Was thinking about this a lot as I was writing about David's company. Very smart tie-in of of Twitter and 8tracks.
robdiana
· 1 year ago
I understand the Twitter constraints as they are based on existing systems. The 140 character limit is because it seems the plan was to support SMS without truncation. Money is always a driving constraint, so hopefully the UK problems can get resolved somehow.
Pandora is a different problem. They (internet music streams) are being taxed at a greater rate than any other type of service. Is there a good reason for this? I saw in one article that satellite radio was being charged almost half what Pandora is being charged. This is being controlled by one company (SoundExchange?). In many other industries, anti-trust allegations would be thrown around like candy. Because this is the music industry, people seem to be content saying they are idiots and moving on to the next issue. I would hate to lose a service like Pandora.
davidporter
· 1 year ago
Thanks for the mention and mix, Fred!
The notion of constraints def informed our approach, even beyond the webcasting rules. On one hand, we wanted to make it easy for people to create a mix, and compiling 1/2 hour of music (given an avg song length of 4 minutes, this translates to 8 tracks) isn't too much of a stretch for most. And while DJs on 8tracks can make much longer mixes (8 tracks is the minimum, not the max), we wanted to create a service with that target in mind to encourage thoughtful song selection and sequencing as well as more frequent mix-making.
Fwiw, we also allow DJs to input their Twitter username/password to automatically inform their Twitter network of new mixes they create : )
I just read of the Pandora situation yesterday afternoon, and it would be a shame if it were forced to close. In a way, 8tracks is fortunate in that we've a bit of runway to operate under the Small Webcaster terms -- the royalty for which is calculated as a % of revenue rather than fixed per-stream rate -- for the first year or 2 of operation, depending on how quickly we grow. Whether there's legislative change in the meantime remains to be seen, but we'll be reaching out to independent aggregators like the Orchard and IODA to seek terms that can be supported under an ad-based model. Indies represented ~1/2 the streaming at Live365, and their share in general will only continue to grow over time.
The interesting thing about Pandora (as I know you know but just stating for other readers) is that on-demand services like imeem pay some 5x-7x the webcasting royalty rate it pays (and that eventually we will pay). If Pandora can't make it as a sustainable business, there's absolutely no way an ad-supported on-demand service will be able to do so.
Nikhil
· 1 year ago
So it sounds like the SoundExchange with their "Small Webcaster" option are much more accommodating than the UK's PPL.
To me 8tracks feels like a legal Muxtape - sharing music and playlists for self-expression. I'm surprised to hear David refer to "DJs".
An ad-supported "on-demand" service may not be sustainable, but an ad-supported "interactive webcasting" service surely is? Is that not the category 8tracks falls under?
davidporter
· 1 year ago
Hi Nikhil - I use the term "DJ" loosely to mean a person who compiles a set, or playlist, of music. As with any DJ -- radio, club or otherwise -- it's arguably all about song selection, and the same is true with 8tracks.
8tracks is a non-interactive internet radio service. The various constraints Fred mentions are the things we have to ensure are in place to qualify (more on that here: http://8tracks.com/legal).
I believe the PPL rates are more expensive than the SoundExchange rates this year ($0.0014 per performance) but will not be so next year (when rates grow to $0.0018 per performance).
Nikhil
· 1 year ago
Okay cheers David. I got my terminology mixed up as it seems the UK terms are slightly different.
Non-interactive webcasting = pure webcasting
PKafka below mentions that no-one has managed to make "interactive webcasting" work at any scale so far. Is that indeed correct?
What about the "listen again" site for Bauer Music's radio portfolio: http://www.whatson.com/
And www.samurai.fm - they seem to be paying broadcast fees (but also have an extremely high CPM).
Does Gaydar Radio offer listen again functionality?
The status of a radio show or DJ mix with an available tracklist seems a tad ambiguous. You know what's coming up, but you're not able to "skip" straight to another song. I believe it's the functionality that determines the category - e.g. the BBC radio player used to only allow forwarding (in 5 minute chunks and a limited number of times).
davidporter
· 1 year ago
Hi Nikhil - the compulsory license established under the DMCA in the US only covers (currently) non-interactive webcasting, which means the provider must comply with the various requirements for radio-style delivery (short summary here: http://8tracks.com/legal).
Internet radio providers in the US (in general) have faced a challenge due to exceptionally high royalty rates. We achieved monthly profitability at Live365 in late 2005 through a business model that blended subscriptions (both DJ and listener) with advertising. Pandora is now nearly 5X the size of Live365, but it is not profitable as it must rely (primarily) on advertising.
I'm not sure exactly what you mean by "listen again" functionality but I'm happy to give you my perspective on this as well as what features might define a service as non-interactive vs interactive.
PKafka
· 1 year ago
No one's figured out how to make "interactive webcasting" work at any scale so far. See: Pandora threatening to throw in the towel. If David succeeds, he'll eventually have the same problems -- he'll need to produce the equivalent of $30 in revenue for every 1,000 views, and that is a tall order.
davidporter
· 1 year ago
Yes, this is true, particularly for music from the 4 majors, short of legislative change. Keep in mind, though, that the compulsory license does not preclude direct deals, and there is greater willingness to explore such deals when it comes to the independent label sector.
It's sad because all that's really needed is a change in *basis* for the royalty. Simply changing the royalty to a reasonable %-of-revenue rate (as is the case with terrestrial radio outside the US, and satellite and cable radio in the US, and composition royalties generally), and the industry is re-born.
The reason the rates are calculated on this unusual "per-performance" basis is an interesting but unfortunate story. Rates were initially established in 2002 based on the lone "marketplace deal" at the time, that between the RIAA and Yahoo, which the latter had intentionally agreed to so that "low-revenue webcasters would be unable to compete", as Mark Cuban put it. More on that here: http://www.kurthanson.com/archive/news/062402/i....
Howard
· 1 year ago
Another great post!
Doing less and launching now always beat doing a lot more later.
Reminds me of what the smart guys at 37 Signals have been preaching (and succeeding) with already. Well articulated in their Getting Real book. A very good "Related" read.
jeff
· 1 year ago
track 7on your 8tracks mix is listed as [object object] by [object object]...come to think if it, that could be a great band name...
fredwilson
· 1 year ago
Yeah it didn't recognize that one. I think its my beloved monster by the eels
davidporter
· 1 year ago
Fwiw, you can correct the missing metadata on any uploaded MP3s by clicking on the [edit] link next to any of the tracks in the Your Tracks tab.
We're working with MusicIP to fingerprint tracks -- so missing or incorrect metadata will be automatically fixed -- and this will be available shortly.
Jeremy Bencken
· 1 year ago
Interesting to consider Craigslist in this light-- they got the constraints part down, but make it impossible for others to innovate around their constraints (or block certain sites capriciously, making it impossible to build a business around their platform)... e.g. Craigslist served Oodle a C&D, but not Housingmaps for identical behavior. Refusing to become a platform may be the single greatest threat they face, and it's self-imposed.
fredwilson
· 1 year ago
I totally agree. Our portfolio company indeed has managed to build a great business in job search but craigslist doesn't embrace them while everyone else does. It only hurts craigslist and their paying advertisers in the end
Joe Lazarus
· 1 year ago
I just noticed that this post and the version on Silicon Alley Insider share the same comment thread...
Cool trick. Is that a Disqus feature or just a some sort of hack that SAI did specific to this post?
fredwilson
· 1 year ago
it's something we've been doing for a few months now. when AI and I talked about them re-running some of my posts, I asked them to share a single comment thread. and we worked with disqus to make it happen. i honestly don't know how AI is doing it, because they worked it out directly with disqus. i hope this becomes a feature that everyone can use because its great.
CG
· 1 year ago
I think it's great that there are efforts like this to stop fragmenting the conversation. Regardless of where the post is discovered, readers should benefit from all of the conversation. It would be great if Disqus could release a standardized way to share (and contribute to) single comment threads.
kortina
· 1 year ago
I could not agree with you more about a need to stop fragmenting conversation. I think FriendFeed, for example, does more harm than good in this area, and I applaud the efforts of disqus and now backtype to make conversation across multiple websites easier.
I saw your comment on my feed at backtype.com and when I clicked reply I was thrilled to see it link me directly to your comment in the thread on the original post. Awesome!
Are you guys releasing an API anytime soon? If so, let's talk.
...addenda... I just realized that although this post is on Fred's blog, the "you" I'm addressing another in my comment is another commenter, not the original author of the blog post. That is cool. Thanks for facilitating conversation / community, Fred.
Joe Lazarus
· 1 year ago
Very cool. It would be great if Disqus and the other comment systems could figure out a way to make this more universal so all comment threads followed content as it travels the web. It's a mess trying to keep everything straight between comments on my blog, on FriendFeed, on Facebook, and what not. Figuring out portable comment threads is probably a big job, but SAI's hack is a cool experiment to demonstrate the concept. Nicely done.
PKafka
· 1 year ago
Very easy for us (SAI) to do - we insert a single line of html into the post. We ran into a problem with one of Fred's posts (funky url, i think), but beyond that it's been easy. Don't know how much work it took on Disqus' end but gather it was relatively straightforward for them as well.
The only snag we've found for the re-posting site is that we don't have any control over the comment string, so if for any reason we wanted to edit something, we can't do it.
fredwilson
· 1 year ago
That's true (no edit) but fot this purpose its prob not an issue since it my post and if we get spam or a real ugly comment it will be on my blog too and I'll nuke it
I also think disqus could add group edit/moderation easily if this became a real feature instead of a hack
fredwilson
· 1 year ago
I totally agree and its one of the reasons I am drawn to the third party comment system idea
terra210
· 1 year ago
8tracks is great. Thanks for that. and yes, another interesting post. Am reminded of beautiful enigmatic music from "Ghost's Ive Met", http://tinyurl.com/5alzxw. Used for our earlier video call: http://tinyurl.com/696rqc
Nikhil
· 1 year ago
"Playing the rules." I wonder if that's what Beatport have done here?
If the ECC anti-competition actions go through, that certainly spells good news for the online music fraternity.
neuraxon77
· 1 year ago
"they need to build an api early on so others can take up where they left off."
I don't agree with 'build <en>an API' but do with early. Most APIs are evil, they add unnecessary constraints for many applications. What they should be building in are dataset query languages used to create 'views' of the data. APIs that define semantics early, often hinder innovation when 3rd party developers can't get the data they actually want.
Constraints are everywhere, it's choosing the right constraints for a specific task that's important. Forth programmers call this Thoughtful Programming. There's a book by Leo Brodie available online called Thinking Forth that exemplifies this. Forth could also be thought of taking constraints too far. ;)
Bruce Warila
· 1 year ago
Great post. My mantra for startups (music) comes from Google’s Chief Economist: “Provide a scarce complimentary service to something that is getting ubiquitous and cheap.” I love Pandora, but the service (recommendation) is no longer a scarce service, and the majors don't want their music to be cheap (ubiquitous yes). The only way the majors are going to play nice, is if you can build something they can't easily build/obtain on their own. Otherwise, I think you have to be prepared to have the margin squeezed out of your business.
Scott Watermasysk
· 1 year ago
I don't think the issue is related to Pandora competitors. If this was the "issue" wouldn't the price get closer to zero as it is for traditional radio?
I do not think it they should or need to get a free ride, but it seems a bit absurd to pay $2.91.
Then again, I am sure Pandora knew what it was getting into and I love the services, so I am very biased. :)
jeff
· 1 year ago
I don't think shutting down completely is the answer. SmoothJazz.com is a great example of how internet radio can thrive. A few years ago they began to play only the artists who signed an agreement that waves the music industry fees. There are still a few major label artists who are played (those who signed an agreement) but many independent labels get spins. There is a lot of great independent music out there and I think that the station sounds better than ever. All Pandora has to do is let their artists choose how important it is for the artist's songs to be heard on Pandora. There will always be plenty of great music to listen to all day long. It might even improve the service as we might not have to sit through overly commercialized music.
spiridellis
· 1 year ago
Orson Welles said it best: "The enemy of art is the absence of limitations."
doris cheng
· 1 year ago
The post and comments are very helpful for us to set the usage limits so we can provide a social networking service based on remixing friends into social circles using drag and drop without losing our shirt.
Georg
· 1 year ago
On the legal music side I think soundcloud.com was one of the more interesting concept I came across in recent times.
All Comments
Pandora is a different problem. They (internet music streams) are being taxed at a greater rate than any other type of service. Is there a good reason for this? I saw in one article that satellite radio was being charged almost half what Pandora is being charged. This is being controlled by one company (SoundExchange?). In many other industries, anti-trust allegations would be thrown around like candy. Because this is the music industry, people seem to be content saying they are idiots and moving on to the next issue. I would hate to lose a service like Pandora.
The notion of constraints def informed our approach, even beyond the webcasting rules. On one hand, we wanted to make it easy for people to create a mix, and compiling 1/2 hour of music (given an avg song length of 4 minutes, this translates to 8 tracks) isn't too much of a stretch for most. And while DJs on 8tracks can make much longer mixes (8 tracks is the minimum, not the max), we wanted to create a service with that target in mind to encourage thoughtful song selection and sequencing as well as more frequent mix-making.
Fwiw, we also allow DJs to input their Twitter username/password to automatically inform their Twitter network of new mixes they create : )
I just read of the Pandora situation yesterday afternoon, and it would be a shame if it were forced to close. In a way, 8tracks is fortunate in that we've a bit of runway to operate under the Small Webcaster terms -- the royalty for which is calculated as a % of revenue rather than fixed per-stream rate -- for the first year or 2 of operation, depending on how quickly we grow. Whether there's legislative change in the meantime remains to be seen, but we'll be reaching out to independent aggregators like the Orchard and IODA to seek terms that can be supported under an ad-based model. Indies represented ~1/2 the streaming at Live365, and their share in general will only continue to grow over time.
The interesting thing about Pandora (as I know you know but just stating for other readers) is that on-demand services like imeem pay some 5x-7x the webcasting royalty rate it pays (and that eventually we will pay). If Pandora can't make it as a sustainable business, there's absolutely no way an ad-supported on-demand service will be able to do so.
To me 8tracks feels like a legal Muxtape - sharing music and playlists for self-expression. I'm surprised to hear David refer to "DJs".
An ad-supported "on-demand" service may not be sustainable, but an ad-supported "interactive webcasting" service surely is? Is that not the category 8tracks falls under?
8tracks is a non-interactive internet radio service. The various constraints Fred mentions are the things we have to ensure are in place to qualify (more on that here: http://8tracks.com/legal).
I believe the PPL rates are more expensive than the SoundExchange rates this year ($0.0014 per performance) but will not be so next year (when rates grow to $0.0018 per performance).
Non-interactive webcasting = pure webcasting
PKafka below mentions that no-one has managed to make "interactive webcasting" work at any scale so far. Is that indeed correct?
What about the "listen again" site for Bauer Music's radio portfolio:
http://www.whatson.com/
And www.samurai.fm - they seem to be paying broadcast fees (but also have an extremely high CPM).
Does Gaydar Radio offer listen again functionality?
The status of a radio show or DJ mix with an available tracklist seems a tad ambiguous. You know what's coming up, but you're not able to "skip" straight to another song. I believe it's the functionality that determines the category - e.g. the BBC radio player used to only allow forwarding (in 5 minute chunks and a limited number of times).
Internet radio providers in the US (in general) have faced a challenge due to exceptionally high royalty rates. We achieved monthly profitability at Live365 in late 2005 through a business model that blended subscriptions (both DJ and listener) with advertising. Pandora is now nearly 5X the size of Live365, but it is not profitable as it must rely (primarily) on advertising.
I'm not sure exactly what you mean by "listen again" functionality but I'm happy to give you my perspective on this as well as what features might define a service as non-interactive vs interactive.
It's sad because all that's really needed is a change in *basis* for the royalty. Simply changing the royalty to a reasonable %-of-revenue rate (as is the case with terrestrial radio outside the US, and satellite and cable radio in the US, and composition royalties generally), and the industry is re-born.
The reason the rates are calculated on this unusual "per-performance" basis is an interesting but unfortunate story. Rates were initially established in 2002 based on the lone "marketplace deal" at the time, that between the RIAA and Yahoo, which the latter had intentionally agreed to so that "low-revenue webcasters would be unable to compete", as Mark Cuban put it. More on that here: http://www.kurthanson.com/archive/news/062402/i....
Doing less and launching now always beat doing a lot more later.
Reminds me of what the smart guys at 37 Signals have been preaching (and succeeding) with already. Well articulated in their Getting Real book. A very good "Related" read.
We're working with MusicIP to fingerprint tracks -- so missing or incorrect metadata will be automatically fixed -- and this will be available shortly.
http://www.alleyinsider.com/2008/8/learning-to-...
Cool trick. Is that a Disqus feature or just a some sort of hack that SAI did specific to this post?
I saw your comment on my feed at backtype.com and when I clicked reply I was thrilled to see it link me directly to your comment in the thread on the original post. Awesome!
Are you guys releasing an API anytime soon? If so, let's talk.
...addenda...
I just realized that although this post is on Fred's blog, the "you" I'm addressing another in my comment is another commenter, not the original author of the blog post. That is cool. Thanks for facilitating conversation / community, Fred.
The only snag we've found for the re-posting site is that we don't have any control over the comment string, so if for any reason we wanted to edit something, we can't do it.
I also think disqus could add group edit/moderation easily if this became a real feature instead of a hack
http://www.bumastemra.nl/en-US/OverBumaStemra/A...
http://www.bumastemra.nl/en-US/OverBumaStemra/A...
If the ECC anti-competition actions go through, that certainly spells good news for the online music fraternity.
I don't agree with 'build <en>an API' but do with early. Most APIs are evil, they add unnecessary constraints for many applications. What they should be building in are dataset query languages used to create 'views' of the data. APIs that define semantics early, often hinder innovation when 3rd party developers can't get the data they actually want.
Constraints are everywhere, it's choosing the right constraints for a specific task that's important. Forth programmers call this Thoughtful Programming. There's a book by Leo Brodie available online called Thinking Forth that exemplifies this. Forth could also be thought of taking constraints too far. ;)
I do not think it they should or need to get a free ride, but it seems a bit absurd to pay $2.91.
Then again, I am sure Pandora knew what it was getting into and I love the services, so I am very biased. :)