New York Times Tells Brits They Can't Read Article On UK Terror Case

Universal Takes Free Music Plunge

from the questions-linger dept

Tue, Aug 29th 2006 8:24am — Carlo Longino

We've talked plenty of times about how record labels, despite their oft-repeated insistence to the contrary, can compete with free -- in particular, how they can embrace free music as a promotional tool and use it to sell other goods. One of the major record labels, Universal, has indeed decided to go the free route, but with a little twist: it's going to work with a startup to make its entire catalog freely available through an ad-supported service. At first glance, this sounds pretty great, but a second look raises some questions, the biggest of course being how they'll make this work commercially. When you see sites with massive amounts of traffic struggle a bit to monetize through ads, it simply underlines the point that having available ad inventory isn't the only thing sites need to be successful through advertising. The startup, Spiralfrog, says its 13- to 34-year-old target demographic is very attractive to advertisers; but this is largely the same market that delivers low clickthroughs and CPMs to social-networking sites. All this comes before even figuring out how to split up the revenues and pay artists.

Another concern is that the company says its files will use some form of copy protection, which raises even more questions, in particular, will consumers have the ability to move files to their music players? The issue of DRM incompatibility among device vendors would say no, and Apple's resistance to license out its FairPlay DRM means iPod users are likely to be left out in the cold -- which won't help this system gain traction at all. Using DRM could also limit the value of the music as a promotional tool, which The issue here isn't that this free set-up will be competing with the likes of iTunes and Napster, but with P2P networks as well. This has been the issue all along, and the lesson still hasn't changed: the labels must come up with something better than the file-sharing services to draw customers away. They can already get free music, and to switch services will take something offering them a better experience, not just an equal price. Universal certainly deserves some credit for trying this new business model, and let's hope they can make it work. Update: Tech Trader Daily points out that iPod users will indeed be left out, and as an added bonus, our old friend Jay Berman, a former RIAA boss, is on SpiralFrog's board.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

31 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

dataguy, 29 Aug 2006 @ 9:00am

"Universal certainly deserves some credit for trying this new business model"

I haven't read the details but it sounds like Universal may have set this up to fail, to "prove" their point that they can't compete with free... I hope not but I have my doubts that they really "get it"
[ link to this | view in thread ]
Charon, 29 Aug 2006 @ 9:03am

Thanks for trying
While its certainly not perfect, and they still insist on using a form of DRM, they do deserve props for taking that first step (and its a big one for a large studio).
[ link to this | view in thread ]
cb, 29 Aug 2006 @ 9:06am

BEWARE of the big bad wolf....but I hope they can make it work. Best of luck.......
[ link to this | view in thread ]
AJ, 29 Aug 2006 @ 9:15am

Good Start!
Nice article Carlo, and I agree, its a great first step. Its about time somone started to see the light. Its not perfect, witht the DRM and everything but you have to start somewhere I guess...
[ link to this | view in thread ]
Anonymous Coward, 29 Aug 2006 @ 9:26am

dataguy said:
> it sounds like Universal may have set this up to fail

Let them. The existing online services are doing fine as far as I can tell.
[ link to this | view in thread ]
chris (profile), 29 Aug 2006 @ 9:27am

the obvious question
if it's "free" why do you need DRM?

hopefully this will shed some light on the Fair Use issues of DRM. since the music costs nothing, people still won't use it because of the DRM roadblocks.

taking price out of the equation will shift the blame squarely on DRM.
[ link to this | view in thread ]
Nobody, 29 Aug 2006 @ 9:56am

Hmm...
If the bitrate is decent enough (192 kbps or higher), and the DRM used is PlaysForSure, then I'll just use that new program to remove the DRM and re-encode as AAC for my iPod.
[ link to this | view in thread ]
rijit (profile), 29 Aug 2006 @ 10:24am

RE: Hmmm
"I'll just use that new program to remove the DRM and re-encode as AAC for my iPod."

Not unless the program (FairUse4WM) creator finds a way to bypass Microsoft's fix, which was released 3 days after the DRM decryption program, according to Engadget.com.
[ link to this | view in thread ]
Mozart, 29 Aug 2006 @ 10:33am

One Step
One step in the right direction.

Like al-a-carte media subscriptions- once one companies starts- they'll all have to do it to compete.

All we need is a catalyst- Universal looks like they could be that catalyst.

Mac better rethink their stratergy- they may have the market for now- but if free music becomes available on other MP3 players consumers will quickly lose any brand loyalty they have for buying iPods.

Consumers will always go for whats best for them.
[ link to this | view in thread ]
JustWanderful, 29 Aug 2006 @ 10:46am

Re: Hmm...
Its people like you that make labels think they need DRM, or some form of protection, even if they don't know what from! Not satisfied with labels wanting some kind of control over their output, even when offering music for free, with some form of restriction, you have to immediately whine "That's not good enough, so I'll cheat it and get it MY way!"
There is a HUGE cost involved in artists and labels putting out music, and you and your whiney liberal punk-ass friends think they should just give it all away.
You and those like you have no honor, no integrity, and in my NOT so humble opinion, you are what is wrong with society today. You want want want, without having to pay, without having to pay dues, without having to work your way up the ladder...
To put it another way, YOU MAKE ME SICK.
[ link to this | view in thread ]
AMP, 29 Aug 2006 @ 11:09am

Just some thoughts

"Just Wanderful" needs to relax.

Generally speaking, just because someone does not want to pay for something does not make them a liberal. And before you go spouting off about me being a liberal, I'm not.

I had the same question as above. If it is free, why DRM? I may not understand the issue entirely though.

Is it possible that Apple is the driving force behind restricting this music to not play on iPod?
[ link to this | view in thread ]
Anonymous Coward, 29 Aug 2006 @ 11:21am

Re: Re: Hmm...
Erm... WTF? He just said he's going to decrypt it so he can use it on his own device. He's still going to be veiwing the ads as he downloads.

Ideally, if *I* were them, I would utilize a P2P network with the servers set up as clients for sharing purposes, then have that client serve the advertisements. That would result in significantly Lower costs on their end as well as more control over the advertisments they do server(I.E Ad-blockers won't work)
[ link to this | view in thread ]
Anonymous Coward, 29 Aug 2006 @ 11:22am

Re:
"I had the same question as above. If it is free, why DRM? I may not understand the issue entirely though."

My thoughts exactly, why encumber something you are giving away?

Also, if the tracks are going to be free, can the RIAA still sue someone for trading the same tracks without the DRM?

What if I own the same CD's they are giving away? Can I now rip those tracks and give them out as well without fear of prosecution?
[ link to this | view in thread ]
Anonymous Coward, 29 Aug 2006 @ 11:44am

Why can't these companies realize that they could put out the music, DRM free for $1 for song for Lossless Mp3 and $.50 per song for a lower bit Mp3. Until then, anything they do is destined to fail.
[ link to this | view in thread ]
Anonymous Coward, 29 Aug 2006 @ 11:44am

Re: Re:
The RIAA probably can't sue you for lost revenue, but I think you'd be subject to the penalties of the DCMA for circumventing the DRM. However, IANAL and YMMV
[ link to this | view in thread ]
Anonymous Coward, 29 Aug 2006 @ 11:49am

Re: Re: Re:
But, If I'm ripping the tracks from my own unencumbered cd, I'm not circumventing anything......
[ link to this | view in thread ]
JustWanderful, 29 Aug 2006 @ 12:00pm

Re: AMP
I don't need to relax...people need to have a little bit of integrity. Period. If Universal, Apple, MS, whomever, wants to put out what they own, for free or for a charge, as long as they can do it without putting Sony-ish crap into your machine, and have some sort of restriction on it, that is their right, it is their business model, whether you agree with it or not, and they have every right to do it. if you don't like it, DON'T BUY IT. Pretty plain and simple.
I am a huge music fan, have owned hundreds, if not thousands, of pieces of music. I rip my cd's onto my computer, I make my own mixes, I do what I want with it for my own use. I wish music were free. But if I buy something with not only the seller's words, but also part of the programming, to keep it locked in whatever fashion, that's my fault if i have a problem with the lock. I bought it knowing that. I don't buy it with the thought of "Screw the maker, I'll hack it however I want, to fit MY WANTS REGARDLESS OF WHAT I PAID FOR!"
You buy something with DRM, or in a proprietary format, or whatever, you knew it when you bought it. Have the respect for the person/company/whatever that made it and sold it to use it as they intended, as you implied you would when you laid your money down.
Again, for those that try to hack around anything and everything that doesn't work their way. YOU MAKE ME SICK.
[ link to this | view in thread ]
Smarter than you, 29 Aug 2006 @ 12:05pm

Re: Re: Hmm...
http://negativland.com/albini.html
[ link to this | view in thread ]
Cantalwayswin, 29 Aug 2006 @ 12:29pm

They could make a few bucks by developing their own DRM scheme, then license it to apple, samsung, etc for inclusion in their portable players. Or maybe make the DRM free, but devise a way to make the files expire, but still transferable. That way users will have to go back to the site, program, whaever every once in a while to re-download their songs and thus support the advertisers again.

Just some ideas.
[ link to this | view in thread ]
BillGod, 29 Aug 2006 @ 1:12pm

I'm with DataGuy on this one
I'm with DataGuy on this one

Looks to me like they are going to go live with this. Lose lots of cash.. if you can call it losing cash. The turn around and tell the government/RIAA/Court systems that it cannot be done and something else has to be done about this.
[ link to this | view in thread ]
Zygo, 29 Aug 2006 @ 1:13pm

Re: Hmm...
I think this could be an important step in figting music piracy , if itis executed well. The DRM option has to be there, else I could wait for a patient friend to sit through the boring ads and get the songs. What is stopping me from doing that ?..DRM with copy restrictions.
Necessity is the mother of invention ...someone is going to come uo with a "TiVO" for this website that downloads the songs and skips the ads ... wonder if this would up in a month after the site launches. Hope we don't have to sit through 2 minutes of ads to download a song. A worthy initiative though !!
[ link to this | view in thread ]
YouKnowNothing, 29 Aug 2006 @ 1:21pm

Re: Re: AMP
Hey "Wanderful", would you buy a car with the hood welded shut?

Just wondering...
[ link to this | view in thread ]
Zygo, 29 Aug 2006 @ 1:22pm

Re: Hmm...
Wondering how the "business" aspect is going to work out ..So are the advertisers going to foot the bill for each downloaded song ? Someone has to pay the artists ...I think Universal will pay about 30 cents a song to the and charge 1.10 or 1.20 per download from the advertiser.. If I was an advertiser, I would go for this than plunking $100,000 for a non primetime program. The payment would be per download and if you can peg your ad to a popular song and expect atleast 500-1000 downloads a week...it would be cheap and effective
[ link to this | view in thread ]
What a Wanderful World, 29 Aug 2006 @ 1:29pm

Re: Re: AMP
Let's say I purchase a song from this new service offered by Universal, complete with all the locks on it. Now let's say that instead of using some program to break those locks, I play the locked song on my computer, but I use a different kind of program to capture the output directly from my sound card and write it to an "unlocked" .wav file.

Remember, I did not break the lock.

What I did was the equivalent of taping a song off the radio, or use my TIVO to record a movie.

Do I still make you sick?
[ link to this | view in thread ]
Peter Rambo, 29 Aug 2006 @ 1:37pm

It depends on what the ads are
It depends on what the ads are for.

What they should do is pay attention to webcomics. Offer free music and have ads for that artist's t-shirts, posters, hats, underwear, mugs, tickets and whatever else they think people will buy.
[ link to this | view in thread ]
Wyndle, 29 Aug 2006 @ 1:40pm

Let's get it right...
When music is licensed for play (they are not giving it to you, they are giving you license to use it) you are bound by the terms they set forth. I'm sure that you will have to "sign" an agreement before you can download the "free" music. By signing that agreement you open yourself to legal action if you perform any "unauthorized use" of the files. Technically, the "free" music is different from the CDs that you already own and any rights that you have with the "free" music will not transfer to the CDs and vice versa.

Oh, and you can make "fair use" copies of your music CDs (except with DRM) but the instant you try to give a copy to anyone else you are guilty of copyright infringment. Another thing about copyright infringment, monetary damage is not a consideration of guilt. Monetary damage is only factored into the sentancing once you've been found guilty.
[ link to this | view in thread ]
dataguy, 30 Aug 2006 @ 4:29am

gotcha
Boing Boing is reporting a rumor, that in addition to all the restrictions listed above, the music will expire after 6 months.

Since Universal also used the same root kit as Sony (some how avoiding the same bad press) I guess all this is to be expected. :(
[ link to this | view in thread ]
Anonymous Coward, 30 Aug 2006 @ 4:31am

im with dataguy on this one - it seems to be setup just to fail for the sake of saying "we told you so - we cant make money giving things away for free". If the BBC report on this is to be believed then any music downloaded ONLY plays within their own software with no option to take the files out on the move via an MP3 player so they are still extremely restrictive and "forcing" people to buy the CDs if they want the music to be portable.

Yes it is a (small) step in the right direction but they are still completely missing the point
[ link to this | view in thread ]
Chronno S. Trigger, 30 Aug 2006 @ 5:41am

Where is this place?
I may be considered stupid for asking this but has any one even been to the site? I wanted to go there and see if it was even worth the time to download, but I can’t find a link. I googled it but came up with a few Chinese web sites.

Oh and they DRM it so that If you want the song your friend downloaded from there website you will have to go there and watch another advertisement to get the same song. Its to make more money off the advertising.
[ link to this | view in thread ]
dataguy, 30 Aug 2006 @ 9:01am

Re: Where is this place?
http://spiralfrog.com/

Site's not of much use yet - just a splash page that says "Coming Soon".
[ link to this | view in thread ]
chris (profile), 31 Aug 2006 @ 9:23am

the answer to the obvious question
if it's free, why use DRM?

the answer is that it's not free. you have to sit thru ads, and can't actually use the music for anything once you have it. no, you don't pay actual dollars, but you don't get the music either. you're getting what you pay for.

i would gladly pay a dollar a track for music that i could use on my terms. i'd pay $2 a track even, as long as i only had to pay once. if i could get a bunch of stuff like shirts, posters, books and whatnot (real property that can't be digitally duplicated) at the same place i would spend a lot more. i have done that with artists like MC Fronatalot and his kind. until i can get my music on my terms none of these download systems are going to work.

the point of DRM has little to do with preventing piracy, since DRM does nothing to stop it. people circumvent DRM before the share it, and the stuff you get off P2P networks has no DRM on it.

DRM is about control. the industry wants the power to make the legitimate user pay over and over. pay for the CD, pay for the copy on your computer, pay for the copy in your portable player, rinse and repeat when they change formats. as long as they do this, it will make the piracy problem worse, not better, because only thru piracy can you get media on your terms.

the industry will either change or die... either way, the consumer will win.
[ link to this | view in thread ]