Yet Another 'Savior For The Music Industry' Shuts Down

from the down-down-down dept

Over the last few years, as the recording industry has finally started to at least come to terms with the idea that its market is changing, industry insiders keep looking for “a savior.” That’s a new tech-focused company that will somehow come up with the magic model that revitalizes the recording industry’s revenue stream. You begin to notice a pattern with every one of these: the hype is never based on users flocking to the service. They’re always based on a big PR campaign and quotes from recording industry insiders. In the early days, there was PressPlay and MusicNet. Then, there was the “new Napster” and Rhapsody. More recently, there’s been SnoCap, TotalMusic, Qtrax and plenty of others. They get buzz, with the stories reporting how the industry is “supporting” these innovative new startups. But they never seem to go anywhere. The latest is SpiralFrog, which got some buzz for being “ad supported” music, which has never made much sense to us. It’s now shutting down, just as pretty much all of the other “saviors” have done.

And yet… file sharing sites are thriving.

It all comes down to the same thing: you don’t compete with free by being lame. And, all of these “saviors” have focused on paying the record labels first, and giving users a reason to use them second (or sometimes even further down the list). The record labels are desperate for new revenue, so when they make these agreements, they’re so costly that it’s impossible for any of these startups to make money — and since they’re bound by all sorts of restrictions, the services tend to not be very compelling anyway. That’s a recipe for disaster. Perhaps before the press declares the next major label-backed music startup the “savior” for the industry, the reporters should take a look at the littered path of failures.

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Companies: spiralfrog

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Comments on “Yet Another 'Savior For The Music Industry' Shuts Down”

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25 Comments
Dave says:

Re: Re:

But these saviours have had the content… it still hasn’t mattered because they’re not user focused, they’re industry focused.

If your sales and customer service revolves around our company and not the customer, you’re not going to survive long unless you have government backing your business model.

PaulT (profile) says:

Re: Re:

I personally refused to use SpiralFrog because of the DRM.

I support eMusic and AmieStreet (both successful sites, one of which has been running for over a decade) because of their lack of DRM and reasonable prices, but they’ll never be mainstream because they concentrate on independent rather than mainstream music.

Surely even your tiny brain can comprehend that there’s a hole in the market between “OMG piracy!” and “let’s overcharge customers and/or restrict them to use music the way WE want”?

hegemon13 says:

Re: Re:

You know what, Harold? You are constantly telling everyone here to think for themselves. Funny thing is, you disagree with TechDirt 100% of the time. Know what that means? You are letting them think for you just as much as those who always agree. As far as independent thinking goes, there is no difference between automatically disagreeing and automatically agreeing. Both allow someone else to form your opinion for you.

So, Harold, I would say to you: please learn to think for yourself. “Think” being the operative word because it’s quite clear you don’t do much of it. Your comment here has absolutely nothing to do with the point of the article.

Weird Harold (user link) says:

Re: Re: Re:

I don’t disagree 100% of the time, sorry. But I do think, and I make it an important part of the day to avoid any and all koolaid stands.

My comments have everything to do exactly with the INTENT of the aricle, another attempt for Mike to bootstrap the idea that free music downloads is the only business model that is valid.

As was shown in this http://techdirt.com/articles/20090313/0115054106.shtml – the numbers show that all the free music in Canada has at best a 4-5% change in actual CD purchases and concert attendance, nothing more. The marginal increases in sales come nowhere near to supporting the idea that music should be free online. If anything, it suggests that the most fevered music fans may in fact be buying and attending LESS.

So yes, it is remarkably relevant to Mike’s blog entry here. Agian, I am thinking, not just reading and nodding like a techdirt dittohead.

Anonymous Coward says:

Re: Re: Re: Re:

You can’t even do math? That’s a 7% increase in sales and 13% increase in concert attendance. Besides, your comments have nothing to do with intent, if one actually goes back over your articles. Your comments are supposedly about ‘fact’ and ‘logic,’ which has little to do with ‘intent.’ At the same time, you can’t ever seem to point to your ‘facts’ and your ‘logic’ is so full of holes we think you’re making swiss cheese.

Weird Harold (user link) says:

Re: Re: Re:2 Re:

You got an extra cup of koolaid, didn’t you?

File downloaders were only 23% of the total. So while they are 7% and 13% higher inside their group, in a sample of 100 people they are only 4 and 5% more likely to do either act.

Nice rant, too bad you can’t read the numbers, which I think in part is what Mike is hoping for here.

William Fleming (user link) says:

Not all is lost!

Ad-supported models can only work if they are in alignment with the current trends of today and tomorrow. SpiralFrog failed because of their business model and the execution. It was old from the start and the croak wasn’t fresh. If you are not swimming in the currents of ‘today,’ you might as well be used as bait.

TurnItUp Media has legally licensed mp3s from all 4 major labels and 1000’s of independent labels/artists.

No need to worry about your music terminating. It is 100% DRM-Free.

Come at least check it out and see for yourself.

TurnItUp Media – http://www.turnitupmedia.com

Anonymous Coward says:

Re: Not all is lost!

Just looked at the site and while it has an interesting interface and social aspect it seems plagued by many of the same issue as other services. How does it compete with file sharing sites when it forces users to watch a 5-60 second advertisement for each downloaded song?

Mike said it well. These services will not work until they focus on providing what the customer wants (quick, easy, cheap music) first and then building a business model around that.

William Fleming (user link) says:

Re: Re: Not all is lost!

First off, we do not “force” users to watch ads. Users have the choice to watch them to earn points. There are other ways to earn points also and we continue to add additional ways.

The fact is nothing can really compete against P2P “Illegal” downloading. Nothing in life is truly free unless you are stealing it. Someone in the background pays for.

What Mike says is ignorance… I want a to buy a Porsche really easy, cheap and quickly…. that doesn’t mean I will get it for free.

TurnItUp Media provides a user platform where people can hang out with their friends in a music community getting media points by purchasing them or earning them. They can even use the two and get discounted songs.

Instead of thinking of ways to rip off artists using P2P illegally why not trying to support them. I wonder what the would would be like if all the artist/labels decided to not do a single concert, create new music, and just fade away. I think people would begin to change their tune.

Anonymous Coward says:

Re: Re: Re: Not all is lost!

William, it is quite obvious that you have not been reading techdirt long and I question is this was nothing but a veiled attempt to promote your new service.

To address your issues:

>>What Mike says is ignorance… I want a to buy a Porsche really easy, cheap and quickly…. that doesn’t mean I will get it for free.

There is a difference between stealing a porsche and infringing a copyright. In the first case you are stealing property but in the second you are violating a government defined right. This does not mean that people should violate copyright but you do everyone a disservice to perpetuate this myth.

Here are a couple of posts I would recommend reading on this topic:

http://www.techdirt.com/articles/20030922/027245.shtml
http://www.techdirt.com/articles/20080219/014250290.shtml

>>the fact is nothing can really compete against P2P “Illegal” downloading. Nothing in life is truly free unless you are stealing it. Someone in the background pays for.

>>Instead of thinking of ways to rip off artists using P2P illegally why not trying to support them. I wonder what the would would be like if all the artist/labels decided to not do a single concert, create new music, and just fade away. I think people would begin to change their tune.

This is an issue of business model. Musicians’ and labels will probably need to find a new way to pay for music creation. Mike has been publishing many examples of bands big and small that have adapted to this new model.

I wish you the best of luck in your new venture but realize that P2P (legal or not) is your competition. Think of the music consumer first and deliver a reason for them to use your site over the competition.

RD says:

Or perhaps...

…its the market (customers, people) telling the industry what THEY want, not what the INDUSTRY wants them to have (or how).

“Duh. few expenses, plenty of ads, little bandwidth, no content costs. Of course they are thriving.”

Ok and why cant the labels USE this? They have EXACTLY THE SAME ability as the “pirate” sites to deliver WHAT PEOPLE WANT and HOW they want it. Just because it isnt overpriced shiny plastic discs doesnt mean its an invalid method. Nothing is stopping them but greed and control.

Oh and mankind has been making music (and stories art and everything related) since the beginning of time, and they did it without label support or expensive middlemen. Seems that all worked just fine through all that time and “art” survived and even flourished.

Weird Harold (user link) says:

Re: Or perhaps...

Ok and why cant the labels USE this? They have EXACTLY THE SAME ability as the “pirate” sites to deliver WHAT PEOPLE WANT and HOW they want it.

Why? Because they are actually PAYING to produce the content, to have the music made, to have the producers work, the writers, and all those other people required to make an actual commercial record.

Unlike the file sharing sites, they actually have significant costs involved in their operations. So expecting them do give it all away for free is just not logical.

RD says:

Ah yes...

The last refuge of those who cant defend their position: claim the other side is just “going along with the crowd” and is “drinking the same kool-aid.”

Ever think that maybe the reason people have similar opinions is because they AGREE on them? Or that they come together BECAUSE they have similar points of view? Just because you agree with someone’s opinion doesnt mean you are devoid of your own, or that its dependent on their opinion, or that you are brainwashed by them.

RD says:

Just not getting it

“Why? Because they are actually PAYING to produce the content, to have the music made, to have the producers work, the writers, and all those other people required to make an actual commercial record.”

ok…and? How does that prevent them from using the exact same MECHANISMS as the “pirates” to leverage their content AND provide a BETTER user experience? Just like EVERYONE else who hears the word “free” you assume it means the advocation of making EVERYTHING free. That is not the case. again, iTunes has PROVEN you CAN make money with these mechanisms.

“Unlike the file sharing sites, they actually have significant costs involved in their operations. So expecting them do give it all away for free is just not logical.”

Only on the front end. The distribution end IS THE SAME as the “pirates.” Why should someone pay $15 for a download-only copy of something when there are minimal (especially compared to a CD/DVD) costs in getting that to the customer? And then laden with DRM restrictions and poorer quality audio/video, no extra features, etc?

This is one of the big reasons why “piracy” is so popular: no restrictions. Free is a part of that, as there are always people who will take something for nothing when its offered of course, but a big chunk of this has to do with CHOICE. Just look at the Gordon Brown/Obama DVD debacle to see EXACTLY why people turn to “pirate” sites (even beyond cost issues). AVAILABILITY in a way that people WANT to use.

This isnt all about “free.” Its about giving the customer what THEY want, and how, not what the PRODUCER wants. And if you say “so, the producer/studio can do whatever they want” we again get back to “yes, they CAN but that doesnt mean they SHOULD.” The customer is always right, the customer is the one who spends the money, and the customer, by using “piracy” to get what they want and get around all these imposed restrictions, is TELLING them what they want. Those who dont listen and adapt will lose, and even you cant deny that. Or maybe you can, being so far up the industry’s ass, you cant see anything else.

Weird Harold (user link) says:

Actually, the customer is rarely completely right, they are often wrong or misinformed. You only have to read comments on this site to see people who have no idea of the costs or value of many things in life. So doing only what the customer wants isn’t exactly the right way to do business all the time. It’s about meeting the customer needs while also meeting the needs of the business. Finding that happy ground in the middle is what makes it go.

Pirates used to copy CDs and sell them at flea markets for pennies (and they still do in many places of the world). The distribution method is the same, but in the end, only one group is paying to make the product, the pirates just steal it. It isn’t exactly the same, so the distribution methods aren’t key here.

Itunes shows you can make some money, but possibly not enough for most. In fact, 99 cents is just a number now, with songs priced as low as 69 cents but most of the popular stuff priced at $1.29 and more. Also, there is a move towards bundling:

http://www.nzherald.co.nz/music/news/article.cfm?c_id=264&objectid=10552045&pnum=2

“In Mraz’s case, Atlantic offered four singles and two EPs – groups of four songs or more – in the three months before the May launch of Mraz’s album “We Sing. We Dance. We Steal Things.” People who had already bought those were more likely to upgrade their purchases to the full album with the extras included, for $19.99 minus what they had paid already. In the first week of release, the bonus-laden album outsold the standard $9.99 one by a 3-to-1 ratio.”

This reflects the true reality, that selling singles is nice (the music industry always sold singles through history, as 78s, 45’s and as cd singles), but the real money is made when an album sized chunk is sold. I wouldn’t be shocked to see Itunes end up with fewer singles from top acts, replaces by EPs and groupings that seperate the fans from $5 – $20 at a shot.

Why? 99 cents is nice – but there isn’t enough money there.

Go look on the torrent sites, and you will see the trend. Less and less single songs getting passed around, more and more compilations, full catalogs, and full albums. It’s incredibly odd to think that what the public apparently wants is what the record companies have been offering all along, they just don’t want to pay for it.

RD says:

The customer

is ALWAYS right when it comes to how they spend THEIR money. Remember, its THEIR money, not the industry. You people seem to forget, you arent OWED an existence in entertainment or the arts, you have to EARN it. This is rather the point of ALL these discussions here on TD and these topics. You own the movie, sure you can do whatever you want to sell that, but it DOESNT MAKE IT A GOOD BUSINESS IDEA TO DO SO. All these restrictive, greedy, and invasive tactics these industries use are pissing people off, and they are finding alternatives. And make no mistake, there are ALWAYS alternatives. Again, you arent OWED a living doing this.

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