Posts from February 2006

The Wall Street Journal broke the news yesterday that Amazon is getting into the digital music business with both a music service and a new music player in an attempt to compete directly with iTunes and iPod.

I am rooting for Amazon bigtime because I believe the market for digital content needs a strong competitive dynamic and Apple has a stranglehold on music and its using its dominance there to start doing the same with video content.

The rumors are that Microsoft will also launch a combined player/service offering this year.  I will be rooting for them too if that rumor is true.

I like a lot of what I’ve heard about Amazon’s plans.  First they are going with a combined service/device offering.  Apple has shown that is what it takes to make it in the digital music market.  The solutions that have required the consumer to buy a device from one party and the service from another have not taken off.  Simplicity rules and the turnkey offering from Apple has won the day.

Second, I applaud Amazon’s choice of a subscription service like Rhapsody and Yahoo! Unlimited.  I am a paid suscriber to both services and love both of them.  Subscription is the best way to consume music digitally.  For a flat fee per month, you can listen to whatever you want.

The problem has been that subscriptions services have never been well integrated with devices. Apple doesn’t offer a subscription option which is one of the many reasons I have come to dislike iTunes.  Rhapsody To Go works with a bunch of windows media devices but I have never been compelled to buy any of them.

I am rooting for Amazon to come out with a killer device that is simple to use, looks great, has a good form factor, and works seamlessly with their subscription service.  If it’s anywhere close to what I expect from them, I will buy the service and the device and leave Apple altogether.

Finally, a word of advice for Amazon.  The big objection to subscription services from consumers is that they are uncomfortable not owning the music.  They hate the idea that if they stop paying for the service, they lose the music.  That is basically true with music bought in iTunes and played on the iPod as well, because of the fairplay DRM, but that fact seems to escape most consumers.

My advice to Amazon is to offer a "buyout" provision to consumers as part of the subscription service.  Market it as "rent to own".  When and if you leave the service, you get to keep a certain number of songs.  And make that number go up every month that you remain a member.  And use the popularity metrics based on listens to create the default suggestion for the songs you would keep, but let the consumer modify it when they want.  And allow the consumer to select whatever format they want the music in on their way out the door.

Then consumers get the best of both worlds.  A flat fee for all the music they’d ever want to lsiten to for as long as they are enjoying the service.  And the ability to keeep the music they most want to own on their way out the door.

I hope Amazon does this.  Because they have the opportunity to level the playing field in digital music (and other forms of digital content) and popularize the subscription offering in one fell swoop.  I can’t wait until they come to market.

BTW – The picture of the device at the top of this post is probably fictitious. I scraped it from Slashgear.

I have never gotten into Guided By Voices.  They are always on everyone’s list of great indie bands and so I have always wanted to like them, and yet I haven’t managed to get there.

Raj Bala is hell bent to change that with his Guided By Voices podcasts.  He plans to do a series of them, and has started with the first called An Intro To Guided By Voices (1986 – 1990).

I listened to it yesterday while walking around the city to various meetings and the like. 

I enjoyed the podcast, but can’t help but think of Paul’s comment to Janine in the Mass Hysteria podcast from February 2nd (16:49 into the show):

I have a love/hate relationship with Guided By Voices. Some of their songs sound as good as anything the Beatles ever did and some of their songs are just total garbage.

I wouldn’t go so far as to call any of the songs on Raj’s podcast "garbage" but there is an inconsistency to the work that I continue to struggle with.

I am going to do something a bit strange and blog a record I’ve never listened to. 

That’s right. I have never heard this record, Love Songs For The Hearing Impaired by Dan Baird.

So why am I blogging about it?

Because I keep getting recommended this record, in last.fm (neighbor radio), in amazon.com (customers with similar searches purchased), and on Jackson’s blog.  That’s a pretty strong set of recommendations in my book.

So why have I never heard it?  Well I didn’t buy it when it was made in the early 90s and now it’s not available on Amazon.com, iTunes, eMusic, Rhapsody, or Yahoo! Music Unlimited.  I suppose I can head down to the used record stores on Bleecker Street but that’s not my style.

If anyone knows where I can get this record online (and not used), I’d love to hear about it.

It’s supposed to be really good.

UPDATE:  I am currently bidding on a "like new condition" used CD of this record on eBay, inspired by Chris Fralic’s comment.  Wish me luck.

Jason Chervokas was the co-founder of @NY which along with Calacanis’ SAR were the two bibles of the NYC internet scene in the mid 90s.  I still miss Jason’s brilliant writing and everyday commentary on the technology and internet scene and wish he and Tom would put the band back together.

But regardless, he’s just penned what I believe is the perfect explanation of what is wrong with a subscription model in a digital world.  He calls is Media Wants To Be Free (But Not in the Way You Think).

His point is simple.  People are happy to pay for content but if they do, they want to use it everywhere.

As Jason says:

The universal appeal of peer-to-peer file sharing ….. in part has to do with the freedom from paying,
but even more so has to do with the freedom of use–not "use" in the
sense of piracy–redistribution for commercial purposes–but "use" in
the sense of personal choice within a neatly legal context.  In absence
of an industrial infrastructure to provide that choice, end users are
doing it for themselves.

EXACTLY

The other night I spent a half hour trying to figure out why a episode of Weeds that Jessica paid $1.99 for wouldn’t play on her powerbook laptop.  The reason?  Because we already had five other computers in the house authorized on the account she bought the song with.  What the hell does that have to do with anything????

I am sick and tired of paying ten times for the same content.  I want to pay once and use whenever and wherever the hell I want to.  I am sorry that others use that same freedom to pirate the same content, but I don’t and I resent the fact that I am treated like a thief by association.

Now that I have calmed down, let me finish by quoting Jason again:

Media companies–producers, owners of programming networks, distributors–had better start thinking not outside the box but outside the device and outside the pipe. That’s the information freedom that consumers want and that consumers will implement whether media companies like it or not.

I am glad that I am not the only one who sees the world this way.

Brad Burnham has a post up on the Union Square Ventures blog about the changing role of R&D in information technology investing.

It’s a good read.  Go check it out.

Brad Feld has a good post on why VCs don’t sign NDAs.

I have been in this business for 20 years and to my knowledge, I have never signed one.

Dave Jilk’s comment on Brad’s post is probably accurate as well:

– Separate from your reasons, I think the underlying reason VCs don’t
sign NDAs is that they don’t have to. They’re the ones with the
checkbooks — simple negotiating power instantiated as a standard
practice in the industry. ALL of us could claim your same reasons for
not wanting to sign NDAs — I don’t like to sign them — but I don’t
always have the negotiating power to say no.

It’s a competitive world out there. Entrepreneurs competing with other entrepreneurs, VCs competing with other VCs, companies competing with each other for the hearts and minds of consumers and businesses.

I often think that simple games like poker, bridge, chess, etc are great analogies for life in the competitive world.  And one game that I often think of in business is Risk.  I play Risk with my kids and although they love it, it can get superheated at times.  When one person starts to get on a roll, amassing territories and armies, everyone else gets annoyed.

And that’s when the enemy of your enemy is your friend. If there is a player who starts threatening everyone else, its gang up time.

And so it is with business.  There may be a company out there that you regard as a very worthy competitor, who you cannot imagine cozying up to for a nanosecond, and then another company makes a move that threatens both of your businesses in some way.  The CEO of that first company calls you and all of sudden you are best friends.  Because the enemy of your enemy is your friend.

These "friendships" can last days, months, or forever.  They are often temporary and based on bonds that will not last.  But every so often, they can develop into long term strategic partnerships. Because its easier to go out into the competitive world with some friends on your flank.  I forget who coined the term "coopetition" but there are certainly times when competitors can cooperate for long periods of time successfully.

But in any case, when you feel your business is threatened in some important way by a move by one of your competitors, look around.  You are probably not alone. And you probably have just made some new friends.

This seems to be the theme of the day.

The Gotham Gal has posted her rant on watching the Olympics.

I heard it live and in person this morning over breakfast.

And I agree with it 100%.

The company isn’t called Bigfoot anymore, but the news they made today is still big.

As longtime readers of this blog know, I was an investor in and Chairman of the Board of Bigfoot Interactive for years and was very pleased with the outcome when the Company was sold to Epsilon last fall and become Epsilon Interactive.  My post on that transaction is here.

Well today I heard the news that Epsilon Interactive has acquired DoubleClick’s DartMail business. It wasn’t entirely surprising to me because Al DiGuido, the CEO of Epsilon Interactive (formerly Bigfoot), had always thought that merging these two NYC-based email powerhouses would bring great benefits to the marketplace and his bottom line.

Well he got it done and I must say that I am very impressed.  It’s never easy to consolidate an industry and Al and his colleagues at Epsilon Interactive are doing it.  Good stuff.