I'll Bet He's Wrong About That

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  Originally uploaded by n8foo.

From the New York Times story on MySpace Music today:

“The majors aren’t going to distribute music unprotected on MP3,” said David Card, a senior analyst at Jupiter Research.

David's a smart guy and generally right about stuff, but I'll bet him a years worth of music on eMusic that within 24 months at least one of the four majors will do a deal with some service that sells music in non DRM'd mp3 format.

Why am I so sure of this?

Because while mp3 is a pretty crappy format quality wise and it doesn't support rights management, it's the standard format for digital music. I can't think of a digital music player that won't play mp3s. I can't think of a music software that won't play mp3s. Portable game players like PSP play mp3s. You can post mp3s to the web and play them easily. Services like last.fm and others can track your music listening habits if you listen to mp3s. You can import mp3s into GarageBand, QuickTime, and most other audio and video software packages.

There are many standards that aren't the best. I remember when IBM argued that SNA was better than TCP/IP. Maybe it was, but TCP/IP became the standard and that's what everyone uses now. I remember when IBM argued that TokenRing was better than Ethernet. Maybe it was, but Ethernet became the standard and that's what everyone uses now. Plenty of people have argued that RSS is not robust enough to be the content syndication standard, but robustness doesn't win over pervasiveness. RSS has won. It's a standard.

And so is mp3. And you can't fight standards. Apple can promote its fairplay based AAC format (m4p). Microsoft can promote its PlayForSure WMA format. But they are going to lose. mp3 is the standard and it's only getting stronger every day.

MySpace gets that. Artists get that. Bloggers get that. And soon the labels will too. And once we've got everyone embracing an open interoperable standard, good things can start happening.

Comments

[Balaji M]

A very nicely illustrated point...And i fully agree with this.

[Nathan Dintenfass]

Are you saying they will sell MP3s in the same basic model as, say, iTunes and that will work, or are you saying they will distribute music in MP3 format and find other kinds of business models to overcome the issues with a non-DRM format? Seems like if it's the former, and it works, the labels will look pretty silly for all the fuss they have made. Oh wait, I guess they already do...

[cfw]

"DRM" is a bit fuzzy - what bundle of rights are we talking about?

Surely the publisher (big 4 music company) can retain some rights and still sell via MP3. For example, if humpty joe schmedlapp (HJS) wants to sell Madonna songs on MySpace, having a few MP3's, the big music publisher (say Universal) can object. Is that a permissible form of DRM? If so, where do we draw the line?

HJS can give it away but not sell it? Sell but with $.xx per song paid to Universal?

So long as Universal only asks for a reasonable cut, it seems HJS and Madonna and Universal and music buyer should go away happy.

Rather than restrictions on alientation (which the law disfavors) the DRM package should simply contain license terms that provide for sale with reasonable (market based) royalties/fees to all concerned.

[may4]

I love mp3s indeed it is compatible to any software. And I like them being free and
available anytime you want to download
them over the net. Let's just leave it
the way it is.

[James Governor]

i am with you - its simple economics.

i heard an interesting story the other day- uncorroborated - that Sony had made an offer to eMusic to distribute the new track by one of their artists, DRM-free, and eMusic turned them down saying they would rather have access to more back catalog...

nice story on eMusic here:
http://www.newsfactor.com/story.xhtml?story_id=001000433142

eMusic apparently the number 2 in music sales after iTunes. not bad for a firm that doesn't seem to spend a lot on ads.

finally - here is a link to evidence given by eMusic CEO to the UK all parliamentary group about why DRM should not be mandated
http://www.apig.org.uk/current-activities/apig-inquiry-into-digital-rights-management/apig-drm-written-evidence/eMusic_final_All_Party_Internet_Group_Janaury_2006_dp.doc

[Erik Schwartz]

I'll bet in five years there won't be majors producing new music. The majors will simply manage their back catalog.

[Megan Cunningham]

Fred, your prediction is not that different from all three major broadcast TV networks choosing Flash for distribution of their programming online. It has no DRM capabilities either; yet, it's become ubiquitous and hence is the standard for "old media" as well as YouTube and Google video. Quite an amazing achievement!

[Jim Eiden]

I remember Sony Betamax was better quality than VCR.

I remember Apple Macintosh was better quality than DOS or Windows.

This reminds me of something I thought of over the weekend. I used to march in a Drum & Bugle Corps. I played cymbals, bass drum, and tenor (quads). One of the major lessons I learned in Drum Corps was that no matter how good you are, there is always someone better. You have to keep practicing, you have keep improving yourself if you want to stay at the top.

The same is true with companies and products. I remember Sony was at the top of their game with the Walkman. Who could have predicted that the iPOD would make the Walkman nearly useless.

I think the music industry as a whole has not quite learned this lesson.

Adapt, Adopt, Innovate, or Die

[Cem Sertoglu]

Fred-
You should get your bet on The Long Bets Foundation. Baris had a good post about it recently: http://baris.typepad.com/venture_capitalist/2006/08/long_bets.html

[mark slater]

correct fred - totally and uterly agree

[jackson]

Wrong, wrong, wrong. I couldn't disagree more. MP3's suck, there seems to be no standard. AAC is the best compressed music format. A 192 bit mp3 sounds good, but it is actaully larger than a 128 AAC which is superior in quality.

I will never understand why people insist on listening to inferior quality, wouldn't you want your music to sound the best it can?

Obviously not or we wouldn't be having this conversation.

[scottie]

aac may be a good way of compressing data, but very few devices use it (mainly SONY - F***ING SC*MBAGS) AIFF/WAV all the way.....then maybe mp3..