For A New Business Model To Work, It Probably Shouldn't Annoy Users

from the just-a-suggestion dept

Wed, Sep 27th 2006 1:39pm — Mike Masnick

In an age where avoiding commercials has been a big part of the pitch of certain businesses, such as TiVo and satellite radio (less so now than when they launched), does it really make sense to base an entire business on adding in intrusive commercials where they didn't exist before? Yesterday at DEMOfall, Lirix presented their software for inserting audio advertisements at the end of songs that people listen to on their computer or mobile device. The idea, of course, is that it represents a different kind of business model for content producers, similar to what Universal Music announced a few weeks back. However, like that system, there are plenty of questions raised by this offering. Even ignoring the proud announcement that this idea is "patented," the company also claims that it will put these ads on music that was "pirated" or loaded onto a device. That, of course, hides the fact that they don't actually determine if your music is authorized or not -- they just put ads on it. So if you were to upload legally made MP3s from CDs you bought or downloaded legally, they'll still put the ads in. They claimed that they pay royalties to companies even on "pirated music" because it still represents legitimate ad inventory -- though that may be news to the person who legitimately bought a song on CD and simply transferred the song to their device for personal use.

In other words, if you do have a lot of your own music, why would you ever put it into this system that's just going to dump ads on it? It adds back in the very thing many people are trying to avoid in terms of intrusive advertising. It may offer up a new business model to the record labels, but for a business model to work it needs to actually involve providing something consumers want -- and that doesn't include (as they showed in the demo) putting an ad for a dating service after any song that has a theme of "loneliness" in the song. I spoke to the folks at their Demo booth, and they suggest that the real power isn't just in ads, but in "value added content." That's a much more interesting idea, but it still seems tied back to ads. They kept comparing the model to traditional radio, but traditional radio is what a lot of people are trying to get away from. However, as an example, they said their system can look at all the songs you have included on your phone, and then automatically recommend and put in another song you might like... with an advertisement (of course). There is some value in dynamically adding in songs that you might like, but if it must involve an additional advertisement, it's hard to see too many people excitedly buying into it -- especially when they can just listen to all their music sans ads already.

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

24 Comments

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

Reader Comments

Subscribe: RSS

View by: Time | Thread

Chris, 27 Sep 2006 @ 2:05pm

I wonder
Well, I prefer the music on Broadway, I wonder what kind of ads I would get on all of my legal broadway soundtracks...
[ link to this | view in chronology ]
anonymous coward, 27 Sep 2006 @ 2:19pm

When I get a check for $100K from them, I'll install their app for one year. Each additional annual payment plus cost of living increase gets another year of me listening to their commercials.

Otherwise, these guys can kiss my commercial free white ass.
[ link to this | view in chronology ]
- Anonymous Coward, 28 Sep 2006 @ 11:41am
  
  Re:
  yer ass is white? how white? is it as white as driven snow? are you albino or is it just your ass that's white? is the rest of you a different shade or white or is it a different color altogether? please, please provide us with more information on your ass. we all care. really.
  [ link to this | view in chronology ]
  - Anonymous Coward, 28 Sep 2006 @ 1:58pm
    
    Re: Re:#21
    You're gay.
    [ link to this | view in chronology ]
Chris, 27 Sep 2006 @ 2:52pm

Quick question
What is DEMOfall? never heard of it in my life (where as the E3, well, lets just say I know how to sneak in....)
[ link to this | view in chronology ]
Boris Jacobsen, 27 Sep 2006 @ 3:05pm

Sign Me Up!!!
Wow where can I get such a thing! Surely, this is the best idea since the adverts-only TV station. Perhaps I can get more spam email and pop-ups too?
[ link to this | view in chronology ]
Brandon Rusnak, 27 Sep 2006 @ 3:10pm

This and P2P
What they can do is install this on the backbone of a peer-to-peer network. What it would do is not touch the music on the sharer's PC but as the music passed through the P2P network this would be applied. Thus the person who shared the files keeps the unaltered files but the person who downloaded from P2P gets a new music file with a small ad.

This benefits the P2P companies, end users and record labels that get a cut on the ad revenew, even if the song is pirated.
[ link to this | view in chronology ]
- Anonymous Coward, 27 Sep 2006 @ 3:22pm
  
  Re: This and P2P
  yeah, right.
  
  NOT.
  
  for a p2p netowrk to actually do something, someone must use it.
  
  Why would anyone use this p2p network to download music they still wont own, when it would be far more annoying than to use ANY OTHER p2p network.
  [ link to this | view in chronology ]
- Rick, 27 Sep 2006 @ 3:30pm
  
  Re: This and P2P
  Which backbone exactly? I thought the point of P2P was decentralization, and what you're describing would require one of two things, either a centralized server setup or for P2P applications to explicitly throw this service into their application.
  [ link to this | view in chronology ]
Mikey, 27 Sep 2006 @ 3:34pm

"Bonjou"
I'm fine with it so long as the ads are really short - nothing longer than a second. I am curious to see what the ad agencies can come up with...
[ link to this | view in chronology ]
Anonymous Coward, 27 Sep 2006 @ 3:55pm

hmmmm
I say let them add the ads to either the beginning or the end of legal or illegal music... It would take me no longer than 1-2 hours to write a program that would chop those ads off for people...

I heard something about CBS putting ads on Eggs? Search it up..
[ link to this | view in chronology ]
Anonymous Coward, 27 Sep 2006 @ 4:07pm

it might be beneficial ...
I might actually be willing to listen to their advertisements if it helped introduce me to music I might not otherwise be exposed to. A couple of caveats though:

1) If it's my music, leave it the hell alone

2) Don't dare track or keep record of what I have on my computer or what I listen to on my portable device
[ link to this | view in chronology ]
bnfmsgeek, 27 Sep 2006 @ 5:22pm

Pandora
If you want to have a system "dynamically adding in songs that you might like" just use Pandora. It's free and ad-free (well a least audio-ad free ;) )
[ link to this | view in chronology ]
- Anonymous Coward, 28 Sep 2006 @ 11:46am
  
  Re: Pandora
  pandora is a pretty cool app.
  
  http://www.pandora.com
  [ link to this | view in chronology ]
RiskyMethodz, 27 Sep 2006 @ 5:38pm

...suggested listening?
If I want a service to suggest new songs for me, I'd listen to Pandora...which I often do by choice. But when I'm in the gym I don't care to hear a 10 second ad for a new show on the WB while I'm lifting. I choose my music for a reason, and don't want ads or suggestions about my MP3's.

As #9 said, even if they did try to incorporate this into something that would ACTUALLY affect people who didn't want it, there would be a patch available to circumvent it in less than a few hours.

The idea is novelty, at best. People will try it for a few hours to see what "interesting" things it does, then people will avoid it forever.
[ link to this | view in chronology ]
Anonymous Coward, 27 Sep 2006 @ 6:01pm

Who doesn't want to add ads to their own music? Hell, I set my TiVo to only record ads. I have the complete set on years one and two of Vonage. Top that jack.
[ link to this | view in chronology ]
Anonymous Coward, 27 Sep 2006 @ 7:23pm

Actually these people might be geniuses. If they have patented the ability to tack ads onto songs then they can simply talk up this business model to the skeletons behind the RIAA and sell it to them for a ton of moola.

I say the idea is brilliant. Then the RIAA will open a music store where every song costs more than the competition and has ads included.

Does anyone think they wouldn't go for it?
[ link to this | view in chronology ]
Eric the Grey, 27 Sep 2006 @ 7:57pm

Patented?
They claim that this is patented, but radio stations have been doing this forever...

EtG
[ link to this | view in chronology ]
me, myself, and i, 27 Sep 2006 @ 9:01pm

re: patented?
i'm sure the patent application states something to the effect of
"a system that appends or prepends audio advertising to static audio media downloaded or uploaded through an ip network via desktop machine"
this clears other patents by
A) static media-clears net-radio stations
B) ip network-p2p, server client, whatever, not peripherals
C)desktop machine-not traditionally defined radio broadcast spectrum
[ link to this | view in chronology ]
Frank, 27 Sep 2006 @ 9:38pm

At least they patented it
Actually, this might be a great idea. Come up with really annoying ideas, and then patent them.
Get a brain trust together and come up with several different ways of doing DRM -- and patent them. Seek injunctions and refuse to license the patent.
Come up with all sorts of ways of inserting advertisement all over the place -- and repeat the patent process.
Who said the patent system wasn't useful?
[ link to this | view in chronology ]
steve, 27 Sep 2006 @ 10:46pm

kiss my ....
a$$ FOR ALL i CARE!

Frankly go ahead and try to sick your BS on the "backbone" of a P2P app.. lets try it out on limewire...

oh wait, you obvriously dont understand the real concept of P2P or rather the technology that makes it work.

It's called TCP/IP and yeah try to send me your adi-invested music.. in 2 weeks there will be a hash code tracker application that will subject mp3's to scans for ads. Any mp3 song found with an ad will be cleaned
or quarantined.. it would be a free download...

Sure its a great idea.. let me get my patent lawyer on the phone and put in an order for the product "mp3-clean"

oh wait, let me order the domain name too!
mp3adscanner.com
mp3adscan.com
mp3clean.us
mp3cleaner.us
mp3cleaner.org
wow the possibilties are endless..

any programmers looking for work? want to design a proggie.. .pst :)
[ link to this | view in chronology ]
Lay Person, 28 Sep 2006 @ 9:41am

I think it's an interesting idea...
I wouldn't mind an add if I can gat the music I want for free.

Sounds like a decent trade. As long as the ad is less than 30 seconds I guess. Even so, I can always reedit and remove the ad in less than a minute and still have just my song.

I'd encourage this to see what happens. Right now they give us nothing. If each song has a parasitic ad, it may work.
[ link to this | view in chronology ]
Anonymous Coward, 28 Sep 2006 @ 11:29am

The last time i listened to a song in its entierty was when i left the ipod on... hence i was not paying attention.

I always skip through songs before they are done...

This is yet another attempt at reinventing advertising...

When was the last time something new was invented?

We went from the wheel, to a cart, to a train, to a car, to an airplane... Horray for the inventor of the airplane... unfortunaltely, that's where creativity ended. Now we try to come up with hybrids, and clean fuel, etc... but no one tries to invent something NEW...

Humans are getting dumber by the minute.

Stop reinventing chit that was invented already!

shesh...
[ link to this | view in chronology ]
- Lay Person, 28 Sep 2006 @ 12:00pm
  
  Re: #20
  You're funny...
  [ link to this | view in chronology ]