Sony Buys Gracenote for $260M

CDDB was started out as an open project to catalog CD track names. Since 1994 it relied heavily on contributions from everyone to establish itself as a very useful service.

It was then sold to a company which then renamed itself Gracenote. Over the years it “promised” to remain open and to let developers continue to use its database. However they got greedy and shut off all developers and free use of the database.

Now they sold out to Sony. Good job, you bastards.

note that the founder/chairman of Gracenote is also the founder of ChaCha search engine, which seems to now have become a service to send answers to your phone.

http://www.gracenote.com/company_info/board_bios/

K

alaska miller,

mog still is free to non-commercial developers. do you really think sites like apple shouldn’t pay? any thoughts on what the costs are for running an infrastructure that never goes down and serves billions of lookups?

aren’t 90% of web 2.0 companies user generated? please.

David Hyman:

1. Admit your role at CDDB/Gracenote. You were one of the key (though not only) people involved in turning Gracenote into a litigious piece of crap. How much time did you spend in court or threatening lawsuits with your baseless patent claims?

2. Admit you are the person behind “mog” — a lame ripoff of countless services before it. Couldn’t you come up with something original or did you spend so much time at CDDB/Gracenote that you forgot how?

——-

Let’s just all hope hope hope that Sony sees the light and disbands Gracenote, takes it assets and integrates them into something else that is as non-evil as possible. Better yet, let’s just hope this deal falls apart and Gracenote dies its long-deserved death and we never hear from them again.

influence. so here they buy ’some’…..something that might be a bargaining chip in the face of apple inc.

Wait, a service that’s used to play music on computers (and to help tag MP3s) was bought by Sony? Are we sure this is not an elaborate trap?

@1 alaska miller

Once upon a time there was an open source music listing company that was sold to Gracenote then sold out to Sony. They Killed CDDB You Bastards!

First you want the music for free. Now you want the damn software that identifies it for you also for free.

Waaahhhh

@3 and @8,

The desecration of CDDB is akin to Jimmy Wales saying F you to all the Wiki mods and contributors and flipping it to Encyclopedia Britannica.

Should Apple pay? Sure. But to who? To the likes of you, David Hyman? Because you were magically able to take CDDB off university servers and gave it hardware? That sure is dandy.

Where’s Steve Scherf? At least he has interesting things to say.

Chapter 1: CDDB is a nice free project. Internet is making people money so naive founders see opportunity and go commercial. Users of CDDB are not happy but it isn’t the end of the world.

Chapter 2: CDDB hooks up with ION which brings the unscrupulous Ty Roberts (and others) who believe that anyone playing or ripping CD’s on computers owes them a royalty. Any chance of CDDB to maintain a positive culture and reputation is gone.

Chapter 3: CDDB sells to Escient, hires new (suitably unscrupulous) President (Hyman), renames as Gracenote, and decides to be a pioneer of the “sue and bully rather than innovate” business model. Keeps lock on CDDB database while performing anti-competitive acts and pursuing competitors with patent litigation. Many companies are affected. This is a long chapter which continues for many years.

Chapter 4: Finally, the end of the CD is in sight and therefore CDDB with it as well. In an attempt to re-invent itself, Gracenote seeks (and finds) VC investment, hires new management, acquires various technology and assets it hopes will diversify it away from CDDB.

Chapter 5: Gracenote and its investors realize they have made too many enemies, lack the ability to diversify away from CDDB, and decide to sell the company while it can still be dressed up to look like a valuable asset. The roadshow begins.

Chapter 6: Gracenote finds a lack of interest. Its years of bullying and anticompetitive behavior have finally caught up. But! Luck finds Gracenote and it eventually convinces naive and desperate Sony to buy its dying business.

The end.

I just wonder whether it is feasible to have a P2P CDDB. While Gracenote’s claim about the cost of the infrastructure responding to millions of request is quite valid, however, a P2P CDDB needs nothing but existing infrastructure of everybody.

How big is the data of 80M tracks? I would assume around less than 256 Bytes to hold meta info of a track in average. (http://www.id3.org/).

So you need around 20G of static storage to make a seed in the P2P CDDB. Do you know how to calculate how many seeds is needed to serve the world (excluding Apple iTune)?

For most users of P2P CDDB, after getting info of a song, the info will be cached in local, so the user won’t need to retrieve the same info again from the net.

In addition, while 20G look big, and many users might be reluctant to make their own computer to hold the seed. There can be an algorithm to hold partial seed.

Jack Bauer ’s text is brilliant. The info about sound track is not copyrighted, and the technology of distributing the info is diversified. Not every valuable thing has a viable business model. Anyway, the business guys in Gracenote are smart, and lucky.

interesting fact - both Gracenote and Snocap use the same audio fingerprinting system developed by Phillips

imeem acquired Snocap for this technology for ‘under $5 million’

I don’t know, Jack Bauer. I don’t like the anticompetitive behavior either, but the Gracenote purchase really does give Sony leverage over Apple, Yahoo, Winamp, and other companies/products that use the Gracenote services.

jack bauer,

itunes wouldn’t work without cddb. steve scherf, the brilliant founder and inventor of the technology is still at gracenote.

gracenote’s revenues are pretty massive and doubling almost every year. in 5 years, just about every car will have a hard drive and gracenote inside to allow for in-car encoding.

and passing by,

there is little value in copyright fingerprinting. not a good business imho. and the algorithms are a commodity. the value is in the database of fingerprints for other things, like music management, serving related content, etc.

Hopefully this encourages Apple to switch to MusicBrainz for their iTunes CD track info. Gracenote is seriously flawed with inconsistent data and misspellings everywhere. It’s crap, basically.

ummm, gracenote employs large teams of editorial to clean the data. if you think gracenote is bad, musicbrainz is in a whole other ballpark. not to mention the lack of a truly global database.

@17 Adam

AMG http://allmediaguide.com (now owned by Macrovision, unfortunately) offers a decent competitor to CDDB called “Lasso”. It is actually used by the SONY PlayStation 3! Pity none of the media (including TC) took the time to find that out. And naturally Gracenote chased AMG (including threatening its customers) for years with patent litigation. Luckily Lasso is still around as with many of Gracenote’s other former foes.

@ 15 david hyman

Typical. You can’t help yourself. Of course iTunes would work fine without CDDB just like many others who use Musicbrainz (aka FreeDB), AMG Lasso, or even MICROSOFT with its own CD database! Don’t you think Apple could easily create a better CDDB if it felt like it? They are the #1 music retailer! Don’t you think Apple or Microsoft could bury Gracenote so deep in legal fees and that is why you picked on the smaller players instead? If you really thought you had a legit claim of course you would have gone after the big pockets. It is your nature.

Perhaps there would be other competitors if you personally hadn’t used anticompetitive tactics to try and kill them? Have you considered that? (of course, no)

Scherf himself (see Wired interview) admits he wasn’t the first to invent the (extremely simple) CD track lookups. And even if he was, it is not like Gracenote owns a patent on CD lookups that has been proven in court to stand up! Why are you claiming otherwise?

Even after leaving Gracenote you are still making absurd hyperbolic assertions to con people into thinking that Gracenote has some impenetrable technology or proprietary IP that it in fact DOES NOT. Get over it. I know they are your investor and “technology” supplier, but please.

And cars with hard drives and CDDB chips? Funny. The future is called “iPod connector” and we are already there.

@18 Hyman, again

Anticompetitive monopolistic tactics will do that to a market. You made sure Musicbrainz (or the others I mentioned) would not have a fair shot.

Anyway — who gives a shit about CD lookups? Is this 1999 again? Are you sticking to this point because you realize it is Gracenote’s only significant revenue source?

“who gives a shit about CD lookups? Is this 1999 again? ”

case closed

@20
i second that

Jack Bauer thanks for your comments, very interesting

Sony has acquired technology that “detects which song is currently being played by an application”. IMHO, they are probably gonna use it to try to track music piracy as well.

Who gives a crap about CD Lookups??? Here are some interesting statistics for the US market.

Once a CD library is digitized, consumers are more likely to become “digital” consumers and begin consuming new digital services. Until consumers are converted, digital consumption is mainly curiosity based with no commitment to any product or premium service. Forrester Research reports that only 1 in 4 digital music player owners download music, leaving a big gap in potential revenue.

FACT: As of Feb. 29, 2006, Apple reports 1 billion tracks have been downloaded through iTunes, and over 42 million iPods have been sold, which equates to only 24 songs or roughly 2 CDs per iPod.

FACT: In just 2005, the RIAA reports nearly 800 million in CD sales for the US (or nearly 10 billion songs). Over the life of the CD, RIAA data shows over 11 billion units in circulation, or about 132 billion songs.

CD lookups are absolutely required for anyone looking to develop a truly mass market solution in digital audio, and in my humble opinion, a solution which has not yet been developed. iPod/iTunes are close, but with a minimum of $500 of investment needed to get started (iPod, PC) with a monthly broadband internet fee to access content, this leaves many consumers without. Currently, there is just a 57% broadband coverage in the US, so certainly digital content is still far away from achieving a medium-less distribution model they all strive for.

The track recognition technology is useful as well, but David Hyman is correct, the algorithms are commodities right now. The true value is the quality of data which is available, and access to keep improving quality. Today, databases need not have unique matching techniques, but rather focus on the quality of data delivered including accurate UPCs, ISRCs as well as other internal consistencies that allow for future development around.

@24 Doug Strachota

OK — so you are behind getdigitaldata.com and you like the CD track listing business. You expect a few more good years (btw, the trend is against you, CD sales are going down and digital up).

Of course Hyman is right about track recognition because the majority of music that will be sold in the future will include meta-data already.

Has Gracenote tried to sue you or bully your customers yet? (if not, watch your back mofucka!)

Yes they have. In fact several lawsuits have been threatened to our customers for using us. Warrantless, of course.

CD sales are trending down, and DVD sales are trending up. It’s good to be the leader in DVD metadata currently.

Unfortunately Gracenote has had the momentum in this space for a few years,. Does anybody think that being purchased by Sony will change that? (that is a serious question, I’d like to know what thoughts are on that).

Though musicBrainz was mentioned as not being a global solution, they are partnered with and using technology provided by MusicIP which is global and has a huge database of quality metadata.

CD look-ups is old business, but that doesn’t mean metadata isn’t valuable. That is where the fingerprinting technology comes in. You know you have tracks without metadata, and you can’t do a look-up because it isn’t part of a CD. Maybe you traded a playlist with a friend, or something and the metadata went missing.

As mentioned above, the data is the value.

Alaska Miller, purveyor of FUD. Gracenote did not “shut off all developers and free use of the database”. RTFWP: https://doors.gracenote.com/developer/. As I understand it, anyone could make a freeware player, get access to Gracenote, and owe them nothing. Yeah, real evil.

Oh and BTW, death to Google for building a business off of *MY* links! How dare they mine our carefully constructed page relationships! I don’t care what “service” they provide. They are evil, pure and simple. Stanford jerks.

@28 Hank Scorpio

You are right — but only by looking at the tip of the iceberg. Beneath the surface lies the big dark awful story.

Gracenote does allow their database to be accessed in all sorts of ways. What Alaska is referring to is the fact that the original database was user-generated and was freely downloadable (in its entirety) by anyone who wanted it. When CDDB went commercial they continued to accept user submissions but no longer made the data available to anyone who wanted it. Many users felt betrayed and developers who expected to have access to the data (and who had previously contributed to because of said future expectation) were left in the dust.

I could probably get over that — it all happened early enough that someone else could have started another free database (e.g. FreeDB) — However, that is where the story gets so much worse.

Basically Gracenote made sure that developers and providers were stymied and deprived of alternative options because Gracenote used anticompetitive / bully tactics to weaken/destroy alternative providers (like they do to @26 Doug) and made threats to developers who wanted to use any alternative track listing DB (or pretty much any kind of music meta-data).

Here’s a super-realistic flow:

- Developer X wants to make a CDDB-style database with some special sauce on top. He wants to make it free but perhaps add some premium services on the side to make money.
- Developer X starts building the database and adding sauce. Things are looking good.
- Gracenote gets wind of this and starts with the lawsuit talk.
- Developer X checks with his lawyer and finds that Gracenotes claims are baseless. Developer X is relieved.
- Company A and Company B like the special sauce and want to work with Developer X.
- Gracenote pays a visit to Companies A & B and tells them that if they work with Developer X, they are infringing on patents and will be sued. They should work with Gracenote instead.
- Companies A & B (like most companies) are conservative and don’t like paying for lawyers so they get scared away from the deal with Developer X.
- Developer X is fucked, Companies A & B are fucked, and most of all the consumer is fucked because all this innovation is gone and the consumer is stuck with Gracenote.

Search for “gracenote lawsuit” on Google and you’ll get over 14,000 results. You’ll see Musicmatch, Roxio, and more. In all cases Gracenote lost and the other parties were able to continue to using alternative databases/services.

The most insane part of all this is that despite the fact that Gracenote has lost in court continuously, they carry on using bully/anticompetitive tactics because they work most of the time!

You might say “well then you can just fight them and win!” But who can afford/wants to do that? Deals have died and partnerships fallen apart because most people don’t want to get into a legal battle of any kind.

@ 27 Pete Field

Simply, if Sony needed meta-data it should have bought AMG (from DRM-happy Macrovision) or Muze (from Enterprise Partners). While AMG is better, Muze is the actual meta-data provider that Gracenote themselves use — (but they probably didn’t emphasize that point to Sony).

Sony did, however, get a whole bunch or litigious bullies! Maybe that was the attraction? The lawyers at Sony got asked about the deal said “hellzyah!!! m00 moniezzzzzzzz 4 me!”

@28 Hank Scorpio

I see where you are coming from but you’ve got it wrong. Alaska Miller is technically correct and seems to know the background a bit better than you do. Let me explain:

Gracenote pulled a switcheroo and that is what made the developers/contributors to the original CDDB pissed.

The entire database used to be free and downloadable to anyone who wanted it. Yes, you could download the whole fucking thing in a text file and do what you want with it.

Users contributed to the database knowing they could always grab a snapshot of it. Gracenote not only turned this off, but continued to accept user contributions with just a “fine print” change to their policy. Made for pissed off contributors.

Gracenote (CDDB at the time) used user good will and a promise of reciprocation to start a business and then once there was momentum, took away what was promised.

In those days the whole “web services” “web api” stuff wasn’t around so the idea of downloading the whole database to build things on top of was somewhat practical.

Say for example — you wanted to build a web site where users could write album reviews and you wanted to start off with a database of artists/albums/songs to build on top of — you could just download the CDDB database and get started. That is no longer the case, so the developer got fucked. Just like Alaska said.

@30 Jack Bauer, and every other Jack Bauer post.

Jack,

You are incredible and knowledgeable. Were you a management guy at Escient, CDDB, or Gracenote? There is a writer from news/blog site that disagrees with you:
http://www.thestandard.com/new.....urn-screws

Your biggest fan,

Rip

It is frightening to think what Sony will do with Gracenote. Are they going to monitor all the music I hear? After the rootkit fiasco, I do not want Sony spying on me. I no longer trust companies that use Gracenote.

@31 RipTyde

Thanks! I am just trying to keep everybody honest here. Hard thing to do when Gracenote is involved.

I have never been an employee of Gracenote, CDDB, Escient, etc. I have had plenty of run-ins with them and have been closely following the space for about 10 years now. I just feel an obligation to get the truth out.

Thank you for the link to thestandard. Looks like Kevin from Rainbow partners already straightened out the author in a thorough and authoritative comment but I’ll go drop a comment as well once I get through their tedious registration process.

I gotta ask: I know why I am here spending my time writing comments, but what brings you here? This isn’t the most interesting topic, is it?

The CDDB integration in iTunes and other SW looks not like a good enough investment argument. But Gracenote has not only CDDB but also audio recognition services. Take the excitement about the iphone hacked application “Listen.app” (an application that is using Gracenote to automatically recognize music) into account and then you can ask yourselves: Maybe Sony bought Gracenote at the 22nd of April 2008 for $260M so that Apples iPhone 2.0 in June 2008 will not be able to listen to music and identify what song is played?
More details here:
http://www.line-of-reasoning.c.....-listen-2/

Excellent history of Gracenote posted by “knows” at Slashdot in the firehose:

http://slashdot.org/firehose.p.....;id=666026