Record companies have tried for years to curb home taping, which they say robs them of $1.5 billion a year. But 35-year-old computer wiz Charles Garvin thinks they’ve gone about it all wrong.
Instead of viewing rampant home taping merely as an evil to eradicate, Garvin sees it as a classic case of unmet market demand.
“How many other consumer products can you think of where customers are going to a great deal of time and trouble to manufacture for themselves (nearly as much product as) they buy over the counter?” he said this week. “That to me is indicative of a market failure to match supply and demand that is so big that you can drive an 18-wheeler through it.”
Garvin hopes to meet that demand with a computerized contraption called Personics, which will be introduced Monday in 25 Los Angeles-area record stores.
Personics will allow customers to program their own tapes from a library of 2,500 songs--ranging all the way from Dean Martin’s “Memories Are Made of This” to the Smithereens’ “Blood and Roses.” The music, stored on a master optical disc, is transferred in just minutes to high-grade TDK tape at a price ranging from 50 cents to $1.25 per song.
“The industry has always looked at home taping as an illegitimate competitive product where the only correct response was to outlaw or tax or in some other way legislatively discourage it,” noted Garvin during a telephone interview from his Menlo Park, Calif., headquarters.
“What we’re saying is, instead of looking at it as a competitive product to be outlawed, look at it as a service to be provided. Think of the immense time and trouble that people are going to to make all these cassettes. And look at that as an ‘80s-type service business.”
Garvin, who will unveil his high-tech baby at a Los Angeles news conference on Monday, suggested that many pop fans make home tapes not primarily to avoid buying records but to personalize the song selection, to get better audio quality than prerecorded tapes, and to get more music on each tape. (Each Personics tape can carry up to 90 minutes of music, which means that a full cassette could cost about $20.)
Garvin, a Harvard Law School graduate who has worked in the Silicon Valley as a corporate strategist, has had to overcome considerable music-industry skepticism since he first had the idea for the system five years and $8 million ago. The record companies’ biggest fear: Fans would use the Personics system to get the key songs from an album instead of buying the album itself.
That was the reservation expressed by David Steffen, A&M; Records’ senior vice president of sales and distribution.
“We have serious concerns about the ability of someone to program the cream off this or that album, thereby discouraging album sales,” Steffen said. “I think Personics has some real interesting possibilities, but I’m not quite certain yet if it’s the answer to the home taping problem. I think it potentially has a greater application as a delivery system for singles.”
Mike Bone, the president of Chrysalis Records, isn’t certain that Personics will alleviate the home taping problem either, but he noted “that any help is welcome. My feeling is that it’s a superior product to anything anyone could make at home, plus it’s easier than having to do it yourself, and faster.”
Bone added that he doesn’t think the custom-made tapes will significantly cut into album sales, because the two are fundamentally different products.
“When people make compilation tapes, they’re normally making them for a purpose--for a party or for the car or for dancing. I don’t think it will replace the album.”
Elliot Goldman, a veteran music-industry executive who has served as a consultant to Personics for the past year, likened resistance to the new system to the reaction in the film industry to the advent of cable TV and the home video market.
“Five years ago, the film companies were yelling and screaming that cable TV and videocassettes were going to kill the theatrical business,” he said. “Five years later, not only is the theatrical business bigger than ever, but the amount of revenue generated by videocassettes and cable is enormous.
“I think that shows that a new technology . . . that is properly used and controlled invariably enhances and broadens the use of software, rather than hurting it.”
Garvin said he decided to unveil the Personics system in Los Angeles because it is one of the hubs of the music business. “We’re eager to roll it out right where the eyes of the industry will be fixed upon us,” he said. (Among the 25 stores sporting Personics will be the Wherehouse in West Hollywood, the Tower location in West Covina, Musicland in Sherman Oaks and Music Plus in Hollywood and in Marina del Rey.)
The procedure is low-tech: The customer can choose to listen to a brief snippet of each of the songs in the library. The customer then fills out a form with the code numbers of the songs that he or she wants recorded and hands it to a store employee. The employee then punches the songs’ codes into a computer, and the tape is ready in a few minutes. (An hour of songs can be recorded in less than 8 minutes.)
If the system is successful here, Garvin plans to introduce Personics in other key California markets and in the New York/New Jersey area early next year. Also in the planning stages: expansion of the song library to 15,000 titles.
Garvin said Personics will be especially valuable for non-hit artists who would otherwise be squeezed out in the battle for store space.
“Handling a more obscure artist or a piece of deeper (older) catalogue in the present distribution system means a very expensive, difficult retail space and inventory decision,” he said. “But with Personics, it won’t take that commitment of space. Also, a customer can begin by sampling one cut on an album, so he’s making a $1 purchase decision as opposed to a $9 purchase decision.”
The Los Angeles roll-out follows a 10-month test in two San Francisco area stores.
The managers of those stores offered similar assessments of Personics: They said that the machines draw considerable interest by customers, but only a moderate amount of actual use. Maria Anderson, manager for the Wherehouse store in Mountain View, said that the number of tapes made daily ranged from one or two on a slow day to 15 on a busy weekend day.
Laura Schacht, manager for the Musicland store in San Bruno, said that about five tapes are made daily at her location. “People still aren’t sure about it,” she said. “But it does bring more people into the store to browse. We have the machine right up front, and people keep saying, ‘Let’s go check out what they’ve got at Musicland.’ ”