At Plug.In, Glaser, Bronfman Jr. Offer Sweet Music
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RealNetworks Inc. Chairman and Chief Executive Officer Rob Glaser kicked off Tuesday's festivities at Jupiter Media Metrix's Plug.In conference in fine fashion with a demonstration of the much-talked-about MusicNet subscription service. Glaser spent a few uncomfortable moments trying to log in to the MusicNet interface, but quickly switched gears while a technical glitch was corrected to show off one of his two news announcements of the day.
This came in the form of streaming a Dave Matthews Band track through a Nokia Communicator 9210 phone, courtesy of Glaser's firm's RealPlayer software application -- a truly nifty trick while someone straightened out MusicNet. Glaser gave the brief demonstration, explaining that is what the capability of a GPRS-enabled phone can bring to the user -- faster playback at lower bit rates. But it was a mean tease because it's not really feasible in the U.S. the way it is in Europe -- a fact he pointed out specifically for those who he said may have "device-envy." Glaser underscored this when he announced that Virgin Radio, BMG Entertainment, Kirch New Media, TF1, Darker Than Blue, Aestheticom and Supersoni.com -- all Europe-based outfits -- would be the first partners to supply content for the advanced, Web-enabled handset.
Glaser also briefly noted that MusicNet, which he skippers until a more permanent CEO can be named, hooked independent music group Zomba as a music affiliate to accompany AOL Time Warner, EMI plc. and Bertelsmann AG as partners. From there, Glaser segued smoothly into the MusicNet demo (this he prefaced with a quick comment about the glitch being the reason why it isn't on the market yet), on which he called up a Britney Spears tune. This was fitting, as Zomba owns the rights to the young diva's music. The interface was nice enough and not all that much of a stretch from Napster with its artist search, and artist and track list capabilities, but Glaser pointed out that a key difference is MusicNet is not only a platform from which tunes may be downloaded, but one from which songs may be streamed before they are purchased.
"We've set out, in the last year and a half to two years, to create this as an integrated ecosystem," Glaser said.
In any case, think of MusicNet as an online version of Virgin Megastore, where scads of music lovers line up each day to listen to music before they make purchasing choices.
Ah, purchasing choices. The big blank to date for both MusicNet and pressplay is that each firm has been cagey about pricing, and that hole remained a large goose egg Tuesday despite the gregarious presentations of Glaser and Edgar Bronfman Jr., executive vice chairman of media powerhouse Vivendi Universal.
But it was clear from Glaser's answers to questions by Jupiter's President and Vice Chairman Gene DeRose that speed to market is not what is important -- quality of product is.
"We want to have a product in place that works for consumers and is legal," Glaser said. "...As opposed to the scattering of Gnutella, Napster clones, and offshore drilling facilities." (the latter was, of course, a joke; a poke at how widespread file-sharing has become in the last year.)
Glaser also noted that CD burning, portability, and other peripheral matters were all important issues, but said it was important to get "the ball rolling" and that MusicNet could be polished down the road. When pressed by DeRose, Glaser said moving MusicNet services to wireless devices (such as personal digital assistants or the Nokia Communicator) could be five to seven years down the road. Moreover, he was confident that 3G services will also be rolling out en masse in the next five years or so. He also encouraged and "welcomed" competition from pressplay. The skipper said that the arrival of MusicNet does not mean RealNetworks will be any less attentive to video and that "audio begets video."
Indeed. Speaking of begetting, Glaser's keynote gave way to Bronfman Jr.'s who proved just how much of a polished speaker he was by lacing his answers to DeRose's questions with corrections to some of Glaser's statements (i.e., Glaser had said that HBO and Showtime started out as independents; in recommending that Glaser check the history, Bronfman Jr. said they had tried to roll out in previous incarnations, but were prevented by the U.S. Justice Department. So goes the advantage of speaking directly after your rival.)
Bronfman Jr. strongly disagreed that MusicNet's strength will be the independence of its business schema. He said the fact that MusicNet is 60-percent owned by three companies and that pressplay is owned 100 percent by two companies makes no difference in the competitive scheme of things. Bronfman Jr. also strongly disagreed with MusicNet's approach to allow retailers under MusicNet's wing the ability to price music. pressplay will have a more centralized pricing model, emphasizing commissions based on affiliates' sales.
Bronfman Jr. didn't have much specific to reveal to the public, but then again Universal has pretty much used its mergers & acquisitions of the last year speak for itself. Bronfman Jr. wasn't kidding, moderator DeRose pointed out, when he claimed Universal would move aggressively in the online music realm (in some form or another, Universal bagged Farmclub.com, GetMusic.com, EMusic and MP3.com). Bronfman Jr. did say it was not entirely out of the realm of possibility that all of the record labels' catalogs will eventually be available on both MusicNet and pressplay, but that probably wouldn't happen until a year or so from now. This makes sense; the rivals will feel each other out for a while and work the kinks out before such matters as sharing catalogs and inking licensing deals with each others' partners is tenable.
In summation, what Glaser and Bronfman Jr. both seemed to agree on was the fact that advertising will not drive either MusicNet or pressplay (thus neither service's backers will spend millions of dollars marketing them in the early going), and that the consumer does not care about the labels or technology, but the artists, and so will ultimately dictate how these services are received.