Some sad (but not entirely unexpected) news to start off with today. A couple of days ago, on the 4th of September, one of the first companies to 'get it' and try to provide a legal source of digital music, Wippit, closed its virtual doors for good.
In a statement made to to Distorted Loop, and now on its web site, a spokesperson for Wippit said;
"Wippit has closed. After eight years of pushing the digital boundaries, Wippit can no longer compete in the current market climate. Thank you to everyone that has supported us over the years and apologies to those that will miss us.
A spokesperson later remarked that,
“Launching an all you can eat, legal P2P service before the iPod had even been announced as well as many other innovations meant Wippit has been a great pioneer, but eventually a victim of our own vision and optimism.”
That aside, Qtrax's strategy doesn't even seem as well-formed as Wippit's - once you look past the "all tracks are free" prospect, they're pandering to the majors by DRMing all the files they sell, their concept walk-up 'music vending machines' are really clunky and not very well designed either, and their selection of music is hardly astounding. I wasn't impressed by the marketing when I first heard of them at Midem, because I almost knew what to expect beforehand - and I wasn't surprised when it turned out to be more of the same, just in a different shaped package.
As other commentators have noted, PlayLouder (who bills itself as an MSP, or Music Service Provider) has offered its web-based music discovery services for a while now. I'm an occasional user, and I've discovered some really great music through it which I would have otherwise never heard. However, they've always billed themselves as a value-added service insofar as you pay a slight surcharge on your monthly ISP bill, and the ability to legally acquire and share music via the PlayLouder platform is included in your broadband package.
Recent reports seem to indicate that they're slowly nudging closer and closer to a deal with a major UK ISP (I'm suspecting either Tiscali or Virgin Media), and I'm generally in favour of this service launching to a large potential market, and doing well - they deserve it, they've certainly been ramping up and planning their main launch for a few years now. However, I do also worry that acceptance of this surcharge (or implied 'fee' for the service) would introduce a scenario whereby when you sign up to an ISP who offers the PlayLouder service, you do not have a choice as to whether you can opt-out or not - so in the end, you are effectively taxed for the service, taking us back to old ideas mooted by both individuals, major labels and even our own Government (a mandatory tax for access to music online). Like watching television, not everybody downloads music from the Internet, so why should they be forced to pay for it?
If it became a popular trend, it could really disrupt the balance of power, and the majors could suddenly perceive this as a potential goldmine and start enforcing massive hikes in the wholesale licensing cost to companies like PlayLouder - mandating raises in the tax, and rises in the cost to customers... And an unregulated market is a dangerous one to be involved in, as anybody will tell you - they have a habit of crashing spectacularly.
In other news, Napster is on the market again - if anything, proof that its legal business mode was really never much good at all. Shawn Fanning's original Napster was far better - I always hoped that the company which acquired Napster would have been brave enough to sit down with the majors and show to them the power of unfettered P2P distribution, and organise a completely transparent method for micropayments so that users who were downloading new music would pay a very small amount (far less than a song currently costs on iTunes or one of its competitors) - and they would have the track for free for a few hours, in case they got a case of buyer's remorse. Of course, they could preview it for free - and after they'd downloaded and committed to owning that track, the system would silently debit a very small amount from their 'wallet', similar to how AllOfMP3 worked.
Yes, the value of music would be measurably less (by their own metrics), but given the amount of covermount promotions, free giveaways and all of the 'free' antics the industry has pursued in order to drum up interest (and sales) in back catalogue or forthcoming releases... Would this have been a bad thing? Many labels are realising only too late that most music has been little more than a commodity for a few years now, and they've been trying to extract a level of value from their catalogue which wasn't even there in the first place. Some people like Gerd Leonhard believe in the 'music like water' principle; a move to lower prices on digital music, and more sales of said music, would still probably equal a higher amount of legitimate, licensed sales (and potentially more profit) than the smaller amount of legal sales we witness today.
Platforms such as iTunes crow about their x-millionth legal download, but what about the billions and trillions of unlicensed swapping and distribution of songs? Had a company such as Napster moved to a concept of 'small price, large volume', the majors could have easily capitalised on a concept which was to pick up speed soon after Napster 'went legit', and the infrastructure, software and userbase were all already there - all the hard work was already done for them, but they chose to ignore it and force a DRMed, proprietary solution into play - a solution which is arguably fundamentally broken, and has been so since the day it was introduced.
I suppose the point I am trying to make is that legal music services, with the exception of a handful (eMusic, Magnatune, and some niche labels who run their own services), are all still trying to perpetuate the broken concept that music still has the same amount of value as it did even just five years ago. It does not. They are also trying to march out the same DRMed solution, hand in hand with the inflated pricing, and customers are rejecting it - but at the same time, by witnessing the closure of one of the first DRM-free, fixed price music vendors, it is painfully obvious that the industry still is not ready to embrace this crop of radically different retail platforms, platforms where the music still has value - it's just sold at its retail value, and the customers aren't assumed to be thieves even before they've purchased a song.