Music 2.0 Business Model: They Did It, So Why Can't We?
You may have heard or read commentary about a favorite way to launch a Music 2.0 site: Start without the proper licensing deals, attract users, and then hope for the best. If all goes well, the company will either be acquired, receive a cash infusion or start generating enough revenue to punch it into second gear. It's pretty much assumed to be fact, though the executives of those companies tend not to actually admit it.
If YouTube did it, why can't others? That's the rationale behind Deezer.com, a French website that offers free music streams. The site has the desire to operate legally, says co-founder Jonathan Benassaya, "but it takes time to put all the agreements in place." Deezer.com is actually the follow-up to Blogmuzik.net, a first incarnation that shut down after pressure from the industry. Now Deezer.com has a deal with SACEM, a French collecting organization for authors and songwriters. Now Deezer.com is in talks with record labels. Why is the wagon still ahead of the horse?
"Asked if Deezer.com should have waited until the agreements were in place to launch the service, Benassaya countered that YouTube launched its service before it signed deals with content owners to distribute their video. He also said that Deezer.com has been operating since April and that only now has Universal raised its objection."
Deezer.com has signed up 300,000 registered users -- most of the in France -- in the last few months, according to the article.
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