Convenience Wins, Hubris Loses and Content vs. Context, a Presentation for Some Music Industry Friends

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Yesterday was a crazy day.

In the morning I found myself car-less and skateboarding to Santa Monica High School in a suitcoat and wool Vans with my computer in a leather satchel over my shoulder (a byproduct of sharing my car with my seventeen year-old daughter — or more accurately her sharing the car with me). In the afternoon I sat on a panel at Digital Media Forum West with the Usual Suspects (TM), and for dinner I had the pleasure of hearing David Pakman‘s “drum story” (which was amazing, btw) and sushi at Ike on Hollyweird Blvd.

But in the middle I gave a brief, twenty minute presentation to some friends in the music industry about why it’s time we pay closer attention to consumer needs when it comes to digital music. I thought I’d share my presentation in case others were interested.

Enjoy,
ian


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Hello. My name is Ian Rogers. I’ve been building digital media applications since 1992, dropped out of a Computer Science PhD program to tour with Beastie Boys in 1995, and have been purchased by both AOL and Yahoo! in the ten years since then, with a stint running the new media department for a record label in the middle. Currently I work at Yahoo! Entertainment on Yahoo! Music.

First, a question: How many of you have tried Amazon’s MP3 download service?

Back in 1999 I ran Winamp.com for Rob and Justin. Napster came on the scene and we thought, “Wow! There’s a market for MP3s!” We had millions of people using Winamp, visiting Winamp.com for skins and plugins — it was by far the largest community of MP3-lovers. We naively and enthusiastically suggested to labels that we’d be a great place to sell MP3s. The response from the labels at the time was universally, “What’s MP3?” or “Um, no.”

Instead they commenced suing Napster. We were naive to be sure, but we were genuinely surprised by the approach. Suing Napster without offering an alternative just seemed like a denial of fact. Napster didn’t invent the ability to do P2P, it was inherent in TCP/IP. It was like throwing Newton in jail for popularizing the concept of gravity.

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Nullsoft subsequently built and prematurely released a program called Gnutella which became the basis for true P2P of the coming years. When Tom Pepper told Time Magazine that Gnutella was for “sharing recipes” he really said it all: This is so much bigger than just sharing music. This is physics. It’s trivial for one person to transfer bits from one person to another. Trivial. Unstoppable. PUT YOUR ENERGY ELSEWHERE, we thought out loud.

I caught a lot of heat from my music industry friends for Nullsoft’s Gnutella leak. In a long and impassioned email in 1999 I wrote to everyone I knew in a band, at a label, or music journalism (whatup, Jay!) and urged them to sell their content to their users in the format they were asking for: MP3. Make it easy, I wrote, and convenience will beat free.

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Well, we (you included) did lots of other things instead. While running “New Media” at Grand Royal I released the first day/date digital/physical release with At The Drive-In’s “Relationship of Command”. Thanks to EMI requirements (hi Ted! hi Melissa!) it was DRM’d WMA and we sold about 12 copies in the first month, probably all to journalists. Years later I helped Yahoo! build Yahoo! Music Unlimited, a Windows Media Janus DRM-based subscription service. Record labels for their part participated in no end of control experiments: SDMI, Liquid Audio, Pressplay, Coral, etc, and they continue to this day.

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But now, eight years later, Amazon’s finally done what was clearly the right solution in 1999. Music in the format that people actually want it in, with a Web-based experience that’s simple and works with any device. I bought tracks from Amazon (Kevin Drew and No Age), downloaded them, sync’d them to my new iPod Nano, and had them playing in my home audio system (Control 4) in less than five minutes. PRAISE JESUS. It only took 8 years.

8 years. How much opportunity have we lost in those 8 years? How much naivety and hubris did we have when we said, “if we build it they will come”? What did we spend? And what did we gain? We certainly didn’t gain mass user adoption or trust, two prerequisites to success on the Internet.

Inconvenient experiences don’t have Web-scale potential, and platforms which monetize the gigantic scale of the Web is the only way to compete with the control you’ve lost, the only way to reclaim value in the music industry. If your consultants are telling you anything else, they are wrong.

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Yahoo! Music demonstrates this scale discrepancy perfectly. Yahoo! is the world’s #1 Internet destination. Hundreds of millions of people visit Yahoo! each month. Yahoo! Music is the #1 Music site on the Web, with tens of millions of monthly visitors. Between 10 and 20 million people watch music videos on Yahoo! Music every month. Between 5 and 10 million people listen to radio on Yahoo! Music every month. But the ENTIRE subscription music market (including Rhapsody, Napster, and Yahoo!) is in the low millions (sorry, we don’t release subscriber numbers, but the aggregate number proves the point), even after years of marketing by all three companies. When you compare the experiences on Yahoo! Music, the order of magnitude difference in opportunity shouldn’t be a surprise: Want radio? No problem. Click play, get radio. Want video? Awesome. Click play, get video. Want a track on-demand? Oh have we got a deal for you! If you’re on Windows XP or Vista, and you’re in North America, just download this 20MB application, go through these seven install screens, reboot your computer, go through these five setup screens, these six credit card screens, give us $160 dollars and POW! Now you can hear that song you wanted to hear…if you’re still with us. Yahoo! didn’t want to go through all these steps. The licensing dictated it. It’s a slippery slope from “a little control” to consumer unfriendliness and non-Web-scale products and services.

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But this isn’t news, nor is it particular to the digital age. History tells us: convenience wins, hubris loses. “Who is going to want a shitty quality LP when these 78s sound so good? Who wants a hissy cassette when they have an awesome quadrophonic system? Who wants digitized music on discs now that we have Dolby on our cassettes? Who wants to listen to compressed audio on their computers?” ANSWER: EVERYONE. Convenience wins, hubris loses. [check Fredric Dannen’s comments here]

I’m here to tell you today that I for one am no longer going to fall into this trap. If the licensing labels offer their content to Yahoo! put more barriers in front of the users, I’m not interested. Do what you feel you need to do for your business, I’ll be polite, say thank you, and decline to sign. I won’t let Yahoo! invest any more money in consumer inconvenience. I will tell Yahoo! to give the money they were going to give me to build awesome media applications to Yahoo! Mail or Answers or some other deserving endeavor. I personally don’t have any more time to give and can’t bear to see any more money spent on pathetic attempts for control instead of building consumer value. Life’s too short. I want to delight consumers, not bum them out.

If, on the other hand, you’ve seen the light too, there’s a very fun road ahead for us all. Lets get beyond talking about how you get the music and into building context: reasons and ways to experience the music. The opportunity is in the chasm between the way we experience the content and the incredible user-created context of the Web.

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By way of illustration (and via exaggeration), in a manner of speaking iTunes is a spreadsheet that plays music. It’s context-free. You just paid $10 for that album — who plays drums? I dunno, WHY DON’T YOU GO TO THE WEB TO FIND OUT, BECAUSE THAT’S WHERE THE CONTEXT IS.

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But the content experience on the Web is crap. Go to Aquarium Drunkard, click an MP3. If you don’t get a 404, you’ll get a Save As… dialog or the SAME GOD DAMN QUICKTIME BAR FROM 1995. OMFG. ARE YOU KIDDING ME? THIS IS ALL WE’VE ACCOMPLISHED IN 15 YEARS ON THE WEB? It makes me insane.

So we have media consumption experiences with no context (desktop media players) and an incredible, endless, emergent contextual experience where media consumption is a pain in the ass, illegal, or non-existent (the Web). FIX IT. Your fans are pouring their music-loving hearts into blogs, Wikipedia, etc and what tools have you given them to work with? Not much, unfortunately.

This is what I’m vowing to devote my energy, and Yahoo!’s energy to.

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Lets envision the end state and drive there as quickly as possible. Lets not waste another eight years on what is obvious today. Lets build the tools of a healthy media Web and reward music-lovers for being a part of it.

In the end you get what you pay for. I won’t spend another dime paying engineers to build false control, making listening to music harder for music-lovers. I will put all of my energy into making it easier and making the experience better. I suggest you do the same.

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Thanks for listening.


Jimmie Dale Gilmore

EPILOGUE:

I wrote this on Thursday but didn’t have time to pull the images together and post. Last night (Friday) I took my mom to the Getty to see Jimmie Dale Gilmore. Mom and I saw Jimmie about fifteen years ago in Bloomington, Indiana. Lots changed for both mom and me in those fifteen years in-between, but Jimmie has only gotten better. His voice is hauntingly beautiful and he nailed every song, even a couple which he said he hadn’t done in a while but would “try”. Mom was cute, she’s in love with Jimmie and was so excited when he walked out on stage she leaned forward in her second-row seat a little and said, “Oh my God!” like she couldn’t believe he was really standing there in front of her. She would turn to me throughout the show to call out a Townes Van Zandt song from the opening riff or ask if it was ok if she sang along with “Dallas”. Anyone who wonders where I get my music nerd-ness from need look no further.

By his own admission, Jimmie’s never met a digression he didn’t like. He tells stories on stage which are things you might expect him to say in the mirror. “What I’ve learned is that when I’m on stage I find out what it is I’m thinking,” he half-joked. But in his very first monologue as he was talking about playing the Getty Museum he said, “I’ve been thinking a lot about content and context lately. As it turns out, there is only context.” Given that I had just made my mom read a draft of the above post before we left, it was a little eerie.

Afterward Jimmie was in the lobby signing autographs. I didn’t want an autograph but I did want to know why the hell he’s been thinking so much about content vs. context. I waited until the autographing was mostly over, introduced mom and myself, and asked. “Don’t get him started,” said his manager. But start he did, and he told us it was the Buddhist concept he’d been considering, and that the notion that anything was without context wasn’t really plausible. I told him I’d been thinking a lot about content vs. context, too, but from a different perspective (in a different context, I suppose you could say).

But they’re related. Music is never without context. Digital music context isn’t nearly as good as it could be. Context is where the opportunity is and therefore where the innovation will be. The next five years is gonna be fun. I think we’re finally going to see some innovation in digital media.

ian

Thank You, Radiohead

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My wife used to work at Capitol Records and remains friendly with Radiohead’s manager, Chris. When “Hail To The Thief” leaked the rumors were that the leak was intentional. I mailed Chris and asked him if there was truth to the rumor. He mailed back (paraphrasing), “I wish we were that clever! What should we do?” My advice was to post a note to the band’s site saying, “We know you have the record. Feel free to pay us what you think it’s worth,” or somesuch, leave a PayPal link, and watch the money roll in. Since they had a label at the time that was a bit tricky and, well, nothing happened except Capitol sold less records than they might have otherwise.

Radiohead has been without a label since that record. It’s been long-discussed where they would go. Rumor was they were seriously considering Warner, but to be honest Chris never gave me a sign despite repeated questioning. Mixed with my questioning was a slight bit of pleading that they go with no label at all, to show it could be done. Fact is, there was easy money for them in writing their own label ticket. Everyone I discussed the issue with said they’d be stupid not to take it (Bob Lefsetz has a pretty good discussion of why conventional wisdom says they should take the cash instead of looking behind door #3). I resigned myself to the notion they’d probably go for the money and that’s ok, their kids need to eat and hey, who knows how long they’ll be in their creative prime.

Well, Radiohead just made my year. Their new record, “In Rainbows”, can now be pre-ordered from their site in two formats: a) “DISCBOX” at forty pounds, which comes with CDs, LPs, and digital download, b) “DOWNLOAD”, which is a digital download and for which you can pay whatever you feel it’s worth, a little as one pound plus a forty-five pence credit card service charge.

I just happily spent eighty weak US dollars (after conversion) on the DISCBOX. If the speed of their site is any gauge, I’m not the only one. If you’re inclined to like Radiohead, buy for yourself. Spend what you think the music is worth. Sleep knowing that the money is going into the band’s pocket.

Key to success in the music industry in the future? Make great music that people want to hear. Go figure.

ian