Jim Griffin’s accomplishments include setting up Geffen Records’ intricate corporate network back in 1994, and convincing them to post an Aerosmith track on the Net way before MP3 was making headlines.
Now chief executive at OneHouse, Griffin won’t say much about his clients, but he has consulted for the major labels’ powerful lobbying group, the Recording Industry Association of America, Microsoft, and record labels like DreamWorks and Interscope.
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Griffin’s vision? Streaming. He won’t hesitate to say that both MP3 and the recording industry’s SDMI download formats are doomed. Critics say he’s too far out in his thinking, he’s wrong, or he’s just loud. But Griffin has the ear of players from all sides, including some MP3 advocates.
Wired News checked in with the digital music guru to see how he envisions the future.
Wired News: Talk about the Aerosmith file you posted in 1994.
Jim Griffin: “Head First” was recognized as the first full-length commercial entertainment product released online. I digitized the song in Microsoft’s wav format, which [Geffen marketing] procured from Aerosmith’s A&R guy. CompuServe [made] it a free download. It took about 25 minutes [to download]. [People] told us it put the stamp of legitimacy on the digital distribution of audio and video.
WN: What does OneHouse do?
JG: We absorb [entertainment companies’] uncertainty about technology, and we take technology companies and absorb their uncertainty about entertainment. Then we help artists form more direct relationships with their audience.
WN: What’s the future of music?
JG: Music is the canary in the mine for entertainment [online]. It’s digital to begin with. Books are not. [Music] doesn’t require the bandwidth of video, so it’s ideally positioned as the next kind of intellectual property that is digitally delivered.
We are currently in a transaction-based push environment — content is pushed to consumers at the instigation of content owners. [But things like] online services … have moved to flat fee pull. Now you can get an AT&T wireless phone, or an online service like AOL for $20 — that is flat fee.
WN: You envision a subscription-based model for music.
JG: And advertising-based. Some will pay for their entertainment by watching advertisements. Others will [pay for] more privacy.
The economic model behind streaming and ubiquitous access obviates piracy. Intellectual property gains value as it is widely distributed, much like television or radio.
There’s an in-between that’s really savage. We’re seeing — in the form of ReplayTV and Tivo — intelligent buffers grabbing digits for us that are pushed, and hold them for us. The Rio is a good buffer.
An example: You leave your automobile. It continues listening to the radio, setting singles aside. You come back and decide which to keep [and] use whenever you want.
The value of digits [is] plummeting toward zero: software, words, images, music. Wired pays money to create the publication, but the marginal cost of delivery is zero. What remains is the economics of connectivity — the ability to become a gatekeeper to an audience. …At first [television networks] feared copying. Now they tell you in ads to “Set your VCR.” Magazines [and] newspapers feared copying. Now they have a button: “Send this story to a friend” [on their sites]. It’s even happening with computers. It’s certain to happen with music.
WN: What do you tell clients to do in the meantime?
JG: If you’re reading the papers, you might conclude that MP3 was big, that distribution or downloading songs is the future. Clearly people like playing with MP3. [But] our statistics show if you put up a stream on the same page that you put up a download, 15 to 25 times more people will click on the stream.
WN: Is that just because it’s faster?
JG: As things become faster, the streaming gets better.
One of the best things you can do is manufacture something that must be replaced immediately after use.
Starbucks … will sell you everything you need to be a pirate: the coffee pot, the beans, hell, they’ll give you a pamphlet that tells how to make every drink. They’re not worried because you’re coming back tomorrow.
Can you imagine [the beverage industry] behaving the way the recording industry does? “We sell $10 million worth of bottled iced tea and water every year. The bad news: as soon as consumers figure out they can make it at home for nothing, we’re screwed.” They don’t try to get rid of water fountains or tea bags. If they offer a good product at a high value, you’ll return.
If a consumer doesn’t want to boil water and drop in a tea bag, why [would] they want to burn CDs at home [or] download music and engage in digital asset management?
The industry says, “You can’t listen to music if you don’t pay.” Michael Robertson (founder of MP3.com) says “I think music should be free.” I think they’re both wrong. Music should feel free but not be free.
It’s not our job to create mechanisms that make the world the way we want. It’s to take that opportunity to change our business models…. That’s how I feel about copy protection.
WN: What about SDMI?
JG: It’s certainly easy to understand why they’re doing it. [But] what we need is a global approach to figuring out how people are going to use all forms of entertainment. Frankly, that’s not going to include copy protection.
WN: Why not?
JG: It’s impossible. The shortest path to that cool album you heard in the dorm room next door [is to] copy it onto a blank CD, or make an MP3 and move it around on a network. I don’t see any way we’re going to stop that.
WN: Do you think CDs will be dead?
JG: It’s around for ten to 20 more years. Until the CD is dead, there can be no copy protection…. If it’s sound coming out of speakers, and you’ve got two microphones and somebody who wants to record and digitize it into an MP3, it’s going to happen. Someone was telling me they saw this 14-year-old at the dry cleaners. He had a MiniDisc around his neck. They said, “Do you get your music off the Internet?” The kid said, “No. Look, I got this patch cord . I go to the [record store] and plug into the listening post, and I dump songs from the listening post onto the MiniDisc player.”
At the end of the day, unless we stop letting people listen to music, we have no way to control the quantity and the destination of those digits.
WN: While at Geffen, you sent letters to MP3 sites about posting illegal MP3 files.
JG: When Nirvana didn’t want their stuff [online], I helped them send notes to people…. We just said, “Please be aware, you’re distributing full-length songs without permission of the artist.” In other words, “Make a [pitch] to the artist.”
WN: Weren’t some sites shut down as a result?
JG: We didn’t want [the sites] shut down. Our goal was to express the artists’ feelings.
I’ve spent far more time helping people keep [MP3] sites up. I may not be MP3’s biggest fan … but those people will tell you I’ve helped more than I have hurt them. I care very much about them and about the dialogue.
It’s a free speech issue. You have every right to control your art.
WN: MP3 has a huge audience.
JG: I’m not sure of that. If you look at Shoutcast’s evolution … it’s not about having a hard drive full of songs. We want access.
The software business played with copy protection for almost a decade, and got rid of it. Software used to be about copy protection, about having and holding it. Now it’s about constantly updating these installations over the Net. You don’t download the RealPlayer anymore, it downloads itself and tells you when it needs to be updated. Java, ActiveX … increasingly these things install themselves, arrive just when we need them, and disappear when we don’t. This is the way of all entertainment.
WN: But consumers own CDs right now.
JG: But why do you need to?
WN: Because there’s nothing in place for me to sit on my sofa and say, “I want to hear Tom Petty’s first two albums,” and some device makes it happen.
JG: But with streaming, clearly that’s possible. When digits are truly ubiquitous, and we’re not there yet.
WN: How long will it be?
JG: Wireless is what we have to watch. I would say Teledesic will be a very important step — the low earth orbiting satellites.
WN: And then people won’t hold onto digits.
JG: Right. I don’t print out my email. Why don’t we? We believe it’s going to be there because it’s been there every time. As access to things goes up, our desire to hold them goes down. That is true for almost anything.
… In Europe, they put the empty CD case on the shelves. You carry it up to the counter and they put the CD in. That’s their security system. But now consumers are stealing the empty cases — the disc has almost no value to them. They can copy that at home for 50 cents.
