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.

Evidently the world's greatest music collection is for sale. The minimum bid to purchase this collection is $3,000,000. It has been valued at $50,000,000. By whom and how this collection was valued I do not know.

I actually find this very intriguing. It is indeed a massive collection:

The listing states:

"Every recording in the collection was purchased by the collection's owner over the past fifty years and represents a lifetime of work and his desire to see the music preserved for future generations. Advancing age and health concerns are forcing the owner to sell."

Is this collection really preserving music? Perhaps there are songs on those pieces of vinyl that have not been digitized. But this pic below is clearly thousands of CDs:

If someone offered, 30 million MP3s, what do you think the chances are that someone would buy it for even $1,000,000?

There is a collection here, but it is not the music. It's the packaging.

For Christmas of 2005, I bought Barenaked on a Stick. It was a USB stick that contained songs mostly from their Barenaked For The Holidays album.

The music was in MP3 format and the USB stick also included videos, live recordings, some of their famous onstage banter, pics, liner notes, and animated GIF buddy icons. The actually physical packaging was pretty sparse and utilitarian as you can see. The price point was $40.00. That’s pretty expensive compared to CDs. However, this package wasn’t for the public or casual music consumers it was for fans. Fans bought it and it sold out.

"Barenaked on a Stick" sold out despite only being sold online and at the live shows. It seemed record stores had no clue on how to stock the item. Get that, a music store has the opportunity to sell a music product with a $40 price point, but chooses not too since they cannot figure out how to stock it. Even Amazon wasn’t sure what to do with it. They put it in the electronics section not surprisingly the same place where blank CDs are sold.

So music on a CD or DVD is sold in the music or entertainment sections of a store not in electronics where blank CDs or DVDs are sold. Yet, music on a USB stick is sold in electronics. If you stop and think about it, this situation reveals a lot about why recorded music industry has struggled. They forgot what it was that they actually were selling.

Anyway, I had a pretty high sense of satisfaction after I bought it. I read the liner notes, and actually used the pics on the stick as my computer screensaver slideshow. I watched the videos and listened to the banter a few times, but once I had moved the music to iTunes and my iPod, I never consumed the media that came with the USB stick again. The screensaver has changed and the actual USB stick is long gone now, too.

My music is now completely divorced from the packaging that I had paid for. Naturally, it would be great if I had that content easily accessibly to me whenever I wanted (on any device). Which is likely whenever listened to Barenaked For The Holidays. This is the simplest reason why I believe that music packaging needs to be offered as both local files and as a service.

Continuing on my digital music packaging discussion. I thought I would talk about the potential market for these packages.

“What’s your market,” asks the VC?

“The people who bought CDs,” is my answer.

“No one buys CDs anymore,” they retort.

“That’s why there is a market for digital music packages,” I reply.

Why we bought music packages?

As I pointed out in my previous post, people* bought vinyl, tape, and CDs for 3 primary reasons:

1. Convenience, which included listening on-demand, portability (tapes), durability (CDs), and acquisition (MP3s)
2. Collectablity. These music packages were expressions of who we were and our social status.
3. Connection. Albums and CDs connected us with the artists and bands we loved.

*Who are these people who bought albums?

Well in the 1990s buyers of CDs were roughly15-20% of the population in North America. That’s buying one (1) CD or more in any given year. During the 90s I bought on average 60 CDs per year. People like Ian Rogers bought 60 in a month! I would fathom a guess that I would represent 1% of the population. Ian Rogers 1/100th of 1%?

“Well that doesn’t seem like much” , says the VC?

“Well that represents *about $8 billion in yearly NA sales,” I say.

*Note: After reading a number of IFPI reports I have no confidence in their numbers. They just don’t add up from year to year. A colleague of mine believes it is a result of their somewhat erratic methods of data collection.

Let’s break up the market

The market is made up of:
Insiders – musicians, reviewers, industry. These guys and gals don’t buy music. Ok, I know a few do, but we can assume it is VERY small over all. The industry does not run on musicians selling to other musicians. (Then again. I think it does in the local Vancouver indie scene.)

Fans - these are people like myself who bought more than 1 CD per year and supported the recorded music industry. These are the people who buy for Collecting and Connecting. However, when looking at this group, I would say you probably are not a fan if you purchase less than 3 CDs in a year. So let’s extract those who bought only 1 or 2 CDs per year. I call these people…

Consumers - I know a lot of these people. You do, too. These people bought CDs for convenience to play in their car, or during parties, or what-have-you. They didn’t follow the artists they purchased. It was about listening to music they liked (or was popular) when they wanted it. As such this group is unlikely to buy digital music packages. I do not know what percentage of the market this group represents other than from some ad hoc surveys we conducted. If anyone has some research on it, I’d love to hear from you.

Public - these people did not buy CDs in a given year. They represent most of the people you will ever meet in your life. We love them. They are mothers, fathers, sisters, brothers, and friends, but they don’t buy music. Interestingly the industry wants to monetize them unwillingly in a number of horrible culture tax schemes. I will leave that for another post.

Below is a diagram illustrating the potential market for digital music packages. The biggest hole as I pointed out is what percentage do music consumers represent verus the music fans.

BTW. I actually didn’t recognize that the diagram looked like a CD until my colleague Seamus pointed it out. So Loren quickly re-authored it. :)

When Ian Rogers posted his Aspen presentation, I received a lot of requests asking to see what we are building and how they could implement it. That’s pretty exciting, but I wonder how many people have actually thought what a package actually means. Although it is too early to show what we are working on, I think its past time we start talking about it more openly.

First, I think it is important to talk about why we began pursuing an open packaging format for music in the first place. My company, Project Opus, originally began as a service for independent music artists and entertainers to self-publish and distributes their own music with a focus toward ‘local music’. Our intent was to further develop the social networking tools for the filtering of music on the site: mine the long tail if you will. We even built one of the first embeddable music widgets for selling digital downloads.

No one values digital audio files

This seemed like a smart approach, and I think it still is in some respects. Except, I discovered that the economics of offering digital music for sale simply were not there no matter how you slice it. Add to that the fact that many new artists are simply choosing to give their music away. They need to get heard, and let’s face it that makes sense for new artists. I cannot argue against it.

Market forces are driving the price point of digital audio files down towards a marginal price. Note I am not using the term music – it is my opinion that people clearly value music. People just don’t value the format it is being delivered in anymore.

Why are consumers not valuing the audio files?

To understand this I think we need to look at recorded material we did value. In my opinion recorded music purchases are about experiences. Until recently recorded music has always had a package that enhanced a fans experience.

First there was vinyl.

1. Convenience. I can listen to my favourite music on demand. This was the most important reason I bought an album. Convenience trumps everything.
2. Collectablity. It is an expression of who I am and my social status.
3. Connection. with the artist or band. Albums included liner notes, pictures, notes, artwork, poetry, rants, stickers, etc.

The Dark Side of the Moon was one of the first albums I ever bought.

Then there was 8-track and cassette.

Tapes significantly reduced the quantity and quality of the “stuff” that connect me with artists, but it added a new element:

4. Portability. I could take my music with me. I could share my music with my friends more readily, which made them more collectable. Portability also enhanced convenience. Flipping through cassettes in your car or home was easy. You could be a bit rougher and less careful with a tape than with vinyl.

I bought The Dark Side of the Moon in 8-track. That was a mistake. I bought it again as Cassette.

Then there was CDs.

CDs provided the same as a cassette, but they also introduced:
5. Durability. I had friends who had bought the same piece of Vinyl or Cassette multiple times. We thought CDs were unbreakable and forever.

I bought The Dark Side of the Moon in CD as my cassette was worn out and sun bleached.

Now, I know many people would argue that CDs also provided consumers with an improvement in fidelity. Although true, I would argue that was not the reason for the global consumer adoption of CDs. Clearly, fidelity took a hit with the move from vinyl to tape, but that did not stop their adoption. A lesson should have been learned here convenience trumps fidelity, too.

Then there was MP3s

This lesson was ultimately learned with the MP3 revolution. Which introduced another element to convenience:
6. Ease of acquisition. I could get a song within moments of hearing it for the first time. Through official routes are still difficult, which just pisses us off.

MP3s are the definition of convenience and convenience trumps everything. However, in the consumer conversion to MP3s everything else around music has been completely stripped away. We are left with just a file on our hard drives with a thousand others.

I DID NOT buy The Dark Side of the Moon as a digital download.

Why are people less likely to pay for music – even though they have ultimate convenience?

People will pay for convenience but when the cost of delivering convenience is near free. That will be the price. But for many of us recorded music is something more than just the audio file. What of collecting and connecting? Mp3s do not provide:
- collectablity. Everyone can have an MP3 so how can it be collectable or be a reflection of me?
- connection. MP3s have been stripped of all contexts. It’s just a file on my hard drive.

It’s time that we reintroduce these two characteristics to the recorded music experience. However in doing so, we need to remember that convenience trumps everything.

If we get it right I will buy The Dark Side of the Moon again.