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THE INDUSTRY STANDARD'S
B E A T S H E E T
A Weekly Report on the Convergence of Music and the Net
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| http://www.thestandard.com |
Tuesday, September 26, 2000
TOP STORY:
* Battle of the Internet Jukeboxes: MusicMatch Passes Up RealJukebox -
or Does It?
NET NOISE:
* EFF.org
BEATS:
* Press One if You'd Like to Sue Us
MP3.com's latest legal battles
* Smashed Up
The Offspring won't offer a free album download after all
* Dot Dot Dot
Napster judges announced ... MP3dom.com asks for help ... Grateful
Dead say no money, no cry
SOUND OFF:
* What's your take on the way that Web statistics are bandied about?
ERRATUM: Due to an error in the copyediting process, the organization
Artists Against Piracy was misidentified in our lead story last week
as the Artists Coalition Against Piracy. We regret the error.
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TOP STORY
~~~~~~~~~
Battle of the Internet Jukeboxes: MusicMatch Passes Up RealJukebox -
or Does It?
By Julene Snyder
Amid all of the hullabaloo over licensing, legalities and Lars, a less
headline-grabbing battle is raging in the online music space - the
fight to establish and maintain consumer loyalty among digital jukebox
users.
To hear MusicMatch tell it, it has already won the bout, and it's all
over but the shouting. MusicMatch says it was first on the scene,
"inventing the category," when it came out with its first jukebox in
May of 1998. The San Diego-based company points to glowing reviews
from established taste-makers like CNET and ZDNet to back up its
claim. When the "Q2 2000 Media Metrix SoftUsage Home Report" came out
recently, MusicMatch trumpeted the results with a press release that
stated the company had surpassed Seattle giant RealNetworks'
RealJukebox in the amount of time that users spend with the software.
It's true that newsgroups and message boards are crowded with zealous
users touting the software as the coolest thing since Al Gore invented
the Net. But the numbers can be somewhat confusing. While spokesman
Gary Brotman says that MusicMatch is racking up record numbers, with 1
million new users coming on board every month, the company is nowhere
to be found on Media Metrix's list of the top 500 digital media sites
for May (the most recent numbers up on its Web site for that
category). By contrast, RealNetworks is right up top, clocking in at
No. 11 for the month of August, with nearly 15 million unique
visitors.
MusicMatch does seem to be the clear winner in some areas - Media
Metrix says that the company has a 57 percent market share, compared
to RealJukebox's 43 percent. The report also credits MusicMatch with a
63 percent jump in active users, compared to 7 percent growth for
RealJukebox.
So it's kicking butt, right?
Not so fast. It turns out that Media Metrix doesn't count programs
that run in the background, but rather looks at programs running as a
user's primary application. This is crucial, according to Steven Wise,
RealNetworks' director of strategic marketing. "You have to look at
how jukeboxes are used," he says. "Typically you open it, choose a
playlist and then it's in the background while you're doing other
things."
Media Metrix representative Shum Preston confirmed the numbers,
elaborating that "MusicMatch created a custom data run and created the
jukebox category; in that category it included itself, RealJukebox and
Windows Media 7 ... Please note that the metric it is using is total
minutes per month."
While representatives from RealNetworks were eager to talk about flaws
in the way that Web usage can be reliably monitored - one even brought
up the old adage, "lies, damn lies and statistics" - it was cautious
in making blanket statements on the record about MusicMatch and the
difficulties in accurately measuring the ways that users run software.
What did emerge from a tag-team phone interview was a sense of
frustration in the current state of measuring Internet usage,
especially when it comes to features like streaming.
Of course, it's tricky to dispute numbers that appear to put the
competition on top while touting numbers that make your own position
look good, but the execs managed to provide a sound bite: "In absolute
numbers, RealJukebox added seven times as many users as MusicMatch
did, according to the Media Metrix soft-usage report from June to
July," says product marketing manager Gary Cowan. He sees the
MusicMatch audience as mostly early adopters, while he says
RealJukebox is after a broader mass of consumers. With the current
influx of new consumers of digital music - RealJukebox is clocking in
100,000 new users every day - it's clearly a boom time for the sector,
no matter who does the measuring.
But as we consumers busily gulp down tracks, we should take a moment
to remember that every click is probably being watched, cataloged and
categorized in a vast statistical machine that either means everything
or nothing, depending on who you ask.
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NET NOISE
~~~~~~~~~
EFF.org
While the venerable Electronic Frontier Foundation isn't a music site
by any stretch, visiting its home page is a must for those following
the current maelstrom of news developments in the digital music space.
The latest missive from the group - which describes itself as a
"non-profit, non-partisan organization working in the public interest
to protect fundamental civil liberties, including privacy and freedom
of expression in the arena of computers and the Internet" - calls for
a boycott of the Secure Digital Music Initiative "contest" that
challenges hackers to test the security of its music encryption
program. The EFF's strongly worded statement says that the Internet
community should "refrain from helping the recording industry perfect
a way to undermine our fair use rights." A huge archive of material on
topics ranging from intellectual property to censorship to digital
surveillance could keep you reading for weeks; if you just can't get
enough, you'll also find an archive of information, opinion and
analysis dating back to the organization's inception in 1990.
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BEATS
~~~~~
Press One if You'd Like to Sue Us
MP3.com's latest legal battles
It's been another one of those weeks for MP3.com. On Wednesday, the
law firm of Cauley & Geller of Boca Raton, Fla., announced a class
action suit against the San Diego-based company "on behalf of all
individuals and institutional investors" that purchased stock between
January 13, 2000 and September 7. The complaint charges serious stuff
like violation of federal securities laws by providing misleading
information and charges that the company caused the stock to dip by
engaging in "willful illegal acts." On Friday, New York-based law firm
Faruqi and Faruqi announced that the suit had commenced and sent out a
press release calling for potential plantiffs to contact the firm.
Similar announcements followed from law firms in San Diego and
Baltimore. On Saturday, MP3.com issued a terse press release that
referenced a shareholder class action suit filed by the law firm of
Milberg, Weiss, Berhad that quotes MP3.com President Robin Richards as
saying, "We believe that there is no merit to the claims made in this
lawsuit. We will react to the filing appropriately." On a lighter
note, today's MP3.com press release has the happy news that the Cowboy
Junkies will be offering free downloads through the site, which seems
appropriate, given the band's propensity toward melancholia.
Nice Try, No Cigar
The Offspring won't offer a free album download after all
Apparently, the whip came down. Yesterday, Billboard Bulletin reported
that The Offspring won't be offering a free download of its upcoming
album, "Conspiracy of One," after all. While no one's talking on the
record, unnamed sources say the likely reason is that the scheme
violated the band's "exclusive distribution deal" with Columbia
Records, a subsidiary of Sony Music. Fans will still be able to
download the album's first single, "Original Prankster," from the
band's official site (www.offspring.com) starting September 29. A
sweepstakes with a $1 million payoff for those who download the track
is still a go; according to a statement on the Web site, the prize
money will come "directly from the band," and "neither sponsors nor
record company funds are being used." Singer Dexter Holland gets extra
points for coming up with the free download idea in the first place
and a bonus gold star for his rationale for giving away the big bucks:
"This money came directly to us from our fans. We feel it would be
cool to redirect it back to them. We are trying to launch our album
with promotions that are fan supportive rather than fan exploitative.
We feel that giving them our music and letting them have back some of
their money is a great way to show how much they mean to us." Pretty
fly for a rock star guy.
Dot Dot Dot
Napster judges announced ... MP3dom.com asks for help ... Grateful
Dead say no money, no cry
The San Francisco Chronicle reports this morning that the names of the
three judges who will hear oral arguments Monday in the Recording
Industry Association of America's suit against Napster have been
announced, and it might not be good news for the little application
that could. The judges, who are picked at random, will be Mary M.
Schroeder, Robert R. Beezer and Richard A. Paez; according to the SF
Chronicle, Schroeder authored a previous ruling that may provide a
"clue" that she's leaning against Napster. ... On Friday, MP3dom.com -
whose catchy tagline is "free music that doesn't suck" - sent out a
mass e-mail announcing that the site's ad revenues have been unable to
cover "even our most basic costs" and that without a big chunk of
cash, "we will not survive." President and CEO Josh Futterman is
calling for those who can afford it to pony up a voluntary
subscription fee of $19.95 for six months, but he plaintively says
that the company will be happy to take any amount. ... A recent
Associated Press story says that although bootleg-friendly band the
Grateful Dead hasn't officially come down on either side of the
Napster debate, it doesn't like other people making money off of its
work, which, one assumes is the ultimate goal of sites like Napster.
Software-piracy attorney Eric Doney is quoted as saying that the band
has "always been vehement about this: If someone is going to make
money, it should be them. The music belongs to the creators, not
someone else."
SOUND OFF
~~~~~~~~~
This week's question: What's your take on the way that Web statistics
are bandied about?
E-mail your opinions to julene@well.com with "sound off" in the
subject line, and we'll print a selection of the responses in next
week's newsletter. Letters may be edited for clarity and length so
keep them short and include your name and affiliation if any.
FEEDBACK:
Last week's question: Is it demeaning to offer a musician unsolicited
tips?
It's not so much demeaning as it is unrealistic. As (last week's lead
story) noted, some artists have cashed the checks and why not? I would
happily cash a check for $25 or $50 if someone sent one to me, but I'm
not going to give up my real source of income for it. Thinking for a
second that artists will leave their recording contracts (with the
advances, tour support and promotion) and work for tips is ridiculous.
Fairtunes is ignoring all of the services that labels provide to
artists.
- Kevin Morrissey
The idea of unsolicited, online "tips" is not what's offensive - it's
the idea of optional "tipping" that's offensive. I think that the big
problem is most people don't understand that unsigned, independent
musicians already spend most of their time singing, writing and
performing for free. They pay their rent by waiting tables, bar
tending, etc., and essentially make their living on "tips" as it is.
Here we have this revolutionary technology that now has a vast
majority of the general public stealing money from artists' pockets
and snickering as they do so. To the public: Do YOU get paid to go
work every day? Does a plumber give away his labor, pipes and hardware
in hopes of picking up customers? Do Wall Street brokers give away
their services in hopes that people will eventually pay? Maybe life
works like that in utopia but not in the real world. It would be OK if
everything in life worked that way ... but it doesn't. Just because
music is on the Internet, doesn't mean it should be free. Shut up
already and compensate a hard-working, passionate community that has
been getting screwed for decades. Pay for the music. It's the only
fair thing to do.
- Patrick Cerria
MusicProbe.com
I don't think that there's anything to be ashamed of at all. What's
really a shame is that sales of online music have not done as well and
that there is no clean mechanism to pay for it. I'd gladly pay a buck
just to hear that Beth Orton song off that Japanese import I heard
ONCE on the radio three months ago. I launched PatroNet for Todd
Rundgren some three (or was it four?) years ago. The model for that
was invest in the artist's future output, and you will be rewarded.
Today, however, all he's got is Peter Wolf and Rosanna Arquette (for a
good laugh read her bio on that site). On the other hand, there was a
recent NPR story about an English band that raised 150,000 pounds
online for advance reservations - like wine futures - for its next
record, which enabled it to make a much more lucrative deal with a
DISTRIBUTOR rather than a label (the investing fans got the CD a month
ahead of the public). I have always said: Do you want to trust the
online distribution of music to the same people that dithered for a
year and a half about what shape box to put a CD in before deciding it
didn't need to be in a box at all?
- Henry Eshelman
Managing director
BWR Public Relations
If you go on and buy all of the albums of a certain band and then
compensate them by the tip-jar model, it's double payback time. So why
bother about the CDs anymore? I don't think that people will feel
guilty because of taking money from the industry, but on the other
hand, if you *only* compensate the artists, who pays for the
promotion? It's a vicious circle, because to establish a really "fair"
model, artists would have to retreat from their major contracts and
simply rely on the payback model - and this will not do, at least not
now. But still - any compensation is better than nothing.
- Richard Pettauer
MP3.lion.cc
It is not demeaning to offer a musician tips. As a musician I would
love to say, "I don't need your money. The only compensation I require
is for my music to be heard by the world." But we live in a world
where I must pay $2.50 for a saxophone reed, $5 for a box of pencils,
$10 for a box of staff paper. This stuff is expensive. This is not to
say I expect a tip. In fact, quite the opposite. But when someone does
take the time to reach into their pocket and share a little with me,
it says they enjoyed the music and appreciate my struggle. And without
people like this, my music would suffer greatly.
- Patrick Lynch
Saxophonist
STAFF
~~~~~
Written by Julene Snyder (julene@well.com).
Editor: Steven Zeitchik (szeitchik@thestandard.com).
Deputy Editor: Michele Keller (mkeller@thestandard.com).
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