by Ben Silverman

Welcome to 2002: The Year of the Living Dangerously. For the record labels that is.

The major labels took their sweet time and finally rolled out Pressplay and MusicNet, online music subscription services, as 2001 came to an end. The reaction thus far has been, in a word, blah. And the reaction I am talking about is not coming from consumers, it is coming from inside the industry.

"The services are useless right now," one major label executive told me. "Unless we crush file-swapping, we'll fail online. And if that happens the industry will have to rethink its strategy beginning at the pressing plants."

While those words seem harsh, another major label executive chimed in with even harsher words.

"I bought my kids a subscription to both services but they're still using KaZaA. My son told me that KaZaA is easier to use and offers faster downloads. My daughter was more blunt. 'They suck,' she told me."

Kids say the darndest things.

Some in the industry speculate that Real Networks and Microsoft, the two software companies powering the competing services, are dictating the strategies for Pressplay and MusicNet.

"There is no downside for them," a tech savvy industry insider told me. "If [Pressplay and MusicNet] fail it won't impact their businesses. But our asses are on the line."

Another insider said he felt that the labels input was being ignored because "we're considered stupid media people by the techies."

While neither service has launched full-scale marketing campaigns, insiders worry that marketing will further alienate fans.

"We're asking people to change the way they've been using the Internet when it comes to music. It's not as simple as saying, 'Ok, we now have compact discs and they offer better music quality so stop buying cassettes.' How do you market a fee-based service that competes with free services and offers nothing new or even better?" a long-time marketing executive at a major label told me.

Indeed, neither service appears to offer anything that can't be found on KaZaA, Audio Galaxy and other peer-to-peer services. While offering music fans downloads, streams and "burnability" in legitimized environment, the services are devoid of anything worthy of note.

For Pressplay and MusicNet to be successful, the labels will have to work closely with partners to build specialized services that offer "inclusion."

"The music fan loves to feel like a part of the scene. They love to feel included," the marketing maestro told me. "If we stream concerts, that's a plus. If we offer subscribers special ticket prices or unreleased CDs, that's a plus. We need to offer [music fans] something that they do not have access to and can't easily obtain access to."

Pressplay and MusicNet could be successful, according to most of the industry people I spoke to. But it will take time, money and some forward thinking.

"The music industry has alienated its consumer base," a major label executive told me. "We need to befriend them again."

Good luck.

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Ben Silverman is the editor of DotcomScoop.com, a daily news publication covering the Internet, technology, telecommunications and media sectors. He formerly owned and operated an independent record label and artist management firm and covered the music industry for various online publications. He can be reached at editor@dotcomscoop.com.

I think it's going to be hard for the labels to befriend us while they are in the midst of taking away the versitility of our PURCHASED music.

Hmmm..... any music you want for free, or a very limited selection for a price. What sounds like the best choice? The major labels will never win!

I am glad you guys informed me about www.weblisten.com a few months ago. They offer the kind of service we all want. Low Price, Flat Rate no protections. That's the way to do it.

I just love it. My audiocd collection has never grown so fast.

I sure hope those US recordcompanies will follow this Spanish example soon.

The RIAA is a BIG LOSER at this game. Not only are there much better services out there than MusicNet and Pressplay, (See Weblisten.com, KaZaa, Gnutella, etc), even some of them are free, and do not use DRM!


What the RIAA should do if they were to get smart.

1) License Music to others, including non-label owned download and P2P services like Napster, Aimster, AudioGalaxy, MusicCity, KaZaa, Grokster, and others. Allow them to use MP3, Ogg Vorbis, and other "consumer desirable" formats, and allow the internet music only companies to use their own infastructure to distribute the music. License Opennap operators too.

2) Stop being so peristent about Digital Rights Management. It annoys customers, and reduces customers. Many people want to burn their music to CD, and use them on their portable players.

3) Make subscription services that have better catalogs of music, and are more feature rich than Gnutella. I bet if a service was as good as Napster used to be, people would sure subscribe to it, if it was reasonably priced. Weblisten is a good example of this.

4) Make all downloads and CDs playable on all OSes, not just windows. Macintosh, Linux, BeOS, Unix and other "non-windows" OSes should not be left out of the internet music revolution.

5) Don't worry about Gnutella and Freenet too much. Decentralized technologies cannot be sued, nor can they be shut down easily. These will probably exist for quite some time. What I would recommend doing about these, is for the labels to sell BLANK CDs, and charge about 50 cents per month, on each persons internet service, with 50% of it going to artists and songwriters.