Where I should I have this article published? DO NOT REPOST.
What's happening to music media?
Words from the street
It's the year 2010, three years from now. You're lying in your bed with your 2-pound blue velvet laptop computer watching The Monkees episode 5. A video on demand website just sent it to you for 49 cents and you're watching it full screen in real time over a nationwide wireless Internet connection. You don't own your own home wireless network, because it's cheaper to get the go anywhere high-speed network from AT+T. The laptop also has a Bluetooth headset so you can make free phone calls.
You really like your new laptop, because it only cost about $400 and has no moving parts. Your hard drive has been replaced with the newest memory chip called Flash or SSD. All of your files and then some, are stored on your laptop or perhaps a centralized database. The battery lasts longer, because there is no hard drive to spin and the latest chip set/Intel processor uses less power and generates very little heat. The laptop has a handle on it, so you don't have to store it in a case; you just carry it like a brief case. A little strap attaches to the laptop and the whole fashion statement comes in various colors.
This is just one of the many scenarios the big players in the Internet and media world are fighting over. Exactly what is going to be our appliance that delivers us all our needs? Will it be phone companies, cellular networks, TV stations, movie theatres, cable companies or the Internet Service Providers (ISPs)?
This fight has been going on now for well over ten years. Many delivery systems have fallen by the wayside during this struggle. As I type this, billions of dollars in satellites are being allowed to fall back to earth and burn up on re-entry into the earth's atmosphere. At one time there was a Microsoft plan to place over 800 satellites in low earth orbit, to feed the entire planet with high speed Internet access. Downsized to 288 satellites, it was too expensive and too slow. The project died after only one satellite had been launched. Motorola launched a system with 66 satellites to provide global telephone service. The system was sold off to the highest bidder. It's still in use but has never turned a profit. For about a dollar a minute, your brick sized phone goes anywhere on the planet, even Mount Everest. But I'll spare you the space talk.
Speaking of space and not turning a profit, MySpace is operating at an estimated loss of $2 million a year. With an estimated 40 million active users, they are in the sights of the largest performance rights organizations ASCAP and BMI. MySpace recently signed an agreement with the "other" rights organization, SESAC. Many people outside the music biz don't realize that MySpace has been operating illegally since its inception in 2004. There is a law that says you must pay a fee to broadcast licensed music to listeners. Nightclubs, radio, television stations and now Internet radio websites pay these fees. These fees end up in the hands of those who own the music; that being, the composer, publishing company, record company or all of the above. Even if the artists give their permission it is still a violation. In fact, in many cases the artist does not have the permission to give away their own music.
So now that SESAC has signed an agreement with MySpace, it means that artists will be paid royalties for MySpace music downloads and plays. Once ASCAP and BMI get MySpace to sign up, the money will start flowing again. Anyone who has signed an agreement with these companies will receive money from MySpace. "I need to look into this, no one has given any of us any revenue yet," stated Producer Michael Binikos. "I have a few artists on MySpace." This is a great step forward for smaller artists to earn revenue. I Think MySpace will get to the point where they won't allow artists to sign up, unless they have an agreement with ASCAP, BMI or SESAC. I also think that MySpace will be forced to start charging for downloads and listens. Perhaps, even charge a subscription fee to listen to music over MySpace, just like Internet radio stations have. Or… they will charge bands to post their music. MySpace has little choice given their financial situation. Affording to "Harlan Lansky" of MyStartMusic Inc. News Corp. just recently bought MySpace for $580 million.
So close friend and Producer, "Chucky D" Duran, jokingly asked, "What happened to free music?" Well, that's a bit of a problem right now, as we watch the major record labels fall like flies to the floor. Music industry executives can't get a job at McDonald's. The price we are really paying is that there is no longer a budget for the development of new artists. If an artist doesn't have the money to build their own following and record their own music, the labels aren't interested. So where does this leave the labels? They have become little more than marketing firms. We do see them putting some money back into established artists, to record new projects but it's not very common. I can remember sitting at the Rainbow Bar and Grill in Hollywood back in the 80's, with friends who are now some rather famous rock stars. They'd be partying it up saying, "Yeah, our label put us all up in at the Hyatt and we're recording our next album at Westlake. Cheers!" I don't hear that line much anymore.
No surprise to me, but whatever happened to the pundits that predicted we would all have videophones in every house? We can do that with a $1000 computer but it's not exactly all the rage it was hyped to be. And what about our so-called "paperless society"? It's interesting to note that paper hasn't changed much in over a hundred years. Many businesses are slowly replacing their file rooms with complex and over priced document scanning operations. But the bottom line is, people still like to use paper. They tear it up, drop a stack of papers on your desk, make notes and throw it away in bundles. It's still easier to look through a file of papers than it is to scan through them on your computer. And to top it all off, we buy back our paper for an even higher price because it's "recycled". One thing that few people saw was the obsession our teens and the twenty somethings have with text messaging. For a while there, it was more expensive than a phone call anywhere in the nation.
So being the computer/music geek I am, I had some people asking me "What's next?" Well, I spoke to a few friends, Melanie Walker at BMI and Phil Soussan who sits on the Grammy board, to name a few. They seem to think that the next media for music will be USB Flash drives. You buy the little drive and it will contain the band's video, music, artwork, lyrics and different mixes of their hit songs. "People feel a little ripped off when they download a whole album from iTunes" says Producer Matt Thorne of Blue Thumb Productions. "We don't have anything to show for our purchase, except a bunch of compressed computer code." I agree. What's going to happen to collectors? What are they going to buy, sell and trade? Flash drives? Hmm. I'd buy one. If I didn't like it at least I could rewrite the info on it and use it for something else.
Getting back to technology, one of the things that techies underestimated was how much information we could squeeze into "The last mile". The last mile is basically two things. First, is the twisted copper pair of wires between your telephones and the closest telephone company building. And second, is the distance between the cable TV connection in your residence and the cable companies "Head End" (broadcast equipment). These connections typically don't exceed one mile. For quite some time we thought we'd be sucking milkshake through a straw with a 56k dialup. Then came IDSN, DSL and cable modems. Oops! Pull the plug on those satellites Mr. Gates. We have also underestimated the compression algorithms used by cellular companies and thus we have wireless broadband Internet to contest with.
Think about all those investors who lost a bundle on the dot-com fever. Think about the money they have now invested on what they think the final delivery system will be. I just wish my parents had bought into AT+T, Time, Warner and IBM in 1965.
I almost forgot Sirius and XM Radio. Is it just me or does satellite radio sound like an AM radio? My first Sirius receiver didn't even have a bass or treble control. That has since been addressed, but maybe I should forget them. It's a great idea, but I think the compression blows it. Besides, digital FM radio is now deploying and that is true CD quality.
In closing, I'll still put my money on the big boys. Who owns the content? Michael Jackson or Ted Turner? Who owns the Internet backbone? AT+T, Global Crossing or AboveNET? And who owns the cable TV? Time Warner or Comcast? Does anybody care? I just want to hear my music and watch TV without commercials. Thank god for Tivo.
In a nutshell, I'm tired of wires. I'm tired of having to reload my computer every time I get a new one. I'm tired of corrupted hard drives and my laptop getting too hot while only lasting a few hours on the battery. Keep going? Plasma HDTVs weigh a ton and the aspect ratio keeps changing while you're watching. Movies and older TV shows often look horrible. Blu-ray? Bluetooth? HDMI? MIDI? SMPTE? No wonder people's VCRs are still flashing 12:00. And Monster Cable? Will someone sue them please?
"The advancement of technology is fighting against itself". Comments Grammy award winning producer Alex Track. "Just as 24bit CD players were hitting the market, as an example, Mp3 players came out still at 16bits. The time frame of new products is overlapping the sonic growth of technology itself." This same problem is occurring in HDTVs. The infrastructure is there but the content is a different story. I don't know that this structure will ever change.
But I digress. I like my old Sony Trinitron, my JBL studio monitors and my collection of 256k MP3s. Anyone listening? I still am, so long as one of those outdated satellites doesn't come crashing into my condo.
Justin Petersen has been involved with music and the Internet since 1980. He is currently the Manager of A&R and Chief Technical Officer of MyStartMusic Inc. Beverly Hills, CA. Justin is available for technical consulting in the music/Internet field. You may contact him at justin@mystartmusic.com.
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By Justin Petersen
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