Tuesday, November 23, 2004

Weeds and Innovation

Many of you (unless you’ve been hiding under a rock) have heard of the challenges the music industry has been facing in recent years. For those that have heard, but might not be up on the scene, here’s a Reader’s Digest:

Several years ago, a new technology emerged that allowed for audio data to be compressed. This reduced the file size for a typical pop song from 75-80 MB to only 3-5 MB. Once it’s 3-5, a person with even a dialup connection and some patience could get full-length, near CD quality digital songs over the ‘net.

Now, that would’ve been all that amazing, except for a few independent musicians putting their songs out on the ‘net, but people started making mp3’s of their CD collections, and posting those songs to their websites.

Then, along came the peer-to-peer networks. Napster was the first and most famous at the time. It allowed for people to search other people’s computers looking for songs and download and share them.

Sounds wonderful, right? Like you could get all the music you wanted, right? Well, that’s true, except it’s illegal. It’s against the law to copy and distribute someone else’s copyrighted material.

So, the music industry started shifting. Changing. More and more people wanted their music downoadable. But the major labels, who owned most of the music available, couldn’t adapt. They started suing the people who were doing the downloading and the sharing. People who, ultimately, they wanted to be their customers. Not a great business model for the long-term, doncha think?

In the last year, however, there have been some changes. The majors, as the labels are called, have started adapting. There are online music shops, now. ITunes, by apple, is by far the most well-known. There are many others, and they’re cropping up all the time. Here, you can buy the songs for download.

The challenge with most of these pay-for-download music shops, is the files they provide are usually proprietary. That means that you can only play them in their players.

There’s one system, relatively new, however that is a unique hybrid between the free-for-all downloading mania and the legal pay-as-you-go model. It’s called weedshare. It allows for downloads, rewards sharing, and yet still makes sure that the artist’s rights are respected and that they get paid for the purchases. The idea is that the music “spreads like a weed”. Click to their site to find out how it works.

Its been getting a lot of press lately, and got written up in wired magazine, the tome of the tech-savvy.

Now, I’m not just here to promote weedshare (my own music site uses the technology). I’m here to use weedshare to show how innovation and forward thinking can be rewarded.

Rather than just fight the power of the record labels and the RIAA (Recording Industry Association of America), or cave in to their threats. Weedshare adapts both models. They took a difficult situation and worked out a win-win. The artists and rightsholders get paid, the people are not only allowed to share the files, but are actively encouraged to, and share in the money when they do.

So, as advice to small business people, part of the key is to find problems, solve them, and market the solutions. Their innovation constantly amazes me. A good example to follow.

1 comment:

  1. I'm newe to music on the web and so I was really happy to find your blog. I'll be visiting often to learn about that and other internet stuff.

    By the way, I'm planning to post Weed files on my blog. Problem is, I am not sure how to do that. Maybe that would be a good subject for a future post on SOHO Man?

    Thanks for what you are doing.