The Daily Swarm

Wired:

The digital music doubters could be right with the contention that advertising revenue can’t cover the costs of licensing music. Meanwhile, illegitimate free music sources continue to proliferate, rendering paid music subscriptions irrelevant for most music fans…Advertising was supposed to be music’s magic bullet, enabling fans to get the free music they’re going to find anyway while contributing at least something to copyright holder coffers. That dream is fading fast. As legitimate sources for free on-demand music dry up, fans will likely head back to file sharing networks, which is bad news for everyone involved in music — except for, perhaps, hard drive manufacturers.

Techdirt:

Of course, it’s really no surprise that most of these sites have struggled. Beyond the ridiculously high licensing rates that the labels forced on them (often by negotiating through lawsuits), none of these sites put together a well thought-out business model. Instead, they all seemed to think that they could just slap ads on the site and that would be enough. But, of course, when you’re listening to music, you’re not looking at that website or paying attention to the ads—and if the ads got too intrusive, they’d just go elsewhere. A real business model would have been setting up something more comprehensive, that gave listeners a real reason to buy associated with the music. Eventually we’ll get there, but in the short-term, the graveyard of failed “licensed” music startups will grow, just as more and more “unauthorized” sites grow in popularity.