Author Archive for silent

2008-2009 Take aways: Business Trends

Published
by
silent
on February 2, 2009
in General
. 0 Comments

Since the conception of the MuSMo project in 2006, we have been carefully reviewing a lot of digital music services (Web and Mobile). Some of the services are listed on our home page – we promise to provide an updated list soon. With the current financial tsunami, 2009 will be an interesting year for all start ups:

  1. B.R.I.C.: There is a world of innovation beyond the usual suspects. BRIC, an acronym for Brazil, Russia, India and China will step up its drive in innovating brand new digital music services. Unlike most Western & developed nations, BRIC services are not sheltered under copyrights/IPR. In many cases, the BRIC nations have understood and embraced the “pirate culture”. This might surprise a few, but in countries traditionally known for Copycats/Clones, their services often include a few more tricks (to combat the supposed figure of 98% pirate nations). Is this the coming out year for BRIC services?
  2. Business models: No one is totally absolved from the current financial tsunami, and with many Sugar Daddies (e.g. Vcs, PEs, Angels, IPOs etc) now out of the frameworks, it is time to go back to the basics – Building a sustainable profitable service business. This might sound cliché, but there are plenty Web 2.0 services with no visible or possible monetization model. Scale & amass users first, think about monetization later will not hold in today’s climate.
  3. Innovation & Copyrights: These 2 are intimately related and will increasingly act as a double edged sword. This is also related to point 1., and why we see greater innovation to occur in the B.R.I.C., innovation protected by a loose IPR system and under the gazing eyes of executives in large copyright owners in the Western developed nations (thanks to the language barrier).
  4. Experience: As a trend, we will all be continuing to push the boundary of digital experience. Learnings and exporting service experiences from the traditional brick & mortar sector helped established the digital service platform in the last 10 years. The time is ripe now to tackle concerns in the digital realm.

Critics of the music industries have accused many record labels and publishers of recognizing too late the value of digital.  The problem, however, is not only finding the right way to step into the digital arena, but in defining what music is nowadays.

Is advertising-supported the magic potion?

Published
by
silent
on March 27, 2008
in General
. 3 Comments

At the recent Future of Web Apps, Kevin Rose, founder of Digg and Pownce blessed us with his thoughts from open standards to Digg’s future.

What caught my attention was:

Are you concerned that if economic conditions get tougher and the ad market tightens up, that you’ll feel forced to sell?

Rose: Digg has 25 million people a month coming to the Web site. We’re not going anywhere. We have very strong financials, we have a very clear path to profitability, we have a small team. We’re 50 employees.

That’s Morse code for “We are not profitable now”.

Markus Frind, CEO of Plentyoffish.com, who is famous for raking in millions on the back of Google Adsense, one known official full-time employee and maybe 2 hours of work per week, recently blogged about his rough estimate on the running operational cost for Digg to be around USD$ 420k per month. Markus was also highlighted that Digg is nothing more than a collection of links to news stories that are indexed by Google – i.e. not as bandwidth intensive as media serving sites.

This got me worrying.

Digg teamed up with Microsoft in Advertising in 2H2007. The combined factor of an exclusive provider of display and contextual advertising deal with the timing when Microsoft was desperately searching for partners to extend their advertising empire means Digg probably got a great deal (Yes, I am speculating here). If under those circumstances, Digg is still on a very clear path to profitability, are advertising-only-supported web businesses sustainable?

What about sites like MuSMo who are expected to be rather bandwidth intensive? Are we doomed?

Or worse, what about sites such as Last.fm who are shouldering the burden of not just the high bandwidth cost but also the content licensing cost? Or are such sites, in general attractive acquisitions for mega companies such as CBS who can fund these projects under loss-leadership.

And content providers, do you really care? On the recent blog entry of David Porter who guess-timated the new internet radio royalty to be around 78% – David showed that the math doesn’t add up. Maybe content providers really do not need these internet radio sites…

My take, I sure do not want to be in a non-profitable non-sustainable business. But is it irrational of me especially when clearly, the new 2.0 mantra is to scale first monetize later? Can the mister who runs the Ad-supported-music blog point us all to an example of a well run, i.e. in profit, ad-supported music site – yes, it has to combine the twin evil of intensive bandwidth usage and licensed content?

Ezmo bites the dust…

Published
by
silent
on March 5, 2008
in Media
. 0 Comments

Is the concept of music on the cloud too early? I received news today via musikkteknologen that Ezmo has announced their decision to shut down the service and terminate the company via their blog 2 days ago.

The reasons detailed including an unsustainable business model, terms by the record labels and difficulties in financing.

I would, however, be very interested in how Ezmo deals with their wind down especially to Ezmo-fans who have taken the time and effort to upload their music content.

It is great to see that Ezmo endorses Anywhere.fm and Mediamaster, but why not MP3Tunes?