PC games — and even Windows customization utilities — make up a much larger market than music software. But in this parallel universe there have been echoes of the challenges facing music developers since the early days of PCs. Both have highly dedicated, niche audiences. Both face rampant piracy. Neither has the support of big business sales as the likes of Adobe and Microsoft do. Many of the customers use the products in their free time, rather than as tools that generate revenue. (Sorry, but it’s true.) Both have, let’s face it, customer bases who often don’t have that much money to spend, period — particularly after a hefty hardware investment.

And both gamers and musicians have been the target of aggressive anti-piracy campaigns, campaigns that get to the heart of the debate over software DRM, and very often blame pirates for failing business models.

Stardock, a “boutique” developer with a rabid following of sci-fi strategy gamers, finally spoke out. And they had good reason: a game with absolutely no DRM made it to one of the top three spots in the country.

Piracy & PC Gaming

There are real lessons for the potential of future music software development, not only in terms of piracy, but in terms of building future businesses.

Trent sez: “Buy all these music formats from meeeeeeeeeee!” Photo: Jenna Foxton.

Artists are known to mouth off a bit about the Future of Music and Digital Distribution and whatnot, but Trent Reznor is putting his money — and not money — where his mouth is.

Nine Inch Nails Menu of Ordering Options for Ghosts I-IV

via Mashable: Practice What You Preach: Nine Inch Nails Gives Away New Album

And they certainly have their bases covered with their new album “Ghosts”:

• Get the first volume of the album free on torrent sites (or via the NIN site)
• Pay US$5 for a download of all 36 tracks (take that, Radiohead!)
• Get a 2 CD box set for US$10 (which also includes immediate full download of the tracks)
• US$75 gets you the 2 CDs, a data DVD with the digital tracks, and a Blu-Ray disc with 96/24 stereo and accompanying slideshow
• US$300 Adds four LPs on vinyl, two prints, and Trent’s John Hancock — limited-run 2500 pieces

I think they should have just kept going. You know, $800 gets you cassette tapes, Pro Tools session files, 8-tracks, surround sound. $50,000 adds an IMAX film (projector not included) and one of those little plastic mini records. $500,000 adds a DIY planetarium show, plus a special Buddha Box edition and a low-power FM radio transmitter so you can self-broadcast the album. $1 million and you get a Jaguar pre-loaded with a specially-signed sound system that plays the album, plus reel-to-reel multitracks. $500 million and Trent comes to your house, brings his studio rig and console, and re-records the album for you in your living room.

Before you assume the downloads are worthless, though, even the torrent file includes PDF “liner notes” and 320 kbps MP3 files. Buy the download and you have an option of either FLAC lossless or Apple Lossless audio — something I know readers here have complained about.

There’s only one problem. The fact that musical superstars are experimenting with various formats amounts to great research into what people may want. But if you’re not a Nine Inch Nails junkie, this is all awfully … well, complicated. For lesser-known artists, it seems like finding just one or two solutions that make most people happy is a better route, and it’s not clear what those are yet.

I’m personally most interested to see how the torrent thing works. Then again, with bandwidth costs plummeting, serving up your own audio — even lossless audio — becomes a viable option for artists and small labels. And so far, the torrent doesn’t seem to be cannibalizing the for-fee options, as NIN’s site says they’re experience high volume of traffic and orders. If enough people spring for the higher-cost options, the free versions may pay for themselves.

By now, you’ve likely heard that Apple’s iTunes Music Store has taken the #2 spot in music sales — all music sales – right behind retailer giant Wal-Mart. This tends to lead to one of two somewhat gloating reactions from Apple advocates. One is a sort of “rah, rah, go Apple!” attitude. The other is along the lines of “hurrah, discs are dead, go throw your CDs in with your eight tracks and vinyl while we leap into the future!”

A typical sentiment comes from Scott McNulty on The Unofficial Apple Weblog: “I have an iPod, an iPhone, an Apple TV, and I manage all my music with iTunes as I am sure many, many other people out there do as well… “

Eep. Any votes for “I have a Sony Cassette Walkman, a cheap mobile phone, a … TV, and I manage all my music on my bookshelf”? Is that more boneheaded nostalgia?

Of course, it wasn’t supposed to be this way — any of this.

Some time in the last few days, browser-based music tool Yottamusic went kaput. For those of you who never saw it, the site was brilliant. Like the Rhapsody music service, Yottamusic featured all-you-can-listen music for a subscription fee, all playable in a cross-platform browser. (Yes, even Firefox for Linux worked just fine, thanks to a Firefox extension.) Unlike Rhapsody, Yottamusic had an interface that was actually attractive and usable, and synced plays to the music community Last.fm. Social features let you easily discover music via what other Yottamusic listeners liked — not a new idea, but powerful when integrated with a subscription music service. At least Yottamusic died a graceful death: playlists created on the site can be exported as XML and even uploaded to Rhapsody.com. A lot of websites may not go as gently into that good night, or, um, whatever.

Now, some of this makes some sense. Yottamusic itself was a creation of Rhapsody. In fact, the logical next step would be to ditch Rhapsody’s clunky, obnoxious interface with animated album covers and whatnot, and learn from Yottamusic’s cooler social features and sleeker interface. Let’s see, did th– nope. Why kill bad ideas and maintain the good ones when you can do the reverse?

It’s hard not to feel like subscription-based music in general is not long for this world.

WAVES and PACE defend their anti-piracy hardware protection and respond to allegations of technical difficulties from a blog entry … and why, if this discussion really matters, we should look at it a different way.

At the beginning of the month, we pointed to a blogger who posted what was essentially a rant about why he was fed up with PACE. (PACE is a common anti-piracy developer whose technology is most often deployed as an iLok dongle, but available as software-only protection, as well.) The blog entry began with a series of technical problems, but developed into an argument about why the author felt third-party anti-piracy technology was problematic in general. There’s nothing so unusual about that, or even the fact that he announced he was "boycotting" products that use PACE. I’m sure you’ve heard people gripe about PACE and iLok; I’ve heard just these kinds of rants for years, and the word "boycott" does come up. (Whatever the equivalent of a "watercooler" is for audio — coffee maker? — it’s something you hear, period.) That’s not universal — some people are very loyal to PACE-protected products, and in some cases prefer an iLok to another solution. But complaints are common on the user standpoint; it’s no secret that copy protection in general is not something that users are enthusiastic about.

What made this slightly unusual was that the blogger, Adam Schabtach, works as a developer (for Audio Damage), and that a rant that a few years ago might have been shared with friends wound up on the Web. (The blog entry was NOT an official message from Audio Damage, but it did cause the blog to be received differently than if it had been a random user.) And because I believe in meeting these issues heads-on, I personally helped the story get more attention.

Of course, just as the Web amplifies rants, it also amplifies the responses. You can read some 86 comments in response to Adam, some very well-reasoned, some heated (including those who claim Adam was biased by being a developer). Sure enough, some people stepped up to defend PACE and iLok. Some did not, though there were two separate responses, one frustration with PACE, and the other with WAVES customer support. (I should note, these are not the same issue. Any developer, no matter their intention, can be bitten by unhappy users.)

There was also an official response: I was contacted by PACE Anti-Piracy. PACE had communicated with WAVES, the developer whose products Adam was using. Waves didn’t contact CDM, but PACE relayed this response from them. Specifically, both PACE and WAVES called into question the blue screen that had so frustrated Adam, claiming it had another cause:

The last written correspondence WAVES had with this user was over two years ago. No other mention in their database of correspondence with this user under this name.

In this "article" the user mentions to different scenarios where he has attempted to install/use Waves.

It is difficult for Waves and PACE to comment on the first attempt as there are not enough details for us to diagnose the problem. [PACE agrees - not a lot of info and historically very very few if any Mac issues seen].

A Waves tech rep will not recommend a user to reformat his system unless; they have found a number of symptoms indicating a major problem with the system. This is extremely rare. I can speak for my self, handling thousands of cases by phone and email where I have maybe suggested 1 or 2 users that they need to reformat their system.

[Note: PACE will NEVER recommend such reformatting due to any PACE issue as that is not how issues can be resolved].

The second scenario is not PACE related, this is an issue with Windows DEP (Data Execution Prevention) protocol.

“The installer almost immediately informed me that it had to restart my PC, so I let it. It launched itself automatically after the PC rebooted, started the installation process, and then my good faith and efforts were rewarded with this: (picture)”

There is a very simple fix to overcome this. All of WAVES tech support reps are aware of this issue and are able to resolve this issue within minutes. Period.

End of Waves response.

Since this description and Adam’s didn’t match up, I went back to Adam to find out what he had to say about Waves’ response. He wrote back:

Updated: A PACE Anti-Piracy official has officially requested that we remove an image of the iLok product. While they asked not to be publicly quoted, they have challenged the technical accuracy of Adam’s blog post, saying they don’t believe their product caused the Blue Screen of Death. If PACE chooses to release an official reply, we will share it.

The debate over copy protection in music software and anti-piracy tactics continues to heat up. Now Adam Schabtach of Audio Damage, the popular plug-in developer, has fired off a call for a boycott of products that use PACE and the iLok hardware dongle. And that means that Waves is again a target, in this case because Adam himself had technical difficulties resulting from the copy protection scheme. But here’s his argument: the problem isn’t copy protection per se, it’s that developers have to cede control to a third party when the technology breaks.

This points up the biggest problem with PACE: if something goes really wrong, the maker of the PACE-wrapped product can’t help you. They didn’t invent PACE, they can’t fix bugs in PACE, they often don’t even know enough about PACE to troubleshoot it (which is not so much a reflection of their ignorance but of the sheer arcane complexity of PACE and the amount of information about it which its makers do not release even to their customers). Their only recourse is to tell you to wipe your hard drive bare and start again. This is one of many reasons that Audio Damage doesn’t use PACE: we want to help our customers make music, and we don’t want to be in a position in which we have to say “sorry, can’t help you” if something goes wrong with one of our products. Of course, unlike Audio Damage, Waves doesn’t offer a money-back guarantee for their products, so in the end I was stuck with software I’d paid for but couldn’t use.

Adam just doesn’t like copy protection, right? Well, no, in fact. The issue is that while PACE fails to stop piracy (something admitted by Waves themselves as they sue studios around the world for millions of dollars), PACE did succeed in stopping Adam from using his software:

I went to the Waves website, logged in to my account, downloaded the latest installer, and retrieved my iLok from the shelf upon which it was gathering dust. I backed up my hard drive (”once bitten, twice shy” and I’ve been bitten way more than once by PACE), launched the installer, and held my breath. The installer almost immediately informed me that it had to restart my PC, so I let it. It launched itself automatically after the PC rebooted, started the installation process, and then my good faith and efforts were rewarded with [a Windows Blue Screen of Death].

… A PC running Windows puts this up when something goes really, really wrong and the OS makes the unilateral decision to bring all proceedings to a halt in order to prevent further mishap. Seeing this screen is the computer equivalent of seeing your car deploy its airbags.

The final analysis:

PACE doesn’t stop piracy; any copy-protection system can, and will be, defeated. What PACE does do is prevent legitimate users of software products from using products which they’ve paid for.

Why I Boycott Products That Use PACE/iLok (and Why You Should, Too)

PACE/iLok is the leading provider of this kind of copy protection, so I expect we may hear a response. If I can get a statement from them, I’ll post that soon. But I will say, Adam is not alone in his frustration. Developers will continue to make the choices they feel are right for their business, which is their prerogative — but it’s likewise the choice of their customers to vote with their wallets. I do know users who are perfectly comfortable with iLok. Let us know how you feel, and whether copy protection has influenced your purchasing decisions.

Updated: Note that we’re talking about two different kinds of copy protection offered by PACE. One is the PACE software protection, which does not use a hardware dongle (or “hardware key” as PACE prefers to call it). The other is the iLok.

Already, readers are split: we’ve got Max/MSP users (myself included) who haven’t had problems with PACE software protection, and even some iLok hardware users who haven’t been bothered. But there are some strong arguments against the hardware dongles, to the point of cutting into sales, something developers may want to watch closely. Keep the feedback coming.

The original promise of digital music distribution was supposed to be greater variety, the availability of out-of-print music, communities serving specific interests that had been under-served by mass culture, high-quality audio, and lots of choice. Slowly, I think, that promise is finally being delivered. Readers of a music technology site may not think much about Josquin motets (well, actually, I do, though I don’t know if I’m typical). But we have talked about a gradual shift away from mass-market, proprietary distribution as with the original iTunes Music Store to more choices of stores, DRM-free music that’s mobile across devices, and, most importantly, more choice in music. What’s amazing is how this trend is accelerating.

This week, Deutsche Grammophon, the classical music recording giant that’s owned by Universal Music Group, launched its own online music store. And there are a number of things that make it unique:

dgwebshop.com

• The store is truly international: No, really international. Not the US and Canada international. The store will sell to 42 countries, and will extend to Southeast Asia including China, India, Latin America, South Africa, and Central and Eastern Europe including Russia. Two words: ’bout time.
• There’s real variety: In a genre badly abandoned by an entire industry recently — long before Napster, in fact — DG has put up a serious catalog. And in a big change, instead of publishing a subset of their current catalog, they’ve actually re-released “out-of-print” albums. Lest you think I’m shilling for UMG, they’ve released a couple of my personal faves I only had access to on vinyl, and made contemporary music far more accessible.
• Big player, small market: It’s owned by UMG, so this is no indie label — in fact, on the contrary, it’s encouraging to see a big media company let the niche division move forward instead of focusing on what’s popular in the mass market.

I got a chance to talk to Jonathan Gruber, VP New Media, Classics & Jazz, Universal Music Group International. He’s on-message as far as UMG’s pitch, as you’d expect, but he had some interesting details to share that should please classical fans, in particular. (And I know there are quite a few who read this site — no surprise, as classically-trained composers were among the first to embrace, and to have access to, electronic music technology.)

Universal CEO Doug Morris makes an easy target for the blogosphere. This is the old-school record industry executive who called iPod owners thieves and wanted broad legal enforcement against piracy — enforcement that, in the end, seems to pale in comparison to the revenue generated by actually offering online sales. So, now that Morris has gone up against Wired, the blogosphere can easily see him as a dinosaur.

Universal’s CEO Once Called iPod Users Thieves. Now He’s Giving Songs Away. [Wired News]

But as artists, all of us face a fundamental problem: how do you put value on something that’s ephemeral? It’s an age-old issue that has faced musicians explaining to their parents why they don’t want a real job, and artists to their patrons when affixing a price tag. (And as we’ve seen from veteran software developers and the BanPiracy debate, software “artists” face the same challenge.) Sure, people love to talk piracy, because it’s easier to talk in those terms. Piracy is theft, theft is crime, and crime is bad — including making a mix tape for a friend. Or all music should be free, and never mind that artists need health insurance and rent money. They’re black and white extremes, entirely couched in moral/philosophical terms, neither of which contend with how to solve the actual real-world problem (at least, not if you stop there).

And then I came across this quote from Morris in the interview:

“Really, an album that someone worked on for two years — is that worth only $9, $10, when people pay two bucks for coffee in Starbucks?” Morris sighs. “People never really understand what’s happening to the artists … If you had Coca-Cola coming through the faucet in your kitchen, how much would you be willing to pay for Coca-Cola? There you go,” he says. “That’s what happened to the record business.”

Wait a minute… a liquid that comes out of your faucet for free, but is also sold, in bottles, at retail. How much would you be willing to pay? Hmmm… this sounds familiar.

It’s called water.

And how much are people willing to pay for the privilege of packaging, control over subtle variations of taste, and mobility? Quite a lot, as it happens. More than Coke.

The Web holds huge potential for music sharing and music discovery, but figuring out how to make that potential work — and how to navigate copyright and licensing laws in the process - has been a major challenge. This week, the creators of the website Mixaloo promised to “bring mix tapes into the digital age.” Whether you buy into that concept or not, or their particular implementation, the site does demonstrate both some of the opportunities and legal hurdles in Web sharing. They also inherit the closed model supported by labels (no full streams, previews only, DRM), but already that’s changing (MP3, and the promise, hopefully, of full-length tracks soon). It’s like a microcosm of the whole business at the moment.

Mixaloo.com

I spoke to the founders shortly before launch, and they described how their approach differs from the online radio model, which is constrained in part by the law:

There’s the streaming radio camp … you have a minimum of forty tracks, you can’t have the same artist twice in a row, and then you get into the whole mess of royalties. Then there’s the way we’re going — user-generated albums. And we like that because it’s personalized.”

The basic model:

• 10 or more tracks on the “mix tape”
• Mix your album from 3.5 million + tracks.
• Majors and indie music — the founders say they have “deals with all the major labels” but also “a ton of independent aggregators like CD Baby, The Orchard, and Iota
• Embed players and market mixes on Blogger, MySpace, Facebook, Friendster, etc.
• Sell tracks via any of your players and earn a 50% commission
• For now, 30-second previews — but hopefully that will change? (more in a moment)

It was inevitable. With the likes of Radiohead doing “donationware”, DRM-free MP3 downloads, someone was bound to follow. (And, in fairness, Radiohead were by no means the first — this is something various artists have been talking about or doing for years. Updated: for some examples of other free albums through music history, see comments below. And as the trend grows, expect a lot more artist-to-listener downloads, or even small label-to-listener or small online store-to-listener, soon.)

The latest is Saul Williams, with the album “The Inevitable Rise and Liberation of NiggyTardust!” So, what has he got that Radiohead hasn’t got?