Another Music Service Shuts Down, Blames Ridiculous Licensing Fees

from the but-of-course dept

We've seen it for years: the legacy recording industry insists that it needs stronger and stronger "enforcement" and laws in order to stop infringement. Yet, every time it gets its wish, it doesn't have any long term impact on infringement, and absolutely no impact on sales. In other words, more enforcement doesn't seem to help the bottom line at all. Instead, the one thing that does seem to get people to open their wallets and pay is innovation in the form of useful services that successfully compete against piracy by providing a better service. And yet... the history of those innovative services is littered with corpses killed off by ridiculously high demands from the labels for licenses that have no basis in reality. As we've noted time and time again, the legacy labels always seem to overvalue the content and undervalue the services that people want. We see silly claims like that Apple is doing nothing but hosting some songs on its servers.

But good services are the key to getting people to actually go to authorized means of acquiring and listening to music. Unfortunately, there is a very small number of such services, in large part because of these crazy licensing demands. David Meyer, over at GigaOm, highlights how Wahwah.fm has shut down due to the licensing demands of labels, saying that they just couldn't build a sustainable business at the rates demanded. While Stuart Dredge correctly notes that there are a number of issues at play, including a perhaps less-than-stellar takeup from users, the licensing costs certainly couldn't have helped. For a startup like Wahwah that is figuring out the right model, the fact is that they don't have much runway to experiment and find the model that works, because the licensing demands are almost impossible to afford unless you've raised a ton of money that you want to flush away.

Plenty of startups would love to build a new business offering licensed, legitimate music services, but they're scared off by the hostility of the old industry to anyone wishing to build a useful service. The end result is that the legacy industry and the RIAA are responsible for prolonging the problem, by not enabling new innovators to build the kinds of services that successfully compete against piracy.

Filed Under: licensing, music industry
Companies: wahwah.fm