rVibe Blog

There continues to be much discussion over whether people want own their music or rent it. Whether music should “stay in the cloud” or get downloaded onto a device for local playback.  The people on the rent side also are typically also on the cloud side and their rationale is that when bandwidth prices come down and super high speed connectivity is ubiquitous then people won’t need storage based devices to house their tunes. And that people will be willing to rent/subscribe to services that allow access to all music - a kind of all you can eat thing.

In my view, technically it’s a nice idea, but not feasible; at least not for the next 5+ years. Bandwidth is too expensive, slow, and the penetration is not there. But there is actually a more fundamental problem - people want to own their music.

There tends to be a much stronger emotional tie to music that any other digital art form and for that reason alone, rental is not enough. People want it to be theirs - and when something is owned, they want to use it the way they want.  Rental or subscriptions are the opposite of that. Granted this is really a perception issue: people don’t really own their music, and the files are not really a physical representation of a non-physical thing, but none-the-less, people believe they own their music. To that end, I don’t think that rental/subscription services are the end all of music delivery. 

And further, I think that until bandwidth is fast enough to drive the perception of locally experienced files, then music will need both a storage device that is local to give that sense of ownership and experience.

You need really look no further than the market today to know that what I stipulate is true.  The dominant music distribution services - iTunes, eMusic, Amazon are download services where you buy your music and are unencumbered by subscription. The dominant form of experiencing digital music is from the local device - MP3 player or local computer.  Even things like Verizon VCast are a la carte purchase and download to device services. The bandwidth is not there and the desire for subscription is not there.   And even the new iPhone or iPod touch are download and local environments.

And generally, right now bandwidth and storage is just too expensive and the margins on music are just too thin to really make money. That’s why you see these orthogonal marketing relationships like Wendy’s and Rhapsody start to crop up. Odd at best.

Hence the reason we’re building rVibe as an a la carte download service with a local management function and peer-to-pere delivery. That’s why it’s not just another streaming website for playlists and social networking.  People use their music locally, people buy music and download it and use it and we want to keep operation costs low.

We made rVibe social music download software, we didn’t make a streaming, subscription website like so many others.

According to Mashable, ad:tech NYC has revealed that advertisers want to be on new media. By new media they mean things like Facebook, MySpace and YouTube.  And that really means social networking and user generated content.  And further, what that really means is highly targeted ads.

Good thing that rVibe also offers highly targeted ad delivery based on user data.  Right along with Facebook and MySpace.  The difference here is that we’re building our data collection around what an advertiser wants to see, and making it transparent to the user.  Better data, better results.

-Braydon

Was in NYC all day yesterday for a variety of meetings.

I just love New York - there is no other place like it. Even when you’ve been to a number of large cities - LA, Paris, London, Chicago, Moscow, etc etc - there is just nothing like New York. It has a vibrancy and electricity that no other city has - and I love it.

Met with a Senior Partner at Lehman Brothers to go over where we are, where are we going.  We’re clearly too early for Lehman, so this discussion was mostly a networking meeting - a “let’s see who we know who can help you in hopes that someday there will be something in it for us.”  Not bad - I never ever miss an opportunity to chat it up with future partners and with people who have a huge hand in huge business. 

-Braydon

Now that the shock has worn off a bit and more information has come out on what Google’s OpenSocial is/is not, I am not sure that right now it’s in our strategic path.  At the moment, rVibe is not primarily a widget application and platform and while we are moving toward platforming rVibe in such a way as to accept widgets from other developers, with our fully distributed nature, it might not make sense to pursue it right away.

Frankly, initially we thought it was going to allow us access to everyone’s profile data in a kind of OpenID format - which would have been fantastic. But in essence we’re still looking at a walled garden mentality - with the exception of Google who gets to have it all.  And as far as walled gardens go, it’s just not that interesting. We’re eventually going to open up in a way to move away from walled gardens; we believe that being good at openness is the ultimate competitive advantage.  Most companies fear openness, but we have found that it does nothing but good for us.  And as long as we’re smart about how we release data, then it can only benefit us.

So - if it looks that OpenSocial will start to provide that for us, then we’re in, but right now it’s still not making full sense for us.  We’re still evaluating, so no final decision - but that is the way the wind is blowing at the moment.

 -Braydon

There is no doubt that numbers of users and numbers of page visits are important metrics. They kind of show popularity and have implications for advertisements. However, there are questions (and thankfully being asked more all the time) whether views really means anything.  But in “web 2.0″ space that seems to be king - number of users.  Let’s take iLike for instance: Social music service that has a Facebook application, an iTunes/WMP sidebar plug-in and something like a million users.   No revenue model. No eCommerce, no ads, not a “freemium” model not even a licensing partnership. But popular and funded (and by very successful VC’s). They are considered some big fish in the Social Networking Music pond.

But what happened to pro formas? What happened to a revenue model?  Is showing usage and traffic enough?  Maybe for an acquisition (is Facebook or now-rival Google) going to buy iLike? Maybe that is the entire strategy - get bought by Facebook/Google. I had thought using that as a strategy is a bad idea. I had thought it made more sense to build a successful business.  It’s a nice trick to pretend that users/clicks/traffic = revenue.

In any case, we’re focused on building a successful, revenue generating and profitable business. One where we make money on retail sales, advertisement click throughs and technology licensing. That also means we have pro forma financials mixed with some actuals.  I prefer it that way - I think it’s wrong to manage to users, it’s better to manage to money and margin.

-Braydon