Matt MacQueen

I’ve been wondering how to capture my thoughts on so much change and online discussion of the digital music industry in the past few weeks, this post is an attempt at synthesis of many developments, all ultimately measured by the quality of the end user experience:

Today Raghav Gupta at Brightcove gives is a great snapshot of a music industry undergoing massive digital (and increasingly mobile) disruption over at GigaOM » The New, New Music Industry

• The worldwide market for flash or hard-drive-based players was 140 Million units in ‘05.
• Add in music-capabile mobile phones and it’s a much bigger pie. Already, ringtones are a multi-billion dollar market in the US. Mobile music promises to be an even bigger market if the operators and labels can figure out how to deliver music to consumers at a reasonable price. $2.50 per download + tax is not it.

I’m with the glass half full philosophy, if the can get rid of the DRM user experience nighmares and think about “mobile music sharing” as a way to sell more (using new peer to peer revenue models of LEGITIMATE distibution) rather just perceiving all music sharing is privacy. Users share music with likeminded friends (and even strangers), that’s now a universal truth.

What the industry has failed to do thus far is innovate around new business models that look at this as an engine for legit sales growth. Zune get my full respect been the first mobile device to try to leverage a feature with sharing behavior, but the major labels like Universal and Sony so far aren’t supporting the sharing “squirt” user experience so well. Charlie White at Gizmodo lashes out on the topic:

Microsoft Zune propaganda welcomes you to the social, but that’s only about a 58% welcome, because sites around the blogosphere are noticing that around 42% of the songs they’re trying to share Zune-to-Zune are on the “Zune sharing prohibited” list. Even that three days/3 plays DRM slapped on every shared song is not enough for those moneygrubbing and paranoid record labels.

More details at Clickzune.com: Universal and Sony Don’t Like Zune to Zune Sharing. This biggest user infraction here is you apparently can’t tell if a song can be squirted or not until after you bought it: OUCH!

Zune Marketplace Song Sharing: A Test — What I cannot excuse, however, is the fact that the Zune Marketplace doesn’t clearly indicate which songs cannot be shared – it’s a “buyer beware” scenario right now, and I believe that only hurts the Zune platform as a whole. Microsoft needs to clearly indicate which songs can be shared, and which cannot. Anything less simply isn’t honest.

Steve Jobs is fired up in his now famous “DRM kills sales” manifesto giving the world reality check, and EMI seems to have generated some buzz just from public statements (and closed door negotiations), but we’ll see if others follow suit. Ars Technica:

Reports are surfacing that EMI is in negotiations with some of the leading music stores to offer a substantial portion of its music catalog without DRM, with an announcement due as early as today. Under one scenario, music stores like Napster, Real Rhapsody, and others would fork over sizable advance payments in exchange for the right to sell music as unprotected MP3s. Another industry source reports that EMI was also discussing the possibility of selling MP3s on MySpace using SnoCap.

EMI has experimented with DRM-free music in the past. The most recent occurrence was in December 2006 when they gave Yahoo Music the green light to sell a single from Norah Jones and a couple of tracks from Relient K as MP3s. Selling a large portion of its catalog as unprotected MP3s would put it at odds with the RIAA and other major labels, who firmly back the continued use of DRM.

There’s certainly no shortage of need for some experimentation here, because the standing still won’t stem the sales erosion that industry has faced for several years now. It will be exciting to watch as mobile phones involve intimate human communication and our media. We share all media with our phones now except music: text, photos, and even video we take. I still hold hope that when companies realize users want an effortless digital “purchase and share” user experience, we’ll someday – legally – be sharing that hottest track too.