End Run Around iTunes

Music companies are increasingly concerned that iTunes is dominating the online music experience and they are losing a direct channel to the customer.  And they should be concerned about that. Their desire to DRM every piece of content is putting that leverage into Apple's hands, but I've ranted about that enough for now.

Yesterday we saw one example of how a record label might go around iTunes and re-establish a direct relationship between the artist and the consumer.

Geffen Records announced a deal with Feedburner where fans can subscribe to artists pages on the Geffen website.

This graphic which I pulled from Marshall Kirkpatrick's post sort of says it all.

Comments

[rob]

They obviously can distribute music this way, it simply becomes a question of "will" (and you can take that both ways!!) they do it. This does raise an interesting question though as iTunes was never providing a service like it before (so it's not "really" an end run) as they were simply the distribution channel. Becoming more of a value add over time....hmmmm...I guess it just becomes a question of whether or not Apple sees the value in doing that - would spending the money to create this capability have a direct impact on the bottom line? Or does their regular email blast that can take into account both new music and what you have already bought serve that purpose just as well?

r.

[howardhoward Lindzon]

You are so far ahead of the curve on this one, but it is a great opportunity for feedburner.

The average yahoo (me) doing this is going to use iTunes for quite some time.

[JayR]

I wonder what MySpace would have become had this happened a couple of years ago.

[SamM]

Good post, but you may want to highlight that you have an investment in Feedburner.

[fred]

Sam,

I am not in the habit of constantly disclosing our investments in FeedBurner, Indeed, Delicious, Tacoda, and all of our other companies that I blog about regularly and use in the production of this blog.

I believe that most readers understand that I am a VC and I blog about my portfolio companies. The Union Square Ventures portfolio is at http://www.unionsquareventures.com/portfolio.html in case you are interested in seeing all of our investments. The Flatiron portfolio is at http://www.flatironpartners.com/index_invest.html (a bit out of date - some of those companies have been sold).

Fred

[Andrew Fife]

Fred:
I suspect that most of your readership knows which companies you've invested in and I don't think you have much to worry about regarding bloggging about portfolio companies and percieved conflicts of interest. That said several other VCs do post lists of their investments in their sidebars. I don't see it as a big deal either way.
-Andrew

[Jonathan Peterson]

The idea of subscribing to fan information is a good one, but bands without major label deals have been doing this stuff for years.

Record companies spent hundreds of millions on digital distribution and failed miserably until Apple came and did it (mostly) right. Unless record companies are willing to give customers a digital sales channel that is no more restrictive and no more expensive than iTunes this is just a low cost direct marketing channel.

[jackson]

Certainly an interesting development we've all been expecting to see. Too bad Geffen is a shitty label that doesn't understand artists and sees music in dollar values. I'll never forgive David Geffen for the way he treated Neil Young in the eighties.

[JayR]

Neil's problems with Geffen did inspire him to toss off "Everybody's Rockin", which has the sound quality of the old AM radio in my Vega but is still a fun record to listen to.

[jackson]

and 'Prisoners of Rock and Roll'....

People tell us
that we play too loud
But they don't know
what our music's about
We never listen
to the record company man
They try to change us
and ruin our band.

That's why we don't wanna be good
That's why we don't wanna be good
We're prisoners of rock and roll.

When were jammin'
in our old garage
The girls come over
and it sure gets hot
We don't wanna be watered down
Takin' orders
from record company clowns.

[JayR]

Actually, I stand corrected on the relationship between Everybody's Rockin and Geffen. I did some research. Neil recorded Everybody's Rockin to be his last record for Reprise, and Geffen bought the rights to the album from Reprise because the countryish album that he had intended for Geffen to release was rejected by Geffen. There was then a legal skirmish where Geffen sued Neil for recording "uncommercial" records and Neil countersued for breach of contract and fraud.

So Jackson's theory prevails and I should not rely so much on my faded memory.