this doesn’t only affect the youthful dollar. According to the Entertainment Software Association, the average video game player is 30 years old and has been playing for a dozen years. Around 20 percent of Americans over 50 years old play video games, and women comprise 43 percent of video gamers. Indeed, women over 18 years old represent a bigger share of video game players than boys between 6 and 17 years old. “We’ll see a time,” said Rob Smith, editor-in-chief of Xbox Magazine, “maybe not in eight years, but in 12, where we’ll have someone in the White House who grew up playing games.”

The music market has stagnated in the face of other draws on discretionary entertainment income. Part of the reason why has to do with perceived value. While a new video game can cost perhaps twice or three times what a CD sells for, it offers between 20 and 40 hours of game play, and the experience often bears repeating. I know my family, one commentator says, have all played pretty nearly every game in Nintendo’s Legend of Zelda franchise several times, and Mario is timeless.

In addition, the perceived value of prerecorded music itself has changed since Robert Shelton compared the cost of one minute of music on LP to one minute on glass and lacquer in the 1950s. Now, fifty years down the road, economist Barry Ritzholtz sees that DVDs are a far better investment than CDs:

It’s pretty obvious to any intelligent consumer that CDs are a lousy deal. For $18 suggested retail price, you get about 45 minutes of prerecorded music. Sometimes, you even get more than a page of liner notes. It comes in a cheap jewel case which is all but certain to break eventually… . Now, compare CDs with DVDs. For about the same amount of money – and often less – a DVD delivers:

1. Two hours+ feature of audio and video;

2. Gorgeous video quality;

3. An informative booklet and/ or decorative case;

4. Pristine audio;

5. Extra features, outtakes, deleted scenes, “making of the film” documentaries, interviews with director, actors, writers.

So for your entertainment dollar, what delivers more bang for the buck, the CD or DVD?... The “central planners” of the music failed to recognise that their oligopoly was not impervious to economic pressures.

Of course, the record industry would argue that a CD delivers an experience that people often want to repeat on a daily basis – people play their favourite music over and over, something they might not do with a piece of media as linearly demanding as a DVD, especially of a movie. However, in 2003, as the record business sagged like an aging weight lifter, Adams Media Research reported that consumers spent $14.4 billion on movies for the home (exceeding the gross take at the theaters and rental shops by five billion dollars).

The record business is keenly aware of its losses to all these sources, but it has just started to twig, over the past few years, how to join ‘em since it can’t beat ‘em. The record companies and video companies, after all, are gunning for the same demographic – people with disposable income that they want to spend on entertainment. In that time, video games have benefited from the record industry’s to license songs. And record companies have benefited from the extra exposure. My 14-year-old son was singing along to “That’s Life,” to the astonishment of both my wife and me. He told us he had learned it from Tony Hawk Underground 2. That game also features the Doors’ “Riders on the Storm.” “Our central strategy,” said EMI Music EVP Adam Klein, “is to get music to where people are and, in that sense, video games are a key part of our strategy.”

“The impact of musical introduction that MTV and radio have had,” added Steve Schnur, a music executive at video game publisher Electronic Arts, “video games have now.”

Record executives bemoan the fact that they have failed to teach “the consumer the value of the CD.” However, as Billboard’s Ed Christman pointed out, “Maybe I’m slow off the mark, but it seems to me that what is going on in the pricing of other entertainment formats matters more to the consumer than label executives’ justifications for the current CD pricing structure."