Streaming Media East 2000 Show Report

  Stan Woodward, who previously worked for such great Internet companies as AudioNet and Broadcast.com, is now the Vice President of Yahoo!, Inc.'s business services. He was the first speaker today and gave the audience a lot to think about. He said Yahoo! reaches 261 million global users today. The majority of people surfing the web at their workplace are using high bandwidth T-1 or better. The demand for rich, multimedia content is very high. Meanwhile, as i said within yesterday's show coverage, more and more home users are also have higher bandwidth rates. 65 million of Yahoo! users enjoy 100 kbs multimedia feeds each day according to Stan Woodward. Sadly, there are multiple vendors that seem to be confusing the marketplace (RealAudio, Liquid Audio, QuickTime, etc). On a global basis, there is a large amount of high bandwidth fiber cables being routed all around the world. This allows for more and more consumers to enjoy higher quality streaming media as time goes by.

Yahoo! merged with Broadcast.com to deliver media to their 145 million unique users every month. How does 625 million page views a day sound? Yahoo! delivers this according to Stan. In fact 11 millions hours of streaming audio/video content was available in March from Yahoo!. Yes, you read that right, 11 million in one month. Will the high-end adapt or have some part in this or will they stay with their legacy systems and low public awareness? Unlike the exclusionary-type system the high-end audio market seems to support, Yahoo! believes that partnerships is the way to go. This is also why Enjoy the Music.com has always actively sought to add more quality content by joining with other magazines. Yahoo! has over 1400 providers whom they have partnered with to help to deliver their audio and video content. This includes not just music, but sports and news to basic local weather and much more. What i am trying to show you here is how a vast network of delivering content, such as music, is available today. What will the future bring?

Stan spoke about Willie Nelson showing up at the Yahoo! headquarters to be recorded for a future streaming music file. Stan said this goes to show how musicians are also grasping the importance of this technology. Need we remind you of the recent Napster/Metallic incident or how Alanis Morissette has partnered with MP3.com? In fact Yahoo! is going to be expanding their music delivery content and offer ever higher and higher quality music streams over time. Fact: 95% of streaming content offered from Yahoo! consist of live broadcasts. Live music concerts are especially popular.

During the Victoria Secret's Cannes show, which brought down servers last year due to the high demand, was alive and well this year and more popular than ever. During the event approximately 7% of all streaming content being delivered over the web consisted of  the Victoria Secret Cannes show as it was happening. The demand for content from the consumer is here today, though it is now up to making higher and higher bandwidth available to the public as the now slow and choppy delivery does not provide a good experience to the consumer.

The one big advantage is that the cost of distributing music over the Internet is less expensive than the current legacy system of delivering physical goods to stores today. While the Big 5 have recently been court ordered to cease and desist price fixing their CD media to allow for lower pricing, music delivery over the internet is more cost effective and could be offered at lower prices than the physical media in stores today. Of course as has been proved, the Major labels like to artificially inflate pricing to consumers.

The next speaker was none other than Michael Robertson of MP3.com. MP3.com delivers over 1 million music streams a day and have over 10 million registered users. With all these music lovers in one location, why has the high-end largely ignored this market? Is it that only the likes of Sony are smart enough to market to many different music lovers throughout the world? How long until someone from the high-end starts their own streaming media company? Anyway, back to the wisdom from Michael of MP3.com.

Michael commented how virtually no one is making money from delivering audio via the internet today. The reason for this is that "The laws of physics are different on the Internet" according to Michael. The Internet must be geared to the different experience of the web as opposed to the experience shopping in music stores. MP3.com now has in their possession a licensing agreement for catalog wide delivery from a major music label. This is the first time ever any music label gave catalogue wide access to an outside company, let alone making the content available to an Internet company. He asked the audience to think about the big picture.

Imagine music sales as movie content is marketed today. Going to a first run movie at the box office costs $8. Next comes buying the video at the store for $20. Video rental for $3 while you can watch it on soon thereafter on HBO for subscribing. Eventually it is shown on TV virtually for free. The advantage here is that when it comes out for free, television adds advertisements. On video rental you get other movie previews and content that brings in revenue. The music business of tomorrow (see photo below) will be inherently different than what we experience today.

Michael Robertson of MP3.com also discussed their new software Beamit that allows you to access your CDs from the internet. This, by the way, is what has caused some recent lawsuits against MP3.com. Regardless of the legality, it allows you to access your CD collection via the internet in mp3 compressed audio files. The advantage of their new Instant Listening Services is that you can buy a CD from MP3.com now, and immediately access the music via mp3 files while the actual physical CD software is being delivered to your home in a few days via the mail. He humorously said that CDNOW should really be called CD-In-Three-Days because you can not enjoy the music now. With CDNOW you must wait for the CD to be delivered to you home in three days to enjoy the music.

On May 1^st, for $9.99 a month on MP3.com you can subscribe to all the classical music available on their website. If you have a broadband high bandwidth connection you could access near CD quality sound. This basically gives you a "virtual CD Player" that allows you to enjoy a vast amount of classical music via a subscription. Soon MP3.com will be offering a home audio component that hooks up to the Internet that will allow you to enjoy music from MP3.com through your home stereo. No computer needed! Of course portable devices will be soon to follow. This will eliminate the need to have a home computer altogether as the web interface is built in to the unit.

Their upcoming Worldwide CD software (as seen above) will allow you to enjoy various music artists from around the world. The point here is thinking of music in a worldwide format and allowing the world to experience the music from other parts of it. New music can be enjoyed and explored too. Not just small unknown bands, but also mainstream audio bands from major labels all around the world. The key here is flexibility of content and giving the user a large choice of content. From discovering traditional Japanese music to Seattle grudge. Maybe, as the Bond movie says, the world is not enough.

To add to all this MP3.com is competing with the dreaded Muzak folks by offering a Linux box that can access music from MP3.com. A retail store can sign on to the MP3.com service and offer their own choice of user selected music versus the dreaded four hour preset Muzak discs as are available today. Furthermore, corporate messages can be added via advertisements within the day's music to help reduce the costs of the MP3.com music subscription. The advantages are not just the larger available of quality music, unlike that of Muzak, but also that the music artists do get paid for their music from MP3.com as well. The point being is that a store can choose the music and songs their customers hear throughout the day... and also the advertisements without a preset disc like Muzak offers today.

Of course Michael Robinson did touch on securing music. He said it is not about protecting their music but in creating revenue from the music. In fact he said protecting music interferes with creating revenue from music. Instead, an "all you can eat" buffet for $10 a month is a great way to go. By offering subscriptions to music services brings in more revenue than the old model of pick and choose. "To really deal with piracy, you need to melt it with service" says Michael. Piracy will always been around as long as the CD-type music distribution is alive and well according to Michael and i fully agree. Instead of a product model, offer a service model such as music subscription. Michael closed his speech by saying "No Internet company has ever gone out of business due to too many users accessing too much content."

Click here for Wednesday's coverage.