Yahoo Music VP of Product Development Ian Rogers and I have different opinions on the future of the music industry. I think the price of recorded music will continue to fall towards free, whereas he thinks the industry can turn itself around and create enough value for listeners to make some money on recorded music. But on one thing we agree: For the last eight years the industry has been doing nothing more than rearranging the deck chairs on its own musical Titanic.
In early 2006 Ian’s then boss, former Yahoo Music GM David Goldberg, stunned attendees of the Music 2.0 conference by urging major labels to abandon DRM and give unrestricted MP3 sales a try. That advice turned out to be pretty prescient: earlier this year Apple started selling DRM-free tracks, and Amazon just launched a completely awesome DRM-free music store.
Last week Ian was back telling music executives exactly what they don’t want to hear, this time at the Digital Music Forum West conference. His talk went back eight years, through the birth of high velocity P2P file sharing networks like Napster. He heavily criticized the way the industry responded (by suing everyone), saying:
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.
He then talked about how ridiculous it is to continue to offer consumers inferior products. He uses the DRM-laden Yahoo Music subscription service as an example, pointing out that music listeners just aren’t willing to pay money for these products:
Yahoo! Music demonstrates this scale discrepancy perfectly…Yahoo! Music is the #1 Music site on the Web, with tens of millions of monthly visitors…But the ENTIRE subscription music market (including Rhapsody, Napster, and Yahoo!) is in the low millions…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.
He compares that to the experience of buying and listening to a song on Amazon:
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.
He ends up saying Yahoo won’t support flawed music industry business models any longer:
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.
In the end, I probably agree with Ian completely. Offer consumers a quality service (no DRM and guaranteed quality) and they will pay something for the convenience factor. Offer them more of the same, and the future of the music industry is pretty clear. Yahoo, at least, won’t be playing along.
Read his entire post here. It’s worth the time.