John

Music 2.0 Tanks.

In News, Online on April 23, 2008 at 10:39 am

Ah, monetization–the Big Answer that still eludes Web 2.0 to this day. Following the news that eBay is going to dump Skype, another “2.0” venture is shutting down within the next couple of weeks, confirming that having tens of thousands of members doesn’t necessarily translate into any form of profit whatsoever.

Gerd Leonard’s idea to free up music while keeping it legal was noble, but it ultimately flopped–it makes me wonder if other sites that run on a similar ad-supported model like RCRDLBL will survive in the long term. As the article in the Register suggests, it was Music 2.0’s goal to be completely legal that proved to be its downfall.

From The Register:

Music’s best-known “futurist” has admitted his latest business idea has flopped and the service will close. Gerd Leonard of “Music 2.0” fame, who popularised the phrase “music flows like water”, has discovered that on the internet, revenue flows like set cement.

His company Sonific, which allows bloggers to embed a widget that plays music, will suspend its service on May 1. The founder blamed “lack of solid revenue modelling” (Translation 2.0: no income).

As a regular keynote speaker, Gerd has been telling the music business what it em>should do for years [2005 interview here], although his focus has more recently switched to telling the TV business what it should do. So we can hear a fair amount of under-the-desk chuckling at Sonific’s hiccup around the music business this evening. But this would be unfair to a generous and big-hearted guy, because Sonific’s failure should be measured against recent “successes”.

Sonific’s concept was a lovely idea, nicely implemented – and best of all, it was completely legal. And that probably sealed its fate.

“It seems that the industry’s major stakeholders still prefer this turf to remain unlicensed rather than to allow real-life, workable and market-based solutions to emerge by working with new companies such as Sonific. This is not the way forward,” wrote Gerd on the Sonific.com site.

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  1. Guys, like everything, this is a question of TIMING. Models like Sonific will work when the context & timing is there, and that could be in 3 months or in 3 years — and therein lies the problem! And again, it’s not just about monetization since it is VERY cheap to run web services and more or less virtual companies such as Sonific (we learned that from the .com bubble!) — it’s a question if having the support of investors that believe in having ANY success in this turf – and that is lacking as well (again, how can you calculate a risk if there are no data points?)

    I have to say that Andrew O’s comment from the Register is rather haughty: Sonific’s concept is a great market fit for labels and artists – see the comments on our blog, here: http://gerdleonhard.typepad.com/songspotting/2008/04/sonific-goes-of.html
    and I would dare say that streaming widget syndication offers will become a standard in the next 18 months.

  2. @gleonhard thanks for commenting! It’s sad that Sonific is under the trouble that it is… trying to do the right thing sometimes doesn’t cut it in the new web. But you guys took the chance to change, and you obviously left your mark for people to follow. Your project could very well be the genesis for some other company who can get the timing, funding, and the investors’ trust.

    After all, good, free, legal music is a good thing for us all, but you have to be wary of the fair amount of skeptical finger waggers out there who wanna say “I told you so!” I for one, am cautious over how some web 2.0 companies can value their companies so highly without a model of monetization. That skepticism has made me cynical of anything that’s free and legal–including Music 2.0, and from The Register’s tone, I’m not alone in my cynical perception.

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