How the Music Industry’s War on Sharing Destroys Markets and Erodes Civil Liberties

Putting the “Play” in Playlist: Uplister

1 Leave a comment on paragraph 1 0 In 1999, few record label executives were more in touch with the brewing digital music revolution than Jeremy Silver. As Vice President of New Media at major label EMI, Silver’s job was to grant licenses to deserving innovators. In his words, “I had every single music internet company that had a new business model for music coming in to see me and putting their business plan across my desk.”[1] From his office on the ninth floor of Los Angeles’ iconic Capitol Tower, he could see Hollywood spread out beneath him, and he was excited when he thought about the changes that would soon transform its business landscape.

2 Leave a comment on paragraph 2 1 The problem was, not everyone in the business, or even within his own company, was as excited as Silver was. As he told me, he’d been “experiencing a degree of frustration with EMI at that point,” because event though he’d been busy granting licenses, often in exchange for big cash advances and/or equity stakes in the companies themselves, “we weren’t actually developing our side of the deal to be able to really play ball.” Silver might be granting innovators permission to use their content, but the label was dragging its heels when it came to providing these companies with access to the content itself. There was no in-house infrastructure to digitize and distribute songs, nor were any of the associated assets, such as videos and metadata, readily available to licensees, and there was no effort to bring the bands themselves to the table to help augment and promote the services. It was as though the company was partially paralyzed, with Silver’s department intent on moving forward and the rest of the organization refusing to budge.

3 Leave a comment on paragraph 3 0 One day, a group of engineers came to his office, and though they didn’t have much of a business plan, their technology piqued his interest. He decided that even if “the music industry was visibly missing the boat,” it didn’t mean that he had to be left on the shore. In May, 2000, Silver tendered his resignation at EMI, and signed on as the Executive Vice President for the engineers’ digital music startup, which was called Uplister.

4 Leave a comment on paragraph 4 0 Uplister’s basic premise was simple: if digitization was going to unbundle the traditional album (a fact that was already evident to many in the industry), music could be re-bundled by the listeners in the form of playlists, which could then be searched and shared among the service’s user base. Music itself might become ubiquitous and commoditized, but the service of providing access to songs, combined with a social platform catalyzing musical community through the act of sharing, would still be a valuable – and potentially profitable – enterprise.

5 Leave a comment on paragraph 5 0 When Uplister launched in September, 2000, it had almost every piece in place: powerful and intuitive software for creating, sharing and searching playlists, an enthusiastic early adopter community ready and willing to pay for the ability to use the service, and enough venture capital to last a year without revenues or additional cash infusions. The only things missing were licenses from the major labels. Without them, the service could only legally provide 30-second clips of each song – a good proof-of-concept, but hardly a compelling proposition for music fans.

6 Leave a comment on paragraph 6 0 Silver knew the licenses would be a make-or-break for his company. Without them, he acknowledged, the service would be “hugely inferior. It was much more exciting once you were able to turn all the music on.” Yet, he wasn’t terribly concerned; as a recent EMI executive, Silver had little doubt that he would be greeted with “open arms.” After all, these executives were his friends and former colleagues. And besides, who knew better how to approach negotiations than someone who had sat on both sides of the table within recent memory?

7 Leave a comment on paragraph 7 0 Silver now realizes that this expectation was evidence of his “incredible naiveté.” True to the old saying, he found that he couldn’t go home again. “As soon as I’d crossed that bridge and became someone in a technology company,” he remembers, “everything that we did was viewed with suspicion.” Not only did the labels have “fundamental business concerns” regarding Uplister’s ability to distribute music profitably based on an untested model, Silver also believes that personal feelings got in the way. In his words:

8 Leave a comment on paragraph 8 0 There was this idea that ‘these guys might go out and make a load of money that we’re not making. And they might make a load of money on the back of our content. And he might make a load of money that he wasn’t making with us.’ . . . And I knew that because I’d sat there in plenty of meetings from the other side of the table, feeling exactly like that about all these guys coming in. Thinking, ‘Well, hang on, this sounds way too good.’ Which is why I started wanting to become part of it.

9 Leave a comment on paragraph 9 0 In the end, the major labels never quite said “no” to Uplister. They simply never got around to saying “yes,” demanding millions of dollars apiece in advances, and refusing to negotiate for a lower fee, even though the sums they asked would bankrupt the fledgling enterprise. Nor did they respond to Silver’s appeals with any kind of enthusiasm or alacrity. As he describes it, the “major labels’ attitude . . . when there was a problem was ‘this is too difficult, we’ll go really slowly.’” And for a venture-funded startup with a high burn rate in a rapidly evolving business and technological environment, this more or less amounted to the kiss of death. Things were a bit better with the indie labels, who were “much more interested, much more engaged, much more willing to experiment,” and thus granted licenses to Uplister only a year or so after the company launched.

10 Leave a comment on paragraph 10 0 Unfortunately, this proved too little, too late. By September, 2001, Uplister had about 750,000 users, six weeks of cash left in the bank, and zero major label music on its site. As Silver recalls, “it was like we were in this racecar, although someone had disabled the brakes, and we were headed for a wall. It was horrible.” The dot-com bust had made investors far more cautious, and venture capitalists (VCs) were unwilling to pour more money into the company if it didn’t have a fully functional service. Then came the attacks of September 11th, which froze investment entirely. Silver was forced to lay off his 35 employees while his wife and young children returned to their native England, and Uplister shut its doors permanently. Though Silver soon moved on to become the CEO of music composition software company Sibelius, his experience at Uplister had left him with a lingering sense of personal regret that stands out in stark contrast to his earlier optimism and enthusiasm. “Actually, it’s quite painful thinking about it,” he told me. “It wasn’t fun.”

11 Leave a comment on paragraph 11 0 [1] All quotes from Silver are based on an interview conducted via Skype on July 20, 2012.

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Source: http://mcpress.media-commons.org/piracycrusade/chapter-7-this-sounds-way-too-good-no-good-idea-goes-unpunished/putting-the-play-in-playlist-uplister/