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Penny Fractions: The Ghosts of Music Streaming's Past

Hello, I hope y’all are doing this week. I want to start off sorry about the errors in last week’s ne
Penny Fractions
Penny Fractions: The Ghosts of Music Streaming's Past
By David Turner • Issue #71 • View online
Hello, I hope y’all are doing this week. I want to start off sorry about the errors in last week’s newsletter that cause the screenshots to either not appear or be incorrectly positioned. No images this week! Today’s newsletter centers on the early days of music streaming and seeing the parallel issues that existed back in 2002 remain in 2019. If you like this please let me know, since I really love these historical deep dives but would love to know y’alls thoughts on them.  

Entering the 21st century the record industry identified an existential threat to sky high CD sales: Napster. By 2000 the file-sharing site created by teenage coder Shawn Fanning a couple year prior was facing legal action by the record industry. However, the records executives couldn’t just take out Napster since another site could always fill its shoes, so a solution needed to be found. Enter: pressplay and MusicNet. My focus this week this week is on these two oft forgotten music streaming services to help contextualize the persistent conflict between artists and labels that continues to define the struggles of music streaming.
How Music Industry Grew to Love the Subscription
Musicians were rather quick to adopt the internet and throughout the 1990s experimented with various experiments: live concert streaming, promotional song giveaways, and direct musician to fan connection like Peter Gabriel offering a 40 tracks a month for $7. (The book Playing to the Crowd: Musicians, Audiences, and the Intimate Work of Connection by Nancy Baym does an amazing job diving deeper into this topic) An artist’s utopia was rather dystopian outcome for record labels. The internet allowed for unmediated artist access to their fans unmediated by record labels and undermined the power of music catalog. Direct payment of artists or posting on the same message boards didn’t offer a perfect solution to inherit class issues within the music industry but it could’ve sparked a larger break in how one conceptualizing being a musician. Fanning’s company didn’t destroy the value of music but rather spooked record labels that saw in Napster as a threat to their previously valuable collection of copyrighted material. The loftier of what could be the future of music were abandoned and Napster took over the industry’s imagination of digitized music.
In May 2000, Universal Music Group joined up with Sony Music Entertainment to create a music subscription service called Duet, which a year later would partner with Yahoo! and undergo a name change to pressplay. The platform launched in December 2001 in the United States and according to the BBC offered music fans:  “basic plan costs $9.95 (£6.87) a month for 300 streams and 30 downloads - the most expensive costs $24.95 (£17.22) for 1,000 streams, 100 downloads and 20 CD burns.” In an era where the music options sat between hyper-inflated $17 CDs or endless content via Napster the major label solution was laughably limited. However the artificially constrained choice showed the unspoken goal for music streaming for record labels: Remove music from hands of fans, who’ll just bootleg CDs and MP3s, and instead offer a closed off digital first world that’d eventually be sold via smart phones under the guise of convenience.
Pressplay wasn’t the only venture in this space. Early in 2001, AOL Time Warner, Bertelsmann AG, EMI Group, and RealNetworks announced MusicNet, a music streaming service, which featured music from EMI, BMG, and Warner Music Group. These two services represented the “legal” options for major label approved music streaming and would be quickly questioned. A chief issue was that both offered a worse product than Napster and expected to people to pay for it, there was also a threat of Department of Justice investigation over how these top players limited music licensing to keep other services out of the market, as well as the whole not paying artists their fair wage issue. The New York Times in 2002 reported on the legal action major label artists were taking against these new music streaming websites:
Representatives of the five major record labels would not talk on the record about the payment system or their rights to use the music. But in comments not for attribution, several executives at labels and their subscription services did not dispute the accusations regarding the payment plan. They said their first priority was to make the services attractive to consumers and that the details of compensation could be worked out afterward.
Now to jump ahead a bit even Spotify’s narrative of needing to achieve user scale before its business can find a path to profitability isn’t just Silicon Valley-speak but rather an old record label talking point, as the group that suffers in this period of market growth isn’t labels but rather artists. The Times story repeatedly highlights how much pressplay and MusicNet stood opposed to the values of artists and fans by reportedly only paying “$.0023 per song downloaded.” Rand Hoffman, of Universal Music Group at the time, rather bluntly laid out the label shakedown happening to artists at this time (emphasis mine):
“Pressplay is committed to making music available on the Internet in a manner that is legal and that ensures that artists and publishers will be paid. This is truly a time for artists and record companies to be working together.“
He added that it was ’‘beyond logic” that artists would choose to leave their music off Pressplay and “effectively encourage the use of illegal services.”
Hoffman makes it clear that either musicians can accept the record industry’s terms or align with piracy. Such a bold anti-worker sentiment is why Courtney Love, the lead singer of Hole, could so boldly say “Since I’ve basically been giving my music away for free under the old system, I’m not afraid of wireless, MP3 files or any of the other threats to my copyrights.” The expansive possibility of the 1990s was silenced by two label-backed service anointed to be the future. Still even with such backing barely two years after their public debut MusicNet never properly launched and pressplay by 2003 was rebranded as…Napster.
Spotify’s narrative of disrupting the the record industry rings hollow when better contextualized. The record industry tried very hard to make music streaming work and understood that in the long term it was the solution to the “problems” presented by the internet—it also meaningfully would increase the amount of money individual spend on “music” every year. When Napster initially shutdown in 2002 Daphne Carr for the Nation spoke to the underlying cynicism of these major label backed music streaming platforms: “Pressplay and MusicNet, then, operate on the assumption that in the future, through lawsuits and media-friendly legislation, consumers will have no choice but to subscribe.”
Spotify and other subsequent music streaming services now exist to obscure this tension. Instead of record labels there is a tech company that shoulders the blame for underpaid artist. I’ll admit music distribution not being solely controlled by major labels is certainly better for artists, but there should still be pause for how things shifted so far towards this direction. Record labels used the story of piracy prevention to decouple music ownership from both musicians and fans alike. The plan didn’t initially work but the foresight of MusicNet and pressplay laid down the groundwork for the record industry’s revival nearly two decades later. Except artists, as in the old system, were left to ask where’s the money.
6 Links 2 Read
I found this story extremely interesting from an antitrust point of view, because I know this might be controversial but perhaps it’d be better for music and society if a single company didn’t own party of a music streaming service, radio station, a ticketing company, and dear god everything in the music industry.
I just wanna know who is the target market for a $100 dedicated car music player? Don’t get me wrong I fully want to believe in the revival of the singular MP3 player but this feels like a company wanting to check off the boxes of diversified revenue streams without offering a compelling product.
YouTube appears to be winning its never-ending fight against any kind of government regulation.
Yes. thank u, next.
This “news story” is simply a press release. However I wanted to include this because even if the actual playlists are absolutely terrible the concept of horoscope-themed playlists is so fucking good. Lazy execution but a novel idea, which describes most music streaming efforts in 2019.
Hazel Cills points out the fact that Spotify’s introduction of a mute feature does nothing to address deeper industry wide issues of dealing with alleged criminals like R. Kelly and simply shifts judgement onto users. There are steps Spotify and the greater record industry could take to address systemic issues of sexual abuse but adding a mute function to Spotify is putting their hands over their eyes and hoping people will stop pointing to them for answers.
The Penny Fractions newsletter arrives every Wednesday morning (EST). The artwork was done by the graphic designer Kurt Woerpel whose work can be found here. My personal website is davidturner.work. Any comments or concerns can be sent to pennyfractions@gmail.com. I was honestly not jacked enough into the matrix to have used pressplay back in the day but if you did certainly please tell me about it.
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David Turner

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