Digital Music: Basically, No One Has Any Idea

Mar 2nd, 2009 // 4 Comments

kermit.jpgFor all the excitement surrounding new ideas about digital music, there’s rarely any follow-up on those concepts. Sure, we’ll get some breathless posts about some great new system for sharing songs or listening to streams, but if it fails, or does only OK, that doesn’t get quite the same amount of coverage. (Unless, of course, it gets sued, at which point it’s a cause célèbre.) So it’s nice to see CNet try to give a once-over to some recent new-media music startups and assess their fortunes. Unfortunately, it doesn’t really do much digging. The playlist site Imeem and the ad-supported streaming site SpiralFrog—two companies that have been thought of as not long for this world for a while—get pegged as failures. At the same time, the case for the “success,” the amorphous digital-music site LaLa, isn’t really convincing.

We’re told (after a correction) that “among [LaLa]‘s users who have provided a credit card, on average they buy 180 songs for every 1,000 they listen to.” But how many of the site’s total users provide a credit card? There’s no indication. The only thing that seems to separate LaLa from Imeem is that “no company has impressed more music execs.” Well of course music execs like LaLa—WMG has invested $15 million in them! I like the things that I buy, too.

Maybe the real problem, though, the real reason that no one (including me!) can tell you what’s actually going on with digital music right is that no one, including the people actually running the companies, knows what’s going on. Ars Technica’s report on this year’s Digital Music Forum: East conference depicted rooms full of people unable to really grasp music licensing, the necessary step that has to happen for music to be sold legally. Music execs said they wanted to work with startups, but weren’t really sure how to do so; online companies, meanwhile, have to hedge their bets to infinity:

The clearest sense of how messy things are came from Cecily Mak of RealNetworks, who said her company had negotiated agreements with over 300 different groups. Many of these were simply proactive attempts to make sure the company doesn’t wind up getting sued if the mechanical vs. performance royalties question gets settled in a way that would otherwise leave Real in legal hot water.

This is madness, surely. Why can’t it be fixed? Well, as the “Ticketonomics” article from earlier today pointed out, the elephant in the room is artists. There’s some back-and-forth at the conference about who’s to blame for arena tickets being higher, and, well, some of it has to be laid at the feet of artists demanding bigger guarantees. Similarly, the problem with music licensing is that the artists sometimes have to sign off on any agreement and—trust me on this—getting a musician to respond to mail can take years, even when you’re offering a check. Ironically, if music labels had been more dictatorial in the past and retained controlling interest in all their music (like they used to), then licensing agreements would be a snap today. But no one wants that, of course. What to do? Everyone’s to blame, and no one’s to blame. And that’s the problem.

Labels size up Web 2.0 music services [cnet]
Music industry: licensing is a problem, but how to fix it? [Ars Technica]


  1. KikoJones

    What a mess.

  2. PhishsBrevity

    Lala is pretty great and they’ve almost completely convinced me to stop buying CDs, although, I can’t see how long they can last with what is probably majority of their users just mooching off the free music locker feature.

  3. Anonymous

    This guy actually seems to have come up with a pretty good strategy for the labels to make money from digital distribution: []

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