I came to this conclusion myself about 6 months ago, after Dalton Caldwell spoke at a YC dinner. I realized it was basically hopeless to start startups that touch label music, because even the ones that seem to be succeeding (in the sense of not being sued out of existence) are only allowed to live so the labels can suck investors' money through them.
But by creating a startup-free zone around themselves, all the labels are doing is hosing themselves, because they won't have startups working to develop whatever would have been the new ways of delivering and using label music. They've created an anti-platform.
What PG says is 100% true. I say this having done a startup in the space.
In a nut shell, you need roughly $1M upfront for legal fees to negotiate with the big four record labels (for an interactive service, not a non-interactive service like Pandora).
I guess I understand what you mean. Though I wouldn't use the words interactive/non-interactive. Pandora is quite interactive in a UI sense, even though you can't select tracks directly.
The situation isn't entirely hopeless. Even within the most aggressive labels (and by that I mean their legal departments) there are parties who do encourage innovation. These are the people that go to bat for artists and are trying everything imaginable to promote them. They try new advertising campaigns, are experimenting with alternate branding, and moving to the sports business model (ie endorsements). Its unfortunate that the legal departments have been the ones with all the power, but this will fade with time as current employees are replaced with ones who see the effectiveness of all these new promotional channels.
This sounds naive. The people running the labels are very cynical, and the way they're compensated makes them even more so. They don't have equity. They're motivated by bonuses that come out of this year's revenue. So they're not interested in building stuff. They just want to extract large amounts of money, this year, from whoever they can.
But why can't this change over a period of time as physcab has indicated (who by the way, works/worked for one startup leading the charge)? I believe it impossible for the industry to fail--there will always be people making music. So the big four are either going to have to get with the program (and probably significantly reduce their market cap), or get the hell out the way.
This is in someways analogous to what YC, super angels, et al. have done with venture capital. Just like ~$20,000 is about all you need to get a talented founding team started, musicians today can do things on the cheap just as well. The entire system no longer hinges on the $100M home-run in either case.
Everyones been focused on investing in the killer app that will bring the music industry back to equilibrium. The Spotify's and last.fm's will certainly play their part, but its a fundamental shift in capital structure that the industry needs. Making it as a musician is, never has been, nor ever will be easy. There's extremely talented people out there though that, given a little cash and a little support, have the drive and persistence to make a career for themselves. Sans record label.
Yes, perhaps thinking the labels changing their ways (or hoping they do) over time is naive. I'll admit that (but I'd like to say optimistic instead).
What the music industry needs is a platform where unsigned artists can go to promote their music without the help of the labels. This platform could probably act like a label, but better serve the artists and users. It would have to garner a lot of eyeballs so it could effectively break artists into the mainstream. It would have to be smart at targeting a specific demographic of listeners so artists could know where to travel and know they can fill auditoriums. Lastly it would have to be a tech company, so the Platform would be in the hands of every listener.
MySpace might be able to do this if they gave up on the social network thing. There certainly is room though for a new company to have this role, but it is going to be a long and painful process. And you certainly shouldn't do it for short term gain.
The idea of simply creating a different distribution mechanism (eg CDBaby) for unsigned artists so that they don't have to sign with a major label is popular with the tech crowd, but fundamentally flawed. It assumes that unsigned artists can all produce well recorded, popular music on their own.
Most can't.
A good producer can pick a rough artist or band and get something popular out of them, but it often involves both mentoring and investment in recording and promotion upfront before any opportunity of return. Note I deliberately use the word "popular" rather than "good" (which is subjective anyway) because clearly as a business "popular" is where the money is. The "long tail" theory is fiction. Music is a hits business where most of the money is made by a relatively short fat body of popular music.
Many of the most popular "artists" are created from scratch by producers. Where do you think Britney and the Spice Girls came from? Like them or not, the revenue from hit music funds the production of new acts who haven't become profitable yet.
Another flawed assumption is that everyone wants to listen to new music. A lot don't. So you have a large body of recorded music that the record labels will never give up or let you sample or remix without a hefty toll. And as soon as any new act gets popular, you can bet they'll be offered a seat at the "big 4" music table. It's the DeBeers business model applied to music.
Personally, I think what the radio station JJJ in Australia does with their unearthed site (http://triplejunearthed.com/) is an excellent model for identifying quality artists. The next step IMHO is a ycombinator style production startup company that invests in developing the most promising acts to become popular and then offers all the recording, promotion, management and touring services that the labels do but on just terms. Distribution is just the last piece of the puzzle.
Your analysis is flawed in that you're only assuming the popular ones are successful. Do you also think successful companies are only those that are used by millions of users?
Its true that the endorsement approach only works for popular artists, but everyone else can take the Youtube approach and let their content speak for themselves. Plus, not every artist wants to be mainstream popular. A lot of artists just want to get their music heard and know more about the people who listen to them. They make their money by touring and merch just like the popular ones do.
And artists don't need a lot of capital anymore. Yes, labels sink enormous sums into the production and marketing of a track in the hope they have a Lady Gaga hit, but I think you'd be surprised by how many successful artists there are that have chosen to go their own way and do just fine.
Hell, I'm looking at the data right now its its quite convincing.
I think we're discussing different things. Clearly there are plenty of independent artists - punk rock has a long tradition of independent label publishing going back decades for example. Anyone who just wants to put their music out there now is well served by distribution providers like CDBaby.
I'm talking about successful disruption of the established music industry and the oft mentioned suggestion that simply offering artists a distribution alternative will do it. It won't. We've had a decade for grassroots indy web publishing to take over and it hasn't.
My point about the long tail isn't that it doesn't exist, but that it's largely irrelevant. Just as Youtube has barely scratched Hollywood, indy music publishing isn't moving the profitability needle of big music enough for them to care. They still have the back catalog, they continue to acquire the vast majority of popular artists and they're still driving the creation of the most popular music which is where the money is.
http://soundcloud.com definitely forms part of this. Especially when you link it up to Facebook via the http://rootmusic.com service. These three are basically the holy trinity when it comes to unsigned bands promoting themselves these days.
What I've been wondering is why Apple doesn't pony up and do just that.
They could say "Hey artists not [yet] on a label, join the iTunes Label. We're a great distribution channel, and we'll give you a 70/30 split."
OK so it's a bit far-fetched, and it really depends on what iTunes-as-a-label would provide (but with GarageBand/Logic/CuBase who needs tons of financing?). Really the only thing iTunes doesn't have a great story for would be touring (but even then, what better way to sell concert tickets than through iTunes/Ping?).
Because record labels are more about promotion than distribution (anymore). Amazon, cdbaby, etc. can all already do this.
Honestly, the artists don't even need those people anymore. I've seen artists who sell their music directly on their own site, and I don't see why more can't.
Also, as part of this cynicism, the labels are very good at having people that seem like the kind of people that are on your side. I.e., the kind of people that "will go to bat for the artists."
I'll believe it when I see it. The labels are largely just a copyright exploitation system designed by lawyers; certainly, this is where the money comes from, and until that changes (which I would imagine would happen approximately never), the fundamental behavior will stay the same. Even as their profits are shrinking, the individual incentives to behave monstrously remain in place. I think that the majors are going to end up as 50 person (all lawyer) holding companies suing the bejeezus out of everyone; and promotion and marketing will end up more evenly distributed, albeit much crappier on the high end. I wouldn't touch a music startup with a 1000' pole -- thankfully, I'm not an investor.
Yes, these people exist, they work for independent labels... The music industry doesn't just suck the money out of start ups, they also suck the money out of artists!
Don't be fooled by the crowd that says the music industry is "investing" in talent, they are lending money (and producers, which of course they charge to the artist again)! There are some ridiculous stories about the music industry.
Just curious: Do you think popular music as a whole is a hopeless area or specifically companies that are looking to stream music? I agree in regards toward streaming music services, but there are a lot of startups focusing on other areas of music that seem to be successful:
"I realized it was basically hopeless to start startups that touch label music"
there's a key word missing in your sentiment. the companies that are streaming music require licenses. there's a number of great companies that are extremely innovative in the music space. the echo nest just raised a $7mil round today. tunecore and indaba are two more varying types that have very nice business models.
from the article:
"There will be no new players of significance to enter the business. Investors don’t want to entertain the remotest possibility of funding any start-up that deals with music"
once again, it's not fair to think of all startups related to music as synonymous with the struggles of the streaming startups. as one who has been involved in the music space for a couple years, i still believe there is potential as more & more music is being produced --> how do we sift through all the noise?
We figured this out at the end of 2008 when we closed our digital music startup, Mixwit (yc w08).
Not soon after we shutdown the founder of a similar service, Favtape, was sued. Yes you read that correctly, Favtape the business wasn't sued, the founder (Ryan Sit) was sued personally. I'm not sure what ever came of that lawsuit, but I'm fairly convinced our name was on their too until we shutdown since we had received threatening letters from the same label a few months previous.
At the time we looked up to imeem as a beacon, thinking if we made a kickass product we could be be on crest of a new wave of successful digital music startups. Fast forward a year later, at 16m users strong Imeem was "acquired" by Myspace for $1m (compared to $50m+ invested) and turned into a redirect to MySpace Music.
Looking back I'm happy we figured this out when we did.
It's hard to say exactly where the line is that you can't cross without getting killed. Industry experts know more precisely. I suspect the fatal combination is (a) a music focused startup that (b) touches label music and (c) makes money.
I suspect this is exactly right. If you make money, they'll send their lawyers in to extort some of it off you.
And so what's happened is that digital delivery of music has largely been via alternative channels such as P2P. And a new generation of music fans is growing up, liking this, and hating the music industry.
The only way out of this that I can see is for artists to sign onto digital-friendly (ie, small-time, currently) distributors. Which loses anything you'd get from signing with a big label. It's a nasty situation; with luck, the music labels will kill themselves off entirely, and something new can rise from the ashes. I doubt they'll actually embrace digital distribution for a minimum of several more years, which is murder to artists.
I remember watching a video of a talk you gave at startup school 08 and near the end during the Q&A, you said something to the effect of "we fund what people apply with, which usually ends up being some form of facebook or something to do with independent music".
It seems that if the labels have positioned themselves as unfavorable toward startups to the point of making an anti-platform, that there would be demand for an independent, label-free music buying/selling experience for startups to work with. Yet the only thing I think of that comes close was the old version of thesixtyone's marketplace.
Are the startups that apply to ycombinator in this area trying to build something outside of the current music ecosystem and failing (and why)? Or is everyone just trying to work with the current system and finding that it isn't feasible/profitable?
I think if the startup has to do with helping bands survive independent of record labels, there's plenty of room. Once the secret formula to finding success as a musician without a major record label is discovered, all bets are off for the suits.
Not all music startups have to be arms of the labels right? Do you think it's possible to develop a music startup independent and free of any association with record labels?
The way I see it is that if it's possible to do this then the reward would be huge since the system is so broken.
No, it's not really possible, since the labels have a government supported monopoly (with pretty serious enforcement, and lots of laws in place to prevent most clever workarounds) on pretty much all the music that anyone wants to listen to.
Even people who like to listen to indie music usually have some more mainstream music owned by the big labels that they want to listen to. The problem is that most people won't stick with a service that doesn't offer the range of music they want to listen to.
And of course, the other issue with an all-indie catalog is that then you have a lot more players to negotiate with, many of whom will be just as clueless as the big labels.
So, you might be able to start a business with a small fraction of the indie labels represented, and appeal to a fairly small demographic, but there just isn't much room for growth there. I remember trying to use Emusic back in the day; while there was some music on there that I was interested in, it didn't even begin to cover most of what I was looking for.
While yes you'd be safe, you'd also much reduced interest. Your service would likely revolve around people using your site and getting told to go elsewhere to find it to listen to.
only allowed to live so the labels can suck investors' money through them
That's true, but not as true as you might suspect. Pandora is profitable. Yes, they are certainly pumping a large amount of money to the record labels, but they're able to exist without driving their users away with over-advertising.
I wouldn't do a (label) music-based startup today, though. Sad.
I don't know the details of Pandora's finances, but present profits tend not to be the whole story here. Many if not most of the startups that have deals with labels also have large debts to them. Plus the labels can change their terms. So you pretty much live on sufferance, for as long as you're useful to them.
AFAIK, Pandora is classed as radio, and doesn't have to do direct deals with the labels. They pay royalties to SoundExchange, which in theory distributes the royalties to the content owners. The rates they pay are a lot lower than the rates companies like Rdio, Spotify, and MOG have to pay to the labels directly for on demand streaming rights.
Absolutely true. I was making the point that they've survived and are apparently thriving. However: Pandora and similar services have had to work far too hard to do such a straightforward thing.
This is a throw away account, I would prefer to remain anonymous. I work for a digital music startup and am privy to the kinds of tactics and ridiculousness that the major labels engage in on a regular basis. I should note however that I am a developer, not one of the guys that do the deal cutting as primary focus.
For example; they're well aware DRM does not work, but their insistence on the implementation of DRM is absolutely not focused anymore on the idea that they can stop piracy, but that they can implement market segmentation and suck the profit out of the kind of content that people actually want.
Case in point; digital music startup that charges a subscription for global access to a large library of content from the major labels charges a flat fee to the customer and is charged by the record labels on a pay per play basis, thus the effective margin that the startup makes is a function of (average amount of plays per user / subscription cost per month) - price paid to record label for the play. It turns out that if you do not use DRM for your player the record label leaves you around a 10% per play margin (on quite a hefty monthly subscription fee). With DRM it's much much more profitable for the startup in question, they bank on DRM being so repellent to customers that the startup will pay the much higher rate for DRM free.
They also micromanage the hell out of the details of implementation, for example they have a specific set of "acceptable DRM" standards which you must adhere to to be eligible for the rates in question. There have been negotiations running for months with them just to get approval to run the same kind of streaming clients as the web service provides available as applications to android / iPhone clients. When considering implementing AWS for site infrastructure one of the objections raised by the music companies was that "they don't want their music on the cloud".
Effectively it chokes what it is possible to do in the market, inflates the prices, and makes the entire offering far less appealing. It does seem like they're headed for destruction but they seem just as steadfast in their refusal to amend their course.
The Dream was over a while back when digital music and Internet got popular. Apple iTunes store kind of brought it back except Apple as the dreamer not Record Labels.
The Dream being control over distribution. Selling over and over the same product. Selling lots crap (most songs on album) on the backs of 1 or 2 hits. Being the gatekeeper between artists and their fans. Near monopolistic control over supply and demand. All of it, a cash fucking cow.
Over, for the Record Labels. Although they're doing a damn good job at legislating their dream into law. Their government mandated welfare will live on similar to but more insidious than farm/corn lobbies subsidy program. And just like corn subsidy it(warping of copyright) will fuck the rest of us for decades.
The point about the labels doing it to themselves is probably only half the story.
The other half is the culturally ingrained phenomena of "the dream." Many artists jamming in their basements dream of "signing," and expect a big advance, tours, radio play, and all of that old-world stuff. Many today of course realize that there's the Internet and they can afford to distribute their work for pennies and market to their hearts desire; but even those artists generally still think that "signing" is the next, big logical step.
The big labels cannot change. The 80s and 90s left us with a market and taste for stadium tours, music videos, and times square billboards. Six decades of business have given us a model that requires a huge up-front investment for a risky, but lucrative return.
The problem is the returns are becoming scarce.
Yet I think big labels will continue to persist only because they're the loan sharks with the money. I think the author is pretty close to right that there's likely no one that will fund a start up that has anything to do with music. If you have an innovative idea that you think can improve the situation, create new markets, etc you'll have to do it on your own.
There are several reasons that "signing" is the next, big logical step.
Larger venues (most of which are owned by Clearchannel) will not give you the time of the day if you don't have a label behind you. It doesn't matter if you consistently sell out of venues a tier below them. Their booking agent won't even take your call. Sell a million mp3s of your song online? If one of the subsidiaries of the Big Four aren't behind you, forget getting to play a place like Bowery Ballroom. The "break-in" venues like CBGBs don't even exist anymore.
In order to tour, and I mean really tour - spend six, eight months on the road - you need a lot of money. To haul equipment. To pay people to schlep your equipment. To deal with contracts with venues. To deal with venue management. To make sure you don't get screwed by the venue management. To book the shows. It's really, really hard for even a locally established artist to tour. That's where the label helps out. I'm not talking stadium shows. I'm talking about shows that break even, where 200-300 people show up.
I've worked with multiple acts (Clark, Broadcast, Plaid) that have played (and sold out) the Bowery Ballroom without major label support.
There is a very successful tier of well run larger indies like Warp, Domino, Beggars Banquet. They've worked out that not fucking your golden geese is a good long term play.
But yes, even they struggle with the costs of big tours. Touring is expensive.
Oh, I concur. I've known a few unsigned local acts that have been able to edge in as an opener at Irving Plaza. But it's a rare case indeed. (it doesn't help that they play a semi-in-the-hole genre, at least in the US. It's still quite big in some cold, northern european countries)
I'm not sure if you can answer this or not, but in your opinion what would it take to get some type of voluntary licensing going for music?
I personally would rather pay a monthly fee than pay for each individual song or cd. I also want the ability to do what I want with the music. I don't want to have to work to get music on an mp3 player or worry about whether I'm going to randomly lose access to songs in library, which has happened with Ruckus.
It's not so much that they don't want to "deal" with the changing business, it's that there aren't proper incentives in place for the people who run the companies.
Chances are, if you run a major music rights company, you get paid a large sum of money and the financial incentives are structured in such a way that it's in your best interest to simply keep the ship sailing rather than make any drastic changes. Why take risks when you can keep getting your 7 figure check? If you tried to stop the bleeding all at once, you'd most likely be shown the door.
I think labels will continue to have its piece of the market. Not the whole market as in the past, but a important one, because they still control access to mainstream media.
Isn't this just wishful thinking? Everybody hates labels, and so wishes them dead (and for the record, so do I). But just because everyone wants them to die doesn't mean they will die.
Labels sit on content, and their monopoly is protected by the full force of the law. The number of startups in the field or the evilness of label people does seem a little bit irrelevant.
There is only one way labels can die: if they cease to have a monopoly on music content -- which means, either the world gets rid of copyright, or (young, new and aspiring) artists stop signing with labels.
None of this is happening anytime soon. (It may happen, but in a rather distant future.)
I have never visited, no. I know people from school who work at labels, but I can't say I meet with them often.
Why the question?
EDIT: oh, I understand the question, you work at a label.
Well, I live in France, where "Hadopi" just went live. It's a government agency that monitors Internet traffic for copyright infringement and that can then cut off the Internet access of alleged offenders -- not because they themselves are convicted of copyright infringement, but because their Internet connection was used in this manner and they failed to prevent it.
This law was inspired by and received the heavy support of professional organisations such as SACEM, etc.
When an industry is instrumental in creating such legal monsters, I think it deserves the hate and contempt of the public, and more.
Now, none of this has much to do with the subject of the article which was about the "digital future" of the industry. I just wanted to elaborate a little on the "hate" part of my initial post.
The irony of the matter is people care: for their music, for their favorite artists, for their lives and moral values.
So instead of making people be grateful for their services, the record labels are doing everything in their power to alienate their customers, bullying them into paying: and in the meantime piracy gets stronger and more accepted, since it's a lot more comfortable to just download a torrent (and no matter how much legislation they're lobbying for, the genie is out of the bottle and millions of people are doing it).
Not only that, but they've been promoting crappy music for a while now, since it is cheaper to produce and such artists are expendable.
I'm not a hater, but as long as they are selling crap, then I'm not buying.
My point is that the industry is right not to care much about its digital future, and to care more about what matters, ie, their monopoly on content. For as long as this monopoly stands, they will be strong and prosperous.
That doesn't make them likable, but that does not make them stupid, either, as the article implies ("They killed competition. Brillant.").
Besides, here's what PG writes in one of his essays:
If you can figure out a way to turn a billion dollar industry into a fifty million dollar industry, so much the better, if all fifty million go to you.
I think the question is: "What else do I get for that $25?"
I hate dealing with my library of songs. If I could stream it to any device, any time, as well as have -any- other value-added service attached, I'd pay the $25 per year.
By 'any device' I mean TV, PC, Android Phone, PS3 and more. Basically, any device that I can hook to the internet.
As much as I hate dealing with a lot of files and ID3 tags, streaming music sucks for mobile devices for a couple of reasons:
- 3G quality and speeds are guarranteed everywhere and every time. I was left with nothing but the songs I had on my SD card when I was on vacation on an island.
- Constant streaming kills battery life, killing your phone and music player in one kick.
- Because of massive roaming charges, you can forget using it outside of the country.
If you don't travel much, have a good plan and don't mind the battery issue, it could be useful.
Yes, trying out other music managers is a very good way to come to appreciate iTunes and how it works. I encourage everyone who thinks they're unhappy with iTunes to check out these other applications.
The Winamp iPod manager wasn't so bad. Sure, there was no drag and drop, but I always kept dropping in the wrong place anyways. The biggest problem was how it handled certain aspects of tags and labelling different from iTunes. It really wasn't a problem if all you ever used was Winamp, but if you started with iTunes, and switched to Winamp, it would just reorder your music (the most obvious example being 0-9 coming before/after a-z), and piss you off.
Today, I use foobar to play my music. And I keep iTunes around to load my iPod. Cause as stupidly annoying as iTunes is, foobar gets it worse.
Can you elaborate? I think the store is frustrating, but I've found the player itself has been pretty stable and usable for the last 6-7 years on OSX (I have 40GB of music btw). It's a big ol' spreadsheet with instant search and drag+drop playlists.
I find the spreadsheet-style interface pretty uninspired for something as personal as music. The linear list of albums/tracks breaks down very quickly once your library starts growing, and iTunes becomes a confusing, disorientating mess. To Apple's credit, they've been taking baby steps towards more interesting ways of browsing your library with Genius playlists and mixes, but they could and should do so much more.
I quite like the three column browser for quickly finding music even if I only have a very fuzzy idea of what I would like right now. It scales quite well, even if you have a library with several thousand songs and a few hundred artists. Together with the hybrid cover view it doesn’t even look very much like a spreadsheet.
Then there’s the grid view which also has its uses. I especially like to display albums by year which gives me a nice chronological overview. Coverflow is pretty worthless, though.
I think that while iTunes gets the big picture somewhat right (at least as far as its audio library functionality is concerned) it gets many details spectacularly wrong. The UI for tagging feels ancient. Oh, and it’s modal. iTunes forces me to play column jockey. I don‘t want to change column widths just so I don’t get vertical scrollbars. iTunes should keep it all nice and tidy for me, kind of like Mail. That, and many other small details.
Like what? This is a honest question. I don't know much about Amarok but whenever I tried it, it looked completely unimpressive and like an even bigger UI clusterfuck than iTunes to me.
This will do it on windows: http://www.mediamonkey.com/
(I have no vested interest in this company other than continued development for my personal use)
edit didn't see the comparison below, but this works very well with Iphone/pod/pad
I don't know if it was just me growing up, but music changed dramatically right after Napster was forced to kill itself.
Perhaps someone else can support this: "Music" has never been the same since then. It seemed so much more available, so much more pervasive, more frequently invasive to my life; better than it is now.
Like I said, I've grown. But it seems that as the generation behind me moved online in a major way, the music didn't quite follow. Its not that you can't find great music these days, it's that - ironically - it is so much more difficult to do so.
I don't see this ever changing really. The blip that was the 20 century music industry is dead and gone, replaced with essentially a long tail market of grains of sand of that - occasionally if you look hard enough - has a couple of diamonds hidden away in obscurity.
"But I have a take on that - people only made money out of records for a very, very small time. When The Rolling Stones started out, we didn't make any money out of records because record companies wouldn't pay you! They didn't pay anyone!
Then, there was a small period from 1970 to 1997, where people did get paid, and they got paid very handsomely and everyone made money. But now that period has gone.
So if you look at the history of recorded music from 1900 to now, there was a 25 year period where artists did very well, but the rest of the time they didn't."
I would absolutely not. What if they decide that the music branch of their business is expendable? "We're shutting down our servers in a month, gl;dd". Remember Microsoft.
As would I, but doesn't that eliminate a lot of the convenience of leaving it up to Google, the cloud, etc? At that point, why not just set your music up on a RAID, and stream it from home?
Pain to set up. Not all ISPs let you run a server. Having to have a server up and running 24/7. Google probably has better infrastructure and more reliable network connections than I do. Google has someone on call 24/7 to fix problems. Basically all the standard arguments as to why you let anybody host anything rather than doing it yourself.
You can do this already. Write a music player client that can stuff your music into an encrypted blob and push it out on Amazon S3 or something. $22.50/month for storage.
The problem is that that monthly price is a bit high for most people.
Well, as a startup, I mean. There shouldn't be any legal hurdles, anyway - it's really just a backup system specialized for music.
And I'll be honest, I have no clue what Grooveshark's business model is. I like it, but I don't see how the RIAA doesn't come down on them like a ton of bricks, and I really doubt the ads they show can cover what they ought to be paying in royalties.
Grooveshark has deals with a few of the major record labels. They get paid everytime grooveshark plays a song. They have been sued a couple times in the past and now have deals with most of these labels.
Grooveshark makes money through their VIP, advertising, and promotions put on by the artists themselves.
Technically they are not sharing music since you cannot download it, which is why I would guess they get around a lot of things that way.
Sounds like a good idea for an OS project, if it doesn't exist yet. But how cheap is storage in the cloud? 25$/months is definitely too much, if that's what S3 costs for 100GB?
S3 and comparable services typically cost around $.15/GB/MO. You can sometimes go down to $.10 with a reduced redundancy service, or for very high volumes (approaching petabytes).
10GB is not enough for an average music collection. Also I think dropbox does not add to your available space on your hard disk. It just mirrors parts of it.
Sure it is, most people don't listen to that much music and there's a ton of 8gig iPods out there and still selling strong. 10gigs might not be enough for you, but it's certainly enough for most anyone's active listening list.
It would probably make sense to do this as a service though. I'm guessing people probably listen to similar tunes, so it would be significantly cheaper if you could pool 10 people's music and only store 1 copy of every song.
I also would not pay anybody to store the music. It's just cheaper to buy two external hard drives and keep them in sync.
As time goes by I have noticed that most of what I have downloaded is becoming extra baggage to log a round. I keep going back to the same set of things to listen as nothing really good seems to coming out in the genre I like (ambient, electronica).
In short, I perceive digital music as the money pit not that's not worth it.
The old guard is losing power, their business models are failing, their control is going away.
A new dream is starting. A different dream than the fantasy of being "discovered" by a major record label and becoming rich and famous overnight (which translated into a reality that often didn't quite match up to the dream, for the bands or for their fans). A new dream where increasingly many artists are bootstrapping themselves into making a living from their music without big record labels interfering with their creative process, sucking the bulk of the profits away with little in exchange, and adding layers of corporate bullshit between artists and fans. Instead, bands are connecting directly with fans, selling music directly to fans, producing their own albums on their own schedules and releasing them however they like for whatever prices they wish to charge, and making the lion's share of the profits for themselves.
This is happening right now. Spreading right now. Becoming the new way that music is produced and distributed. It's something to look forward to.
The music industry is dead! Long live the music industry!
This was a foregone conclusion when the labels set this policy several years ago. Clearly this former president of Grokster is still telling the same story.
An interesting bit of insider info I have - a relative of mine is a young Sony VP. Apparently their senior executive still wants their digital people to explain things in terms of 8 tracks and tapes. No exaggeration.
I still don't get how an artist actually makes money on a streaming service. It seems pretty good for the labels, but not for the artists. I know people say artist should make their money off other things, but their are some good artists who do poorly in a concert venue.
>Nobody’s going to pay Google $25 a year to store their music in a cloud.
I probably would. $25/year for my collection would make it by far the cheapest file hosting available, and as I have a couple machines and a couple OSes, being able to consolidate everything, synchronize everything, and actually keep my ratings of songs across different systems would be wonderful. Most places I go I can stream music, so I wouldn't even need to keep most / any of it on my devices.
Go me thinking, wonder how successful it would be if someone like apple wrote a program to determine people pirating music then sent then somehow got in contact to them with a link to buy, like the Microsoft anti piracy strategy with windows. On the whole would probably be more successful than the lawsuit path.
Another idea for a service, something that scans a computer for pirated music, lets a user select which albums they would like to buy and offers a big discount.
Maybe the real answer is an entirely new label, having to start from zero (sign on new artists, establish new distribution channels, etc.), but with a corporate philosophy diametrically opposite the existing market and simply subvert the whole thing.
God... This whole debacle is a true indicator that the patent office should just grant my patent already. I have a non-obvious solution that has solid legal grounding.
If anyone is interested I am going to be handing out a bunch of trial membership codes to interested parties in a few days...
Somewhat related, what's the status nowadays of un-DRM'ing music you've purchased, say from iTunes Store, to play on other players, particularly on Linux? Is it possible? What if you don't have access to Windows or OSX (to burn an non-DRM cd)? Legal?
It used to be, young grasshopper, it used to be. I still have a bunch of DRM'd iTunes music I bought years ago when all iTunes music was DRM'd, and want to be able to listen to on Linux now.
And yes, Amazon is my savior for unecumbered music. I'm a very happy customer of theirs. But they weren't always around.
Nobody’s going to pay Google $25 a year to store their music in a cloud.
What if cloud hosting was bundled with MobileMe or the initial sale of an iPod? I bet Apple could get people to pay $12.50 additional hidden in the price of the iPod and $12.50 as an add-on.
So what will music look like in 5 - 10 years? Still just iTunes and streaming? Lets not forget labels aren't sustainable businesses in their current form.
I can show you what I think it will be like. I have developed a media distribution system that is unlike anything that I have seen before. I will be opening it up to a limited number of people soon, and when I do, I can give you a code that will let you create an account.
Google music. Who cares? Oh right, you guys don't have Spotify.
I don't know anyone that has it that bothers with iTunes or actually buying music anymore. Get the free version, and get any music anytime and the occasional ad. Pay a few bucks a month, and you get any music anytime with no ads.
Spotify is great as long as you don't step out of the narrow scope of the music offered. Try finding anything released <6 months ago and report back. rdio and MOG are even worse in that respect. Grooveshark is the only service that has a decent though a Kazaa-like chaotic catalogue.
It isn't that bad, I would say I'm listening to pretty broad spectrum of music, most of it being not very popular, and Spotify has roughly 75% of what I need. OK, when something that was there disappears after a while then it's seriously irritating, but still, the true selling point of Spotify is the quality of the program itself: it's super slick, fast and has the best interface ever in the category of music players.
Personally, I ignored a bunch of artist just because they don't have their music in Spotify; "you want me to listen to your music? let me do that the way I want, otherwise go screw yourself" type of thing.
Well, the truth is in somewhere in the middle - I suppose it's not that Spotify doesn't want Tallest Man on Earth to be in its' catalog, nor that Tallest Man on Earth doesn't want to be in Spotify.
(Worth to note: Spotify actually has Tallest Man on Earth in its' catalog, I'm now listening to the guy)
I would say that the scope of music offered by Spotify is not so narrow. They have more than 10 million songs now, compared to about 2.5 when they launched late 2008 and 11 million in the iTunes store. AFAIK, music goes up more or less as soon as the labels deliver it.
One really scary thing I've heard though, is that the masters for a lot of older music is missing, so while the labels might have the rights and even the willingness to license the music, they just don't have it anymore.
Spotify is excellent, I love it but more and more I get tracks in playlists that are 'not playable in your country' or 'the record label has chosen to make this track unavailable'
Reminds me of youtube. I'm in europe and about half of the time I click on a youtube link I get this friendly message about the content being property of UMG|Sony|Warner|whoever and I'm not worthy to see it...
This week I played a track only to find it had actually changed since last time I played it. The original was retracted and instead I got an alternative version.
Nonetheless I'm happy with Spotify, although the number of unavailable records is increasing
There's http://www.rdio.com -- The library isn't exactly mind-blowing, but they put up fresh music every week (Recently: Maximum Balloon, Engineers, Ice Cube's new independent album, Neil young, Lil Wayne, Clapton, Mark Ronson...) and seem to work with some decent independent labels (Ghostly comes to mind.)
If it's lasted this long it will probably keep going for some time yet. They have a pretty clear song takedown policy, so any music being shared on grooveshark is likely being done so with the full consent of the label.
Grooveshark is also paying the music owners royalty from a share of their ad revenue.
While not free ($5/mo), mog.com has been awesome for me. The only time I buy on iTunes is if I have gift cards and need to burn a CD for my old car stereo.
But by creating a startup-free zone around themselves, all the labels are doing is hosing themselves, because they won't have startups working to develop whatever would have been the new ways of delivering and using label music. They've created an anti-platform.