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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, November 28, 2000
TOP STORY:
* Whither Peer-to-Peer? The Future of File-Sharing
NET NOISE:
* Grandroyal.com
DOT DOT DOT:
* Bowie on MP3.com ... Spin's 'Album of the Year' is Not ...
Bertelsmann Says Record Companies Are Talking
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TOP STORY
~~~~~~~~~
Whither Peer-to-Peer? The Future of File-Sharing
By Julene Snyder
Peer-to-peer: Can it still change the world or, at least, how we
consume entertainment? For a while, it looked like it could. But after
a litigious year, there's little consensus on p-to-p's future.
We asked a few players in the digital music space to speculate on the
subject. Our respondents (via e-mail) were Whitney Broussard, an
entertainment attorney with Selverne, Mandelbaum & Mintz; Gene
Hoffman, president and CEO of EMusic.com; Ian Clarke, developer of
Freenet; and Matt Goyer, co-founder and CEO of Fairtunes
Q: What do you see as the future of p-to-p? Contrast where we were a
year ago to where we are now.
Whitney Broussard: It remains to be seen what the future of
Napster-type public p-to-p file sharing is, but I think that even if
it is determined to be an infringement of copyright, we will likely
see private (i.e., friends and family) p-to-p networks proliferate
wildly. Not being open to the public, these types of communities will
be almost impossible to police in any meaningful way. Individuals will
likely belong to many different such communities, each aggregated
around different themes (for example, blood relations, fraternities, a
particular recording artist, etc.) and will share different types of
files depending upon the basis of the community. For instance, a
family may use a p-to-p network to create an online family
album/family tree, Radiohead fans may use it to collect live
recordings, press clippings, photos and the like and war buffs may use
it to share historical data pertaining to their fields of interest.
Gene Hoffman: I think that peer-to-peer will prove to be one of the
most overhyped, overrated concepts in recent memory. Undoubtedly,
Napster is an extremely popular application, but that has much more to
do with three other factors than it does p-to-p: access to free music,
the convenience of the MP3 format and a strong sense of online
community. I believe that within a year, legitimate music sites based
on centralized servers will be able to greatly surpass p-to-p networks
in terms of convenience and community so that cost will not be an
issue. Most consumers will be willing to pay a low monthly fee for
legitimate, high-quality services.
Ian Clarke: I think it is becoming clear that there is much more to
peer-to-peer than the music and copyright debate. This view is
validated by the interest shown in p-to-p by respected companies such
as Intel and O'Reilly. Certainly, what interests me is the way that
p-to-p may frustrate those who are trying to turn the Internet into
just another broadcast medium.
Matt Goyer: I really don't believe that the commercial p-to-p efforts
will succeed. They'll try and implement a multitiered payment system
and end up frustrating all their users who will move to a noncharge
system like Gnutella, Newtella or Freenet.
Q: If p-to-p succeeds, who will be the winners and losers?
Broussard: People will undoubtedly find a wide variety of applications
for these types of networks, which haven't surfaced yet, and these
technologies will help them build and maintain relationships. As to
losers, I am not sure why there needs to be any at all. This is
progress, not war. Companies that are sensitive to what people want
(instead of telling them what they can have) will likely do very well.
Companies that are not responsive to their customers will lose out.
This is nothing new though. It's always been like that.
Hoffman: The losers are the ones that have fallen in love with p-to-p
and believe that it's the end-all, be-all solution. The winners
recognize that it's an interesting technology that has its benefits
and its limitations.
After all, while p-to-p allows the sharing of music free-of-charge, it
also relies on other users' equipment - resulting often times in slow
downloads, unreliable availability and poorly encoded files being
traded back and forth. These are three things that centralized servers
are much better at delivering: high bandwidth, 24x7 availability and
quality control. If it's all legitimate, paid for and above board, why
would you use a peer-to-peer system to offer downloadable music files?
It's incredibly inefficient.
Clarke: The winners are the users of the Internet, since p-to-p
encourages them to participate in the Internet, rather than just
consume the products of the mass media, which is the direction the
Internet was being pushed in up until now.
Goyer: Losers - the record labels. Why? Because it's going to cost
them a lot of money to keep pace with the existing p-to-p players and
to keep on top of all the emerging p-to-p technologies being developed
by students in their dorm rooms. Let's face it. The tables have
turned, and we, the young guys, are now on equal footing with the
established industry players. They're crippled by bureaucracy, red
tape and coding by community. We're not. We do what we want, when we
want and make it happen.
Q: What model is emerging that will fairly compensate artists while
giving consumers what they want (access to free or nearly free music
from their computers)?
Hoffman: MP3 download subscriptions where you pay one low monthly
price and can download as much high-quality MP3 music as you want from
a huge catalog. Musicians and labels, as well as songwriters and
publishers, are fully compensated - without sacrificing consumer
convenience or low cost. Consumers want inexpensive music, but they
also want convenient music - which right now means MP3. I don't
believe that consumers will be willing to pay to stream music that
they already own on CD.
Clarke: A subscription model may work if it is priced very reasonably,
but anyone who tries will always be able to obtain free music if they
want to. I like the idea of Fairtunes, which allows users to reward
their favorite artists on a voluntary basis. There is even a piece of
software in the works called Tropus, which will allow music to be
distributed over Freenet and which will allow users to conveniently
reward artists for music they like.
Goyer: I truly believe that the future model will be based in part on
a voluntary payment mechanism. Sure, some artists will object to it
because they no longer have ultimate control over their content and
the prices they charge. Technology has destroyed barriers instead of
making them sturdier. So what possible compensation model will persist
in a world where everything is available for free? A voluntary one.
Users will be able to pay what they want to pay, when they want to pay
it. It's true buyer-side pricing.
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NET NOISE
~~~~~~~~~
Grandroyal.com
Forget Al Gore, it was the Beastie Boys who invented the Internet. OK,
so that's a bit hyperbolic, but the seminal hip-hop trio was among the
first to put up outtakes, rarities and live tracks on its own Web site
way back in the '90s. The group is still doing it right: It's a treat
to visit a band site that combines eye-catching design and cool bells
and whistles in a way that's not overwhelming. (Soundbreak, anyone?)
Among the dozens of free MP3s are gems like Adam Horowitz's mix
"Countdown," which features Ralph Nader being outraged about
everything from the media to the political process set to a
head-bopping beat, along with offerings from bands like Buffalo
Daughter, Luscious Jackson, Moistboyz and At the Drive In. You'll also
find streaming radio, video clips, feature stories from the Grand
Royal print magazine, a nifty little text box up top that shows what's
being said in the chat room along with a refreshingly entertaining
FAQ. So whatcha, whatcha, whatcha want?
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DOT DOT DOT
~~~~~~~~~~~
Bowie on MP3.com ... Spin's 'Album of the Year' is Not ... Bertelsmann
Says Record Companies Are Talking
MP3.com announced yesterday that David Bowie is the first artist to
open his catalog to the company's My.MP3.com service. Those who add
their Bowie CDs to an account are promised an alternate live version
of "Ziggy Stardust" if they add Bowie's latest, "Bowie at the Beeb,"
to their "Beam It" account. ... News that Spin magazine chose "your
hard drive" as album of the year for 2000 is hardly cause to stop the
presses, but it does show that the self-described "music and youth
culture magazine" is paying attention. Reuters points out that this
isn't the first time that an inanimate object has been given such an
honor: Way back in 1982, Time magazine named "the computer" as its
"Man of the Year." One artist who isn't likely to be up for any such
awards? Eminem. That doesn't mean the poster boy for bad behavior
can't score "Artist of the Year" from Spin, which he did. ... Reuters
recently reported that German media conglomerate Bertelsmann has
confirmed that talks are underway with "a number of record companies"
about joining its alliance with Napster. But, there's no word as to
when these talks might be concluded and whether the other majors will
end up sanctioning Napster in any way. Bertelsmann's Andreas Schmidt
told Reuters that the company is close to revealing a new string of
deals and continues to work "to inspire the other labels to join in
the partnership."
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SOUND OFF
~~~~~~~~~
This week's question: Who are the winners and losers in p-to-p? Why?
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: What digital music goodie do you want to find in
your stocking?
I'd like to find a Sprint PCS phone - Samsung Uproar - the first MP3
wireless phone, in my stocking. With an Uproar, I could download MP3
files from my computer directly onto my phone and store an hour's
worth of music - very cool for boppin' around NYC. While listening to
my groovy tune selections, I can take calls - a soft ringer alerts me
to incoming calls - or surf the Web with the phone's minibrowser. All
in all, a very cool holiday gift!
- William McCue
I'm hoping Santa brings me that spanking new MP3 player/digital camera
I saw the other day. But I can't remember who the makes it.
- Jody Lentz
VP of buzz
eConception
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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