Fast-forward on the frontier

MP3 only a pause in music's migration to the Web, futurist says In June 1994 -- long before the rest of the music industry even paid lip service to the digital distribution

Friday, March 3rd 2000, 12:00 am

By: News On 6

MP3 only a pause in music's migration to the Web, futurist says

In June 1994 -- long before the rest of the music industry even paid lip service to the digital distribution of entertainment -- Jim Griffin persuaded bosses at Geffen/DGC Records to put Aerosmith's "Head First" single up on the Web.

The track took 25 minutes to download on the standard 14.4Kbps modem of the day. It was the first major online commercial music release in history.

Since that seminal event, the entertainment industry has listened attentively to Mr. Griffin. Wired magazine has dubbed him a "digital music guru."

The Recording Industry Association of America, or RIAA, has paid mightily for Mr. Griffin's thoughts about copyright infringements with the MP3 audio format. It fears that violations have run rampant across the Internet.

And now, the cell phone maker Nokia has hired him to bring streaming music to hand-held devices.

"Basically, it's about building a celestial jukebox," Mr. Griffin says, declining to get any more specific.

Mr. Griffin, now an independent, Los Angeles-based consultant, doesn't always tell companies what they want to hear. The record industry flap over online exchanges of commercial CD music in the MP3 format, he says, is largely the fault of antiquated record company business models that actually provide incentives for pirating.

On the other hand, MP3s and the furor over copyright protection for other digital entertainment products will be short-lived, he says. Ubiquitous streaming technologies will soon replace the need for MP3 players and computer storage devices. Such "intelligent buffers" are simply way stations in a massive, worldwide analog-to-digital conversion, Mr. Griffin says.

Today, Mr. Griffin spends his time manning a dozen cell phones inside the Wilshire Boulevard offices of his company, Cherry Lane Digital.

He took time recently between trips to Nokia headquarters in Finland to expand on his theories about the state of digital entertainment and his visions for the future with Person@l Technology staff writer Doug Bedell.

DMN: At the pace of recent technological advancements, you'd think we'd have come light years with entertainment technology since that first Aerosmith experience. But there is still very little available online from major record labels. We haven't come light years, have we?

GRIFFIN: I think we have, in a way. When we did the Aerosmith song, we were convinced that the digital distribution would be the future. And people would be downloading songs, and that would be the dominant paradigm of how people would be using intellectual property in the future. Today, I don't believe that our future is the digital distribution of music.

DMN: Huh?

GRIFFIN: Well, I do believe we'll move from an analog world to a digital world, but I think it's distribution that will die. There's really no need to put digits [bits of data] in a place before they're used. We have access to enough of them as quickly as we want them that we don't need to download them. We once believed that when we'd go to the Dallas newspaper's Web site, we'd be downloading the newspaper. Well, that doesn't happen, does it? You go there and read it. You merely access it.

DMN: You talk a lot about having "option value" on digital products rather than possession and control. It's your contention that the current model for producing and distributing music will be replaced by subscription services?

GRIFFIN: Today, the only way to have option value on content is to have it before I need it. In the future, the way to have option value on content will not require distribution. We'll merely have access to all the digits we want, wherever we are, whenever we want them.

And when we do, we stop downloading. And that's why nobody downloads the newspaper over the Web. Because they don't need to.

Look at the value of streaming companies. You don't need to look much farther than Mark Cuban [Dallas-based founder of Broadcast.com] to know that downloading doesn't mean much. Broadcast.com doesn't download anything. It's all about access to streaming content. I think there are a lot of reasons that's true. Among them: It's far more valuable both to the consumer and the company.

DMN: So MP3s aren't something the music industry should worry about?

GRIFFIN: It's a temporary anomaly. It won't last long. The rise of streaming will obviate our desire to hold and copy music. Think about it. We've seen this revolution before. The videocassette came out. The industry said, 'We can't have people making copies of movies and television shows; it'll ruin us!' They swore that it was true.

Now think. Almost no one I know ever records with their VCR. The idea of getting a fresh blank tape and hitting a record button is almost unheard of. The reason is we've destroyed their motive to be a pirate, not the mechanism. You can get access to the content, so why would you want to buffer it?

We've destroyed their motive. That is the real lesson in the MP3 debate.

It's our challenge in the business to create new business models that give people a motive that is favorable, a motive that is profitable. That's the connection. That's the relationship with consumers.

DMN: So all this furor is just a part of growing up, digitally?

GRIFFIN: Yeah, but ultimately, the problem is this: The music industry, like every other part of the U.S. economy, is moving from product to service. In general, we think of music as a product because we want to control it because we can determine how many copies go into the marketplace. But truly, music is becoming a service, as is all intellectual property.

Your own newspaper is today a product, manufactured in a plant and thrown to my doorstep. But online, it becomes a service in which you have a relationship with me. I learn what you use and I learn more about what you have to offer.

DMN: How out of touch has the music industry been?

GRIFFIN: About 70 percent of the time, RIAA says, you don't know when your favorite artist has a new album out. That's how disconnected we are. You know why? If somebody uses a buffer, they do it in complete isolation. We don't know how they use it, when they use it. We are completely disconnected from them when they interact with a buffer. We sell them products that disconnect us from them, when in fact we should be offering them services that are highly connected and form a relationship.

If you contrast that with other media, like movies or television or radio, I promise you that 90 percent of the time you know when there's a movie coming out you don't want to see. It's like Scream 3 or something. How do you know a movie's coming out you don't want to see, but you don't know when your favorite artist has an album out? My point is that the movie is connected. There's a relationship. It's not discharged with the transfer of a buffer into your library.

DMN: How do record company executives react when you tell them stuff like that?

GRIFFIN: I'll be honest with you. The grins they have on their faces remind me of the stereo cartridge manufacturers toward the end of the turntable. They were charging $100 to $150 for things that cost $5. They were wringing the last ounce of blood out of the rotting corpse. And the music industry knows it's doing that now.

They have retailers screaming at them in one ear, their lawyers screaming at them in the other. And the lure of real money from this new digital relationship is looming on the horizon, and they're watching other people scoop it up.

DMN: It's your view, then, that entertainment will become much like these new applications that allow you to use software such as Microsoft Office on a Web site. You'll use digital entertainment rather than buying a copy.

GRIFFIN: You look at this new business model and it's so much more enlightened than the old one. It means grow the size of the crowd.

We've seen it over and over again. We saw sports owners say to broadcasters, 'Well, if you're going to broadcast my baseball games, you have to make sure all the seats are filled.'

Well, today, that rule is out the window. They'll do anything to get you to broadcast the games. That's my point -- that the connection to the consumer is all-critical.

And what's the cost of adding another viewer to that baseball game? Zero. And what's the price of watching that baseball game? Zero.

And does anybody think that's bad biz? No. They used to, didn't they? They used to think it would be the death of them.

DMN: If you're talking about creating new digital entertainment services based on target marketing, there are plenty of problems with privacy. Is that at the heart of your vision for the future of entertainment?

GRIFFIN: No, what I'm getting at is relationships. I know where you're going when you say direct marketing. But let's be clear what it really is. It's the difference between men and women. That's what we're talking about. We're talking about a gender difference. Men -- what we know is consummating a relationship with a consumer. We think about selling products. We like to say, "Next!"

And the woman, she knows that the relationship is worth far more than one visit. Amazon.com is a woman, isn't it? Amazon remembers your birthday, doesn't it? It remembers what you bought. It sends you cards; it reminds you of things. They data-mine you like a woman does.

A woman, she will remember the color of your eyes, your birthday, she will remember much about you. A man doesn't remember. He moves on.

Our future is very much about the feminization of marketing. Our future is about data-mining. And remembering those things and forming relationships that never end instead of consummating transactions with consumers that end in 'Next!'

DMN: To make all this work, you need ubiquitous connectivity. In what dominant form will that materialize? It's got to be cellular and satellite, right?

GRIFFIN: I was at a conference two weeks ago, the Digital Frontier Conference sponsored by Northwestern University, and the dominant view of the futurists was that AT&T would have the hardest time in the future because they spent $110 billion on copper cable.

For a long time, we thought, 'Sure, that's the play.' But it's not. Wireless digital ubiquity is where it's at.

Cell phones -- I love them. I have about a dozen of them or so. They're my pride and joy. Because to me it's the ultimate manifestation of killing the buffer.

It is digital ubiquity. It is this idea that you can have whatever you want, whenever you want it, wherever you are. And when I read that in Finland, they have shown you could have Internet connections faster than a T1 line on a cellular phone, that's when I realized digital ubiquity is already here.

Staff Writer Doug Bedell can be contacted by writing dbedell@dallasnews.com.