Tonight I had dinner with Alex Zubillaga of Warner Music. During our dinner conversation we spoke a lot about the so called problem of music piracy, namely the heavy downloading going on on the internet that results in people filling up hard drive after hard drive with music that they do not have the rights to listen to. As we all know, the problem of illegal downloading is considered by most executives one of the biggest problems facing the music industry but for Alex Zubillaga who is in my view one of the smartest, more visionary thinkers in the music world this is not the case. Alex spends most of his creative time working on models that embrace music downloading without destroying the industry he represents. Now after brainstorming with Alex for a few hours I came back home and thought that the whole downloading phenomenom is likely to dissappear in the not so distant future. This is why.

We are now evolving towards a world of ubiquitous home and office broadband (cable and DSL) connected to WiFi. At Fon with our formula of paying and sharing at home and enjoying WiFi everywhere, we are extending this environment to most city streets around the world. As this new world unfolds I believe that one of the surprising side effects of it will be the end of music and movie downloading. Why? Because in a world of ubiquitous wireless broadband downloading as an activity simply does not make sense anymore. In the future all iPodlike devices will have WiFi as the Music Gremlin does now. And homes will have systems such as Sonos that streams any song that you want whenever you want. Now when WiFi enabled iPods and Sonos like systems are hooked to services such as Napster or Rhapsody who give you instantaneous streamed access to 2 million songs a month. Why would you download music wasting time and costly hard drive space? In WiFi everywhere world Limewire becomes obsolete as Limewire is not free. Limewire has basically two very significant costs, one is hard drives and the other is your time organizing, labeling all your music. Napster, Rhapsody give you fantastic interfaces, instantaneously streamed music and a choice of 2 million song instead of 10,000. Bottom line. Downloading won’t be killed by laws or policing. It will be killed by broadband streaming technology available everywhere that will make downloading obsolete. And when services like Rhapsody appear for movies, namely all you can eat movies for $10 to $20 per month this will be even more the case. At 4GB per movie who wants to hoard say 10,000 movies when all you can watch is one at a time?

Follow Martin Varsavsky on Twitter:

No Comments

Ray on August 7, 2006  · 

statement 1: They call Central & Eastern Europe the fraud pot. But there is no iTunes store available there, for instance. Claims are void.
statement 2: WiFi isn’t really that ubiquitous yet in Europe and I’m affraid this downloading era is not close to an end. People still like to download, download and download, for no reasonable reason.

Regards, Ray. Germany

3.0 rating

Killy_the_frog on August 7, 2006  · 

I do not fully agree,
First: People like to have the things, not only rent, I know so many people who have dozen of GB of music that they never listen, or hundred of DivX, but they have it.

Second: Many students will always prefer have FREE things than paying 10 Euro or more a months.

Third: in some countries like China, Piracy is a necessity to go across censorship (check this last news:
Quentin Tarantino told once something like: Piracy? without piracy no Chinese will have seen my movies.

And to finish…when you go to remote place without wifi (they will always be full of these place) you will be happy with your stored MP3 😉

Best Regards

3.0 rating

Felix Fietkau on August 7, 2006  · 

I agree. This can work if the music industry finally gets around to making serious offers instead of desperately throwing lots of resources at making politicians protect their obsolete business model by law.

One major showstopper in their new offers is the widespread use of Digital Restrictions Management, which not only produces dozens of completely incompatible systems, but also annoys everybody who chooses not to use Microsoft Windows.

The movie and music industries really need to stop treating every customer like a criminal and blaming file sharing for problems which were created by refusing to adapt to modern times.

3.0 rating

pradyum on August 7, 2006  · 

I agree. Also, I am sure subscription model sounds music to record labels & Hollywood industry. Although, $10-20/mo type services may further divide the haves and have nots.

It will be interesting to see what Steve Jobs announces on Monday @ Apple WWDC.

Exciting times ahead!


3.0 rating

Kasper Daniel Balslev on August 7, 2006  · 

Exactly – consumers are very much willing to pay for a smooth, seamless, no-brain technical solution (that is cost efficient).
As the “long tail” evolves and techical interfaces improve, so will the willingness to pay for a digital 24/7 “all you can eat buffet”.


3.0 rating

Daniel Torres on August 7, 2006  · 

I agree with the idea of a ‘all you can eat’, flat rate. Once this becomes a reality and wireless coverage and speed is good enough, the streaming will gain market. As so will do the virtual disks and information hosted in the internet, but not in the physical devices that we have to carry today.


3.0 rating

Martin Varsavsky on August 7, 2006  · 


Interesting that another tech guy decides to experiment in this direction. But, personally, I think that memory itself has to have a molecular component. That does not mean that synapses are not the way to organize the info before it is stored. But there has to be a storage medium in itself.


3.0 rating

Martin Varsavsky on August 7, 2006  · 

Hi Ray,

I know they do, and I used to like it as well. But when you start using services like Rhapsody or Napster for $10 per month all you can eat all you can download you download much less and start streaming. Streaming beats download for most songs, then you download the few ones you really like.


3.0 rating

Hernán L. Romay on August 8, 2006  · 

The issue regarding royalties and music/video companies revenue is far from being settled. I generally support the entrepreneurs´/companies interests, which usually lean to the right. But when it comes to arts and entertainment, I think some rules should change to the left.
Number one, too few making too much, namely through monopolies or oligopolies. It´s easy to defend the right to self realisation and to be competitive, but when you become so big that you don´t let others join in, then I want you at least down, if not out.
So in my humble opinion, what should change in the movie/music/entertainment industry is the lenght and spread of copyrights. I believe right now it´s 99 years in most cases. Let´s bring it down to 5. 1 to promote, 2 to break even, 2 to make money. With that scheme in mind we would see things that have never been thought of yet, since they would take much more brains to develop than the simple and comfortable oligopolised entertainment business today. Long live free arts!

3.0 rating

Dan Berte on August 11, 2006  · 

Art is the fruit of passion, weather it’s music, paint or video. And that’s priceless! Do people think that pleasurable music is a right they own for free, just like breathing air for instance? Yes, they currently do! Is that fair for the artists or the industry? Not really! Moving forward, people think the internet is commodity, thus should be free. WiFi included.
You can’t really go on trying to impose business models that your customers do not digest. Because, ultimately, that’s your income. Adapt, adapt, adapt!

Shame the above discussed industry fails to mold to the market reality. The internet industry, though, is still in its infancy. So it can be saved. Some entrepreneurial ones are brewing less restrictive policies for their internet services and products. And that spells promising near future. I can’t remember someone who streamed a Porsche, or a Romanian wine. Just like cars, wich you park in you garrage, or wine you store in the cellar, music is a pileup on your harddrive. This being a universal truth, streaming as the “way to go” for audio entertainment is a potentialy flawed business model.

I suspect this subject will still be a flame for the time being. Looking forward to a fellow entrepreneur to show us the way to music 2.0.

Best wishes,
Dan Berte
CEO, c*free wireless

3.0 rating

rsm on August 15, 2006  · 

Agree up to a certain point. Most younger people these days will not pay for music. Many young people I know (recent graduates) have never bought a CD in their lives!

Having filled up my mp3 player with every single song and music I have, from pop to classical, and having listened to the entire collection a few times, I am fed up with it now.

My cable provider on the other hand gives me free access to Launchcast Plus which I customize to my music liking. This I don’t get tired of. I am not paying for this – directly that is. I am paying for my cable line and this is one of the services they give me. I may be paying indirectly $1/month for it, this I don’t mind. In fact I selected this specifc cable package partly because of this feature (and its speed).

Maybe suscribing to ‘FON+’ one day will give users the right to listen to streamed music, daily, monthly, for whatever period they paid for. That could be a reason to choose FON.

3.0 rating

brian on August 16, 2006  · 

Hello! I am a student in Taiwan,I just knew this cool thing,”FON.” And I got an idea in a second, maybe in future we can pick up the movie or comedian shows we want by FON just like the digital channel or video on demand something like these, not only I can do this from others but also others can get it from my sharing, too. Just a little idea.

3.0 rating

Leave a Comment

Español / English

Subscribe to e-mail bulletin:
Recent Tweets