Pricing Digital Music: An academic perspective

April 25, 2007

the_analog_hole_is_my_ear.pngTrolling SSRN I came across another academic report destroying much of the FUD put out by the RIAA in their attempt to criminalize digital downloads. Like all good academic studies it has a cumbersome and wordy title, The Analog Hole and the Price of Music: An Empirical Study, which belies the rather simple text contained within.

The report starts off with an exploration of the analog hole , which frankly isnt that interesting but then goes into how the analog hole will effect the pricing of digital music. They set off to answer two questions: Do consumers perceive a difference between analog hole copies and the originals? Kinda. At what price would they be willing to sacrifice some quality? Twenty-five cents. The sample size is pretty small for the survey, only 66 respondents, but the findings are really interesting. Read the full report here and check out the abstract here:


RIAA Sultans of Spin: Survey Data From 1,077 Internet Users

April 23, 2007

riaasul.jpgA Pew Research report it aint, but the good folks at P2pnet.net have released the raw data from their online survey of Internet users, entitled “Sultans of Spin“. The data is released under the creative commons license and is in MS access format for easy crunching if your a database geek (I’m not). I mentioned the report last week and while I hear the folks at P2Pnet have caught a lot of flack for the survey its a great resource for getting the pulse of the folks the RIAA’s lawsuits are intended to pawn. If you do anything with the numbers ping me so I can get a look. Here is the data file zipped.


AnywhereCD and the $12 MP3 Album

April 23, 2007

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Last week serial business starter and aging Internet super-star, Michael Robertson, launched the 6th iconoclastic Internet venture in his portfolio of disruptive ventures. The new business, called AnywhereCD, billed itself as an MP3 music vendor with a CD delivery option.  And while the business itself is a bit of a yawner, its pricing and sales pitch are at least entertaining.

Explaining the AnywhereCD business model is a bit complex, largely because of how they are trying to market the service. Basically for around $15 bucks you can buy a CD from the site and get it sent to you in the mail. With each CD purchase you also get DRM-free files of songs from the CD int eh MP3 format. This is pretty impressive given the labels resistance to MP3 downloads even when they might make money from it. This is of course where things get kinda wonky. For $3 less than price of both the CD and MP3 files, AnywhereCD will sell you the CD and MP3 files but only give you the MP3 files. Confused?

The CD is clearly the basis of pricing on the site but their sales pitch is fashioned in a way to make it seem that the MP3 files are what’s being sold. The MP3 delivery and all the digital goodness that flows from having a DRM-free digital file is ancillary to the basic transaction of buying a CD for 12 bucks. The sites original pricing model featured two sets of prices one for MP3’s + a CD and the other for just the MP3’s. Thankfully, before anyone really had a chance to ask any questions or point out what was truly being offered, the MP3 album option disappeared.

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In less then 12 hours after the sites launch, on April 12th, the MP3 only option was gone from the site. Apparently even the pretense of being able to buy albums exclusively as MP3 files is more then the labels can stomach. Gone is the “MP3 Album + CD” verbiage, replaced by the much safer and probably more truthful CD plus MP3 wording. Thus an interesting, if not truly new, online marketing and sales scheme was killed on the vine by the luddite music business. But wait, there’s more…

On April 20th Reuters reported that AnywhereCD had filed a lawsuit against Warner Music for breach of contract, business defamation and trade libel. Former liquor vendor and current Warner Music topper, Edgar Bronfman Jr., is reported to have said that selling digital music without DRM is illogical, clearly he believes not selling any music at all is the better option.


Zopa Planning a National Roll-out?

April 19, 2007

header_logo.gifI’ve been a Prosper lender since October of last year and in January I started lending on Kiva as well but my online lending trifecta wont be complete until I can gamble on human hope using Zopa. Zopa is an online market place for lending to other folks much like Prosper in reverse. I’ve been anxiously awaiting the coming of Zopa but despite all the funding noise and media attention they havent made it to the US.

Well that may be about to change. According to an email they sent out this morning they are getting ready to launch, not just in the California as they originally stated, but nationally. With Zopa I’ll be able to loan money for as little as 6 months and further diversity my portfolio of person to person loans. From purely social lending on Kiva to the modestly social lending on Prosper and wholly economic lending on Zopa, I am becoming a banking institution $100 at a time.


Why I love Public Access TV

April 19, 2007

Its the original YouTube. The precursor to Vlog’s and it’s everywhere. Yes folks I’m talking about public access TV. There are few better methods for getting the tenor of a community then the local public access station. It the one location where anyone form your grandma to your pet snake can have their own soap box for 30 minutes, without commercial breaks. If you watch regularly your likely to be treated to everything from musical odes by tone deaf religious zealots, aspiring strippers or failed geriatric rockers to diet tips, spiritual guidance (in many flavors) and sexual advice. Despite all noise on public access, every once in a while something breaks through. Some gem of insight so sharp or commentary so timely and biting that it cuts through the clutter and transcends all categorization.

The following video is one such piece. Taken from PeopleTV in Atlanta Ga, this snippet of educational goodness is a must. Be forewarned, may not be work safe depending on your circumstances so while I give it two thumbs up it also gets a NSFW label.


Media Exec’s: Start-ups and User Generated Content Are Eating our Lunch

April 18, 2007

Came across a great post on the Future of News blog, about a survey conducted by close talkers over at Accenture consulting. The annual survey, entitled Beyond the Hype: How Content and Technology Are Redefining Media, is given to “110 of the worlds most influential media executives”. Of the many interesting tidbits in the report the thing that has the press abuzz is that more then 57% of the exec’s believed that user generated content was one of the biggest challenges to their business. Another was their inability to adapt to the changing environments in which they found themselves. To quote the report:

Although large companies will be well-positioned here (having the depth of resources and financial framework needed), smaller more dynamic businesses may be the ones to watch.

You can read the full Accenture article here or you can check out the summary on the Acccenture site.

http://www.acenture.com/Global/About_Accenture/Business_Events/By_Industry/Communications/gcf07_redefining_media.htm


The Death Knell Tolls for Pandora and Other Webcasters

April 18, 2007

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A couple of weeks ago a little known government body called the Copyright Royalty Board set new rates for webcasters like Pandora, Last.fm and other streaming music services. The new rates made many webcasters and streaming music entrepreneurs apoplectic. Only being tangentially related to the streaming music space I was a bit confused by all the doom and gloom talk that had lots of really intelligent and articulate folks claiming that this was the end of streaming radio. It all sounded so over the top that I sent an email to the ever accommodating Tim Westergren, of Pandora, asking for his take on the controversy. I sent him a series of questions largely based on some projections Michael Robertson posted to the Pho List and one of this responses at the time really shocked me.

“There will be no Internet radio by the end of 2007 if these [new rates] go unchanged.”

pandora_logo_email.jpg At the time I thought there was no way that the music industry would allow the mostly legal and fee paying interactive music services to go under. Services like Pandora and Last.fm have been hailed in the media as the new “it” companies for music promotion and fans across the globe embrace these services for music sampling and discovery. But as of yesterday, influenced by the ever present RIAA in the guise of its bastard child SoundExchange, the CRB denied webcasters like Pandora’s attempts to rehear the case. Effectively putting an end to the nascent interactive radio business.

The survival of Pandora and all of Internet radio is in jeopardy because of a recent decision by the Copyright Royalty Board in Washington, DC to almost triple the licensing fees for Internet radio sites like Pandora. Tim Westergren in letter to Pandora commuity

In what seems like a last ditch effort to make a change to the deadly new rates, Tim Westernger sent a letter to the Pandora community asking people to write their lawmakers for a literal stay of execution. If you’ve enjoyed Pandora and Last.fm you might want to go ahead, sign the petition and get involved. Normally I’d also suggest that you go ahead and enjoy Pandora and Last.fm before they go out of business, but since the rates are being retroactively enforced, they apply to everyone that used the service in 2006 and everyone that uses it now, potentially tripling the fees these services owe copyright holders.


What Evil File-traders Think about the Virtuous RIAA

April 15, 2007

Last week, I mentioned the survey from P2Pnet.net, that AllofMP3.com was promoting on their homepage. Well the good folks at P2Pnet have released some initial data and say they will release the entire data-set on Monday. So far they have over 750 respondents and what looks like some really good directional information on the thinking of at least a segment of the file sharing community. Watch for the full data, including answers to open-ended questions, to go live later this week and I’ll try to keep track of anyone that crunches the numbers and makes interesting connections.


BumpTop: An Interesting Desktop Metaphor

April 14, 2007

I know they’re a bit old but I love the direction that this research is moving in. Check out the video of the BumpTop desktop application (the first video) and then look at the Pixel Play video (vid #2). You can see how the ideas evolve and converge and point to where this sort of thinking is heading. I personally cant wait for this stuff.


ALLofMP3.com: Voice Your Opinion of RIAA

April 13, 2007

allofmp31.jpgOur Russian friends over at ALLofMP3.com are showing the kind of staying power that would make Lexington Steel proud. Despite being perpetually attacked by the bulldogs of the copyright industries ALLofMP3.com continues to evolve their offering and enhance their site. While checking out their latest upgrades I came across a rather incongruous image on the home page.

It was a link in the news section directing people to take a survey being conducted by the good folks at P2Pnet.net a site dedicated to news with a distint anti-RIAA flavor. The survey is being billed as the first online survey of perceptions of the RIAA and its title, The Sultans of Spin, shouldn’t in anyway skew the results.

ALLofMp3.com decision to feature the survey on their homepage is what struck me as strange. Last year the US trade rep was on the war path and tried to get Russian strongman Vladimir “toxic tea” Putin to shut the site down. ALLofMP3.com responded by starting a half-hearted attempt to get their side of the story out but ended-up just ignoring the public altogether. ALLofMP3 seemed more comfortable trying to avoid confrontations with the IFPI, RIAA and BPI by putting out luke warm statements asserting the legality of their service under Russian law. This is what made the prominent placement of what is clearly anti-RIAA propaganda so shocking. When the upgraded their site did they increase the amount of backboneas well?


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