SmoothSpan Blog

For Executives, Entrepreneurs, and other Digerati who need to know about SaaS and Web 2.0.

Why Fred Wilson is Wrong About Streaming Music Taking Over for Files

Posted by Bob Warfield on April 4, 2008

Fred has a new post up that says streaming music will take over for files in just a few years:

Yes, it’s true that listeners will still want to own files for a few more years. There are places and devices that can’t get high bandwidth wireless Internet access, like my macbook pro which I am writing this on the plane ride home to NYC. I am listening to mp3s (no drm for me) in iTunes all the way home.

But over the next five years, the number of places and devices where you can’t get a speedy wireless connection is going to dwindle to maybe the car. And you’ve always got radio in the car which is going to get better and better because it has to in order to survive.

If it were just a matter of having enough bandwidth that there are no performance disadvantages to streaming, I would agree with Fred, but there is a lot more to music than bandwidth.  Put another way, the music experience is about a lot more than just getting hold of the bits, or even just playing them back.  More about why in a minute, but first let’s following along with Fred a bit longer and see what else we can glean from his thinking.

I can see the business opportunity for streaming.  The file end has become commoditized and evolved to the point where Apple is now the largest seller of music files in the world (we’re considering CD’s and iTunes downloads as files since you own the bits).  Streaming offers a chance to start over pre-commoditization.  It’s like the labels making all that money from switching from LP’s to CD’s or VHS to DVD’s all over again.  I can already hear them rubbing their hands together and saying, “And we’ll do things differently this time.  We will be in control.” 


Do you want the music industry in control?  Haven’t we seen how they behave? 

Fred sees streaming as the new radio stations.  They not only play you music, but they keep your playlists based on tracks you like, your friends like, people with the same taste like, yada, yada, yada.  It’ll all be supported by advertising (yay!  another reason why free isn’t dead.  maybe.) and the labels will get an appropriate kickback each time the song is played.

Hmmm.  It sounds so “Back to the Future.”  Didn’t we just spend most of the last 10 or 20 years moving away from this model?  Aren’t we madly Tivoing, Napstering, Web Browsing, XM Radioing, and a whole host of other “ings” precisely because we don’t want someone else in control of our dial?  Precisely because we don’t want all the advertising distracting us?

Of course this is relevant to riff on because of the MySpace announcement.  They now have a streaming service with deals with the big labels as Fred mentions.  The other point that has Fred’s attention is he has evidently been talking to Ian Rogers, ex-Yahoo Music about the whole thing.  Ian evidently waxes eloquent about how music starts.  What it takes socially for music to spread.  This is where Fred’s problem starts, I believe.

He is so focused on the social aspects of music, he loves to talk about his own latest musical discoveries, that he is willing to project the experience of discovering new music as the whole experience involved in enjoying and experiencing music.  That’s just wrong.  For Fred, the joy of discovering a great new song and sharing it with others may be the majority of what he gets out of music. 

For others, the joy may be more focused towards experiencing the music itself.  Experiencing in recordings, concerts, live bands playing a favorite song as a cover, and wherever else you can.  Discovering a new tune is great, but I don’t grow tired of great old tunes either.  That’s why I’m not willing to cede total control over my music to streaming.  I want to control my music.  It’s annoying enough if it only plays on say the iTunes player because of DRM.  I’ve seen too many of these format changes to think that’s a good thing.  I buy DRM-free whenever and wherever I can.

Mathew Ingram gets it:

I only have about 3,000 songs — but the main reason I do is because I like to put them on shuffle and get surprised by a song that I can barely remember ever downloading or ripping, but one that I remember listening to way back when. That’s a great feeling. And it’s even better when you can do it with a select group of songs you love, rather than just waiting for one to come on the radio by accident.

Maybe the majority of people aren’t like Mathew and me.  I have about 3,000 songs, but I remember them all clearly, can recite the lyrics, and recognize the tune from a few notes.  That music lives for me.  It triggers memories of what I was doing in life when each song was a hit.

You can’t replace that by ceding control to streamers.  A streamer owns it all.  Here today, gone, higher priced, or less desirable to use tomorrow.

Fred is right about streaming as a discovery vehicle.  You have to cede control to discover new music.  But he is so wrong that files have only a few years left and it’s only a matter of bandwidth.


10 Responses to “Why Fred Wilson is Wrong About Streaming Music Taking Over for Files”

  1. frederickwilson said

    i may be wrong. it happens all the time!

    but it’s how i see all of this playing out

    i own close to a thousand vinyl records

    i own at least that many CDs

    i have a terrabyte server full of mp3s

    all of that is available in our home to our whole family

    and yet we listen to rhapsody and other streaming services close to 80% of the time

    it’s just easier. we don’t have to wonder if we own it. we just decide what we want to listen to and then play it.


  2. smoothspan said

    Fred, it’s like a lot of things on the Internet, in fact it’s like all media period. There are different styles that people gravitate to. Some love Twitter (you are one, I believe), some hate it. Some love video, like Scoble, some hate it. Some are in between.

    The music thing is no different. If you’re content to just surf these streams with minimal control, that’s one style. For the reasons I mention in my blog post, it isn’t everybody’s style. In particular, it’s pretty analogous to a lot of things we’ve given up or tried to move away from.

    If it’s on my disk, I don’t worry about whether I own it either. I also don’t worry about which services can handle which of my preferred artists, which player I like better, whether there is enough bandwidth to stream, and all the stuff you do deal with whether or not it bothers you. I just play my bits any time I want with the player I’ve chosen to live with. That sounds pretty easy to me.

    It’s ironic that Sand Hill Road, perhaps the epicenter of VC-dom (though I know you don’t like to hear that being in NY) can’t get good cell coverage. Stanford won’t let them build the towers for it. Wireless ain’t all gravy, and it’ll take a lot more than a few years and more bandwidth to see it all go streaming.

    Check back with me in 5 years. We still won’t all be streaming. And BTW, why haven’t you deleted all those mp3’s, sold your LP’s and CD’s? They’re of little use to you in a streaming world!



  3. […] Why Fred Wilson is Wrong About Streaming Music Taking Over for Files :: SmoothSpan Blog – It appears that the writer behind SmoothSpan doesn’t think too highly about Fred Wilson’s assumption that streaming music is going to be the next big market rather than downloading or buying. […]

  4. joelaz said

    Why couldn’t your 3,000 songs be streamed from an online service that offers you the choice of which song to play & when, the ability to shuffle, etc? I must be missing your argument. I don’t see what the size of your collection or discovering vs. experiencing has to do with whether the tracks are delivered from your machine or from a web service. Many people use Rhapsody in a similar way to how you and Matthew use the files on your PC, without leveraging any of the discovery or social features of the application.

  5. smoothspan said

    Let me ask you this Joelaz:

    Is every email program precisely equivalent, or do you prefer one in particular?

    Your emails can go to any of them, but with a streaming model you’d be looked into one reader. If another came along that you liked better, you’d be stuck. This doesn’t even begin to address the issue I raised about whether all artists are available from all streamers: they’re not. iTunes has had to negotiate with all sorts of artists and only recently closed The Beatles, for example.

    If you own the bits, you’re in control. With sreaming, they own the bits. So what is your priority? Acquisition favors streaming. Experiecing the Music favors owning the bits.

    Fred says he has a Terabyte of music files, a thousand LPs, and at least as many CD’s. Sounds like acquisition is his priority. I’m not surprised he prefers streaming. My quarrel is that the whole world doesn’t all think that way, and hence I don’t see streaming taking over in just a few years as Fred predicts.



  6. joelaz said

    Smoothspan, I think I understand your point a little better now.

    I was assuming that the streaming service that Fred discussed on his post would include all artists (unlike today). That’s one of the requirements he listed. Obviously, getting all the labels to agree to that would be challenging, but I was starting with Fred’s vision.

    I also don’t see why you couldn’t switch between streaming services. I signed up for Rhapsody years ago. Later I switched to Yahoo! Music Unlimited, another streaming service. Later still, I switched back to Rhapsody. It’s pretty easy to move between the services regardless of how you use them.

    That said, I agree that streaming today benefits those who like to explore new music more than people who listen to the same collection over and over again. However, if the streaming services were pervasive, if you could listen on any device, anywhere in the world, and if you could switch between services, I don’t see the need to store files locally. In fact, I think “experiencing” benefits in that you don’t have to worry about backing up your music, taking it with you when you travel, replacing stolen or lost CD’s, and many other limitations of physical files. Your email analogy is actually a good one. Most people store their emails on a web server for many of these reasons.

    Thanks for the additional insights.

  7. smoothspan said

    Joelaz, consider this: many of the benefits you list are benefits not just of streaming, but of moving you personal data into the cloud and off your local machine. That’s another possibility.


  8. […] Why Fred Wilson is Wrong About Streaming Music Taking Over for Files :: SmoothSpan Blog – It appears that the writer behind SmoothSpan doesn’t think too highly about Fred Wilson’s assumption that streaming music is going to be the next big market rather than downloading or buying. […]

  9. […] of.  Be careful, because there are even stronger variants than what Apple is offering.  I have argued in the past with Fred Wilson about streaming media.  Get roped into allowing your media to be strictly streamed by a few providers and you are well […]

  10. […] Fred and I have tangled before over the issue of owning your music versus streaming it.  Fred continues undaunted in his latest post, a reaction to Amazon’s Music Locker announcements: […]

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