Online Music Will Fail (part deux)

Companies are very quick to diss apple for using its own music formatting. Leaving aside the fact that AAC and Fairplay are open standards, all of these comapanies are missing the point. Granted, their business models depend on the success of their subscription and pay-to-play download schemes, so their business models themselves are missing the point. The point being: Apple makes its money off of iPods. People own iPods to play mp3s they’ve either grabbed off the net or ripped from their collections. The ITunes Music Store is merely the (not-so-sweet) icing on the cake. Should it become profitable, Apple will benefit. Should it not (more likely), they’ll still be making money off of ipods and the fact that they play back non-DRM’d music formats.

Apparently no one realizes this but Apple, who introduced iTunes and iPods under the notion that people should be able to use the music they already own as they please. Companies like Real (245 million dollars of debt in the last 3 years) are trying to jump on what they perceive as a gravy train. In truth, the pay-to-play music market has already reached saturation. I believe that these stores will never replace free downloads nor will they replace brick and mortar retailers. They may get a decent amount of business, but not to the degree that 20 or so online sources will be able to succeed. Walmart may prove an interesting case.

Wake up!

6 thoughts on “Online Music Will Fail (part deux)”

  1. I still think P2P can work, but something would have to be done to get rid of the free p2p networks, unlikely to happen I’m sure. Then there is the question of quality of product since people would now be paying for it. As far as paying the artists, instead of paying the RIAA, the networks could set up a system of paying BMI and ASCAP (and other music publishers) who then pay the artists publishing royalties- like radio does now, except if these P2P networks were legit, they could track usage, presence etc to determine payment, or they could use a flat rate, like radio. They would additionally have to pay a blanket royalty fee per user to the RIAA as with cassettes. The only thing that isn’t covered then is non-RIAA record labels, who would have to perhaps set up an alliance of some kind or negotiate with the service to insure payment. How to eliminate free networks though? I don’t know. However, I think do believe that a lot of people would be willing to pay for Napster if it was the way it used to be. People like Laura’s dad even.

  2. But why would someone use the twenty dollar soulseek if there was a free soul seek?

    So you are talking about the riaa getting a flat cut, like from the sale of audio tapes, of the p2p subscription? How would these royalties be shared with the artist?

    What if I am a musician that wants to sell my music but doesn’t want to go through the riaa? How can I get royalties from this p2p service?

    I think there is some kind of ideal system, that would combine open drm and auto-magic micropayments. Can such a system actually be built? Will industry and consumers accept it? I don’t know.

    I guess the most ideal solution would be for the mass acceptance that recorded sound is no longer something that can be owned or sold. Technology giveth and it taketh away. Although I realize that if this won’t happen until somewhere between 150 years from now and when pig’s fly.

    I am writing in the vernacular when I use the term piracy. I think the definition of piracy has changed with the rise of p2p. I can’t really argue with this change. Before p2p there wasn’t a need to have a word to classify someone willing to make free copies for anyone and everyone. If it isn’t piracy, it is something, and it is still illegal. Perhaps using your definition of piracy, the person offering the content on a p2p network isn’t guilty of piracy, but the person downloading is – they are getting something of value for no cost.

    I may also on occasion use the word “stealing” , but really it is not stealing. Like “piracy”, we need a new word.

  3. The problem with distribution is that the problem has already been solved and its called p2p. The online music stores will never be able to account for all people and all tastes, which is something p2p has succeeded at completely. What the RIAA should have done (and could have) was work with p2p companies to distribute content. I certainly would be willing to pay even 20 dollars a month for a service like soulseek, if it were to provide the same breadth of music it does now.

    Your definition of piracy alarms me a bit. Piracy, as I understand it, is the distribution of goods you don’t own the right to distribute for profit. If I am a member of an online community sharing music with my friends, how is that different than making a tape for friends of mine, which is a fair use right and generally seen as protected under copyright law. With that said, cassette manufacturers pay a royalty to the RIAA for every single cassette sold, and there is currently no analog in the online music world- sure you can buy a ‘music CDR’ and money does go the RIAA, but most people don’t. At the very least the p2p networks could be made subscription only and the RIAA could get a cut. I would be willing to support that, and I’ll bet a lot of hard core fans and collectors would as well.

    If DRM is to completely succeed it has to be fully transparent. That is to say it can’t succeed? I hope that what may come is not drm but selling music to fans as a value-added incentive to seeing concerts or participating in online communities. I’m trying to see an pragmatic solution to this stuff, so I don’t now that we’ll see a Free culture of Art (at least in America). Recorded music media can become the stuff of collectors and aesthetes, as it is coming (has come?) to a point where its perceived value is far lower than it was even five years ago. You will go to a concert and buy a recording of that concert as you are walking out of the building, artists will get their cut based on usage on p2p networks. I believe it can work, but like you said it will be far different than its current state. Probably far different than I talk about here.

  4. I can totally dig what you are saying. So our culture is really product. So where does that leave us with regards to ownership of music? Does a musician have the right to tell you can only listen to his song on up to three computers? That you can’t transfer the music to any format or listening device of your choosing?

    It seems every month wired has some article about some artist getting gallery showing of their little chotchke cute action figure keychain things, “blurring the line between high art and consumerism”

    What about a rejection of the society of consumerism, and art released as Free?

  5. I just lost my whole comment, but one thing I wanted to add to what I just wrote which will return here at some point is that all art is product. Mass media is art in a society built on consumerism, baby. There shouldn’t be a line drawn between high art and pop culture, its like Whedon man. He sees what other people don’t. Our culture is defined by our product, not the underground or the rich or the ‘high’. Its up to us to take it over and make it ours.

    So yeah…I wanted to reply to comment (joke?) that music is product when there is drm attached to it.

    I will write more after my taco.

  6. Online music may fail in its current form, but in the long run online music will succeed. Is this good or bad? I don’t know. I do think that the current model of distribution is through. Doesn’t the internet make it easier for an artist to distribute their music? Doesn’t technology allow a serious musician to reach an audience without major label support? DRM allows the artist to keep some control over their product. (Product is what it becomes when you slap drm on there, I guess).

    I hate drm more than the next guy, but maybe it is a necessary evil since most people are willing to pirate anything and everything. drm can also alter our society in a very negative way. Maybe artists getting paid is less important compared to damage drm could cause (see the right to read for an extreme example).

    What am I even saying? I don’t know. I guess it comes down to three things:
    1) I think a lot of people like to buy music on-line, and don’t mind putting up with a little drm to do it.
    2) If you infringe on someone’s copyright by illegally downloading content, then you have no right to complain about drm.
    3) online music will be the primary mode of distribution in the future, I don’t think anyone can imagine the form it will take. hopefully the large record companies will cease to exist.

    P.S. In the ideal world, a Free music movement, similar to the Free software movement, will pick up momentum, and become the dominant paradigm.

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