Overview in online music distribution

[Week 4] A little bit of P2P history

You may remember the days when Napster p2p network got shut-down due to RIAA pressures. At that time, most labels and musicians(notably Metalica) were arguing about how the internet would ruin the music industry. There might have been a similar psychose around mix-tapes in the 80s, but the current technological leap can’t really be compared to anything.

Using BitTorents protocols, it’s possible to reproduce content seamlessly, anywhere in the world, more quickly than a ride to the shop, and at virtually no cost (since all BitTorrent users host and exchange files within themselves, no costly web servers are required to distribute even the largest files).

The first reaction to such a powerful technology has been really negative and larger organizations working in the music industry has been greatly concerned. As we’ve seen, most RIAA efforts has been to shut down any new development, building tension with digital music lovers who only became more affirmed pirates over time.

Some labels dipped their toes in the online distribution world, but were so afraid at first that they bloated their low-quality audio-files with complex DRM systems that prevented users to copy and redistribute the song. But as a side-effect, these audio-files were unreadable on half of the mp3 players and required special softwares. While the pirates community were growing quickly these website were still selling their music at a price-tag close to the physical store’s one. It’s not surprising to see that most users preferred the more convenient (and free) downloads offered on P2P networks.

Apple, with its iTunes had the most innovative approach in this online market race and are today seeing the profit of their efforts. However, iTunes has only replicated the old “album-in-store” model, still haven’t manage(for most labels) to offer DRM-free downloads, and they’re still missing important artists on their catalogue (you might have heard about The Beatles?). But even if it’s imperfect, the iTunes model has now became the standard in online music distribution, leaving very little room for new players to come up with new approaches.

The subscription model vs the free “myspace” model

Rhapsody and Napsters are two famous online store that offers monthly based subscription. You can basically listen to all the music you want. Since it rely on DRM we run into the same issues when it’s time to move it on an mp3 player or burn it onto a CD for the car. More importantly, these two online store are solely based on labels catalog. It’s not possible for artists to submit their music directly to either of these systems. Interestingly the content on these sites is also poorly organized and doesn’t take into account user’s tastes and habits.

Since its very beginning, LastFM applied themselves to study their users’ tastes and make music suggestion based on their listening habits. This engine made the fame of LastFm, but since CBS bought the company they’re now looking more closely into ways to make profit of their $280 million investment. LastFM first proposed a subscription based formula where user had the opportunity to play unlimited music want from the website in exchange of a small monthly aiming directly at the Rhapsody and Napster market.

If labels don’t move, maybe artist can change the rules.

After all, artist are at the beginning of the chain, so they should have the right to decide what to do with their music. Before the facebook & twitter era, mySpace was the largest social network on the web. Music bands are one of the last mySpace niche today. Thousands of garage bands created themselves mySpace account to promote their work. This practice become very common along all sorts of musicians and even mainstream artists embraced the ugly myspace platform. Myspace can easily be compared to youTube in the terms of content quality and practicality. Listening to few highly-compressed songs in a web-browser can be nice but it clearly doesn’t fill the need for proper music distribution: you can’t save myspace songs, you can’t listen to them on your mp3 player, and the sound quality is just awful. Since myspace and youtube are so unpractical, it didn’t really called for any economic model (no ones would pay for this crap), but it may remain another promotional tool in the arsenal of labels and self-produced artists.

Few months ago, LastFm discussed the possibility of a new business model. The songs would be freely available to any user (with and without subscription), while artists would also get revenue from some advertising revenues. Since it will be open to all, this structure will let local artists advertise themselves over LastFm as they used to do on mySpace, but also touch some revenue. While it might not be a perfect model, it’s the first complete online structure that can match the offer on illegal downloads. We still can’t take our music on our mp3 player, but on the other hand we’re gaining community-based music recommendation. Since it’s also free, I would expect such model to gain a lot in popularity. I guess LastFm will realize soon enough if the advertising revenues can match artists’ and labels’ expectations, and see if they can keep on going this route.

New means of music distribution (for rock-stars only).

Ok, the artists will now be able to skip the label, and publish directly throughout an equally big online organization. With less intermediaries in between, users will pay less for their music while artist might receive a better pay-check. While this is a major improvement compared to the original CD distribution system, some artists thinks there’s ways to cut even more steps in between them in their fans.

In 200* Radiohead introduced their inRainbows album online. The album was available for download at a price selected by users. While there was a many steps and forms to fill in order to download the songs, it was one of the first massive auto-distribution campaign. As a side note, Tom York(Radiohed’s signer) recently affirmed he wouldn’t propose free downloads anymore, so I’m not sure it really worked out as they expected.

It didn’t stop many well-known artist to offer a lot of their content online freely. Many local and less-known artist are doing so as well but they they have everything to win by getting heard by more people. Since it’s impossible to get the media attention of Radiohead or Coldplay, smaller artist giving away their content have few chances to get their message to an audience and most of these free albums remain undiscovered.

And while large group can give away a live album here and there without hurting their budget, it’s hard to justify giving away you stuff in the long run if you don’t have a tour/t-shirt/event machine bringing some revenue form your work. In the current context, it seem like this more liberal distribution approach is only an option for already famous bands, or starting artists trying everything they can in order to get discovered.

One step further: ditch copyright

Two years ago, Nine Inch Nails went one step further than getting rid of all the distribution intermediates, and ditched the good old copyright protection by releasing an album under a creative common licence. Fans were not only able to get the digital album freely, but they also had the legal opportunity to remix and create derivatives work from the original pieces. Many videos using NIN’s instrumental music sprung on youtube, and the physical version of the album even reached the forth position of amazon.com 2008 best selling CDs. The album had a critical acclaim and probably worth its fourth positions. Nine Inch Nail just released an other album under the same cc liscence called the slip. The album can be downloaded freely from NIN website and there’s no hassle around the download process. NIN also offer various high-quality download(up to few GB) aimed at audiophile, and audio professionals.

Just by looking at NIN’S numbers it’s hard to draw clear a relationship between an infinite free supply(either voluntary or through piracy) and a money loss as the good old market formulas and RIAA would suggest. Maybe these new utopians means of distribution will remain the a rockstar fantasy, and the last resort of underground bands, but I hope we’ll continue to see new development around music industry!

http://creativecommons.org/weblog/entry/11947 -> NIN- ghost best selling album of 2008 on amazon

http://www.flickr.com/commons/

http://www.free-culture.cc/

http://www.free-culture.cc/freeculture.pdf

the white stipes album

http://mirrors.creativecommons.org/getcreative/

http://mirrors.creativecommons.org/getcreative/Creative_Commons_-_Get_Creative.mov (mov file)

in 2008, NIN – ghost – released under a CC liscence under a Creative Commons Attribution Non-Commercial Share Alike license.

http://ghosts.nin.com/main/faq

coverage : http://creativecommons.org/weblog/entry/8095

the slip – available on NIN website
- Geo data project

http://www.zeropaid.com/news/9026/radiohead_shocks_record_industry_with_free_download_of_new_album/

images to use (show income of CD industry)

http://www.zeropaid.com/news/9750/marillion_outdoes_radiohead_releases_album_on_bittorrent/

better than radiohead : no fuss. Directly on bitTorent network

http://www.zeropaid.com/news/9446/radiohead_no_more_free_albums/

The slip

What we’re seeing is the emergence of a new business model for established, superstar acts,” music guru Alan Cross said Tuesday of Coldplay’s heavily hyped return to the spotlight.

“They realize that they have, already, over years, built up a very tight relationship with their audiences and that they have the power and the infrastructure to reach out to them directly.”

The next time someone tries to convince you that releasing music under CC will cannibalize digital sales, remember that Ghosts I-IV broke that rule, and point them here.



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