WMG and Facebook Total Music Tussle
p2pnet news view Advertising | Music:- It’s one sad tale after another as companies line up trying to find a way to milk the online music loving public without actually giving anything back.
One of the latest horror stories centres on Warner Music and Facebook.
“Facebook’s ongoing effort to launch a free streaming music service is stalled, according to multiple sources familiar with the situation,” says TechCrunch.
“The company was close to a deal that would bring free streaming music from three of the four big labels (Universal, Sony, EMI) through the Total Music joint venture. But the deal stalled when the lone holdout, Warner Music, refused to participate.”
The labels approach the Net with the command and conquer approach – “Sue the hell out of whoever dares to host music online, then cut a deal with them that brings in millions of dollars in penalties and fees” – and a second approach, which is, says the story, “what Total Music is all about”.
“The service, which acquired Ruckus to handle the back end, is striving to cut two types of deals. The first is with device makers to allow music to be accessed directly from the device for free. The device makers pay a fee to Total Music, which is passed on to the consumer. The second type of deal is with websites – who get to stream music for free with advertising. The revenue from those ads, plus a lot of user data, is owned by Total Music.
“That’s the deal that Total Music approached Facebook with. Facebook would get free streaming music (while rival MySpace paid a fee per song played). Total Music would serve advertising and keep all the revenue. Facebook would also hand over user data to allow Total Music to port playlists to supported devices and other services.”
But, continues TechCrunch, some sources say the deal didn’t happen, “because Facebook didn’t want to hand over all the revenue and user data, and so they reached out to third parties to get a better deal.
It adds »»»
But others have a different explanation which makes more sense. Warner Music refused to allow their music to be accessed for free.
Warner, a big shareholder in LaLa (a service we’ve raved about) – they took most of the company’s recent $20 million venture round. They’ve been pushing LaLa heavily to Facebook. But LaLa’s model requires users to pay to stream music, a non-starter for Facebook and any serious rival to MySpace.
That leaves Facebook in a tough spot. Venture dollars to fund a big new streaming music service have dried up, so its unlikely that any third party will be able to pay the tens of millions of dollars it will require to get a MySpace Music-like deal done. The Total Music deal is being blocked by Warner. And LaLa’s business model just doesn’t work with what Facebook wants to do (free).
That means Facebook either needs to pay, or Warner needs to budge. Neither may happen, and rumor is that Total Music’s political capital at Universal and Sony has all but dried up as they struggle to complete the Facebook or any other deal.
It’s tough at the top.
:sigh:
And meanwhile, 99.9% of online music lovers continue to get their fixes from one or other of the independent music sites and services, or free from the P2P networks.
Just as they’ve always done.
TechCrunch – How Warner Music Killed Facebook Music, January 15, 2009
Use free p2pnet newsfeeds for your site. It`s really easy!
Subscribe to p2pnet.net | | rss feed: http://p2pnet.net/p2p.rss | | Mobile – http://p2pnet.net/index-wml.php
Net access blocked by government restrictions? Use Psiphon from the Citizen Lab at the University of Toronto. Go here for details.
