Net Soup: Frank Beacham
MusicNet Tries to Create an Online Music Market
If you've spent much time around college kids lately,
you know how seriously they take online access to free music. Used
to getting song tracks at no cost in nice little MP3 files, these
sophisticated young music lovers hoot at the very idea of ever paying
for it.
The free music ethic is pervasive. The hated record
companies be damned. So what if they shut down Napster? There's
always FastTrack, a peer-to-peer service in Amsterdam that Webnoize,
the research firm, says has exceeded the 1.57 million-user peak
in Napster's heyday. And, if that goes, well there will always be
other places to download free music.
It's against this ingrained mindset that MusicNet,
the first of several planned new commercial online music services,
has appeared. The venture's marketing campaign refers to music listeners
as "consumers," as if to emphasize in no uncertain terms that music
must be "consumed" in exchange for money.
The battle line has been drawn in the sand. Get ready
for a culture clash that has huge implications for the future of
all personalized pay media.
IT_S FOR REAL
One of the key players trying to straddle that line
is Rob Glaser _ founder of RealNetworks, the streaming media company
_ and a key player in creating MusicNet, the first alliance of record
labels to offer music online via subscription. MusicNet is a partnership
of RealNetworks and mega music rights_ holders, EMI Group, Bertelsmann
and AOL Time Warner.
On Dec. 4, RealNetworks launched RealOne Music, a
new online pay service that rebrands MusicNet. RealOne Music will
soon be followed by America Online, which will market the same service
under the MusicNet name.
For a fee of $9.95 a month, subscribers can access
100 streams and download 100 songs to their computer's hard drive.
At the end of 30 days, those songs _ from a catalog of over 100,000
choices _ will become unplayable unless the subscription is renewed.
The music can be played only on the computer of the
purchaser and only with a proprietary browser incorporating the
necessary rights_ management technology. Music files cannot be moved
to portable MP3 players or burned onto a CD.
Even if a subscriber would want to purchase a music
file for permanent use, it's not for sale. A link takes the subscriber
to Amazon.com with information on how to acquire the full CD _ the
only purchase option.
PAYING ONE WAY OR THE OTHER
Glaser, perpetually upbeat, is fully aware of the
challenges of trying to pioneer a pay service to an audience used
to getting music for free. He thinks he can succeed by making the
subscription music acquisition process so attractive and hassle-free
that music aficionados will gladly pay to avoid the inconveniences
now associated with the free services.
"In the case of music, people have a mental model.
They think Napster. We have to expose them to a new model that's
much more compelling," Glaser said in an interview after the launch
of RealOne in New York City.
The streaming media pioneer acknowledged there's
a balancing act going on between those who listen to music and those
who own the rights. "It's clear that services like Napster worked
for consumers, but didn't work for rights_ holders. So the rights_
holders declared war.
"The legal precedents are pretty clear that any services
like Napster are _ at a minimum _ going to have to be less and less
centrally coordinated," Glaser continued. "That's because the judge
ruled in the Napster case that you cannot maintain a central directory
(of music). As a result, these free services are getting harder
and harder to use and much less reliable. I know _ I've used them
all. It's my job."
This, argued Glaser, opens the way to an appealing,
easy-to-use music service. For less than the price of a single CD,
users can now explore, for a month, the catalogs of hundreds of
artists at many of the top record labels. Downloads will be reliable
and of high quality. There are artist guides, discographies, bios
and even album art.
_I_LL BUY IT_
Skeptical, I asked Glaser why not let subscribers
buy the music files and use them as they please?
"The fact we haven't announced the implementation
of how you would own it doesn't mean we won't do that," he responded.
"It's putting the pieces together. The logical next step would be
to enable purchase of the digital list.
"But the interesting question will be _ when you
really offer it and it costs, say 99-cents a track _ will people
really say 'hey, I'm thrilled to pay ten times as much as I'm having
to pay for rental to own it,' or will they say, 'I'm glad I have
that option, but I think I'll just keep renting it for a while and
maybe I'll buy the CD [later].' I don't know the answer to that
question. We'll certainly give people an option at some point."
Finally, I asked Glaser _ who earlier had expressed
personal admiration for Apple's elegant new iPod music player _
how the RealOne Music service can succeed by prohibiting the playback
of sound files on portable players?
"We need a comprehensive solution for portable players
and it's not there yet," he admitted. "It's an issue of the portable
devices being compliant with the security system." (Apple and other
manufacturers have refused to implement such rights_ protection
on their portable devices.)
Hang on for the ride, it's going to be an interesting
journey, Glaser advises. "My sense is what we have today isn't perfect,
but it pushes the ball a huge leap forward."
We'll see if the college kids agree.
Frank Beacham is a New York City-based writer and
producer. Visit his Web site at http://www.beacham.com.
E-mail: frank@beacham.com.
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