Muxtape and the Future of Music

Clicking the above will tell you more than you ever wanted to know about my tastes

In the movie Groundhog Day Bill Murray's character is faced with the same daily fate no matter what he does.  After a while, he figures that driving himself off a cliff with the Punxsutawney Phil in tow is the only way out of his nightmare.  It's not.  Murray then slowly makes strides forward to get out of the continues loop.

I'm a music person first and a policy person second.  But, I have barely been able to muster the energy to write about online music issues here because I don't like analyzing a truck as it heads off a cliff on a regular, repeated basis.  It's remarkable how little has really changed since I worked for a Internet music start-up and we caught wind of Napster's launch.  (For the historians, their public event was sponsoring a rave in Oakland.  For the curious, I was much younger then, but still too old for the crowd.)

But, recently, I wonder if the music industry has collectively come to the conclusion that the only way to get out of their digital nightmare is to embrace it.  Not, of course, in a way that would cede the value of their digital goods, but, in a way that enables them to create new revenue opportunities built on digital platforms that mitigate the losses felt by declining CD sales, piracy and crappy music.  This is easier said than done.  But, at least, it's beginning to seem that the labels aren't completely ceding all innovation to tech companies and bedroom coders.

Example #1:  Earlier this week, EMI hires Google's CIO as a president who will have a “leadership responsibility for all of the company’s digital strategy, innovation, business development, supply chain and global technology" activities.”  Certainly, EMI is on the ropes.  But, with this move, the label, at the very least, is signaling that it intends to go down fighting.  The smallest of the big labels could have a big impact in creating innovative strategies that get bubbled up into the Big Three (perhaps after an acquisition).  Or, optimistically, the strategies could save the firm.

Example #2:  Last week, Warner hired industry veteran/critic Jim Griffin to manage a significant tweak in the company's business model that would support Griffin's hobby-horse of getting consumers to pay a mandatory fee for an all-access pass to the oft-dreamed-about celestial jukebox.  From Portfolio:

Edgar Bronfman Jr.'s Warner Music Group has tapped industry veteran Jim Griffin to spearhead a controversial plan to bundle a monthly fee into consumers' internet-service bills for unlimited access to music.

The plan—the boldest move yet to keep the wounded entertainment industry giants afloat—is simple: Consumers will pay a monthly fee, bundled into an internet-service bill in exchange for unfettered access to a database of all known music.

We covered this when Griffin discussed the plan (but not Warner) at SXSW.  The concept had its critics then and does now.  Many simply don't like the idea of a "tax" that is applied on all for the benefit of some.  But, the bigger point, is that Warner is willing to put some dollars and credibility on the table to create a NEW way of distributing music to fans and compensating rights holders.  They've decided that running the truck off the cliff for the 197th time isn't going to cut it.  New ways of doing things create new ways of thinking.  Controversy creates discussion.  Eventually it may even create compromise.  But, this time, empowered consumers will have leverage when deals are made.

What does any of this have to do with my kick-ass mixtape above?  It's that there continues to be an unlimited number of ways for the Internet to enable a couple of guys in a dorm room to create a killer new music service and with new ways to code, cheaper ways to store content, and a generation who understands social networking, trying to stop them will be like whack-a-mole. 

In this case, the host of my mix is Muxtape. It's a site where you can upload 12 MP3s to create your own personal mix that you stream to friends when they click on your new Muxtape URL.

I have no idea who made it and launched it a couple weeks ago.  There is no identifiable contact information and no apparent means of making money off the service (yet).  But, it's pretty cool.  And, simple.  And, it made me care about music, what tracks where on my computer and what albums/tracks that I wanted to buy.   But, just as soon as I got excited about it, I thought that anything as fun/cool as this must be illegal.  CNET's Daniel Terdiman wondered the same thing:

As my colleagues Rafe Needleman and Josh Lowensohn have noted, Muxtape appears to be a legal time bomb, merely awaiting the wrath of the Recording Industry Association of America... Despite the obvious problem of letting users upload music of sometimes dubious legal origins to its servers, Muxtape won't automatically be receiving any cease-and-desist letters from the RIAA, said Eric Goldman, a professor at the University of Santa Clara Law School.

"They just don't sue every single home-brewed...Web site," said Goldman. "There are plenty of people who have launched endeavors that the RIAA hasn't sued, because they're so small."

Bill Murray will live to see a new day when the Muxtape's of the world aren't immediately squashed when they get big enough because the complex tendrils of the music world are too busy creating their own new distribution channels and they don't want to kill something that they may want to use soon enough.

Update (4/4):  VC Fred Wilson and fellow music nut has an interesting tangential take...

Here’s what we need. We need someone to create an easy to search streamable library of all the recorded music in the world. We need to be able to grab a track and embed it on our blog. We need to be able to see how many people played it. We need others to be able to crawl these user pages with the embedded music and create algorithms based on who posted it, how often it was played, and how often it was reblogged and linked to. The services that do all of that need to be able to play the music that flows out of these social algorithms in the same way. This all has to be licensed and legal and it has to result in money flowing to the artists. If you put the music on your blog, you should have two choices. Allow the ads to be served into your music or your page or both by the service you got the music from. Or deal with the monetization yourself and pay the royalties you owe. Most people will do the former but some will do that latter.

Comments

[fred wilson]

"a fellow music nut"

thanks for the compliment, the link, and the quote!

i totally agree with you and plan to listen to your muxtape.

fred

[Debbie Rose]

This is an interesting post. While the major labels work out new business models, there exists today many legal ways for innovators to create music services within the existing legal framework. Go to http://blog.actonline.org/ for more.

[ps3break]

This is an interesting post. While the major labels work out new business models, there exists today many legal ways for innovators to create music services within the existing legal framework. Go to http://www.volumerates.com/ for more.

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[Rigoberto]

Perhaps Im a little late in the cotenmms section; however, online music sales do not yet make up the majority of all music sold. Universal figures that about still about 75% of all music sold is in CD format. I believe this was the report from them that I saw in 2007 through an inside source. This seems to be the trend and perhaps is an odd mix-up of generational issuses as every semester we ask our incoming freshman music industry students how many of them still buy music in CD format it's almost always total yet most of the graduate students that I know almost exclusely deal in downloaded goods. Purely speculation but I bet there's a weird juxtaposition (younger generations like hard goods and older generations like downloads obviously stopping with the boomers)I've also done some non-irb research on student's ipod inventories and it would be my guess that until these online mixing applications become more mainstream then the effect on sales will be minimal if even calculatable.torrents on the other hand are a whole nother story

[Dani]

Actually, I doubt it. Pretty much anyone who sees me using my Zune pass will end up AT LEAST asnikg how in the hell I'm doing this so effortlessly. I don't even have to download a song, I can just stream the full track in an instant. It's pretty easy to get all wrapped up in it's wow factor and then feel the need to tell others how awesome it is. Imagine a kid forcing cotton candy into people's mouths after their first taste, they have to know that others love it too. Really, the software sells itself.

[Ryoichi]

No.Did the music industry's smrnecorgeaing advance to the point already that people actually believe that they are breaking the law?The music industry wished that it would be that way. That doesn't make it so, no matter how many ads they place saying it is so .At least where I live Austria there is the right for private copy which we pay for, mind you -, so of course we can give a copy of the MP3 (or anything else) to our friends, since we are paying for the privilege anyway.

[Tatiana]

paul, remember that 15 milioln(?) people pay for satellite radio in the u.s.i hear your criticisms loud and clear and we're working to close the gap. i can't say the space between songs is a big one. maybe 5 reasons sounds better than 4? : )although i agree with your issues, i'd still rather pay $5 for MOG than pay for 5 downloads. by a longshot.

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