I launched MP3.com in 1997 and have been kicking around the digital music business for a decade. Here are my predictions about what you can expect to see in 2008, which will be more eventful than any of the last ten years.
1) All four major labels get the MP3 religion.
During the monumental Universal Music Group v. MP3.com trial in early 2000, it was uncovered that The Recording Industry Association of America (RIAA) had an initiative to block the growth and adoption of MP3. Court documents revealed that the RIAA paid people to track me and take notes on my speeches so they could devise counter-plans. They sued the first commercial MP3 player -- Diamond Multimedia's Rio. (They lost, which is why you have your iPod today.) Major public relations campaigns were launched to smear the MP3 format.
Seven years later, the music company EMI broke ranks and announced it would sell its music catalog in MP3 format. Recently, Universal Music made part of its library available in MP3 format via Amazon's music store. In 2008, you will see Warner Music feel the pressure of declining CD sales and offer their catalog via MP3. Later in 2008, watch for the pioneer of proprietary formats, Sony, after a year of mourning the aborted atrac format it was pushing at Connect.com, to finally relent and make its catalog available. By the end of 2008, every major music label will offer catalogue-wide MP3 sales via Napster, Wal-Mart, Amazon, and Best Buy.
2) The CD becomes the $0.50 lure for the digital album.
For two decades, the CD has been the monetary mainstay of the music industry. Widespread digital music player adoption has lessened the need for CDs. So 2008 will see the continued deterioration in CD sales, nearly matching the 25 percent decline in 2007. Plus, the prevalence of CD burners and pallets of blank CD bundles at Costco have educated people to the fact that CDs cost pennies to make. Music fans have actually made many more music purchases in 2007, but the average purchase price went to single digits from double digits.
How do you make someone pay for nine tracks when they only lust for one? Throw in a free CD for the bookshelf. "Rebundling" is the keyword for the industry next year. Progressives in the music industry realize that the best use for CDs is to entice that 99 cent purchaser to spend $9.99 on a digital album. If the industry grosses a $10 sale instead of a $1 single, that's a net positive of $7 after paying 50 cents for the CD and $1.50 for shipping.
3) Digital music insurance replaces storing files under your mattress.
The explosion of online music stores makes it a snap to amass hundreds or even thousands of dollars in music with just a few clicks. Unfortunately, it's just as easy to lose files through user error, hardware failure, or some other digital catastrophe. Geeks will spend thousands on a home media server, only to have it stolen and, with it, their entire digital library. People will realize that storing your digital possessions on home computers is like putting your money under your mattress.
Savvy music buyers will get a free personal music locker, like the one from MP3tunes where ALL their music purchases will be automatically backed-up from any store they frequent. No need to worry about losing your music, because it will be safely stored online, serving as a digital music insurance policy. Once there, music fans will realize that this is more than just dormant backup copies. They can sync their song library to any computer, stream it on any Net-enabled device, and listen to it on Internet radios like Logitech's Squeezebox or Terratec's Noxon. But I'm getting ahead of myself. Facebook-like popularity for music lockers is my prediction for 2009.
(Disclosure: I am CEO of MP3tunes.com, and I hope you read this and sign up for a free music locker.)
— Michael Robertson, Founder of MP3.com and current CEO of MP3tunes
re: home server - Apparently you didn't read the kool-aid marketing material from Microsoft. The software is pre-installed on a little box that you plug in to your network, and then put a cd in each of your machines. Simple! < /sarcasm>
re: the old mp3.com service, i do believe that all the problems stemmed from the way the files were "activated" in your account and what you could then do with them. if it's now just your own files that you upload and share with yourself, all the issues with "ownership" and "broadcast" concerns would go away. i think that's the key difference...
re: storage vs. access... i'm not asking for the same server on the Internet to provide both for me... i'm asking for one "service" to offer both options to me. having one service for backup, another for media storage and access, and another set of services available directly on my desktop seems ridiculous. that redundancy would be time-consuming and messy.
re: the "home server" concept ... i think this falls in the realm of things like the Slingbox... that appeals to a really narrow set of people... and probably always will. so maybe there's a market for it, but i don't think it has the more ubiquitous appeal that the mp3Tunes or other online storage service might have b/c it requires some relatively significant setup, etc. to get going... you might be capable of that, but i guarantee that lots of folks are not.
Yes, a major point of the lawsuit was that mp3.com had made digital copies of CDs. However, I don't think uploading your files would avoid the issues. The RIAA assumes you are guilty until proven innocent, so if you are uploading files, you must have gotten them illegally. There is still the issue of ASCAP and the streaming aspect, because it was an "interactive" broadcast - you could choose the order of your songs.
I don't think that the online storage service is necessarily the answer. Most of them are backup services, and I don't know what their support of on demand download and streaming would be (probably they wouldn't have streaming). I think that media storage and media access are 2 different animals. To provide on demand media services to whatever machine you happen to be sitting at requires more than a simple server with a hard drive attached...
To your point of whether we are moving away from the home computer - Microsoft recently announced their "home server" - which provides backup and restore services - so that if your system crashes, you can put in a new hard drive and restore your entire OS. It also allows for remote access. With ubiquitous high speed connections, you can access your home computer(s) from anywhere. I was able to remote desktop to my home computer from China and browse the web (and avoid blocked sites). I'm interested to see whether we will move more toward the thin client or the fat home based remotely available server. Remember everyone predicting the paperless office, and then the printer was networked?
as i recall, wasn't the issue with mp3.com's old service that you didn't upload anything? you just used your CDs to verify that you "owned" an album, then it was accessible to you over the Internet. then, you were able to stream high-quality .mp3 files that mp3.com had created for those albums.
mp3Tunes seems more fully-featured because it sounds like you'll actually upload your files. i'll guess that this avoids almost entirely the issues that gave the RIAA leverage before. in fact, this sounds very much like other over-the-Internet storage options that are currently available.
which begs the question of why i wouldn't just upload my files (music and otherwise) to an online storage service instead of something very specific like mp3Tunes.
i think michael's 3rd prediction above brings up lots of interesting questions... as someone who has a backup drive dedicated to providing disaster relief from a hard-drive failure (and sometimes wakes up worrying that i should have something better, or off-site), i'd be really interested in an online storage service that was cheap, easy, and likely to not fold in a few years... that's been my big fear with services i've investigated so far (though i haven't looked seriously in a year or so).
i just want storage, but it seems that lots of folks would need to backup files, passwords, plugins, favorites, etc. etc. are we maybe moving away from having so much of our processing and storage in our homes to having something more like a thin client that accesses all my settings, files, etc. from a remote server (that's backed up and can provide instant recovery when there's a failure)? definitely not in 2008, but might this be hugely attractive if/when Internet access is available almost everywhere (WiFi, etc.)?
This one already happened - on mp3.com no less, so Mr. Robertson could give you a review of the legal ramifications. Suffice it to say, that service didn't last very long (at the time, at least).
The music industry said that they owned the music that mp3.com was hosting, and since mp3.com had possesion of it, they should pay for it. In order to prove you owned the music, you just needed to insert the cd in your drive when logged into your account. It used the same technology as CDDB. I think the RIAA used other arguments, like "streaming" constituted a broadcast, so mp3.com owed not only money for possesion, but money for every song streamed.
At the time, mp3.com had no agreements with any labels (RIAA would consider that sleeping with the enemy). Today, however, there might be a different story. The music locker would need to be predicated on the agreement of everyone involved that the music stored in your locker is indeed yours and begotten legally. I think this music locker idea is a great idea. I used to work for a company that provided online music sales (an offshoot of Diamond Multimedia's Rio device - Rioport) and we considered the music locker, but the labels wanted nothing to do with it. My impression of the music industry is that it is a ruthless cartel that cares nothing about the consumer's rights. I worked directly with some of these people. If they could, they would have absolute say in how, when, where, and why you were playing their music.
Do people really think their mp3 files are valuable enough to put in a lockbox? When my laptop was stolen, my downloaded/ripped music was the very last thing I cared about. I wanted the things I'd created myself or that weren't easily replaced: tax returns, email archives, vacation pictures.
The other problem with online backup services aimed at home users is DSL's upload speed (usually < 1 Gbyte/hour.) I don't see how they can compete with USB flash drives.
Second, I think it's interesting how relatively quickly television and movie rights holders have bought into downloading compared to the music industry. You could say the time was more ripe, but there just doesn't seem to be the kicking and screaming that the labels have continued to make.
I think an interesting event awaits when some retailer pulls CDs completely from their stores, or customizes their inventory to compete only in some niche manner. Retailers, I think, simply can't afford to tie up so much money in inventory anymore when all of it turns much slower. Rarely can you go to a large music retailer (Border's, Best Buy, etc.) and see the full catalog of an artist anymore and Target and WalMart music departments look more like the small department stores of the 1970s anymore.
I often thought the retailers had the most to lose from music downloads and this was a fight the labels were making on behalf of the retailers. People still like to browse, so I'm surprised there aren't more downloading kiosks at retailers that allow people to make a downloaded CD on the spot. It seems like it would be a better alternative for retailers than to watch this part of their business dry up. Once consumer behavior completely swings, it will be too late to bring those persons back to stores.
there isn't really much data yet, and there really isn't much public data. EMI and Apple came out to say that iTunes Plus was going really well, but consider the source big time on that one.
Provided the service notes that they are simply providing the storage medium and not the actual owners of the music/data on their server(s) they should be relatively safe. Since information for the owner of the "locker" is needed any piracy issues will easily be routed to the person that actually uploaded the pirated file(s).
Remember, this is simply a place for me to store my music in the event that my computer dies and my library is not recoverable, the service will likely not allow public downloads from a private library.
From MP3tunes.com:
"Transmit (a) any content or information that is unlawful, fraudulent,
threatening, abusive, libelous, defamatory, obscene or otherwise
objectionable, or infringes our or any third party's intellectual
property or other rights;"
So if you upload pirated music you violated the Terms of Service and in the event the copyright owner(s) find out MP3tunes.com will get a nice notice from them.
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