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Music Media

Musicnet Fails to Impress Customers 270

Posted by michael from the coulda-told-you-that-last-year dept.
mcwop writes "A Wall Street Journal story carried on MSNBC chronicles MusicNet's failure as a service before it even gets started. The story contains some funny quotes such as: 'The first offering was too clunky and too consumer unfriendly to hold much hope for its success, says Richard Parsons, AOL Time Warner's incoming chief executive. So we are going to go back, and we will come out with a 2.0 product which will be more consumer friendly, easy to use. ... This is a business of trial and error.' Any consumer could have informed the music titans that their business plan was flawed. Unfortunately, version 2.0 won't be any better unless the music industry is willing to take some risks. One of the more interesting aspects to the story is how the major music companies could hardly be present in the same room for fear that antitrust laws may be broken." A good business-oriented review of Musicnet's operations. With the artists making a quarter-cent per downloaded song, they're probably just as happy to see it fail.
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Musicnet Fails to Impress Customers More

Musicnet Fails to Impress Customers

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  • With the artists making a quarter-cent per downloaded song, they're probably just as happy to see it fail.

    more than they got from napster or any of the current junk out there!

    long live furthur net!! real live good music!
    www.furthurnet.com

    • Re:more than.... (Score:3, Interesting)

      by Danse ( 1026 )

      Prove it. Most people I know actually buy the cds from the artists that they discover on P2P services. They just aren't buying the cds that the record industry is hyping the most. Maybe that's why they have their panties in a wad.

    • Re:more than.... (Score:4, Insightful)

      by TheViffer ( 128272 ) on Tuesday May 07, 2002 @12:06PM (#3477673)
      more than they got from napster or any of the current junk out there!

      Bull *blank*

      When napster was in full swing, Many people used it as a music trial service, kind of like our own personal listening booth. Try and buy.

      Let us not forget that music sales dropped 9% after Napster took a dirt nap. Many people blame it on economics. I blame it on the fact that exposure was removed from the mainstream.

      A quarter of a cent or 9% increase in overall sales. You decide.

      And do the math. 1 million sales is a MASSIVE $2500 for the artists. I make more then that in two weeks.

    • Re:more than.... (Score:2, Insightful)

      by Soulfader ( 527299 )
      more than they got from napster or any of the current junk out there!

      Were I a recording artist, I would rather see these services fail. Every inadequate business model--and 1/4 cent per song is decidedly inadequate--should fail.

      I would rather see a dozen of these fail--to be replaced by one that works, balancing the needs of the consumers and the recording artists. [I can't honestly claim to care much about the needs of the RIAA.]

      If this is successful, it will only lend legitimacy to a model which screws the consumers and the artists to support the old-style distribution interests. Such interests should adapt or die.

  • "Quarter cent per song" (Score:5, Interesting)

    by delta407 ( 518868 ) <slashdot@nosPAm.lerfjhax.com> on Tuesday May 07, 2002 @12:00PM (#3477626) Homepage

    There's an article entitled "Courtney Love does the math [salon.com]" that talks about why Napster isn't the problem; rather, the record companies are screwing the artists. (Worth a read.)

    This applies to the above "quarter cent per song" -- which may actually be more than what they get making CDs.

    • sites like mp3.com are better for the musician. Fans can hand pick the music they like, musicians get paid, everyone is happy.....Except the record executives who have been shoving pre-canned bands down our throats for 40+ years.

      • Well, seeing as how mp3.com is a wholly owned subsidiary of Vivendi Universal [mp3.com], I'm sure the record execs are probably smiling, too.
        • I don't see this as a problem. Isn't it one of the arguements around here that the labels should reevalutate and update their business models. If a label run mp3.com because they want to hedge their bets against the future, then more power to them. I hope they are the last one standing.
          • I see it as a problem, because Vivendi, along with Universal, Sony, BMG, and a bunch of other big labels, essentially sued mp3.com out of existence [usatoday.com]. Mp3.com owed hundreds of millions of dollars to the big labels after a judge ruled that they were in copyright violation. Their choice was either to be bought up, or cease to exist.

            So Universal gobbled up mp3.com, cut payment to the artists, and turned it into a house organ for Universal's signed artists. Hardly a victory for the little guy.

    • Courtney's Math (Score:2, Insightful)

      by PunchMonkey ( 261983 )
      So here's a company who invests a million dollars into a group of four guys who have talent.... and no other financial backing (I assume). Then another million dollars is invested into making some music videos for the band. They also invest a lot of money (4.4 million according to courtney) in marketing, publishing, manufacturing etc. She doesn't even mention things like cost of doing business, etc. (Record labels have employees).

      So.... the record label has invested 6.4 million dollars into an artist....and they end up profiting 6.6 million.

      If you ask me that sounds like the artists are getting a pretty good deal. Where else are they going to get 6.4 million dollars from without any finances of their own? And what happens if they fail? What about contacts, etc.

      Not to mention what if that band fails and the record label comes out in the red...it's pretty easy to imagine losing a couple million dollars on an artist.

      After putting it into perspective I really don't see what there is to get upset about.... If an artist wants to try it on his own, go for it. But if he wants to make it national, he's going to need lots of money and help.
      • but then, if the artist is succesfull, the artist pays back all of the money with their share of the profits. Not to mention that their share of the profits is very small, since the record company takes most of it.

        Who's getting screwed? Poor record companies.
      • I think her point is that all the money it takes to go national is needed because of the jacked up system in place.

        Isn't it supposed to be illegal to pay radio stations to play your music? Apparently everyone knows it still goes on.

        As she says - the internet and technology are going to change a lot of this for the better and artists will be able to do it on their own w/out 6 million dollars and taking home more of the profit.

        A friend of mine is in a band and they just came real close to signing. But the guy trying to work them into the deal blew it. He showed his hand too soon, trying to get them to change all kinds of things about their music to fit what he thought was more marketable.

        They are going to go it on their own now. Produce their own CDs and use the web.

        I think we will see more and more of this be successful and I'm glad.

        .
      • So assuming that the artists get all $400,000 dollars that are left - thats $100,000 dollars a guy for what amounts to more than a year of recording and filming (and that doesn't even count touring). These seem to be very tedious and boring things to do. Heck, I get close to $100,000 and I work a 8-5 job. Doesn't seem like a whole lot of money for a gold or platinum artist, does it? And it certainly doesn't seem to justify a $30 price for a CD. Maybe all the groupies make up for it.

        I recognize that most artists get money up front, and that most of their living expenses are covered (homes, cars, etc...), but it still appears like there are millions and millions of dollars disappearing into black holes somewhere.

        If I was Courtney Love, I *would* be upset (mostly because I was Courtney Love, but aside from the self angst, I would be upset that I gained so little from my talent).

        • Re:Courtney's Math (Score:4, Interesting)

          by arkanes ( 521690 ) <arkanes@NoSPam.gmail.com> on Tuesday May 07, 2002 @01:23PM (#3478211) Homepage
          Important: They don't actually get money up front, and living expenses aren't covered - it's all a loan, and it's all taken out of their (small)share of the profits. Basically, unless you manage to impress someone at the record companies enough that they will actively promote you (and not just half-assed promote you), you WILL NOT make money by signing with a label. Period. If you DO get heavy promotion, you still have only even odds, because you end up paying for all this promotion. If it weren't for that fact that all the promotion paths are covered by the industry, artists could (theoretically) get bank loans or whatever, on much better terms, and do everything themselves, or with independent managment, but because theres such a tightly held, vertically integrated cartel, there's little or no chance for anyone.
          • Important: They don't actually get money up front, and living expenses aren't covered - it's all a loan, and it's all taken out of their (small)share of the profits.

            That is important - and thank you for setting me straight. I assumed that it was somewhat like the movie business where the superstars get the money in advance (ie, Arnold gets $5 million for his next movie) and thus I figured that a big draw like Aerosmith would get millions for their next record (just to use an example).

            But for being such a terrible business to be in, there sure are alot of people who want to do it. Maybe it *is* the groupies that is getting them all excited... :)

            • It's because up until recently, nobody KNEW... (Score:4, Insightful)

              by Svartalf ( 2997 ) on Tuesday May 07, 2002 @01:52PM (#3478409) Homepage
              That's right. Until recently, nobody except the people being screwed knew anything about it. And most of the people being reamed didn't think that it could be any other way so they kept quiet about it.

              Nowadays, technology has come to the point that the producers of art (for music and literature, at least for now) don't need these parasites to get their stuff out to their customers. They might need someone to play filter/promoter, but they don't need the labels as they currently are to do that- anyone can play that role, incl. independant labels, etc.
              • Until recently, nobody except the people being screwed knew anything about it.

                Sorry, but that's just not true. As far back as 1991 (over a decade ago!) it was being widely reported -- just witness Dannen's excellent book Hit Men [barnesandnoble.com], which came out 7/91. Or the anti-signing screed "Some of Your Friends Are Already This Fucked" [arancidamoeba.com], which I don't have a date on -- but I know I read months or years before Love's speech.

                The problem's been around, it's been out in the open, but it's just now getting the attention it deserves because it's a convenient excuse for people who want to justify using P2P music networks.

                Don't get me wrong -- I'm not condemning people for sharing music via P2P, but if all these people are "sharing the tunes for the benefit of the artist", they should also be feeding the artists -- going to concerts and buying two CDs, three t-shirts, and six beers (how do you think bands get re-booked? Tip your damn wait staff!) Some people do. I applaud them. Most people, being lazy, don't.

                • When I say "nobody" I mean the general populace. 1991 would be when many started twigging onto the reality of things. I suspected, but didn't know what is now public knowlege until 1995. Most other people didn't either.

                  In both examples you give, it's from the people getting reamed that are spreading the word. I didn't know about Hit Men, but I did know about Some of Your Friends Are Already This Fucked back 1997 or so when it confirmed what I'd been suspecting since 1995.
                  • Sounds like we've got a different definition of "recent". '91 was high school for me; the Albini article was late-college. IMO, the Napster explosion is at the far edge of what I'd call "recent".

                    In the 1995 Grammies...

                    • Jagged Little Pill won Record of the Year
                    • Hootie won Best New Artist
                    • Kiss From A Rose won Song of the Year
                    I guess I just wouldn't consider '95 "recent", and the fact that I read Hit Men (as did most people I knew at the time) in '92 or '93 -- the facts of the Music Biz have been "public knowledge" as far as I could see for a decade or so.
            • I figured that a big draw like Aerosmith would get millions for their next record

              Many big, established artists do. Once they negotiate their second contract, they set the terms (if they sold well under the first contract). Often the terms include purchasing the copyright to their older material back from the label and ownership of all music to come out in the future. The only conditions become "we agree to put out n albums exclusively through you".

              The ownership of the back catalog is the big thing. Generally, under the terms of the deal, they grant the label distribution rights. They end up paying the label a set fee per CD and taking the rest for themselves (effectively reversing the equation.

              For instance, in the early 90's, Metallica did this with Elektra. The back catalog was transferred to a company, E/M Ventures (stands for, obviously, Elektra/Metallica Ventures), which was owned by Elektra and the band. This gave Elektra a share of the concert and merchandising revenues (which have tended to be huge), but in return, they gave the band (by some reports) upwards of $3/album in royalties (which is huge).

    • Exactly. I came here to post something similar, guess you beat me to it :P

      I found this post [google.com] on Google Groups. And it goes on saying that your base royality for a CD is 12%. So, for a $16.98 CD (sold in US), they get $2.04. However, after reductions such as "container,"
      "free goods," and a "CD adjustment," you'll be left with a mere 97 per CD.

      Unless artists start they're own label, they lose. There was something like this on Dateline (NBC) once - I think it analyzed the Dixie Chicks. They said that they earn pennies from CD's, but what they earn money from is Concerts.

      So if you want to support your favorite artist, go to a Concert. I really believe that most artists don't mind their fans downloading their songs off the Internet. I think most of them want their music to be heard and remembered more than earning billions off of it. (well, not all :P)

      Go ahead and use MusicNet or just download off Gnutella. Maybe after they start paying the artists more, or lower the prices for the consumer... they'll learn. There is a huge flaw in the music market. (It would be nice to download a single song, instead of an entire album for it - or maybe adding something special for online purchases? Like the ability to keep all your songs you bought to be able to download from an online site - so you can load them in your iPod wherever you are just from going to the site? Searching, Buying, and Downloading off your MP3 player? I'd pay for that!) It's not our job to figure out a way how to repair it. Keep hitting the music companies by downloading off Gnutella, maybe they'll find a solution faster.

    • the record companies are screwing the artists

      So why don't the artists just start their own record companies then?

      • So why don't the artists just start their own record companies then?

        They sometimes do when they survive their first contract, or more often their second, since they've gotten enough leverage that they can get the resources to do it. But when they're first getting their foot in the door, they're working for minimum music wage, along with 99% of the signed acts out there.

      • Money, and distribution channels.

        Most companies under the RIAA have established channels to radio, music stores, etc.

        For someone else to break in and convince the already existing channels to take a) the financial risk and b) risking the wrath of the RIAA members (I'm sure RIAA folks would be more than happy to "accidently" delay shipments of the latest Backseat Boys hit CD by a few weeks to stores who don't toe the line).

        The best thing the artists can do it just not play the game. Go to the MP3.com's, or use their own web sites, and encourage their fans to buy from there. Cut out the middle man.

        Eventually, a collection of these can built up enough clout to challenge record companies head on. It's like a union - they'll need to build up members, power, and solidarity. (And then they'll become lazy and corrupt, but that's a different issue.)

    • Re:"Quarter cent per song" (Score:5, Insightful)

      by Rogerborg ( 306625 ) on Tuesday May 07, 2002 @01:17PM (#3478170) Homepage
      • There's an article entitled "Courtney Love does the math" that talks about why Napster isn't the problem

      The big eye opener for me is this line: "It's not piracy when kids swap music over the Internet using Napster or Gnutella or Freenet or iMesh or beaming their CDs into a My.MP3.com or MyPlay.com music locker. It's piracy when those guys that run those companies make side deals with the cartel lawyers and label heads so that they can be "the labels' friend," and not the artists'."

      Napster, uh, yeah, I remember them. The guys who tried to move up to the Big League with the labels, right? Didn't they used to run a P2P service? ;-)

      That's not to say she's completely getting it though. She's a bit confused about the ability of (e.g.) Gnutella to control the content that's being shared; girlie, there's no point exhorting a bunch of P2P developers to work with you. My god, Limewire (the most professional gnutella client development team that I know of) has six code monkeys and a web guy working on it. How can they negotiate deals with tens of thousands of artists? And that's just one solitary client running the gnutella protocol.

      And the horrible thing is, Courtney is still stuck in litigation with Universal. See Hole's web site [holemusic.com] for the latest news. And notice that despite good intentions, Courtney is still not offering us what we want. You can download 60-some 128 bit MP3's right off the site (all live recordings rather than studio recordings, because lest we forget, the studio owns all rights to the music, and Courtney only owns limited rights to her performances of it), and you can click on a link to buy albums from CDNOW or Amazon. But you can't pay money for the MP3's, or pay for better quality ones. It's frustrating when even the champions of the e-distribution campaign don't give us the chance to show how lucrative sales of uncrippled, high quality, correctly labelled, untruncated, non-radio edit mp3's could be - if they were only given a chance.

      • "It's not piracy when kids swap music over the Internet using Napster or Gnutella or Freenet or iMesh or beaming their CDs into a My.MP3.com or MyPlay.com music locker. It's piracy when those guys that run those companies make side deals with the cartel lawyers and label heads so that they can be "the labels' friend," and not the artists'."

        This was exactly Metallica's point, when all you other Slashdotters were bashing Metallica and buying "Fuck Metallica" t-shirts. The point is, that these P2P applications should negotiate *with the artists* not the *labels* to distribute legitimate content. This is NOT to say that the either the artists or the labels will be able to completely control the medium and totally prevent copyright infringement, but where they CAN offer legitimate content, it should be the *artists* which do so, not the labels in some shady deal with the P2P folks to *mutually exploit* the artists. Of course all of you took this as Metallica saying that they didn't want their songs traded, period.
        • Remember this, because it's important. The DMCA introduced a new copyright to the producer of a digital phonogram, one which determines where and when it can be accessed (this appies to digital only, not analog). Thus, even if Napster had wanted to, they couldn't have cut a single binding deal with a major label artist to distribute anything other than live performances or tunes produced after a given band's recording contract had expired. The label's have a lock-down on everything else.

          What I'm banking on to break the impasse is the fact that the bands have to pay back the record companies, and some interprising band is going to claim that that makes them the producer and sue.

          Then the shit hits the fan
        • Why would they negotiate with the artists? The artists have no control over their songs, they're owned lock stock and barrel by the labels.
    • I found this link [arancidamoeba.com] to be far better than Courtney's ramblings. Besides which, I'll take Steve Albini's word over Courtney's any day of the week. Of course, Albini's opinion is pretty set, too, but at least there're more hard figures involved.
    • Hmmm. What's MusicNet cost? 10 dollars a month? That means that if you download, uh, over 40000 songs in a month, you're costing them money. That's only one song a minute all month long! Anyone got a T1, a *large* hard drive, and a grudge?
      • Anyone got a T1, a *large* hard drive, and a grudge?

        If you're just doing it to hurt them, you don't need the large hard drive. Just download and delete.
      • Hmmm. What's MusicNet cost? 10 dollars a month? That means that if you download, uh, over 40000 songs in a month, you're costing them money.

        You're forgetting about the "over-download fee" which will be charged against the artist's $0.0025 if their song gets downloaded too much. In fact, if you download even more, the artists have to start paying the record company.

        OK, so I made this up, but it'd be perfectly in line with the other terms of their contracts.

  • Gimme a break... (Score:5, Insightful)

    by Danse ( 1026 ) on Tuesday May 07, 2002 @12:00PM (#3477631)

    Early last December, three of the world's biggest music companies launched a counterattack against the rampant digital piracy that has gnawed at their sales in recent years.

    I would love to see their evidence for this. I assume it would be the same crap they've been whining about for months, which is that their sales are slightly less record-breaking than they'd hoped. Whooptee... it's a recession. Guess what kind of stuff is the first to get cut from people's budget? Yep, overpriced crappy music.

    • Not then only example of bias (Score:5, Insightful)

      by drew_kime ( 303965 ) on Tuesday May 07, 2002 @01:43PM (#3478331) Journal
      You quoted:

      Early last December, three of the world's biggest music companies launched a counterattack against the rampant digital piracy that has gnawed at their sales in recent years.

      But you missed this one:

      And there are the problematic relationships between the record companies and the rest of the music industry, which make it difficult for MusicNet to offer as much music as the illegal services do.

      And this one:

      The struggle to create a legitimate commercial online music service goes back years, before there even was a Napster.

      And this one:

      Yet the industry still feared that creating a legitimate market for music downloads would cut into sales of compact discs.

      And this one:

      But now, music fans were racing to outlaws such as Napster.

      And many others, but you get the point: Not only are we accepting on faith -- and against reams of evidence to the contrary -- that online trading actually hurts sales; but also that any services that aren't set up by the studios are "illegal services," "outlaws" or, at the least, not "legitimate."

  • what a suprise :). (Score:3, Insightful)

    by Abnormal Coward ( 575651 ) on Tuesday May 07, 2002 @12:04PM (#3477657)
    The qoute from the article: "It didn't allow consumers to keep downloaded songs permanently."
    pretty much sums why its was doomed for failure.

    Lets see.. advantages of buying a CD, I can rip it to mp3/ogg and Ccpy it to my PC for listening to (and upload it to my protable mp3 player). And very importantly, I get to put the CD on my shelf with the rest of my collection.

    Oh but wait that make me a priate so I will go spend my money on music that I don't actually get to own... sounds logical to me :).

    • Not to be a broken record, but check out emusic (Score:4, Informative)

      by wundabread ( 242160 ) on Tuesday May 07, 2002 @12:32PM (#3477863) Homepage
      Then you should check out emusic.com. The trial is free.

      1.)$10/month for a year subscription. $15/month for 3 month subscription.
      2.)All-you-can-download, one click album downloads.
      3.)MP3 format.
      4.)You own it.
      5.)Artists get paid.
      6.)Tons of great bands you have and haven't heard of.

      The only downside is that the bitrate is a bit low (128). But for my $10 I've gotten about 15-20 albums this month. All nicely organized and ID3 tagged, downloaded in one click. They use .rmp song list downloading files and mention linux specifically as being able to use the "one click album downloading" via FreeAmp. I use Tafkar on my Mac.

      I know I've posted about this a lot, but it seems to address many of the issues that slashdotters have with Musicnet and the new Napster.

      This is the best money I've ever spent on music.

      Even though I've never heard of many of the artists, emusic's "Picks" tend to be pretty damn good. And if they aren't I just delete them.

      --wundabread

      P.S. Check out all of Mogwai's stuff, Taking Back Sunday's album "Tell All Your Friends", Firewater's album "Psycoparmacolgy", and Ursula 1000's track "Beat Box Cha-Cha" track.

      None of which I had ever heard, nor likely ever would have heard without my subscription.

      • Agreed, emusic is pretty damn cool and their ties with big labels haven't turned them into crap (yet). I love the electronic music, jazz, and classic and most of the time end up buying the CD anyway (cause of the low bit rate).

        I think a big record company with a working set of testicles should buy both emusic and Napster, rebrand the entire thing "Napster" and charge $x/month, with downloadable MP3s and file sharing capabilities (with some kind of low-price pay-to-share system). Come up with a "new music finder" (i.e., kinda like Amazon's system, customers who downloaded this also listen to that). I bet this will be EXTRA revenue for them, on top of CD sales.

        Napster is a powerful and potent brand. "PressPlay" sounds like some kind of press release service, "MusicNet" sounds like something from an 80's computer movie, and the service will ALWAYS be shitty until it uses regular MP3s that can be copied.

        Anything else will fail. These RIAA labels seem to be complete morons. They remind me of dogs who can see food on the other side of a fence but are too stupid to climb it or go around it and spend the day walking back and forth and/or butting their heads against it.

        If a Capitalist saw 20million people on Napster, they'd think "wow, think of all the money that could be made from those 20million *customers*". Instead the monopolistic morons saw "20 million *thieves*" and didn't even bother trying to think of a way to exploit it.

      • Flightcrank! Everyone must check out Flightcrank! Use the 50 free downloads (used to be 100, guess they're hurting a bit for money) to check out Flightcrank!

      • Uh... No. (Score:2, Informative)

        by Backov ( 138944 )
        Why would anyone pay for 128kbps? You'd be better off going to a used music store and buying cassette tapes.. It'd be cheap, and probably about the same sound quality.

        128kbps. Pfft. I won't even keep FREE 128kbps tracks.

        Cheers,
        Backov

  • Why are we surprised? (Score:1, Interesting)

    by Anonymous Coward
    People are accustomed to free access to music,
    we've been spoiled by Napster and its successors and those of us who don't want to burn our own CDs or download can get free music from the Radio (althought it is somewhat limited in selection).

    The business model used by these guys was wrong and musicnet is part of the establishment that is trying to (i) dictate how we listen to music and (ii) bill us for it. As if they were doing us a favor, yeah right...
  • Of COURSE it was going to fail... they forgot quality tracks from albums like "The Best of Cowboy Neal"!

    But seriously, once the artists start getting the respect that they deserve from the companies, the business model will follow. Just look at the explosion of home-based studios and smaller record labels. We're all tired of the BS and are taking matters into our own hands napster.

    Just my $.0000002

    -Daniel

  • Reading through the MSNBC article, I noticed one thing, references to much fanfare with which these "legal" services were introduced. It all comes down to one aspect. Music industry never intended to make this attempt succeed. They know that they could sell Old CDs at a profit many years from now, and by giving music away at this cost, no one is going to buy these CD's years from now.

    They remind me of a pack of dogs fighting over a piece of meat, while someone else gets the most of it.

    I for one, is reminded of musician Moby who once said that "If I ever hear that someone on the other end of this world downloaded my songs and listens to them on their computer, then I would be content because that makes me proud of what I do as a musician" or something to that effect.
    • "Most people I know who listen to a lot of MP3s will download a lot of different songs. And if they like the song, they'll go out and buy the album. The record company doesn't want me to say this, but out of the millions of MP3 files that are out there, if someone chooses to download one of my songs or an album of mine, I'm very flattered."

      -- Moby, Macaddict.com

  • Does anyone else wonder what would happen if some of the big artists told the record company to go take a flying leap and just distributed their music directly to the fans? I know Steven King tried that once, but just on the honor system (on the internet, HA). But, if they could take credit card payments, paypal (evil), etc., people could download the music and burn a copy of it, or put it on a portable MP3 player, or just play it from the PC.

    After all, of the roughly $18/CD, how much do you think that the artist really sees?

    • Re:Another distribution method (Score:4, Informative)

      by gclef ( 96311 ) on Tuesday May 07, 2002 @12:20PM (#3477776)
      The real problem here is that record companies are more than just distribution chains. They're also advertising agencies. They're good at making folks want to buy the stuff they're selling (and at going the other way: making what they're selling what folks want to buy...cf Nirvana).

      It's the advertising element that makes artists famous. That's also a part of why they sign up. (No fame == no sales. No sales == no money. Plenty of folks are presently distributing music for free online....but you never hear about them since they don't have the advertising budget of the major labels.

      Personally, I'd love to see a label split into two parts: a distribution channel and an advertising agency. But it'll never happen. The distribution chain only works because the advertising makes the demand. If there wasn't the advertising-created demand, the distribution chains would be worthless.
      • 'Fame' as you speak of it is ultimately going to go away, along with the need for insane advertising to pimp crap music. And good riddance to it all.
        • Real artists don't do art for the lust of fame and/or money.


        LEXX
    • *Several* bands, including the Smashing Pumpkins have already done this.

      It would take a whole lot of major headliners to do this all at the same time before it would make a difference. One or two bands here and there doesn't really tell the RIAA anything...they'll just find the next cookie-cutter band to fill their shoes.

  • Viability of Pay-to-Download Schemes... (Score:3, Insightful)

    by Dante_H ( 537218 ) on Tuesday May 07, 2002 @12:14PM (#3477721)
    It'd be interesting to see if something like this can work fully. The problem is, that these schemes don't really seem to offer anything value-added. 1. A lot of the time, downloadable content is in crappy proprietary formats (for copy-protection purposes). Real Audio? I don't even keep free stuff which I've downloaded in Real format, let alone paying for the privilege. If you're going to downloads, then please do decent formats which I can easily convert to other formats (e.g. Mp3, Ogg, etc).

    2. Presentation of paid-for content isn't better than "scene" produced stuff. Slightly off-topic, but look at .NFOs supplied with decently packaged film releases. Contains film information, cast + a handy link to the IMDB, etc. It's pseudo-professional.

    3. Fast downloads. Woo. Anyone who knows what they're doing can easily get decent servers/download speeds. Try again.

    In short, the only way schemes like this will work is when they have very different pricing strategies at the Cable Company.

    Monthly Cable Modem fee (capped at 256kbit/s, max transfer limit of 1GB a month)

    Monthly Content Fee (downstream from specific secured server : 5mbit/s). Specific music videos, audio files, etc offered per month.

    Premium Monthly Content Fee : Same as above, but newer releases, classics, requests, etc.

    Until then, I'll keep filling my HDDs up with the latest MP3s, Divxs, and the like. Not that I actually ever listen/watch any of it. I just know it get's to them.

  • c'mon - the record companies? this is and will always be a trick - all they want to do is suck every last dollar out of your pocket. sometimes they want to rub it in your face sometimes they want to hide it - this is hiding it.

  • Pathetic... (Score:2, Interesting)

    by burnsy ( 563104 )
    These guys have had like 15 years to come up with a way to distribute songs (remember the promised custom CDs where you could select the songs you wanted) but they refused to do it.

    Congress esentially forced them to do MusicNet. Of cousre they are going half ass about it.

    BTW, they sure haven't put much marketing muscle into. Where are the MusiCNet CD's stuck to magazines and advertismentents in Time and commercials on CNN promoting the service? Where is all the AOLTW synergy they talk about?
    • > Where are the MusiCNet CD's stuck to magazines and advertismentents in Time and commercials on CNN

      If they figured out from very early on that it wasn't going to fly, I'd imagine they wouldn't waste their money this time around. Companies dont throw major dollars into marketing unless they have at least mildly compelling evidence that advertising is going to result in a favourable return on investment. The article seems to suggest that the players _knew_ it was blowing before they ever really got off the ground; aside, you don't wanna dillute the brand by advertising it before the market is ready to accept it or else you have to rebrand it the next time around.

  • Sisyphus vs Don Quixote (Score:3, Interesting)

    by stereoroid ( 234317 ) on Tuesday May 07, 2002 @12:16PM (#3477751) Homepage Journal

    The title refers to two examples of mythic literary charcters, who are forever doomed to hopeless, impossible tasks - like the big media companies. At the risk of restating the obvious: folks, music can never be truly secured from copying - deal with it.

    Even if the worst happens, and Sony etc. take complete control of the whole distribution chain, including your audio player... their secure "content" will still be exposed at the point in which it escapes into the analog world, even if it is at the loudspeaker. With a little care, you can make very acceptable copies in the analog domain, even if the digital side is uncrackable. Current watermarks have been shown to be defeatable, so (as the moment) the recording can be rendered untraceable, even if they encode your credit card number in there.

    How will they get round this? Fancy having a Sony secure digital converter attached to your auditory nerves? It would take a brain surgeon to hack that. Lord, the future ain't what it used to be..!

    • Don Quixote wasn't "Doomed to impossible tasks," he chose to be a "knight" even if he was a bit self-delusional. He was a tragic character, yes, and comical but was more a tool to make social commentary.

      He is NOTHING like the music industry; he devoted his life to trying to be a moral, good person. Don't sully his reputation! ;)

  • Note the BMG Rep. (Score:2, Interesting)

    by robkill ( 259732 )
    Bertelsmann's MusicNet board representative, Joel Klein, says: "Nobody thought you would put out a service MusicNet 1.0 and it would not need to be debugged." I'm sure BMG needed an attorney familiar with antitrust law, but I liked Klein better when he was working for the DOJ, pursuing Microsoft.
  • in Japan CD's cost 40$? I mean seriously the 20$ we pay is bad enough. Oh wait, I REMEMBER! The artists get 20$ per CD!!! Wow, who would have thought that the people who made the music get the money? Unheard of. Of course the people who publish the cd deserve most of the money.

    One of these days I'm going to run into one of those RIAA execs and give him what for. Either that or I'll start my own non-RIAA record label and have real music. Like techno, eurobeat, and all the music that is popular in every country BUT the US.

    • Re:How come? (Score:2, Informative)

      by blackchiney ( 556583 )
      Actually, in Japan nobody actually buys CDs. They are too damn expensive. The big thing over there is MiniDisc (god bless it). Its extremely popular over there for making custom CDs. just go to a kiosk. insert money, insert blank disc, select your favorite japanese pop and wait for the machine to finish writing. The only reason Sony still has a market for its discs is because of this reason. All the local artists prefer releasing singles on minidisc As a side note they also prefer to rent CDs from the music store and burn there favorite songs at home.
    • I went cd shopping the other day, I was looking for the Strokes, and the White Stripes. I listened to both albums from mp3s given to me by my friends. At the store, the White Stripes were $9.99, the Strokes were $18.00. Guess which CD I bought. It really irks me when I look at dvd's, so many older movies are less than $15, and even the brand new ones can be had for less than $20, for a 2 hour movie that most likely cost much more to make than the albums I would regularly buy. (alright, my clerks DVD is probably an exception to that rule) Result? My DVD collection is growing rapidly, while my cd collection slowly dwindles away.

    • in Japan CD's cost 40$?

      Not really. I bought some CDs from Japan and they usually run 2000-3000 yen - $15 - $15 US.

  • Do you ever play a CD... (Score:3, Funny)

    by dpbsmith ( 263124 ) on Tuesday May 07, 2002 @12:22PM (#3477795) Homepage
    ...with more than one person in the room?

    What will happen when the music executives find out about THIS? Oh, those clever, wicked teenagers... they buy ONE copy of a CD, but TWO people get to listen to it!

    If they play it on a boom box on the subway, the number of illegal listeners can climb even higher! It's theft, that's what it is! It's just like shoplifting--no, bank robbery!

    We need a law requiring every CD player to include a little IR scanner that counts the number of people in the room and shuts down if you haven't purchased the right number of licenses (or charges them to your credit card). This is in our own interest as consumers, because if this isn't done, there won't be any profit in music any more and then there won't be any music. Nope, none at all. How would we like THAT?

    (P.S. It's irony, folks)

  • Here's what I want in a music service (Score:5, Interesting)

    by Basilius ( 184226 ) on Tuesday May 07, 2002 @12:29PM (#3477842)
    And, most likely, what I'll never see.

    1. Cheap downloads of decent quality (160 or 192) MP3s. Maybe US$0.25-$0.30/song. Give me a printable receipt. These are true MP3s, no time sensitivity or DRM. If you want to encode the receipt number into the MP3, I think I can deal with that. Just let me copy it onto my laptop, MP3 player, etc. and keep it for perpetuity.

    2. Now, since I've paid less for a lesser quality product, I'd like an upgrade path. Let me use that receipt as a discount coupon on the album I've downloaded. Usable anywhere.

    This way, I can legally sample albums for about a buck. If I like it, I'm not out that dollar, It was just a down payment on the stuff I like.

    3. (Since I'm already shooting for the moon, why not...) Let me order custom-mixed CDs of MP3s I've purchased. With or without the aforementioned discount. That part I don't care about. If there's 10 or 12 songs I like where the rest of the album's trash (i.e. just about everything released these days) then let me just buy those songs.

    4. Access to _every_ label's material, not just two or three.

    5. A shopping cart style interface. Something like Amazon will do nicely.

    I can't imagine I'm the only person out there that thinks something like this would work.

    How the royalties get distributed would naturally need some thinking. It's got to be better then a quarter of a cent per song, though.

    • I can't argue with most of what you say - however, you won't get music from all labels on there, perhaps only the majors. Since the most interesting new music coming out, for me, is not released on major labels, I don't see myself being affected too much by such a setup.

      What I am seeing more of these days is music staying in the hands of the artists, and not being signed away to a label to dispose of as they wish. DGM [discipline...mobile.com] is an example of a "label" who act as distributors, helping to release music by its artists and getting it into the stores, yet ensuring that the rights stay with the artists. (No, they're not taking on new artists at the moment - I checked!)

      That, in my opinion, is the way forward, but it means we're not likely to see a "one-stop shop" for music downloads. I can live with that, in the same way I can live without buying a Dell PC - I like freedom of choice, even if it means I have to do my homework...

    • I would like every song to be avilable for free and easily downloadable within 3 minutes. The only difference is that my expectations are are realistic.

  • Every time this subject is raised, people holler about cutting out the middle man and sending money direct to the artists through FairTunes [fairtunes.com] or whatever.

    Tiny point: most artists signed up to the Big 5 labels have no rights to the music. They either do it as work for hire (in which case they never owned it), or they explicitely agree to sell the rights to a publisher. And that's actual artists, let alone miming meat puppets like Ms Spears who are technically committing breach of copyright if they so much as hum "their" music without prior written consent from their label.

    Now, I'm not saying that's right (it's not), but artists have a choice. They can choose to self publish. And those artists deserve support. But most artists choose to take what looks like the easy, lucrative route, let a publisher take the big risk to pay up front to record and promote their music, in return for a smaller reward. And sure, a lot of them get screwed, but they're (mostly) adults, and nobody's making them sign up with the Big 5. I'm not entirely clear on why we should be rewarding them for that... although I'm quite happy with punishing the Big 5 labels for their cartel abuse of the market.

    • A decent point, but I thought I'd add that there are plenty of musicians who thought they were signing one thing to find themselves in another. Or, the almighty $ blinded their vision temporarily. I understand that a certain amount of "caveat emptor" is required in this world, but that still doesn't mean all labels are innocent upfront businessmen and artists are methodical, thoughful signees with a good business acumen. Even if these artists sign up knowing what they are getting into, I'd say its often out of lack of reasonable alternatives; not everyone has a clue on how to pimp their styles or promote their work.

      That being said, I still think your proposal is the only way to go, because ....

      I'm more intersted in dispelling the myth that 90% of all humans are liars and cheaters when given the chance. This is the profile of the human condition (aka, Napster user) that labels wish us to swallow. Psycology shows us that it is context (your external situation) that plays far more of a role into whether you cheat or steal rather than your base personality. If thats the case, when major greymarkets spring up, we should be asking, 'why do people feel that stealing is the best choice to make, and how can we chance their circumstance', not 'how do we prevent homosapians from exercising their penchant for being liars and cheats.' In that respect, I totally feel that self-publication is the only way to go .. the labels have shown no interest in projecting the current situation back onto the environments they are providing in media and retail, and so the only thing we can do is raise a new breed of industry down there in the trenches that knows people pay good money to support things they love once they know they love it, they feel they played a part in finding that music (one of the big reasons Napster was so popular IMHO), and are contributing to its existance (ie, are not a disposible consumer).
    • Now, I'm not saying that's right (it's not), but artists have a choice. They can choose to self publish.

      Well said. Sometimes people get too carried away with this "the artists are getting screwed" argument and they forget that the people who provide the seed capital need to make a fair return too.

      But to follow this up, if the artists are getting completely screwed by this arrangement, do you have any idea why the cycle continues? If the big labels are making out like bandits then why aren't smaller labels cutting into their market share? I'm a fan of some musicians on smaller labels, and my experience has been that their CDs are, if anything, more expensive than the stuff put out by the big 5 (plus, they are hard to find in here in Canada).

      Also, if the artists know they are getting screwed then why do they sign with the big labels? Surely anyone who aspires to be a pop musician has heard the Courtney Love rant by now... And clearly only struggling new artists are getting shafted by the record companies. I highly doubt that Mariah Carey's $100 million deal was based on the premise that she was going to sell 40 billion songs (i.e. 4 billion CDs).

      Let's say that you record your own CD and try to sell it on the Internet. Clearly, the biggest thing you will be missing is marketing support. We may not want to admit it, but clearly advertising has something to do with our music preference. Unless a large group of people can get together and agree that a band is good, they will never acheive critical mass. Without critical mass, you can't take advantage of economies of scale and you won't be able to sell your CDs at a reasonable price.

      On another note, I believe that artists typically get to retain ownership of the songs but not the recordings of those songs. Prince got into an argument with his record company so he ditched them and re-recorded all his old songs. Moby can say that he doesn't mind if people copy his songs, but that's not his perogative since he doesn't own the recordings. Maybe those people will turn into future Moby fans later and buy his albums, but he might be with a different record label by then.

      -a
    • The songs are generally owned by whoever wrote them - the record label owns the rights in the recording they made and not the song itself.

  • And they say that MusicNet is secure (Score:5, Informative)

    by Anonymous Coward on Tuesday May 07, 2002 @12:50PM (#3478006)
    how NOT true. You can record the music which they offer there WITHOUT even hacking anything in windows..

    Here are few steps which you can do (if you have some linux programming skills, a VMWare [any version] or Win4Lin..)

    Instructions are pretty easy - and I'll put it as generic as possible (who knows who reads this...)

    You start VMWare with windows as a guest (or win4lin with your windows) and install the client and subscribe to musicNet. Now you're installing their client and making sure that everything works, and that you can hear your music well (with VMWare you might need to play a bit with "renice" command)..

    Now - the Linux part. You'll need to write/steal/beg-someone-to write a small wrapper program which simply "records" whats going into /dev/dsp. You can use KDE's aRTs or ESD, and play with it, but remember - both VMWare and win4lin (not sure about win4lin) run as setuid root, which means you'll need to run ESD or aRTs as root...

    Now the fun parts begins - with your new program, start recording whatever comes out of /dev/dsp and press the "play" button on the MusicNet player. When the music ends - stop your /dev/dsp grabber.

    Now you have a big WAV file. You can use a simple editor to cut some empty sound seconds, and viola! you got a WAV file ready to be converted into mp3/ogg/wma/whatever - which you can now trade, put in your player, etc...

    Enjoy..
    • Easier: Get Total Recorder. This installs as a 'virtual sound card.' Point it at a file to record to. Tell your music player to use it, instead of your physical sound card. Hit 'play.' I did this with audible.com stuff, before they built CD burning capability directly into their software.

    • You'll need to write/steal/beg-someone-to write a small wrapper program which simply "records" whats going into /dev/dsp

      I don't know if this would work with Win4Lin or VMWare, but there's a program called vsound [zip.com.au] that does pretty much what you're talking about. It wraps its own sound functions around the program, and records any audio output. It's worked with every program I've tried -- RealPlayer, mikmod, web browsers with plugins, and so forth.

  • Why it failed (Score:2, Insightful)

    by grung0r ( 538079 )
    Musicnet and Press play are failing for one simple reason: the record companys made them to do just that.

    Putting monatary and moral issues aside for a moment, why would anyone in their right mind subscribe to these services? They have shitty music selections and massive restrictions on what you can do with the music you download. Even if someone is willing to pay for a music service, there is no way most people would use these when the free alternitives are so much better.

    I think it was obvioius to anyone who read about these things before they came out that they would fail. It was certeinly obvious to me. It should of been obvious to the record companys as well. why wasn't it? Becuase they where designed to fail. They realised that when these services failed, they would have ammunition to throw into legislaion. They are going to say that it's a faulty buisness model, and that musicnet is proof. Too bad too, as I am sure that a pay service that was not restrictive and was offered for a decent price would be quite sucsessful.

  • With the artists making a quarter-cent per downloaded song, they're probably just as happy to see it fail.

    When asked about why the actual artist got so little, an RIAA representative answered "The value of the is questionable. The way we see it, we provide all the bandwidth, and without our promotions no one would even know about the artist. We have a lot of costs, so we should get a lot of money."

    An RIAA representative was quoted [slashnet.org] as saying "People need ot [sic] understand that this system is much more akin to a tip jar then a true subscription."

  • msnbc starts off with a quote claiming that free download services have been cutting into music sales for years. I just don't buy that. Consider:

    Music download services have only been around for (at most) a few years (that I am aware of). Long before the introduction of the mp3, people used this funky gadget called an audio tape to exchange music. I don't recall hearing them yell that tapes were going to bankrupt them (although it's possible I was too young to remember such a time).

    And yesterday, AP (that's the Assosciated Press) sent a story across the wires saying that Jupiter Media Metrix had hard data that music services actually boosted music sales. I don't have the numbers or a link handy, but they indicated that people with a CD writer who downloaded music were more likely to buy than people without one (among other stats). The other thing the article mentioned is that Napster has become the industry's straw man.

    It's no shock to me that customers prefer to download, evaluate, and buy rather than subscribe and rent. I just wish that the music industry megacorporations would drop the FUD and do something productive.

    Then again....anyone notice that earthlink started running commercials about how you could download and share music faster on their broadband service and now AOL is making a similar claim about its broadband service? Hmmmmm....

  • A Few Comments (Score:3, Insightful)

    by Sir Elton John ( 577301 ) <e_john@musician.org> on Tuesday May 07, 2002 @01:03PM (#3478090) Homepage
    As a professional in the popular music industry, I thought I might offer my impressions.

    Once upon a time, it seems that the phonograph must have threatened the music industry. After all, performers of the time would have made their living from live performances, so the concept of people being able to hear the music without attending a physical performance must have been very scary indeed. But of course, the availability of records just made music more popular and more in the mainstream.

    Then when music radio came along, it must have shaken up the music industry of that time. All of a sudden, people didn't even need to buy records to hear the music: they could hear it for free on the radio! But, once again, this just increased the public's love for music.

    And here we are again, playing out the same farce. Don't believe it, Internet friends: pop music is in no danger. The artists are as excited about the new frontier of music as the fans are. Let's just try to get through the painful transition period in one piece.

  • Better example: emusic! (Score:4, Interesting)

    by startled ( 144833 ) on Tuesday May 07, 2002 @01:24PM (#3478214)
    emusic.com has stayed out of the spotlight this whole time. This may be intentional-- if they actually got popular, their business wouldn't make any sense compared to other offerings out there (not sure how it does now).

    They charge 10 bucks a month. With that, you get unlimited downloads in mp3 format. That's right-- you can download that Haujobb CD 8 times if you want. I downloaded 20 CDs in my first three days.

    How the hell does it work? How do they make any money (after they pay half to the labels)? I have no idea. On the label side, they don't get the big names. Their biggest are people like TMBG, but most bands are significantly smaller. And if you're looking for cool small, unsigned bands, you won't find 'em either. So it's not the only service you'll need. But at 10 bucks a month, it's a hell of a start on your collection. And it makes MusicNet look downright stupid (well, like that was hard).

    P.S. On the antitrust note (how they could hardly be in the same room): well, duh. It's a big fat antitrust violation already, and they're just observing the technicalities to avoid a prosecution. Let's see-- they all collaborate to wipe the other online music services off the face of the planet. Then, they get together and start one of their own. They're a music mafia, but they aren't allowed to get all the families in one room together. No big deal, there are plenty of other ways to communicate.
    • I think that you do them a disservice making it sound like a place to download TMBG crap. emusic has some pretty tasty music.

      Chill stuff like Ursula 1000 and Thievery Corporation.
      Stompin' trance by Juno Reactor, Kox Box, X-Dream and Timo Maas.
      Random stuff by those "no-names" Sasha and Digweed.
      Jam bands like Hot Tuna.
      Rock outfits like Bush, Rancid, Green Day, Violent Femmes, Mogwai.
      Silly shit by Frank Zappa.
      Awful music by Elvis Presley.
      No-name reggae artists like Bob Marley, Eek-A-Mouse and Black Uhuru.
      Classic ragas by Ravi Shankar
      Shitty celtic music by Clannad
      Brit-shit like Belle and Sebastion, and The Gentle Waves
      Old punk favorites like NOFX, Bad Religion and Pennywise.
      Hip-hop turntablists like Invisibl Skratch Piklz, Mixmaster Mike and DJ Assault.
      Classic Jazz by Thelonious Monk, Bill Evans, John Coltrane, Billie Holiday, Miles Davis, Chet Baker, Count Basie and more
      It even has some classical music that's well-performed and recorded.

      emusic is a great service, and i think that if you like any genre of music other than 'top 40', you'll be really happy with it. if you like top 40, do us all a favor, and jump off a tall building, ya lemming!

  • The real reason CD sales are falling (Score:3, Insightful)

    by joshv ( 13017 ) on Tuesday May 07, 2002 @01:33PM (#3478263)
    The real reason is that CDs no longer good value for your entertainment dollar, in a world where a 2 hour DVD can be had for $15-$20 and I can listening to streaming audio (legally) all day long for free.

    Try as they might to change the crumbling economics of their situation, technology has moved on and there are better, cheaper options to the CD. The music industry must get over the fact that the goose that laid the golden egg has been slaughtered, and they are never going to be able to make as much money as they once did.

    -josh
  • Is anyone really surprised?

    If the record industry wants to tell us what we can do with music we pay to download from them, of course we're going to tell them what they can do with their lame-brained, greed-inspired scheme-- mainly, to stick it where only Hilary Rosen's proctologist will be able to find it, assuming there are fresh batteries in his flashlight. :-)

    Of course, like others have said, MusicNet is probably just a designed-to-fail operation, so they can say, "But we tried to change our business model, and failed! Obviously, the public does not want to buy its music in downloadable format, so we'll just keep selling these plastic thingies for $20 each, and buy some laws to make it a crime to do anything we don't approve of with what's on them."

    ~Philly
  • "unless the music industry is willing to take some risks... "

    Now, I work in the music industry, and I can assure you that a viable internet-based distribution model is pretty far off.
    Two short reasons why:

    1) Cost and Exposure. For all the carping that goes on about how labels pocket about $15 of a $17 sticker price on new cd's, it's not true. Once you take out mechanical royalties, publishing fees, licensing fees, distribution fees, songwriter percentages, producer percentages, miscellaneous finders fees, manufacturing costs (which typically run between $1.50 and $3 per unit depending on configuration), there just isn't that much money left over for labels to play with.

    Don't get me wrong, a million-seller still rakes in the cash, but it's not like we're Saudi oil magnates.

    Also, please remember that less than 10% of all releases sell more than 10,000 copies. When it costs tens of thousands of dollars to market an album, get it in stores, get a profile, that is usually a dismal failure. And now my point... labels, generally speaking, profit on one out of ten releases or so. That's a pretty poor margin.

    Rather than drive labels to try to find more efficient ways to get music into people's hands (and money into artists' and our pockets), it makes them more conservative with their money, and ties them to traditional distribution channels.

    2) Most/many labels are still run by boards of directors who don't know ANYTHING about music at all. They are interested in the health of the quarterly balance sheet, and are reluctant for their company to be the first one over the cliff into new, unproven business models. Also, remember, many of the major players in the music business- the rich guys, the guys with the cash to make digital distribution happen-- made their bones in the 1950's and 1960's. Even rich younger guys (...ermm...David Geffen??... Strauss Zelnick?...) learned at the feet of the codgers and adopted their ways.

    Don't forget... if a label head tries some crazy new digital distribution scheme, and it goes horribly wrong, it's his or her butt on the line.
    Dn't look for a really good digital distribution model from within the music industry any time soon.

    And remember... all labels are not evil, and music is everything.

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