The Blueprint

Unlimited Downloads?

I do not own an iPod MP3 player, but I do own a Treo 650 mobile phone which has a built in MP3 player.  I subscribed to Napster's "Napster To Go" service.  This allows me to download an unlimited number of songs to my Treo.  Unlimited??  Isn't that a contradiction to what I said in my previous post?  Maybe...maybe not.

Here's how Napster To Go Works
1. I can download unlimited songs to my Treo
2. I can't sell the music
3. I basically can't copy the music to other devices (there are some exceptions)
4. I can't give anyone else my log-in info
5. If I want to burn my downloaded music to a CD I must pay for it (usually $.99)

Is this profitable for Napster?  Well, how much did John Cronin spend in purchasing music in the last 12 months? ... Nothing!  How about the last 5 years.  Probably about $35 to $50.  Now that I have easier access to information and the ability to discover music that is similar to the music I am listening to (Napster has filters that help me) I am listening to more music.  I am also paying more for music.  I am paying more than 10X on an annual basis for music than I did over the last five years.

What is the cost of producing a download versus a CD and its case?  What is more profitable?  Even though I have "unlimited" downloads, I believe it is more profitable than selling me CD's.

Can you see the power of abundance (downloads) versus scarcity (CD's)?  Napster has come up with a pretty powerful business model that takes advantage of abundance and Long Tail economics.

Do Your Printers Run More than 2 Hours a Day?

Somebody commented that 425,000 square feet on a printer a month was a lot.  This means your printer is printing for 2.5 hours a day on a KIP 8000.  This is 31% utilization for an 8 hour work day.

Here's the math:

• 22 D's a minute or 7,920 sqft / hour
• 21 Workdays per month
• 425,000 sqft a month is 20,238 sqft per workday
• 20,238 sqft per workday / 7,920 sqft per hour is 2.56 hours per workday

200,000 sqft per month is 1.2 hours per day!  How many hours per day are your printers running?

 

7920

What do Reprographers and iTunes have in Common?

As I read the book "The Long Tail" a thought came into my head;  Apple's iTunes music service and Reprographers have a lot in common.  Chris Anderson references iTunes often in his examples of Long Tail dynamics.  I realized that some of the dynamics that were occurring in the music industry were also occurring in the construction document distribution market.  Here are some examples.

                        

iTunes	Construction Document Distribution
Music was previously burned onto albums and pushed to consumers, now it is posted on-line and consumers pull the music when they need it.	Construction sets used to be pushed out to contractors, now sets are more frequently posted on-line and contractors can select which projects they want.
Previously, if a consumer liked a song he would purchase the album. This would give him the songs he liked, but also other songs that he may not care for.	Contractors would often get full sets, now they select the sheets they want [disclaimer:  not always what they need.]
Musicians initially fought on-line distribution of music, now most of them embrace it.	Architects fought on-line plan distribution, now most of them embrace it.
Artists that may not have been “found” previously, now have a means to get their music into consumer's play lists.	Contractors now have a means to look at and bid contracts they may not have previously known about.
The digital music business model has to deal with delivering many singles versus albums.	Reprographers are having to deal with many more small orders rather than large distribution sets.

 

Not the Only Industry Seeing a Decline in Volume

Chris Anderson describes in his book, "The Long Tail", how the pervasiveness of Internet technology has caused a decline in traditional media sales.  Newspaper distribution is down 33 percent since the 1980's.  Album sales are down 20% since the launch of the iPod and iTunes.

He points to other more current statistics in a blog article in November of 2005.

For companies whose business model was based on selling plastic CD's or paper newspapers this is not good news.  For those who produce music, distribute music, or are involved in journalism; there are more opportunities for your music or ideas to be heard.  There are also many evolving business models for making money off these new ways of creating and distributing media.

I see several parrallel trends in the distribution of construction media.