Dave Haynes

The stampede towards free music for the masses came a little closer with some news that Yahoo may start offering DRM-free music for free (that’s right I said free three times in that last sentence). I’m sure we’ll be hearing more and more similar announcements over the coming months. Will 2008 be the year that many people’s predictions about MPfree (cheezy but inevitable pun) finally come true.

Regardless, people still shouldn’t overlook the fact that a buoyant market for paid music can happily co-exist with these free services. And co-exist much more happily than it can with the P2P and illegal download services. My take is that the ad-funded and streaming services we will see emerge will be used more as a better option to traditional forms of music radio and used by a similar demographic. But it will be important for the music industry and stores to find a way to truly add value to a customer when they sell him/her a digital music file a la carte.

There’s been enough discussion of the recent Last.fm announcement so I’ve decided not to make a full post. Hopefully I’ll have some more interesting insights after catching up with Last.fm’s own Jonas Woost at Midem next week. I’m hoping to hear what their plans for the full subscription service will be. Here was some initial thoughts:

1) How does their subscription service compete with a site like Napster? For me the Napster subscription service was the way forward for heavy music consumers such as myself. I’ve often bored someone to tears evangelising about my Napster-To-Go subscription but I’ve recently been a little disappointed with the lack of innovations with their offering. Perhaps it will be a positive step in encouraging music subscription take-ups in general.

2) I have to say I’m very impressed with the media coverage they’ve received during the announcement. I guess this is an area where having a parent company like CBS really helps. They could have rolled on someone a little more charismatic to do the BBC News interview I caught over my lunch on the day of announcement though?

Here’s an update to the Pandora UK closure that I highlighted in a previous post. After ltrying to listen to Pandora from my office at home this morning I was unable to login and use the service. Read the below statement of affairs. What’s interesting is that after logging into our VPN (which gives a US IP Address) I was able to resume login and resume listening. So it would appear that my account has not been disabled, but rather blocked from a UK IP address. This is good news for anyone tech-savvy enough to spoof their IP address, but still certainly far from ideal.

Dear Pandora Visitor,

We are deeply, deeply sorry to say that due to licensing constraints, we can no longer allow access to Pandora for listeners located outside of the U.S. We will continue to work diligently to realize the vision of a truly global Pandora, but for the time being we are required to restrict its use. We are very sad to have to do this, but there is no other alternative.

We believe that you are in United Kingdom (your IP address appears to be **.***.**.***). If you believe we have made a mistake, we apologize and ask that you please contact us at pandora-support@pandora.com

If you are a paid subscriber, please contact us at pandora-support@pandora.com and we will issue a pro-rated refund to the credit card you used to sign up. If you have been using Pandora, we will keep a record of your existing stations and bookmarked artists and songs, so that when we are able to launch in your country, they will be waiting for you.

We will be notifying listeners as licensing agreements are established in individual countries. If you would like to be notified by email when Pandora is available in your country, please enter your email address below. The pace of global licensing is hard to predict, but we have the ultimate goal of being able to offer our service everywhere.

We share your disappointment and greatly appreciate your understanding.
Sincerely,

Tim Westergren
Founder

Based in Vienna, with an outpost in Berlin, Zero-Inch (or is it zero”) is the newest kid on the block in the somewhat crowded world of download stores specialising in Electronic Music. Launching in the first quarter, the site is currently in beta testing stage while they add new features and content. I’ve logged on to give you a sneak preview.The first question that sprang to mind is ‘what’s their unique selling point’? How are they going to topple Beatport’s dominance in the electronic & dance download market? Here’s a quick analysis of some of the key sales points in their rather slick looking PDF brochure.

1) CONTEXT OF LOCATION - They’re going to be listing labels and artists by city encouraging customers to explore the local music scene’s and styles of different locations. As a unique selling point I find this a little underwhelming.

Firstly, I’m not sure how much value it adds to a customers browsing experience. So what if a label is based in Tokyo, their artists might be based in Melbourne, Helsinki or London. It might be they are simply licensing tracks from the US. The dance music world in particular has become a lot more globalised in the last decade with producers sending tracks over AIM or Yousendit to labels at all hours.

Secondly, the logistical part of my brain wonders if the effort in compiling this data outweighs the benefit. A few of the digital distributors will be able to provide the country of each label but I can’t see anyway they will be able to provide the country and city of every single artist that gets listed on the store.

2) FREEDOM TO LISTEN - One thing that zero” does very well is its sample soundclips. On clicking the Listen button a waveform of the track pops up on your screen and almost instantly starts playing. Users listen in high quality to any section of the track by simply clicking on the waveform. Although this does seem to come at the expense of more advanced cueing and playlisting features that you get when listening on a site like TrackItDown or DJDownload the sacrifice does seem worth it and the sytem neatly gets round the issue of how long a soundclip a store is allowed to play (in general, stores are only allow to give 30 second previews due to licensing issues).

3) THE ADVANTAGE OF ACCURACY - zero” claim that they will be focusing tightly on the accuracy of their discographies and verifying every single release before importing it to ensure an accurate product display. Whilst this is a noble gesture, is the problem of inaccurate data really that bad on the digital stores that it worsens the customers experience? Admittedly it is a problem for services such as Last.fm and MusicBrainz who are going to great lengths to collect sound data. But for digital retailers the metadata that they receive from labels should be gospel and it’s the labels’ job to make sure they are providing accurate data. In my opinion the successful digital retailers of tomorrow will be those with the leanest and most efficent ingestion routines to provide as little friction from label to store as possible.

4) STATE OF THE ART INTERFACE - being a late player to the game zero” have the advantage of being able to utilise the modern, but universal web standards of today. Their use of AJAX allows the customer to download every track and every release without ever leaving the page they are on.

I still wasn’t blow away by the design but it did look a lot smarter than some of the other download stores did at their own launch. Hopefully we’ll see some more features before the full launch.

An interesting post from Seth Godin on the Music Industry which while lacking a little in substance is a good read, especially given that its a perspective from someone outside of the industry itself. For those unfamiliar with Seth Godin his blog makes from an interesting read if you want to pick up a few tips and insights into Internet marketing.

The most interesting point that I took away from reading the post is that music is social and tomorrow’s winners in the Music Business will be those acting as the hub.

“3. Interactivity can’t be copied
Products that are digital and also include interaction thrive on centralization and do better and better as the market grows in size (consider Facebook or Basecamp).

Music is social. Music is current and everchanging. And most of all, music requires musicians. The winners in the music business of tomorrow are individuals and organizations that create communities, connect people, spread ideas and act as the hub of the wheel… indispensable and well-compensated.”

Last night I was preparing a blog post for this week. The subject was gonna be on just how damn cool Pandora was. Especially as I’d just discovered this even cooler mash-up site that lets you scrobble tracks you’ve played in Pandora to your Last.fm profile. I’d only heard of Pandora for the first time in May whilst listening to Tim Westergren on a panel at The Great Escape down in Brighton. At the time they were already sweating it over royalty hikes for internet radio, yet the service was still running in the US and in the UK.

I had dismissed it back then as I couldn’t see why I needed it when i was already using Last.fm. And I also couldn’t quite get my head around the somewhat human-generated and labour-intensive Music Genome Project that is the fundamental driver behind the Pandora radio service. However when I stumbled across the aforementioned Pandora.fm site I thought I would give it a whirl, especially as a couple of good friends had recommended it during the New Year holiday.

I’d been using Pandora pretty much non-stop for the last week or so having seen the light and seeing what a great radio service it was. And then it was snatched away from me in one poignant email that took the form of an open letter from founder Tim Westergren. Read on for the contents of that email… I’ll post further thoughts and analysis on the 15th when us listeners in the UK wave goodbye to Pandora.

hi, it’s Tim,

This is an email I hoped I would never have to send.

As you probably know, in July of 2007 we had to block usage of Pandora outside the U.S. because of the lack of a viable license structure for Internet radio streaming in other countries. It was a terrible day. We did however hold out some hope that a solution might exist for the UK, so we left it unblocked as we worked diligently with the rights organizations to negotiate an economically workable license fee. After over a year of trying, this has proved impossible. Both the PPL (which represents the record labels) and the MCPS/PRS Alliance (which represents music publishers) have demanded per track performance minima rates which are far too high to allow ad supported radio to operate and so, hugely disappointing and depressing to us as it is, we have to block the last territory outside of the US.

Based upon the IP address from which you recently visited Pandora, it appears that you are listening from the UK. If you are, in fact, listening from the US, please contact Pandora Support: pandora-support@pandora.com.

It continues to astound me and the rest of the team here that the industry is not working more constructively to support the growth of services that introduce listeners to new music and that are totally supportive of paying fair royalties to the creators of music. I don’t often say such things, but the course being charted by the labels and publishers and their representative organizations is nothing short of disastrous for artists whom they purport to represent - and by that I mean both well known and indie artists. The only consequence of failing to support companies like Pandora that are attempting to build a sustainable radio business for the future will be the continued explosion of piracy, the continued constriction of opportunities for working musicians, and a worsening drought of new music for fans. As a former working musician myself, I find it very troubling.

We have been told to sign these totally unworkable license rates or switch off, non-negotiable…so that is what we are doing. Streaming illegally is just not in our DNA, and we have to take the threats of legal action seriously. Lest you think this is solely an international problem, you should know that we are also fighting for our survival here in the US, in the face of a crushing increase in web radio royalty rates, which if left unchanged, would mean the end of Pandora.

We know what an epicenter of musical creativity and fan support the UK has always been, which makes the prospect of not being able to launch there and having to block our first listeners all the more upsetting for us.

We know there is a lot of support from listeners and artists in the UK for Pandora and remain hopeful that at some point we’ll get beyond this. We’re going to keep fighting for a fair and workable rate structure that will allow us to bring Pandora back to you. We’ll be sure to let you know if Pandora becomes available in the UK. There may well come a day when we need to make a direct appeal for your support to move for governmental intervention as we have in the US. In the meantime, we have no choice but to turn off service to the UK.

Pandora will stop streaming to the UK as of January 15th, 2008.

Again, on behalf of all of us at Pandora, I’m very, very sorry.

-Tim Westergren
(Pandora founder)