iTunes Music Store and Coca Cola Music consultant Denzyl Fiegelson here continues his enlightening history of online music. Enjoy!
After reminiscing a bit in the last blog post, I have been asked to continue the story and time-line. Its not easy as so much activity came and went, and we could fill many pages with stories, which I hope others will fill in some gaps. Here’s a start to jog the memory;
In conveying a story of where music and the internet have come from, we get insights as to what the critical issues are for artists, labels and all the industries that rely on a healthy music economy (especially now!) I’ve been lucky to be involved in digital music and marketing since 1996, and have seen companies come and go. A great feature of The Wayback machine lets you see part of the history of my awal label back from 1996. In those days the big news was the arrival of the mp3 format in the early 90’s and the release of software that made it easy for anybody to ‘rip’ songs from their CD (a master copy of music files), an industry-changing influence on music’s online accessibility. The 90’s was a heady time of pioneering a new form of distribution and D2C communication. In 1997 I launched a free newsletter with music news and self-marketing links, and within a year had almost 30,000 subscribers.
1997 also saw the launch of MP3.com, which was co-founded by Michael Robertson and Greg Flores as part of Z Company which ran a variety of websites: filez.com, websitez.com, and sharepaper.com. The idea to purchase the MP3.com domain arose when Flores was monitoring search traffic on filez, a FTP search site whose first incarnation simply shunted queries to an existing free search engine developed by graduate students at the Norwegian University of Science and Technology. Flores noticed in his review of the search logs that people were searching for things like “Metallica” and “Madonna.” After investigation, Flores discovered that people all over the World had MP3 files available for download. He downloaded a song from a then pirate website and was amazed by the quality of the file so he e-mailed it to Michael and they agreed that this was pretty cool stuff. Michael e-mailed the current owner of MP3.com, Martin Paul, to purchase the URL. The business plan was to re-direct traffic from MP3.com to Filez.com, the source of most of the company revenue at the time. Filez.com was a pioneering website in that free search results contained pay for placement click-through results. MP3.com received over 18,000 unique users in the first 24 hours of making the URL live, and Greg received his first advertising purchase call within 18 hours of launch. The resulting advertising purchase and traffic caused the team to re-direct focus to MP3.com. The site was shut down in December of 2003.
So many companies came and went during that period of boom. One we talked about a lot at the time (mostly because of the amount of funding they raised) was Riffage, which launched in July 1999 and closed just over a year later. I still have some great (expensive) promotional material they gave out at events! The first commercially released personal music player capable of handling MP3 files, I believe, was the MPMan F10, manufactured by Korea’s Saehan Information Systems and launched in March 1998. The F10 contained 32MB of Flash storage, enough for a handful of songs encoded at 128Kb/s. It measured 91 x 70 x 165.5mm. It connected to an old-style parallel port on the host PC from which songs could be copied to the player. There was a tiny LCD on the front to give an indication as to what you were listening to. The following year prompted the release of the Diamond Multimedia Rio PMP300, which was priced at $200. The PMP300 – widely but wrongly held to be the world’s first commercial MP3 player – also had 32MB of storage fed through a parallel port. But it boasted a larger display than the F10 and also featured a Smart Media slot to allow users to increase the gadget’s storage capacity
The Rio was released in September 1998, but by 8 October had become the subject of a lawsuit from the Recording Industry Ass. of America (RIAA), which claimed the player violated the 1992 US Home Recordings Act. By that point, Rio had already teamed up with MP3.com to offer songs from the website. The RIAA asked for a sales ban, and got one on a temporary basis on 16 October, only to have it withdrawn on 26 October. In December, Rio countersued the RIAA, claiming the organisations actions were an attempt to impede the growth of a market – digital music – which it didn’t control. The RIAA and Diamond would eventually settle their differences in August 1999, but by then Rio was a household name, especially among internet users busily sharing MP3 music on the internet using newly created peer-to-peer (P2P) file-sharing software. Saehan later appeared among the roster of members joining the Secure Digital Music Initiative (SDMI), an cross-industry attempt to develop a universal digital rights management (DRM) technology. SDMI ran out of steam in 2001, largely because of a highly publicised cracking of its encryption technology, leaving the way open for Microsoft’s Windows Media DRM technology to fill the gap. And it might have done if Apple’s release of the iPod in the October of that year hadn’t proved ultimately so successful. In the interim, MPMan had continued developing and offering MP3 players, but Apple’s move to allow Windows PC owners to use the iPod, from April 2003, resulted in explosive growth. MPMan, Rio and other pioneers couldn’t keep up.
Liquid Audio was formed in May 1996 by experts in the music and technology industries and was the first company to deliver secure music over the Internet. Liquid Audio had the first digital music commerce system featuring copy protection and copyright management, as well as the first and largest digital music distribution network. CEO and President, Gerry Kearby, testified before the US Congress regarding digital music. He also drove development of digital audio watermarking technology (acquired and used by Microsoft). At its peak, Liquid Audio had a market cap close to $1 billion.
The first version of RealAudio was released in 1995. In August of that year I remember the first live broadcast of a baseball game over the Internet between the Seattle Mariners and the New York Yankees.
There was so much activity in the late 90’s. Online music sites were raising massive start up funding. In May of 1999, Musicosm declared itself the first interactive MP3 Record Label. In June music download site Tunes.com files for IPO. The company, which ran a Web site where visitors could download music for free, filed to raise $46 million through an initial public offering. Tunes.com operated several music sites, including RollingStone.com, DownBeatJazz.com, and TheSource.com. Also that year, Earthlink and Wherehousemusic.com announced a big partnership. That year, Web Radio was building. AOL Radio can trace its roots to two companies it acquired that year on for $400 million, Spinner.com and Nullsoft. Spinner.com was formerly known as TheDJ.com. Nullsoft was the maker of the popular Winamp and SHOUTcast products. The Spinner.com brand was retired in July 2003, but exists today as an AOL Music blog and a series of channels on AOL Radio.
More to come in the next blog post. In the meantime, I like to recommend you read Keith Jopling’s blog – Juggernaut Brew, which will keep you updated on more current events. I have also just returned from a 10 day trip to South Africa, and will write about that
experience in a forthcoming post.
Also, watch Tina Fey as Sarah Palin in VP Debate on SNL.