Perspective: My music, my way

Wall Street's been manic and office pools are springing up around the country wagering when CNBC pitchman Jim Cramer will suffer an on-air embolism.

But it's hard to get too carried away by the latest ups and downs of the stock market. We've survived worse. For my money, anyway, the more interesting story had absolutely zilch to do with stocks.

On Wednesday, the suits at CBS finally caved to reality and loosened many-- though not all--of the restrictions on its Internet music service, Last.fm.

I'll give them a B for trying, but it's just a half step. The truth is that the news is more significant as a possible harbinger of real change. Less so as an example of bold action on how the music industry will profitably co-exist with the Internet.

In this post, post-Napster age, Internet radio doesn't do it for me anymore--not when I can choose other, more attractive digital music alternatives.

First, the details. Until now, Last.fm offered Internet radio. A lot of people are fine with that sort of uni-directional arrangement. To each his own, but I've always chafed being on the receiving end of someone else's musical picks. In this post, post-Napster age, Internet radio doesn't do it for me anymore--not when I can choose other, more attractive digital music alternatives.

Some bright bulb at CBS convinced management the time was ripe to let listeners select their own tracks to stream. Unfortunately, Last.fm puts limitations on the number of times you can play a particular song: three. Also, you're not able to download the tunes to a portable music player.

That's a disappointment, though I imagine even reaching this stage involved no small amount of arm-twisting. Quincy Smith, who directs the CBS unit in charge of Last.fm, told The New York Times there was a "healthy tension" with the music labels. Translation: the music companies went batshit crazy at the first sign that CBS would open up the vault without strings attached.

So they struck a compromise--one hardly deserving of some of the curious coverage about "free music on-demand." Besides, users can already get digital music without paying from Napster and RealNetworks' Rhapsody, among others. Not to nitpick, but Last.fm sports a terribly clumsy interface. I still can't figure out how to automatically play multiple songs without the system forcing me to manually intervene when the track ends. Even more annoying, I'm required to page back each time I want to find an artist's other songs.

Those are minor details any good Web designer can fix. The bigger problem is a dated assumption about consumer behavior. Subscription services are so, well, 2003. I've heard RealNetworks' CEO Rob Glaser on several occasions plug music subscriptions as the future. It's a valiant try but he's tilting at windmills. The experience of the last several years is beyond contestation: most people either will download songs from Apple's iTunes Music Store--or they'll steal them.

In fits and starts, though, the music world is heading toward advertising-supported models for downloadable music. If Web sites like Imeem, Spiral Frog, and Ruckus Network can prove there's a real business, the studios' icy resistance may begin to thaw.

Biography
Charles Cooper is CNET News.com's executive editor of commentary.

More Perspectives

[dascha1]

Don't Be Lazy

The real music-on-demand tech for your music your way is simply
this-

Learn to play the piano - buy a Steinway and watch your consumer
ROI grow, as well as buying stock in it on NYSE.

In no time at all, you too can play a Bach 3-part Invention to
impress either yourself and/or friends and family.

[oufan299]

Free Is Overrated

Last.fm is much ado about nothing. You still only get 30-second clips of some songs. Search for "Beatles," and you get one Beatles song and then 50 non-Beatles tunes, some of which you may have heard before.

[anthonyv60]

Much more available

There's so much more available than Last....pardon the quip, but they really ARE last.
Try http://www.finetune.com yeah they're still streaming radio, but YOU get to choose what you want to hear. They have tons of artists..jeez, I even got Iron Butterfly and Tim Buckley (for those who know). They Do have some limitations, like only three tunes per artist and no downloads ( but you do get the option to purchase)and edit at any time. You can create any number of playlists with hundreds of tunes per. and the real nice thing is they give you a little AIR app to place on your desktop as well....awesome, in my opinion. Try it, you'll love it.....and no, I don't work for them LOL.

[davidrepas]

iTunes is sooo 2001

If you've every used a subscription-based portable music player, such as the Rhapsody Sansa - it will become very clear, very quickly that the download music model (iTunes) is dated. Subscription and/or the free model is without a doubt the future of music distribution.

[Goodman.seth]

Too early to tell

We'll just have to see won't we :) Both legal and illegal downloading
are both going up, and subscription services have so far stayed at a
simmer. Free / Ad supported is too new to say, but there seem to
be very inherent flaws in allowing advertisers to control content.

[sismoc]

The Songs ARE Advertisements!

Think of the songs as nothing more than advertisements for the recording artist.

Stop thinking of audio recordings as intrinsically valuable. They have almost no actual value. Instead think of them as marketing tools for the recording artists. Most advertising companies would kill to have ads that people actually wanted to listen to!

The old way of thinking about the music industry has got to go. A new age has dawned and those who do not change will be run over.

[Goodman.seth]

okay, but...

I've heard this argument over and over, but how will new
recordings be financed? If no money is to be made, then no
recordings will be made. There is NO merit in the "cheap digital
recording revolution" theory....I'm an audio engineer, I know
this. Aside from the cost of QUALITY recording equipment,
there are fees for well-built studios, producers (who, when
qualified, are worth their weight in gold and are very important
in ensuring the quality of music), engineers (ditto), and
marketing departments who make sure people hear the
recordings. If recorded music has no value, then it ceases to
exist, and there are no tours for artists to go on since they have
no songs to play that any fans know.

The fact is if you want to listen to cheap demos from
inexperienced bands who need the publicity, then the free idea
works. But quality has always had it's price, and will continue
that way for as long as people still listen to music. Remember,
when CD sales were at their peak (early 2000's), the retail price
was always at it's peak! ($18.98)!!! It's not the price, it's the
quality of the music, as it always has been and always will be.

[rschulze]

depends on the "my" in "my way"

Different strokes for different folks. Saying that subscription services are so ... depends on your listening habits. Subscription services are not for people that listen to the same songs over and over again.

Subscription music works for me as I love to explore new (to me) and revisit old music. I rarely listen to a song more than twice in a week. I like to listen to artists "albums" and complete bodies of work. I do purchase "albums" from artists that I discover and would like to support.

[j dunitz]

Subscription music services

Subscription services present the best value and greatest flexibility. The only reason they have not achieved commercial traction is the absence of compatible music players that are attractive to consumers. If the iPod ever becomes compatible or if the consumers ever find favor in a competitive player, the subscription service model will win the race.

[jcahealey]

Studios?

The major record companies aren't Hollywood, so the word "studio's" in the last graf is misleading. Of the big 4, only Sony BMG is even tangentially related to a movie production or distribution company. And CBS, since spinning off from Viacom, isn't really a studio, either.

[shawnu]

No One Right Model

You're suggesting there's some single right model for how everyone wants to listen to and purchase music. I don't agree. And like every other high tech industry, it will take a bunch of small steps from a variety of places to find the 2 or 3 winning combinations. I, for one, find this fits an important hole in my habits. I can use the social aspects of last.fm to find music I may want to hear, then try it out w/o shifting to another service. Then I can buy or stream it as part of my acquisition model. Or forget about it if I don't like it w/o it ending up on some playlist of mine.

[Goodman.seth]

There won't be any ONE way

I agree that there will continue to be a number of ways that
consumers will find out about, aquire, and share music. Since I
work in the music industry, and my paycheck is based on people
purchasing or consuming music, the more important question to
me is how will consumers pay for the music they hear / aquire?
There's no established way for subscription services to pay
labels for streams, there's no standard for the distribution of Ad
revenue, and there's no (direct) profitability from P2P or social
networking. Aside from exposure and "buzz" (which has an
indirect worth), the most important issue is how will artists and
/ or labels get paid?

[dsherr1]

So music demand is inelastic with respect to credit

It must be nice to ignore the general economy. But we always need the music to back set the drama of our lives: up and down. Part of Spirit other than Sex, Sustenance and Sociality. Actually, all of the Four S's are back set by music. Only Death is more necessary.

[azzuro2006]

On-Line Pricing Is All Wrong

The reason why people pirate and the reason why people still buy CDs is simple - you are getting a much better deal if you buy the CD. This is nonsensicle - why should I pay more for a download that has DRM and is of inferior quality to buying the CD? Especially given the whole underlying premise of the internet is to cut out the middle men.

What the media and record companies need to do in order to bolster sales is charge the price at which a CD would cost after eliminating the margins for the retailers, wholesalers and manufacturing of the physical media (i.e they still make the same $ amount per album). This means that if a CD costs say, $10....they should charge less than $5 for an entire album on-line. Once you have purchased the album - you OWN the intellectual property and you can download as many "versions" of it as you like - and that means you can download a lossless version or a ripped MP3 version - and you can copy it as many times as you like - and while you are at it...you should get the video clips for free with lyrics.

That is what needs to happen. Unfortunately it won't for a while because the media companies are scared and defensive, but they are missing out on a huge opportunity to make a lot more money while at the same time pleasing cutomers - a true WIN WIN...the only people that lose are the retailers and wholesalers.

The current pricing strategy is DEFENSIVE rather than OFFENSIVE. They are trying to keep CD sales high....which is just delaying the inevitable...they should try to be offensive and derive legitamite sales from on-line by pricing it at what it needs to be priced at in order for people to buy much more on-line.