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Let’s Sell Recorded Music! Part 2: We Have The Technology, What’s The Solution?

4th November 2008 @ 6:30 pm - 9:00 pm

Venue: The Boardroom, PRS for Music

TOPIC: How can technology enable licensed services to develop some of the functionality of existing unlicensed sites? How reliably can we sample and identify internet traffic for managing tracking and payments?  Is this only possible within a walled-garden system, or is the technology available to monitor all traffic for accounting purposes? How might this sit with the notoriously privacy minded torrent communities? What are the benefits and pitfalls of using deep packet inspection and can this work for encrypted content? Is copyright filtering on a network level desirable or possible?

Are there more creative, compelling or enduring models out there? What can we learn from some of the more advanced licensed P2P platforms such as Korea’s Soribada?  What about licensing the end user or the access point, à la Noank, rather than the delivery platform?  Might this enable music fans to continue to with their consumption habits and trusted filters in a way that better utilises the internet’s potential?

How does the blue-sky model square with the needs of ISPs and device manufacturers?  What kind of ISP might be interested in developing content services anyway? And would they look to do so themselves or rather to provide a platform for third parties?  And how many kids are right now in their bedrooms cooking up new ideas that will do to P2P what Napster did to the traditional business? Can we develop more futureproofed solutions or are we forever doomed to play catch up?


POST-EVENT MUSICTANK SUMMARY: It was round two of MusicTank’s series of file sharing debates last week and yet again we saw that, where digital music is concerned at least, take any two people from the music business and you’ll end up with three opinions. Kicking off proceedings and soon to become the focus of much of the evening was Jim Gelcer, CEO and Co-Founder of Harvard start-up Noank Media. Flying in from Toronto, Jim made full use of his air miles with a considered sales pitch for his new service; one he believes could solve many of the music industry’s woes.

For the uninitiated, which appeared to include around 90 per cent of the audience, Noank’s big idea is really quite simple: rather than obsessing over who is downloading tens of thousands of tracks and trying to herd consumers onto shiny new platforms, allow the end user to carry on as they were, using whatever kind of music delivery service they want, over a safe and reliable platform free from viruses and Trojans.

By installing an unobtrusive app on the consumer’s machine, Noank monitor what they actually play, tracking everything from what media files they are really listening to, to the preferred bit-rate and how much of a track they are playing. This information is then used to calculate revenue splits, which are paid back to the rights holders via licences secured by Noank (or not secured, as the case stands at the moment).

On paper it’s a fairly decent proposition. The consumer is able to carry on as they were before and the ISPs avoid the ire of the recordings business, who can not only monetise unlicensed downloads but also harvest vast amounts of data invaluable for plotting everything from tour schedules to marketing budgets.

It clearly piqued the interest of Carphone Warehouse’s Andrew Heaney, who saw the potential in the service to both his company and customers and believed it would fit in with his view of an open and unrestricted internet, provided comprehensive licences could be secured with the majors and indies. He certainly preferred what he termed this ‘carrot and twig’ solution, compared to the ‘stick’ approach of disconnecting his customers’ broadband, a route he bluntly stated Carphone Warehouse would not be prepared to go down in any rate.

Perhaps unsurprisingly, the remaining panel members were less enthused about the new service, with 24-7 Entertainment’s Frank Taubert particularly dismissive of the concept of a commercial P2P service, claiming that it had been tried countless times and never delivered a satisfactory user experience (something the 19 out of 20 downloaders who prefer to use unlicensed sites may dispute). For the rest of the panel, legitimising the current P2P free for all was a non-starter. Instead they were looking to refine their own proprietary à la carte and subscription services, with Tom McLennan, Head of Music at Vodafone UK going as far as decrying the alternative to the top down approach as potential “anarchy”.

Still, without the licences in place, Noank would be little more than a nice idea, and despite claiming that rights holders had been very receptive to his service, Jim Gelcer has yet to bring any of the majors on board. They have begun trialling the service in China, with some indies such as Nettwerk signed up, and he believes they are poised to turn that notoriously unprofitable region into a source of revenue that would be measured in billions of dollars. If they do succeed there, then you can be assured there will be a few industry execs paying more attention to this new upstart and we’ll all be hearing a lot more from Noank.

The next in the series takes place on the 18th of November and will consider how to go about licensing compelling alternatives to P2P.  Looking at the issues including the popularity of live shows, bootlegs, studio outtakes, mash-ups and other user generated content, we hope to go some way towards settling the debate about collective vs. individual licensing in the digital age.


SERIES CONTEXT: Illegally downloaded any music recently?  Given that nearly two thirds of all internet traffic is made up of P2P activity these days, if you haven’t, then most young people you know are.  Since Napster first reared its head in the late nineties, the recorded music business has tried in vain to put the genie back in the bottle.  The result – some pr blunders and an estimated 20:1 illegal/legal download rate.

For music fans it’s been a golden age where hard to find and out of print releases have been readily available alongside the latest hits of the day, but with no way of monetising these streams the record labels have been forced to watch their profits dwindle while the world’s been moving online.

The UK government has taken notice and is overseeing a three-pronged initiative aimed at educating and developing awareness, dealing with the most serious infringers and facilitating legitimate offerings.

This series will focus on that third prong: effective legitimate alternatives.  Over the course of the four events we will review what people want, where technology is heading, what the most plausible new models are and how they might be licensed.

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