Wednesday, January 23, 2008

The Last Shall Be First

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You have to hand it to the crew at They did it. And they did it, really, before anyone else. The "it" that I'm referring to is free, ad-supported, on-demand streaming of music content that includes the catalogs of the major labels. iggli should have been there first. But we weren't. Dammit., a UK-based company I began to write off after their purchase for $280 million by CBS, has managed to keep the goal in focus and get it done despite (or perhaps even, in part, because of) an infusion of significant corporate capital. And the folks at most definitely deserve congratulations. [As an aside, that $280 million purchase price is particularly interesting. It's exactly the price I sold one of my previous companies, Service Metrics, for in 1999.]

Not that this means the game is over. On the contrary, it is just beginning.

Meanwhile, not everyone tells this story in the same way. The New York Times was full of praise.

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Techdirt, in contrast, was almost uniformly negative.

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But techdirt's sour grapes are mostly misplaced. Or perhaps Mike Masnick didn't take the time to understand what was "on offer" (as those over the pond might be inclined to put it). This certainly seems to be the case. He says:

It's so tempting to tell that story that everyone seems to be missing a few important details. Detail #1: It's not really free. Detail #2: It's nothing new at all. It doesn't let you download music. It merely lets you stream it. And, even then, you're only limited to 3 streams before you can no longer hear that song again without buying it. That sounds quite similar to the program that RealNetworks launched nearly three years ago allowing you to stream 25 songs per month for free. Or how about Napster's program, launched in 2006, which let you stream songs five times for free before asking you to pay up. If anything, the deal, with only 3 streams, is a lot more limited than these earlier offerings.
Oops. Mike seems to have missed a few salient points. Now it's true, the "free streaming" has its limitations. That doesn't mean it isn't free. It just means that what's offered isn't everything you could ask for. Still, it's a damn sight more than what has been available previously without plunking down your stack of nickels - i.e., 20 nickels per track on average. OK, I think at some point in the future viable ad-supported music solution will eventually provide unlimited access to content. But just because the record labels (and have only come part way down this path doesn't mean they haven't come a worthwhile distance.

As for "merely lets you stream it," um, well. True. And unless you pay Real Networks an additional $5 a month, their Rhapsody music service "merely lets you stream" content. Millions of songs of content. Without the 30 second limitation - on almost every track - that handicaps Apple's iTunes offering. Now suppose were offering millions of tracks of content. And suppose you could play any of those songs - or, rather, stream them via your computer. The catch? You can only stream any particular song three times before you need to pay for it (e.g., via a download from Amazon or Apple's iTunes). Sure unlimited streaming would be absolutely wonderful for the consumer. But the major labels are cautious. They're not going to agree to unlimited streams unless / until they are certain they have developed a viable economic model. (Never mind, for now, whether their caution will prolong their corporate lives or, more likely, hasten their much anticipated demise.)

There's more. One of the really interesting things about has always been its social dimension. Unlike Napster, Rhapsody or even iTunes, the folks at understand the wonderfully twisted byways that lead to a deeper, satisfying awareness and appreciation of music and all of its related elements. That's one of the most interesting things about Personally, I never believed this would survive inside CBS.

I could still be proved right. At the moment, though, I'm celebrating what has gotten right, and hoping they (and others - particularly iggli) will soon demonstrate the ultimate social music network, something that would benefit both consumers and content owners.

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