Comments on: Lala, Free Music Streaming, And Why Two-Tier Pricing is the Future http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/ The latest gear, software, and techniques for electronic music production and performance Wed, 03 Dec 2008 02:44:02 +0000 http://wordpress.org/?v=2.6 By: Create Digital Music » DRM Lessons: MSN Music Restores Authorizations Through 2011 http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/#comment-502745 Create Digital Music » DRM Lessons: MSN Music Restores Authorizations Through 2011 Wed, 18 Jun 2008 22:06:49 +0000 http://createdigitalmusic.com/?p=3538#comment-502745 [...] The lesson here seems clear to me: the cost of DRM is ultimately exacted on the vendor. It’s especially ironic as video sellers move toward more DRM rather than less, but DRM in music seems utterly dead. And whereas the DRM controversy began as a discussion of piracy issues, it’s now centered on sales. The simple fact of the matter is, online music has proven to have real profit potential, even if it’s been slow to catch up with the late 90s CD bubble. True, DRM does live on in subscription services, though I think the comparison there isn’t entirely valid — the point of subscription models is unlimited access to music, not necessarily building permanent collections. And even there, we’ve seen a migration away from DRM, as in the streaming/purchase model on Lala.com, which I examined earlier this month. [...] [...] The lesson here seems clear to me: the cost of DRM is ultimately exacted on the vendor. It’s especially ironic as video sellers move toward more DRM rather than less, but DRM in music seems utterly dead. And whereas the DRM controversy began as a discussion of piracy issues, it’s now centered on sales. The simple fact of the matter is, online music has proven to have real profit potential, even if it’s been slow to catch up with the late 90s CD bubble. True, DRM does live on in subscription services, though I think the comparison there isn’t entirely valid — the point of subscription models is unlimited access to music, not necessarily building permanent collections. And even there, we’ve seen a migration away from DRM, as in the streaming/purchase model on Lala.com, which I examined earlier this month. [...]

]]> By: Sebastien Orban http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/#comment-495442 Sebastien Orban Sun, 08 Jun 2008 21:22:17 +0000 http://createdigitalmusic.com/?p=3538#comment-495442 About the metered bandwith : here in Belgium, it's what we've got, and to be honest, it's not that bothering. Here I've got more or less 100go in download (the upload is not accounted), and between 1am and 1pm all traffic is divided by two (happy hour time). It's enought for most people, and I can get more if I need to. But well, it's on a slow ADSL line (3mbps dnw/512kbps up) About the metered bandwith : here in Belgium, it’s what we’ve got, and to be honest, it’s not that bothering. Here I’ve got more or less 100go in download (the upload is not accounted), and between 1am and 1pm all traffic is divided by two (happy hour time). It’s enought for most people, and I can get more if I need to.
But well, it’s on a slow ADSL line (3mbps dnw/512kbps up)

]]> By: Peter Kirn http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/#comment-493951 Peter Kirn Fri, 06 Jun 2008 21:42:21 +0000 http://createdigitalmusic.com/?p=3538#comment-493951 @Monk: Wait a minute here. The ads aren't paying for the radio *content* so much as the radio broadcaster. And plenty of streaming services have additional revenue models -- underwriting on public radio online, and ads on streamers from Last.fm to AOL radio. So I'd say the comparison is absolutely apt. And anyway, I think the market is speaking, given the explosive growth of some of these sites, especially given they've only barely gotten started rolling out this kind of service. @Monk: Wait a minute here. The ads aren’t paying for the radio *content* so much as the radio broadcaster. And plenty of streaming services have additional revenue models — underwriting on public radio online, and ads on streamers from Last.fm to AOL radio. So I’d say the comparison is absolutely apt.

And anyway, I think the market is speaking, given the explosive growth of some of these sites, especially given they’ve only barely gotten started rolling out this kind of service.

]]> By: Monk Edsel http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/#comment-493656 Monk Edsel Fri, 06 Jun 2008 15:31:40 +0000 http://createdigitalmusic.com/?p=3538#comment-493656 The direct comparison to broadcast radio isn't valid, because it isn't actually free. It's paid for by advertising, which the listener is then subjected to for minutes at a time at set intervals. We all know that everyone generally hates advertising, particularly on the Internet. No one here is mentioning advertising as a means to sustain a music service, so we'll assume that no one here wants it, either. In fact, everyone seems to agree that a quality streaming music service would require some sort of subscription which, without advertising to subsidize it, it certainly would. The problem the record industry has is that the unwashed teenaged masses (re: the mainstream, i.e. where-the-money's-at) have no interest in paying for anything they can dig up and keep for free on a file sharing service, which—if I may be so bold—essentially ends this whole argument as far as the average consumer is concerned. People who are willing to pay for music they don't actually get to own (music itself still considered a disposable commodity by most) are still in the minority; the average Rihanna fan is not using or reading this website, and indeed is downloading her latest single for free from Limewire as I type. In short, a bunch of neat-o ideas are being presented here, but the market won't allow any of them to take off anytime soon. The direct comparison to broadcast radio isn’t valid, because it isn’t actually free. It’s paid for by advertising, which the listener is then subjected to for minutes at a time at set intervals. We all know that everyone generally hates advertising, particularly on the Internet. No one here is mentioning advertising as a means to sustain a music service, so we’ll assume that no one here wants it, either. In fact, everyone seems to agree that a quality streaming music service would require some sort of subscription which, without advertising to subsidize it, it certainly would. The problem the record industry has is that the unwashed teenaged masses (re: the mainstream, i.e. where-the-money’s-at) have no interest in paying for anything they can dig up and keep for free on a file sharing service, which—if I may be so bold—essentially ends this whole argument as far as the average consumer is concerned. People who are willing to pay for music they don’t actually get to own (music itself still considered a disposable commodity by most) are still in the minority; the average Rihanna fan is not using or reading this website, and indeed is downloading her latest single for free from Limewire as I type. In short, a bunch of neat-o ideas are being presented here, but the market won’t allow any of them to take off anytime soon.

]]> By: Sizzurp Sippa http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/#comment-492728 Sizzurp Sippa Thu, 05 Jun 2008 18:02:43 +0000 http://createdigitalmusic.com/?p=3538#comment-492728 The model they need to adopt is the model of cable television. For $100 a month, I get thousands of channels, tens of thousands of free movies to download, a PVR to record shows, etc. Basically, for $100 a month I get all the TV I could possibly watch. Basically, I would pay $100 for a service that has all the music I want. I don't mean just one label, I mean basically all the music that comes out on every significant label, all that I want to download, with no DRM. Sure, I can download the music off of some pirate site, the same way I can download episodes of my favorite TV show instead of getting cable - But it is just so much easier and higher quality to use cable. Likewise, it will be possible for people to illegal exchange that music that they download, but to have all the music at your fingertips immediately with a high-bandwidth connection (vs slow-ass filesharing), linked to reviews, cross referenced to similiar artists and genres all in one place, I would easily pay $100 a month. The model they need to adopt is the model of cable television.

For $100 a month, I get thousands of channels, tens of thousands of free movies to download, a PVR to record shows, etc. Basically, for $100 a month I get all the TV I could possibly watch.

Basically, I would pay $100 for a service that has all the music I want. I don’t mean just one label, I mean basically all the music that comes out on every significant label, all that I want to download, with no DRM.

Sure, I can download the music off of some pirate site, the same way I can download episodes of my favorite TV show instead of getting cable - But it is just so much easier and higher quality to use cable. Likewise, it will be possible for people to illegal exchange that music that they download, but to have all the music at your fingertips immediately with a high-bandwidth connection (vs slow-ass filesharing), linked to reviews, cross referenced to similiar artists and genres all in one place, I would easily pay $100 a month.

]]> By: sudara http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/#comment-491304 sudara Wed, 04 Jun 2008 10:39:14 +0000 http://createdigitalmusic.com/?p=3538#comment-491304 Thanks for the article, Peter. It is nice that the first stream is free. But it doesn't feel right. It's not a bold move and the model is not inventive. It basically says: Ok, so, you still must pay per item, but we're going to give you a taste of whatever you want to make sure that item is the item you want. How is this one bit different from iTunes or Amazon or any music service from 1999? Because the whole song is listenable in low quality stream instead of only 30 seconds? I'm not sitting here with all the answers, but I truly believe that what 'feels right' is for music distribution to be: a) actually distributed (meaning, it's not coming from a few select sources, it moves freely between many many sources) and b) much more cheap and often free (true to the fact that the internet actually exists and delivery costs close to nothing) This is what the internet has long ago proven that people want. It's a real shame that there is only a handful of artists/companies who see that and are honest with their fans. (I'm talking about Radiohead/NIN/friends.) The sustainability of their particular approach and appropriateness for smaller artists is questionable, but at least they are being creative, honest and walking away profitable. Their approach is right, for their listeners and at this point in time, and the market proves that. We've yet to see new model move into the main industry space that branches from the pay-per-item approach of the 20th century and moves to embrace the real life consumers of today. I have nothing against Lala, but I will never go there - it is another old-industry-loving site full of rules and prices where there shouldn't be any prices. A barrier to repeated streaming? Crazy, I tell you, it's only going to hurt them. Unrestricted repeated streams would jack up user loyalty and time spent on the site. Sigh. Thanks for the article, Peter.

It is nice that the first stream is free. But it doesn’t feel right. It’s not a bold move and the model is not inventive. It basically says: Ok, so, you still must pay per item, but we’re going to give you a taste of whatever you want to make sure that item is the item you want. How is this one bit different from iTunes or Amazon or any music service from 1999? Because the whole song is listenable in low quality stream instead of only 30 seconds?

I’m not sitting here with all the answers, but I truly believe that what ‘feels right’ is for music distribution to be:

a) actually distributed (meaning, it’s not coming from a few select sources, it moves freely between many many sources) and

b) much more cheap and often free (true to the fact that the internet actually exists and delivery costs close to nothing)

This is what the internet has long ago proven that people want. It’s a real shame that there is only a handful of artists/companies who see that and are honest with their fans. (I’m talking about Radiohead/NIN/friends.) The sustainability of their particular approach and appropriateness for smaller artists is questionable, but at least they are being creative, honest and walking away profitable. Their approach is right, for their listeners and at this point in time, and the market proves that.

We’ve yet to see new model move into the main industry space that branches from the pay-per-item approach of the 20th century and moves to embrace the real life consumers of today. I have nothing against Lala, but I will never go there - it is another old-industry-loving site full of rules and prices where there shouldn’t be any prices. A barrier to repeated streaming? Crazy, I tell you, it’s only going to hurt them. Unrestricted repeated streams would jack up user loyalty and time spent on the site. Sigh.

]]> By: The Next Lala — The Field Guide http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/#comment-490987 The Next Lala — The Field Guide Wed, 04 Jun 2008 03:44:12 +0000 http://createdigitalmusic.com/?p=3538#comment-490987 [...] Kirn at Create Digital Music has reviewed the latest incarnation of lala.com that was recently released in beta as next.lala.com. As a longtime Lala user I agree with his [...] [...] Kirn at Create Digital Music has reviewed the latest incarnation of lala.com that was recently released in beta as next.lala.com. As a longtime Lala user I agree with his [...]

]]> By: BassTooth http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/#comment-490937 BassTooth Wed, 04 Jun 2008 02:47:47 +0000 http://createdigitalmusic.com/?p=3538#comment-490937 oh. this would be cool with something like last.fm oh. this would be cool with something like last.fm

]]> By: Guillermo http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/#comment-490778 Guillermo Tue, 03 Jun 2008 23:38:02 +0000 http://createdigitalmusic.com/?p=3538#comment-490778 Awesome! will bands be able to sell music on lala? Awesome!
will bands be able to sell music on lala?

]]> By: Peter Kirn http://createdigitalmusic.com/2008/06/03/lala-free-music-streaming-and-why-tiered-pricing-is-the-future/#comment-490464 Peter Kirn Tue, 03 Jun 2008 17:48:32 +0000 http://createdigitalmusic.com/?p=3538#comment-490464 Darren, I'm not convinced about that at all. First, a 5 GB cap would definitely kill streaming, but audio is significantly lower-bandwidth than video, and Time Warner's 40 GB cap would be plenty reasonable for audio streaming. Second, I can't imagine a worse time for Time Warner to be trying this stunt. They're about to go up against a massive deployment of Verizon fiber optic here in NYC. So I wouldn't take that one pilot program in Texas as an indication of what they'll do here. The moment these companies have to compete, metering will be out the window -- at least at any level that would kill audio streaming. Darren, I’m not convinced about that at all. First, a 5 GB cap would definitely kill streaming, but audio is significantly lower-bandwidth than video, and Time Warner’s 40 GB cap would be plenty reasonable for audio streaming.

Second, I can’t imagine a worse time for Time Warner to be trying this stunt. They’re about to go up against a massive deployment of Verizon fiber optic here in NYC. So I wouldn’t take that one pilot program in Texas as an indication of what they’ll do here.

The moment these companies have to compete, metering will be out the window — at least at any level that would kill audio streaming.

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