Do I believe in Daisy?
I’m willing to give Daisy the benefit of the doubt on growth. I think they could succeed at getting big.
But what I don’t see in their vision is an economic innovation. And the really hard problems for on-demand services are economics.
Songza, for example, is an economic innovation. Playlists have always been an on-demand product, hence one that is unaffordable to provide. Songza’s product innovation was to make playlists work under the rules for non-interactive webcasts. This allows them to pay much lower royalties, and so to have a fighting chance of making a profit.
Sites that aggregate music blogs are an economic innovation. These sites have no royalty bills at all, like a filesharing vendor, but they also have little fear of being sued to death.
YouTube, as a music vendor, is an economic innovation. It serves on-demand music and pays royalties, but pays royalties based on a share of revenue, which frees it from the crippling per-user minimums that services like Daisy must pay. It did this via the product innovation of tying the DMCA process to an opt-in advertising business.
So the question about Daisy is about the business insight behind the product vision. Iovine’s vision for the company is that there is a way to sell more subscriptions. However volume doesn’t change the economics, and if it does then more established vendors like Spotify will use it for competitive advantage.
Maybe there is an economic insight that hasn't been shared. There's no reason for the company to tell the world. But with the information we have, we don't have reason to see Daisy's chances as any better than MOG, Rdio, Deezer, Rhapsody, Spotify, Yahoo! Music Unlimited, or Napster 2.
Any researcher affiliated with a big institution already had access to the articles in JSTOR. It’s the independent researchers who have been locked out.
Personally I have followed a trail of searching up to the locked door at JSTOR many times. It always disgusted me.
People doing research for its own sake are doing something great and beautiful. They are not drones, not on automatic, not following the path of office politics.
These are the people who needed JSTOR to be liberated.
I took Swartz’ action not as a protest but instead as an object lesson in the true value of content. We from the content business think our value is encased in our content. That is why we sell it, build walls around it, protect it (and, yes, I will still happily sell you mine). Inside the Gutenberg Parenthesis, that is the only model we have known.
But the net has taught me that content gains value as it travels from person to person, just as it used to, before Gutenberg, when it wasn’t content but was just information.
Google and Facebook have taught me that content’s worth may not be intrinsic but instead may lie in its ability to generate signals about people, build relationships with them, and deliver relevance and value to them. In that, I think, is a new business model for news, one focused on value delivered over value protected, on service over content. For content is merely that which fills something—a page or a minute—while service is that which accomplishes something for someone.
Lessig and company have taught me that content’s value can lie in what it spawns and inspires. Locked away, unseen, unused, not discussed, not linked, it might as well not exist.
David Weinberger has taught me that knowledge confined in a book at a single address on a shelf is limited.
And Aaron Swartz has taught me that content must not be the end game for knowledge. Why does knowledge become an article in a journal—or that which fills a book or a publication—except for people to use it? And only when they use it does content become the tool it should be. Not using knowledge is an offense to it. If it cannot fly free beyond the confines of content, knowledge cannot reach its full value through collaboration, correction, inspiration, and use.
I’m not saying that content wants to be free. I am asking whether knowledge wants to be content.
I think this is an elegant distinction. It's an intuitive way of drawing a line between free speech and commercial speech.
Here's my guess for the vision behind Ian Rogers going to MOG/Beats/Daisy: much tighter integration between the content business and subscription service. The service will have business deals to heavily promote artists. It’s similar to paying radio stations to play a single, but rather than pay them, the label will own one.
If the Daisy service can break even and attract a reasonably large number of users, it will become a marketing platform. It may even become a profit center for the label if it can avoid giving too much of the revenue to other labels.
What did the MOG acquisition cost? I would guess 20 million or so. I think I’ve seen that number around, but if I’m just making it up I bet I’m within ten million. That's a reasonable budget for a publicity machine with so much potential.
The Daisy service itself will be marketed like a music product. Having a sub will be cultural identity just like those red headphones or the white earbuds before them. Rappers will all have subscriptions. It will be design-forward and style-forward. It will be perky, gym-toned, safely dangerous. Compare to this heinously unhip MOG ad.
Or, that’s Iovine’s vision. I can’t say for Ian or the investors.
Why tech companies can’t succeed at music subscriptions:
I was shocked at how culturally inept most consumer electronics companies are. And what I also learned is that you can build Facebook, you can build YouTube, you can build Twitter — you can be a tech company and do that. But those [sites] program themselves. Subscription needs a programmer. It needs culture. And tech guys can’t do that. They don’t even know who to hire. They’re utilities.
Why Beats/Daisy will be different:
[Other music subscription] companies, these services, all lack curation. They call it curation; there’s no curation. That’s what we did as a record label, we curated. There’s 150 white rappers in America; we served you one. We are heavy on curation, and we believe it’s a combination of human and math. But it’s a give and take.
Right now, somebody’s giving you 12 million songs, and you give them your credit card, and they tell you “good luck.” You need to have some kind of help. I’m going to offer you a guide. You don’t have to use it, but it’s going to be there, and it’s going to be a trusted voice, and it’s going to be really good.
Ian's getting back into the on-demand streaming business. So here's the interesting question. When he took over Yahoo music, Yahoo's on-demand streaming business went away. Now he's going there again. So what's different?
- He might feel that Yahoo’s service was too far ahead of the market, and the market has now caught up.
- He might feel that costs have come under control since then, so that it’s now possible to make a healthy business.
- He might feel that Beats is the right parent for such a product and Yahoo was the wrong one. Maybe the company has more leverage in the market, or more plausible marketing to consumers, or the company can deliver higher quality.
- He and Beats might have a new, yet undisclosed product vision which changes the game. What they’ve been talking about is curation, and it’s reasonably likely that all parties really believe that.
I’m thinking augmented reality for fiction. For example you go to a movie and use Google Glass to view comments on it that are synced with the timeline.
What do you get when you cross books with second screen apps? Or music recordings?
It’s not augmented reality, it’s augmented creativity.
Rod Furlan built his own version of Google Glass, and found that it acted as extension of his senses :
My world changed the day I first wore my prototype. At first there was disappointment—my software was rudimentary, and the video cable running down to the onboard computer was a compromise I wasn’t particularly pleased with. Then there was discomfort, as I felt overwhelmed while trying to hold a conversation as information from the Internet (notifications, server statuses, stock prices, and messages) was streamed to me through the microdisplay. But when the batteries drained a few hours later and I took the prototype off, I had a feeling of loss. It was as if one of my senses had been taken away from me, which was something I certainly didn’t anticipate.
When I wear my prototype, I am connected to the world in a way that is quintessentially different from how I’m connected with my smartphone and computer. Our brains are eager to incorporate new streams of information into our mental model of the world. Once the initial period of adaptation is over, those augmented streams of information slowly fade into the background of our minds as conscious effort is replaced with subconscious monitoring.
The key insight I had while wearing my own version of Google Glass is that the true value of wearable point-of-view computing will not be in the initial goal of supporting augmented reality, which simply overlays information about the scene before the user. Instead, the greatest value will be in second-generation applications that provide total recall and augmented cognition. Imagine being able to call up (and share) everything you have ever seen, or read the transcripts for every conversation you ever had, alongside the names and faces of everyone you ever met. Imagine having supplemental contextual information relayed to you automatically so you could win any argument or impress your date.