Universal Takes Free Music Plunge

from the questions-linger dept

We've talked plenty of times about how record labels, despite their oft-repeated insistence to the contrary, can compete with free -- in particular, how they can embrace free music as a promotional tool and use it to sell other goods. One of the major record labels, Universal, has indeed decided to go the free route, but with a little twist: it's going to work with a startup to make its entire catalog freely available through an ad-supported service. At first glance, this sounds pretty great, but a second look raises some questions, the biggest of course being how they'll make this work commercially. When you see sites with massive amounts of traffic struggle a bit to monetize through ads, it simply underlines the point that having available ad inventory isn't the only thing sites need to be successful through advertising. The startup, Spiralfrog, says its 13- to 34-year-old target demographic is very attractive to advertisers; but this is largely the same market that delivers low clickthroughs and CPMs to social-networking sites. All this comes before even figuring out how to split up the revenues and pay artists.

Another concern is that the company says its files will use some form of copy protection, which raises even more questions, in particular, will consumers have the ability to move files to their music players? The issue of DRM incompatibility among device vendors would say no, and Apple's resistance to license out its FairPlay DRM means iPod users are likely to be left out in the cold -- which won't help this system gain traction at all. Using DRM could also limit the value of the music as a promotional tool, which The issue here isn't that this free set-up will be competing with the likes of iTunes and Napster, but with P2P networks as well. This has been the issue all along, and the lesson still hasn't changed: the labels must come up with something better than the file-sharing services to draw customers away. They can already get free music, and to switch services will take something offering them a better experience, not just an equal price. Universal certainly deserves some credit for trying this new business model, and let's hope they can make it work. Update: Tech Trader Daily points out that iPod users will indeed be left out, and as an added bonus, our old friend Jay Berman, a former RIAA boss, is on SpiralFrog's board.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    dataguy, Aug 29th, 2006 @ 9:00am

    "Universal certainly deserves some credit for trying this new business model"

    I haven't read the details but it sounds like Universal may have set this up to fail, to "prove" their point that they can't compete with free... I hope not but I have my doubts that they really "get it"

     

    reply to this | link to this | view in thread ]

  2.  
    identicon
    Charon, Aug 29th, 2006 @ 9:03am

    Thanks for trying

    While its certainly not perfect, and they still insist on using a form of DRM, they do deserve props for taking that first step (and its a big one for a large studio).

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    cb, Aug 29th, 2006 @ 9:06am

    BEWARE of the big bad wolf....but I hope they can make it work. Best of luck.......

     

    reply to this | link to this | view in thread ]

  4.  
    identicon
    AJ, Aug 29th, 2006 @ 9:15am

    Good Start!

    Nice article Carlo, and I agree, its a great first step. Its about time somone started to see the light. Its not perfect, witht the DRM and everything but you have to start somewhere I guess...

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Anonymous Coward, Aug 29th, 2006 @ 9:26am

    dataguy said:
    > it sounds like Universal may have set this up to fail

    Let them. The existing online services are doing fine as far as I can tell.

     

    reply to this | link to this | view in thread ]

  6.  
    icon
    chris (profile), Aug 29th, 2006 @ 9:27am

    the obvious question

    if it's "free" why do you need DRM?

    hopefully this will shed some light on the Fair Use issues of DRM. since the music costs nothing, people still won't use it because of the DRM roadblocks.

    taking price out of the equation will shift the blame squarely on DRM.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Nobody, Aug 29th, 2006 @ 9:56am

    Hmm...

    If the bitrate is decent enough (192 kbps or higher), and the DRM used is PlaysForSure, then I'll just use that new program to remove the DRM and re-encode as AAC for my iPod.

     

    reply to this | link to this | view in thread ]

  8.  
    icon
    rijit (profile), Aug 29th, 2006 @ 10:24am

    RE: Hmmm

    "I'll just use that new program to remove the DRM and re-encode as AAC for my iPod."

    Not unless the program (FairUse4WM) creator finds a way to bypass Microsoft's fix, which was released 3 days after the DRM decryption program, according to Engadget.com.

     

    reply to this | link to this | view in thread ]

  9.  
    identicon
    Mozart, Aug 29th, 2006 @ 10:33am

    One Step

    One step in the right direction.

    Like al-a-carte media subscriptions- once one companies starts- they'll all have to do it to compete.

    All we need is a catalyst- Universal looks like they could be that catalyst.

    Mac better rethink their stratergy- they may have the market for now- but if free music becomes available on other MP3 players consumers will quickly lose any brand loyalty they have for buying iPods.

    Consumers will always go for whats best for them.

     

    reply to this | link to this | view in thread ]

  10.  
    identicon
    JustWanderful, Aug 29th, 2006 @ 10:46am

    Re: Hmm...

    Its people like you that make labels think they need DRM, or some form of protection, even if they don't know what from! Not satisfied with labels wanting some kind of control over their output, even when offering music for free, with some form of restriction, you have to immediately whine "That's not good enough, so I'll cheat it and get it MY way!"
    There is a HUGE cost involved in artists and labels putting out music, and you and your whiney liberal punk-ass friends think they should just give it all away.
    You and those like you have no honor, no integrity, and in my NOT so humble opinion, you are what is wrong with society today. You want want want, without having to pay, without having to pay dues, without having to work your way up the ladder...
    To put it another way, YOU MAKE ME SICK.

     

    reply to this | link to this | view in thread ]

  11.  
    identicon
    AMP, Aug 29th, 2006 @ 11:09am

    Just some thoughts

    "Just Wanderful" needs to relax.

    Generally speaking, just because someone does not want to pay for something does not make them a liberal. And before you go spouting off about me being a liberal, I'm not.

    I had the same question as above. If it is free, why DRM? I may not understand the issue entirely though.

    Is it possible that Apple is the driving force behind restricting this music to not play on iPod?

     

    reply to this | link to this | view in thread ]

  12.  
    identicon
    Anonymous Coward, Aug 29th, 2006 @ 11:21am

    Re: Re: Hmm...

    Erm... WTF? He just said he's going to decrypt it so he can use it on his own device. He's still going to be veiwing the ads as he downloads.

    Ideally, if *I* were them, I would utilize a P2P network with the servers set up as clients for sharing purposes, then have that client serve the advertisements. That would result in significantly Lower costs on their end as well as more control over the advertisments they do server(I.E Ad-blockers won't work)

     

    reply to this | link to this | view in thread ]

  13.  
    identicon
    Anonymous Coward, Aug 29th, 2006 @ 11:22am

    Re:

    "I had the same question as above. If it is free, why DRM? I may not understand the issue entirely though."

    My thoughts exactly, why encumber something you are giving away?

    Also, if the tracks are going to be free, can the RIAA still sue someone for trading the same tracks without the DRM?

    What if I own the same CD's they are giving away? Can I now rip those tracks and give them out as well without fear of prosecution?

     

    reply to this | link to this | view in thread ]

  14.  
    identicon
    Anonymous Coward, Aug 29th, 2006 @ 11:44am

    Why can't these companies realize that they could put out the music, DRM free for $1 for song for Lossless Mp3 and $.50 per song for a lower bit Mp3. Until then, anything they do is destined to fail.

     

    reply to this | link to this | view in thread ]

  15.  
    identicon
    Anonymous Coward, Aug 29th, 2006 @ 11:44am

    Re: Re:

    The RIAA probably can't sue you for lost revenue, but I think you'd be subject to the penalties of the DCMA for circumventing the DRM. However, IANAL and YMMV

     

    reply to this | link to this | view in thread ]

  16.  
    identicon
    Anonymous Coward, Aug 29th, 2006 @ 11:49am

    Re: Re: Re:

    But, If I'm ripping the tracks from my own unencumbered cd, I'm not circumventing anything......

     

    reply to this | link to this | view in thread ]

  17.  
    identicon
    JustWanderful, Aug 29th, 2006 @ 12:00pm

    Re: AMP

    I don't need to relax...people need to have a little bit of integrity. Period. If Universal, Apple, MS, whomever, wants to put out what they own, for free or for a charge, as long as they can do it without putting Sony-ish crap into your machine, and have some sort of restriction on it, that is their right, it is their business model, whether you agree with it or not, and they have every right to do it. if you don't like it, DON'T BUY IT. Pretty plain and simple.
    I am a huge music fan, have owned hundreds, if not thousands, of pieces of music. I rip my cd's onto my computer, I make my own mixes, I do what I want with it for my own use. I wish music were free. But if I buy something with not only the seller's words, but also part of the programming, to keep it locked in whatever fashion, that's my fault if i have a problem with the lock. I bought it knowing that. I don't buy it with the thought of "Screw the maker, I'll hack it however I want, to fit MY WANTS REGARDLESS OF WHAT I PAID FOR!"
    You buy something with DRM, or in a proprietary format, or whatever, you knew it when you bought it. Have the respect for the person/company/whatever that made it and sold it to use it as they intended, as you implied you would when you laid your money down.
    Again, for those that try to hack around anything and everything that doesn't work their way. YOU MAKE ME SICK.

     

    reply to this | link to this | view in thread ]

  18.  
    identicon
    Smarter than you, Aug 29th, 2006 @ 12:05pm

    Re: Re: Hmm...

     

    reply to this | link to this | view in thread ]

  19.  
    identicon
    Cantalwayswin, Aug 29th, 2006 @ 12:29pm

    They could make a few bucks by developing their own DRM scheme, then license it to apple, samsung, etc for inclusion in their portable players. Or maybe make the DRM free, but devise a way to make the files expire, but still transferable. That way users will have to go back to the site, program, whaever every once in a while to re-download their songs and thus support the advertisers again.

    Just some ideas.

     

    reply to this | link to this | view in thread ]

  20.  
    identicon
    BillGod, Aug 29th, 2006 @ 1:12pm

    I'm with DataGuy on this one

    I'm with DataGuy on this one

    Looks to me like they are going to go live with this. Lose lots of cash.. if you can call it losing cash. The turn around and tell the government/RIAA/Court systems that it cannot be done and something else has to be done about this.

     

    reply to this | link to this | view in thread ]

  21.  
    identicon
    Zygo, Aug 29th, 2006 @ 1:13pm

    Re: Hmm...

    I think this could be an important step in figting music piracy , if itis executed well. The DRM option has to be there, else I could wait for a patient friend to sit through the boring ads and get the songs. What is stopping me from doing that ?..DRM with copy restrictions.
    Necessity is the mother of invention ...someone is going to come uo with a "TiVO" for this website that downloads the songs and skips the ads ... wonder if this would up in a month after the site launches. Hope we don't have to sit through 2 minutes of ads to download a song. A worthy initiative though !!

     

    reply to this | link to this | view in thread ]

  22.  
    identicon
    YouKnowNothing, Aug 29th, 2006 @ 1:21pm

    Re: Re: AMP

    Hey "Wanderful", would you buy a car with the hood welded shut?

    Just wondering...

     

    reply to this | link to this | view in thread ]

  23.  
    identicon
    Zygo, Aug 29th, 2006 @ 1:22pm

    Re: Hmm...

    Wondering how the "business" aspect is going to work out ..So are the advertisers going to foot the bill for each downloaded song ? Someone has to pay the artists ...I think Universal will pay about 30 cents a song to the and charge 1.10 or 1.20 per download from the advertiser.. If I was an advertiser, I would go for this than plunking $100,000 for a non primetime program. The payment would be per download and if you can peg your ad to a popular song and expect atleast 500-1000 downloads a week...it would be cheap and effective

     

    reply to this | link to this | view in thread ]

  24.  
    identicon
    What a Wanderful World, Aug 29th, 2006 @ 1:29pm

    Re: Re: AMP

    Let's say I purchase a song from this new service offered by Universal, complete with all the locks on it. Now let's say that instead of using some program to break those locks, I play the locked song on my computer, but I use a different kind of program to capture the output directly from my sound card and write it to an "unlocked" .wav file.

    Remember, I did not break the lock.

    What I did was the equivalent of taping a song off the radio, or use my TIVO to record a movie.

    Do I still make you sick?

     

    reply to this | link to this | view in thread ]

  25.  
    identicon
    Peter Rambo, Aug 29th, 2006 @ 1:37pm

    It depends on what the ads are

    It depends on what the ads are for.

    What they should do is pay attention to webcomics. Offer free music and have ads for that artist's t-shirts, posters, hats, underwear, mugs, tickets and whatever else they think people will buy.

     

    reply to this | link to this | view in thread ]

  26.  
    identicon
    Wyndle, Aug 29th, 2006 @ 1:40pm

    Let's get it right...

    When music is licensed for play (they are not giving it to you, they are giving you license to use it) you are bound by the terms they set forth. I'm sure that you will have to "sign" an agreement before you can download the "free" music. By signing that agreement you open yourself to legal action if you perform any "unauthorized use" of the files. Technically, the "free" music is different from the CDs that you already own and any rights that you have with the "free" music will not transfer to the CDs and vice versa.

    Oh, and you can make "fair use" copies of your music CDs (except with DRM) but the instant you try to give a copy to anyone else you are guilty of copyright infringment. Another thing about copyright infringment, monetary damage is not a consideration of guilt. Monetary damage is only factored into the sentancing once you've been found guilty.

     

    reply to this | link to this | view in thread ]

  27.  
    identicon
    dataguy, Aug 30th, 2006 @ 4:29am

    gotcha

    Boing Boing is reporting a rumor, that in addition to all the restrictions listed above, the music will expire after 6 months.

    Since Universal also used the same root kit as Sony (some how avoiding the same bad press) I guess all this is to be expected. :(

     

    reply to this | link to this | view in thread ]

  28.  
    identicon
    Anonymous Coward, Aug 30th, 2006 @ 4:31am

    im with dataguy on this one - it seems to be setup just to fail for the sake of saying "we told you so - we cant make money giving things away for free". If the BBC report on this is to be believed then any music downloaded ONLY plays within their own software with no option to take the files out on the move via an MP3 player so they are still extremely restrictive and "forcing" people to buy the CDs if they want the music to be portable.

    Yes it is a (small) step in the right direction but they are still completely missing the point

     

    reply to this | link to this | view in thread ]

  29.  
    identicon
    Chronno S. Trigger, Aug 30th, 2006 @ 5:41am

    Where is this place?

    I may be considered stupid for asking this but has any one even been to the site? I wanted to go there and see if it was even worth the time to download, but I can’t find a link. I googled it but came up with a few Chinese web sites.

    Oh and they DRM it so that If you want the song your friend downloaded from there website you will have to go there and watch another advertisement to get the same song. Its to make more money off the advertising.

     

    reply to this | link to this | view in thread ]

  30.  
    identicon
    dataguy, Aug 30th, 2006 @ 9:01am

    Re: Where is this place?

    http://spiralfrog.com/

    Site's not of much use yet - just a splash page that says "Coming Soon".

     

    reply to this | link to this | view in thread ]

  31.  
    icon
    chris (profile), Aug 31st, 2006 @ 9:23am

    the answer to the obvious question

    if it's free, why use DRM?

    the answer is that it's not free. you have to sit thru ads, and can't actually use the music for anything once you have it. no, you don't pay actual dollars, but you don't get the music either. you're getting what you pay for.

    i would gladly pay a dollar a track for music that i could use on my terms. i'd pay $2 a track even, as long as i only had to pay once. if i could get a bunch of stuff like shirts, posters, books and whatnot (real property that can't be digitally duplicated) at the same place i would spend a lot more. i have done that with artists like MC Fronatalot and his kind. until i can get my music on my terms none of these download systems are going to work.

    the point of DRM has little to do with preventing piracy, since DRM does nothing to stop it. people circumvent DRM before the share it, and the stuff you get off P2P networks has no DRM on it.

    DRM is about control. the industry wants the power to make the legitimate user pay over and over. pay for the CD, pay for the copy on your computer, pay for the copy in your portable player, rinse and repeat when they change formats. as long as they do this, it will make the piracy problem worse, not better, because only thru piracy can you get media on your terms.

    the industry will either change or die... either way, the consumer will win.

     

    reply to this | link to this | view in thread ]


Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here
Get Techdirt’s Daily Email
Save me a cookie
  • Note: A CRLF will be replaced by a break tag (<br>), all other allowable HTML will remain intact
  • Allowed HTML Tags: <b> <i> <a> <em> <br> <strong> <blockquote> <hr> <tt>
Follow Techdirt
A word from our sponsors...
Essential Reading
Techdirt Reading List
Techdirt Insider Chat
A word from our sponsors...
Recent Stories
A word from our sponsors...

Close

Email This