Music on the radio (and later MTV) has always been free for fans. Advertisers paid for it on the fans behalf. In fact the record labels were willing and eager to actually pay to have their songs playing for “free” on the radio, but that was deemed illegal.

Record company execs monetized those free plays by selling packages of convenience in the form of discs and tapes so that fans could have, on demand, the music that they liked. Those packages also had collection and connection value to fans, which the industry has all but forgotten. Not surprising, I guess, since the industry is predominantly run by lawyers. (See Rule #1)

The MP3 is now the most convenient medium for music rendering the convenience of tape and disc packages irrelevant. The problem I see is that the industry is trying to treat MP3s as the replacement for the packages they once sold. They want to now sell MP3s: just the audio files, but they have never sold audio files. They gave audio files away for free on the radio. Record companies and performers sold packages. It should not be surprising when people view these naked MP3s as FREE. It's just a type of radio. It's not what fans buy.

I made a post on what I thought was the essential architecture of a digital music package. The top left section represents the metadata or facts that describe:
1. An artist, or
2. A group, or
3. A song, or
4. An album or music collection

Presently there are a number of options for this:

All Music Group (AMG)

AllMusic.com
Pros: Structured data, highly accurate, deep in content for major artists
Cons: Private, terms and license not open, not offered as a Web service, not timely as most indie and non-English bands are not represented, cannot be updated by third parties

Audioscrobler

Audioscrobler.com
Pros: Web service, timely metadata
Cons: Private, terms and license not open, light on artist content as metadata focused on discovery and social map, cannot be updated by third parties

Music Brainz

MusicBrainz.org
Pros: Non-profit, open, free, structured data, updateable by community, pull web service
Cons: Complex model, incomplete and inaccurate content, difficult to maintain and update, not offered as a Web service No API for updating/writing to the service

Wikipedia

Wikipedia.org
Pros: Non-profit, open, free, in depth and highly accurate data, timely updates
Cons: not structured data, not offered as Web service.

Why are non-profits better for offering a metadata service?

You may be wondering why I listed non-profit entities as a pro, and private companies as a con. My friends are wondering – that’s for sure. The reason is simple, and it has nothing to do with wanting to sit around the open Web campfire singing “Kum By Ya”. It’s pure economics of the new digital world.

Non-profits are simply the stable entity for offering metadata, whereas private companies will be inherently unstable. Music metadata is factual content about known items. As such the cost of acquisition of this data is quite low and falling. The price of metadata, like that of music will approach ‘near free’. Wikipedia already offers better quality music metadata than the other 3 services combined. If Wikipedia data was offered as a structured web service it would be game over.

Check out Wikipedia’s entry on Pink Floyd.

Check out All Music Group’s entry on Pink Floyd

Save for music moods and similar “taste” data, Wikipedia’s is far richer for describing the band's history and relationships.

As for timeliness it’s no contest:
Check out Wikipedia’s entry for local Vancouver band, Art of Dying

Against All Music’s Art of Dying entry.

An indie band has to stop being "indie" before they will be properly covered on AMG.

Why didn’t Music Brainz make it as the default service?
It was staffed by wonderful, incredibly smart, and committed people who understand the need for a free and open metadata service. However, in my opinion Music Brainz is simply way to complex, tedious, and time consuming to update. Wikipedia on the other hand is dead simple. End of story. However, the Music Brainz still has a lot to offer as we discovered.

Building new music metadata Web service

Unless you have deep pockets AMG is out of the question, but Wikipedia does not provide a web service with structured data. So, how can new Web based music businesses effectively use the data?

So to solve this problem we have taken Wikipedia and joined it to Music Brainz to get structured Wikipedia music metadata. That’s cool and useful. At least we think it is.

We will be offering it as a free “for commercial use” Web service in a few months. Sure, we could offer this service at a rate to undercut All Music Group and there would be many takers, but then someone else would come along and under cut us, and so on, and so on, until finally the price was near the cost of offering the service – the margin, or “near free”. So let’s skip all of that rigmarole and go right to free service.

A service like this will help give the hundreds of small music service companies trying to innovate a leg up and an opportunity to innovate rather than trying to collect or pay for music metadata.

Yes there are costs to offering this service: support, hosting and maintenance. We figure the way to pay for this is for companies who hit the service frequently to pay a minimal fee. Hence, ‘near free’. So a new company can use the service for free and make money using it. Once thet grow to the point where they use the service frequently they can help support the infrastructure by paying a small fee.

We are still about 3 months away from releasing it as a service to the public. So, if someone comes along and offers this service before we do, great, we should all use it. The economic rules won’t change.

However, should people take to our implementation, we are going to need some help. Maybe Jimmy Wales can take it over as part of the Wikimedia Foundation. It is using data from his baby after all. Maybe Mozilla or Music Brainz can help and show how this can be managed. We are open to and are actively seeking suggestions.

In my previous post, I described a basic music experience that I would like to have. In this convenient experience there are two types of content with two classifications.

A. The two types of content. Let’s call them:
1. Official Content .
2. User Generated Content , or should I say Fan Generated Content.

and,

B. The two classifications of content. Let’s call them:
1. Free Content. Content that is readily offered without thought to compensation.
2. For Sale Content. Content that the owner wishes to make some financial return. It may be offered for free in lieu of other considerations.

So we have four quadrants:

Quadrant 1: Facts

(Top Left)
The upper right quadrant of Free/Official content. This is the metadata and factoids for the song, album, or artist in question. It can also be the meta-media, which the copyright holder is offering openly for consumption, such as album art, liner notes, possibly even lyrics.

Quadrant 2: Original and Fair Use

(Top Right)
This is original and fair use content generated by the fan. This is the reviews, photos, artwork, opinion, etc. It may even be copyrighted material under fair use provisions.

Quadrant 3: Creative Works

(Bottom Left)
This is the creative content developed by the artist(s). This includes audio, video, pictures, imagery, interactive content, etc. Consumption can be “Free”, and compensated by other modes other than money. This can be any type of content not just the typical song, pics, and video. Think interactive digital items. Widgets if you must, but don't limit your thinking to the common Flash widgets populating the web-o-sphere at the moment.

Quadrant 4: Derivative Works

(Bottom right)
This is content that has been remixed, mashed-up, reused and re-published as a derivative work. The question mark represents content that will be anything that reuses column 1 content. Like quadrant 3, we shouldn't pigeonhole this region to video, pics, audio, etc. Also, let's not forget that other artists can be fans, too.

We believe this is the essential architecture for a digital media package solution.

I talked about how the Barenaked Ladies USB music package "Barenaked on a Stick" had some promising ideas around content packaging but the experience was ripped away. So I thought I would describe a simple experience that I would like to have, starting with one of my all time favourite songs.

So, here is what I think a simple recorded music experience could be.

I have a music audio file. Now here is an important point – it doesn’t matter where or how I got it. If you think it matters where I got that file, you should stop reading now. The rest will be lost on you.

In my case the song is Money by Pink Floyd. It’s one of my favourite all time songs.

I want to play it in my music player. Any damn music player I want. In this case my Xbox.

I want the player to tell me some facts about the song.
The album, when it was recorded, who played on it, general liner notes, maybe the lyrics, you know standard factoid stuff.

I would like to be offered more content, too. Give me some videos, interviews, icons, flash movies, and pictures. I never did hear the live solo recording David Gilmore did of Money. Give me that, too.

I would also like to have access to all the fan generated content around the song. Fan art, pics, videos. What part of The Wizard of Oz is playing to Money in The Dark Side of the Rainbow? Does The Dark Side of the Moon and The Wizard of Oz really synch-up? Show me.

I want the ringtones, sure. Whatever.

Gimme the files for my iPod, but can you replace my crappy 128 MP3s (who cares where I got them from) with 256 AAC while you’re at it? Thanks.

Is Roger Waters still touring and performing The Dark Side of the Moon?

Hey, I couldn’t get to Live 8 to see the reunion concert. Could I watch the Live 8 HD recording of Money? Cool.

Oh, and I want to mash-up and remix all the digital media, too. That would be fun.

I want to know when other fans of Money make interesting mash-ups and remixes.

I want to know when that unheard of band in Youngstown, Ohio does the definitive cover of Money. I’ll be the judge if it is the definitive cover by the way, thank-you very much.

Hey if the band ever releases that early demo track of Money from 1970, can you give me that too please. Thanks.

I want everyone to know that I am a big fan of Pink Floyd and Money is one of my all-time favourite songs. It is important and it’s true.

And for God’s sake let me know immediately and give me front of the line tickets if Pink Floyd ever tours together again. I mean it. Don't you dare forget me.

Now understand that’s just one simple experience. One of many, but that’s something I will pay for, but please make it convenient!

What’s your experience?

Three years ago, I began asking the question what if music was free. I should have been clear, by music I meant the audio file.

At that time however, I had trouble convincing anyone that DRM was doomed. It was pointless and an only an obstruction to the industry evolving. I know that everyone now believes DRM is dead, but three years ago, people looked at me like I was crazy. I tried to talk to VCs and media pundits about investing in or covering media technologies that would emerge in a non-DRM world. Laughter would have been a more pleasant response than what I got. One "Angel Investor" even told his colleague in a crowded room - in my presence - this guy (motioning toward me) doesn't understand how the business world works. His idea doesn't have a chance. I only thought of my bright cheeky reply the next day as I was fuming in bed. I hate when that happens.

So, there was very little reason for me to try and convince anyone that my experience was also telling me that audio files are going to eventually be priced at the margins. That would be near the cost of delivery. That would mean "near free".

Kevin Kelly, Chris Anderson, Gerd Leonhardand Fred Wilson are finally galvanizing opinion that business models exist around offering the underlying media for free (you may have no other choice).

Although music is what most are focused on today. The same is true for any media which can be digitized.

Answer the question:
How am I going to make money if everyone can get my media for free?
Once you answer that you need to ask, how can I get people to ACCEPT/TAKE my media because I need their ATTENTION to it to make money?

Welcome to the new world.