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« Avoiding Avoidance | Main | Reconsider promotion. The faders are coming. The faders are coming. »
Wednesday
Jan062010

High margin digital music products that won't be stolen...

It’s easy for me to imagine high margin digital music products that can’t be stolen (as they will be infinitely attached to some server somewhere).  If you have not seen this already, take a look at the Sports Illustrated’s tablet edition (concept video below).  Start planning your digital music industry future now.  Like all things internet, this stuff will eventually be accessible to everyone.  And, here are eight things I would put into one of these products…

Reader Comments (9)

This is pretty cool! I saw this earlier and it definitely gives the magazine industry a boost in the digital world.

I wonder how it could be applied to music. I guess it's all about imagination. Maybe you could subscribe to information from your favorite artists and get in-depth information, media, and updates from them directly in an aesthetically sweet fashion.

Hoover

http://www.DIYgigs.com-Building a worldwide underground touring network
http://www.NewRockstarPhilosophy.com

January 7 | Unregistered CommenterHoover

I thought it was pretty much already concluded that heavy DRM (which is what this is) just isn't going to fly in the music industry.

The music equivalent of this would be a "sealed box" MP3 player that only plays music from a certain band or label. And then what, you have to have a collection of these locked down MP3 players to cover all the different artists you like?

Even this Sports Illustrated e-book thingy is going to have a hard time up against any website that does the same thing for less cost (due to not having to distribute a custom high tech gadget for access)

January 9 | Unregistered CommenterSam K

sam - what's your background? go back to technology school would you. have some freaking imagination. are we even on the same planet?

January 9 | Unregistered CommenterBruce Warila

My background, re: technology is that I've been a total computer geek for my whole life (Atari ->C64 -> Amigas -> PCs) and have spent a full decade employed in the IT industry which included 5 years as a self-emplyed web application developer up until 3 years ago when I had a sea change and started a new business in something totally unrelated. Now back to the topic...

Since you didn't actually specify what point we are disagreeing on, I'll just have to guess....

I re-watched the SI Tablet commercial and nowhere did it say anything about running on a Mac, PC or in your browser, etc. So, the only logical conclusion is that it's a proprietary tablet gadget created solely for veiwing this SI app and presumably other TimeInc publications down the track. This custom gadget connects to the SI server (WiFI/3G?) to fetch new content and also provides server based interactive features. Am I wrong in my assumption that this is what is being touted here?

I fully understand the attraction of wanting to tap into the "server subscription" model that makes games like World of Warcraft almost totally unpirateable, but unfortunately it simply doesn't make any sense with traditional non-realtime-interactive media such as magazines and music.

I could easily pirate any of the content of World of Warcraft any time I wanted, I could record videos of the gameplay, burn my own CD of the music, rip all the text and item info to my hearts content, but none of that matters because what Blizzard are selling is not the content but the interactivity between the players and Blizzard's instance of the game world.

With friends, I have even set-up and run a pirate server of an old MMO called Ultima Online, and it still sucked because even though you have all the content fully singing and dancing, the game is nothing without the world being full of other players.

The only way you shoe horn old-media into that model is through heavy handed DRM such as only allowing data to be distributed to a locked down, purpose built gadget so you control the entire distribution chain from HQ right up to the consumers ears and eyeballs. If your talking about music, you can't even put a headphone jack on it or it'll be up on a torrent in a matter of hours.

This doesn't even begin to get into what a massive pain in the arse it would be to have to buy, carry and keep charged and 'net connected an additional laptop sized gadget just for one narrow slice of content.

The actual tablet itself doesn't even make sense, the only thing it provides that's missing from a regular PC+custom app is the multitouch screen. Blizzard don't ask you to buy a custom box to play WoW, why do you need one to read a magazine? Because the project managers at TimeInc convinced the higher-ups that they could be safe from piracy if their digital delivery platform runs only in their walled garden Tablet instead of in the wild west of Windows.

NO, this is utter crap. This SI tablet will CRASH AND BURN. It's just more of the same, old-media grapsing at straws and only suceeding in making Dilbert a reality.

January 10 | Unregistered CommenterSam K

Nice insight, Sam. The new move with music channels seems to be harnessing the economics of abundance with non-monetary transactions: give everything that can be copied out for free, but on the condition of the web 3.0 mindset of sharing it before you access it. The next level that seems to be cropping up is web 4.0 where we are gatekeeping media access and Anderson's Long Tail theory is slightly adapted so that it is still top 20% of media people access, but it is their own personalised top 20%, using amazon or youtube suggestions box as an example.

The development on from this, which ties in with the subject above, would be labels listening to where demand is and stopping their economic egoism (presuming that if they provide what they think is a good product, it will sell, and suing anyone who goes against their pre-formed ideas of what is good) and adapting to the audience - who are more and more becoming partners in the creation and distribution of products - so as to find the correct audience charged at the correct price.

It seems this product distribution will be the summation of proper data collection and analysis techniques, user adaptation of the model and simple, fast product selection based on the individual user's preferences. This platform can offer a multitude of products at different price levels and in different formats and it seems .mp3s or .aac (inc lossless) should be considered advertising sunk costs and promotional tools.

A real life example would include offering out .mp3s or even logic pro mixdowns or cubase multi-tracks for web 4.0 end-user interactions, then including either clauses such as 'tell some firiends, sign up for subscription, comment on forum for chance of free tickets' and direct towards live show listings, radio performances, press releases, other formats (biographies, music books, (im sorting out tutor books with one band at the moment!), instrument or clothing lines) and of course have cds, vinyls and limited edition versions on sale, but at a reasonable price.


The development of culture around the individual artist is of paramount importance to help image, endorsements and nurturing of fanbase - committed fans spend the most money on luxury goods (in terms of music goods)

This tablet is not required for this to be achieved.

January 10 | Unregistered CommenterTheo Smith

I seriously doubt anyone is going to try to force a proprietary tablet down the throats of humanity. I believe you are far too focused on the delivery mechanisms.

Take some time and read Rick Goetz's post with Eric Garland, the CEO of Big Champagne. Eric's stats and take on who steals what and why are dead on (you probably can't find someone with more knowledge and facts pertaining to the subject).

Then, please examine the post that I linked to within this post. Please take an hour to really consider what might be successful within one of these comprehensive "ecosystems". Theft here seems to be as much of an option as stealing the entire contents of Facebook..

- Perhaps these products are not going to be for everyone? I can certainly see smart "umbrella" brands bringing products like this to market.

- I am a huge believer (as I often state - see my Eight Things post) that many, many artists should be working together. Clumps of artists and songs can be the "the better-new radio stations".

- End-user generated content and fan-to-fan engagement should be as important as anything else within these packages.

It's pretty easy for someone to stand up and say "I just want the songs, nothing else". OK fine. We have gone beyond worrying about that. Industry participants need (and will get) mechanisms (packages) that enable them to collapse a whole bunch of stuff (read my Eight Things post) into something they can sell for more than 99 cents. Along a spectrum, some will fail and some will succeed. It's early days, but I can guarantee you that "theft" is NOT going to be the mitigating success factor. It's going to be about delivering a value proposition that resonates with fans, and it's going to be about execution.

If anyone thinks it's just about "flac" or "lossless" or "ripping", or if anyone thinks it's just about getting the songs, then you are doomed to be stuck in the past and/or trampled by those that get it. Billion dollar++ businesses have already been built on the backs of music plus all the other stuff (once again, read my Eight Things post). It's already been done ten times over!

The SI example sited in this post is an example of how the industry (anyone with imagination and resources) will be able to simply and rapidly package music plus the other "stuff" into packages that are not controlled and priced by middlemen. Moreover, this type of "packaging" combined with open login methods and social APIs, will make it easy for consumers to "join" and "participate" in numerous "ecosystems" (also consider the freemium model where some stuff is free and some stuff is premium).

It's going to be (already is) far easier now for small creative teams to deliver everything (all the stuff - figure it out). Albums used to cost over $100,000 to make. This is the new album. Along a spectrum, some will fail and some will be wildly successful. It's early days still, but I love the option. It's far better than attempting to wind back the clock (let's just make the ISPs throttle sharing, and let's worry about theft. Let's just go back to 1999.)...

January 11 | Unregistered CommenterBruce Warila

Just very quickly, because I have to leave for work, that Big Champagne interview was fascinating!

January 11 | Unregistered CommenterSam K

I think some of the other commenters misunderstood: nowhere in that video does it say this is a proprietary tablet only for SI. This looks like a demo of a magazine app that you would pay to download to your new Apple iSlate or PC tablet (available later this year), or a Kindle or eBook reader, just like you would download an app to your iPhone. Quite similar to an encapsulated Flash file, it would contain all the content in one download, and would offer some level of reasonable DRM.

I think this looks like a value-added app that a lot of subscribers would be happy to pay a couple bucks to have downloaded automatically to a tablet or eBook device. If you consider the music industry, a song download might include interactive lyrics, photos tour dates, etc., in a digital equivalent of liner notes, again, adding value and encouraging a purchase over an illegal file swap.

The author of the brief comments who posted the page misunderstands things when he says "attached to a server somewhere," but the video itself looks like it demonstrates a viable digital magazine format option.

January 13 | Unregistered CommenterDan D

@Dan D. Right on. "Attached to a server somewhere" means retaining the ability to continuously obtain updates to the things you mentioned (photos, status updates, etc) and the things you did not mention (end-user generated content)..

January 13 | Unregistered CommenterBruce Warila

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