4 ms·

The New Economics of Music, or, why stealing feels so right

9 points by steffon 19y ago

This article (part 1 and 2) has helped me think critically about new models for selling music, along with the process of discovering other kinds of user-generated content.

cstejerean 19y ago
interesting article, but i'm not sure if I agree. I think iTunes reduces a lot of the risk the article is revolving around (of buying something you didn't like in the first place). I think most P2P downloads are of songs one heard on the radio. If I wanted to discover new music I'd go for Pandora or last.fm instead of illegal downloads. I can say from personal experience that when I was a student and was low on cash I felt bad about spending 20 dollars at a time on an album (out of which I liked a couple of songs). Buying songs from iTunes allowed me to buy what I wanted or get entire albums for $10 dollars. But even that didn't allow me to get all the music I wanted on a student budget. Now that I have a job I ended up spending hundreds of dollars on iTunes over time because for the most part it was less time consuming than finding the music on P2P networks. Once my time became valuable buying music started to make sense.
- rms 19y ago
  When online piracy reaches a certain point of perfection, there is no reason to buy music anymore. I'm a member of oink, which is one of the best private bittorrent trackers out there. It is focused mainly on music. It's both where I acquire music and discover music. Everyday, I go and I look at the Top 50 most popular albums uploaded today and at least three or four sound interesting. I usually download at one MB/s and the oink archives are by far more complete than iTunes. I also get to pick from a FLAC and V0 encoding, at least. By the time I've discovered my new music, I already have the whole album. Thank you, technology.
- steffon 19y ago
  What iTunes does not reduce are the search costs incurred by a user. If a user isn't planning on purchasing what is on the top ten list, a user has to know what he wants beforehand at iTunes, just like shopping at a Virgin Megastore. So before a purchase is made, a user still has to pay search costs to find what he wants before he makes a purchase. So as you said, you would go to Pandora or last.fm instead of illegal downloads to find new music and when the new "good" song is discovered, you go to iTunes to purchase it. In this situation, Pandora and last.fm decrease your search costs by presenting what you found to be a "good" song in less time than it would have taken you to find a "good" song on your own. So as long as Pandora and last.fm can reduce your search costs enough so that the value of the "good" song outweighs the cost, then Pandora and last.fm replace the record companies as better agents and you derive more value from your music. But are Last.fm and Pandora good enough agents for everyone? Or do they really only work as good agents for some people (i.e. better solutions exist)? For example, record companies can and do play a strong hand in determining the results on Last.fm. As long as there are mass-media outlets like the radio and MTV, record companies can influence the "tastes" of mass numbers of people, which influence what music they play and share on file networks, which influence dramatically the scrobbling statistics on Last.fm and the recommendations Last.fm produces with its collaborative filter, skewing results dramatically and consistently toward major label artists: getting results of mainstream artists on Last.fm does not reduce search costs as these artists were easy to find regardless. It seems to me that the search costs for discovering music on Pandora are also very high, as I have to listen to Pandora like a radio station as opposed to just getting results, and the database is set-up by what musicologists think. Sure the sonic characteristics and structure of a song influence the song, but it doesn't determine whether I will think it is "good". As an extreme example, take two piano sonatas: one is written by Chopin, the other by Tom Dick last week in Ohio. A musicologist at Pandora would classify them the same as they have the same sonic characteristics, arrangement, instrumentation, structure etc. but that does not help me reduce my search costs because I still have to listen to Tom Dick's sonata on their web radio before I get to Chopin. I think audiences that consume a lot of music could significantly reduce their search costs on a site like oink, because everyone there consumes a lot of music. Because everyone in the community is always on the hunt for the new "good" music (and are technologically savvy), their top ten lists are predictably very relevant to their community, probably much higher than any of them would ever find on Pandora or Last.fm.
colortone 19y ago
I started a facebook group yesterday to discuss all aspects of Bubblegeneration/Umair Haque, FYI: http://www.facebook.com/group.php?gid=5842972550 http://www.facebook.com/group.php?gid=5842972550 Obviously, the game is in reducing search costs. The REAL issue I see here for all these "music recommendation" startups is that they still are nowhere near competing with quality human DJ/knowledge. There are thousands of music supervisors, party Dj's, and just general record nerds whose recommendations/playlists CRUSH last.fm, et al. Somebody needs to build the Digg of music, moderated by people with real music knowledge. That's the moneymaker. All this implicit listening information is garbage.
- steffon 19y ago
  But would the Digg of music be enough? iJigg, which is something like that, launcher earlier this year. http://www.techcrunch.com/2007/01/18/jigg-that-music/ http://www.techcrunch.com/2007/01/18/jigg-that-music/. Although it doesn't seem to have moderaters with real music knowledge. But even if it did, that wouldn't be enough to make results relevant for everyone because the criteria for relevance is an individuals concept of "good". Sure moderators might know what is "good" for certain audiences, but if results are organized in a digg-esque fashion, it becomes a top-ten list, meaning that no matter how good your moderators are, they can't generate recommendations that will be "good" for individuals (and the strategy to appeal to the largerst number of individuals is to appeal to the lowest common denominator, which one could argue radio already does well.)
  - colortone 19y ago
    well, my proxy of "digg for music" is only a jumping off point. It would have to be organized differently. That iJigg thing is garbage, for now I would strongly recommend reading Scott Karp's pitch for Publishing 2, a "journalist-powered news aggregator": http://blog.publish2.com/2007/08/14/introducing-publish2-networked-news/ http://blog.publish2.com/2007/08/14/introducing-publish2-net... The key with these communities is seeding them with, OMG, domain-specific talent. I can imagine a social platform where various DJ's, music supervisors, musicians, etc, could be the curators of long long long playlists [organized by mood, genre, style, time period, lyrics, whatever] that are tagged with a bunch of metadata [enabling them to be recombined easily]. Non-curators can suggest tracks and gain authority by having them added to curated uberplaylists. Or something like that ;-) The key is knowing your ass from a hole in the ground about music...really. Not just thinking you have good taste...that's how all the media execs (that all tech people hate) got into this mess in the first place. Anyways, I'm already on this, if anyone is interested further you can contact me ;-)

9 points by steffon 19y ago

This article (part 1 and 2) has helped me think critically about new models for selling music, along with the process of discovering other kinds of user-generated content.

cstejerean 19y ago

interesting article, but i'm not sure if I agree. I think iTunes reduces a lot of the risk the article is revolving around (of buying something you didn't like in the first place). I think most P2P downloads are of songs one heard on the radio. If I wanted to discover new music I'd go for Pandora or last.fm instead of illegal downloads. I can say from personal experience that when I was a student and was low on cash I felt bad about spending 20 dollars at a time on an album (out of which I liked a couple of songs). Buying songs from iTunes allowed me to buy what I wanted or get entire albums for $10 dollars. But even that didn't allow me to get all the music I wanted on a student budget. Now that I have a job I ended up spending hundreds of dollars on iTunes over time because for the most part it was less time consuming than finding the music on P2P networks. Once my time became valuable buying music started to make sense.

rms 19y ago
When online piracy reaches a certain point of perfection, there is no reason to buy music anymore. I'm a member of oink, which is one of the best private bittorrent trackers out there. It is focused mainly on music. It's both where I acquire music and discover music. Everyday, I go and I look at the Top 50 most popular albums uploaded today and at least three or four sound interesting. I usually download at one MB/s and the oink archives are by far more complete than iTunes. I also get to pick from a FLAC and V0 encoding, at least. By the time I've discovered my new music, I already have the whole album. Thank you, technology.
steffon 19y ago
What iTunes does not reduce are the search costs incurred by a user. If a user isn't planning on purchasing what is on the top ten list, a user has to know what he wants beforehand at iTunes, just like shopping at a Virgin Megastore. So before a purchase is made, a user still has to pay search costs to find what he wants before he makes a purchase. So as you said, you would go to Pandora or last.fm instead of illegal downloads to find new music and when the new "good" song is discovered, you go to iTunes to purchase it. In this situation, Pandora and last.fm decrease your search costs by presenting what you found to be a "good" song in less time than it would have taken you to find a "good" song on your own. So as long as Pandora and last.fm can reduce your search costs enough so that the value of the "good" song outweighs the cost, then Pandora and last.fm replace the record companies as better agents and you derive more value from your music. But are Last.fm and Pandora good enough agents for everyone? Or do they really only work as good agents for some people (i.e. better solutions exist)? For example, record companies can and do play a strong hand in determining the results on Last.fm. As long as there are mass-media outlets like the radio and MTV, record companies can influence the "tastes" of mass numbers of people, which influence what music they play and share on file networks, which influence dramatically the scrobbling statistics on Last.fm and the recommendations Last.fm produces with its collaborative filter, skewing results dramatically and consistently toward major label artists: getting results of mainstream artists on Last.fm does not reduce search costs as these artists were easy to find regardless. It seems to me that the search costs for discovering music on Pandora are also very high, as I have to listen to Pandora like a radio station as opposed to just getting results, and the database is set-up by what musicologists think. Sure the sonic characteristics and structure of a song influence the song, but it doesn't determine whether I will think it is "good". As an extreme example, take two piano sonatas: one is written by Chopin, the other by Tom Dick last week in Ohio. A musicologist at Pandora would classify them the same as they have the same sonic characteristics, arrangement, instrumentation, structure etc. but that does not help me reduce my search costs because I still have to listen to Tom Dick's sonata on their web radio before I get to Chopin. I think audiences that consume a lot of music could significantly reduce their search costs on a site like oink, because everyone there consumes a lot of music. Because everyone in the community is always on the hunt for the new "good" music (and are technologically savvy), their top ten lists are predictably very relevant to their community, probably much higher than any of them would ever find on Pandora or Last.fm.

colortone 19y ago

I started a facebook group yesterday to discuss all aspects of Bubblegeneration/Umair Haque, FYI: http://www.facebook.com/group.php?gid=5842972550 http://www.facebook.com/group.php?gid=5842972550 Obviously, the game is in reducing search costs. The REAL issue I see here for all these "music recommendation" startups is that they still are nowhere near competing with quality human DJ/knowledge. There are thousands of music supervisors, party Dj's, and just general record nerds whose recommendations/playlists CRUSH last.fm, et al. Somebody needs to build the Digg of music, moderated by people with real music knowledge. That's the moneymaker. All this implicit listening information is garbage.

steffon 19y ago
But would the Digg of music be enough? iJigg, which is something like that, launcher earlier this year. http://www.techcrunch.com/2007/01/18/jigg-that-music/ http://www.techcrunch.com/2007/01/18/jigg-that-music/. Although it doesn't seem to have moderaters with real music knowledge. But even if it did, that wouldn't be enough to make results relevant for everyone because the criteria for relevance is an individuals concept of "good". Sure moderators might know what is "good" for certain audiences, but if results are organized in a digg-esque fashion, it becomes a top-ten list, meaning that no matter how good your moderators are, they can't generate recommendations that will be "good" for individuals (and the strategy to appeal to the largerst number of individuals is to appeal to the lowest common denominator, which one could argue radio already does well.)
- colortone 19y ago
  well, my proxy of "digg for music" is only a jumping off point. It would have to be organized differently. That iJigg thing is garbage, for now I would strongly recommend reading Scott Karp's pitch for Publishing 2, a "journalist-powered news aggregator": http://blog.publish2.com/2007/08/14/introducing-publish2-networked-news/ http://blog.publish2.com/2007/08/14/introducing-publish2-net... The key with these communities is seeding them with, OMG, domain-specific talent. I can imagine a social platform where various DJ's, music supervisors, musicians, etc, could be the curators of long long long playlists [organized by mood, genre, style, time period, lyrics, whatever] that are tagged with a bunch of metadata [enabling them to be recombined easily]. Non-curators can suggest tracks and gain authority by having them added to curated uberplaylists. Or something like that ;-) The key is knowing your ass from a hole in the ground about music...really. Not just thinking you have good taste...that's how all the media execs (that all tech people hate) got into this mess in the first place. Anyways, I'm already on this, if anyone is interested further you can contact me ;-)