Pirating=Drug Dealing

Gizmodo has a clip of an RIAA training video that makes some, er, we'll say "large" claims that pirating music is closely tied to drug rings and violent crime. I'm not saying I endorse pirating music, but I can't say that I believe these claims. Check them out for yourself here.

Just when you thought they were doing something right...

Sony BMG clarified the earlier rumors about going DRM-Free--they will offer DRM-Free downloads, but just to people who purchase a physical card in a store and visit a Sony BMG online store (www.musicpass.com). Right, so, this is different from purchasing the physical CD and burning it to your computer how? Oh, that's right, the RIAA won't sue you this way. These cards aren't a new idea, either. Check out www.DiscRevolt.com for another example of how bands can self-publish physical cards redeemable for digital downloads (and while you're there, pick up the new Edison Glass EP).

End of an era (good riddance)

Well, looks like Sony finally decided to give up on DRM. Bout damn time. This means pretty much everyone under the sun is free of DRM (though the EU is apparently considering their own DRM...weird). The next question is: why is anyone still using iTunes?

3rd Discussion- Existing Alternative Models

Soundtracks

• More effective
• John Cougar Mellencamp and Chevy
• Starbucks’ label
• Of Montreal’s Outback Commercial
• Only a niche can get on TV shows & commercials and such
• Also many don’t want the perception of “selling out”

Touring is increasingly important

• Bigger money generator than record sales in many cases

Ben Karis-Nix model

• Give away music and make money off something related
• Difficult to get numbers on revenue potential of giving away vs selling
• Musicians have to be talented enough to create something else to accompany their music (unless, of course, they have a label or someone paying someone else to do it)
• Physical goods (other than shirts and such) are a dicey area in the age of digital music
• However, if you can pull it off, it can really help build you as a brand and be have a real marketplace for all related goods
• Also helps branding when an artist isn’t much of a hustler (as many aren’t)
• All has to reflect the overall identity of the band/artist

Pay-what-you-want or free model

• Fine for established artists
• Prince probably gave his away 5 years too early, and the quality really wasn’t there
• Viable in theory—biggest key is just getting your music heard
• Difficult in practice—many things associated with recording and touring cost money
• Not necessarily viral—people who would buy it would buy it
• Can hurt the band’s branding through the fan’s sense of value of the music
• Though could also be more engaging—those who pay may feel like they contribute to the band and their value (probably not the majority use-case)
• Doesn’t make much sense to keep it open forever
• Could reduce price of music in general IF you could guarantee bands could make up the revenue in another way
• If you put a community feel there, ask people to share how much they paid and why, there’s a better chance for success (though you have to be able to roll with the punches when people speak their mind negatively)
• What about a pay-what-you-want for a show? It would be incredibly tough to convince promoters, but you could also do an airfare/amie st type model where the early ticket buyers get the tickets for cheaper

Offering up all material for remixes

• Makes music two-way, plus can create cool new music
• Create a community aspect surrounding a band (beyond just discussion boards)—have a place for fans to post their related material, and have other fans rate it
• -A little dangerous in that if fans don’t get along with other fans the band may suffer
• -Difficult to monetize

Discussion 2: Startup Roundup

Biggest consumers are only half into their music—don’t spend the time on sites, but enjoy hearing new music

• iLike has potential to surface some of the smaller stuff through Facebook (where EVERYONE is)
• Yet they haven’t gotten into the social graph stuff too much—can’t see who among friends likes the music

Music Discovery Engines: Last.fm and Pandora

• Discovery vs Radio: For avid music listeners, Pandora is predictable in its recommendations. However, it may be used for simple internet radio.
• Would be nice to have statistics on how long users stay on site and how heavily they interact with the site

Streaming: Imeem

• May be useful down the road when internet is ubiquitous, but currently not an alternative to purchasing
• Has inked lots of good deals, and continues to grow as a default tool for bloggers and such

Streaming: Songbird, SkreemR, & Seeqpod

• Songbird is a full application built like iTunes
• Songbird has SkreemR integrated-- crawls the web/scrapes blogs in much the same way Seeqpod does—finding mp3s on existing servers and giving you a simple UI to stream them in one spot—but Songbird also allows you to download the mp3s directly to your computer
• Is that legal? I guess they aren’t physically hosting stuff

Music sales- AmieStreet

• Really cool business model idea (price increases as more and more people purchase songs), BUT…
• Horrible UI—focus more on comments (who cares????) than on song/artist name
• Where is the draw for established artists? Unless the site takes off and everyone wants to use it, they are unlikely to make the same kind of $$ they can (and do) make elsewhere. And same goes for the flip side—no significant number of users will come if they don’t have lots of good music

Music Sales- Rhapsody

• How are these guys still around? Unless you buy into the concept fully and plan on paying your dues until you (or they) die, this seems worthless. You’re paying for music, but it never becomes truly yours—you can’t take it with you, and it disappears when you stop paying your fees

Music Sales- can Amazon be the next iTunes store?

• The 5 billion song giveaway will help gain notoriety, and it’s not like Amazon is going anywhere soon, but until they get some software and hardware to go along with it (and barring a royal F-up from Steve Jobs), they don’t stand much of a chance against Apple.

First Discussion: Give the people what they want

So here's the deal: as TechJam goes on throughout today and tomorrow, I'll be posting a quick summary of key notes from each discussion on here. These won't be as in depth as the end summaries that will come in the revised packet of readings, but it's a quick catch-up for folks who are joining the weekend's discussions late in the game.
Our first discussion revolved around determining what are the wants and needs of artists, labels, and fans. Here is a quick overview of some of the stuff we hit on (please comment and keep the discussion going!):

Bands: want to easily and effectively get their music heard by as many people as possible

• Need someone pushing the marketing button all the time—something that labels can offer
• Interaction with media—more mentions spread virally

Labels: want to promote their artists, make money doing so, publishing rights

• New metrics for determining whether a band will be successful—but you can never take the human aspect out
• Healthy number of retention and repeat visits to myspace (etc) page
• Want to have stake in every aspect of bands

Users: want access to music, want access to bands

• MTV people: want “the show”
• Indie shop people: dig for the most obscure
• Majority: like it for what it is and don’t pursue it much beyond that—really the key to distribution
• Want tools to be able to “communicate” with bands—don’t like one-way conduit of information (OMG I LOVE U GUYZ SOOOOOOO MUCH!!! LOL!)
• Love opportunities to generate their own band-approved content related

iTunes 1 Everyone Else (look deep into scientific notation)

Peter Burrows over at Business Week wrote an article with some nice sentiments in it on the potential downfall of iTunes. While, no doubt, the toppling of iTunes would be a wonderful thing in many ways (DRM, pricing, etc), it's unlikely to happen as quickly and easily as Burrows seems to suggest. Amazon certainly has the best shot, at least in the short run: an equally trusted name offering a superior product (DRM-free and 256kbps encoding) for a lower price. So they're going to win, right?
Wrong. The biggest barrier for any new company or product is the status quo. In this case, iTunes is incredibly well established--not only as the world's largest internet music retailer, but also as possibly the most popular music player and a portal for transferring music to the world's most popular portable music players (and now phones). As a rival points out in the article "Apple's never been in the music business; they're in the iPod business." Even if you chip away at their market share on music sales (which initially will come almost exclusively from the minority of folks who use alternative mp3 players to the iPod or know about and care about the music quality difference), you still miss the convenience factor that most people see in iTunes--it's their one-stop-shop for music.
The status quo is incredibly tough to beat. It's what makes Seth Godin's idea in Purple Cow-- that you need to be "remarkable" to be truly successful--hold ground. Imeem, at least in theory, has Amazon beat. Whereas Amazon's store is evolutionary, Imeem's idea is revolutionary. Or is it? Imeem runs the risk of being ahead of its time--wifi is not ubiquitous, so we can't stream music everywhere we go. As a result, they are still not a single music solution--people will still go elsewhere to actually purchase or download music so that they can take it with them.
The idea of alternatives brings me to tell eMusic founder Bob Kohn why his website is not the ultimate solution either. In the Business Week article, Kohn asks: "People spend $10 a month to get an extra 400 minutes on their cell-phone plan. Why wouldn't they spend that to get access to all the music that has ever existed?"
Well, Bob, people don't see options in cell phones--it's something they need, and all the providers offer nearly identical prices for nearly identical products with a few very slightly differentiated features. In music, on the other hand, people have lots of options, and lots of payment options--including not paying at all. In the end, the products aren't very highly differentiated, and most people are going to go with what they know--which at this point means mostly iTunes or BitTorrent.
So how does one take down iTunes? Come up with something completely revolutionary that people find easy and useful (meaning they don't have to learn much or change their habits drastically), at a price they appreciate (though I insist that comes late in the determining factors), and doesn't make too many enemies with the suits. Ready, go.