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Tuesday, March 21, 2006

All your CD's are Belong to Us

I dont buy CD's anymore. Its not my fault the music industry trained me not to purchase CD's. For years CD's magically appeared on my desk every morning, often with T-shirts, caps, or other shawg attached to them. Even as a relative outsider to the music business, I became so accustomed to getting free CD's that I lost the habit of purchasing music. Neither the shrill wails emanating from the music industry nor the slick gadgets and mobile devices from companies like Apple computers has succeeded in enticing me open my wallet and purchase (or rent) music. The only sites that have managed to tempt me back into music buying mode are a group of small, quasi-legal Russian sites that the music industry is desperately trying to shut down.

Although I had completely lost my appetite for CD's and was no longer a part of the music purchasing masses, I was still listening to music. In fact, I was listening to lots of it. Between my own extensive CD collection, USENET, Napster, BitTorrent and other peoples CD's, my music collection grew to over 40GB. Occasionally, I was beset with pangs of guilt about not financially supporting the music I enjoyed and would have to visit the Terms of Serivce at any digitally restricted music (backcronym for DRM) store to remind myself why I didnt buy music online. As the number of digital music stores grew and the restrictions placed on them shrank, I began to feel increasingly uneasy about my lack of economic contribution to the music ecosystem. So, while while listening to a Dave FM station in Atlanta, I heard a song by KT Tunstall (Silent Sea) and decided change my ways, rather then downloading the album I would buy it. Done

"there is little doubt that Russia fails to provide effective protection [for IP]. We strongly encourage USTR to... move quickly to remove Russia’s eligibility for specific trade benefits." --RIAA

Having made the decision to once again purchase music all I needed to do now was find a place where I could actually buy a digital copy of, "Eye to the Telescope". My requirements where simple, it had to be playable in Winamp or Songbird, I would need to be able to move it without permission, it should play on a varitiy of devices and it must not be tethered to a computer or company. Basically, it should give me more options and be more convenient than the free alternatives I'm attempting to replace it with.

Subscription services, like Napster, Yahoo Music or Real Rhapsody, were immediately eliminated as potential recipients of my hard earned $15 due to the number of restrictions on their services. These sites have fairly cumbersome DRM embedded in their files that limit where and how music purchased from their stores can be used. It has also recently been shown that the implementation of DRM within many of these services drains the batteries of most digital music devices and reduce their playtimes. As an iPod owner I gave iTunes a try but was uncomfortable with being locked into Apple's universe and didnt want to spend the time with the technical intricacies of freeing myself using Pymusique or its successor Sharpmusique . What I wanted was a place to cheaply purchase DRM-free music not tied into any companies idea of the perfect walled garden within which to sequester paying customers. I came to believe that what I was looking for wasnt available.

Then I came across the grammatically impaired site, Originally launched as in 2000 the site takes advantage of Russian licensing terms which it states allows it distribute music online and to date their claims have held up. Largely due to loose copyright laws and a political system more interested in enriching its citizens rather then American corporations. While sites like Napster and generated huge amounts of press and attention seems to be buzzing under the radar, largely unmolested. However, a check of its Alexa popularity shows that it is more frequently visited then an equivalent offering with a stronger brand like the new Napster or

The way works is that you register on the site and pre-fund an account through either a credit card, paypal or The emphasis on multiple payment methods seem directly targeted at overcoming reluctance to provide credit card information to a Russian company. Once an account is funded its then possible to begin purchasing tracks all of which are DRM free and can be purchased in a variety of formats (from MP3 to Ogg). Their catalog is composed of an extensive collection of American and International artists on major and independent labels and is updated daily with new music from across the globe. While the navigation and search features of the site are nowhere near as good as some of the more polished online stores, its companion software, allTunes (which is remarkable similar to iTunes) makes up for it.

While all of mp3 is the oldest and most popular of these sites there are a number of others which use the same basic model and are attempting to improve on it. Sites such as, and all offer the same model as AllofMP3 and are based in Russia but get less press and therefore less traffic. The real draw of these sites is of course the prices they charge for the music files they offer. For example the Arctic Moneys' album which sells for $9.99 on iTunes, goes for $1.15, on Allofmp3. You can also purchase individual tracks like Riot Van also by Arctic Monkeys. for six cents on versus $.99 cents on iTunes.

Allofmp3 and similar sites charge by the size of the files or bandwidth used in delivering the files, not for hte music itself. So, the prices quoted above are for files encoded as MP3 files at 192 kbps, which is considered "high quality" by the site. If you accept the more standard 128 kbps file encoding the price for the album drops to $.77 cents because the file size goes from for 58MB to 37MB. If you were to select CD quality (which is 320 kbps) with MPeg4 encoding file size would grow to 96MB and the cost would balloon to a whooping $1.92 for the album. Cost for albums encoded in "lossless" formats such as FLAC, WMA 9 Lossless, PCM Wave and OptimFROG Lossless is roughly $5.41 for the Arctic Monkeys release. Needless to say Allofmp3 and similar sites have been a major thorn in the side of the the RIAA.

So if paid $15 retail for the original CD and some nominal fee to the licensing agency for the right to distribute a copy online then all they would need is roughly 15 people to purchase the album from their site in order to recoup their costs. Every sale on top of that would be gravy. Thats a winning business model if ever I heard of one. With no role in the music value chain other then a delivery mechanism, I'd argue that AllofMP3 has properly priced the music they offer. Music companies that continue to view their main business as the delivery of music to as many people as possible will need to think about this level of pricing in order to become competitive in the digital space. These companies fail to realize that people have never wanted to purchase a cassette, disc or digital file, these were merely a means of delivering a an emotional experience. What people were paying for was the emotional connection to an artist or community centered on a shared musical experience. The difference between me paying $1.27 for Eye to the Telescope at AllofMP3 or paying $35 for tickets to a performance is this emotional connection. Its the difference between consumers looking for the cheapest price and fans looking for the deepest connection.


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