Jim Griffin:

No need to draw this discussion out via public e-mails, but it deserves another round. Put simply, what Gary acknowledges as a lovely notion is not a government-imposed music "tax" and is far more likely to happen than will customers accepting locks and keys on music that function as tethers. When the business started suing customers, Verizon’s General Counsel responded by asking if a buck a month per customer would be a good start, and she was rejected. Universities and others are clamoring for a network fee to be rid of the hassle, and this is precisely what you, Bob, have regularly advocated. Indeed, you recently wrote that all that is needed is an agreement not to sue for the duration of the fee, and that is roughly put what ASCAP/BMI/SESAC and SoundExchange offer. This "lovely notion" is around the corner if the business can come to terms with the notion that no form of DRM will save the product model, and frankly I do not see another answer to recovering the losses we’ve experienced as an industry. Music well done is anarchy, and it is better we should monetize that anarchy than continue to vainly attempt to end it.

Frankly, collective licensing is a far better notion than what we have now, which is collective enforcement. Unfortunately, the source of the money ends up defunct and the money is rarely split amongst the artists. Better we should keep the revenue flowing and divide it equitably based on sampling.

Licensing is what we do best. Why do we license pubs, restaurants, hotel lobbies and webcasters but refuse to license networks? They have the deepest pockets and they are profiting the most from the friction-free delivery of music. Networks, cellular carriers and ISPs are growing fat on the movement of music, and they slap fees on customers for almost any half-decent reason. Verizon is now charging a fee for customers who don’t use long distance, and every carrier charges a fee for directory assistance whether you use it or not. Network fees are the best way to recover the lost value of sound recordings.

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Gary Stiffelman wrote:

"A million selling album would generate a total gross of $600,000, barely enough to pay the costs of recording,"

You are REALLY out of touch, Gary…

a) for a comparatively small investment, true artists can install world class recording equipment in their basements & bedrooms.

b) I have a studio in my house but wisely still use real studios to record basic tracks and to mix and master in WHEN IT COUNTS.

I just made the most complicated album of my career for $60k. I had to find someone to invest in it, but I did. There are real musicians playing on it ($$$) and there are synthesized parts on it as well. $600k would pay everyone back, support a massive PR campaign AND advertising and put a few hundred grand in my pocket…………It’s not like I gotta press up a million copies anymore

Al Kooper

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Hi Bob,

Gary Stiffelman’s email was meant to provoke, right?

It’s like he’s got all these pieces to the jigsaw puzzle but insists that they have to fit together just like the last jigsaw puzzle he worked on.

Who says there would be no correct attribution of payment in a subscription service? (It’s "just ones and zeroes", after all.)

For every person who downloads 10,000 albums a month and then cancels the subscription, there will be 10,000 people who can only assimilate about a dozen new albums a month, and will gladly subscribe permanently for the ability to download anything of interest. (Characterizing music consumers as "greedy to the point of stupid" is something you expect from a multinational record company, but in fact that’s an apt description of the multinationals
themselves.)

As for a model that permits the labels and artists to continue: News flash for Gary Stiffelman: Artists will always survive and (as someone who’s worked at small labels since the early 70’s) I’m convinced that labels that don’t adapt will wither away – however there will always be people working with artists to help get their music out there.

Young people don’t collect music in same way that I collected 45’s, 33’s and CD’s. (I never "collected" cassettes; they were just a carrier of convenience.) However there are enough young people who are passionate about music that there is a huge demand for the stuff. So as you constantly point out, the content owners should be concerned with monetizing the music, not protecting it from the public.

If there’s any point where I differ from you in your vision of a successful subscription model, it’s that I don’t believe you focus enough attention on the negative impact of music publishers. If they bought into the subscription concept, the majors’ resistance would have to collapse.

Keith Brown

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If you print any of this, please keep it anonymous:

Re: Subscription services from an indie perspective:

-Large repertoire owners get advances because they have the market share strength to demand them (good luck to those royalty recipients trying to get their ‘fair’ share of that.) Indie labels and individual artists will get some extremely small amount per song-last I checked it was about $.24 at Emusic. Try paying statutory mechanical and then parsing the balance….and try covering the administrative costs in doing so.

-Anyone ever audit a subscription service to determine whether the streams vs. downloads are accurately calculated?

-Another current example of a subscription service which is screwing performers/content owners is the promoter yearly concert subscription. These subscriptions are sold at a high price by some clubs and the laminates allow free access to shows. Those attendees are not figured in the settlement unless the act has enough market power to force the accounting.

Apple’s model works for me as a label owner and works for my artists. At $.99 per track everyone gets paid-not as much as before but enough to make an indie model work. Now that Amazon is in the download business, those who want to avoid drm can purchase MP3s at the same price as through iTunes.

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Lindsey Pearl:

enough already. i just want to pay my Verizon internet cable service bill $2.00 extra a month for access to EVERYTHING. maybe i pay $4.50 for the premium package, and with that i get an email with new releases and "first dibs" on the new music.

so simple. i won’t feel that $2.00, but the rights holders will —
especially if 250,000,000 people are paying it each month. watermarking is a brilliant, German invention that’s being used for EVIL instead of GOOD.

everyone needs to just shut up. the solution is clear as day.

if another SXSW goes by without Verizon, Time Warner, Comcast, etc reps there, talking up THEIR new premium services, i’m going to tear my face off in frustration.

i just might quit music until this happens.

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Rocky Del Balzo:

Subscription service will not work. Labels would end up fighting over their cut until they argue themselves into oblivion. The only thing that I believe will work is for the major labels to become huge websites that provide music downloands and content for FREE. Then charge people to advertise on the sites. Just like a radio station.

They would pay artists for their music. They need to entice the artists enough to make it exclusive to an individual label. Not to itunes or other services. No CDs. That will eliminate some of the sharing. Also, they will be able to encode their downloads so they are not easily transferrable.

For example Columbia could have several different sites with different advertising rates for each site.

Fans would go to the sites like they would to a radio station. They could download older music, new music whatever. The artists get paid, the label gets revenue and bands people go to see the bands they love live.

It is a radical step, but the only thing that I think will save major labels. The question is it is such a radical step will they have the courage to do it. If not, we will use the remains of major labels to power our cars in the 25th century.

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I’m glad others listed the spuriousness of the Stiffie’s arguments.
I’m tired of trying to explain real life to lawyers.
Lawyers fuck up anything that is real and imaginative because they need to define, control, manipulate, differentiate, subjugate….it’s a long list of awful things they do…you know.

AC

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"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

Let me give you some insite on that one – Please post this anonymously – God forbid the RIAA reads this and sues me…

I have, for the last few years had WinMX, Edonkey, Limewire and then more recently EMule running 24/7 on a separate computer whose sole function for me is music, ebooks and audiobooks, and some occasional software.

I now have a hard drive full of stuff I can’t possibly take all the time to listen to because of Gary’s "grab it all while it lasts" idea.

Recently I had to make space to back up and wound up deleting a bunch of stuff I’ve never listened to or never will listen to, and if I need it that badly I can always go back and redownload it.

I mostly use it for new stuff, singles and obscure "song is stuck in my head gotta grab it and listen to it a dozen times to get it out of my head" type stuff.

I would gladly have paid $10 or $20 a month for it…

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Regarding Jim Griffin’s comments on subscription, I agree with the majority of what he says. However, on the idea that "sampling the network" can provide an equitable distribution of revenues to artists, I respectfully disagree.

Sampling is just what it implies. It takes a snapshot of activity and applies it to mass use. It’s exactly what’s wrong with the old Nielsen and Arbitron approaches. Survey 1000 people and use the results to interpolate the behavior of 100 million. It isn’t fair, it isn’t accurate and it’s unnecessary in a connected world.

As Charles Crossley Jr. and Sean Burak point out, there is excellent technology available that can track every play/stream or download event and divide revenues on a granular pro-rata basis.

Subscription will ultimately work, unfettered access trumps ownership. The largest iPod available will not hold the vast repertoire of music that I need to hear where and when I want.

Rhapsody rules!

Ted Cohen

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Found this article searching Google for Gary Stiff

http://blogs.wsj.com/law/2007/01/03/the-longest-law-firm-name-ever-part-ii/

Funny. As are the comments.

Drew Robertson

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Dutch Seyfarth:

I personally have numerous acquaintances that download THOUSANDS of music tracks, movies, cartoons, TV shows, etc EVERY month for many, many years now. People do indeed have the time to spend downloading illegal content contrary to other people’s opinions.

I believe that created content such as music or movies is in a new realm where it is the "loss leader" and the live performance (touring), first run movie theater release, or live broadcast (supplemented by paid advertising) is the new Profit Center. Modern internet technology is a Pandora’s Box where created content once released for free (legally or illegally on p2p) can never go back to the tangible consumer purchased product it once was.

Of an interesting note I’d like to point out is the continued lower cost of (local) radio, newspaper, and mass media advertising expenses. As a young independent concert and event promoter, I am amazed how today it costs as little as $200 in my market to advertise upcoming concert and other live events (for 10 to 15 prime radio spots) where just 4 years ago it was easily 10 times that cost (Denver metro area market pricing).

Of course, these days like so many other people, I am now looking more and more at cable TV advertising to better target my niche audience and promote my upcoming concerts and events. To my surprise, advertising costs for 10 TV spots surrounding a well known cable TV show like the syndicated "Law & Order" on A&E networks costs me roughly $400 (for 10 spots over a week) and gets me closer to the target market demo I want to reach.

You have been preaching for artists and performers to reach out to "niche markets". From a very different road I have traveled, I have
reached the same conclusions. The future is indeed very different from the past in the live entertainment industry, but I for one welcome the new, more level playing field I now have against the industry titans.

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John Davidson:

Subject: What Stiffelman is avoiding

The "stickiness" of the data is abhorrent because what that means is that the same greedy assholes who put the music business in the toilet will be the ones with monopolistic control over subscriptions. To wit, I load up my hard drives (1TB and counting in my house) with a bunch of subscription music and then I have to pay one company for the rest of my life to listen to that stuff? Sorry, but I don’t have nearly that much faith in any company in the music industry. I certainly don’t trust them to keep the price from skyrocketing over my "sticky" data. Do we really need to revisit the cost of cable television over the past 20 years vs. inflation?

Also, what’s to keep EVERY subscriber from going out and constantly downloading off the main servers, loading up on every song they’ve ever heard, downloading the top 200 albums of every year? The server backbone and bandwidth needs would be MASSIVE unless it was all satellite based. It’s currently around $200 for a 1TB hard drive..people are going to want to fill them up if they know they can, and the price is going to continue to plummet.

The bottom line is that right now, technology just isn’t there and until it is, our ownership culture in music isn’t going to change.

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Sean McPharlin:

"In summary, while the arguments are well-meaning, I am dissuaded that there is any inherent flaw in the subscription model other than the difficulty of adoption, which I have already noted."

right. so the one flaw is the fact that no one who likes music will want to adopt his music ‘rental’ service.
sounds great!

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David Rubinson:

It is clear, and has been clear for years, that what is needed is exactly this kind of PUBLIC OPEN dialogue, where people this intelligent and experienced and dedicated to the music and the business of music, can come together, and debate, illuminate, and evolve these issues.

What the RIAA and record companies have done is conspire among themselves, largely without any real input or free exchange of ideas like those we have just witnessed, alienated from exactly the people who can create the kind of conceptual re-organization that will surely be required.

How can we get this to happen?

By the way, it’s an EMERGENCY.

Thanks,

DR

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AnalogKidd at the Shop:

Bob..

Lessee, subscription. This is a rebuttal to Mr. Open Your Mind down there, that phrase always makes me think these people have rotten goods to sell and they are in "con you" mode. Back to subscriptions… Mmm yes, I know what this reminds me of… Columbia House! Remember the idiots that sold you some loss leader CD for pennies in order to get a subscription in which you were shipped a certain number of albums a month no matter what you did? You had to agree to a certain number of purchases per year, whether they sucked or not! Oh let’s not forget that convienient billing… and just wait till you try to cancel this lovely "subscription". Three months later overpriced CD’s are occupying every cranny of your office. Thise who do not heed the past are doomed to repeat it, Mr. Open Mind…. I’d bet Columbia House is your blueprint.

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What planet is stiffelman living on when $600k is "barely enough to cover recording costs". I made a record for $5k which a major bidding war ensued over!!! I am sure I am not the only one and this was a pop rock record!!

The old guard needs to wake up. My band could have lived on 600k for YEARS!

Please post anonymously if you post.

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"The essence of the subscription model is a radically reduced price to the consumer, tied to a premise that so long as you pay the modest monthly sum you can enjoy all the benefits of ownership."

Of course, if I buy a CD when I have a good job, and then lose said job and can’t afford the "modest fee," I no longer have music? No way I’d take that risk… not in a million years, as someone who has weathered the ups and downs of dot coms and the advertising industry over the past decade.

Pixie Kruczynski

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Whoa! This guy Stiffleman is WAY out there.

"I am a fierce artist’s advocate, but the last thing I want to see is the labels go down in flames because the labels are still the only companies willing to spend money so that you can discover new artists and music."

That is so bizarre I can hardly find the words to reply. No one needs to "spend money" so that I can discover new artists; I do it all the time, by myself. It’s the Internet, dufus! And who wants to discover artists from the major labels anyway? Not me. That statement REEKS of a major label apologist.

"The dream of the internet as the perfect tool to connect artists with their fans was disproved when not a single MP3.com artist became a star."

What planet does this guy live on? The Internet IS the perfect tool to connect artists with their fans, and this fact certainly does not need to be borne out by the failure or success of some company. Just ask the thousands of bands that are in constant communication with their fans and making a decent living totally under the radar.

Just about every comment this guy makes comes down in favor of major labels making as much money as possible; his rare mention of the artist seems a token concession. He is lost in the past — and I mean the 70s. $600,000 is barely enough to pay for the recording of an album? I guess he’s still thinking of Fleetwood Mac’s cocaine bills or some shit, or he’d know how inexpensively the real artists today are making their excellent records. And when a record is good, viral movement on the Internet does the promotion. But why am I trying to explain all this? Stiffelman doesn’t want to know. So let’s not wake him. Just cover him up with some dirt, but please move him out of the way.

Rob Meurer

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Larry Hoppen:

My "experienced Artist’s" rebuttal to Stiffelman’s premise:

Regardless of what ‘business model’ will best work theoretically, whether it works FOR THE ARTISTS in the REAL WORLD has everything to do with WHO is running the "model;" and WHO is collecting the $ to be "distributed".

As a pro recording / touring musician still, after 35 years, a few examples of WHY that’s a truism:

1) Took Warners 21 years to put our band "in the black" on our royalty statements, given their "accounting" methods.
And we had HUGE hits on the radio in the 1970s. BIG sales of singles and popular LPs, cassettes etc. AND many significant TV / Radio commercials using our songs for sizeable Sync royalties. 21 years. They never thought we’d last long enough to remember, I’d bet.

We are still very active and doing well – but not from the establishment label efforts, because of OUR OWN efforts, talent, passion and perseverance. NONE of the good people who signed, produced and/or promoted us – the VISION and WORK part – has been there for decades. But they still make pure profit – rereleases, comilations etc – and don’t "distribute" it as per our Contract.

2) Over the last 4 years AT LEAST and especialy since Bronfman’s tenure, Warners’ can’t even FIND big money I already know is out there. The kids in Accounting are young, clueless and they don’t have any pride in their work that I can detect. So, I personally have to go chase that money and get it sent to THEM. AND THEN – I have to FIGHT Warners’ to get my/our piece. WTF?

3) MCA has 4 titles by my band from 1973 – 1986, but we haven’t even seen a statement in 15 years.

4) Re: digital income – all the major labels take the vast majority – in our case 92% – of iTunes revenue generated, for example. Certainly that’s the norm for ‘catalog’ tracks and albums. They have done ABSOLUTELY NOTHING to EVER deserve that. That’s a LOT of free money !!!

I could go on, but you get my point. The labels will ALWAYS serve their own interests, NOT the Artists’.

Stiffelman’s holding forth that the labels are the only ones willing to spend money to promote Artists is complete BS. It’s disingenuous at best. For a long time now, the labels spend money ONLY to rake in money on the marketing ploy of the week/month. T&A, violence, vapidness, Ringtones, whatever. Yeah, once in a while a John Mayer gets through. Wonder how much he’s gonna get ripped for over HIS lifetime, regardess of the ‘model’?

The labels should all go the way of the dinosaurs, because that’s what they they are.

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I could only get past the initial portion of his response as I am completely dismayed. What planet is this dude from?

Gary obviously is not a music fan because no music fan would ever find his subscription concept intriguing. NO ONE WANTS TO RENT MUSIC!

I own thousands of albums as do many people I know. I will have these albums for the rest of my life. I have an incredibly diverse catalogue of music that I continue to explore and enjoy on a daily basis. Why the fuck would I ever want to shell out $10 per month indefinitely just to have access to a music catalogue with music files that have restrictions?

So what is the "incremental fee" he suggests for ownership? The current Apple $1 per track concept? Or something higher (which will be outrageous)? Fans will pass on the rentals, pool some money together, download the tracks that can be owned and trade the shit out of them once they figure out how to bypass the protection element of the file.

The subscription model will fail on so many levels. The music fan wants to own music for a reasonable price. The moment the labels attempt to take away that freedom, their fate will be sealed.

Andy Rock
andyrockmusicblog.blogspot.com

Ps. Don’t you love how so many executives rag on
Apple constantly? It is so transparent….

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Cody Willard:

Why on earth do any of us care what Stiffelmen even says at this point? I guess it’s because we wish he were just irrelevant and not dangerous. But frankly, what else do you call somebody spewing this: "We need to change people’s thinking…"

No, good sir. You don’t need to brainwash us.

That one sentence says it all about the record label mindset. Here’s hoping the studios have a better clue with the commercial video revolution that’s now upon us.

Revolutionomics dictates that all central control disperses to the end user over time. And can’t nobody stop the revolution, by definition, of course. We are living in the Age of Empowerment.

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Re Subscriptions, I tried Bearshare’s new service. For 7.95 a month you can get virtually anything. But you can’t burn it to a CD. What good is it if I can’t carry it with me? Any subscription plan without burning ability is worthless to most everyone except people locked in their house.

Regards,

Joe Pollock

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Dwayne Keir:

He still didn’t answer my question.

What difference does it make when you have an Ipod in 10 years that will hold, I don’t know, 400,000 TERRABYTES? All it takes is one nerd to collect all the music he can find, and say to his buddy… you want me to give you all of the recorded music in history, or at least 90% of it?

And then this procedure is repeated like copied Jerky Boys tapes. God Dammit!! you don’t even need the internet to figure this shit out.

The old way is fucked, the world changes, that is automatic, the question is… do you change with it?

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Bob,

I’m not sure where I fit in when it comes to a viable system of consuming music – although I want to point out that i give as much of a damn about the major labels as they give/gave about bands and consumers over the years. But when it comes to actually owning music, well, I own some 10,000 cds (I dumped my vinyl in the ’90s – no room for it). But in recent years, I only listen to music on my computer system. Of course I can stick a CD in anytime I want, and listen, but frankly it’s not as convenient as just going to my itunes software and finding in on a hard drive. So I’ve tried, with limited success due to hard drives crashes, to digitize my collection.

Currently I have about 50,000 songs on several hard drives (which I’ve now backed up – never trust a hard drive). I’ve then sold (at Amoeba) some of what I’ve ripped, but I could spend a lifetime getting all 10,000 albums digitized. And lately, I have begun to not care. Because I can go online and download what I want to hear (and that includes buying stuff at itunes, which I have no problem doing). I realized recently that with the exception of 1000 or so CDs, I could lose my collection and though I’d miss it – my old "look at all this great music" pleasure paths still exist – it wouldn’t change my listening habits. Because unless I really want to listen to something I haven’t ripped, it’s easier to listen to what I have ripped (more songs than I’ll hear this year, for sure), and to troll the net looking for a song if it’s what I really want to hear on the spot.

Truth is, I use the Net the same way I use all information technology. The idea is that when it comes to knowledge, I don’t need to know everything under the sun (which was once the phony, class- and culture-based conceit of the so-called "learned individual"), I just need to know how to find information, which means understanding how search engines work. Someone else stores it, I find it, use it, and move on.

Likewise, with music, what I need to know is where I can find a song or an album – and sometimes, in a scattered collection of 10,000 albums, it’s easier to use Limewire than it is to dig into a few walls of shelves looking for a song or two, that I may not even own (try keeping track of all that music, especially when a couple of thousand of the albums are compilations).

I don’t care whether or not I own it; I care whether or not I can listen to it – which is to say hearing music is what I care about; the impulse to own it doesn’t matter to me in the long run – it’s a thing unto itself, but it was rooted in my youthful desire to hear every fabulous bit of music i could find. For collectors, I don’t know – I don’t have that impulse. As a listener, I don’t care whether it’s on the radio, the Net, or on my CD shelves.

To me, that’s music consumption in the information age, and these days, I believe this: sooner or later knowing I have access – free, subscription, or whatever – to the entire universe of songs is what matters, not whether or not i can pull it onto one of my fragile daisy chain of hard dives and call it my own.

Keep the debate going; it’s instructive, challenging, and fun to read.

Tommy Tompkins
Editor-at-large, SF Bay Guardian

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A couple of musings and a pep talk.

A subscription service may be the only reasonable option. But it will only serve the consumer, not the labels. Labels are currently complaining about getting paid 70 cents out of a dollar, which is ridiculous. (We all know this is because they are making a case for a $1.20 on established acts. Merge the record and publishing offices, fire some execs, and you can make it on a dollar per song) A subscription service significantly lessens that margin, therefore according to the labels themselves, it won’t work for them. itunes is the best friend the labels have, mainly because hardware is their first line of business, not downloads, so they provide a stable revenue stream and captive, one stop shopping, music environment.

As I commented in my last email, the labels are the problem. They are good at discovering, funding, marketing, licensing, creating cross promotional opportunities, and promoting artists. They need to function as managers with money. And if they could sell this, they could take half of ALL the money, and by industry standards, be entitled to it! Take the 20% management commission and the 30% that producers (who front the money for recording) take, and you’re at 50%! You not only earned it, but you might be under paid! Not to mention you have an exponentially larger staff than any management company ever did, nice offices, field staffs, licensing, internet, radio, retail, and tour marketing, seasoned employees, clout, and sister companies who are publishers. (why are they separate with people doing duplicate tasks? Again, it’s an upper management salary thing) SOMEONE JUST NEEDS TO SELL THIS CONCEPT TO THE ARTISTS, THEY WANT TO BE IN THE BIG SHOW!!!!!!!!!!!

If you need proof, keep reading. I know you’ve bashed me in the past for saying positive things about Lyor, but….. I signed Paramore (as their manager) to Warner Music Group as part of a worldwide joint venture deal that the band’s attorney and I, not the label, architected. (at Lyor’s request by the way) 50/50 on touring, merch, publishing, and recording. I will tell you from experience that having a PARTNERSHIP with the label, and not the usual adversarial relationship, created a working relationship that I completely credit for a new artist, another pop-punk artist for that matter, being in or very near the top 50 every week since their June release! Over 300,000 albums sold and sold out 2000 seat venues here and in
Europe. Can I take the credit for using my Creed experience to do this? No. It was my idea, but the label did 99% of the work. In my opinion, it is the relationship and the investment in touring. Not the artist, not management, not the record, and not the label by itself, that made the difference.

Moving forward, if it’s a subscription model, sliding prices on Itunes, or even all of the above including the ones we may not have explored, such as a digital service that operates similar to the old record clubs or a subscription service option that is genre or artist specific. (both good ideas I think, especially if it’s genre specific like a magazine) The label may not get paid on the front end but can use it as an investment for the monies that come on the backend like the eventual sales of tickets, merch, and song licensing!

As for My idea? Again, print this, I want someone use it. It might make things better. I plan to offer an initial bundle of tracks for little money or for free. You can call it an "introductory offer", followed by a new song every other month with digital bonus material in between songs. Charge what you want to, what you need to, or what the market will bear. By the track, by the bundle, by the year, or forever, just make sure you open up a direct line of communication between artist and fan. I want to eliminate record cycles for the on demand consumers with limited attention spans. My artist will record a few songs between tours, every few months. Write on the road, record frequently, record live, keep the juices flowing, keep the music and free digital stuff that doesn’t cost you anything flowing. Everyone benefits and music is better. We all want and need that.

Jeffrey S. Hanson

Silent Majority Group LLC.

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John Ashfield:

The subscription system Stiffelman describes sounds horrible. Who would want that? Who wants record industry tethers in their computers? I sure don’t! I want to buy music, and have it be in my library. I don’t want the record company meanies taking away my music if I lose my job, or hit a rough spot in life.

Isn’t that one of the great things about owning books or music? Years later, you can revisit a book or a song, even if you can’t afford to pay for a new book or a new cd. Of course in Stiffelman’s world you are screwed. You never owned the music, you are just renting. But music has never really worked that way. You bought the 45 (or player piano roll, or CD, or 78, or LP, or sheet music), and owned it, you could give it away, trade it, smash it, paint it, whatever. You never rented it, it never self destructed when you couldn’t make a payment.

Subscriptions won’t work. No one will go for it. It’s a lame idea.

Come up with a way that we can buy music, easily. Maybe iTunes with no DRM or compression?

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Gerd Leonhard:

good debate here, but you are forgetting one thing: just like Radio, it would not matter how many tracks any given person would download if there was a flat rate. Any and all use would be covered, and the creators would get paid exactly pro-rata with the actual use, whether streamed or downloaded. Unlike today where kids download stuff in a quest for making sure they have it, a flat rate would not incite such ‘hoarding’ so they would be likely to only download what they actually need (which some research has shown is approx 40-50 new tracks / month). I covered some of this stuff at www.muserati.com btw. Keep up the good work!! Gerd

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Bob,

If I may….

…the solution is to eliminate the idea of song ownership and focus on the option value of having a song instantly available to your ears. We have a patent which covers the delivery of completed files (copies) on a prepaid decremental basis and I believe it creates an ideal solution by completely eliminating the idea of selling tracks. Everytime a delivery is made a copy is created so all we need to do is guarantee a compensation event on a completed delivery. What does this mean?

It means you store your music up in our cloud at no cost. When you pull a song down to your local drive you consume the measure your song is weighed in: bytes. Like the gallon of milk in your fridge, you have prepaid for your "gallon" of music measured in bytes. You can give songs to friends and you can give recommendations to friends. You can transfer songs between accounts in the cloud at no cost. These are just pointers to the file. When you move a file from the cloud to your local realm and your download completes remuneration to rights holders happens automatically.

Since songs vary in length we set a minimum and maximum though one might argue to let the price float according to the byte count which corresponds to the quality and the time.

The price of the music gigabytes would have to be high enough to properly remunerate the rights holders but it is easy to imagine this method contributing as much or more than what iTunes and other services pay. Say $20 per gigabyte for lossless files DRM-free files?

You cannot move a file out of our system without a transaction event. Transaction events are weighed according to file size. The songs on your hard drive need not disappear because the reason for using our service centers around convenience, sharing and discovery. If you opt out of the system you lose a ton of functionality around the music you listen to.

We plan to run a test. Do you like the idea? Would you be willing to help gain support for the test from some rights holders?

Kind regards,

Mark Smith
MoveDigital, Inc.

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Paul Sanders:

Gary Stiffelman wrote:

"I am not sure what program you are promoting. It seems you like the idea of an involuntary fee at the ISP level. While this is a lovely notion, it is unfortunately not going to happen. It’s tantamount to having the government impose a new ‘music’ tax."

Is he saying it’s a lovely notion because he hates it? If he doesn’t hate it, why not give it a chance?

I have been slaving away in the UK putting together an ISP which pays for the music. You, Bob, have said that it’s crap in the past, because you said that the labels would force us to lay on the DRM crap – which some of them have to a non-fatal extent in our judgement. But here we are, an ISP that can account for transfers of music across its network, block almost all transfers of music to other ISPs, and is setting aside a share of the monthly sub for the music business.

If it’s lovely – if it’s the future – if it means that P2P can be monetised – if it’s all those things could we have a little sunshine on our efforts? How about ‘Playlouder.com is cool and doing the right things – let’s support it and try to get the other ISPs on board too’?

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The labels aren’t spending money to help me discover new artists. The labels are laying their bets that the "flavor of the week" they choose will win and pay off.

The last thing I need is some "demo listening food chain" that starts with an intern and ends with some guy who inevitably will change the original artists vision to be "more accessible" before I ever get to hear them.

I get at least 5 new artists a day sending bulletins to my myspace page.

I’m surprised with the amount of new artists/music coming at us, there aren’t 10x as many music publications with critics to review them being created everyday.

r

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Wayne Mitzen:

yea.. right tethered…. my hacker friends would kill that in an instant… things don’t just "disappear" from hard drives – ask any forensics team.

Market people … not music… educate the consumer as to what a quarter note is…

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subscription sux. won’ t work. noone gives a damn. until there is another outbreak like grunge hiphop disco new wave punk prog beatles elvis there will be no listeners.

owen

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Bob,

Mr. Stiffelman still doesn’t get it. We can get all Stiffelman suggests through P2P. Our drummer said, "But those tracks are all compressed." Yeah, I found Nilsson and Orleans and a bunch of other bands on AM radio. Compressed sounds much better than AM. We have a service already, Mr. Stiffelman. And it is un-"tethered."

We don’t want to be tethered. We don’t want the big company to exercise its "condition of payment." In the days of vinyl or CDs, did the big companies come into my house and take my records or CDs because I did not meet the "condition of payment?" Hey, I recorded plenty of my music onto tapes and gave them away (an early P2P). Was that a violation of the "condition of payment?"

No, Stiffelman’s proposed service is not like iTunes. I am not "tethered" to iTunes. After I buy a piece of music, it goes onto my iPod and into my backup machine and I never have to look at iTunes again. I don’t have to pay them every month. In fact, they offer me updated software once a week so that I can take advantage of the latest cool stuff. They don’t turn off my iPod or iTunes for not meeting the "condition of payment."

Mr. Stiffelman and his ilk are delusional. They are trying to con us into paying for something we don’t need because we already have a much better version! We keep our music. We don’t have some musical Big Brother reaching into our computers to take our music away.

If I want to pay monthly, I would get satellite radio. I have read your posts. You hear new stuff or are reminded of stuff you have or want. That’s the idea of radio. To let people hear good music. Terrestrial radio screwed us because it is controlled by the same guys for whom Stiffelman works. Alan Freed, come back, payola is actually required nowadays.

Honestly, Bob, is Mr. Stiffelman in his right mind? Music is not cable TV. Music is not a movie. Music is not satellite radio. Each of those entities would be lessened by the absence of music. I don’t want to rent my music. I want it instantly available for when that memory of Gail pops into my head and I want to hear "You’re Breaking My Heart" by Nilsson.

The meteorite has hit and your type are not long for the world, Mr. Stiffelman.

Dana Reed Thurston
aka Nigel Knucklehead of the Allstonians

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Steve Blair:

OK, so… $5-$10 a month for unlimited use. That is enough money to split up to all of the writers, publishers, labels, etc? Meaning, if I download 2 songs a day for 12 months, I downloaded 730 songs for $.16 each or $120 a year. This is enough money to pay everyone? Let me tell you this. I just bought my first full album off of iTunes this week. I paid $7.99 for Colbie Caillat. I’ve owned an ipod for 3 years now and have spent a grand total of $35 on downloaded music. I own thousands of CD’s… If they would let me download any song I wanted for $.16 each and let me keep it forever, I’d spend a crap load more than $120 a year in music. I’d buy more than 730 songs a year… I’d buy 10 songs a day. But if I knew I was going to lose them if I stopped paying, I’m not playing. I have CD’s now that I bought when I was a kid. These are high school memories, first dates, first kiss, prom, graduation, first broken heart. Music is a timeline to life. I just think the subscription model takes the emotional connection away. I don’t want to rent my memories. I want to own them.

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Gary Stiffelman wrote:

"You then have the right to download a limitless number of songs, which you can sort into playlists, etc. At this point, the service is just like iTunes. "

What? I don’t think it’s really even close to iTunes at any point. It’s actually nothing like iTunes. First and foremost, you get to keep and do "almost" whatever you want with the songs from iTunes. They’re not yanked away at any point and you can burn them to disc, etc. That’s where subscription services suck. If they were iPod compatible, if they allowed users to permanently keep the songs and to burn them, we’d ALL be using a subscription service. I always get a kick out of the subscription services trying to imply that they are anything like iTunes…using a point like "you can sort into playlists"…that’s the similarity they’re touting? I would hope that all services would offer that. It should be a given. Not that iTunes is perfect by any means, but at least when I pay them money for a song, I feel some sense of ownership and more flexibility.

I guess I’m too into music to want to rent songs. I can’t even begin to comprehend or imagine the thought process behind someone wanting to "rent" a song for a limited amount of time. If I am into hearing a song today, there’s going to be a point in the future, be it a week, a month, or a year from now, when I’m going to want to hear it again, and I’m going to want the ability to listen to it anytime I want without having to pay a monthly rental fee for said song. I just don’t see the Netflix or Blockbuster model working for songs and music, but maybe I’m wrong. I can either buy a song or a CD once and have the music forever, never having to pay for it again, or I can pay every month to listen to said song? I’ll take the one time fee thank you very much.

– dr. tony shore

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Montry Carroll:

Bob, I am fifty two, up until two years ago I could have cared less about Kazaa. I walked into my sons room one day and saw him downloading music, even though I felt it was illegal, he was downloading ‘rap’ so who gives a damn. I am into classic jazz among other genres of music and when he showed me I could download a lot of old jazz I could not find in stores, I was hooked. And as far as the legality? Most of the Jazz artists I download are dead anyway, so who loses?

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What an ass.

I have an eMusic subscription. I own my copies of every single one of those songs. I’ve been a member since 2003, when you paid a flat fee for as much as you could download. Now I get a limited number of downloads per month, and I’m still a happy user of the service. Why?

Because once I download those songs, those copies are mine to keep. MINE MINE MINE MINE MINE. If I want to burn them to a CD, I can. If I want to stuff them on a disc and stick ’em in my attic, they’re mine. And I can keep them as long as I want, even if I cancel my subscription tomorrow.

Oddly enough, that’s just like buying a CD. Or cassette. Or vinyl, which I still buy regularly.

If the record industry is so terrified of people KEEPING the music they buy, why the hell are they still basing all their hopes and expectations off the CD, an UNPROTECTED FORMAT!?!

Of course we all saw what happened when Sony tried to protect it, those turds.

Buy indie. I haven’t purchased a major label release anywhere but the Used Bin in 15 years. Plenty of great music to be found, if you’re willing to look, and you’ll never have to deal with No Idea Records trying to tell you that you don’t own the music that you bought. Or Epitaph. Or Chunksaah. Or. Or. Or.

Stiffelman, damn your eyes and the eyes of everyone who looks like you.

– Steve Brown

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What Gary doesn’t quite realize is that intellectual property on the internet is at a failure point. This is a value-free statement. I’m not saying there shouldn’t be intellectual property; I’m just saying that with the freedom of the internet and its anonymity it isn’t protected right now as evidenced by the the fact that the RIAA’s lawsuits aren’t making a dent.

That doesn’t mean that there aren’t ways for artists to make money. I think that we will return to something like the patronage system. Mozart didn’t worry about royalties from every copy sheet sold. But what he did worry about was a rich patron paying him up front to create a song. We can have a similar system in this country but the patrons would be brands who without interfering with the integrity of the song, can imbed their image into the code, so that it pops up every time it’s played. Then they would want the song traded as much as possible.

I don’t see anymore how the solution can be "1.) artist/label delivers the song 2.) consumer delivers the money". This is the same process for our current model, AND the subscription model. The consumer can with very little effort get around step 2. So the key here is to create a whole new fundamental process. We cannot rely on the consumer to get revenue anymore. It must come from a 3rd party.

Gary says:
"I am not sure what program you are promoting. It seems you like the idea of an involuntary fee at the ISP level. While this is a lovely notion, it is unfortunately not going to happen. It’s tantamount to having the government impose a new "music" tax."

This is not true. Taxation is backed by the government’s threat of violence. If you don’t pay, you go to jail. ISP fees are not. If you don’t want to pay the fee, you don’t have to. You just won’t get service. It is a solution that doesn’t require more legislation, more lawsuits, and congressional hearings.

Travis Page, President
Steeleworks Entertainment

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Gary Stiffelman wrote:

"The essence of the subscription model is a radically reduced price to the consumer, tied to a premise that so long as you pay the modest monthly sum you can enjoy all the benefits of ownership."

The actual "essence of the subscription model" is Ownership.
Subscriptions are ownership at a perceived bargain price.

Enjoying all the "benefits of ownership" would be akin to leasing music.

When I subscribe to a magazine I don’t expect them to come to my house and take back all the issues when I don’t renew or cancel my subscription.

They’ve made back their money on advertising and other ventures. Why else could I get 12 issues for $12 by subscription instead of paying $60 bucks in the store? I’ve perceived I got a bargain so I’ve purchased the easier method.

Same goes for a subscription on the web. Join a porn website download all the porn you want and then cancel. Your porn will still be there and they’ve made their money on your subscription and your clicks through advertising or other means. Maybe you buy a DVD of what you saw, a t-shirt, a signed photo whatever. All are other revenues for the "artist" to make money and keep you a happy "paying" customer.

The opposite end is when I decide not to renew the lease on my car I do expect them to take my car.

How has cable survived for so long when all the TV shows, actors, producers and multiples of people who have worked on what you view are all trying to get paid? This, as has been stated, is a medium where you can Videotape, Tivo and now burn to DVD whatever you want. It’s not taken away from me after I cancel my cable.

And again who’s paying a big chunk of all this? Advertisers are that are selling products to you the paying subscriber.

Stiffelman’s premise: "that so long as you pay the modest monthly sum you can enjoy all the benefits of ownership." Sounds like I’m making a deal with the mob…or maybe the mortgage industry.

People want to physically own stuff that’s the American way. Ever heard the saying "he who dies with the most stuff wins"? It’s why every block of every city has a different strip mall. America is an endless string of strip malls filled with stuff for people
to consume. They definitely will not be happy when you take their music from them for not re-subscribing.

http://en.wikipedia.org/wiki/Subscription

Jeff Campagna :: Sales- Forced Exposure

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Talley Griffith:

As an analogy, I would like for Gary and others to analyze something as simple as the PPV model vs. Broadcast/Cable model for something as ubiquitous as NASCAR racing. I use this form of sport as an example because:

All through the late 60’s and the 70’s most NASCAR races were only shown as clips on Wide World of Sports or local news/sports highlights (and then mostly only in the South and on the West Coast where races were held).

Then, at the Daytona 500 in winter of 1979, a miracle occurred. CBS decided to broadcast the full-length race in its entirety (which was a first for ANY race as even the Indy 500 was tape-delayed). A spectacular fist-fight broke out between two crashed drivers on the last lap which left viewers glued to the screen. Since a massive snowstorm blanketed the entire Northeast of the U.S., this became water-cooler talk the next day. Even the New York Times had a major article about it at the time.

CBS Sports found itself deluged with ad specs and buys, and within a few years, NASCAR itself (as the sanctioning body) signed its first-ever full-season broadcast contract with CBS and ESPN (alternating races). By the turn of the century, NASCAR would sign a massive 5-year $2.4 BILLION television broadcast deal with NBC, FOX, and TNT alternating races during the season.

NASCAR divided the TV revenue among the teams who qualified for the races, pro-rated and divided in equal share all season long. Just as each team would collect their winnings post-race, they would also get their share of "TV money" from each race. It quickly became a revenue stream for teams who also earned income from lucrative merch deals in addition to winnings.

Obviously, race teams derive their operating budgets from sponsorships (as of 2007, most top teams require around $15 million a year to operate). Thus, they depend on that TV money share along with winnings and merch/licensing to earn a living.

My point is: NASCAR did not seek some sort of PPV deal for each race, where only die-hard fans would pony up the cash to see their heroes crash, burn, or win. NASCAR (and team owners) opted to seek the widest coverage possible in order to not only boost appeal of the sport across all geographics and demographics…but also to bring in lucrative network and cable money which would far outweigh even PPV for each single event.

As a result, since that deal was made in the early part of this decade (and a new deal has been struck with broadcasters since that one expired); NASCAR has grown to equal infamy and appeal as stick and ball sports (even outpacing it in many major markets) and continues to expand at phenomenal speed. Not only in America, but internationally as well (with Colombian F1 driver Juan Montoya being an international favorite).

Even though CBS, ABC, and ESPN had broadcast full-length, live races for nearly two decades…it wasn’t until this major TV deal that NASCAR was elevated to major international prominence (now available as prime-time viewing to ALL viewers) and the teams themselves began earning major TV money.

So why would we expect it to be in the best interest for musical artists to accept a PPV deal? Never mind the isolationism it would perpetuate against music fans?

When instead, we could adopt a "broadcast model" as opposed to a PPV model that would essentially allow all artists (via their participating labels) to benefit financially. Sure, it may seem like socialist economics, but in truth it’s more about baseline revenue which will allow capitalism to spring forth in the form of greater live gig earnings, merch, etc. for those artists who TRULY EARN IT (by making great music, great shows, etc.).

Thus, it falls back to Darwinism, as the best will succeed exponentially by virtue of the popularity of their live gigs and fan base (just as NASCAR race drivers/teams will earn more based on their winnings and track performance). Meanwhile, all artists signed to participating labels will earn a fair share.

Sure, more fans tune in to races to watch Dale Earnhardt Jr. and Jeff Gordon than they do to see J.J. Yeley or A.J. Almendinger. But Almendinger and Earnhardt earn the same amount of money from the TV deal revenue pool (which I THINK is the same way NBA, NFL, MLB all do it too).

If the drivers/teams want more money or popularity? They better earn it on the track. Likewise, more people may download Nickelback, Stones, or Kanye West songs than songs by Railroad Earth or KT Tunstall. But Railroad Earth and KT can earn their bread and butter from live gigs. This would allow new artists, old artists, or under-performers a degree of earnings – even if not enough to live a "rock star" or "bling-bling" life totally.

Sure, acts who do not perform live might suffer if this is their main revenue stream, but it’s NOT supposed to be welfare for musicians. If you’re not able or wiling to do live gigs, then you should be seeking alternative revenue models regardless (like licensing to film/TV or commercials, jobs at Burger King, whatever).

Or perhaps, even some sort of scale could be agreed upon based on actual download tracking numbers – not unlike SoundScan in physical product. The more you sell, the greater your share of the revenue pool.

Yes, I’m aware that this is exactly the same comparison many others have made, or variations of the same. Yes, there are a trillion "what ifs". But the biggest "what if" should be: "What if the major labels wake up one day very soon and find themselves alone in Siberia?"

Certainly no deal will be perfect, and there would likely be many caveats. But it makes far greater sense than resorting to some type of exclusionary PPV-style model that would close off music to the masses, instead of making it open to all. Then, let the strongest survive based upon their own skills/abilities to make the best music. Otherwise, all artists and labels may as well face the possibility that they too will go the way of many defunct auto racing series: Nowhere.