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Why AnywhereCD Failed

Posted by kdawson on from the unblinking-look-at-the-business dept.

An anonymous reader writes "In an obituary for AnywhereCD, which closes in one week, founder (and MP3.com founder) Michael Robertson chronicles how at least one record label wanted him to embed credit card numbers of buyers into songs. A fascinating story about how at least some of the labels still don't get it and why AnywhereCD is about to be buried."

37 of 184 comments (clear)

  1. FTA by MyLongNickName · · Score: 2, Interesting

    Here is the real reason the business model failed:

    "I believe that if you give people real value (music or anything else) they are happy to pay."

    --
    See my journal for slashdot ID's by year. Mine created in 2005. http://slashdot.org/journal/289875/slashdot-ids-by-year
    1. Re:FTA by User+956 · · Score: 4, Insightful

      "I believe that if you give people real value (music or anything else) they are happy to pay."

      I believe that if the RIAA members were in the business of giving people anything of real value, there would not exist an RIAA.

      --
      The theory of relativity doesn't work right in Arkansas.
    2. Re:FTA by Scrameustache · · Score: 2, Funny

      Here is the real reason the business model failed:

      "I believe that if you give people real value (music or anything else) they are happy to pay." So THAT's why iTunes never sold a single song!
      --

      You can't take the sky from me...

  2. All about control by Major+Blud · · Score: 4, Interesting

    The reason that Robertson' business didn't succeed is that the record companies are getting tired of dealing with third-party vendors selling their music. They want total control over their content, whether it be distribution, payment methods, and DRM. They want to decide how you buy it, how much it cost, and what you can do with your purchased music. We're seeing this come to light now, with Universal and others pulling out of iTunes and controlling distribution internally.

    --
    If you post as Anonymous Coward, don't expect a reply.
    1. Re:All about control by Gr8Apes · · Score: 5, Interesting

      And this is where the music industry as it stands fails to see the logical end to their model: If it is more profitable for them to pull out of an aggregating portal site and run their own, then what's to prevent artists from doing the same? Why should artists remain with them in this scenario? Artists could, gasp, make their own deals with iTunes or the like. Odds are that artists will wind up with agents that manage that for them in return for a fee.

      I would not be surprised to see this develop to their logical conclusion where there are distribution sites that offer a range of services to artists to distribute their work but do not "own" the distribution or copyrights to those works. This can only help artists in the long run, although the conversion to that environment will mostly likely have some short-term hiccups as marketing etc is worked out.

      --
      The cesspool just got a check and balance.
    2. Re:All about control by gfxguy · · Score: 4, Insightful

      And they are going to wonder why sales drop further as they pick one form of DRM that many players can't handle.

      So they'll sell DRM WMA files and lose all the iPod users, or they'll sell AC4 and lose all the "Windows" compatible players.

      AND

      They'll piss off people who don't want to go to fifty different sights trying to hunt down the music they want.

      And then they'll blame piracy for slow sales.

      --
      Stupid sexy Flanders.
    3. Re:All about control by king-manic · · Score: 5, Insightful

      And this is where the music industry as it stands fails to see the logical end to their model: If it is more profitable for them to pull out of an aggregating portal site and run their own, then what's to prevent artists from doing the same? Why should artists remain with them in this scenario? Artists could, gasp, make their own deals with iTunes or the like. Odds are that artists will wind up with agents that manage that for them in return for a fee.

      At the moment the Labels still have control over traditional media. So While you could theoretically make a living via web distribution it still requires people be aware of who you are. Word of mouth can do it but traditional media has the power of hype. Word of mouth is a natural hype. Traditional media brokers in an artificial hype.

      I think it's inevitable that the internet replaces traditional media but it means the death of the super star. We'll go back to more regional artists with few cross region cross overs if there is a lack of a artificial national hype machine like the labels.

      I think that may be a good thing. You don't' need millions to produce good music and may mean that instead of a lottery mentality in artists you'd have more of a real natural industry. Instead of 90% going to the super stars and 10% divided over the desperate numbers of struggling artists you might have a profession where you could actually live off playing music without having to be a superstar or have a second job.

      --
      "There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
  3. Another shining example of failure to adapt by LoadWB · · Score: 3, Interesting

    I have to agree with his biggest point, that people WANT the music, but they also insist on value. This is an area where The Labels have failed to grasp onto the idea of adapting to the medium of the day: the Internet.

    Isn't there a theory about failing to adapt and thus failing to survive? Sounds familiar for some reason. (Though, in this unfortunate case, failing to adapt to lack of adaptation lead to demise. Sounds soooo bass akwards!)

    1. Re:Another shining example of failure to adapt by gstoddart · · Score: 4, Interesting

      This is an area where The Labels have failed to grasp onto the idea of adapting to the medium of the day: the Internet.

      Isn't there a theory about failing to adapt and thus failing to survive? Sounds familiar for some reason.

      Well, the Labels want to make sure that they get paid every time you listen. If they can't do that, they'll try to ensure you only get to play it if you have the original CD (or if they can install a rootkit on your machine, or what have you).

      See, you only have to adapt to survive when you can't have the environment around you modified. When you can get laws passed like the DMCA which allow you to make it a crime to do things that used to be covered under fair use (or, indeed, try to legally remove the concept of fair use altogether), you don't need to adapt.

      In their current business model, they can change the reality around them. I'm with you, hopefully "adapt or die" will have to apply to them. But, I'm not holding out any belief that they're willing to accept any scenario in which I buy music, digitize it, and then listen to it on any device I want to when I want to without further requirements imposed by them. To them, they want complete control of how I use it once it's in my hands.

      Cheers
      --
      Lost at C:>. Found at C.
  4. AnywhereCD ??? by fishybell · · Score: 5, Funny
    I think I can offer a better reason why this company failed:


    Raise your hand if you both a) have heard of AnywhereCD and b) purchased anything from them.

    --
    ><));>
  5. Seemed like a good idea... by bteeter · · Score: 5, Interesting

    I'd never heard of them until today - and I practically live online. They must not have been marketing all that much for me to have not even heard of them.

    In any event, it sounds like AnywhereCD had a pretty decent business idea, except maybe that it should be the CD as the "addon" instead of the downloads.

    I wonder if Apple or any of the other major retailers will ever offer an option like "buy this digital album for $x and for $y more get a CD copy". I don't see why not. CD's are so cheap you could sell them as add ons for say $5 dollars more than the download and make a nice profit. Plus the buyer will have the permanency of the CD.

  6. Not even /. covered it by Alizarin+Erythrosin · · Score: 4, Interesting

    Sadly, few press outlets covered our grand opening. Looking back I suspect there were probably many contributing factors.

    I did a search for anything here on the /. and, other than this article, nothing came up. I guess that not even /. wanted to cover a new (and rather interesting) online music store.
    --
    There are only 10 kinds of people in this world... those who understand binary and those who don't
    1. Re:Not even /. covered it by jandrese · · Score: 2, Interesting

      Probably he never submitted it anywhere. Even Google doesn't know much about this site; the first page is all new articles about how it is shutting down. I'm wondering if he did any advertising at all (even free advertising by submitting articles to Slashdot and the like)?

      --

      I read the internet for the articles.
    2. Re:Not even /. covered it by jandrese · · Score: 2, Funny

      You need some sort of flamebait in the writeup, that way kdawson will approve it for sure.

      --

      I read the internet for the articles.
  7. Record Labels hate all things digital by ErikTheRed · · Score: 2, Insightful

    unless it comes wrapped in a mountain of DRM. Let's face it - the entire recording industry's existence is based on its ability to gouge artists on one ends and consumers on the other. They could get away with this because they controlled who had access to their expensive studios and who could get heard on the radio (Payola lives to this day), what was carried in stores, and more importantly what was promoted in stores. The value of each and every one of these points of control is diminishing by the minute. The labels are all fucked, they know it and they're grasping at whatever straws they can and dragging their feet wherever possible. It's all just delaying the inevitable - people will buy reasonably priced music (look at the success of iTunes), but they won't get fucked if they no longer have to. Siooma, motherfuckers.

    --

    Help save the critically endangered Blue Iguana
  8. The music industry sucks by mlwmohawk · · Score: 4, Insightful

    Sorry, no one is addressing the real problems:

    The music sucks. Maybe one good song on an album.
    Little girls who can't sing dancing on stage with no cloths
    Utter and complete pathological need to control the content
    contempt for their customers
    Failure to recognize that people like music on CDs, MP3 playes, and their computers and don't want to pay three times.

    1. Re:The music industry sucks by qweqwe321 · · Score: 2, Funny

      > the music sucks

      Well, yes, the music does suck, but it's not like music overall has gotten better or worse over the years. Remember the old rule, "95% of everything is crap?" It was true 50 years ago when the record labels were making out like gangbusters and it's still true today. The only difference now is that no one remembers lousy bubble-gum pop bands from the early 1960s like "The Archies." "The music sucks" isn't a real problem-- it's code for "get off my lawn."

  9. Embedding credit card numbers???? by Iphtashu+Fitz · · Score: 4, Interesting

    Am I the only one whose jaw just about hit the floor when reading this asinine comment? It absolutely amazes me that ANYBODY would make such a suggestion. I could see identity thieves salivating at the thought of this. (Yes, I know you would need more than just the number to really do anything with it)

    That guy should see if the job of CEO at Sony is available...

    1. Re:Embedding credit card numbers???? by moderatorrater · · Score: 2, Funny

      That guy should see if the job of CEO at Sony is available... Looking for a dead-end career path, where your products are full of potential but little value? Do you like insulting your customers and then telling them that they like it? Have I got the job for you!
    2. Re:Embedding credit card numbers???? by jcr · · Score: 2, Funny

      I never got any specifics of what the schemes were. Just that she often had coversations like "what if we do this?" "The cops come and shut down the company." "Well, what if we do this? ", "The SEC, the IRS, and the FBI come and shut down the company."

      -jcr

      --
      The only title of honor that a tyrant can grant is "Enemy of the State."
  10. Re:Give me 320kbps VBR Downloads by Indecision+Bob · · Score: 2, Insightful

    Personally, I find it just as much hassle to burn a cd of everything I buy as it is to rip a cd of everything I buy... And you don't get no artwork...

  11. The Whole Enchilada by daskrabs · · Score: 2, Interesting

    The only way the labels can make a profit off of digital downloads is to offer a subscription to their entire library, with on-demand access to any album, available at home and on the road, without any restrictions. That way, you eliminate the need for illegal downloads and file sharing. People will gladly pay for that. I would. And this, of course, does not apply to people who still want to buy CD's for the sake of an official tangible package from the artist. The day this happens, we all win.

    1. Re:The Whole Enchilada by king-manic · · Score: 2, Insightful

      The only way the labels can make a profit off of digital downloads is to offer a subscription to their entire library, with on-demand access to any album, available at home and on the road, without any restrictions. That way, you eliminate the need for illegal downloads and file sharing. People will gladly pay for that. I would. And this, of course, does not apply to people who still want to buy CD's for the sake of an official tangible package from the artist. The day this happens, we all win.

      iTunes showed that most people weren't in it so much for the "free" music as for the "convenient" music. So while there are many who will never pay for music or pay more then a subscription fee, Apple showed there is a significant number that doesn't mind paying $0.99 for a song.

      --
      "There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
  12. PCI anyone? by alcourt · · Score: 2, Insightful

    Somehow I suspect the credit card companies wouldn't like that idea. It would use the PAN in an area where it is not required and storing it (presumably) unencrypted.

    --
    "I may disagree with what you say, but I will defend unto the death your right to say it." -- Voltaire
  13. Credit gift cards by Weaselmancer · · Score: 3, Informative

    Michael Robertson chronicles how at least one record label wanted him to embed credit card numbers of buyers into songs.

    Credit gift cards are excellent to use if you're buying stuff online and don't want the vendor to have any personal info. Good for sites like mp3sparks. Or if you're buying modchips. Or any online transaction where you don't want the buyer to know anything about you, or have any access to your accounts.

    Or so I hear.

    --
    Weaselmancer
    rediculous.
  14. Never heard of it before now by jj00 · · Score: 4, Insightful

    I believe the real reason is that no one has really heard of the service and the site seems pretty amateurish.

    1. Re:Never heard of it before now by nwf · · Score: 4, Insightful

      Indeed, it looks just like a domain squatter site. When I first went there I though it was already gone and replaced by an advertisement site.

      Tip for potential businesses: don't make a site whose business model relies on tech savvy people look like a site tech savvy people are trained to ignore.

      --
      I don't know, but it works for me.
  15. Thanks for all the feedback by Lindows.com+Michael · · Score: 5, Interesting
    A couple points I might add:

    - Until 9/30 most all of the CDs are $7 which includes a physical CD and 192K MP3 files loaded nicely and permanently into your locker.

    - One poster complained you can't download the MP3 file without installing an application. That's inaccurate. You can download all the tracks individually directly from the locker - no application install required. Just click on the triangle in the flash UI and select "download".

    - We do provide several different applications for your convenience all of which work on Linux as well as the other PC OSes. There's an Album Downloader which will with one click download any new purchases and load into iTunes or your fave media player. There's also Locker Sync 3.0 which will sync your entire music library from locker to PC. So lots of different options.

    - Slashdotters might be interested in our API (see: http://mp3tunes.com/api). My vision is all your music goes into your personal locker and then with a click can be streamed or synced to ANY device in the world. It's a very open view of the world and of your media. We have 100,000 lockers and a great list of devices coming by this holiday season all of which talk directly to a locker. We're even having a contest to spur developers for $10,000 to come up with new music devices/interfaces: See http://mp3tunes.com/contest

    -- MR

    1. Re:Thanks for all the feedback by Reziac · · Score: 2

      Too bad this is the very first I'd ever heard of the venture. I think the idea is sound enough, tho the firesale pricing is more like what I'd have hoped for as everyday.

      (Too bad this happened when I'm too broke to pick up a bunch of stuff...)

      --
      ~REZ~ #43301. Who'd fake being me anyway?
    2. Re:Thanks for all the feedback by mabinogi · · Score: 2, Informative

      If you want the bits and not the plastic then you were never a potential AnywhereCD customer anyway.
      They're selling the CD - that's the point, and you get the mp3 version immediately so you don't have to wait (and don't have to rip it yourself if you don't want to)

      So if you're not interested in getting the CD, then go to iTunes or something.

      --
      Advanced users are users too!
    3. Re:Thanks for all the feedback by GWBasic · · Score: 2, Insightful

      So if you're not interested in getting the CD, then go to iTunes or something.

      Actualy, AnywhereCD's sale prices are lower then Amazon's MP3 downloads. What I'm trying to express is that music prices are waaaay toooooo high.

      --
      No, I will not work for your startup
  16. Re:Who Owns the Record Companies? by king-manic · · Score: 2, Insightful

    Aren't most record companies part of bigger media companies? There doesn't seem to be anyone above them saying, "you are aren't adapting to the changing market dynamics, start adapting."

    Has there been any change in management or management philosophy that I am not aware of?

    Not yet. My generation is the first of the "less TV" generation. We watch less then our older counter parts did and tend towards other sedentary activities like video games. Once we get into power we may start changing things. IF the major media giants don't adapt they may become irrelevant. Viewer ship in the prized 18-34 male demo is slipping. So perhaps when todays 18-34 year olds become studio heads we may see some change.

    --
    "There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
  17. It failed because it doesn't fucking work by noewun · · Score: 2, Insightful

    So, I figure I'd throw a few bucks into the company's till try to find some music I like. I did find some oldish Oakenfold I never got around to buying, so I got it, followed the instructions in the email they sent me and figured I download the mp3s while I ran some errands. The only problem is I can't.

    Well, that's not the only problem. Problem #1 is that I have to download some third party app to download the mp3s, which doesn't make sense: I have downloaded thousands of things off of websites, and none of them has needed a third party app. What does this third party app do? Does it install spyware on my system? Does it report back to the record companies? Where's the info telling me what it does? But I did it anyway, cause I want my music. Only now, it won't download anything: it's stuck in "adding album to queue", where it's been for fifteen minutes. I looked in the email, and it mentioned another way to download the tracks, which is to click on the Playlist in my online music locker. Only problem is that the music I just bought isn't there, so I can't download it. Boy, I hope I get the CD in the mail, or I just wasted $20 on nothing. Or, in other words, I just got ripped off

    So, Mr. Robertson, your idea failed for one simple reason: it sucks. Apple's iTunes Music Store runs circles around CDAnywhere in ease of use and execution. So does eMusic.com. You failed to produce a competitive product, plain and simple, and all the conspiracy theories in the world won't explain it away.

    --
    I am a believer of momentum and curves.
  18. Maybe they should have tried... by psykocrime · · Score: 2, Insightful

    doing some advertising? I never even heard of this outfit before today. And I probably would have bought
    some stuff from them, depending on the price. Heck, while I'm at it, I'm taking advantage of the "closeout sale"
    to pick up some stuff I didn't have (a couple of Kix and Skid Row CDs) for cheap.

    --
    // TODO: Insert Cool Sig
  19. Artists still need a label ... by AHumbleOpinion · · Score: 2, Insightful

    Why should artists remain with them in this scenario?

    Artists need a label if they desire a certain level of commercial success. It takes a lot of money to promote an artist and bring them to the attention of the mass national or world market. Artists can not afford to do this on the money they making playing in small venues, among their core audience. If they manage to feed themselves they are doing above average, if they can support a family they are so rare they are nearly an anomoly.

    The label system persists because there will always be some artists who want large scale success. Of course these successful artists gripe when they think about the small percentage they receive themselves but the truth is they are getting a small percentage of a much larger pie. If you are only getting 5 cents on the dollar, but you are generating several hundred times (or more) the revenue then they are far ahead.. To be faiir to the labels they need a disproportionately large cut from one artist to pay for the dozens of other artists they had *speculatively* financed they did not attain large scale commercial success. Please understand that I am not saying the current label/artist split is correct, I have no way to calculate what the split should be. I am merely arguing that the label system is quite logical and it is economically justifiable for the labels to receive a large percentage due to the speculative nature of their investments.

    Artists have almost always needed patrons throughout history. Centuries ago it was the church, royalty, or the wealthy. Today the record label fulfills that role.

    I would not be surprised to see this develop to their logical conclusion where there are distribution sites that offer a range of services to artists to distribute their work but do not "own" the distribution or copyrights to those works. This can only help artists in the long run, although the conversion to that environment will mostly likely have some short-term hiccups as marketing etc is worked out.

    The marketing required is far beyond hiccup level. What is the source of money used to *speculatively* promote an artist beyond the level I decribed above?

  20. Re:Don't forget clunky software... by WK2 · · Score: 2

    Rather than just "Download file" you've got to download some random third party app to actually receive your music on MP3.

    Not sure I would call flash a "random third party app." I agree that a direct link to the mp3 would be better. A thinking individual would have done both. Although, you know how labels can be.

    --
    Write your own Choose Your Own Adventure. http://www.freegameengines.org/gamebook-engine/
  21. How sad by FreeBSD+evangelist · · Score: 3, Insightful

    This Slashdotting of the Going Out of Business posting is the first I've ever heard of AnywhereCD. Which is unfortunate, because I'd be a customer.

    I have about 400 CDs, and buy one or two a month from Amazon. If I could get the same CDs, at approximately the same price but someone else would do the ripping for me, I'd be there.

    Where did they advertise?