For A New Business Model To Work, It Probably Shouldn't Annoy Users

(Mis)Uses of Technology

from the just-a-suggestion dept

In an age where avoiding commercials has been a big part of the pitch of certain businesses, such as TiVo and satellite radio (less so now than when they launched), does it really make sense to base an entire business on adding in intrusive commercials where they didn’t exist before? Yesterday at DEMOfall, Lirix presented their software for inserting audio advertisements at the end of songs that people listen to on their computer or mobile device. The idea, of course, is that it represents a different kind of business model for content producers, similar to what Universal Music announced a few weeks back. However, like that system, there are plenty of questions raised by this offering. Even ignoring the proud announcement that this idea is “patented,” the company also claims that it will put these ads on music that was “pirated” or loaded onto a device. That, of course, hides the fact that they don’t actually determine if your music is authorized or not — they just put ads on it. So if you were to upload legally made MP3s from CDs you bought or downloaded legally, they’ll still put the ads in. They claimed that they pay royalties to companies even on “pirated music” because it still represents legitimate ad inventory — though that may be news to the person who legitimately bought a song on CD and simply transferred the song to their device for personal use.

In other words, if you do have a lot of your own music, why would you ever put it into this system that’s just going to dump ads on it? It adds back in the very thing many people are trying to avoid in terms of intrusive advertising. It may offer up a new business model to the record labels, but for a business model to work it needs to actually involve providing something consumers want — and that doesn’t include (as they showed in the demo) putting an ad for a dating service after any song that has a theme of “loneliness” in the song. I spoke to the folks at their Demo booth, and they suggest that the real power isn’t just in ads, but in “value added content.” That’s a much more interesting idea, but it still seems tied back to ads. They kept comparing the model to traditional radio, but traditional radio is what a lot of people are trying to get away from. However, as an example, they said their system can look at all the songs you have included on your phone, and then automatically recommend and put in another song you might like… with an advertisement (of course). There is some value in dynamically adding in songs that you might like, but if it must involve an additional advertisement, it’s hard to see too many people excitedly buying into it — especially when they can just listen to all their music sans ads already.