Lucas Gonze blog

Internet music companies like Pandora, Spotify and Turntable.fm create some but not all of the value they offer to users. The rest is created by the musicians and labels. Some of the revenues coming into the internet company flow back to the musicians and labels. Some stays with the internet company.

The internet company is buying the music as a raw material, processing it, and adding a markup. It’s like a candy bar company. It buys sugar and other ingredients, turns them into candy bars, and sells the bars at a higher price than the ingredients.

The internet music company must be able to add a markup. If it is paying the musicians and labels the same or more than it is earning, it goes bankrupt.

The internet music company must be able to keep the markup rather than pass the additional revenues back to the musicians and labels. If it does not have the negotiating leverage to do this, it might as well not be adding a markup at all.

Pandora pays about ½ its revenues for royalties. The rest goes to expenses, I believe mainly ad sales. The amount it owes for music is a percentage of revenues. The more it earns the more it owes. When Pandora makes a great new app for the iPhone or for auto dashboards it gets additional users, but it doesn’t make more money.

From http://www.physorg.com/news199264403.html :

“We’re definitely on a steep growth curve right now,” said Tim Westergren, who founded Pandora in 2000 and now serves as chief strategy officer of the Oakland, California-based company.
“We just passed 60 million users and I’ve never advertised,” Westergren told technology and media executives at the Fortune Brainstorm Tech conference here. “I’ve been a beneficiary of this incredible viral phenomenon online.”
Westergren said Pandora, which creates personalized radio stations for users based upon their favorite artists or songs, was seeing booming growth on mobile devices.

Note what he’s not saying: that Pandora is seeing booming profits. It’s nice but irrelevant that Pandora’s traffic was growing. Pandora has never had a problem getting users.

You only get to keep the revenues from the value you generate yourself. Part of your value to customers comes from the music. Revenues for this part of your product flow back to the labels and musicians.

When Pandora grows as a result of shipping software for iPhone, the value is in the software. Users could already get music on iPhone. What they couldn’t get is the usability and convenience of the Pandora user experience.

There is no exception to this rule for businesses based on infringement. If your internet music company doesn’t pay royalties it will pay out at least as much in legal expenses.

if your internet company don’t add value to the music, it has no reason for living. You are not a music company. You are in business to sell whatever it is that you add to the music.

Archiving Is The New Folk Art:

From the moment we used the “save as” command when composing electronic documents, our archival impulses began. “Save as” is a command that implies replication; and replication requires more complex archival considerations: where do I store the copy? Where is the original saved? What is the relationship between the two? Do I archive them both or do I delete the original?

I spend much more time acquiring, cataloging and archiving my artifacts these days than I do actually engaging with them. The ways in which culture is distributed and archived has become profoundly more intriguing than the cultural artifact itself. What we’ve experienced is a inversion of consumption, one in which we’ve come to engage in a more profound way with the acts of acquisition over that which we are acquiring; we’ve come to prefer the bottles to the wine.

Think of the way you change the volume on the car stereo when you don’t have attention to spare. It is a single instinctive motion. Your body knows approximately where the stereo is on the dash, so you reach for the volume knob instinctively. If you have to look at all the glance doesn’t last longer than it takes to aim your grasp in an approximate way. One you have the knob in hand you don’t use your eyes to see how far to turn it, or in what direction to turn it.

This is crucial for driving safely. Your attention belongs on the road.

Apps on a mobile device with a touchscreen don’t have this advantage. You have to read the screen to learn where the controls are.

So haptic feedback on a touchscreen phone is a milestone for mobile apps for drivers.

IT World – “Netflix isn’t swamping the Internet; ISPs are overstating their congestion problems“:

It’s not compensating for Netflix that is taking up most of the carriers’ R&D and network-upgrade work.

It’s the effort to upgrade the nets to support their own streaming-media services, which not only compete with Netflix, but also come supported by internal business cases that have to show how quickly each new major upgrade will pay for itself through new services or the ability to support more subscribers.

Related data points – Comcast’s xfinity service and the Comcast acquisition of NBC Universal.

A Kickstarter project to make a public domain music engraving with musescore:

We are creating a new score and studio recording of J.S. Bach’s Goldberg Variations, and we’re placing them in the public domain* for everyone to own and use without limitations on licensing.

Bach wrote his seminal work over 270 years ago, yet public domain scores and recordings are hard or impossible to find. Until now!

This project will start by creating a new engraving of the Goldberg Variations using the MuseScore notation software. The edition will be subject to scholarly review, and when it is finished, it will be available to everyone to own and use without limitations.

Then we’re working with pianist Kimiko Ishizaka to create a professional studio recording of the Goldbergs. This recording will also be made available to everyone to own and use without limitations.

Evolver on Songza’s innovations in non-interactive streaming:

Instead of choosing an artist (as with Pandora) or even a song (as in Slacker) to create a station around, Songza users can handpick each and every song that makes it into a station. The company gets away with this, from the perspective of the DMCA and its attendant copyright issues, by allowing only other people to hear the station in that handpicked, mixtape form. When you listen to it yourself, you get a stream with other music mixed in, the way you would with the competition.

It’s a clever approach, and all in all, this latest version of Songza does succeed in offering a new mix of features that fits in somewhere between Muxtape and the more established players.

The NY Times did a story on consumer electronics and car stereo apps
at MOG. The desk here is really mine, except that I tidied up.

To some extent the euphoria is justified: Apple AirPlay is genuinely excellent. But it has a very big drawback: the media bytes played by the device with the speakers must pass through an iOS device. The device with the speakers can’t fetch those bytes from the internet itself.

This will run the radio on your phone constantly, so the battery will run down.

This will stop the song when you get a call, or when you leave the room with your phone in your pocket, so anybody else listening to music on the AirPlay speakers in your living room will have the music suddenly end.

These are not small problems for the user.

To fix them, AirPlay needs to be rearchitected so that the device with the speakers is a semi-autonomous bot fetching its own audio from the internet or a local storage device. Your iOS controller would pass instructions for what media to fetch rather than the media itself. For example, it might send a playlist of MP3 URLs instead of fetching each MP3 URL and retransmitting the bytes.

However this new architecture is much harder to implement outside of the trivial case of an M3U playlist of MP3s on the open web. In the case of something like MOG’s iPhone player, which has complex and constantly changing security requirements, iOS developers might need to provide a little headless program to run on the device with the speakers.