Sam Strasser

Digital Music is Not Where it Should Be

That was the title of a draft of a post I have been meaning to write on this blog for more than a year.  I haven’t had a chance to formulate my thoughts on digital music clearly yet, so I did some research.  It seems that no one really has a grasp on it yet.

Right now, there are three (digital) ways people get music.

1. Pay-per-track – think the iTunes store
2. Subscription – for example, Rhapsody, and I think Zune offers this too
3. Internet radio – for example, Pandora or Last.fm

Each has its advantages, but I think we are in for a big change soon.

1. A lot of people have ripped their CDs to the computer.  Even more, especially young people, still have their semi-) illegal music that they downloaded from Napster back when people used it.  Plus, the iPod.  Everyone has at least one, and probably more like 8.  These actual mp3s are perfect for the hard drives of portable players.  But people love social sites.  They like when their friends tell them what to listen to, and when they can choose custom AND random stations.  So the problem with the iTunes model is that people only listen to what they know about.

2. Subscription: I hate Apple, and had many, many bad experiences with them, one after the other.  So I tried Rhapsody.  I have found that i suits my listening style; I listen to a song about 6,000 times for 2 weeks then almost never again after that.  I often like to hear exactly what I want though (usually it is by Mike Jones).  I pay too much for the service, so it doesn’t make a lot of sense for a lot of people.  But if it were cheaper, everyone would do it.  Especially if it worked with iPods (we’ll get to that).  So Rhapsody’s big problem is price.

3. internet radio: this has blown up recently.  Recent battles in Congress (read more here) have brought many of the issues to the forefront.  I listen to Pandora about 65% of my average work day, and that is not uncommon among people of my age.  Its biggest issue is that when you have that craving for a particular song, you don’t get to hear it, unless you are very, very lucky.  So Pandora’s big problem is choice.

I think all 3’s weaknesses can be eliminated and strengths can be combined, pending one or two developments.  I think the one most likely to change the game will be Pandora, because Apple is too dominant to be forced to innovate, and because Rhapsody’s model doesn’t seem to get cheaper very easier.  When Pandora figures out a way to make real money off their service (that they can then pay to artists), everything will change.  Wait for 3G and 4G to be everywhere, for everyone to have the internet, and for the distinction between streaming radio and stored media to disappear.

This post started off about an open source version of iTunes, for lack of a better description.  It is called Songbird and can be found here. I first heard of it about 3 years ago, and, I am sad to say, not much progress has been made, at least as far as user adoption.  Then I thought it would force innovation, but, needless to say, it has not.  That worries me but at the same time, some smart people work there, and you never know when a whole new way of making money might turn up.