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France saves the music industry

The music business isn’t as easy as it once was, and record labels often blame the internet for that. After all, the internet has enabled piracy on a scale never seen before, which is often cited as a major reason CD sales have declined so much.

While the internet did usher in an era of digital piracy, the truth of the matter is that industries change over time, and the strongest players in them find ways to adapt.

Adapting, however, has proven difficult for much of the music industry, and even for those who are adapting, the future still isn’t entirely certain.

So what is the music industry to do? In France, it can turn to the government thanks to a new initiative that aims to turn young pirates into paying customers. How will the French government accomplish that? By subsidizing the music industry.

Ars Technica has the details:

Under the initiative, citizens between 12 and 25 years old will be able to purchase a “carte musique”—a prepaid card  usable on subscription-based music websites. The card will come with €50 worth of credit, but customers only have to pay €25. The rest will be paid by the French government.

The purpose of the program is to get the young’uns into the habit of paying for content instead of pirating it. The program will last for two years, and France expects to sell about one million cards per year. That translates to an expected €50 million total expenditure by the French government to help young people learn the value of paying for the content that they consume.

This, of course, is bound to be a rousing success. The European Commission, after all, says the plan is “well designed“. Scourge of digital piracy your days are numbered!

As Ars Technica notes, the plan is also justified as a means to protect French culture, and it isn’t the first time the French government has used subsidies in this fashion. Previously, the French saved the newspaper business by giving 18 year-olds free newspapers.

Sarcasm aside, it’s hard to see France’s music subsidy working. The popularity of music hasn’t declined; the appeal of the product as currently packaged has. Like so many other content businesses, those creating and selling music find that the perceived value of their content is often less than what they’d like it to be. Allowing youngsters to essentially purchase €50 of music for only €25 will only reinforce the perception that the value of recorded music is low.

On the provider side of things, France is also capping the amount an individual vendor accepting the carte musique can make at €5 million. This, of course, is done in the name of promoting ‘competition‘. But if France is going to subsidize music purchases, the least it can do is allow the vendors offering the best experience to maximize their sales under the program. There’s lots of room to innovate with new models for selling music online and preventing the strongest competitors from reaping the benefits works actually against the initiative’s goal.

Such flaws aren’t surprising, however. Governments can try to bail out businesses and industries, but that only works for so long. If the music industry — in France and elsewhere — wants to survive and thrive, it’s going to have to help itself.

Photo credit: Ferrari + caballos + fuerza = cerebro Humano via Flickr.

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