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Cloud Music Services Square Off at Digital Music Forum East

It's a given that the future of digital music is in the cloud, but what services will bring us there? A mid-day panel at the Digital Music Forum East conference in New York City took aim at that topic.

The odd man out on the panel, BitTorrent CEO Eric Klinker, led off the conversation. Introducing himself as part of a "satanic cult" called BitTorrent, he emphasized how his company is working with artists to help get them exposure. BitTorrent recently launched a record for the band Sick of Sarah which netted it 500,000 unpaid downloads and much exposure, he said. Klinker drew derisive laughter from the crowd when he said that the band had gone gold.

One of the few moments of friction on the panel came when Anu Kirk, the vice president of mobile for online radio service Mog suggested that those 500,000 authorized BitTorrent downloads would turn into many more unauthorized BitTorrent downloads as new fans decided to grab the band's whole catalog for free.

Online locker service Mspot got off to a rocky start, said CEO Daren Tsui, because he hadn't done a good job of explaining what it does. His company is working without licenses from the major record labels (or any labels), but Tsui asserted that there was no music sharing taking place on his service, just people getting cloud-based access to the songs they already own. The courts may need to decide, at some point, whether that form of digital copying requires a license.

Online music service Rdio has been seeing some high-profile growth lately (it just expanded to Roku boxes today) and the company's COO Carter Adamson said that expansion to new devices would continue. One of the benefits of music services like Rdio, he said, was that people were finding it easy to discover new music again, something many stop doing after college. He said one person had told him that, after using Rdio, he'd discovered more music in one week than he had in the previous three decades.

Digital Music Forum East
Left to Right: Anu Kirk, VP of Mobile Product, MOG; Eric Klinker, CEO, BitTorrent; Daren Tsui, CEO, Mspot; 
Carter Adamson, COO, Rdio; Vickie Nauman, VP North America, 7digita

Once introductions where over, the panel took aim as several hotspot issues of the moment. Kirk suggested that hype over free streaming service Spotify and whether or not it would come to the U.S. was overblown, and that it won't make that much of an impact if it does. Vickie Nauman, vice president of North America for locker service 7digital, said that most consumers don't understand the differences in digital music (such as tethered downloads or digital lockers), and gravitated to simple solutions, such as using BitTorrent and ripping CDs.

One point of contention is the hefty 30 percent subscription fee that Apple recently imposed on all subscriptions sold through Apple apps. "We are still sifting through what this actually means," said Kirk. One likely outcome, he added, is that subscription sign-up will likely be removed from apps and done on websites. "Apple does not add more value to MOG that MOG adds to MOG," he said.

One questioner from the audience pointedly asked the panel what they were doing to educate shoppers, saying that she hadn't heard that from of any of them. That's putting the cart before the horse, said Adamson, who noted that the digital music startups were still focusing on fundamentals. Until those were worked out, he said, it would only be garage-in, garbage-out.

Another audience questioner wanted to know what the startups would do when the big guns entered the area, such as when Apple launches a subscription services. The best experience will win, replied Adamson, who said he welcomed Apple and Google's marketing dollars since that would help educate the public to the digital music area. Will that turn out to be famous last words? We'll see at next year's Digital Music Forum.

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