Tuesday, 9 December 2008

Reflections on 2008 #1: Music's Big Mistake: Muxtape – the best music store we never had?

What's the one thing that the digital music business needs most right now? The answer is a business model with natural friction. Stay with me...

In my view, Muxtape was the most powerful music business idea in 2008. It was also one of the most workable new concepts because it had, in its very essence as a playlist service, natural friction. The song downloads could be DRM-free because the number of tracks was limited each time (to a playlist of typically 12-20 songs) in a way meaningful - and palatable - to both industry suppliers and consumers.

Contrast this with more compromised service launches later in the year such as Datz or Nokia's Comes With Music. These appear to offer a total catalogue to consumers, but of course they don't really, due to various imposed restrictions. Datz lacks brand new releases and then presents single songs alphabetically. Nokia's CWM has the majority of song catalogue but is restricted by DRM to one mobile phone and one PC. Any attempt to communicate either the completeness or simplicity of these offers to consumers will immediately ring false – they’re neither complete nor simple. However, any attempt to explain the restrictions will either confuse potential users, or simply turn people off.

These are unnatural frictions, placed upon these services in order to protect the music labels from potential cannibalisation of existing formats. This is a perfectly legitimate concern of course. Only a ship of fools would capitulate to the file-sharing minority by opening up entire music catalogues digitally at commodity prices (like free!). However, just because these frictions are imposed on these services doesn't mean that music fans will understand or except them. The results end up mixed at best, with Nokia and Datz talking of ‘market testing’ and ‘learning’ from consumers’ response. In other words a win-win for precisely no one – not artists, labels, publishers, service providers or consumers. Just more examples of potentially good music services with their wings clipped by the constraints of the current business.

It could have been so different with Muxtape. The service embodied a universal need among all music fans – to compile and receive music as a thought/gift/experience. It captured the best of recommendation and discovery. Because of this, it was popular. When it was launched in early 2008, Muxtape attracted 8,685 registered users in the first 24 hours and 97,748 in the first month, with some 1.2 million unique visitors to the site (those stats from the current Muxtape url). It had real, organic, buzz.

Muxtape lent itself quite well to each of the current payment models – advertising, premium subs, a-la-carte – or any combination of these. Its early success was built on the strength of the idea itself. As founder Justin Ouellette puts it: “My goal with Muxtape's design was to translate some of the tactility [of cassette mixtapes] into the digital world, to build a context around the music that gave a little extra spark of life and made the holder anxious to listen”. Spot on, and his early customers got the sentiment loud and clear.

For a truly absorbing read, go to the current Muxtape site and read Justin's very articulate account of the experience he had in taking his innovation to market and the industry's (mainly the major labels) response. Fascinating but a little bit sad at the same time.

Why does this happen in the music industry time and again? A young upstart with a great idea creates an early phenomenon – followed by a complex, stifling attempt to grow it within the rules set by the business – followed by an exhausted, emotional shutdown.

My hope for 2009 is a genuine, un-compromised music service offering - one that meets real, if latent, consumer demand. Muxtape had that extra special bit of insight – something real music fans understood and wanted to engage with. Digital music services launched by big brand telcos, physical music retailers, handset manufacturers and ISP's have, so far, lacked exactly that insight (with the almost singular exception of iTunes).

Why do the big brand institutions continue to try to invent the next big music breakthrough? Why not instead, seek out the bright young things and buy them in or partner with them? Surely that’s a better alternative than trying to re-invent the wheel, when the chances of building a service based on real insight, or even that little bit of luck & serendipity, are narrow. I'm sure there will be other start-ups in 2009 that will show the same qualities that Muxtape did, despite the difficult economic times we are in. And maybe because of the times, one of the bigger players will be savvy enough to pick them up and run with them. If so they could reap the benefits and rewards, and industry kudos, of being the challengers and even successors to the mighty iTunes.


JimBellizzi said...

Thank you. The ease in which Muxtape's idea both engaged consumers and encouraged them to spread music was phenomenal. And when it gets shutdown people moan for a day and then forget the next. The labels are just akin to US Government now a days, so much bureaucracy you can't get anything done, plus only a few people at the top have any real power. Extremely frustrating.

Edwin said...

Not to worry. This is just a phase. It's only a matter of time before non-creative middlemen (today's super giants) are simply cut right out of the equation and we're dealing with the musicmakers directly. The internet will allow us to do things the way we want. It's part of supply and demand.