I had a fascinating conversation with MediaNet CEO Alan McGlade on Friday morning. Unless you're deeply involved in online music, you probably don't know MediaNet, but it's the back end powering a lot of music services you might have used, including MOG's subscription service that launched earlier this week, as well as Microsoft's excellent Zune Pass subscription service and iLike's online music marketplace. (MySpace acquired iLike in August, and in November, links to iLike's service began appearing directly in music-related search results on Google.)
Fox Interactive used MediaNet's technology to embed this list of Aerosmith songs in a story about the band. Readers could then listen to a sample or buy the song.
(Credit: MediaNet)They've also got more history in online music than just about anyone. The company started off as MusicNet, with part-ownership by three of the then-Big Five major labels: BMG, EMI, and Warner. They powered RealNetworks' music initiatives before RealNetworks bought Rhapsody. They powered Yahoo Music. They powered MTV's online music store.
These early stores went nowhere. Content owners insisted on digital rights management (DRM) restrictions, which meant that content from these stores had restricted use rights and couldn't be played on every device--including, in most cases, Apple's iconic iPod. Setting up a store using MediaNet's platform often took 18 months and significant technical expertise. In the meantime, Apple focused on a dedicated online store for its own devices, and completely dominated the market for music downloads.
But the landscape has changed. Labels don't want to be beholden to Apple. They no longer insist on DRM for single-song downloads, and have realized that the more outlets there are for their digital music, the more customers they'll reach, and the more sales they'll have. (Amazing it took this long to figure out.) MediaNet is, in my opinion, incredibly well positioned to take advantage of this sea change.
In October, the company released a set of technologies called MN Open that make it almost trivially simple for companies to add a wide variety of music consumption options to their Web sites. Sure, companies can still use MediaNet to build an end-to-end service like MOG.
But say you're Fox Interactive and want to make a story about Aerosmith more engaging. Using a MediaNet component, Fox created a link for the first mention of the word Aerosmith that took users to a page with more information about the band, and links to play and buy some of their popular songs. Fox also posted Aerosmith songs in a box directly on the story page.
MediaNet handled all the heavy lifting: licensing the music, streaming the samples, and fulfilling the transaction. Fox kept its brand and design throughout the process, and users didn't have to leave the site to buy the song. Best of all for Fox, it didn't have to make any up-front payment to use MediaNet's technology. Instead, MediaNet takes the customary cut of any song purchased through the site (about 60 percent, if it's anything like Apple). The model's the same for sites that offer free ad-supported streams or subscriptions--MediaNet takes a portion of each transaction, then handles payment to the content owners.
Now imagine this kind of integration on sites for radio stations, record labels, or your favorite bands. Imagine your ISP or cell phone carrier offering you a music subscription service bundled with your Internet service or smartphone. In this world, users won't have to go to iTunes or Amazon MP3, or subscribe to Rhapsody (or MOG for that matter). Music will be available for consumption everywhere. And content owners will get paid regardless of where users buy it.
According to McGlade, it's already happening--he said MediaNet is adding about one new distributor per day, and has already got about 50 customers using the Open ML platform. One site, GetPlaylists.com, was able to add playable song samples and downloads-for-sale in only two days with Open ML, according to McGlade.
Thanks to this upsurge, the company--which is owned by a private equity firm and no longer has any direct ownership affiliation with the major labels--has recently crossed over into profitability. A rare situation indeed in today's online music landscape.
It's a great vision, and something that Microsoft, the original platform company, could have done. But Microsoft spent years pushing the Windows Media Platform, which made heavy use of Microsoft codecs and file wrappers (instead of MP3s, which were becoming the industry standard). Microsoft also spent a lot of effort trying to enable the labels' DRM demands--for example, by building a platform to enable subscription-based downloads to be transferred to portable devices. Then, just as the labels were getting ready to abandon DRM, Microsoft basically gave up pushing Windows Media as a general-purpose platform for distributors and device makers, and instead started trying to mimic Apple's end-to-end software+service+device with the Zune strategy.
Talk about an opportunity lost! Instead of struggling along with something like 2 percent of the digital media player market, Microsoft could have ended up powering the music technology on thousands of Web sites.
Another aside: while MusicNet offers a lot of flexibility for distributors--downloads, samples, free streams, or subscriptions are all supported--McGlade is most bullish on subscriptions as the digital business model of the future. He admits that old fogeys accustomed to CDs and vinyl will have a hard time giving up the concept of ownership, but suggests that today's teenagers don't care--they want music on demand from any device, any time, in any location, and don't need to have the files physically present. McGlade thinks that subscriptions will have the best chance of taking off if they're bundled with some other product, like ISP service.
Scoff all you want about subscriptions, but the concept keeps coming up: music industry expert Donald Passman also believes they're the best chance for the music industry to thrive in the future. Even Apple finally seems to be bending to the idea of streaming music with its acquisition of Lala, although Lala isn't a straight subscription service, but more of an online music locker with some free streams, plus fee-based individual streams.
MOG offered me a free trial to its subscription-based streaming music service, MOG All Access, which launched on Tuesday. The service costs five bucks a month, and gives you unlimited on-demand streams of more than six million songs from all four major labels and plenty of indies. The site is trying to differentiate itself from competitors like Rhapsody and Napster with high-quality streams--all songs are 320kbps MP3s--and some fairly sophisticated music discovery features, like playlists posted by musicians (David Byrne got the featured spot on the day of launch) and other fans with similar tastes to yours ("Moggers like me").
I've been sampling the service for about an hour, and I do appreciate the sound quality (although better volume-leveling between songs would be nice) and recommendation services. And I'd like to thank the designers personally for the ability to add any song to the already-playing queue--a feature I love on Grooveshark and my Zune HD and that I always miss whenever I use one of my iPods. But there's one big problem: song selection.
Because MOG is licensing content directly from copyright owners, there are big gaps from artists who simply don't want to participate in online music. The usual suspects like AC/DC, Led Zeppelin, and the Beatles are mostly missing in action. There are also strange gaps elsewhere. For instance, half the songs on the Pixies' "Surfer Rosa" are unplayable. Compared with Grooveshark, which relies on user-posted content, MOG has too many holes. And of course, Grooveshark remains free (although a $3/month subscription gets you a version without advertisements).
Song selection could improve over time as MOG signs more licensing deals, but I found some other related glitches as well. For instance, '70s folk artist Roy Harper, whom I often use as a test case to see how well an online service does with relatively obscure old content, has almost no playable content, but does offer a nice list of albums with links to Amazon. The only problem: when you follow the Amazon link on unplayable songs, it takes you to the Amazon Music front door--most of his songs aren't available for download there, either.
In its demonstration video, MOG touts its online radio service as a unique feature. When you're playing a particular artist, a slider lets you control how much variety you want, from "play only songs by this artist" all the way up to "play mostly songs from similar artists." It could use some fine-tuning, however. When I started a queue with a Modest Mouse song, it used Modest Mouse as the basis for its selection. Fair enough, but when I added songs by Talking Heads and Public Image Limited, the radio algorithm didn't account for those artists. It simply switched my radio playlist completely when the new songs started playing, showing all Talking Heads songs, all PIL songs, and so on. Pandora and Slacker do a much better job of creating custom stations based on multiple artists. (Although, of course, those services don't let you play individual songs on demand.)
Finally, as I wrote last week, I still think MOG's lack of mobile support is a fatal flaw, but one that could be easily remedied: Apple's approved iPhone clients for subscription services Rhapsody and Spotify, so why not MOG?
All of these flaws can be fixed, although licensing content takes time and convincing. I'm a big fan of competition, though, and MOG takes many of the best features of a lot of other services, combines them in one place, and improves on some of them. For that, the company should be commended.
Start-up company Gigzee recently updated its free gig-finding iPhone app. I love live music, and I'm always happy when there's another iPhone app to help me find out what's going on. But Gigzee's competing in an already crowded space, and it doesn't have much to set it apart from its competitors.
The concept's familiar enough: Gigzee uses the iPhone's GPS transceiver to detect your current position, then lists live music gigs happening in the next two days, within a certain distance (the default is five miles). You can also enter a ZIP code to get gig listings for another area, view gig locations on a map, and customize the date range to show all gigs within the next month, for example.
Unfortunately, that's about all there is. There's no way to track favorite artists, which means it falls short of the free JamBase iPhone app. JamBase lets you track favorites on its Web site, then link the iPhone app to your account to see a list of gigs only by those artists. (My absolute favorite app in this category, the $2.99 iConcertCal, saves you this manual process by automatically pulling favorite artist information from your iTunes library, but apparently it has a bug and has been removed from the iTunes store for now, and I can no longer get it to open on my iPhone. Bah humbug!)
More importantly, these apps are only as good as their databases of concert information, and here Gigzee appears to fall short. In a quick test, the JamBase app showed me six live gigs happening within five miles of my location tonight. Bandloop, which is also free, showed me a remarkable 12 gigs. (But Bandloop can only show gigs in the next two days--there's no way to get a longer-duration list, which is why I don't use it.) Gigzee? Only three.
I've spoken to Gigzee founder Anurag Jain, and he's a big-time music fan with lots of interesting ideas, like letting artists link their MySpace profiles and automatically post gigs to the site. But so far, the service still looks like a work in progress.
If free ad-supported music services aren't going to make it financially, what about paid subscription services? Rhapsody and RealNetworks continue to soldier along, but RealNetworks is apparently looking for investors to take some portion of the Rhapsody business off its hands, and we haven't heard much about Napster since Best Buy, which acquired it a little over a year ago, slashed subscription prices in May in a bid to build membership.
A new subscription music service is coming next week.
Soon, there will be another competitor in the market: MOG. The company has offered a kind of music blog site with a social-networking spin for a couple years now. On Monday the company announced it will launch MOG All Access, a new subscription service, on December 2. At $5 a month, the price will match Napster's, only without the minimum 3-month commitment that Napster requires.
MOG has been teasing the service with videos for a couple of months now, and the latest demonstration video looks pretty appealing. Fast search will show results as you type, and you'll be able to create and save playlists, which will then appear in other users' search results (for instance, if you create an all-shoegaze playlist, it should show up when I type "Boo Radleys Curve Slowdive"). There's also a social-networking aspect: you'll be able to create profile pages which will display information such as the last song you played, and add other users as "trusted sources" to get their recommendations--very similar to Microsoft's Zune Social.
There's also a radio feature that trumps every other online radio service I've seen. You can enter an artist, such as the Dead Kennedys, and it'll begin playing songs only by that artist; unlike most other online radio services, you'll be able to see the queue and move to any song in it. If you crave more variety, you can have the service add related artists to the mix in a fashion similar to Pandora or Zune Smart DJ.
All this sounds like a valiant effort to move the subscription market forward, but lack of a portable story is a big drawback. Rhapsody To Go is available on the iPod; Microsoft gives you its own alternative for the Zune. Still, I've signed up for the beta and will be testing it out as soon as I can.
For the last year or so, it's become clear that the economics of ad-supported streaming music services are not good for their creators or investors. As CNET's Greg Sandoval reported last week, the acquisition of streaming service Imeem by MySpace Music for pennies on the dollar is the latest bad news for the sector, following the bankruptcies of SpiralFrog and Ruckus and the similar fire sale of iLike to MySpace.
Who's left? In the U.S., we've still got LaLa, which has the blessing of the major labels and seems to be enjoying dramatically increased traffic (as measured by Alexa) thanks to its recent deal with Google, and Grooveshark, which has kept a low profile. Neither of these services is purely ad-supported--particularly LaLa, which hopes to charge customers for downloads and "permanent" streams once they surpass a quota of 50 free streams a month.
But the service most often cited as the future of online music is Spotify. It's only available in Europe right now, but it seems like everybody who tries it loves it, myself included. Spotify offers a premium service as well, which offers portability and higher-quality streams, but the free service offers unlimited ad-supported streams, and that's the service that has everybody so excited.
But there's one small problem with the Spotify-as-savior story: it doesn't pay artists very well. According to this story in a Swedish publication, as translated and explained by the TorrentFreak blog, Spotify delivered more than one million streams of Lady Gaga's hit single "Poker Face" over five months. From these streams, she reportedly earned about 1,150 Swedish kronor--about $167--from the Swedish agency responsible for paying royalties. That's not even enough to cover the cost of four tickets to her upcoming concert in San Francisco.
If this story's true, why would any artist agree to make songs available on Spotify? With these kinds of payouts, it looks like music business expert Donald Passman is right--advertising is never going to support an online music service.
If you work in the music business, you probably already know the name Donald Passman. For the uninitiated, his book "All You Need to Know About the Music Business," which was first released in 1991 and comes out in a seventh edition today, is the book on how the music industry works. If you ever wanted to know how major and indie label deals are structured, the different types of royalties that musicians can earn and how they're calculated, what a personal manager does for a band, how much money artists make on tour, where your ticket fees go, or any of countless other nitty-gritty details, this is the book. Music industry people sometimes call it the bible, and they're not joking.
The seventh edition contains numerous updates since the last release in 2006, including the final resolution of the battle over Internet radio royalties, details of how royalties are calculated for iTunes and YouTube, and the latest developments in label deals. I had a chance to talk to Passman on the phone on Tuesday morning about the changes he sees in the music industry and where he thinks it's going.
Q: Since the last edition of the book was published in 2006, what's the biggest change to the industry?
Donald Passman: 360 deals [in which record labels get a cut of the artist's revenue from touring, merchandise, and other sources apart from record sales] are a tectonic shift in the way record deals get done. There was a smattering of them three years ago, but now it's become the norm. Early deals with Madonna and other established artists were really banking deals, where everybody knew the artist's track record and they were making a bet on what the future would be. Deals with new artists are quite different. The labels are saying that they're the only ones really willing to spend money on a new artist's career, and they can no longer make money just in the record business, so they need a cut of this other income.
We're also starting to see some industry patterns in how royalties and payments are calculated for digital music. So far, none of the business models have made a lot of money. Even iTunes doesn't make a huge profit. But part of the problem three years ago was that if you started a streaming music service, you had no idea what you were paying. Now we're starting to see industry patterns.
Do you still think it's worth an artist's time to pay or find funding for a professionally recorded demo in a big studio? Or would you recommend that artists invest that time and money in buying a computer and other home recording gear and learning how to record themselves?
Passman: There's no one-size-fits-all answer. The software that's available now is better than what professional studios used to be like 10 years ago. You can create an extraordinarily good demo in your house. The key is to create a demo that sounds like a hit so they don't have to use their imagination to hear it. People will tell you they can hear a diamond in the rough; they can't.
Do you think the rise of do-it-yourself online services like CDBaby, Tunecore, and Sonicbids will lead to a new thriving "middle class" of musicians--folks that aren't signed to a label, but spend most of their time recording and touring and make a decent living doing it?
Passman: It's a reality today. If you're a niche-type artist and you don't mind staying in your niche, you can make a perfectly good middle-class living that way. If you're more mainstream, you can use those techniques to build buzz and attract a label. Nobody's yet had a major career without a label behind them. I'm certain that's going to change, but for bands that want to be truly international and mainstream, they still need a label.
In your book, you mention that you favor unlimited music-streaming--the "celestial jukebox"--as the most likely future business model to succeed. Do you think ad-supported free services (like Imeem or Grooveshark) will ever be viable?
Passman: I'm skeptical that ad-supported music services will work in a major way. People have had a hard time monetizing music to advertisers because the music is so diverse. Advertisers don't know what type of music they're going to be associated with, so it's hard for these services to get high enough CPMs [impression-based advertising rates]. YouTube's had the same problem: you don't know what kind of video's going to pop up next to your advertisement. Free services will probably be a model, but I don't think they'll be the model.
Why do you think subscription-based services (such as Rhapsody) haven't really taken off?
Passman: They're not convenient enough, they're not truly cross-platform. For me, the ultimate would be anytime-anywhere access to any music for one subscription. On my computer, in my car, on a connected device, whether it's an iPod or something else, on an airplane when I don't have an Internet connection. Not just tied to one or two devices. I'm personally a believer in subscription services. People don't think twice about paying for cable, and when you stop paying it goes away. But with music, there's a kneejerk reaction because we're used to owning it.
We hear a lot of doom and gloom about the death of the music industry. Are you still optimistic?
Passman: I'm optimistic in the longer term. Not for the next few years. I think it'll probably get a little worse, and then we'll bump along the bottom for a while. I don't think we've hit bottom, and that's because I see the trends that are happening now. CD sales are declining and will eventually disappear, and retailers are making it happen. They're cutting back the floor space they devote to CDs, which means less CD sales, which makes them cut back more.
But the digital opportunity is huge. We can sell music to people who've never gone into a record store, people who never listen to music because they stopped listening to the radio at a certain age will now have access. Unfortunately, we're not there, technically or legally. The more pain the industry feels, the easier the legal side gets. The better the technology gets, the closer we get to delivering an experience people want.
Wolfgang's Vault, which offers high-quality digital recordings of rock concerts, has been trickling out updates since I wrote about its new iPhone app last month. On Tuesday, the site will begin to offer a new optional membership model where $48 a year gets you $50 worth of merchandise, plus discounted downloads and other benefits.
Wolfgang's Vault offers free streams, and downloads that cost up to $12, of professionally recorded concerts, in various formats up to and including lossless FLAC files. The Vault got its start by buying the recorded archives from San Francisco concert promotion company Bill Graham Presents, and added to that with the King Biscuit Flower Hour, a live concert radio show popular in the 1970s and '80s. That means the vault is pretty heavy on music from the classic rock era. However, the same company also owns Daytrotter, which invites touring bands into a studio in Illinois to record a session, which adds nearly 800 sessions from modern, mostly independent acts to the archive.
Starting last week, the company began releasing hundreds of new recordings under a promotion called Cracking the Vault. It expects to add more than 1,000 new concerts over the next three months, including 150 shows by the Grateful Dead that have never been officially released. (Although, knowing the Dead, bootlegs probably exist.)
The new membership model allows true fans of the site to show their colors and become WVIPs. It's strictly optional--this isn't a new subscription service, but more of a fan club. An annual fee of $48 nets you $50 in merchandise (including posters, T-shirts, and other memorabilia) from the Vault Store, plus 10 percent off on all merchandise (you can take the 10 percent before you reach $50), 30 percent off on all downloads, unlimited streaming access from the iPhone app (non-members are limited to 10 hours a month), special offers, and exclusive download packages. Perhaps most interesting: if you're ever in San Francisco, you can arrange a tour of Wolfgang's Vault headquarters, which the company claims contains the world's largest collection of concert memorabilia.
Whenever the band Phish plays on Halloween, they pretend to be another famous rock band and do an entire album by that band. This year, they did one of my all-time favorite records, "Exile on Main Street" by the Rolling Stones. It's a double album, 18 songs worth of blues boogie, and I was very curious to hear whether they pulled it off.
Friday morning, a relative who knows of my fixation with that record sent me a link to the show, but the link--as is so often the case--wasn't working. Of course I could have purchased the entire set for 99 cents a song from the LivePhish.com site, but the samples on that site are only 30 seconds long, and I wanted to try it out before committing with a credit card. So I did a little hunting on my own. Lala didn't have it. Imeem didn't have it. I couldn't find it on a Google search.
I used Grooveshark's playlist feature to arrange the songs from Phish's cover of "Exile" in order.
So I turned to old reliable Grooveshark. Sure enough, a search on "Phish Ventilator Blues" (one of the song names from "Exile") turned up a hit. From that result, I saw that the name in the "Album" column included the date, 2009/10/31. I ran another search, "Phish 2009/10/31" and there it was, the entire show. I took all the songs from "Exile" and arranged them in order on my playlist, and soon I was enjoying the band's faithfulness to the original recording, down to the horn parts and backup gospel singers, mixed with some very extended jam sections. The bit between "Ventilator Blues" and "Just Want to See His Face" is miraculous.
One of my complaints about Phish is that they often sound too perfect and clean, especially the singing. But in this particular case, it was great because Phish obviously studied the lyrics very carefully, and I could finally understand whole lyrical sections ("there's fever in the forecast now") that I've never been able to figure out despite hundreds of listens. (Mick mumbles, and he's buried pretty deeply in the mix on the original.)
I have no idea whether the recording was posted with the permission of the band. Probably not. But the beauty of Grooveshark is that users post the content themselves, in a similar fashion to YouTube, so you're not reliant on content owners.
Correction 2:22 p.m. PDT, Nov. 13: This post mischaracterized how Grooveshark gets content. All content on Grooveshark is uploaded by users. Grooveshark says it complies with the Digital Millennium Copyright Act, and pays appropriate royalties for live and other types of recordings.
Tuesday's post on using Craigslist to buy secondhand concert tickets drew a response from a company called FanSnap, which uses live feeds to aggregate ticket listings from online marketplaces and broker sites (such as StubHub and TicketNetwork) and eBay auctions.
FanSnap would argue Craigslist is fine for price-sensitive fans who don't need to go to a particular show and who are willing to meet and negotiate with other individuals, pay cash where necessary, and run the risk of buying a fake ticket. (Although the only time I've ever seen a fake concert ticket was in 1989 on the streets of Manhattan, when I bought a very realistic counterfeit to a Jane's Addiction show at the Ritz.)
Fans who want a slightly more convenient buying experience might go with eBay, where they can use PayPal and rely on seller ratings, while fans who absolutely need a guaranteed ticket can go with a marketplace like StubHub, which offers a toll-free customer service line, money-back guarantee, and other benefits. FanSnap operates on an affiliate-oriented revenue model, so it gets a commission from sites on which sales are made.
FanSnap shows you where tickets are located in a seating chart of the venue.
I ran a search on FanSnap for Pixies tickets, and it found more than 70 listings for the sold-out show this Friday, compared with about 30 listings on Craigslist. (The Craigslist screenshot in Tuesday's post showed only listings that had been added on that day.) Prices were similar to Craigslist--lower in a few cases--and the site has some great design touches, like a seating chart of the venue that maps tickets to particular locations. Craigslist, of course, is purposely and resolutely lo-fi. I still think there's something refreshing about dealing with a real fan, face to face, but I can see reasons why others wouldn't want to.
Correction at 8:00 a.m. PDT, Nov. 12: This post mischaracterized how FanSnap aggregates ticket listings. The site uses live feeds from its sources, which allows ticket listings to be updated immediately as prices change.
Here's what I suggested for the word "volcano."
Internet memes travel in waves. A fun site can lie dormant for years before suddenly being rediscovered.
The latest example I've found is Let Them Sing It For You, which has been around for years, but has been drawing new attention on blogs in the last couple of weeks. On Tuesday, I received my first personalized message through the service.
Created in 2003 by Eric Bunger, Let Them Sing It For You is a simple but fun Web application that lets you enter a text message, then translates the words into audio. The catch: it uses popular song snippets for each word.
So, for example, if your message contains the word "creep," it gathers that song from the Radiohead tune of the same name. "Fire" gets you Jim Morrison yelling the last line of "Light My Fire," and "love" has Robert Plant's holler from the swirly psychedelic middle of "Whole Lotta Love." If the app doesn't know a word, it tries to stitch together a phonetic approximation from multiple songs, and also asks you to suggest a source for later use. Once you're done, you can e-mail the finished message to your friends. Try it out here.





