The FezGuys
From Here On Up It's All Downhill*
[ No. 51 - January 2001 ]

Sometimes it feels like the insanity will never stop. In an epoch where you can buy a CD through your cell phone (soon your Palm handheld - maybe even your palm!) and prices for storage media drop through the floor on a daily basis (DataPlay will offer a $10 re-recordable format for 500MB of digital music, Iomega has a $10 40MB data disk) it feels like the deeper we investigate Internet audio the more it appears the same people are running everything. The year 2000 has seen many venture capital backed indie companies plucked up by large businesses, and others burn through millions of dollars until there's nothing left, their workable business model dangling somewhere in the future. The big 5 (perhaps soon 4) labels continue their cozying up to the Internet industry, injecting their money (and their will). Bertelsman's "loan" of $50 million to Napster for the development of a subscription model featuring BMG music is a perfect example.

This month we want depress and elate you. Recent Internet audio company downers will be balanced with displays of actual common-sense by the oftimes over-funded online music community. That sense of entitlement oozing from the pores of corporate "cybermusic" whores is finally washing off in reality's cold shower. It's the wake up call we've been anticipating.

First, let's talk about how the major labels have bitten the bullet. Streaming companies like Musicbank <> and Streamwaves <> are finally able to buy licenses to legitimately stream major label catalogs (i.e.: the latest Mariah Carey and Sting releases can be legally listened to via Internet radio). EMI will license music to Streamwaves for their own subscription model (between $10 and $13 per month) set to launch at the beginning of 2001.

The above shows adherence to the "if you can't beat 'em, join 'em" business model. That, and the "duck and cover" are all the tools the techno and the bureaucrats seem to be using. Hell, it ain't easy sailing for Interent music companies right now. Tech stocks are way down and many companies are hemmorhaging cash or have simply tanked.

---> Venerable Riffage <>, having already received large infusions of cash from BMG and AOL, is having a rough time. They need even more money and are considering selling themselves off. Who, other than an old-school, cash heavy big label, is going to step up to the plate? Riffage recently spent one million dollars on a site redesign and another million buying the hundred-year-old Great American Music Hall in San Francisco. Reports from the front line are: web operations remain a far third in revenues, well behind 1500 Records (their acquired private indie label), and the live venue. The FezGuys never really cared for the domain name (c'mon, man: "riffage" "Dude!") but wish them the best.

---> Emusic <> has been making overtures to Napster <> regarding illegal sharing of Emusic copyrighted material. Rebuffed in their negotiation attempts, Emusic is now claiming Napster has "forced" them to report offenders. They'll use a 'bot to find 'em, an email to warn 'em and 24 hours later demand Napster remove 'em if those files are still beginning shared. In spite (or because) of this frantic proactivity Emusic's stock remains bottomed out.

---> Online indie distribution company The Orchard ("A Place To Grow") has pruned staff and owes tens of thousands of dollars to employees and artists.

---> Independent label Platinum Entertainment is selling all its assets and filing for bankruptcy (it was probably that horrid domain name for their web site: <>).

---> Once proud Artistdirect <>, valiantly attempting to staunch rabid spending, has dumped 12% of its staff and more layoffs are expected. The company had been blissfully burning through $10 million a quarter. Of course, it still has $97 million in cash so anything's possible. How about one last megalithic party?

---> Punch-drunk but still standing, <> has settled with the last of the big 5 record labels. That's a total cave-in of about $170 million out the door to mollify the plaintiffs and pay the lawyers. Of course, probably still has a cool $100 million in the bank. Maybe they'll buy Riffage. Probably not, because labels that have already settled with still have the right to come back and collect more damages. This raises the possibility of the defendant's dissolution into bankruptcy and would mean, of course, that no one gets paid. And so has suddenly added a retired judge who specializes in intellectual property rights cases to its corporate board! Smart thinking.

The online music flash in the pan is becoming cold, curdled grease. Most everybody's finally stopped screaming "There's gold in them thar hills!" Of course, this is all good news. Realistic business models and realistic expectations can now take their rightful place. One potential downside here is cool indie sites being bought by suits, branding kept and braintrust fired. Once again the big guys can own the space by simply waiting to get a good deal to buy the intrepid trailblazers. Sounds a lot like Microsoft's strategy: the Law of Attrition. But we're not bitter about it! "Always look on the bright side of life...."

Now, let's take some questions...


Hi Fezguys - can you explain how, if Napster is free, no fees or nuttin', how does it generate any money? Who pays for the servers/electric bill. The guy who 'invented' it sez he quit school to 'run the company'. Who pays his salary? How can it exist as a company with stocks etc, if it doesn't really exist? Thanks - Steve

Steve - You've hit upon the essence of this era of online music! Napster the technology is a small app that a college student developed in his spare time for the hell of it and released to anyone and everyone. It works without money or sales because everyone simply donates the disk space on their hard drives to share and share alike. As to Napster the company with payroll, etc., well, it's called investment. People with money to burn offer some (for operational costs and frequent trips to music conferences) to a bunch of heads who are attempting to turn a free tool into a profitable one. Whether or not it'll work depends on an infinite number of variables including, to a large part, luck. If Napster the company runs out of money and they can't get any more the employees will migrate to the next company and the investors will own what's left including the name and the technology. A fire sale will ensue. Isn't the free market cool? Hope this helps. - The FezGuys

Dear Fezguys, I need some advice. One day my dream is to own a record label, and I have done a lot of song writing and a little producing, but my two big questions are how do I get my foot in the door, and how do I keep my beautiful ship of artist from sinking? Would I need to start my own web site? I have thought about this for a while, I'm not just playing on the computer. Please reply!! - John

John - You can't get your foot in the door without first getting your boots on. Do this by playing live as much as possible. You can't keep your artist's ship afloat if they aren't naturally buoyant. Let them sink and go find someone else already knows how to float. You've got enough work to do just taking care of your end. Remember, the music comes first and then the web site. A good first step might be to take advantage of free upload sites (IUMA,, Riffage, etc.) to create simple but useful web pages for your music, bio, and tour dates. Your local dialup ISP account should include some web space which you can play with to create a more personalized site for your band. Also remember to register your band's domain name. Good luck! - The FezGuys

Fezguys - When are we mac users goining to see a mac version of Shoutcast? I saw a version for macos x, but in an attempt to down load, it could not find the file. I would like to see a pre-macos x version. I'm not ready to jump on the macos x bandwagon. - Sean

Hi Sean - We feel your pain, but the only get some love there is to ask the folks who develop Shoutcast when (and if) they will produce a Mac version. Get your friends who also want a Mac version to e-mail them as well. Show Shoutcast there's a demand. That will help them prioritize your request. By the way, we assume you are talking about the server component, as there are a number of MP3 players out there for the Mac that can play Shoutcast streams (Audion, Macast, etc). You go! - The FezGuys

Hi Fezguys - I am writing this note to you because I need a little direction (though not much). What's the technology, is it simply Java applets plopped in (obviously I want to avoid the media players.) to auto-start sound on homepages? Will Javascript do the same? Or am I so far behind that I should just go pickup my Sigma-acoustic Bass and pass the time away? I hope you have a chance to respond, and I do appreciate your time. - Peter

Peter - There's lots of ways to start audio playing as soon as a fan brings up your web site. Macromedia flash easily embeds MP3 audio in a page, and most browsers (certainly Netscape) can play WAV files with the <EMBED tag also. Javascript can be used to automatically pop up new windows with music in them, too. But, soft...take a moment and ask yourself this question: Do people really want music to start playing when they arrive at a web site? Here are the FezGuys top 5 reasons to avoid embedding music on your home page:

  1. It's simply not expected and can be jarring.
  2. It may require software which users don't have installed. This would result in a warning message - not a good first impression!
  3. Most people are already listening to their own music and once yours mixes in it's instant cacaphony.
  4. Many users are still connecting with dialup modems. Including music in your home page will take much longer to load - also not a good first impression
  5. After clicking on one link, clicking "back" on the browser restarts that same audio clip over again from the same place often delaying the time until your visitor can click on another link.

Visiting your web site should be easy, quick, and pleasant. We encourage you to incorporate all sorts of features into your site, but try to place them where people know what to expect. Offer links to this information with helpful messages such as: "Click here to see a cool multimedia display of our music video!" or "Check out our music in our interactive jukebox!" It's an aesthetic choice only you can make. Choose wisely. - The FezGuys

(* with apologies to Walt Kelly)



About the authors:

Jon Luini is a working technophile, a musician (bass player/singer) with full-blown facility and extensive experience on the Web and no free time. He is a co-founder of IUMA and MediaCast, co-creator of Addicted To Noise, and runs an Internet and music consulting and technology company, Chime Interactive (formerly Evolve Internet Solutions). <>

Allen Whitman is a working musician (bass player/singer/producer) with a keen, real-world interest in the practical use of the Web. Music credits include: The Mermen, "Brine-The Antisurf Soundtrack, biL, Deep Field South, Doormouse, Delectric and Drizzoletto. He has written for the San Francisco Examiner, Wired, EQ, Revolution, Yahoo Internet Life, Prosound News, Surround Professional, Replication News and others. <>

©1996-2003 The FezGuys™