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File swapping MSPs - the future of digital music?

We talk to the pioneer

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Don't expect Bono to descend from a cloud. Or orgasmic praise from the Wall Street Journal's Walt Mossberg. When PlayLouder quietly rolls out its music service in the UK, it won't initially match the razzle-dazzle of the iTunes Music Store launch, Rhapsody or the other million dollar marketing blitzes.

But the initial, low-key 'soft launch' of the first legal file swapping service to be backed by one of the major labels is deceptive. PlayLouder MSP offers something quite revolutionary, and its fate is more likely to shape the future of digital music distribution than anything we've seen to date.

The broadband bundle gives consumers a zippy DSL connection and allows them to listen to and exchange Sony BMG music freely for a single monthly fee. PlayLouder co-founder Paul Sanders tells us that it's a simple value proposition.

Free music really isn't free.

"The Total Cost of Ownership of music has really gone up from when all you needed was a £100 CD player and a set of shelves from IKEA," says Sanders. "Now your cost of enjoying music is a computer - that's £400 to £1000 - another couple of hundred quid for your iPod, and in the UK, between £20 and £25 a month for broadband."

"When you're already paying £25 a month for an ISP to pay another £15 on top of that is really quite painful," he points out. "When people say they get stuff for free, they're actually spending quite a lot of money."

The MSP (Music Service Provider) deal is all inclusive for £26.99 a month ($48.50) and that includes a 1Mbit/s DSL line. But the subscription creates a digital pool which is then divvied up and returned, via the MCPS-PRS collection agency, to the rights holders. PlayLouder will monitor exchanges on the network for two reasons: counting the exchanges to produce a fair tally, and to block Sony BMG content from escaping the walled garden.

"We recognize that no walled garden is going to be 100 per cent safe," reckons Sanders, "but 100 per cent is a target." He says that Audible Magic's watermarking software identifies files exchanged in P2P transfers with 96 per cent accuracy, and that's more accurate than Neilsen's TV sampling.

As for blocking, Sanders wouldn't be drawn into details, and hinted that the firewall would be expected to do its work.

The Sony BMG deal follows a string of deals with indie labels, who have provided music unencumbered by DRM. Sanders wouldn't say if the Sony content would have DRM or not, but we inferred it would.

"I've some sympathy with people who value freedom on the data networks and in everything they do. I’d say with a network such as ours to fulfill our obligations we’d have to report properly and accurately on the music you’re using – so freedom from DRM might not be the best choice."

Ordinary people who value music, Sanders reckons, are far more likely to struggle with practical issues surrounding today's music services such as limited format choice; incompatibilities, and login issues rather than the loss of "freedom" implicit in DRM. And he's probably correct - which shows what a lousy job "digital rights" activists and us hacks have done.

And isn't having access to the full catalogs and deep treasures of the labels' back catalogs a "digital right", too? Right now the only legitimate choices we have are the poorly stocked online services, and material released under the misleadingly-named Creative Commons license. (The largest Clip Art library in the world).

"It's fine that the activists are there - they're useful to seed the P2P networks. But it's a historical quirk. Most people are normal, and quite happy that someone who makes music that they enjoy in turn enjoys some success."

"The digital rights extremists can go off and set up their own thing and leech off each other - but gradually they will become irrelevant to every day life," says Sanders.

Then again, just how the rights are to be enforced will be a large factor in PlayLouder MSP's fate. Will MSP allow CD burning of Sony BMG content? Will the label reserve the right to revoke rights, as Apple has already done with iTMS?

We'll have to see.

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