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Musicnet Fails to Impress Customers
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.
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.
It's not enough to bash in heads, you've got to bash in minds. - Captain Hammer
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.
security through obscurity = modding down anti-linux posts so maybe noone will see them
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
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.
-- Knowing too much can get you killed, but knowing who knows too much can make you rich.
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.
Rapid Nirvana
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.
Yeah, there are gigs of music I have that I might never purchase. At the same time, when I used Napster, my CD purchases were 100x what they were before...
Regardless of the legality of those mp3s that I won't buy, I put far more money into buying CDs than I otherwise would have... to the point where I physically COULDN'T spend more money because I ran out. I bought a lot of the best of what I downloaded.
This, to varying degrees, is a definite trend among people who download music. Regardless of the fact that SOME didn't get purchased, much more money went to the artists than under normal circumstances. This doesn't change the legality of it in itself, but it does point toward different motives on behalf of the music company that have more to do with maintaining a monopoly rather than recouping lost sales.
After all, if more money goes TO the labels, it shouldn't matter how much music goes to me, because it cost the labels nothing to put out (please note the difference in what I'm saying from the lame leeching kiddies... I don't think that because the music costs nothing to transmit that it is worth paying nothing for... just that there are no disadvantages to this scenario for the music companies other than the loss of control... I'm more than happy to shell out cash for good music.)
Sorry, I stand corrected. I shouldn't apply the Evelyn Wood's speed reading method to /. posts.
I still think the recording co's are missing the boat where all this new technology is concerned. Yes, p2p and high bandwidth home net connections will shake up their industry, but they need to let go of their established production/distribution systems. They will not, must not succeed in perverting technology useful to their customers by browbeating us with legislation and prosecution. If, instead, they embrace the tech, make it mutually beneficial to the artist, the consumer and the record co, that would be ideal. If I could instantly purchase and receive the music I want at a reasonable price, I would become a consumer of music again.
All things in moderation.
How does a song that you don't know, from a band that you've never heard, expose itself to you on any of the P2P programs? The reality, of course, is that it doesn't: The only most people ever hear it is if they pulled a fast one and labelled it "Britney Spears duo with Christina Aguilara.mp3". The P2P networks are all built around searching, meaning that you hear a song on the radio, or in a movie, and you think "Hey! Remind me to download that from Gnutella later!".
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.
I'll have something intelligent to add one of these days...
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.
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.
"I'm a rocket man / Rocket man burning out his fuse up here alone." - Sir Elton John
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 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.
If you were blocking sigs, you wouldn't have to read this.
Artists don't start their own because they either don't have the time/experience to start a business beyond their group, and because if they *do* go with a big label, they have a chance at britney-spearshood
So they're not getting screwed over at all.
The solution is for them to come up with their own cooperative to compete with the RIAA. Of course then not only will they have to pay for the recording and promotion themselves, they will get the ire of napster users directly.
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
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."
Nope, no sig
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.
I am not merely a "consumer" or a "taxpayer". I am a Citizen of the State of Texas
All right, then let's try a slightly different approach. Let's say the recording contract is written up, and the artist makes a record, and the record does fairly well. In fact, let's assume it went gold! The record company spends 5.4 million dollars, and the record pulls in about 7 million. That's a win all around, right? Not quite. See, according to the nicest recording contracts, the artist gets a small percentage of the gross. From that percentage the artist must pay back the record company for the cost of production and promotion, while the huge percentage the company gets is just considered gravy. So, while the artist pays back the 5.4 million, he doesn't get a dime. The artist's cut of the 7 million doesn't begin to cover the 5.4 million dollars he owes. So, now that he's mildly popular and 5.1 MILLION DOLLARS in debt, he either:
1.) goes on tour and pays the debt back over the next several years, or
2.) declares bankruptcy and dissolves the band.
The problem with number one is he can't pay the rent during those touring years, and the problem with number two is that once he declares bankruptcy he's not legally allowed to perform or record under the now-popular name, so the hard-won fame vaporizes. Now, let's do that math:
Original investment: $5.4 million
Profit: $7 million
Amount to artist: $0.00
Amount to record company: $7 million
Value of artist in the market: $0.00
So, in exchange for that one year of fun, he's got no real property, ten years of not being able to get a credit card, and he's got to go back to the 7-11 job, or do the whole thing again. Maybe it's just me, but that doesn't seem to qualify as "a heck of a lot further ahead than he was". This is one of the major contributors to the "one hit wonder" phenomenon, and even the major players have difficulties with it. Glen Campbell has twenty gold records, and he has said that he lost money making every album he recorded.
Virg