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Tuesday, August 29, 2006

Free Music Download Dumbness

A major label announced it will allow people to download music for free and will support the service with ads. As much as I believe that online media (like its broadcast predecessor)can be ad-supported, I am very skeptical about the viability of the agreement between startup SpiralFrog and Universal. Having commercials in between video and audio streams can work if properly implemented, but so far online music sites haven't gotten it right. Napster was the first to launch a free streaming music service earlier this year, which as I predicted, cut into its subscription revenue. Napster doesn't have that many ads on its site and they do not use targeting (hence the constant barrage of Snakes On a Plane ads). But allowing music to be downloaded for free is nuts. Yes, the International Federation of Phonographic Industries says there are 40 illegal downloads for every legal one. But getting a penny or two to advertise to the few who aren't already illegally downloading music will be a big money loser. Allowing people to download songs for free will only increase the amount of songs shared via P2P networks. Perhaps SpiralFrog will limit the free downloads to less popular tracks, and in that case nobody will use the service. This service will have a lifespan much shorter than your average leopard frog (5-8 years).

By Jason Dowdell at 12:50 PM | Comments (16)

(16) Thoughts on Free Music Download Dumbness

When a producer makes a movie with new music, he has to pay a royalty to the
artist, which royalty is recovered from the price of the ticket we pay to see
the movie. So, indirectly, everyone of us pay a small royalty to listen to the
music. Likewise, if we watch a beer advertisement, which happens to use the
same music, we're paying again to listen to the same music whenever we buy that
brand of beer, because the brewery has to pay a royalty for the commercial, too.
So, what you are saying is that we should pay again if we want to listen to the
music on a computer. Where does it end? The way some of you are talking, you
want us to pay a fee every damn time we listen to the same music. Those
bitching that we are stealing are probably starving artists, unable to make a living without making us pay every time we listen to their music. Suggestion:
write more music! We're not ripping you off. You're ripping us off because
we're already paying too many times to listen to your music. Quit trying to be
a greedy scavenger!!!

Comments by bp : Tuesday, August 29, 2006 at 02:37 PM

There is very little money to made in the music download business and the average profit made is about 5c on a 99c download after the label takes thier 60c, you pay for bandwith and hosting ,then support and licencing for DRM then you have to pay for bussiness operating costs .

So an advertising based subscrption model makes sence .One digital media exec told me that music will be the new adware .People will pay subscrptions for movie downloads as evidenced by the success of Netflix ,but TV and Music are somthing that many young consumers are not willing to pay for when they can get it for free .If these services offer thier consumers a safe harbor agaist prosecution while still offering a compelling music download experience they may be successfull .

Take it from an industry insider Music insder

Comments by Matt : Tuesday, August 29, 2006 at 03:20 PM

Well John, based on the comments this post has received thus far, I'll let Em express my feelings...

How could I predict my words would have an impact like this,

...I must've struck a chord, with somebody up in the office,

cause congress keeps telling me I ain't causin' nuthin' but problems,

and now they're sayin' i'm in trouble with the government, i'm lovin' it...

Write On Brother!

Comments by Jason : Tuesday, August 29, 2006 at 03:34 PM

John,

Maybe you're right. Maybe allowing a free download is nuts. But is there really that much of a difference between a $0.99 download model (doing very well on iTunes) and an ad-supported download model? What if it were empirically true that each ad-supported download could generate at least $0.99 in revenue? (disclaimer - I am not familiar with the Spiral Frog service and am just going on the basis of your post.)

Perhaps your post pre-supposes that such will never be the case, but I don't see why not. The more popular a download is, the more an advertiser might be willing to sponsor the download of that song. I am no online marketing genius (my area of expertise is closer to music licensing in general), but there does not seem to be anything inherently problematic here.

You suggest that ad-sponsored free downloads will result in more music available on pirate P2P sites/sessions. And I suppose it could, and that might even be the case with the service available from SpiralFrog. But why can't an ad-supported model use the same copy-protection measures that other online music models use?

I guess I don't really see the big difference between this and the iTunes model. Someone is agreeing to pay money each time a song is downloaded. That same someone (the owner, in the case of iTunes, and the advertiser in the case of Spiral Frog) has made a decision about what minimum price is acceptable. In either case, a license to the song is delivered in exchange for value provided.

The user pays either with his own money (iTunes) or by giving an advertiser access to him for a brief period of time (Spiral Frog). The owner gets paid either way.

Of course, the devil is in the details and it all depends on how one decides to implement this service. But I fail to see how this idea is inherently stupid.

Now, on to bp's comment:

BP, you're real problem here is with the disproportionate market power weilded by the Recording Industry, which has always used typical oligopoly/monopoly tactics to limit the supply of and therefore stimulate demand for new music. I hate this practice and so would any right-thinking American.

However, stealing music is still stealing music. Microsoft was misusing monopoly power during the late 90s by using its desktop OS monopoly to dominate other tied markets, like web browsers, applications, development tools, etc. Companies like Apple, Netscape, Borland, and others felt the sting of this unfair and illegal practice, and users/consumers were the real losers because these kinds of practices invariably limit choice and raise price.

But guess what? Walking into Best Buy and stealing a copy of MS Office would still have been illegal. Same with using one single-license install disk of Visual Studio to run a dev team of 20 folks.

Like it or not (I'm guessing not), music is intellectual property that gets licensed, not sold. When you buy a CD, you're only buying the hard media that comes with a license to listen to the music that is recorded on that media. The fair use exception to copyright gives you some wiggle room about what you can do with that disc, such as make an archive recording, play the disc on your PC (an act which probably causes the PC to make a few different extra copies of the music as it plays the disc), etc.

The owner of a copyright has the freedom to license some, all, or none of the rights that come bundled with the over-arching copyright to a protected work. The owner can license only the right to listent to the music on that disk, or he can license a right to perform the song, or to play it in public, or to incorporate that song into a movie or television commercial. This is not evil (or even greedy)... it is merely the nature of a copyright.

Comments by Clegg : Wednesday, August 30, 2006 at 05:01 PM

yeah this rocks

Comments by sam-j : Monday, September 04, 2006 at 10:07 PM

Aunelstr. 846427

Comments by Marius : Monday, October 02, 2006 at 12:45 PM

question: now that fees are being asked to use stuff like kazaa and napster, please tell me, what free sites are available for music download that are legitamate or trustworthy etc. ?

Comments by eric smith : Tuesday, October 17, 2006 at 08:21 PM

what music websites r there which i can just dowload music on my mp3. i dont want 2 dowload a whole music site.

Comments by carly marshall : Tuesday, November 28, 2006 at 01:34 PM

what music websites r there which i can just dowload music on my mp3. i dont want 2 dowload a whole music site.

Comments by carly marshall : Tuesday, November 28, 2006 at 01:35 PM

this site is a load of f---ing wamk i i dont say so my self so who ever made this site go fu-- yourself or learn how to make website you fu--ing dick head

Comments by ash : Friday, December 08, 2006 at 07:49 AM

Someday, the music industry will have to raise the white flag and admit that iTunes is the only online music service that gets it right. They hate Apple dictating them the price, but Apple didn't invent this. Wal-Mart forces their vendors to keep their prices low and it's the biggest store in the world as a result. It's working for Wal-Mart, it's working for iTunes. Sorry music suits, but suck it up.

Comments by Commenter : Saturday, September 22, 2007 at 01:33 AM

I AM SICK AND TIRED OF EVERYONE SAYING FREE DOWNLOAD WHEN ITS NOT FREE FREE SHOULD BE FREE INSTEAD THEY MAKE YOU WONDER ALL OVER THE WEB CHASING SOMETHING THAT YOU WILL NEVER SEE FREE WITH IT. IM A CONSUMER WHO JUST WANTS TO DOWNLOAD MUSIC TO MY PC THATS IT SO I CAN LISTEN TO IT WHILE I SURF BUT CAN I GET THAT NO AND IS THERE ANY WAY I CALL UP A COMPANY TO MAKE ME A CD WHITH JUST THE SONGS I LIKE ON IT NOT THAT I HAVE SEEN SO WHAT I SAY TO FREE IS THERE IS NO SUCH THING WHY THEY ARE LISTED AS FREEIS B.S. IN MY BOOK

Comments by wonda : Sunday, October 21, 2007 at 05:03 AM

I am curious what you think the next business model will be. There's always a next and we are at a crossroads where there isn't much rationality left to pay for the production and pressing of a CD-ROM.

Next is tomorrow. What do you think it will be?

Comments by Mark Allen : Thursday, June 19, 2008 at 03:56 AM

this is cool, this is what we want dude......

Comments by Henks : Sunday, November 02, 2008 at 07:25 AM

well i downloaded limewire for free so get my music for free im totally cool with that haha and limewire is pretty fricken great

Comments by V : Thursday, January 08, 2009 at 08:39 PM

Hi, many thanks for your awesome post. I need this article to fill my blog. Once again, many thanks.

Comments by Free Full Videos : Tuesday, February 03, 2009 at 06:02 AM

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