by Scott Bass
October 10, 2000
|
At its core, Live365.com is a technology company that lets users program and stream their own Internet radio stations. The company developed its own streaming MP3 servers, choosing not to use Winamp’s Shoutcast technology.
But even with its server technology, Live365.com is mostly an Internet broadcasting community. When Live365.com launched in late July,1999, there were barely 20 stations broadcasting through the site. Now, just over a year later, the site sports nearly 20,000 streams and seems to be growing at a rapid pace. In June, the company announced it reached 10,000 simultaneous broadcasts, with stations originating from more than sixty countries.
The larger the site becomes, the more potential it offers to advertisers. As the broadcast network becomes larger and more robust, it becomes more attractive to sites looking to license streaming technology. Last month, Live365.com unveiled a streaming MP3 player for Windows CE allowing mobile users to listen to its stations. Previously, WinCE devices could only download audio or video.
It looks like Live365.com has its eggs in a number of baskets. Streamingmedia.com reporter Scott Bass recently caught up with CEO Alex Sanford to find out exactly what kind of omelet they’re making.
Q: The big “wow” over at Live365.com is that you’ve recently “cut the wires” so to speak. Can you tell me about that?
It’s something we’ve been working on for some time, because the real value of Internet radio happens when Internet radio is ubiquitous. Projections for wireless are astronomical and so going wireless is of the utmost importance for people that want to stream audio content. Since we’re the largest streamer of audio content on the web, we think it’s important to go wireless and we’ve had a wireless department working on that for some time. We’ve demonstrated that we can transmit to a cell phone and to a PocketPC. Right now it’s a demo version.
Q: Something else I find extremely interesting is that Live365.com is working on streaming ad insertions, and have proposed revenue splits with DJ’s to encourage them to create good content. How’s that going to work?
We’re building our own ad server technology that being tested now and will roll out very soon; within weeks. We want to make sure that we’re fair with broadcasters, and we want to be able to share revenue with them if they are helping us increase traffic. Our idea is to split some revenue. The overall vision is that revenue that’s attributable to a given station or broadcast would be shared with the broadcaster. We haven’t worked out the exact specifics [but] the idea is to get a virtuous loop going so that broadcasters do more and more to both keep their content as fresh as it can be and get listeners to come to their station. Obviously, we benefit from that as well and our listeners benefit by having better music to listen to. Advertisers benefit because they’re able to reach people who meet certain targeted markets if the listeners provide that information. It’s a complicated offering, but we’ll be rolling it out soon.
Q: Do you plan to establish your own network of advertisers or are you going to establish with an already established network like DoubleClick?
We’re exploring all opportunities. Stay tuned for that one.
Q: How big of a focus is licensing your technology?
We’ve had a number of inquiries and are negotiating something right now. We have the most scalable streaming audio server on the Internet, so we can do things that other people can’t yet do. And by that I mean the biggest names in the industry can’t offer the nearly 20,000 broadcasts that we offer. So the scalability is important and I think that potential partners see that and are interested in the technology.
Q: You mentioned 20,000 stations. That’s a whole bunch of people setting up stations. I think one of the reasons why that number has gone so high is because you have made it easy for a person to set up a station when, for example, they may not be skilled enough to set up a Shoutcast server.
We found that it can be very difficult to set up a Shoutcast station. One of our initiatives from a year ago was to make it as easy as possible for people to do. There are a number of things we’re doing now to make it easier for listeners to find the content that they like. So we have personalization that just rolled out last week.
Q: I was going to ask you about that;it makes me think that when cable came out, people were saying: “100 channels, that’s too many! That’s too many choices!” And here we’re talking about 20,000 radio stations. It’s almost overwhelming.
I think there’s a fundamental misunderstanding when people look at that number. If you can find what you’re interested in easily, it makes no difference how big the universe of content is. But if you can’t find it, then you’re lost in a “complicated forest.” Usually, of course, people consume one piece of streaming audio at a time, and we’re not trying to do anything to disprove the reality that people aren’t going to listen to 20,000 or 1,000,000 stations or whatever. And I’m sure in a very short period of time there will be a million stations available on the Net. They won’t be able to listen to all of them but they’ll find the things they like and come back to [them]. And they’ll enjoy being introduced to new things, which our site is now doing.
Q: And how does the new “Personalization” work?
It lets people save a station when they find one they like. Right now, when you’re listening to a station you can email it, or refer it to a friend. That helps people communicate and share. We’ve been improving the Broadcaster profile page where people can list who their favorite broadcasters are. That lets the listener find things they like. If they like one broadcaster, they will probably enjoy that person’s recommendations. We’ll continue to improve this;nothing you see will stay the same for long.
Q: It seems to work very well from my end. A recent topic of much discussion has been the subscription model. With Emusic.com, RealNetworks, DiskJockey.com, and other adopting a subscription model where users pay to access content. Do you see this as ever having a place at Live365.com? And what’s your opinion of this model in general?
We’re looking at a number of things on subscription model right now. They may not be the same as what you’re talking about, but we definitely see value in establishing a continuing financial relationship with various users of our service. Certainly as we have advertising on the site, we’ll have enormous amounts of very specific data that will let people identify how to improve their ads to get better results.
Q: Do you anticipate ever charging listeners to access content?
That’s a possibility, but it’s not our main priority. We’re looking at that as an alternative, but most people like the idea of radio being free as a listener, and you’d have to do a lot to change that opinion. So I’m sure we’re not going to take that on as our first challenge. But we’ll continue to look at ways to extract value ourselves and see that there’s value for people that use the service, whether that be broadcasters or listeners or advertisers.
Q: What’s your opinion of the Napster debate?
What part of the debate are we on now? I used to be a lawyer and I have a very lengthy opinion…
Q: I guess what I’m getting at is, peer-to-peer technology: Does it mean the death of copyrights?
I think that “death” is a bit extreme of a word, although that very well may be an outcome. But I think there are so many uncertainties. Among the biggest are: How big of a club is copyright law, and who is willing to use the club? We’ve seen some people who have been willing to use the club, like the RIAA. Who are they using the club against? Only recently they’ve begun talking about “clubbing” individuals, who are violating the rules of copyright, or at least are perceived to be by those wielding the club.
Q: You’re referring to the kid in Oklahoma?
Right, that’s an interesting case. When was the club used, and when should it have been used, and how effective will it be compared to the technology are all issues. Like it or not, I don’t believe that the law has ever been completely effective in managing technology issues. Technology evolves more rapidly than the law does, and that’s pretty much a given. It doesn’t mean that one shouldn’t wish that things be different, and it doesn’t mean that someone can’t say “the law says this is illegal” or “the law is unclear but this appears to be illegal.” The reality is that if you’ve got technology that can get out very rapidly, then the law will have to evolve and the enforcement mechanisms are going to have to evolve.
Historically, even if there had been copyright law 500 years ago, and you had a masterpiece of art, say a painting and you wanted to copy that painting, it would require another master painter to do so. It would involve an enormous amount of time and an enormous amount of skill. Now bring that up to more recent days: copying books and documents 20 years ago largely was only doable by hand or by copiers. To have a copier you had to invest in one. Not everyone had a copier but there still were violations of copyright. The increasing infringement on intellectual property is a trend that has been facilitated by technology as the cost just keeps going down. People think,“this seems like an easy thing to do, I’ll just do it.” Then if the enforcement isn’t there, the fear of doing it disappears and you end up creating a whole culture of “we can just do this.” There’s definitely a feeling these days among some people of “Since I grab it, it belongs to me, and I have a right to do that.” I think this is a social issue and not just a technological issue. And the law finds it very difficult to control either.
Q: Reading between the lines, it sounds like a dim prognosis.
For?
Q: Everyone.
Not necessarily. I think the models are going to change. I don’t believe for a minute that people are saying: “Oh, creativity is going to die.” I don’t believe that for a minute. I do think that the way people are going to get compensated for things will differ, and it will be more and more difficult for people to plausibly set themselves up as the middleman, (like a book publisher or a music publisher) because they can’t control those rights uniquely. But we may be surprised and the law may take some serious steps towards enforcement, there may be some technologies that get instantiated into the content earlier. There’s also an educational component. It may be that spending some time, money, and effort with people at formative stages of their development, will get them to respect intellectual property in a different way than is currently the case. Currently, the feeling is “If you can do it, do it. Nobody’s going to hit you on the head, so why now.” That’s not a legal point, it’s a social point and it’s a technological point.
Q: And the longer that feeling goes unchanged--
That’s the point. It’s gone unaddressed for some time, and now it’s being addressed but it goes back to the “club.” Who do you use it against, when do you use it, is it effectively used? Should you be using the club at all or should you be doing different things? I think you see music companies say,and I don’t mean this to be a “music company comment” because it’s an intellectual property issue,they have concerns that they be fairly compensated. On our site we have no downloading;no one, including the broadcaster, can download. So we’re very much like radio and nothing at all like file sharing. But people get confused. We’re licensed and we pay royalties, but people still get confused. That confusion is something that exists and we have to deal with it.
Q: That concept is clear to me at least, but I’ve been working with the people at Antenna Internet Radio (www.antennaradio.com) for around three years. We, like all legit Internet radio stations are ASCAP/BMI licensed to broadcast, not distribute. But the fine point that I’ve always found interesting, is that if music is coming through your sound card, you can capture it. It might not be easy for all users to do, but it’s always a possibility.
We’ve been working since before we launched the service to understand the laws. Again, I’m a lawyer and we have other lawyers in the company. We use law firms, including those that have worked with and for the RIAA in the past and we’re very focused on the legality of what we’re doing so we can stay on the right side of the law on this issue. One of the things we’ve done is set the maximum bit rate that our streams go out to 56K. Generally speaking, nothing on our site is available at higher than 56K and quite a bit of the content is available at something less because some broadcasters are looking to meet a different audience that wants a smaller stream. 56K isn’t randomly chosen, it’s roughly analogous to FM radio and yet it’s nothing like CD quality.
So if people are going to capture the stream data, it’s just like hooking a cassette tape up to your radio. If people want to do that, fine, go ahead. The music companies have never worried about that. If they ever did worry about it, they’ve certainly gotten over it because they understand that radio introduces music to people that may not have heard it before, and who are sometimes so entranced that they will then go out and buy it. And so that is exactly the model we are pursuing, where people are introduced to new music. You can find 20,000 stations,things you’ve never heard beforeand then you can buy that music immediately on the site if it’s available in the store. Regardless, even if you want to copy it, you’re like the person who is taping off the radio. I don’t think the music companies consider that a lost sale. It’s just introducing new music to people that may go out and later buy.
Q: It’s a logical analogy.
And it’s one that I think people in the industry understand. We have no control over what people do with the stream that they receive. Our control stops as we deliver it, but we can set the quality and bit rate to control the sound quality and as new technologies develop, we’ll always keep an eye on them and make changes as necessary.
Q: People should know that even at 56k and below, the streams sound very good.
We’re pretty happy about that!
Q: Last question: Any plans to support video?
We’ve talked about video from the outset. We’re one of the very few companies that have developed their own streaming server technology. Our technology supports video andwe have the ability to do it now if we want to. But we don’t plan to do it anytime soon, and maybe never. We may end up licensing the technology to a third party that is interested in utilizing it, but we think that there are some inherent issues with streaming video.
Q: Like what?
One, there’s a lot of good audio content that is available under the DMCA which are professionally produced, that’s readily available. With video it’s less clear, regarding the DMCA and the ability to generate revenue as well. We’ve seen audio can drive CD sales but can video drive video sales, or will there even be anything to sell? We have a model where we let the world use our tools to broadcast audio, but with video we run into unique issues because you have more user-generated content, and then you also have pornography and issues like that which can be difficult to address. Then, of course, bandwidth requirements for video are higher and therefore more costly.
The last point, which is also fundamental, is delivery to wireless devices. Coincidentally most of these wireless devices--particularly the early first efforts--are going to involve things like a cell phone or the tuner in your car; where people aren’t really going to get a good video experience. Whereas with audio, as long as they can properly interact with the device and can find the content they want, they will get a good audio experience, even in the early stages. So there are a lot of reasons. Probably the last and biggest reason is that we’d like to do what we’re doing as well as we can first and not dilute our efforts and try to do too many things at the same time.
