Jim Griffin:

I was shocked to read Gary Stiffelman’s comments because a professional like Gary should know better than to sling the falsehoods he so casually tossed in his comments. Let’s clear up these mistakes lest they spread:

1. No one proposes network licensing without sampling the network to help split the money proportionally. It’s relatively easy, and companies like Big Champagne have been doing it accurately for years.

2. If Gary’s indicting collective licensing without census data, then ASCAP/BMI/SESAC/SoundExchange (or their counterparts worldwide) can’t license hotel lobbies, restaurants, pubs, webcasters (there are many webcasters, even big ones, who don’t report). etc. — there are European countries that license music in taxicabs without sampling. Is he arguing this money should be turned away until such time as we get perfect data? That until we can effectively monitor everything we license we shouldn’t take their money? Absurd.

3. The voluntary subscriptions he touts are like so many other voluntary endeavors — they are like a tip jar, and their results speak for themselves. Even their employees acknowledge they will work better as involuntary, actuarial network fees. Rhapsody and Napster combined don’t come close to the delta of loss experienced from networks.

4. Gary thinks music’s failure to license somehow reduces the losses from these networks, and that’s ridiculous. The amount of downloading, trading and otherwise transferring music on-line and off-line will continue regardless of licensing, but licensing can monetize the anarchy of networks without controlling them. I repeat: Our failure to license does not reduce the use of networks to trade music, it only reduces the amount of money we receive for what happens anyway.

5. The red-herring — people will download everything and then quit — isn’t possible with involuntary network fees. What’s your suggestion, Gary? That a fee on a university network that collectively can gross billions worldwide will somehow lead students to go to school to download music and then they will quit school, having gorged themselves on music? That people will quit their ISP once they’ve acquired all the music they want? Never mind your implication that new music isn’t worth the fee, these are the sorts of crazy, now disproven arguments once made against putting movies on HBO or making video cassette recorders (or insert the name of most any new technology here, especially MP3 players) legal (people will record all the shows and music and never watch or listen again!). The sports business got it right after a brief period of legislating against broadcasting games: They did what you, Bob, now in effect advise record companies to do: They got baseball, basketball and football on the basic tier of every cable network, thus gleaning a fee for that which they otherwise feared, and they’ve never looked back. I could go on but will not. Gary’s comments are proof that some will cling to the old vine regardless of the facts and they seemingly choose not to learn from history.

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Dave Lang

"Imagine if your idea were accepted: A consumer pays ten bucks for a free month of p2p and downloads 10,000 albums. Then he stops paying, keeps his 10,000 albums of music, and laughs as the labels all go out of business." – Gary Stiffelman

I guess Gary thinks that nobody will want to buy any new music? We’re only interested in catalog? Highlights mainstream thinking about the business these days.

Dave Lang

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John Brodey:

As per Stiffelman’s comments; his problem with Apple seems more about the fact that their monopolistic position is a byproduct of regularly introducing innovative and exciting products. People love them. You don’t think MS would be a tyrant if they had that kind of brand loyalty and product line? Subscription is a concept. Of course it doesn’t work if you let everyone join for a month and then dump you after they’ve had their fill. Obviously, Verizon wouldn’t be discounting phones if you could then buy the phone and dump them a month later. You can’t get in on an IPO and then sell the stock 24 hours later after a big opening day. No, it’s about how you turn the concept into a practicable reality. Nobody can tell me it can’t be done. Guess what, people started paying for tv and water because the free versions sucked. Doesn’t work for music today, why would people rent what they don’t feel committed enough to buy? You better give them a good reason. Does that mean they won’t pay at all? No, just give them a way to do the right thing. Music isn’t water, it’s not a product and anyone who thinks otherwise is probably disproportionately concerned with the survival of the big labels. The consumer is far more receptive to doing right by the very artists the label’s are hiding behind.

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Bob, please oh please keep me anonymous:

Dude, technology is a moving target. Get with the program. Ya just can’t fight/end it. These lawsuits are going nowhere. I’m still downloading my ass off. Last I heard, Con Ed, NYSEG and all the other utilities were never selling a lifestyle. Nice try with your analogy… from an otherwise good lawyer. Just looking out for his clients I guess. Get with the program. Do your homework Gary… you’re credibilty is questionable. You’re a lawyer for fuck’s sake!!! And no one ever wants to be in PG&E’s fan club.

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David Reilly

Bob,

Re: stiffleman, Who the fuck has time to download 10,000 albums in a month??? Or ever for that matter.

He is wrong. I refuse to pay for cable/satellite tv. I buy the occasional bottle of water for convenience when I’m out.

I will not rent music nor the right to play it. It is not like renting
movies, and I buy a lot of the classic movies anyway.

It is not irrelevant – to own or rent – if you know the difference.

Then again, ashes to ashes, you could say no-one owns anything, but I think that’s a different line of thought.

I am fine with apple’s model. It works great and NOBODY else could figure it out, so they deserve to have it all. One song – one dollar, what’s the problem?

Still leaves my question: how do the artists get paid in this P2P world?

Glad I’ve still got a US bank account to shop itunes at the abovementioned rate.

David Reilly

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Charles Crossley, Jr.

Gary Stiffelman says:

"Its time to begin supporting the only model that can possibly replace the income that the labels and artists need in order to survive the current crisis. Do your homework. Understand better how the subscription model can work, then open your mind to a practical future."

My reply:

Music subscriptions aren’t wheels. They aren’t electricity. They aren’t flying machines. They aren’t bottled water vs. smelly bad-tasting tap water. They aren’t satellite television vs. cable television vs. network television. Music subscriptions aren’t any of that, because a music subscription isn’t what we want. Since we don’t want it, that model is going to fail.

See, everything in that list, except for cable and satellite television, we own once we’ve bought it. That goes even for electricity, which we can store in a battery if we want. Even with pay television, we can videotape the program or save the program on our TiVo and pretty much do whatever we want with it.

Music subscriptions don’t allow any of that. So, how are they the same? We don’t own the music with a music subscription like we do with these other things. So, since we don’t own it, it’s not what we want.

What’s more, you’ve failed to address the main issue. You’re competing against free. Illegal, yes, but still free.

Lefsetz’s model addresses the main issue, and gives the consumers what they want at a reasonable price.

What’s more, Lefsetz’s model of paying a monthly fee for P2P isn’t even the Apple model. It’s a model legalizing what the customer wants. To be able to get any track they want for a minimal price and own it. I don’t know why you think Lefsetz’s model is the same as supporting iTunes. Yes, he loves Apple. He also supports other things.

If "someday" is ever going to arrive, then, yes, by all means let’s begin now. Let’s dump the "gouge the fan" mentality and find a way to provide the fan with what they want at a reasonable price.

I’ve read that software developed as a result of the original Napster for monitoring music files now exists. I recall Lefsetz was the one who alerted us to this. Check it out over here: www.noankmedia.com/. If that’s true, the labels have the means to monitor usage. There will be bugs, there will be modifications, no new computer technology is ever perfect the first time it’s rolled out. But it’s there. So it can be done.

So when are we going to change?

Charles Crossley, Jr.
A fan of rock and roll

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Please post anon if you do this.

Gary Stiffelman:

"Changing how people consume anything is difficult, but, for heaven’s sake, we BUY water now. Someone like you probably wrote that we’d never live with that model either, yet it has succeeded gloriously."

Riiight! That’s a really great example to drag out..NOT! It has succeded gloriously as a MARKETING CAMPAIGN, not in terms of sustainable, ethical product development. www.fastcompany.com/magazine/117/features-message-in-a-bottle.html .

In fact as a case study it supports all the arguments in favour of a corrupt dying record industry ruled by fat greedy wankers with size 100+ egos!

More proof? www.treehugger.com/files/2007/02/pablo_calculate.php

As Douglas Adams said, we need to ship these people off into a starship and fire it into the sun…regime change is needed.

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Dwayne Keir:

"Imagine if your idea were accepted: A consumer pays ten bucks for a free month of p2p and downloads 10,000 albums. Then he stops paying, keeps his 10,000 albums of music, and laughs as the labels all go out of business."

What difference does it make when you have all of the music ever recorded in the palm of your hand.

www.macnn.com/articles/06/11/28/google.vp.on.ipod.video/

Music isn’t a product… its a connection, why on earth would you ever go and see a band live. You have them in the palm of your hand… Hell you even have their live album to boot.

The connection is what is being sold. That connection is most vivid and tactile when it is formed organically, formed naturally. It can come in the form of hearing a certain band or music at a certain time in a certain place. Hmmm…what do T.V. shows and movies do? Oh yeah… that’s right…they evoke something at a certain time in a certain place.

It is about being enlightened about paths to travel down and experiencing the experience they entail. That is what you make money off of. Show people more connections and you make more money, but let them decide what connections they want to make. It is as simple as that.

Some people eat to live, others live to eat, but we all eat. For some people music is background noise to interrupt the monotony of a day, for others it is their life. But we all listen.

And we all know what we like, and what we don’t like, be it food or music.

"People can listen to music on the radio for free, they come to see you for a connection" – Livingston Taylor

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Bob Klanac

Bob

Tell Gary Stiffelman that subscription will never work for one simple reason. Long-time music consumers such as myself will never buy into it. Period.

Whether it’s ones-and-zeros or grooves in a piece of vinyl, music fans will want to own it.

If he needs a business plan to figure out what a consumer thinks, then he may as well buy the farm now.

Bob Klanac

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Mario

Gary Stiffelman is right. You can con people into paying for anything: TV, water, music subscriptions. But "can" doesn’t mean "should."

Your model could work like this: $x for xGB/month. That’d keep people coming back.

-Mario

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Sean Burak

I think Gary is missing the point. The concerns he raises are valid (although for such a long rant he only really raised two):

1. There needs to be accounting for which tracks get downloaded

2. There will be people who pay the monthly fee for one month and download all the music they can find.

With some creativity, though, both of these can be easily remedied.

First of all, regarding fair allotment of funds, even if the model is "one price for unlimited downloads", this doesn’t prevent the system from tracking the downloads. Each user has to log in, presumably, before they access the music. Then you track each click and each download (just as with ads). If a user downloads a song more than once, it only counts as one download. Then all of the funds collected (After the labels take their necessary 99% of the money) gets spread to all of the artists based on number of unique-user-downloads (UUD – a new industry ranking term?). In fact, it is a great idea that no matter what model is chosen, each click should be monitored so that the LP2P (legal p2p) system can suggest new tracks, new artists and even advertise other things to the music buying customer (download a diddy track, see an ad for his clothing line etc) – yet another revenue stream for the labels (and, to their joy, one that doesn’t ever need to be shared with artists!)

As for the second issue, there are a few creative ways it can be counteracted. The first is to do what the cellphone companies do — set people up on long term contracts. So you can pay $50/month for a month-to-month plan, $20/month for a 12 month plan and $10/month if you sign up on a 3 year contract. Another way is to offer several versions of each song and limit the download speed. So there would be a 64k mp3 of each song as a "sample", which downloads fast enough that you can essentially stream it for immediate trial purposes. This satisfies the requirement for immediate gratification. Then for the REAL download, it’s 256k and takes longer to get — so that it is physically impossible to download the entire catalogue in just a month. Another way is to disallow concurrent downloads — you can download only one track or one album at a time, and you can download as many as you like but they download in a sequential manner. Yet another way — and this is the best way — is to make sure that there is a constant stream of NEW AND INTERESTING MUSIC. If you only sign up for one month, you can only get the music that’s already been released. But under this new model, bands will have an incentive to release tracks as soon as they are completed — releasing full albums won’t make as much sense. So, yeah, you can pay once but you’ll be behind the times within a couple of months. This fear is based on the assumption that people only care about the legacy tracks. There is a truth to this, but hopefully in the end, the new model results in more and better new music!

And my final note is regarding the fear of these pay-once-download-all type of users. These people are going to hoard and download from somewhere. If you don’t give them an opportunity to "pay for one month", they are going to find a way to get their legacy tracks by paying nothing. The people who are going to treat a pay-for-play system this way are the people ALREADY getting everything for free. You might as well get ten or twenty bucks out of them. Meanwhile, under the current system, my mom, my dad, my sisters — the regular people who aren’t nerds — are not buying anything at all. THESE are the people that need to be targeted by a monthly p2p service that is easy to use and offers no frustrating restrictions, either on megabytes, number of tracks, where they can be played etc. — and these people are not going to try to download the entire catalogue in one month. There is no point in stressing out over the hardcore downloaders because they will always find a way around the system. Every day that goes by without an easy p2p system for the masses (while the industry waits for a magic solution to the problem of the bulk-downloading-nerds) represents potential dollars that are being lost by everyone in the industry.

Sean Burak
www.hcal.ca/