Place Elasticity

I walk 10 blocks to work and back everyday I am not travelling. It’s usually a nice walk unless it’s pouring rain. I’ve taken to listening to my iPod lately instead of yacking on my cell phone. It makes me a bit less productive, but I feel better when I get to work or get home.

Lately, it seems that everyone on the street has an iPod. I am serious. Today I made a point to count the percentage of adults I passed that were listening to an iPod (or some other digital music player). It was about 50%. That’s huge.

That exercise reminded me of the scene in Kurt Andersen’s Turn of the Century where the lead character walks around NYC counting people on the street for an entirely different reason. If you read the book, you’ll know what I’m talking about.

Anyway, back to the point of my post. I learned in business school about price elasticity. The idea is simple. The lower something costs, the more it’s used. Clearly music is experiencing the same effect. Digital music is often free and the result is most people have a lot more music on their iPods than they ever had in their CD collections.

But I think there’s something else more fundamental going on. We are seeing place elasticity. People can listen to their iPods everywhere. It’s not just walking down 5th Avenue. It’s in their car with the iTrip. My friend Dr. Dana listens to her iPod in her hotel room with her cool little portable speakers. Mario Batali uses an iPod to power the music in all of his restaurants. And as a result, we are experiencing an explosion of music listening that is possibly more impactful than what happened when radio first made music portable.

Comments

[Toby]

Personally, I'm looking forward to the post-iPod world of on-demand streaming. Since starting to think about the possibility of listening to new music on my phone (just assuming) at any place or time, my iPod has lost a lot of it's appeal. Being the operator of Musicmobs has really made social interaction and finding new music a must while I listen. The iPod just seems unplugged and stale to me now. My guess is that in the not too distant future we'll all be paying a low flat rate to listen to the ever popular "celestial jukebox" and instead of paying for the music, you'll basically be paying for the service (with the aggregated cost of helper services built in (cough, cough, music recommendations)). Anyway, watch for it because it's coming.

[Jackson]

When mac finds a way to get 16 bit quality in mp3 format then I'll buy, til then I'm a discman man. I cannot listen to mp3's for anything other than reference. The qulaity lacks, to my ear.

[Druce Vertes]

Cross elasticity: as price of gas rises, demand for H2s (and Bush's second term) declines.

Regarding the sound quality, to my ear 192kbps mp3 is not particularly distinguishable from CD, however if you have "golden ears", there are digital players that support FLAC, free lossless audio compression. Only compresses about 2-1 vs. something like 10-1 for 128kbps mp3, but should sound same as CD over same equipment.

[Druce]

looks like Rio Karma might be only HD player to support FLAC right now, 20GB should store something like 60 CDs:

http://reviews-zdnet.com.com/Hard_drive_MP3_players/4521-6532_16-5021434-3.html

FLAC faq -
http://flac.sourceforge.net/faq.html

[Jackson]

I suppose that's good news. My "Golden Ears" thank you. Now comes the nighmare of purchase and conversion.

[Xavi]

iTunes can create lossless audio.

The iPod can play lossless audio.

http://www.macmusic.org/news/view.php/lang/EN/id/1748/

http://www.apple.com/itunes/import.html