by José Alvear
April 11, 2000
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Myplay, which Camplejohn co-founded and launched last year, allows users to organize, download and share their MP3 collections with other users. In effect, Myplay looks and acts exactly like main competitor MP3.com and its Beam-it service (http://my.mp3.com). The main difference, Camplejohn points out, is that MP3.com chose to break copyright law by pre-encoding CDs while Myplay played it safe by allowing users to (slowly) upload their existing MP3 files.
Additionally, users can add music to their “lockers” by direct server-to-server transfers from Myplay partners like Epitonic and Emusic. Myplay even offers free promotional songs that are highlighted on its site and can be added to lockers with the click of a mouse. It also has a downloadable application called the DropBox that’s good for getting songs from sites that haven’t yet partnered with Myplay. Last week, Myplay got its biggest partner so far: America Online. Myplay will provide lockers and “Add to Locker” functionality to AOL’s Spinner and Winamp properties. Not a bad deal for the young company.
Camplejohn has previously worked for Apple and later joined Starlight Networks, an early player in the streaming market. He talked last week about how Myplay works, how they differ from My.MP3.com and the future of digital music.
Q: Start out with a quick introduction of Myplay.
A: Myplay is a music locker. It is a place on the web where you can store all your music and access it anytime and anywhere you’ve got a connection to the Internet. Today, that primarily means your personal computer but fairly soon it will include your Palm Pilot, TV or even cell phone. [Now] you can select tracks individually and download them directly from Myplay into portable MP3 players like the Diamond Rio.
Q: So the main difference between you and My.MP3.com is that you do this legally. [Laughs]
A: We’ve really made a conscious choice from day one--obviously there have been people that have thought about things like My.MP3com (a universal jukebox). Coming from Silicon Valley and Apple, I wanted to build a service that was incredibly simple to use and in many ways unlimited by the current copyright law. But we made a choice. The majority of the world’s music sold today is owned by the five major record labels. We want to be able to have a long term and healthy relationship with the record industry. We also want to make sure that the people who create this great music ultimately get compensated (the artists and the record labels). We went with an approach that is very cleanly legal. The first step was a private place to go put your music. And requiring customers to make their own personal copies and put that into their lockers--that is considered fair use under the Audio Home Recording Act. In the recent Diamond Rio ruling they came up with the term “space shifting” and made it clear you can store digital copies of your own music for your own personal, non-commercial use anywhere.
Q: So basically the main problem with MP3.com is that they’re doing the encoding, not the consumer.
A: Right. If Michael Robertson [MP3.com CEO] bought 80,000 CDs and made a personal collection for himself on a private web site, they would have no problem with that. It’s the minute that he says, “We are making that copy and are making it freely available and we are a commercial enterprise and are making money off this without paying the rights holder” that the record industry has a problem. And justifiably so.
Q: What if Michael said nothing about how they were doing and let the user assume they were uploading files?
A: It doesn’t matter.
Q: It just seems very semantic.
A: It seems semantic but it’s very black and white in copyright law. The analogy I’ve used is: just because I run a red light and don’t hit anybody doesn’t mean that act was legal. So Michael basically said, “I know exactly what copyright law is and I’m going to violate copyright law because doing it this way makes sense”. And he hopes he could get away with it. And it’s pretty clear that the record companies immediately saw that and said, “You’ve stepped over the line”.
Q: So you could have done it, too, right?
A: The very first business plan for Myplay looked almost identical to My.MP3.com. We talked to copyright lawyers, the RIAA and the record industry and they said that’s crossing over the line--you can’t do that without a license. And those licenses are obtainable but it’s a long, drawn out process.
Q: Will you do it at some point?
A: Uh, absolutely.
Q: Anytime soon?
A: We can’t comment on that at this time.
Q: Nevertheless, you can still upload illegal music. For example, I can upload MP3s I get on Napster to my locker on Myplay.
A: Right. You still can and that’s the strange part about copyright law. I’m legally allowed to borrow your CD and make a copy for my own personal use. So I’m legally allowed to go find a file on a server (or Napster) and store that on my hard drive or Myplay. That being said, everything in our terms of use [agreement] says this is for legal music that you have purchased for your own non-commercial use. We have the right to shut down your account if you violate that--and we have shut down accounts where people have violated our terms of service.
So that’s one part of the service. You can consider that part of Myplay a legal version of My.MP3.com.
Q: What are the other parts?
A: There are really three ways to fill your locker. You can rip your own CDs and upload them. You can go to partner sites (like Emusic.com or Epitonic and others) that have “Add to Locker” buttons that copies the file server to server, such that you don’t have to go through an upload and download process. The third way is the Myplay DropBox that lets people drag and drop URLs from sites like MP3.com (who we don’t have a relationship with) and add it to their locker that way.
Q: Some of the Internet hard drives sites also provide similar programs where you can upload and store music from partner sites. Do you compete with them?
A: You know, we really don’t see ourselves competing with those guys. I think that storage is a commodity and there are 30 or 40 different hard drive companies--I can’t even keep track of them anymore. What all of them are finding is that storage is the commodity and they have to build application functionality on top of it. It’s kind of like the difference between a web application like Hotmail or AOL Calendar. It’s very different from saying “Here’s 10MB of hard drive space you can put your Outlook PST files as a backup”. Really, a hard drive is just a place to temporarily swap stuff. It’s not really that useful. Coming back to streaming media (which we’re big believers in), any music in your locker is immediately streamable back to yourself.
Q: And right now you only use MP3 streaming, right?
A: Right now we stream MP3 and Windows Media; we will support additional formats in the future. We’ve hired some of the Icecast team and do that from some enhanced Icecast streaming technologies.
Q: Are you afraid that sites like Yahoo (which are already taking other functions like bill payment, e-mail, hard drive space, etc.) will get into this space?
A: Certainly. I mean this is one of the hottest areas on the net and there will certainly be some of the portals that decide to build it themselves. We’re working with one that we announced last week--America Online. They decided not to build it themselves and instead partnered with Myplay so that every Winamp and Spinner customer gets a Myplay locker and makes that their default place to keep the music on the web. And there are others that we’ll announce in the future as well.
Q: Yes, that opens up a huge audience to you.
A: And certainly the focus right now is on the Spinner and Winamp but they’re putting the pieces together for a killer music strategy.
Q: Are you concerned or interested in applications like Napster that let users share their music collection with each other?
A: I don’t know if we’re concerned. We think sharing music in a responsible way is a wonderful thing and Napster has certainly proven a few things: that people like to have immediate access to their music. Just as people want to be able to buy thing with a few mouse clicks, they want to have instant access to their music--and we’re big believers in that. In Myplay we’ve found a way for people to take music they legally own and share it legally with their friends, in something called the Myplay Playlist feature.
Q: How does that work?
A: You can create a mix of any tracks in your locker and then email that list to a friend or post it to a public section of Myplay. That’s legal for a few reasons: first of all we’re not sending the files, it’s only a stream. It’s like a radio station--I can’t fast forward or rewind, for example. So we built the software to make any playlist stream compatible with the Digital Millennium Copyright Act (DMCA). And that act is a series of rules that tell web broadcasters to follow rules in order to get a blanket license rather than negotiate individually with each of the record companies.
Q: How can you do that when users make their own playlist?
A: We know what the songs are in their playlist so we have all the rules coded in the software so that those customers can--for example one rule is that you can’t have more than four tracks off of an album. So we say, would you like us to fix it for you or will you fix it yourself? When they’re listening to it privately they can do whatever they want. But when they’re broadcasting and doing a public performance we make sure it conforms to the rules and also we track what’s being played so we can pay the performing rights societies--ASCAP, BMI and SESAC. So ultimately the artists and record labels get paid.
Q: Does the playlist play continuously?
A: Basically the first person that listens to the stream will start it from the beginning, then anyone joins it in progress.
Q: How many people can listen at once?
A: We haven’t hit that limit yet. [Laughs] We basically built the system for initially tens of thousands and ultimately hundreds of thousands of simultaneous users. We’ve put several million dollars in the infrastructure in building Myplay. The way we look at this, there’s a new power grid that’s being built for digital music and entertainment that’s similar to the old infrastructure of CD pressing plants and trucks. Now it’s about servers, streaming, bandwidth and application middleware--all these pieces that we built that we can a service like Myplay on top of.
Q: It reminds me somewhat of applications like myCaster and Live365.com that allow people to broadcast their own music stations.
A: In some ways it is. Our focus has been around the locker. If you think about the analog world, a lot of the time I spend listening to music is my own personal collection and that’s on CDs and cassettes. A smaller fraction of those people will put together a mix tape and share that with their friends. And that’s what you find in the playlist feature like Live365 and myCaster. So it’s not where most of the customers are spending the time, but already in the first 30 days we launched Myplay we had over 10,000 playlists created. So almost overnight, we became one of the biggest radio broadcasters on the net and that’s not the main focus of the site. It’s very viral.
Q: What other metrics can you release in terms of members, number of songs?
A: As a private company we don’t release any of that information right now but I can tell you the growth of the site has been phenomenal. We’re not quite at the Hotmail numbers but compared to most other online web applications we’ve blown their numbers out of the water and exceeded our expectations.
Q: So what exactly is your revenue model?
A: The revenue model--and this is where it comes down to working with the record industry and not fighting them like Napster and MP3.com--is that we believe it will come from direct marketing. That is the ability to introduce new music to customers to Myplay, with their permission.
For example, we’ve already worked with emerging artists like Aimee Mann and Kittie that have paid us to reach our customer base. Kittie put a free track on Myplay and it was a popular track. Immediately we had a customer base that we knew were Kittie fans and was larger than Kittie’s record label [Artemis] had on its own. So we went back and offered those customers a chance to see a private Kittie video shoot, and private concert. Also, when the CD came out we gave them the ability to order the CD at a discount. Customers that were Kittie fans loved that and when the album came out it was on the Billboard 200 chart. So that’s an example of the type of market we’re doing. Obviously there will be parts of the site that will be advertising and subscription and e-commerce but we’re really trying to build a direct marketing machine.
Q: How about pay-per-listen or other revenue models?
A: I think there will be some really interesting models that will emerge on the net. If you look at the record industry in comparison to the movie industry, it has a few price points: you can go to a concert or buy a CD. Look at the movie industry: you can go to the theater, buy the video, buy it on pay-per-view, rent it, and at some point the movie becomes free on TV and is advertiser supported. So I think you’re going to see a lot of those models emerge for the music space as well and obviously we want to have a play in that.
Q: It seems that making money from artists--“payola” I guess I’ll call it--
A: It’s not really payola. If you think about it, payola is when I pay something to play on the radio and the customer thinks they’re getting an informed opinion. What we’re talking about is really a more targeted form of advertising. The net started with companies like Yahoo! that had no idea who you were and flashed some ads at you while your eyeballs were passing a page. In Myplay’s case (with your permission) we can market music and products that are specifically interesting to you. And you have full control over the volume. It’s more than an on-off switch with Myplay--we give them a volume knob so they can say “I only want to hear about Rock or Blues and talk to me twice a week”. What we found is that less than 2% of customers opt out of email and over 40% go in and adjust their settings.
Q: I guess my point is: Will you make enough money using this direct marketing approach?
A: We’ve only been launched for four months as a site [Laughs]. So the focus right now is on building the customer base so we have millions of active customers. Then the real focus shifts to revenue. We have this business-to-business infrastructure for the entertainment industry and we’re also building the stickiest MP3 and music site on the web. So those two things combined makes for a very interesting business.
Q: Are you looking to be a portal, or will you partner with sites like AOL?
A: AOL is a great example of the kinds of deals we’re doing. It’s a co-brand “Powered by Inktomi” type model and partnering so that Yahoo!, AOL, Excite, Microsoft or RealNetworks can offer this type of service. You’ll still be able to come to Myplay to access your account but many of our customers will experience Myplay through these other partners.
Q: Is Myplay a little bit ahead of the curve? Are people ready to put their music on an off-site location and not on their hard drives or CDs?
A: It was interesting when we started this company, our biggest fears were: Are we six months too late or two years too early? And the answer turned out to be: neither. What we found was that the uptake of MP3 has been phenomenal so the activity level is fantastic. If you have more than one computer in your life, you rip a few CDs, put them on your hard drive and suddenly realize your music became less portable. The whole benefit of the net is putting things out in the cloud where you can access them anytime and anywhere. When you have multiple devices in your life and the Internet is ubiquitous as electricity, it certainly doesn’t make sense to store your music in just one place.
Q: From a consumer point of view, why would anyone want to go to Myplay when they can go to My.MP3.com and have it all done quickly by simply inserting your CDs?
A: Sure. If My.MP3.com is deemed legal then there’s no reason and we’ll have the same service the day after [a decision has been made]. The reason why you might not want to do My.MP3.com is that first of all you’re violating copyright laws (you care about that). But most importantly is that if MP3.com--when MP3.com--loses the case, they will no doubt be shut down and your account will be deactivated. So you won’t have access to music that you just spent the time to go beam to your MP3.com account.
Q: Well the downside to My.MP3.com is that you can’t upload individual MP3 files to the site.
A: Yeah, well really My.MP3.com is really just a faster way to fill your locker and it’s only music that you have on CD. So if Emusic.com has a promotion, I can’t add that to my locker. I can’t create playlists that I can share with friends. I can’t take my music collection and download it to my Rio. It’s really a limited set of things you can do.
Q: So where are you headed from here? Any other features you can reveal?
A: Lots of new feature sets. I don’t know if I can reveal any though. I think one of the things we’re still really focused on is making the digital music experience as easy as popping a CD into a player and pressing play or turning on a car stereo and hitting a pre-set button. And as you know, digital music isn’t there yet. A lot of the things we’re doing is spending time on customer research (where they get stuck). For example, we wrote something called Audiomatic that checks if you don’t have a player or if it doesn’t stream properly. It can check your system and install or configure your player for you or show you how to do it manually. Those are the kinds of things that make the whole experience a little bit better for customers and we’re really focused on that.
