December 4, 2006

Another Crazy Music Model

Michael Arrington

33 comments »

eListeningPost is a new music service that allows artists to distribute their songs via a link on a website or by email. The file can be listened to up to five times on any one computer - meaning it can be forwarded to others and they can listen to it five times, too. There are no restrictions on the number of times a file can be forwarded, and if someone likes the song, they can purchase it.

Artists have the option of selling DRM’d or clean MP3 versions of the song, and they keep 94% of the proceeds. The artist can also choose to include advertising with the emailed version of a song, and keeps a portion of revenue from that advertising. eListeningPost makes money by charging artists a signup fee of $45, plus $9 per month. Other than clean MP3s, none of these files will work on an iPod.

The company has signed a deal with EMI Records to test the service and is reportedly in talks with other labels.

We’re tracking a number of new music distribution models (a couple are listed in the last paragraph here), but our favorite continues to be Amie St., which we first profiled in July. Amie St., which has no DRM on music, starts off by distributing new songs for free. As songs become more popular, the price rises, until very popular songs hit $0.99. It’s a great way of building buzz for new bands, and consumers demand music without DRM.

Great artists will find a way to make money - via small download fees, live performances, merchandise, etc. But the age of DRM is coming to an end. Startups that embrace the DRM world are going to have a very hard time finding success.

  • Sphere It

Trackbacks/Pings (Trackback URL)

  1. Web 2.0 Sammelalbum - Web2Null - eListeningPost
  2. eListeningPost:有限播放音乐推广服务 at E-space
  3. TechCrunch Japanese アーカイブ » また一つ、大胆不敵な音楽ビジネスモデル
  4. eListeningPost: Share your Music and Get Paid » Dee’s-Planet! Blog
  5. testblog » links for 2006-12-05
  6. the sniffer: foursevens network » Blog Archive » move over Axe, Brut is back! Ack!
  7. Elisterningpost, otro servicio para promocionar creaciones musicales
  8. eListeningPost :: Blog » TechCrunch talk about us

Comments

RSS feed for comments on this post.

  1. Sotek

    Very, very stupid idea!

  2. Uri L.

    Looks like too much friction there, and the model is a little less intuitive.

    Aside from posting songs on the many portals and online dist. services, what artists probably need is an advertising ecosystem that is adapdted to their marketing goals, and can provide them with effective tools to bring traffic and hits to their pages, based on initial interest from the consumer (just like any other ad works).

    If local businesses had to have the local search and vertical portals, which allow them to target their advertising, musicians need a compelling music/entertainment related experiences, that would integrate google ads for musicians.

  3. telecom rep

    Yet another turd thrown at the wall that is not sticking.

    The model that emerges will enable artists to distribute their music as if they are running their own businesses.

    It will have to be open-source and multi-platform, as in the same method is used at their website as is used to order from their phone.

    The new iPhone in January should create the platform standard on which all else goes forward on.

    http://telecommer.com

  4. Shokal

    Triond is also distributing User Generated Music on loudio and shares the revenue generated from advertising with the artists. They have been doing this wonderfully with user generated text and images, and it will be interesting to see how they will do with user generated music and videos.

  5. Darren

    I would expect that MS might have something to say about this. I expect they have patented the listerning of a track for a certain amount of plays (Zune does this).

    I don’t actually think its a bad idea. I would rather listern to a track or album a few times before deciding to buy it.

  6. NeoTechie

    Crazy indeed!

  7. Richard Bowles

    This service - seems to rape the artist off the bat; Artist will think; I just put 20k into making this album, and now - I have to pay $45 for some no name website to give my songs away 5 times ^ number of emails sent. hmmm ….

    - Will flunk out if not bought up by a single record label - and offered on a special site- like sony.com/rap .. /country .. /indie — then generate sales of music and sales of ads out of the site. make it a community thing - where users can review the songs offered - (offer all songs) -

    - Just an idea, Rbowles

  8. Rahul

    Not the worst of ideas. But, their spamming me with a 3 page email about the launch is a pretty bad idea.

  9. Rajeev

    I dont know why sites like e-bay do not allow digital downloads based on online payment, this site also looks promising. I think DRM makes sense to the artists and the music companies.

    http://www.tekno-world.blogspot.com

  10. Christopher Sisk

    As an artist that sells music online … DRM makes absolutely NO SENSE. When you buy it… its yours. Do with what you please.

  11. cuube

    They need a better name for their company/product. Their current name is way too long and sounds cheap.

  12. Adrian Keys

    The concept of allowing artists to upload their music is great…it will certainly facilitate the discovery of new talents from across the world.

    I know a few struggling artists who will find this very useful…before now they have had problems distributing what they of course considered to have been the next big hit!

    http://www.revafinancial.squarespace.com

  13. garyL

    Michael

    How do you justify the statement that DRM is coming to an end? The biggest success story, and really the only big success story, in the world of digital music is iTunes/iPods.

    Typical users don’t care about DRM - most don’t even know what DRM is. Power users don’t worry about DRM - they know how to get around it. The people that do care about DRM have not demonstrated that they are a demographic with much financial impact to the music industry.

    Typical iPod owners have about $20 invested in DRM’d tracks. Who’s worrying about $20?

    If you’re going to say that the age of DRM is coming to an end, at least put some meat on your statement. When will it come to an end - will it be next year, in five years - or will it be when Linux finally takes over the desktop, enterprises switch to Web office suites and we get our flying cars?

  14. Denver Wang

    Come on, this model is good, the questions is, how about the user who listened it for 5 times but don’t like it anymore?

    http://www.ezecho.com

  15. lemon obrien

    As I’m in the space; and know it very well…

    check out tamago.us

    ummm…its the $45 upfront fee, plus another $9 a month. For a band that only exist in someone’s mind located in their bedroom…this is steep. But a better question would be, why?

    “The model that emerges will enable artists to distribute their music as if they are running their own businesses.” — This is true. And it is what we do; except we com.

    we turn the whole intellectual property thing into one vast market.

    tamago.us

  16. Randy

    The biggest problem with business offering a service to artists is that money is probably not exactly pouring in. Artists/bands are broke. Period! Ok, not all, but the few that do probably care less about this especially when they have their own bills to pay.

    Sure, $150 isn’t much for some people. A solo artist playing 3-4 nights a week and making $50-$150 per gig obviously has less overhead and could afford it, but consider a band who needs to split that 5 ways with enough left over to drive 300 miles to the next gig.

    I’m not saying a service like this is a bad idea, but most up and coming bands usually don’t have money unless mommy and daddy are loaded. I wonder if the people responsible for this “service” were fortunate enough to have ever made money as a musician? I honestly doubt it, because if they did I’m sure they wouldn’t charge $150 for some fly-by-night service nobody has never heard of. But what do I know. I’m just a ex-drummer wannabe-geek.

  17. SFGary

    I agree with #12 the other garyL. DRM is here to stay unless the top musicians leave the major labels in droves which may force the labels to change their tune (no pun intended.) The “No DRM” people have not put forth a viable business model to make money for musicians and their sponsors, the labels.

    If the powers that be can solve the problem of competing DRMs and interoperability with one common, non intrusive DRM, the industry will be better off.

  18. Wolfgang

    We advise our artists to join a digital music store only if the store makes money when the artist makes money. A large upfront fee and recurring monthly fees should be a red flag. I’m biased because I help run a DRM-based music service that helps musicians sell downloads directly from their websites too, however, we only charge a one-time fee of $1/song and give artists 70% of the proceeds.

    The real value in our service is helping musicians with their digital marketing (Uri L. #2). Protected music files that allow 3 free plays are really a marketing tool that artists can distribute freely and creatively. DRM enables artists to give away samples, embrace file-sharing and still get paid for their work.

    I’m all for open-source, multi-platform (telecom rep #3) or whatever else but DRM is what’s available to help fight illegal file-sharing. The strengths of Microsoft’s DRM can be used to benefit the artist! Feel free to share your thoughts with me at info at securesong.com. (sorry for the shameless plug.)

  19. squim

    yay, now i can DRM my own music… give me a break… i’d much rather have a free service that alows people to listen to the songs i post as much as they want, whenever they want!

  20. tawm

    off topic:
    damn, i absolutely do not mind that michael & co want to make some money off techcrunch, and i do not mind banners either.
    but that raketu banner reminds me of the web 1.0 days:
    1. it says “click me”
    2. it makes extremely annoying and loud sounds when hovering it
    3. it’s totally unclear what it’s advertising
    4. the text on it is barely readible
    come on, that’s the kind of advertising that fossils such as big mainstream newspapers are currently using. i expected the techcrunch crew to have a bit more modern views on advertising. practice what you preach!

  21. David Mackey

    I am looking forward to taking the labels out of the deal a bit. I think this will help musicians develop more and higher quality music. It is not that music labels are bad, its just that times have changed - and just as the television will soon pass into oblivion, so will the labels.

  22. Calvin

    DRM will not be dead for a while people. Why? Because of greed.

    Artists will continue to be enchanted by the BIG PAYDAY offered by labels. Most folks just don’t have the sack to slog out their music career on their own. Talented musicians are not necessarily great business people and who wouldn’t want to be a star, baby!??

    I’m not a fan of DRM, btw - and I do not work for any music label. I believe in consumer choice and freedom to consume music in any f*&^%ing way I want. Thank you.

    What needs to change is the currency of the realm and the incentives. If bands can have the temerity to say NO to the BIG PAYDAY and slog it out on their own, they will change the system. But they may make less - and there you have the paradox.

    I propose a system that does the following:
    1) compensates artists for their effort - say $.25 per track
    2) allows you to preview/listen all tracks in a secure manner, multiple times
    3) has drm that permits use on any device - apple/msft can go to hell.
    4) has drm that does not allow free copying and distribution

    I think people are basically good and realize the fairness of compensating an artist for their labor of love.

    And I think over cocktails, most label folks would agree with the vision outlined above. But the institutional inertia is too great. No one at the top wants to make the decision to cut prices and devise a solution that is much more consumer friendly. I mean, what would the shareholders say???

    It’s a vicious cycle - similar to what the newspaper industry is experiencing right now. Everyone knows they have to embrace the web and settle for lower profits, but no one has the sack to make the move. After all, retirement is just two more years, and that pension looks so tasty…

    Big music blows… because it tends to ruin the spirit and goodness of the product it promotes. How ironic.

  23. Calvin

    Oh, and another thing. Y’all quit bitching at Michael. He’s got a good thing going and he’s trying to strike the best balance between the benjamins and our interests. It’s not like he’s done this before…

  24. William

    Any music site/model that as a choice forces drm standards that are not open and that do not allow interoperability between existing mobile music players (ipod) are doomed to a quick failure.

    All of the major media players support mp3. None of the major music players support the proprietary drm of any of the other players.

    Today drm is not about protecting the rights of the artist; it is about selling hardware and software, as well preventing the disintermediation of old world distribution channels .

    If any of the major software and hardware makers decided to release their drm formats to one another there would be no drm issues. If this scenario were played out it would not matter what format you choose or which player you purchased.

    A unified drm solution puts the artist and the consumer in control of the distribution channel. If an artist has to go to a major media company to have there content distributed in the predominant drm format for the most popular player; who is in control of distribution. Certainly not the artist, and certainly not the consumer.

    At this point choosing a drm format that cannot be played with the player with the highest market penetration rate would be a choice that would render your content un playable by most of the current market for music downloads.

    One thing to understand is that even if an artist chooses to use any of the current drm standards, this will not prevent anyone from recording the music or from finding a way to crack the drm. Any protection that the artist perceives that they have is an illusion.

    It is only a matter of time before there is an open, unified and real digital rights management system that allows all music to be played regardless of player (And this may mean that a new one need to be created) or software. Once this point is reached artist and consumers will become the distribution channel.

  25. stress

    yes it s a real good tool