PlayLouder: future of the music biz?

August 29, 2005

More details on the new legal P2P service from Sony BMG, written by the intrepid Andrew Orlowski of the Reg. (He’s one of the best trade-pub journalists covering DRM and digital music.)

It’s called PlayLouder MSP (Media Service Provider), and it’s being launched in the U.K. Users pay a single monthly fee of 27 pounds (about 50 bucks) and get both a fast Internet connection (1Mbps DSL) and the legal right to download and share any song from the PlayLouder service.

It’s only a first step, but look forward a few years and imagine:
1. All the major and many indie record labels offering extensive back catalogs through a single network (or a client that can access multiple networks)
2. Portable players with wireless access.

Suddenly, you’ve got access to any song, anywhere, any time, from any device, for a single monthly fee that also includes your broadband and/or wireless access. The record companies and artists get reimbursed through the subscription fees, with some sort of tracking mechanism ensuring that the most popular artists get the most bread.

The technology’s all in place. All that needs to happen is for the content owners and technology companies to work out the business model.


A moment of silence…

August 26, 2005

For Rio, the first iPod casualty.

I remember the first MP3 player, which was sold under the Rio brand. 32MB of flash memory! Held about 16 songs. I was one of three “gadgets” editors for CNET at the time and wondered what the big deal was.

According to Moore’s law, which says capacity doubles every 18 months, we should only be at about 512MB players now…not the 60GB (days and days of music, tens of thousands of songs) offered by the highest-end iPod.

But I guess the record companies had it all figured out: they tried to sue Diamond (who made the first Rio) to prevent them from shipping the thing! (They lost.) The first of many great examples of the music industry’s aversion to innovation.

New business models

August 22, 2005

When music was distributed physically, artists were encouraged to record an “album”–a collection of songs that the record company could distribute as a package. This made financial sense: certain costs, such as manufacturing a disc and bribing retailers for shelf space are fixed. So your margins are much higher if you can charge $17 instead of $5, and the only way you can do that is if it’s got a reasonable number of songs on it–hence, the “album.”

The marketing model grew up around this distribution model: companies geared all their budget toward a release date, spent a bunch of money pushing one song which would sucker kids into buying the rest of the songs, and perhaps sent the act out on tour to push the album. These marketing pushes are so expensive that music (like movies and, now, video games) became a hit-driven business, in which one grand slam was necessary to pay for all the failures. And if you’re not the grand slam, sayonara.

But what happens when physical product is replaced by bits? Well, how about an all-electronic label that releases clusters of three songs every couple months, rather than an album every three years? That’s exactly what Warner Music is planning to do.

This could be great for serious musicians (as opposed to plastic packaged performers of the Britney variety). Imagine not having to have a smash hit to justify your existence. Imagine lower marketing budgets, making it easier to recoup. Imagine switching producers, studios, engineers every six months. Imagine experimenting with different sounds, shifting line-ups, side projects. Imagine touring and gigging all the time, cross-pollinating with other musicians and staying in touch with fans instead of holing up for months in isolation with an engineer.

Meanwhile, one exec at Sony BMG Music is starting to embrace the file-swapping networks rather than fight them. OK, maybe this is doomed. I can’t see many people using a client like Mashboxx unless they get some obvious benefit out of it…and being “allowed” to pay $0.99 instead of getting music for free isn’t a benefit. But still, at least the labels are starting to wake up and think about how to benefit from technology, instead of keeping their heads buried.

The Chumbawamba Factor

August 22, 2005

Excellent article on Pitchfork today about BigChampagne, a service that measures traffic on file-trading networks.

The jist: by seeing what people are downloading and swapping, record companies can get an accurate idea of emerging trends and hot new acts. For example, The Arcade Fire is one of those bands that up-to-date music fans and college radio stations love (deservedly so), but that nobody else has ever heard of. By looking at online trading stats, their record company might notice this and decide to embark upon a major marketing push to try and turn them from indie-rock sensation (I think they might have gone gold, but not sure) into bona fide super stars (multiplatinum, like the albums of yesteryear). Of course, they’re on a pretty small label–Merge–which probably doesn’t have the money to take full advantage of this data.

Anyway, seems like a lot better way to conduct research than asking radio listeners to fill out diaries or calling random people and playing them song samples over the phone. And it sure beats payola, which is all about short-term gain (record gets airplay; radio station gets money) in exchange for long-term pain (listeners avoid radio because it’s out of touch and turn to alternatives like iPods or satellite; radio becomes ineffective vehicle for music promotion).

BTW, I’m one of those idiots who bought that Chumbawamba record. Occasionally, that song comes up on my iPod and I wonder what I was thinking. It’s not even worth $0.99, much less $17.