File Shearing

Remember Napster?

Oh, sure, it's so two years ago now, but remember all the time, energy and money spent by the record labels to beat it down? And how about all the time, energy and money now being spent doing the same to the similar services that sprouted in Napster's wake? Notice that?

After all those courtrooms and injunctions, the labels needed to come up with some by-the-books alternatives, and fast. That's why December saw the launch of the first two major-label-supported platforms to consumers: MusicNet, a joint venture among Warner Music Group, EMI, BMG Entertainment and RealNetworks; and Pressplay, backed by Sony and Vivendi Universal. Both feature music from their respective sponsors, plus a smattering of indies, and EMI has cross-licensed to Pressplay as well.

These systems face an incredibly steep climb. Napster-style peer-to-peer music trading is something consumers can really get behind. By connecting with others who've made their music available, users get free, unlimited downloads of virtually any music they want -- new stuff, old stuff, long-out-of-print stuff, even never-actually-in-print stuff. By contrast, MusicNet and Pressplay offer, to put it mildly, considerably less than that -- and for a fee.

"It's as if everyone had a satellite dish for free," says Erik Flannigan, vice president of music services for RealNetworks, "and a descrambler card for every premium channel on the dish. And then someone came along and said, 'Hey, we want to sell you 48 channels of cable TV instead.'"

Of course, the music on peer-to-peer is provided mostly by regular Joes who don't have any legal rights whatsoever to offer it up for downloading. Assembling the ultimate music marketplace is a piece of cake when you're neither seeking permission from nor financially compensating those pesky musicians and rights-holders.

Even though it was their infringement claims that got Napster (version 1.0) quashed, record labels don't own all the copyrights to the songs, either. Most albums are tangled up in labyrinthine combinations of labels', publishers' and artists' rights and approvals, as well as the same rights and approvals for any and all samples used in each song -- a big, screaming mess when you're trying to clear Hello Nasty for your digital subscription service.

Of all the many, many ways these services could be technologically and structurally organized, MusicNet and Pressplay turned out remarkably alike. Both offer fixed numbers of streams (click on a song and it plays once for you) and downloads (load a copy onto your own computer for replay over and over). RealOne, the first provider to offer access to MusicNet's library (AOL's version is coming shortly), allows you 100 streams and 100 downloads for $9.95 a month, while Pressplay's got several "tiers" of service, in various combinations. Pressplay also lets you burn 10 to 20 songs onto CD-R.

Though they're far from comprehensive, there's actually a lot of music found on both services, especially for those more into the Buzzcocks than Britney. In fact, despite all the copyright hoo-ha, the services' main problems aren't really lack of selection, though there are some glaring omissions (Bruce Springsteen and Madonna, to name just two). Nor are they technological limitations (the songs do sound kinda tinny, but so does lots of online music). Nope, the biggest impasses are the way things were set up.

First of all, the peculiar MusicNet/Pressplay duality means you need two services to get a reasonable selection of music. And unless you're particularly schooled in the complex interrelationships among the labels (okay, smarty-pants: Who owns Sire?), you'll have trouble figuring out which you want. Realistically, most people won't have a preference. Consumers just want all the songs, and they're gonna find half of them missing with either service.

Andy Schuon, president and CEO of Pressplay, acknowledges the problem. "I'm making it a mandate that we will come to terms with [the remaining majors]," he says. "The dialogue is ongoing, and it's not like we're far at odds. I would say sooner than later that will happen."

All right, then, so let's assume the rest of the music's on its way. Unfortunately, the problems don't end there. Unlike with peer-to-peer or a file you rip yourself, these downloads aren't yours to keep, despite the fact that you've paid for them. With both MusicNet and Pressplay, your music is playable only as long as you subscribe to the service; once you quit, all your files time themselves out. In other words, you'd no longer own the music -- you'd simply be renting it. (And this at the exact time when the film industry is proving that consumers actually want the opposite, given the through-the-roof success of DVD sales.)

For lots of music fans -- presumably the same ones who'd cough up $24.95 a month for Pressplay's Platinum tier of 1,000 streams, 100 downloads and 20 burns -- there's an appeal in actually owning your music collection. It's fun to show your friends your nicely alphabetized (or not) disks, your milk crates full of vinyl, or even a thousand MP3s on your hard drive. And it's reassuring to know they're yours -- forever.

But even for those who aren't particularly attached to plastic disks (or liner notes, or cover art, or lyric sheets), the impermanence is still problematic. MusicNet's the worse of the pair, with a cap on songs downloaded per month that's absurdly skimpy, especially when you realize that retaining some songs for the next month re-deducts them from that month's quota. In other words, if you downloaded ". . . Baby One More Time" in January and you want to hang on to it for February, you're going to have to give up a download one more time, baby. And with a 100-song limit, the most you can accumulate at any given time through MusicNet is about 10 albums' worth. Try impressing your friends with that collection.

In contrast, Pressplay's downloads are cumulative, meaning that new downloads are added to your quota each month. "You don't go to the store, buy the new Bruce Springsteen album, and go home and throw out the old one to make room," notes Seth Oster, vice president of corporate communications and public affairs for Pressplay. "That's not the way people collect." Then again, most collections don't require monthly rental fees just to prevent them from vaporizing, either.

Compare this to simply buying a disc of some sort and hanging on to it. Maybe you carted a 45 of "Antmusic" through two dorms and three apartments; faced with repaying for the tune every single month, it might suddenly feel dispensable.

Pressplay gives consumers a weensy bit to hang on to with its limited burning. No more than two tracks can come from the same artist, though, which rules out burning, you know, a whole album. ("You could over time," points out Oster -- though obtaining an album two tracks at a time over six months would really strain consumer habits.)

And, in case CDs are a little too old-school for you anyway: Neither service currently lets you transfer your music to a portable digital device, such as the Rio.

So there's still a lot to iron out. "We needed to start somewhere," explains Lisa Amore, a senior PR manager at RealNetworks, of their current file limit. "We decided 100 was a good round number to see what the usage rate is and how many downloads people are doing."

"[The services] know what people want," disagrees Jim Griffin, CEO of Cherry Lane Digital and a digital music analyst. "They want whatever they want, whenever they want it. What [the services are] trying to figure out is what they can give them from rights-holders."

And, as everyone involved is quick to point out, MusicNet and Pressplay have only been around for a little over a month. "They are 13-year-olds on a date," says Griffin. "They are fumbling with the buttons and the snaps. This doesn't mean it's not going to work; it just means that it's gonna work 10 years from now."


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