Archive for the ‘Business’ Category

Hellfire for Filesharers…

Friday, October 16th, 2009

The Guardian newspaper today has this very pertinent story on the challenge of getting music reviewers’ interest while at the same time preventing pre-release leaks:

http://www.guardian.co.uk/music/2009/oct/15/illegal-file-sharing-promo-copies

“In the war against albums being illegally uploaded on to the internet before they are released, David Tibet of the underground band Current 93 may have struck a minor, if resounding, victory. “This is a promotional CD,” announces a little girl on the promo copy of Current 93′s new album Aleph at Hallucinatory Mountain. “Anyone illegally selling, copying, uploading or downloading this material is condemned to eternal hellfire. Happy listening, God is love.” Then Tibet – a devout Christian with strong views about the impending apocalypse – intones “murder” over a guitar riff heavy enough to terrify Satan. It makes you wonder whether a casual upload is really worth being cast into Hades for.”

I declare an interest – state51, one of the businesses that came together to create Playlouder MSP, works with David Tibet.

When we were putting together the original plan for Playlouder MSP we built a beta ISP partly because we believed strongly that the ISP music bundle was very compelling and felt a retail strategy had chances, but also because we had to demonstrate to two cynical industries that it was possible for the technology to work to deliver consumer friendly services as well as to protect the value of music.

Ironically, while we were the only ISP in the world that was able and willing to identify music being illegally shared, and then intervene to stop it, one of the accounts on our network was used to upload a pre-release copy of an album. We were in beta phase, and were handing out IP addresses dynamically without keeping records, so when we received a notification from the BPI there was nothing we could do, short of the rack and thumbscrews for all our trial account holders, to identify the culprit – even if it happened on the wire rather than on an open wifi.

Even more ironically that transfer would and could have been stopped automatically if the record label involved had supplied us with their music, as it would have gone into our content recognition systems which in those pre-encryption days were reliably catching high 90s percentages of music transfers.

It is a sign of an industry in distress when the relationships between artists and the honoured few who are offered the chance to hear and review new music are so weak that the trust is routinely flouted; and when there is more kudos for upping on waffles than for delivering a thoughtful review. When, where, and how to introduce a work to the public seems like a reasonable privilege to reserve to the creator, even if we recognise that once released other people have many other rights that need to be respected. It is also one of the foundations on which value in music is built.

So respecting the release date is one of the principles we hold to at Playlouder MSP, and we have invested heavily over the years into making sure that as far as possible we can back up that respect with real action. The final irony is that the label itself was the cause of our failure to stop a pre-release leak on our beta network, but that did not stop them circulating some of the correspondence to ISPs we were trying to interest in solutions to help prevent new leaks in future, in an attempt to damage our reputation. My conclusion – if one is needed – is that trust is a conversation built on mutual respect.

Lobbying by Numbers – The Record Industry Credo

Monday, July 27th, 2009

A perfect exposition of the difficulty of adapting what’s inside executives’ and industry leaders’ heads in a period of change appeared in the FT this morning, in the form of a letter from BPI head Geoff Taylor responding to a somewhat downbeat piece on the futility of fighting piracy.

The figure 13% is a bit of a bloody disaster if you ask me – the fact that it is so low shows far greater success in holding back the electrification of the music industry than it does ‘substantial progress’. But this picaresque tour of the problems and concerns shows that the lobbyists either do not wish, or are not equipped, to deliver a nuanced and complex message which reflects the complexities of the world they are trying to change.

The fact that they are not willing to spend more than a few million per year to recapture the £200m claimed foregone revenue shows that either they do not believe the number themselves, or that they do not believe that enough of them believe it.

There is a strong case to be made on behalf of all the affected industries that incentives are misaligned to the point that public value in digital networks is being destroyed almost as fast as it is being created, but it won’t come out of something that relies, Chauncey Gardener-like, on hovering along a continuum between cab-driver common sense and a fundamentalist credo.

The letter is below, and online here.

UK record labels have refashioned their businesses

Published: July 27 2009 03:00 | Last updated: July 27 2009 03:00

From Mr Geoff Taylor.

Sir, The suggestion that “the music industry is no closer to solving the problems created by digital piracy” overlooks substantial recent progress made in the UK (“Pirates on parade”, Analysis, July 22).

UK record labels have refashioned their businesses to bring music to consumers online. Digital music services such as iTunes, Amazon mp3, WE7, Spotify and Comes With Music now contribute 13 per cent of overall revenues, and groundbreaking new offerings, led by internet service providers, are coming online.

The memorandum of understanding signed with the government last year saw ISPs publicly accept their responsibility to deal with online filesharing. The UK government explicitly committed to achieving a 70 to 80 per cent reduction in illegal downloading in two to three years, and the forthcoming digital economy bill will propose new duties on ISPs, enforced by Ofcom, to tackle illegal filesharing. It will also give Ofcom the power to impose stronger regulation if that is needed to solve the problem.

For the record, independent research for BPI by Jupiter shows that this year music labels will forgo £200m ($329m) in lost revenue due to illegal downloading. Between 2007 and 2012 the cumulative loss will be £1.25bn. These figures discount heavily for downloads that may not have been purchased, contrary to the assumption frequently levelled at the industry that we treat every illegal download as a lost sale. The jobs that are being lost as a result, and the threat to future investment in creativity, should be of concern to everyone in the media industry, including the FT.

Geoff Taylor,

Chief Executive,

BPI (British Recorded Music Industry), London SE1, UK

Commissioner Viviane Reding Makes Important Statement

Thursday, July 9th, 2009

Viviane Reding, EU Commissioner for Telecoms and Media, has made an important statement about the approach Europe will be taking towards the balance between consumers’ and creators’ interests and rights as the EU forms and delivers its digital policy over the next five years. It is very clearly in favour of the development of new content licensing and distribution models, even where rights owning industries have been themselves reluctant to come forward into the digital marketplace.

Playlouder MSP has been at the forefront of this movement for the last 6 years, working with the music industry and ISPs to develop a licensing and service model that can truly deliver the benefits of a networked digital economy to consumers and business alike. With support from the EU the promise looks closer than ever to being fulfilled.

This is a key excerpt:

It is necessary to penalise those who are breaking the law. But are there really enough attractive and consumer-friendly legal offers on the market? Does our present legal system for Intellectual Property Rights really live up to the expectations of the internet generation? Have we considered all alternative options to repression? Have we really looked at the issue through the eyes of a 16 year old? Or only from the perspective of law professors who grew up in the Gutenberg Age? In my view, growing internet piracy is a vote of no-confidence in existing business models and legal solutions. It should be a wake-up call for policy-makers.

If we do not, very quickly, make it easier and more consumer-friendly to access digital content, we could lose a whole generation as supporters of artistic creation and legal use of digital services. Economically, socially, and culturally, this would be a tragedy. It will therefore be my key priority to work, in cooperation with other Commissioners, on a simple, consumer-friendly legal framework for accessing digital content in Europe’s single market, while ensuring at the same time fair remuneration of creators. Digital Europe can only be built with content creators on board; and with the generation of digital natives as interested users and innovative consumers.

The full speech can be downloaded here: Vivianne Reding Speech, Brussels, July 9th 2009

Is The Playlouder MSP Model Gaining Credibility?

Tuesday, May 12th, 2009

Market research and academic studies are no substitute for the informed judgement of experienced business people; but in a time of doubt and a shrinking recorded music market the conservatives and zero-sum boys seem to dominate. Anyway, we get a mention in this article by Volker Grassmuck who has an impressive CV in the social impact of information systems.

Of course we know how well our model stands up to scrutiny, in its ability to deliver a substantial and relatively risk free income stream to the music industry on the one hand, and in its impact on ISP economics on the other hand. We did go through a very stringent due diligence process with a very large broadband company in the UK over the second half of 2008. So we obviously feel we have nothing to fear from the endorsement of ‘academics and so-called thinkers’.

Job ad: Music service developer

Thursday, August 14th, 2008

We’re hiring!

Playlouder MSP has been working with ISPs and the music industry to develop both an innovative business model for music consumption, and innovative user experiences around music and communication to complement ISPs’ offerings.

As a key addition to our small but growing development team, you will be critical in helping to refine, scale and roll out our application and service to white-label ISP clients.

Key requirements

  • Background in computer science, mathematics, software engineering or similar (degree or equivalent experience)
  • A solid technical all-rounder with software development experience on sizeable projects

The specifics

Our work involves all of the following, and you’ll be tackling problems involving many of them:

  • Dynamic languages (experience with Ruby, on which our current implementation is based, would be particularly desirable)
  • Rich web application development with a large Javascript-based client-side portion
  • A modular, widget-based user interface framework for the above
  • Databases (MySQL at present), data modeling and ORM tools
  • Unix-based deployment environments
  • Large volumes of media, media metadata and usage statistics
  • Web services APIs, and large-scale integration work
  • Server push technologies, and scaling applications with a live messaging component
  • Common agile software development tools, processes and techniques – source control, bug tracking, testing etc
  • A warehouse full of music geeks :)

Some other things which you might get to play with:

  • Other languages – Java, Python, C, possibly Erlang (see ‘messaging’ above), …
  • Messaging technologies like AMQP, ActiveMQ, XMPP
  • Music technology R&D projects
  • Lots more in a fast-growing company

In return we can offer challenging problems in an interesting domain, competitive pay, and a great work environment for music fans in our E2 warehouse!

Enquiries to matthew@playlouder.com

Two Comments from the ISP World

Tuesday, November 6th, 2007

At Telco 2.0 I met Keith McMahon who writes the insightful TeleBusillis Blog – I have linked to his comments about Playlouder MSP. The Telco 2.0 organisers have now posted about us on their blog under the title, MSP: ISP plus Content.

Many thanks to each.

The debate we are part of in the ISP world makes the music industry paroxysms look puerile. A quick summary of the latter. Major record companies have turned a very simple question – how to charge digital music companies for their use of the sound recordings – into an extraordinarily complex and fraught conflict. In return the world is giving their revenues a pasting, and the artists are finding ways to do without them.

ISP future business models are an altogether bigger and more complicated story. Ed Richards of Ofcom suggested at the annual lecture recently that broadband should start to be considered a utility, as so much of life depends on being connected. That introduces ideas about universal service which give a different slant to the European version of ‘net neutrality’, the ‘mere conduit’ status which protects the ISP from liability for the acts of its subscribers.

For sure there is a big difference between the two, but the essential principle that makes them both work is that the carrier should not interfere with the content on its network. ‘Mere conduit’ seems to me to be an acknowledgement that some behaviour will be undesirable – and certainly in the copyright industries we have seen that more bandwidth means more undesirable behaviour.

For Governments though, the great threat is that investment in new broadband capacity will lag behind other more adventurous nations, and broadband scarcity will bleed innovation out of services delivered over broadband networks. Now is not the time to be introducing greater risk to that investment, by opening service providers to new liabilities, or new responsibilities.

Our own view is that the content and services that broadband bring into people’s homes and lives are being undervalued by the very mechanisms that were designed to protect the carriers, and that until we all find a way to unlock that value both the broadband and content industries will remain blighted.

A Copyright Win Win for ISPs

Monday, October 29th, 2007

Tomorrow (October 30th, 2007 for posterity) Playlouder has a chance to make its case at the ISPA‘s annual conference. Paul Hitchman, along with other ISPs, regulators, commentators and Government will be discussing copyright. It’s a very good time to be raising our heads above the parapet, with relations between ISPs and the music industry looking set to take a far more corrosive turn.

To support our case I have written a short article for ISPA. If you can get past the local references it states our position quite well.

A Copyright Win Win for ISPs

Hearing Lord Triesman’s somewhat confusing description of data banks being matched to music being exchanged on the net was just as puzzling for us at Playlouder MSP (arguably the UK’s only specialist in this area) as it must have been for ISP observers and the more clued up members of the record companies.

With a foot in each camp we at Playlouder MSP can take a stab at how the thought might have got lodged in his head. The ‘sue the fans’ strategy implemented by the BPI on behalf mostly of the major record labels, which has had no discernible positive effect on the growth of digital revenues and has been a PR disaster, has run its course. In search of a target other than itself the recording industry has stepped up rhetoric about ISPs being gatekeepers to illegal music, and was hugely encouraged by recommendation 39 in the Gowers report which seemed to agree with them that ISPs could and should do more. Boosted by the Belgian SABAM/Scarlet case, in which the Audible Magic Copysense appliance was mentioned, the BPI has been busy telling anyone who will listen that there’s a cheap and easy way to clear unauthorised music off the internet, and it’s only self-interested footdragging by ISPs that is stopping it happen.

I’m not going to rehearse the arguments, both technical, legal, and strategic, which make any such attempt an extremely bad idea for music companies as much as for ISPs. Instead, there’s a compelling case to be made that music can benefit the ISP industry even more that it currently does. There are a number of obstacles to be overcome, not least on the music industry side, but none are insurmountable. And, far from trying to achieve a ‘least worst’ settlement over copyrights on public networks, a bit of imagination coupled with some negotiation could see a settlement which flips the antagonistic relationship between music companies and ISPs into a model of co-operation and mutual value creation.

If this sounds like I have been drinking the ‘special sauce’ (this is the music industry after all), well maybe I have. But Playlouder MSP has been building the model and it seems to us to stack up. First, consumers value music, very highly. For your hardcore music fans it might surprise you to know that music makes up a £10 per month value that they perceive in their broadband service. The real nutters can be stretched up to £20 per month. Even mainstream users reckon that £5 per month is a fair price to pay for broadband music. To us this says that anyone who was sitting on the now deceased OiNK.cd (RIP – looking forward to BOiNK.cd from the Pirate Bay) and its ilk was getting too much of a bargain.

While incremental revenue opportunities here might be limited except for a few niche players, we need now to turn to what broadband music lovers say about ISPs, none of which has so far managed to tap into the emotional relationship people have with music despite chucking a bit of money at ‘brand affiliation’ projects. Over 60% said that music would keep them loyal, and a huge 70% said that music on a competing ISP would make them consider switching.

Those of you with active product strategy brains will already be spinning this out into the future. Today BT’s Digital Vault includes ‘private’ music sharing (itself a bundle of copyright infringements which don’t seem to have bothered their corporate lawyers too much), but how about building public sharing, community, and internet radio right into every broadband subscription? All the value of that past music experience and music preference, coupled with the digital libraries of your customers, and the infinite future opportunities around finding and sharing new music would be stuck firmly to the broadband subscription, and every outreach by a customer to their music loving friends would be an invitation to switch ISPs and join the party.

Back to reality, though. What’s it going to take to stop both sides of the divide from doing all they can to destroy the value of broadband music? The answer is surprisingly simple. A licence and some money. No ‘big brother’ network monitoring, no DRM, no ‘unplugging’ customers, no compliance overhead, no invasion of privacy, and no compromise of the ISP’s ‘mere conduit’ status. I’ve called this a copyright win win. I’ll add another win – for the Government, which surely would prefer to see a private commercial settlement than a bundle of extra legislation that would end up not actually helping the music industry but would add an unwelcome element of risk to the next generation of ‘broadband Britain’.

All comments welcome!

Why Playlouder Pays Rather Than Charges Music Companies

Monday, October 22nd, 2007

One of many conversations I had at Telco 2.0 resurfaced a question that ISPs like to throw into a debate about unlicensed music distribution (AKA p2p filesharing). Why, instead of trying (with great difficulty it must be said) to get record companies to accept money for the music on the networks, why should ISPs not charge them for carrying the product to the customer?

It is after all a very valuable service. Without that free carriage – provided at zero incremental cost over the standard consumer broadband charges – download services such as iTunes and Napster would be looking at very different economics, and labels would not get their current majority share of retail revenues. We just need to look at mobile music services to see how this works. The networks take about one third of the retail price just for delivering the file.

As an ISP we could have taken that view too. The very low chance of getting targeted by the BPI for filesharing, coupled with a few simple and cheap services we can bundle with the ISP subscription, such as encrypted VPNs and online digital storage lockers, would mean that our subscribers had access to safer and more convenient ways to share music without paying the people who make it.

But that would have left us in the same competitive position as every other ISP, charging the same for music as they do for spam, and fighting a low level war of attrition with rights owners over p2p filesharing they refuse to license. Our customers tell us they love music; they want more of it, more conveniently delivered, and they’re happy to pay. Read the Playlouder MSP research for yourselves if you are sceptical.

So rather than pick up pennies on delivering music for other companies, which our technology would allow us to do just as it allows us to report on licensed music traffic, we set out to unlock the true value of music, for our customer, for us and for the creators. We’re sailing with the wind here, as we learned recently that p2p filesharing is by the music industry’s own calculations the lesser of many evils besetting the music business.

Playlouder market research

Friday, October 19th, 2007

Back in June we commissioned an independent market survey carried out on our behalf by Entertainment Media Research. We presented a summary of this research this week at the “Who Is In Control” conference in Reykjavik. Here is a copy of the presentation: Market Research presentation

There are a number of interesting points to note and conclusions to draw. In particular: the implications for ISPs are that an MSP service bundled with broadband access would reduce customer acquisition costs and reduce churn; and music fans are prepared to pay a significant premium to vanilla broadband for unlimited legal access to music.

If we extrapolate from the findings of the survey it appears that there is market of more than £250 million p.a. in the UK alone for the MSP service.

Playlouder attending Telco 2.0

Friday, October 5th, 2007

I shall be attending the Telco 2.0 event on the 17th October in London, along with Will Page from the MCPS-PRS Alliance, who is speaking. On the basis of past performances what Will has to say should be extremely interesting to those considering the nexus of communications, the creative industries, and public policy. Will has published a paper on the economics of recorded music which I would recommend to anyone.

Playlouder is of course right in the middle of the debate, having taken the highly controversial step of offering to pay for and manage the flow of music on its network. As we see it we are removing a level of legal risk, while at the same time delivering a much higher value experience for broadband users who have been very badly served recently by music companies and ISPs alike. BT plus Limewire is in no way a decent music offering; customers deserve far far more. And DRM is poison, not panacea.

The 16th October also sees me at the Ofcom annual lecture, this year entitled ‘Citizens and consumers in a converged world.’ I am hoping that at Ofcom at least they will not try to wrap up unlicensed use of music with pornography in one big bundle of content likely to cause ‘harm and offence’. There is a normal and reasonable commercial solution to the music use; license it.

I hope that what we are doing at PLaylouder is enough to show people on all sides that there is a third way in which we don’t have to sacrifice any party’s interests to deliver next generation broadband services and healthy creative industries, without requiring half the country to be illegal, or indeed needing any government intervention. Perhaps I shall see you there!