AOL, the most boring of all ISPs, is jumping into online music, after purchasing Musicnow.com. They’ll be offering a subscription music service similar Napster, Yahoo, and others. Cost? $10 a month for unlimited subscription downloads, and $15 if you want to transfer them to a compatible DAP. Will it work? Maybe. AOL is more “mainstream” than Napster for instance.
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Any owner of copyright can license anything. What changes is whether you can control anything as a copyright, or if you try to monetise the anarchy. It#039s very easy to point fingers at the record industry, but the people on the Napster side of the desk have crossed and are trying to find legitimate ways of making P2P work.
The industry has to trat the Net like radio and TV – being able to track transaction and grant licenses. It#039s an impossible situation where, as a lawyer you have huge numbers of contracts, when there really ought to be a blanket contract.
Imagine trying to license the BBC and Channel 4 without a license?
Shannon Ferguson, Yahoo Music Europe said:
Both ad-supported and subscription with be the model for Yahoo Music Europe.
We compete more against the free music than against other music subscription services.
I think there is some price senstivity. Less people have taken the portable tier and that#039s a reflection of the fact that there#039s not enough portable devices out there.
MusicBites is live blogging from the MusicAlly debate on “Does Digital devalue Music“.
The line-up:
Keynote address:
Adam Singer, Group CEO, MCPS-PRS Alliance
Thomas Gewecke, SVP Digital, Sony BMG
Panel discussion:
John Benedict, Partner, Benedicts Grant
Tim Clark, Partner, IE Music
Wayne Rosso, CEO, Mashboxx
Shannon Ferguson, Director, Yahoo Music Europe
Chair:
Paul Brindley, MD, MusicAlly
Thomas Gewecke, SVP Digital, Sony BMG started by saying “we#039re big”.
“Piracy distorts everything and takes away from the underlying value of music.”
“Digital is now an integral part of our producing music. It is a fundamentally part of the work we create.”
“That activity is going to grow. It changes everything we do in terms of promting and distributing.”
“Digital does not destroy the CD, it creates a wide variety of formats which require encoding and security. Our own research shows the digital consumer is not a homogenous consumer with a single pricepoint. They buy many different products and on many different devices.”
“People do not want to have to pay multiple times. They just want to pay an appropriate price which compensates every one the value chain. If you look at mobile games and master ringtones, you see robust pricing which has been sustained for a long time. The difference with online is just about piracy, the technology and whether people can freely copy or participate in the economic model.”
“Over the next 12-18 months a convergence between the mobile and the PC. There are more mobiles than iPods. 800m mobiles sold this year, 26m ipOds. There is no competition. 3G is taking off for full length audio and video between phone and the PC.”
“The rise of commercial superdistribution is inevitable.”
The fact you can make a copy in another format doesn#039t
Digital doesn’t devalue music. Absolutely not. But to whom does it deliver the value?
There are proliferating opportunities to create black boxes – hiding revenue from artists. Digital can help to deliver transparency.
As artists representatives this is what we want to talk about.
Digital can deliver this and there#039s no reason why it shouldn#039t.
Culturally we are worse off is artists are worse off.
Artists need protecting – anyone who thinks this a battle about giants has it wrong.
Adam Singer MCPRS:
“The music industry is first and foremost about harnessing ther technology. If copyright and tech grow up together then you also change the nature of copyright.”
“Nature dislikes difference. Similarly in the music industry, copyright must adapt to new technology.
“How do we react? There is a cultureof fear among music industry executives addicted to the past.”
He quoted Stanley Baldwin “We should accept this is a time of change.”
“Running established corporations is about stretching the status quo – the winner stretches it before it becomes a stretch to far.”
“Steam engines didn#039t make it into cars.”
“Music firms locked into the industrial physical model of music will struggle to make it in a post industrial world.”
“Platforms will come and go. Music is permanent. But platforms are ephemeral. What changes is the platform between creator and audience.”
“Digital technology is an exponential change. Digital reduces cost and enables huge increases in supply. Basic economics apply – increase supply value goes down.”
“The early period of music ownership is over. We are moving from an ownership model to a leasing model. It wil apply to film, TV and books.”
“Most economic models online are about leasing not owning.”
“The model of free online is about to change.”
In a DRM world with increasing levels of meta data, levies would become a nonsense.
A healthy DRM is good we start to ensure an economy based on IP values.
But if Shapsepeare could not borrow from Plutarch there would have been no Shakespeare – so balance is required.
Paraphrase: Corporations have to realise that if you create desire and do not fulfill that then you create a market which wil go around you
“Regional encryption encourages consumers rebellion.”
It#039s no possible to create music in a bedroom or a TV channel for under #1000.
In a networked world, audiences fragment. This will also happen to supplier of music.
“The new world belongs to the intermediary, the search engine.”
Yes, the Arctic Monkeys are signed by a major, but they broke themselves on the Net. But artists will also need help to scale.
In the digital world there is no
In the end digital does not devalue music but it devalues the current generation of msuic based intermediaries.
We need the online version of Microsoft to turn up.
Click to download the video or subscribe to the video/audio podcast.
Digital Music Weblog reviews iTunes 6: It concludes it is “functionally and cosmetically the same as iTunes 5 for the most part; the big difference, of course, is the presence of videos in the iTMS catalog. Music videos form the bulk of that catalog addition, but the most significant part of the iTunes 6 package is the TV section. It does not replace DVRs or revolutionize television habits, as iTunes 6 opposes bit Torrent distribution of TV episodes, it might not affect that distribution. As a podcast aggregator iTunes will face intense competition, but its first-mover advantage in the mainstream market will serve Apple well.”
So, to wrap up from the Apple announcements. A new iMac G5, with nice DVD controls. iTunes with music videos (2,000 of them) to buy, and the ability to subscribe to video podcasts – plus user recommendations and collaborative filtering which will increase the “Long Tail” of the store. The new iPod plays video. A deal with Disney to time-shift 6 leading US TV shows (not a big deal, but it has long term implications). Ok, a question: The event was at BBC Television Centre. We all expected a deal with the Beeb for video, but the lawyers couldn’t hammer out a deal in time for the announcement. Come on guys, get with the programme! Lastly, and not leastly, the new ability to provide recommendations on iTunes will act as an olive branch to the indie labels who have had trouble getting onto the front page of iTunes. The question is, will it cool the industry’s desire to move to subscription services. We’ll have to wait and see.
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