Digital Music Trends – Episode 46

This week on the show an interview with Gregory Kris, CEO of Decibel.net a company that focuses on gathering rich music metadata, also in the news: Limewire loses big time in court against the RIAA in what may be a very significant ruling, Warner Teams Up with Myxer, the Echo Nest partners with Play.me and finally a small window on what happened at the Great Escape conference in Brighton. I’m going to briefly cover the Psonar controversy, the thoughts of the VP of Digital at Universal Music Group international Francis Keeling on subscription and piracy and the potential of China for UK companies.

But let’s start with this week’s interview with Gregory Kris, CEO of Decibel.net (here is not a transcript but a more conicise summary of some of the subjects covered in the interview):

First of all, how did Decibels start out and what is the idea behind the company?

Our founder is a music fanatic and software architect. He got the idea when he tried to digitise his own collection, and found that the software was in its infancy and all the information was in silos. The idea was to provide knowledge and navigation in one place, and to make the listening experience totally compelling for digital music.

The product was made with many issues in mind. First was the need for knowledge — to duplicate the record notes. Then came the idea of navigating a typically-large digital music collection. The next was in finding music online. Then there’s the “English-only” nature of the music market, with many interested people left out.

As listeners we typically use separate programs or web sites for each function, but if you think about it, all of these issues are part of a single, musical ecosystem. The job of Decibel is to allow all items to function together smoothly, and that’s a pain-point right now. We want to power the next generation of digital music.

The focus of the company is on music discovery, a field that is now expanding on various fronts including that recommendation services. How does decibel spur music discovery? Decibel furnishes the raw material for recommendations, but more important, it lets listeners follow their own trail of interest. There is no field where people love details more than music, and Decibel allows listeners to make their own discoveries. Social connections are interesting, but listeners may also want to follow the guitarist, or the piece or the label … or whatever else strikes them. We make no assumptions — we simply furnish people with the tools to do what they want, and can find things even if they’re not on the cover. Decibel can be used to discover your own collection, but equally, it makes online services easier to use. All of a sudden, sellers are music experts.

How do you gather the information that you include in the music? You talk about listing all session musicians, backing vocalists, producers etc for a specific recording but often this information is not even available to the original record label – do you need to carry out a lot of detective work on some of the recordings?

We often have better information than the record companies. Record companies are in the business of making music, and don’t always have the time to look after data. In fact, we view them as potential clients, since complete data will help them make better sales.

We get the information wherever we can find it, and sometimes spend ridiculous amounts of time on small details. The sleeve notes are all-important, but we also go to reference works, blogs, and any sources that will help. Generally, we have a 30,000-foot view of music data, so we can make the best guess if we need to. Nobody’s perfect. We often find that the sleeve notes have the wrong song authors, and we’ve even found a record where they got the artist wrong (Joe Turner / Big Joe Turner). We’ve asked everyone to be extra-critical of our own information, and we make a point of putting fixes in place immediately.

Is the information provided by Decibel for now only accessed by larger organizations or is it accessible through specific software I could use so that if I pop a CD in my drive that has been indexed by Decibel I can access all that wealth of information?

Decibel is accessed through an API. Using this model, anyone can write software to use the data for whatever purpose they need. For instance, Decibel has a program that recognises CDs, and rips to MP3 and FLAC with all the rich information in the tags. We see a wealth of consumer products coming from the same source. The same way that PCs have the “Intel Inside” sticker, we see the products having the “Data by Decibel” label.

I imagine that your client base is split – on the one side the content creators that want you to index their tracks on Decibel and on the other the service providers who want to access the content. In that respect are these two forces equivalent or is one more predominant than the other in terms of your business model? You can’t have one without the other! The move to digital music has caused some friction between the producers and consumers, when really, their interests are totally shared. Die-hard fans can’t get enough music, and creators need everyone to know that they’re there. The problem is that something has been lost in the translation on the way to digital music. The physical product is going away, and traditional magazines and advertising are going through turmoil as well. We look at Decibel as the missing part of the equation. Good information lets creators sell something of similar value to the original product, and good navigation lets listeners find what they want. Everyone wins.

What are your plans for the service in terms of the information you hold? Is your goal to keep distributing solely via the Cloud or would you like a tie-in with Mp3s or other upcoming interactive formats? We plan to deliver data from the Cloud, since that easiest and most convenient. However, we have no limits on the products we will produce. As new things are invented, Decibel will be part of them.

Most of the data will be dynamic, though some will go into more static products such as MP3 tags or eBay listings. We already have tag formats for MP3 and FLAC, where users can get full information and link back to Decibel — without breaking players like iTunes or Winamp. In fact, listeners can even get the tags in their own language. This is all proven technology. And we’re happy to be a part of any product that uses information.

Labels work with proprietary and closed systems to create their products so the metadata is fragmented and for example I can safely assume that EMI can’t access Warner’s systems to look up the product details, engineers and backing vocalists of a specific track. Do you think that Decibel may finally provide not only consumers but also professionals working in the music industry with a solution that may help resolve issues regarding licensing and sample clearances for example in a more straightforward way?

We are looking to make Decibel the reference database for the music industry. EMI might be able to look at Warner, but it’s true that too much data lives in silos. There’s one database for CD recognition and another for publishing rights, when it all deals with the same material. A laser focus can be helpful, but you never know why people will want certain information. Producers may want to find songs for their performers to sing, DJs may want to research their programmes, and fans may want to follow someone they like. We don’t make any assumptions. We gather any and all information, and make sure that it’s linked to work with all the other information. At this point we’re in discussions with the royalty agencies to make sure we have the information they need, as well as all other people in the music industry who we want to work with in the future.

And now for the news:

1) Limewire loses big time in court

The big story this week was definitely the RIAA’s win in court against Limewire. U.S. District Judge Kimba Wood, for the Southern District of New York, on Tuesday found Limewire liable for copyright infringement. CNET quotes parts of the sentence written by the judge “The evidence demonstrates that [Lime Wire] optimized LimeWire’s features to ensure that users can download digital recordings, the majority of which are protected by copyright,”  “And that [Lime Wire] assisted users in committing infringement.” What is really interesting is that the judge did not only declare Limewire and the Limewire group as responsible but also held its main owner and CEO Mark Gorton accountable and he may face having to pay part of the charges himself if and when they are handed down. Cnet makes the interesting point that this may prevent investors and VCs to invest in start-ups that don’t have all the necessary licenses to distribute or aid in the distribution of copyrighted material, whilst ZDNet’s Sam Diaz wonders whether there will always be way for the entrepreneur to get around a ruling like this. Ars Technical also has a really great in-depth analysis of Limewire’s history and of the legal proceedings connected to the company so go and check that out, the link is in the shownotes. Main thing to take away from this is that even the most anti-RIAA people out there could not deny that Limewire was basing it business on people downloading copyrighted material and the NPD in a recent survey reveal an astounding figure –  58% of all people surveyed who were filesharing indicated that they were using Limewire, and it’s not hard to believe given that the software amassed over 200 million downloads per year. The RIAA said it will seek the maximum compensation that nowadays is set at 150,000 dollars per work downloaded, which is enough to sink Limewire many times over. The RIAA may also seek an injunction to get the company to shut its doors as soon as possible. Whilst I have been known to maintain on the show that it’s pointless to try and get all P2P networks shut and that P2P has its place in the grand scheme of things I cannot say that I feel any sympaythy for a company that built its business model around the exchange of copyrighted material.

2) Warner Music Teams up with Myxer

http://www.allheadlinenews.com/articles/7018674084

Mobile music platform Myxer has found a new partner in Warner Music. The major has agreed to partner with Myxer to promote its music to the 34 million users of the service. The deal gets Warner artists’ on Myxer’s MobileStage platform where on one side they can stay in touch with the fans directly via mobile messaging and on the other fans can gain access to mobile-friendly audio material, videos, wallpapers and ring-tones via their handsets. The content will be available from www.myxer.com/warnermusic.
And now onto another partnership as Billboard Business reports that the Echo Nest inked a deal with the Play.me service by Dada entertainment, and this has lots of exciting implications. First of all if you haven’t heard of Play.me it’s a streaming service that offers 5 hours of free streaming per week before asking you to pay a $5 or $10 monthly fee to continue listening – and it features tracks from EMI, Sony and many indies. The Echo Nest and its API allow developers to create really amazing apps but the problem was that up until now many of those never saw the light of day because app developers had to negotiate licensing deals for the music on their own and most of them did not want to hear of it or didn’t have the resources to delve in such a complex field. By partnering with Play.me the Echo Nest is providing its developers with an invaluable source of pre-cleared music that presents the same restrictions and limitations of the original service. The great thing though is that if users decided to pay for the premium access through the app or because they are using the app all the time both the App developer and the Echo Nest will receive a cut of that. The ability of tapping into this vast amount of music is likely to spur the release of many more apps based on the EchoNest platform – as a Wired article points out – and the developers will be able to focus on creating amazing programs rather than worrying about other issues. I’m personally a big fan of the Echo Nest and see endless potential to what people can do with their engine so I can’t wait to see some of these new apps!

4) And finally I’d like to end the show with some flash coverage of The great escape conference that took place last week-end in Brighton:

a) Best of British Music Start-up and the Psonar controversy,

First of all let’s talk about the Best of British Digital Music Start-ups session. This involved Silence Media, Psonar, Music Metric, Music Glue, Pledge Music and RjDj. These represent a wide variety of business models with the advertising platform, music locker service, direct-to-fan marketing and music app development all in the picture. But a company that caused a little bit of controversy as reported by Music Ally and Mobile Entertainment was Psonar. Psonar is a music locker service that works in principle in a way not dissimilar to other companies like Tunesbag for example. It lets users upload their entire music collection and then listen to it from any device – thus creating your own mini version of Spotify. The interesting thing is that you can browse other people’s collections and search for tracks that are not part of yours – the catch being that you can only listen to 30 seconds of any given track. The company then provides you with a link to buy the track from a legitimate store if you realize that you like it. Naturally music locker services have come under fire lately as there is no proof that the music that is uploaded is actually yours and has been acquired by legitimate means. Mobile Entertainment reports that Mark Mulligan – analyst at Forrester who was also one of the judges for the session remarked on the lack of licenses for the service and on how it’s effectively becoming an enemy of the labels that should instead be partners. Francis Keeling also remarked on the fact that the company is not legally able to do what they are doing when the discussion was opened to questions from the floor. I personally think that music lockers are just a phase – why if you have the option of having all the music that was ever made on one service like spotify would you go through the trouble of pirating the music and then uploading it all to a server in the cloud? it seems like many users would choose the convenience of paying a monthly fee and not being limited by the size of their own collections. I may be wrong – but unless someone like Apple comes up with a working model of the locker that gets over the licensing hurdles of proof of ownership I see the future as being a service like Spotify or We7 and not a locker service.

b) Francis Keeling VP of Digital At UMGI

Francis Keeling – the VP of Digital at Universal Music Group International took part in one of the sessions at the Great Escape and his remarks were reported by a number of outlets including the BBC and Bilboard Business. According to Billboard, Keeling stressed his belief in subscription models like  Spotify, backed the freemium model and remarked on how the slow pace of acquiring licenses is essentially stalling the industry. The BBC article instead focused on Keeling’s take on Piracy – that is still clearly seen as a number one enemy in the creation of a healthy business – a problem that needs to be tackled especially in those countries, like Spain and Italy, where there is the feeling the music is free and therefore there is no reason to buy it. Keeling also backed the Digital Economy Act – telling delegates on the subject of the yet-to-be-determined sanctions that “The solution needs to be fair, proportionate and implemented well,”

c) China and the music industry through the eyes of young entrepreneurs http://newsblog.thecmuwebsite.com/post/The-Great-Escape-UK-music-entrepreneurs-on-the-potential-of-china.aspx

And finally there is a really interesting article on the CMU website about the session focusing on the Chinese music market. This year five of the participants in the Brit Council’s UK Young Music Entrepreneur Award were selected to take a trip to China at the British Council’s expense in order to understand the market and develop business proposals that could expand their own companies into China. These included representatives from well-known companies like Mixcloud and Songkick. The participants found several issues that stifle the development of a healthy music market in China. First of all although the population is around a billion – that does not mean that there are a billion music fans and although the music scene is expanding it’s still an underground phenomenon, second there is lesser chance of endorsement by large international brands because of the success of local equivalents such as Baidu for example, third even though the number of music events has increased exponentially there are still only 5,000 concerts per year, fourth the issue of government control and censorship is still a pressing one. Nevertheless in spite of the challenges – all five participants remarked on how many opportunities there are in China to create a business and expand it quickly given that many of the major players that already dominate the market in the west are simply not there. Certainly an interesting experiment from the British Council!

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