Music Streaming Services

[nobby]

July 26, 2009
Slipstream
The Music Streams That Soothe an Industry
By BRAD STONE

LIKE many teenagers, Josh Wilson, the 13-year-old son of the New York venture capitalist Fred Wilson, has on occasion visited the Internet’s peer-to-peer file-sharing services to download music and television shows.

But recently, as Mr. Wilson recounted last week on his popular blog, A VC, Josh has started streaming television shows from Netflix under the family’s $24-a-month subscription plan and listening to licensed, ad-supported music videos from YouTube on his iPhone. Asked by his father why he was not using file-sharing services like BitTorrent to download shows like “Friday Night Lights,” Josh replied, “BitTorrent takes too long.”

I guess any consideration of legality, morals, or ethics would be too much to ask for, especially from a 13 y.o.

The answer neatly encapsulates the remaining hope of beleaguered media executives everywhere, especially those in the rapidly deteriorating music business. After a decade of rampant digital piracy that has helped to gut album sales, a raft of new streaming music sites is making the experience of legally finding and listening to music just as seductive as downloading it free.

Many music industry observers now believe that there is a fundamental shift under way: from illegal downloads to licensed streaming services like MySpace Music, imeem and Spotify, where users can play any song, anytime and — coming soon — on any device. These sites are free, supported by ads, and with an expanding catalog of songs, they are finally ready to overshadow the more cumbersome, unauthorized services that can be hard for newcomers to navigate.

“We have been on this endless hunt for a decade trying to accumulate both our all-time favorites and the new hits,” said Bob Lefsetz, author of the Lefsetz Letter, a music industry newsletter, who believes that the future hope of the music industry lies in charging people monthly subscriptions for access to streaming sites on the Web and their phones. “Why are you going to steal if all of a sudden you can check it out quickly on a streaming service?”

I do wish people would ignore Lefsetz and stop treating him as anything but a blowhard.

Two recent studies of online behavior contribute to this optimistic view. In June, two British research agencies, MusicAlly and The Leading Question, generated a wave of headlines in the tech press after reporting that the percentage of 14- to 18-year-olds using file-sharing services at least once a month dropped to 26 percent in January 2009 from 42 percent in December 2007.

Similarly, a survey by the NPD Group in the United States this spring found that teenagers aged 13 to 17 illegally downloaded 6 percent fewer tracks in 2008 than in 2007, while more than half said they were now listening to legal online radio services like Pandora, up from 34 percent the year before.

There are some good reasons to keep a salt-shaker handy here — some teenagers may not be honest about downloading, for example. But there are also some indisputably positive factors at work. The streaming music services are providing not only an authorized but also in some cases a superior alternative, and may be the first obvious stop for a generation that is too young to remember when the original Napster revolutionized the music industry.

MySpace Music, introduced last September, now makes millions of songs available free, accompanied by ads and links to buy concert tickets and merchandise. Nielsen recently reported that the number of visitors to the site grew to 12.1 million in June, from 4.2 million last September.

YouTube also streams millions of songs under agreements with three of the four major music labels in the form of music videos — Warner Music is a holdout — and is increasingly available free from mobile phones like the iPhone. In the weeks after Michael Jackson’s death, for example, 12 million people played his “Thriller” video from pages on the site with display ads and links to buy the songs.

But perhaps the most-discussed licensed service is Spotify, a two-year-old Swedish start-up that has amassed six million users in Europe — and a few hundred lucky media and music industry insiders in the United States who have been given early access.

Spotify users download a program to their computers that allows them to quickly search for a piece of music and play it instantly. Spotify’s innovation is subtle, embedded in its intuitive user interface and efficient design. Anyone familiar with iTunes can figure out how to navigate Spotify’s s five million songs and add them to playlists.

The free version comes with ads, or users can upgrade to a premium version for 10 euros monthly (about $14). Daniel Ek, a co-founder, was in New York this month, talking to the American music labels and preparing to introduce the service here later this year.

“Piracy is essentially the consumer’s wish to have everything on demand. It’s not like people want to necessarily have it for free,” Mr. Ek said. The problem is that there have not been commercial services “that allowed people to discover new music and easily share music with friends,” he said.

Even if people are abandoning free downloads for ad-supported services like Spotify, the industry will keep facing larger existential questions. Companies like MySpace Music, Pandora and even YouTube — though thick with ads and links to paid downloads — cannot yet (if ever) replace depleted revenue from physical CD sales.

They might even be exacerbating the problem. “The big question is, are we not just fighting piracy, but also taking away the industry’s most lucrative customers, the ones that were buying 30 or 40 CDs a year?” Mr. Ek asks. “If so, the music industry is in worse shape than it was before.”

Mr. Lefsetz believes that the answer is for the music industry to nourish the streaming sites and then push users toward subscribing to them for a monthly fee. “The key is to just get $10 from everybody,” he said.

That, he said, might finally vanquish the demons of music piracy. Mr. Lefsetz uses himself as an example of this salvaged future. He used to turn to file-sharing sites to quickly sample new music he wanted to write about. Now he just streams songs free from Spotify.

I'm not familiar with Spotify but I just get the feeling that anything that relies on ads and cheap subscriptions will just be pennies on the dollar.

And shut up about Lefsetz already. He knows less that we do and he doesn't have a horse in this race.

http://www.nytimes.com/2009/07/26/bu...ndustry&st=cse

[contrary]

http://forum.cockos.com/showthread.php?t=40214



Der Kitty is outta der bag
The freetards won't stop being freetards

[Bob Olhsson]

Needing to edit the audio turns most people right off. We're also long past the point where having every single song known to mankind on your i-pod or computer is going to impress anybody. The tech crowd is getting old too...

Piracy is not inevitable and indeed may have been mostly a fad.

[radiationroom]

Originally Posted by nobby

And shut up about Lefsetz already. He knows less that we do and he doesn't have a horse in this race.

The problem with cranks such as Lefsetz is they have name recognition, courtesy in part to the tech press.

[otek]

Originally Posted by nobby

I'm not familiar with Spotify but I just get the feeling that anything that relies on ads and cheap subscriptions will just be pennies on the dollar.

I use Spotify.

It costs 14 dollars a month, which gets you add-free usage.

I use Spotify mainly to reference music when I work with bands, and to explore new music. I still buy records when I find something I like, vinyl if available.


otek

[Bob Olhsson]

There is still, of course, the fundamental problem with all advertising sponsored music and media. The advertiser will always want to choose the music and only services that allow them that choice tend to survive in the marketplace.

This is why most commercial radio in the United States today sucks. Advertising support is the underlying problem and not any solution because there is still a disconnect between the music played and the fans.

[dwoz]

Originally Posted by Bob Olhsson

There is still, of course, the fundamental problem with all advertising sponsored music and media. The advertiser will always want to choose the music and only services that allow them that choice tend to survive in the marketplace.

And the really REALLY bad part of it is that it is by no means a hands-on, direct editorial-slash-censorship interaction that the advertisers have with the process.

The chilling effect that will definitely occur in that model is several-steps removed. It's very much like the form of editorializing that a newspaper engages in, not by overtly stating a position, but rather by choosing to omit certain stories.

Originally Posted by Bob Olhsson

This is why most commercial radio in the United States today sucks. Advertising support is the underlying problem and not any solution because there is still a disconnect between the music played and the fans.

Market segmentation using music as the pivot point can, does, and always will fail to service a significant percentage of the population.

Market segmentation is by it's very nature a following trend, not a leading trend.

dwoz

[otek]

Apparently Spotify is being considered right now for becoming an iPhone application.

It's only available in Scandinavia, France, Spain, Switzerland and a few more European countries yet, but it's one of the fastest growing services over here, faster than iTunes. The company is apparently worth about 2 billion after a little less than a year. The user interface is a dream to use, and the streaming quality is high (320 kbps for premium users).

What they've done is to offer the labels shares in the company.



otek

[Mick Stuart]

I used to have Yahoo Launch. I paid about 40 a year for it and loved it. It was the best. New music, old stuff I liked. Metallica would not allow their music on there so that was a big plus and it got me interested in bands I would have never thought about. Used it at home and work and my friends all loved it as well when they came over. I had the service for about 8 years.

Then the bastards shut the door on my face and cancelled the service for all. All my work to rate songs, bands, albums and genres gone overnight. I had over 9000 songs rated and had my own bad ass radio station only to get screwed by a corporate decision. I was livid.

That has sense left a bad taste in my mouth about doing the same thing all over only to get shut out once again.

I will stick with my XM/Sirius and my own collection for now.