Yahoo Music VP of Product Development Ian Rogers and I have different opinions on the future of the music industry. I think the price of recorded music will continue to fall towards free, whereas he thinks the industry can turn itself around and create enough value for listeners to make some money on recorded music. But on one thing we agree: For the last eight years the industry has been doing nothing more than rearranging the deck chairs on its own musical Titanic.
In early 2006 Ian’s then boss, former Yahoo Music GM David Goldberg, stunned attendees of the Music 2.0 conference by urging major labels to abandon DRM and give unrestricted MP3 sales a try. That advice turned out to be pretty prescient: earlier this year Apple started selling DRM-free tracks, and Amazon just launched a completely awesome DRM-free music store.
Last week Ian was back telling music executives exactly what they don’t want to hear, this time at the Digital Music Forum West conference. His talk went back eight years, through the birth of high velocity P2P file sharing networks like Napster. He heavily criticized the way the industry responded (by suing everyone), saying:
Suing Napster without offering an alternative just seemed like a denial of fact. Napster didn’t invent the ability to do P2P, it was inherent in TCP/IP. It was like throwing Newton in jail for popularizing the concept of gravity.
He then talked about how ridiculous it is to continue to offer consumers inferior products. He uses the DRM-laden Yahoo Music subscription service as an example, pointing out that music listeners just aren’t willing to pay money for these products:
Yahoo! Music demonstrates this scale discrepancy perfectly…Yahoo! Music is the #1 Music site on the Web, with tens of millions of monthly visitors…But the ENTIRE subscription music market (including Rhapsody, Napster, and Yahoo!) is in the low millions…even after years of marketing by all three companies. When you compare the experiences on Yahoo! Music, the order of magnitude difference in opportunity shouldn’t be a surprise: Want radio? No problem. Click play, get radio. Want video? Awesome. Click play, get video. Want a track on-demand? Oh have we got a deal for you! If you’re on Windows XP or Vista, and you’re in North America, just download this 20MB application, go through these seven install screens, reboot your computer, go through these five setup screens, these six credit card screens, give us $160 dollars and POW! Now you can hear that song you wanted to hear…if you’re still with us. Yahoo! didn’t want to go through all these steps. The licensing dictated it. It’s a slippery slope from “a little control” to consumer unfriendliness and non-Web-scale products and services.
He compares that to the experience of buying and listening to a song on Amazon:
But now, eight years later, Amazon’s finally done what was clearly the right solution in 1999. Music in the format that people actually want it in, with a Web-based experience that’s simple and works with any device. I bought tracks from Amazon (Kevin Drew and No Age), downloaded them, sync’d them to my new iPod Nano, and had them playing in my home audio system (Control 4) in less than five minutes. PRAISE JESUS. It only took 8 years.
He ends up saying Yahoo won’t support flawed music industry business models any longer:
I won’t let Yahoo! invest any more money in consumer inconvenience. I will tell Yahoo! to give the money they were going to give me to build awesome media applications to Yahoo! Mail or Answers or some other deserving endeavor. I personally don’t have any more time to give and can’t bear to see any more money spent on pathetic attempts for control instead of building consumer value. Life’s too short. I want to delight consumers, not bum them out.
In the end, I probably agree with Ian completely. Offer consumers a quality service (no DRM and guaranteed quality) and they will pay something for the convenience factor. Offer them more of the same, and the future of the music industry is pretty clear. Yahoo, at least, won’t be playing along.
Read his entire post here. It’s worth the time.
But will the labels actually listen?
And why can’t Yahoo lock up the same deal as Amazon has for distribution of non-DRM’ed music?
I think the future of music really is online songs for less than a dollar. Mp3 players and CD creating technology is not going to slow down inspite the the record industry’s recent victory about illegal downloads against one person (who now owes over $200,000 in damages). What the record industy needs to do in a step up its efforts to make more websites offering individual song downloads and they need to buy out the websites that are already selling songs. The songs that they will sell should be of excellent quality and need to be much better than the sites that illegally transfer song files, anything to produce a better quality song because the cost of each song is very affordable and reasonable. The illegal song transfers will phased out eventually for quality, ease of download and upload to music players, and already sensible/reasonable prices.
I hope they don’t take down Yahoo’s Launch service, though, which I’ve been using for years (the free version!)…I like the idea of streaming cool music and being able to zap songs I don’t like and rating songs/artists/albums I do like…
I agree that consumers do want a better experience, but it’s hard to enforce any rules and force them to adopt any one solution, Amazon rightly understands this and has responded to consumers’ needs. But I don’t want to see the music labels buying up all of the websites that sell music, oligopolies aren’t fun for my wallet! And as for the recent trial where the lady has to pay $200,000+ in damages, that’s not going to happen very often, as private p2p file-sharing between friends is 100% legal and becoming mainstream, see http://www.gigatribe.com for an example of the many alternatives file-sharers have.
Music will be freely streamed to our Internet mobile devices like the iPhone upon market proliferation of such devices.
Google adds a streaming media player to their search page, where users listen and search all through the same page/interface. Google based upon your IP can provide links to local retailers. While streaming your song of choice through Google, you look down to see song information, but you also see an ad saying, “Starbucks is around the corner, buy one get one free!” Google pays RIAA and everyone gets richer!
Will take time, but something like this is the future! Hmmm, maybe I should get to work….. though Im devoted to the alarm clock.
As a web developer i see this experience echoed in our industry. Constantly we have clients asking us to do certain things which run against best practice and are blatantly stupid ideas, and no amount of persuasion will get them to drop their requirements of a flash intro then a website smooshed up in a 600 * 300 rectangle.
Glad to see Yahoo! taking a hard line stance and saying No! Maybe that s what i should do with some of my clients? If only i had Yahoo!’s bank balance
I think that it is about time that an executive in an influential company such as Yahoo got the courage to tell the music industry exactly what the majority of people think. Granted, not everyone knows how to get around the DRM features built into iTunes and the majority of the other music services, but it is easy enough. I just got a new player (Zune) and had to convert my entire iTunes library to MP3s. The process was so simple that all it took was one application and the computer running overnight. Applications such as TuneBite and SoundTaxi are great for doing this.
Just like the music industry could not control CDs and the ability to make copies of CDs, I don’t believe that eventually they will be able to control music that gets downloaded. The same people who used P2P services such as Napster, will figure out the various ways of getting around DRM. To them, using a 3rd party application is not all that difficult or limiting.
Amazon’s new MP3 Download Service is a great service that makes that works well and allows you to share your music anywhere. It is truly a move in the right direction.
The greatest restriction of DRM is that it limits the user who bought and owns the right to listen to it. My wife’s car has a 40gb harddrive in it and can sync wireless, but can not do so with iTunes. So I can not do what I used to do with CDs which was just move them from Car to Car. Further, it locks you down to using one type of device such as the iPod for iTunes, PlayForSure devices for most of the music services (which are not compatible with iPods). When is the Music industry going to learn that it is this restriction that encourages people to try and get around their restrictions?
For all the flaws with digital music distribution - Yahoo screwed up royally with the execution of their music subscription service - even after handing it out at 4 dollars they could not round up the listeners. It says one thing - they did not deliver on the consumer experience compared to better services like Rhapsody.
They could have bought out one of the better platforms like Last.fm or Pandora and learned a couple of lessons on what the average music listener appreciates. And let’s not forget they paid 160 million dollars for Muiscmatch, and here again they screwed it up royally. Come on Yahoo - who else are you going to blame for not being able to deliver on a good conumser experience. It would be nice if Yahoo could take some responsiblity for their problems before dumping the blame on the rest of the world. And Yahoo’s execution problems go way past just the music services - and that is no secret.
@2 - the issue is that the labels (what about the others?) or the RIAA (not their business) can’t buy out sites selling music - it’s eating too much into their retailers and they don’t do retail, they do marketing and physical distribution.
@4 - music over the air to mobile devices? Ever heard of limited spectrum? Crazy $/MB charges? Tunnels? Airplanes? I think the device you’re looking for is a radio, but there’s a reason why people want their own music, stored locally.
I agree with first point of Ian, that music industry is going to survive and will find some best model for it. Because, if it doensnt the industry is simply not going to survive, how the great artist will earn money, which they deserve? thy simply cant sell their precious creation on free.
Even if Radiohead started selling their music on free, they still expect to thr donation part to work.
Its only pity that web/music industry is not experimenting much to find some good model to sell. But, they will surely when they will start feeling the heat.
99cts is a good price to pay for convenience.
Don’t fuck it up. Leave it like that.
Those who want to copy will do it even if it is free.
Misery
I use a Mobile IE Internet Radio web app; my Treo plugged into car stereo.
http://www.youtube.com/watch?v=cq_lkSRDFck
I drive regularly up & down I-95, through underwater tunnels and the reception is great via my EVDO. I may lose it for 20 seconds, at the deepest part of such tunnels, but EVDO streaming reception beats radio and Im sure it will improve over time!
Also, have you not seen the recent news clippings of
“High-speed Net access coming to planes,” ( http://www.msnbc.msn.com/id/6717750 /) ?
Id didn’t say this would happen overnight, but it is the future!
You think a penny, you got a penny. You think a dollar, you got a dollor.
Most of time, when I want to buy a CD, I always download MP3 online first and listen to it times times again, I have to make sure that the songs in the CD is worth for money.
Yahoo must did something right !
Look at Google’s approach with everything to see the future of music distribution.
I think that unfortunately the music industry doesn’t give a heck about what Yahoo says.
WRONG!
Inconvienence scales quite nicely!
Have you ever tried SAP, VisualBasic, .net, xBoxLive, ….
You people should find out what you are talking about before printing this stuff!
Inconv. slows down users, yes, but it slows down hackers even more and should be engineered into every system!
http://fakesteveballmer.blogspot.com
It’s not the Titanic. They’re soaring. It’s rearranging the deck chairs on the Hindenburg.
“I think the future of music really is online songs for less than a dollar.” Actually the future of music sales is any encoding you want for 10c a track. That’s about the price point where easy can compete with free.
It doesn’t matter if music is free or not. Peole will continue to download it for free and you can’t stop that.
The issues arent the price of a song people, it’s how to access the song that you want to buy. people have no problem buying A song, but they dont want to have to jump through a hoop to buy it, and then jump through another to download it and then another to transfer it to a device and then another if they wish to share it with a friend.
it seemed so simple when they were on lp’s now, didn’t it?
there are too many layers as there has always been in the music industry, and as usual, they all need and want to get paid…
If music makers can’t find any way to protect their copyrights, then music will go amateur, sort of like youtube home videos.
#17 - LPs are great! Check this out: http://www.brookstone.com/stor....._re=Result*R1C1*T
I wonder how long before the music industry will request the list of people who bought that device…
This post completes me. Finally people are shouting that the Emperor has no clothes.
songs should be free or should cost less than a dollar… sounds like an online dollar shop
http://vidsonly.blogspot.com
Rogers is right. And exactly the same argument applies to video.
I’ve bought music online, but I haven’t bought video online, precisely because of the DRM. So the TV companies have missed out on probably hundreds of dollars of revenue from me alone.
BTW, techcrunch’s Atom feed link for this item took me to the main techcrunch.com page, not to this item. Perhaps it needs looking at?
The other problem (beyond the what Ian describes) with music subscription services is the failure of these services to account for the total end-user cost of obtaining a single track.
The real cost of obtaining a track is not the pennies that subscription services charge, or the .99 cents that download services like iTunes charge. The real cost of obtaining a track is the value of the time it takes to discover a new track plus the purchase price of the track.
The value of the time it takes to find a new song that you like is actually more valuable to most consumers than the retail cost of the track. This explains why a far greater percentage of the population prefers to own the music they consume. The retail cost of loosing your music is one thing, but the time value of loosing the collection you amassed during so many music safaris is priceless.
It seems like the best solution to the collection-disappearance problem would be to offer a bookmarking feature or service that enables any subscriber to easily move his song collection to any other music platform in the marketplace. After all, nobody wants their song collection inescapably tied to one company.
The music subscription service providers only have to look at how phone number portability in the telecom industry has helped ease consumer concerns, as well as to drive new service activations.
I think Ian Rogers is the one of the rare digital media executive who truly loves music and is young enough to understand the realities of P2P. I’m still shocked how much I’m in agreement with TC in regards to everything music.
I actually really, really like Yahoo! Music Unlimited.
I happen to agree with Arrington that music is headed for “Free”. No configuration of deck chairs on the RIAA titanic will stop that.
RIAA’s monopoly was built in a time when it was too expensive for an artist to record themselves, produce a physical LP or CD, get wide distribution for it, and promote its sale. Each one of these roadblocks is now easily within reach of even my 18 year old son’s garage band.
Technology and the Internet have rendered all media distribution businesses obsolete (newspapers, book publishing, record and film distribution). Most of them just don’t know it yet.
Arrington has long time been a supporter of innovative paths in the music industry. But in the end his most recent post is right. The price for music distribution will eventually drop to $0; without DRM, why would consumers want to pay a fee to download something from Yahoo or iTunes when they could download it for free via P2P?
I think we need new innovative models that offer some value-add that doesn’t exist now. I’m always considered radical, but I suggest that we have consumers pay when an artist creates something and then let the final product circulate for free. It costs nothing to distribute, so why charge for it? Charge for creation.
The value-add is that consumers can get involved in the creation process. Seeing their favorite musicians’ works grow from idea until completion and giving feedback to affect the growth of the song.
Here is a good example where the artist is slowly constructing his song.
http://www.strayform.com/Propo.....html?id=21
Not just music but anything could be made this way. If people put their money where their interests are then you would see a lot more specialized music, movies, and books being created. Here is an interesting one about the “Giants of Silicon Valley”.
http://www.strayform.com/Propo.....html?id=48