Digital Noise: Music and Tech

Now here's a recipe for success: Take a brand that your parent company's been on the verge of abandoning for the last four years. Slap it on a new music download store for mobile phones. Encrust all the tracks with DRM, even though the rest of the music download industry is finally moving away from DRM. Make sure that the downloads are tethered to the user's handset, so they can't keep them when they upgrade phones in a year or two. Charge more than the competition. Then, when questioned what the heck you could possibly have been thinking, blame a business partner who's actually running the store for you!

On the same day Microsoft announces its first-ever major layoff, the company relaunches an MSN-branded download site for mobile phones in the United Kingdom. Huh?

That's what Microsoft has done with Thursday's launch of MSN Mobile Music, a new part of the U.K. version of its MSN Mobile portal. The MSN brand is old news--most of Microsoft's popular consumer online services (e-mail, instant messaging) got the Windows Live brand four years ago, and Microsoft abandoned its MSN Music download service in the United States when the Zune launched.

We know that the Zune team is working on some sort of strategy for mobile phones. Digital rights management? Nobody's using it anymore, except for subscription-based services. And we know how DRM worked out for the original MSN Music--Microsoft said it was turning off the DRM servers, rendering songs nontransferable to new computers, then it reneged under public pressure.

But the kicker has to be the price: 1.5 pounds (a little more than two bucks), while Apple's iTunes, Amazon.com, and most other music stores start at .79 of a pound. Did anyone happen to notice that we are in a recession?

Most of the time, poking fun at a poorly thought-out Microsoft initiative is good-natured ribbing. But this comes at a time when the company has just announced its worst earnings miss ever and is looking to cut 5,000 jobs over the next 18 months. That makes this kind of incompetence sad, not funny.

Covering Microsoft for the last eight years, I've seen this pattern time and time again. Internet trend comes along. Microsoft watches. Trend picks up steam. Microsoft watches. Some other company--usually a start-up--creates a site that perfectly crystallizes the trend and achieves a surprising spike in traffic. Microsoft creates a product team somewhere in the bowels of its online organization to come up with an answer. Six to eighteen months later, the imitation launches to general yawns in the press and perhaps some temporary spikes in traffic thanks to Microsoft's massive online reach. (400 million-plus registered users--that's the number of Windows Live IDs out there, and it's sure to get you some cross-traffic.) Endgame: obscurity. Think of MSN Soapbox versus YouTube. Or Windows Live Expo versus Craigslist. Or MSN Music.

Give that boy a recording contract!

(Credit: MSN Unsigned)

This takes the cake for me, though. This week, MSN U.K. launched a new site, MSN Unsigned, that proposes to give unsigned musicians a new chance to reach a bigger audience. Sort of like OurStage has been doing since 2007, and MySpace has been doing since 2004, and Sonicbids since 2000, and CDBaby since 1997, and IUMA way back in 1993. Except that MSN Unsigned doesn't let you upload audio clips, create a home page, find gigs, or communicate with your fans. Instead, it's simply a vehicle for bands who own the rights to their music (look ma, no copyright infringement lawsuits) to upload videos via Soapbox, after which MSN will review them and promote a few on the front. Never mind that most unsigned bands don't have the budget to film a video, but every garage band worth its salt has a folder on their computer filled with music clips. Oh, there's also going to be articles and advice, like this priceless set of tips for aspiring guitarists. (Someone tell Keith Richards--watch the sauce!)

In all seriousness, if you're going to do something halfway, why bother doing it at all? It just makes you look silly.

Earlier this year, I gave Microsoft some flak for its decision to stop issuing DRM licenses for MSN Music downloads in Aug. 31 2008. That would have meant that consumers who'd purchased downloads from MSN Music before it became defunct--Microsoft is putting its focus on Zune--would no longer be able to transfer their songs to new computers after that date.

Now the company has reconsidered, and will extend the deadline until at least the end of 2011, according to this IDG story. I still think DRM is a poor way to address the very real problem of music piracy and intellectual property rights, but Microsoft should be given credit for doing right by its customers in this case.

If you're one of the few who downloaded music from MSN Music, which Microsoft shuttered shortly after launching its Zune initiative, then you have until Aug. 31 to get that music onto the five devices you're allowed to put it on. After that date, Microsoft is shuttering the DRM servers used with the service, and any further transfers will render the songs unplayable.

Know your rights. They are your rights.

This is the inevitable last step in a transition that began when Microsoft killed its old PlaysForSure initiative. Why keep paying to maintain a service that's no longer offered, and runs counter to the current strategy? And I believe MSN manager Rob Bennett when he says that Microsoft was compelled to add DRM to songs on MSN Music--that's what labels demanded from legal download services at that time.

At the same time, Microsoft isn't totally innocent here. DRM was a big part of Microsoft's pitch for the Windows Media platform, and the company had a whole product team devoted to researching, developing, and updating DRM. Microsoft tried to sell content owners on the idea that Windows Media DRM was much more flexible than its competitors, allowing business scenarios like subscription-based content being transferred to devices (stop paying, the songs stop working on all your devices) and various rental models (like content expiring after a certain time period or number of plays). The laughable part: Microsoft tried to portray these scenarios as offering more consumer choice.

No. DRM is and always has been about about restricting choice. In fact, the whole notion of having "rights" to music you purchase is completely backwards--digital rights management should have been called digital restriction management. So for all of you buying restricted content from iTunes or the Zune Marketplace or anywhere else, let this serve as a warning: the provider or distributor of that content can unilaterally change your "rights" to it at any time. If you've invested a lot in DRM-protected music, burn it to audio CDs and then re-rip those CDs into MP3 files. Better yet, buy it in a non-protected format--like vinyl, audio CD, or MP3--in the first place.

One of the first things Microsoft did when launching the new Zune was kill the 2-year-old MSN Music download service.

The business reasons were plain: MSN Music was a PlaysForSure service, but the Zune wasn't PlaysForSure-compatible, and it came with its own music download service, integrated into the Zune software.

Sure, there's still something with the brand name MSN Music, but it's basically a shell--a few music videos, some promotional tie-ins with Zune (through a program called Ignition), and a radio station powered by Pandora.

If Microsoft's smart, it'll keep LaunchCast around.

(Credit: Yahoo)

So what might that mean for Yahoo Music, if Microsoft's proposed acquisition of Yahoo clears? Probably not much, at first.

Microsoft's Kevin Johnson, who leads the group responsible for online services and Windows, mentioned in a conference call that the company would get the quickest benefits from combining their advertising platforms, particularly paid search: "scale economics can kick in fairly rapidly when you just look at the simple step of just combining the search-related ad inventory on a single ad platform."

Translation: as soon as the acquisition closes, Yahoo Search would be folded into Microsoft's Live Search, and Panama would be folded into AdCenter.

Eventually, though, Microsoft would go through all the other Yahoo divisions, looking for overlap or strategic misfits. Here's where Yahoo Music could feel the heat. Selling PlaysForSure-protected files does nothing for the Zune, and even if Yahoo goes with DRM-free MP3 files, it would seem to be redundant with the Zune Marketplace.

Now, if Microsoft were smart, it would recognize the popularity of the combined Yahoo Music and LaunchCast (see Aribtron's online-radio ratings). But often, decisions in acquisitions are driven by politics and emotion rather than actual business logic.

Editors' note: Yahoo on Monday announced that it is discontinuing its Yahoo Music Unlimited subscription service, transferring its customers to RealNetworks' Rhapsody service.

Among last week's digital music news was the item that seminal hard rock band AC/DC has taken a tentative step on the information highway (as opposed to that other highway). AC/DC's deal with Verizon was notable because the band chose to bypass industry leader iTunes, and because the band is selling only complete albums (for $12 apiece--higher than the current price of their CDs on Amazon!) rather than individual singles. Another oddity: most of AC/DC's catalog will be not be downloadable over-the-air to Verizon phones; instead, users will have to download the albums to their PC first, then transfer them. (The sole exception is the song "You Shook Me All Night Long," which is probably the one track that most non-AC/DC fans have heard and might be willing to download.)

Something about this story sounded familiar, so I did some digging. Sure enough, AC/DC helped Microsoft launch its MSN Music download service by offering a similar exclusive nearly three years ago. That deal was also for albums only. But the MSN Music download service was a casualty of the company's Zune initiative. Instead of making Zune compatible with the PlaysForSure program, which allowed multiple online stores to work with multiple devices, Microsoft followed Apple's model of tying the Zune to a dedicated store, the Zune Marketplace. Microsoft didn't want the cost and complexity of licensing music for two stores, so MSN Music got the axe. Apparently, the AC/DC exclusive went with it.

More exciting was the still-unconfirmed report that Led Zeppelin will be offering a new greatest hits collection, Mothership via iTunes. The Zep has never approved its music for digital download, although you could always find it via unapproved sites like MP3Sparks (the replacement for AllofMP3.com, which was shut down by the Russian government earlier this year).

Even more interesting, however, was the revelation of a new official band site, LedZeppelin.com. (The old familiar Led-Zeppelin.com is still up.) There's nothing there today except for the four logos from the band's fourth album, the release date of Mothership...and a link to sign up for updates. What sort of updates could they possibly deem important enough to create an e-mail list? Most fans already ahve all their albums or one of their earlier hits collections, and if we (yes, I'm a fan) really want this one, we know when it's coming out. Could the band be planning that long-rumored reunion tour with their original drummer's son? I can just imagine their reaction to the recent Police tour: "Those guys got $225 a ticket?"