Off-The-Shelf Online Music Stores

jpkunst writes "The Chicago Sun-Times and C|Net news.com report about a new product from Loudeye Digital Media Solutions and Microsoft: pre-fab online music stores for companies who want to join the digital music goldrush. I wonder when this bubble is going to burst."

Comments

what bubble?

[silicongodcom]

when will what bubble burst? best i can remember is that apple's barely making any money at all off the actual music sales, let alone all the companies following

Re:what bubble?

[FooAtWFU]

that's the point. Best I can remember is that most of the dot-coms weren't really making ANY money off anything.

Re:what bubble?

[Anonymous Coward]

No, but Apple has made money off the 4 million iPod's they've sold. It's like giving away condiments with your burger and fries - if you don't offer them, people may go somewhere else.

Re:what bubble?

[sagarsanghani]

True, Apple makes about 5 cents a song from itunes. So even selling 25million songs is not a lot of money. However- iTunes is the big trojan horse for selling iPods. And that is why Apple has had its best year -EVER!

Re:what bubble?

[mahdi13]

Apple makes about 5 cents a song from itunes. So even selling 25million songs is not a lot of money

When did $1,250,000 of pure profit in 2 months become "not a lot of money"?

Re:what bubble?

[sagarsanghani]

Thats not pure profit. Once you factor in operating costs, marketing etc it goes even lower. Also compared to what they make off the iPod that is nothing.

Re:what bubble?

[BobTheLawyer]

Absolutely. How many mult-billion dollar companies bother to develop revenue streams generating income in the single figure millions? It's simply not worth the management time and development costs. Large organisations don't, as a rule, do small things efficiently.

Re:what bubble?

[TrippTDF]

This is a lot like a little mini-bubble. The big problem is that so many people are hoping on this bandwagon, consumers are not going to know where to turn. Apple will probably come out on top of the pile, as they have the recognition and the coolness factor at the moment. However, consumers stand to become very, very confused in the fray. I for one can't keep track of who has a music service and who does not anymore. Consumers will get overwhelmed by the choice. Hell, the more companies that come out to play. the better it could be for Apple as more and more people turn to the popularity/ease of the store. Still, there is not a lot of profit there. Again, thanks to the RIAA eating a chunk of the money that Apple is taking in. And I suppose that's the real reason it will fail if it does- the RIAA still taking too much of the money to make it feasible. Unless you are trying to push another product, online music sales are going to be a tough business to enter.

Re:what bubble?

[dema]

Yes, and as with the use of a trojan horse as a virus or at Troy the attack was a suprise. In this case, Steve Jobs and Apple openly say that the reason for iTMS is to sell iPods.

Re:what bubble?

[Frymaster]

which is why it's going to burst. apple makes money in the long run off hardware sales, but all the "me toos" showing up won't have that second revenue stream - hence failure.

of course, near-certain doom isn't never enough to stop thousands of get-rich-quickers, people with a low common-sense-to-money ratio and general greedheads from fighting over the steering wheel fo this bandwagon. it's gonna be ugly.

apple created a whole new business model. microsoft will turn it into a bubble... sigh.

Re:what bubble?

[Dechah]

But surely all of these ventures need financing. And surely the financiers, after getting burnt badly in the dotcom bust of 2000 will be a lot more stringent in their lending criteria for these sorts of vendors. I could not imagine anyone getting very far in a venture capitalist's office these days with just a winning smile and a flaky idea about how selling songs over the web is going to make zillions. you would be escorted out of the building by baseball bat wielding security guards.

Re:what bubble?

[Doc Ruby]

How do you distinguish between a bubble and business development? Bizdev has a working biz model, with product/services delivered to customers, whose revenue exceeds costs, to produce profit. Fast growth can be a boom, or even a goldrush, which might be followed by a bust if not sustainable. Bubbles are seen in equity speculation, where profits are not related to equity price. Speculation bubbles inevitably burst, with a shakeout seeing some survivors when the market is sustainable, or a totally collapsed market when it's not.

The music download bubble burst a long time ago, when Napster got popped by the traditional businesses. Now we're seeing another goldrush, driven by cheaper technology, and Apple's iPod/iTunes marketing. The equity market is still in disarray, but this time it's being led by profits, which are scaling. Products like LoudEye do reflect a possible incipient goldrush, but since music downloading both increases efficiency of the music consumption market, while removing limits to scale, there's not necessarily a bust lurking just over the next ridge.

We are likely seeing a rational entertainment business develop, now that it's been squeezed out of the slippery hands in Hollywood, into the firmer grip of Silicon Valley. Time to sell shovels!

Burst...

[swordboy]

It'll burst when someone creates a non-RIAA internet radio station / distribution hub. Unsigned artists submit their music to the site, a group of public moderators give the music good/bad karma and the good stuff gets streamed to millions of PCs. Users can download the stuff that they like with a simple click and yet another simple click burns it to CD or moves it to the player.

Re:Burst...

[LetterJ]

This is like saying that there aren't any painters producing any good paintings. Just because you're trying to buy paintings at garage sales and WalMart doesn't mean that no one is painting great art, just that those places don't have any decent art.

In almost any style, there are innovative, original musicians making music. For instance, one of my favorite styles is acoustic/roots rock. PasteMusic has a bunch of free MP3s and an Internet <a href="http://www.pastemusic.com/radio/">radio station</a> of their music. In the last 3 months, I've found several artists through them and bought 8 new CD's. Out of those 8, I'd only heard of 1 of the artists before hearing them through Paste. These are not the artists that your local gas station has at the checkout or carried by Target, WalMart or BestBuy. They're also not ultra-rare imports or obscure techno. It's straightforward music, made domestically (for me in the US) that just happens to not be distributed as widely as the popular stuff.

I haven't bought a CD in the top 40 (or top anything measurable) in several years, but I do buy CD's regularly. Just get off the damn music freeway and see the rest of the music countryside.

The important element: WMA

[burgburgburg]

LoudEye does all the work, Microsoft gets check after check for licensing WMA technology and their monopoly is extended once again. Oh, and their highly restrictive DMA grasps tighter at the throats of users around the world.

I'm looking forward to it.

Re:The important element: WMA

[3Suns]

It's not the DRM (I think you meant this instead of Direct Memory Access) that's the problem. If copyright owners want to restrict how their property is distributed, fine. The problem is that the DRM is not an open standard, and people who don't have Media Player 9 on Windows are forced to choose between breaking the law or being left with nothing to listen to. If, that is, this becomes a trend.

What?

[Anonymous Coward]

Ok, someone please explain to me why anyone would want to have a cloned music store? What value is added? What are the licensees bringing to the table?

this is bs

[pavs]

most of the online music stores suck anyway, why do we need more prefab music stores that will all sell the same junk anyway. Just because you can build it and put it up faster doesn't mean it's any better.

Where's the msPod?

[mh_tang]

This quote says is all. "Loudeye Digital Music Store, which uses Microsoft's Windows Media 9 series digital media platform..."

Given the alternatives (mp3 on Kazaa, aac on the iPod) already out there, who is really going to choose to buy their music in .wma format?? I just don't see this really taking off with public. It's a case of too little too late, and trying to copy the iTMS model without really offering anything compelling.

If you want to really be inspired, read this article from Rolling Stone where they interviewed Steve Jobs, who knows how to do this the right way...

And then there's Microsoft. What happens to Apple when they build an iTunes-clone into the Windows desktop?
I think Amazon does pretty well [against Microsoft]. Microsoft hasn't really been able to compete with them -- maybe not wanted to. EBay does pretty well; Google's done pretty well. Actually, AOL's done pretty well -- contrary to a lot of the things people say about them. So there are a lot of examples of people offering services, Internet-based services, that have done quite well. And Apple's in a pretty interesting position. Because, as you may know, almost every song and CD is made on a Mac -- it's recorded on a Mac; it's mixed on a Mac. The artwork's done on a Mac. Almost every artist I've met has an iPod, and most of the music execs now have iPods. And one of the reasons Apple was able to do what we did was because we are perceived by the music industry as the most creative technology company. And now we've created this music store, which I think is nontrivial to copy. I mean, to say that Microsoft can just decide to copy it, and copy it in six months -- that's a big statement. It may not be so easy.

Re:Where's the msPod?

[billtom]

Given the alternatives (mp3 on Kazaa, aac on the iPod) already out there, who is really going to choose to buy their music in .wma format??

Well, non-/. people generally simply don't care about the format. All they care about is: does it play on my stuff (computer and portable) and is the DRM not too restrictive (and is the price right, of course). Really, they *just don't care* about the format.

So Windows users will use a WMA encoded service over the copyright infringing P2P services if they value their time (ie. not having to filter through all the bad/incorrect encodings to find the good one) and don't mind spending money.

And Windows users will use a WMA encoded service over iTMS if they don't use an iPod as their portable device (because very little else supports AAC and the average user doesn't want to do the burn to CD and re-encode as mp3 trick).

There is no spo^H^H^Hbubble

[Unregistered]

Apple will be the only online music store to survive. Apple makes no profit, so nobody can compete on price points and make a profit. If you charge more people will go to apple instead. Either way, you go bankrupt while apple sells iPods.

btw, i use iTunes for the 1st time today, so it's not 25,000,001 songs downloaded.

Re:Why would anyone want to pay for music?

[AKnightCowboy]

amen! why pay for gas either? the prices are heinous! just drive off after pumping. And what about food? Why dont we just get it for free by leaving before they give the check? What has this world come to? what has happened to our god given right to free stuff that others work hard to make?

Another person confusing copyright infringement and theft. *sigh*. If I take your gas and don't pay for it, you don't have the gas to sell to another customer. If I create gas out of thin air that is completely identical to your gas for my own use, you still have your gas to sell and nobody is missing anything. Sharing is GOOD. For Pete's sake, the only people that are against sharing are fscked up RIAA lapdogs who must've been the ones running home to mommy when other kids asked to play with their toys. Selfish pricks.

Re:So this is how M$ cashes in???

[Anonymous Coward]

Yes. In a gold rush, the people who make money are those that sell picks and shovels.

That is what they are doing. Selling picks and shovels.

naturally

[geekoid]

the person who gets rich during the Gold ruch isn't the miners, it's the guy selling shovels.

OH YOUR GOD!!!

[SweetAndSourJesus]

If you see a story you don't like, ignore it. Don't come here and tell us that you don't like it. We don't care.

You really need to relax if a slashdot story is making you whip out the exclamation points like that. It's not the end of the world, calm down.

Fine, I understand if it's interesting to many people. But on the front page every day?!?

Yes, for the reasons you stated.

When will the bubble burst...

[Anonymous Coward]

"I wonder when this bubble is going to burst."

When people buy all the old music they want, and they can't sustain on sales of crap-rock, crap-hop and crap-rock.

Too bad...

[dgulbran]

I was hoping "Off the Shelf" meant something different... I'm sure that the RIAA would have a cow with this, but I'd love it...

A store that stocked CDs and the MP3 versions of the albums... I buy the "CD" on-line and get instant MP3s of the album I now *own*. Then they can slow boat the CD to me any ol' way... instant gratification, I have the CD that I wanted anyway, I don't have to rip it when I get it, and I get instant gratification.

Re:Why would anyone want to pay for music?

[GospelHead821]

Neither analogy is good, but yours is worse. If you create gasoline out of thin air, your new gasoline is just as good as the old gasoline. They're the same stuff. Now, if you'd like to commit to the idea that all new music is identical to old music (please, no boy band/Britney Spears comments), then perhaps this argument holds. However, the reason that music is valuable isn't because it is scarce, which is why gasoline is valuable, but because it is new, unusual, different. If it were cliche and uninnovative, it wouldn't be worthwhile music. Now, what are scarce are sources of worthwhile music. If you decide that music isn't worth paying for since, after all, it can be reproduced for free, then you'll lose the interest of those sources of music. They'll go do something else that puts food on the table, instead. So, to answer the question, I want to pay for music, since I enjoy having something new to listen to, every once in a while.

Re:Why isn't MS going at it directly?

[iso]

They're helping because they want to push WMA to as many services as possible. They don't care who wins, just as long as the winner is using their DRM.

Also, Microsoft has never been a company that jumps into an emerging market. Their behaviour is down to a science:

1) wait for an emerging market to mature and for the major players to drift up to the top
2) offer to buy the largest player at slightly less than they're worth
3) if they refuse, put hundreds of millions of dollars into developing a competing service or product.

They did it with browsers, game consoles, webmail, you name it. Microsoft will do what they do best -- sit back and wait and then throw their money at the best bet. They call this "innovation."

Or even better...

[xixax]

Let's start a company where we get bands to sign up to giant loans at extortionate rates that we then spend on their behalf by deliberately choosing really crap distribution models that involve shipping slivers of acrylic all over the world. If anyone comes up with a parallel path for musicians, we'll use our artists money to lobby, sue and legislate them out of existence.

Xix.