March 27, 2013 at 2:33 pm

Fred Wilson on Music Interoperability: ATM-Style ‘Roaming Network’

Fred Wilson a VC

Fred Wilson, a VC`

Venture capitalist and blogger Fred Wilson, whose firm invests in Turntable.fm, SoundCloud, Twitter, and other companies, weighed in on an issue we’ve written about several times: true music portability.

By that, I mean the ability of music fans to take their music from one service to another, instead of being locked into Spotify, Pandora, or any other service. Two of our favorite examples:

Last.fm and now Facebook offer a partial solution to the social part of this problem, by tracking what you play on various services and letting your friends see it. But overall, as music moves to the cloud, it’s becoming decidedly less portable. If Spotify, Rdio, Rhapsody, and the rest of the on-demand music subscriptions love their users, why don’t they set them free, allowing them to take their “collections” from one service to the next, rather than trying to tie them down?

The answer is simple: It’s a difficult leap to make, for these services, because common sense appears to dictate that they do whatever they can to attract new users and then do whatever they can to keep them. There doesn’t appear to be much motivation for them to cooperate on that level or any other.

This is shortsighted.

If music fans know they’ll be able to take the music they buy and collect in subscription services to any “legitimate” royalty-paying service, for the rest of their lives, they would be more likely to plunk down cash each month for a subscription. That way, if one of these services goes out of business, as they tend to do, all of their careful collecting will not have been in vain. Remember what happened to Google Reader last week? It’s like that, except without the ability to export your stuff.

Fred Wilson’s take on this concept is astute: He likens the music space today to ATM machines before banks introduced “roaming.” Back then, you could only use the ATM machine from your own bank. This was annoying, and the solution — banks honoring one another’s customers so they could at least withdraw money  – made banks even more money. By building this “roaming network,” they also became able to charge fees for the withdrawals.

Those fees are big business — about $8 billion per year in the U.S., by one count. Even without that effect, which might or might not translate to digital music, but this roaming network made ATM cards much more attractive (and therefore worth charging more for), and arguably even greased the wheels of our economy, especially on the weekend and after hours, when most teller windows are closed.

Fred Wilson is a smart guy, and he thinks Spotify should let Rdio people listen to music there, and so on, all across the board:

And that is the case in subscription music services. I have used Mog (now owned by Beats which is rebranding it as Daisy), Rhapsody, Spotify, and Rdio. They all offer essentially the same libraries. The listening experience is almost identical. They differentiate with slighly different user experiences. Some are more social. Some are faster. Some offer better curation. But in my opinion they are all proprietary commodity services and a roaming service that would allow a subscriber to Rdio to log into Spotify would be a good thing for a lot of reasons.

Wilson argues that record labels should encourage this “roaming network” if only to avoid the same big mistake they made with downloads: giving one tech company, Apple, control over distribution and with it pricing, bundling, the fee structure, and so on.

His article sparked a lot of conversation. Some people wonder what it would look like. I have an idea.

A standalone “collection” — sort of like the XML version of an iTunes library — could be downloaded from one service and uploaded to another, by users. Even better, they could even transfer it automatically, by simply providing their log-in information. (Of course, they’d need a unique identifier translator or “one big database” in order for that to happen). Let’s call it something like “Open Music.” It could be a protocol, an app, or both — why not?

This would not be complex enough to transfer taste-based elements such as likes, listens, ratings, social sharing, and other next-level stuff, but it would be enough to allow music fans to collect music, for real, for the first time since the CD started getting phased out. (No, I don’t count MP3 collecting on Napster and other P2P services, because I was there, and people downloaded so much stuff as to make any concept of a real “music collection” ridiculous. “The Beatles? Yeah, I’ve heard of them — downloaded their catalog the other day, haven’t listened yet.” Doesn’t count.)

Music needs collecting, but collecting is broken. Kudos to Wilson for moving the chains forward on this debate, and for coming up with a great analogy — one that demonstrates clearly the money-making potential of not trying to trap people in return for their attempts to collect music.

Our pal J Herskowitz wrote about another aspect of this situation recently.

Image courtesy of A VC

Note: Evolver.fm is on a reduced publishing schedule due to a new human.

  • Brady

    Thanks for keeping on this issue. It is really shocking there is no solution to this after about a decade of subscription music services.

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