The Equity Kicker

This deal has been reported on in detail on GigaOM and by Jason Ball, but in summary MySpace has cut a deal with a group of independent music labels and legal peer to peer download service Snocap to sell DRM free MP3s.  A neat feature of the deal is that individual users can put a line of code on their page to sell music from their favourite band.  It looks like MySpace, Snocap and of course the labels share the revenue, nothing for the user.

The music will be unprotected MP3s.

That is either very far-sighted or very stupid.  The major labels will think the latter and avoid this like the plague in the fear that rampant copying and piracy will hit sales.  They might be right, but they just might be wrong.  The other way this could play out is that untethering legal downloads from annoying DRM restrictions might send sales through the roof.  I would like to believe this will be the case, but I really don’t know.  One thing is for sure - it is great that the indy labels have the guts to experiment like this.  We will all be the richer for it.

In the past music hasn’t been protected by DRM, and people have always been free to make copies and give them to their friends.  Things never got out of control because burning CDs and making tapes is a bit of a hassle.  Digital music is much easier though - music files can be emailed around, or shared using networks like Allpeers.

For this to work, over the medium to long term artists and labels need to make a living - if there is too much copying then they will stop selling unprotected files and we will be back where we are today.

This experiment will be closely watched by Hollywood and other video content owners.  If unprotected distribution works for music then it should also work for film.

Also interesting is the peer to peer delivery infrastructure.  With Joost and others adopting the same model for delivery of broadband TV peer to peer is starting to emerge as the dominant architecture.

Finally - this news nicely follows my post last Friday: The Long Tail theory is playing out well for music lovers.  I was responding to suggestions that niche music producers were getting squashed by the death of the record shop with the point that these labels and artists aren’t dying, they are simply using new distribution channels on the web.  Then two days later Myspace make this announcement.  If only some of my football predictions (and bets) were as prescient….

Posted on January 23rd, 2007 under Business models, Consumer Internet, MySpace, PCTV, Social networks, TV, Venice Project. RSS 2.0 feed. Leave a response, or trackback.