Saturday, May 01, 2004

I just offered my encouragement and enthusiasm to the DJs at the Live365 Broadcaster Conference. That's me in the center green.

For those who don't know, Live365 is doing for radio what GarageBand is doing for musicians: creating a community that empowers individuals and evaluates their creations. They've aggregated the third largest internet Radio audience by broadcasting user programmed stations exclusively. This differs from AOL Spinner (number one) who broadcasts staff programmed stations and Yahoo! Launch(number two) who broadcasts computer generated personalized streams. In each of their own ways, these top three stations draw a sharp contrast to ClearChannel/Infinity Broadcasting dominated terrestrial radio. Over the years a handful of mega corporations have consolidated control over thousands of radio stations under one roof - creating a small target for people who would want to homogenize the airwaves. AOL has a large number of diverse stations programmed by independent PDs. Launch replaces the PD with a personalization algorithm (no channel switching). In a way, Live365 is using the Internet to take radio back to its roots: thousands of stations built on the personalities and tastes of real people. There is real potential in Live365's model for communities to emerge centered on the radio stations or for existing communities to start their own radio stations. As Blogger has done for print, Live365 has put the power of radio in the hands of anyone. What this means, is now anyone can be a tastemaker, and only the best at forecasting future hits will gain a committed audience. As opposed to the current terrestrial radio situation where a few people have the power to "make" a hit and continue to have that power despite their dismal track record.

I should note, that my company is looking forward to a partnership with Live365, but my enthusiasm for them pre-dates both the partnership and this article.

Wednesday, April 28, 2004

Happy Birthday iTunes. There are a number of new features in this release that exhibit Apple's willingness to break down old paradigms they can't benefit from. For instance the new "publish your iMix" meme (a copy of Napster's playlist sharing, but not as community oriented as their Inbox), is another stab at cutting down the per transaction cost from single song downloads. Of course it also blows away the traditional album meme that the traditional music industry depends on, but I think that was just a second effect. Similarly, Radio Station charts, builds on the celebrity playlist meme to encourage buying of multiple tracks at a time, except now based on favorite terrestrial radio stations.

On the other hand, there are some hoped for things missing because they would cut into Apple's bottom line. The radio station charts actually highlight one: there's no affiliate program. This impacts a whole bunch of people. Independent artists who drive sales to their songs (cuz Apple sure isn't) would get a bigger cut of the sale. Radio stations (internet or terrestrial) are still the most common means of discovering music and drive sales to the iTMS without compensatio. Finally, there is a whole new class of tastemakers, the people who publish their iMixes, whose talent Apple fosters and the profits from.

Similarly missing is support for other brands of music players, probably the single biggest restriction to the growth of the iTMS. But then again, Apple doesn't really care about digital retail market share. They care about selling iPods. Likewise, an affiliate program would cut deeper into the loss-leader digital single sale, so Apple has to be careful about who gets to participate and how much they get. When they do release an Affiliate program, I'm guessing it will only be for the sale of iMixes, since paying out for single sales would worsen an already bad cost structure.

No one can deny the impact the iTMS has had on the music industry. It is also hard to deny the impact they haven't had...and probably won't.