EMI – The long and winding road
How collective idiocy left the record companies in bits
When the history of our digital times comes to be written, one of the questions that will puzzle historians is why the record companies missed the significance of the internet. Throughout the post-war period, theirs was a big and powerful industry making lots of money, and controlling just about everything - recording artists, publishers, distributors and retailers. By 1982, music had gone digital. (The first CDs went on sale that year.) So recording studios converted the sounds made by musicians into bitstreams - long sequences of ones and zeroes - while, at the consumer end, CD players converted those bits back into high-fidelity sound. The problem was: how to get the bitstreams from the recording studio to the consumer? The solution was to 'burn' the bits onto plastic disks which were labeled, packed in (fragile) plastic cases, boxed and shipped to distributors' warehouses. From there they were ferried to retailers, who removed the disks from their cases and filed them in shelves behind the counter while leaving the case and its associated sleeve artwork out for browsing by customers. Customers would take the empty case to the counter and hand over their money, after which the disk was fetched from its hiding place and replaced in the box. Once home, the customer inserted the disk in his or her CD player, and the sound of music filled the room. This palaver of 'shipping atoms to ship bits' (as IT guru Nicholas Negroponte dubbed it) was probably the only way to do it at the beginning. But it was expensive, inefficient, inelegant and uneconomic: nearly 50 per cent of the retail price of a CD was taken up by the costs of manufacture and distribution. The internet as we know it today was switched on in January 1983, and at that point a light ought to have gone on in the heads of senior management of recording companies. For the net was effectively a vast machine for shipping