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Author Topic: The Music Business  (Read 8109 times)

JimH

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The Music Business
« on: October 02, 2017, 05:24:05 pm »

I realize it may seem like I enjoy reporting on these failed or failing music services, but the purpose of this log is to demonstrate how risky it is for JRiver to align with them.  I wish it were different.
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stewart_pk

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Re: The Music Business
« Reply #1 on: October 02, 2017, 07:49:08 pm »

I realize it may seem like I enjoy reporting on these failed or failing music services, but the purpose of this log is to demonstrate how risky it is for JRiver to align with them.  I wish it were different.

What does "align" mean?
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JimH

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Re: The Music Business
« Reply #2 on: October 02, 2017, 08:15:56 pm »

Become a partner with.  Work with.
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jachin99

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Re: The Music Business
« Reply #3 on: October 03, 2017, 08:25:44 am »

I honestly don't know what they were thinking when it comes to their media streaming/purchasing options.  They should have left their old store alone IMO.  I bet groove had a whole five users on it at any given time, and MS Movies & TV is probably about the same.  They already had tight media integration with the OS in WMC, and they broke it all to launch a bunch of failed services instead. 
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stewart_pk

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Re: The Music Business
« Reply #4 on: October 03, 2017, 07:42:49 pm »

Become a partner with.  Work with.

Do you think Spotify or Apple music would be interested?
And if so surely the risk of either one of these big players going belly up is incredibly low.
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blgentry

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Re: The Music Business
« Reply #5 on: October 03, 2017, 07:50:01 pm »

In 5 years I would bet that there would be roughly 3 streaming providers for music.  If you could guess which three that would be, you might make some money.

Except that every streaming service seems to lose money.  So where does that leave their business model?  Ancillary income from other sources?  Like advertising?  Raising subscription rates?  Squeezing the record companies for lower prices?

It all seems like a losing proposition to me.  In my opinion, streaming only still exists because of ULTRA strong consumer demand.  Everyone is betting that they can somehow figure out how to give all of these consumers what they want and somehow make a profit.

The problem is, as Jim said way previously in this thread, it's like a business where you sell $10 bills for $3.  OF COURSE YOU HAVE CUSTOMERS!  But how long can you stay in business?

So, Spotify, Apple, Tidal, whomever... Who knows if ANY of them will be a player in 5 years or if they will actually turn a profit.

Brian.
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JimH

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Re: The Music Business
« Reply #6 on: October 03, 2017, 08:18:36 pm »

Do you think Spotify or Apple music would be interested?
And if so surely the risk of either one of these big players going belly up is incredibly low.
Apple only plays with itself.

Spotify might want to cooperate, but record labels restrict what can be done.  Spotify will go belly up unless they find a company like Google to acquire them.
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stewart_pk

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Re: The Music Business
« Reply #7 on: October 03, 2017, 09:15:43 pm »

Apple only plays with itself.

Spotify might want to cooperate, but record labels restrict what can be done.  Spotify will go belly up unless they find a company like Google to acquire them.

So it seems like there's nothing for JRiver to do regarding streaming services anyway.
So I'm not sure what the point of this thread is if nothing can/will be done.
I heard it here first regarding Spotify.
If a huge company like Google aquires Spotify it could hardly be called a "struggling" company, they would have to see potential value in it.
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Awesome Donkey

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Re: The Music Business
« Reply #8 on: October 04, 2017, 04:19:59 am »

If I had to guess, Microsoft might be the one to acquire Spotify, especially since they're replacing the Groove Music with Spotify.
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JimH

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Re: The Music Business
« Reply #9 on: October 04, 2017, 07:02:38 am »

If I had to guess, Microsoft might be the one to acquire Spotify, especially since they're replacing the Groove Music with Spotify.
Why would you buy a money losing business when you can just "rent" it?

But strange things happen.
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stewart_pk

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Re: The Music Business
« Reply #10 on: October 04, 2017, 07:21:49 pm »

Why would you buy a money losing business when you can just "rent" it?

Because it will make money in the future.
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JimH

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Re: The Music Business
« Reply #11 on: October 04, 2017, 07:55:28 pm »

Because it will make money in the future.
None of the music services have ever been profitable for long.  Pandora put together a couple of profitable quarters before going public, then went back to losing money.

https://finance.google.com/finance?q=NYSE%3AP&fstype=ii&ei=D4PVWYi4JIGHjAGDz66AAw

They've lost $275,000,000 in the last quarter, on $375,000,000 in sales.

That's like growing a business by selling $100 bills for $25.
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Hendrik

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Re: The Music Business
« Reply #12 on: October 05, 2017, 01:57:52 am »

If a huge company like Google aquires Spotify it could hardly be called a "struggling" company, they would have to see potential value in it.

You don't purchase a company like that for its "value", especially if you already have a competing service of your own (like Google has, even two, technically) - you purchase it to inherit their users and exclusive music deals, and get more users and more music onto one platform, saving costs.
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stewart_pk

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Re: The Music Business
« Reply #13 on: October 05, 2017, 02:09:34 am »

You don't purchase a company like that for its "value", especially if you already have a competing service of your own (like Google has, even two, technically) - you purchase it to inherit their users and exclusive music deals, and get more users and more music onto one platform, saving costs.

Thank you for understanding there can be more value of an asset to a particular buyer than just it's raw value on paper.
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stewart_pk

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Re: The Music Business
« Reply #14 on: October 05, 2017, 02:15:38 am »

None of the music services have ever been profitable for long.  Pandora put together a couple of profitable quarters before going public, then went back to losing money.

https://finance.google.com/finance?q=NYSE%3AP&fstype=ii&ei=D4PVWYi4JIGHjAGDz66AAw

They've lost $275,000,000 in the last quarter, on $375,000,000 in sales.

That's like growing a business by selling $100 bills for $25.

Thanks for the economy lesson.

Isn't this all just a moot point anyway? Because you've already said Apple won't be interested and Spotify has licensing issues even if they were.

I'd really like to see Spotify integration in JRiver. But if it's never going to happen then maybe we should save time and stop discussing it.
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JimH

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Re: The Music Business
« Reply #15 on: October 05, 2017, 06:26:43 am »

You don't purchase a company like that for its "value", especially if you already have a competing service of your own (like Google has, even two, technically) - you purchase it to inherit their users and exclusive music deals, and get more users and more music onto one platform, saving costs.
The purchaser doesn't automatically acquire the licensing deals.  The record labels can require new licenses and additional payments.

I don't think there would be enough cost savings to make a business profitable.  There is an advantage to gaining enough scale to become more attractive to a buyer.  But these companies lose so much money that even at some size, they're not attractive.  Pandora, for example.
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jachin99

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Re: The Music Business
« Reply #16 on: October 05, 2017, 07:51:00 am »

lets say they all go belly up tomorrow.  How would everyone consume music?  I don't see rows of CDs being sold at big box stores like there used to be, and I don't hear much about online music stores anymore either.  Someone would have to buy them i think because if not, the music industry will have destroyed all of the mechanisms it uses to distribute content. 

If I had to guess, Microsoft might be the one to acquire Spotify, especially since they're replacing the Groove Music with Spotify.

That would be pretty cool to me, and it might be a huge selling point for MS in general.  Or MS would try too hard to Tailor it to whatever business model kick they happen to be on at the time and destroy it. 
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drmimosa

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Re: The Music Business
« Reply #17 on: October 05, 2017, 08:08:35 am »

I have a feature request. Could JRiver buy Spotify and Pandora and route all revenue back to the musicians?

Just for a few months...
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JimH

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Re: The Music Business
« Reply #18 on: October 05, 2017, 09:23:02 am »

:)
I guess we could make an offer.
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blgentry

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Re: The Music Business
« Reply #19 on: October 05, 2017, 09:50:57 am »

lets say they all go belly up tomorrow.  How would everyone consume music?  I don't see rows of CDs being sold at big box stores like there used to be, and I don't hear much about online music stores anymore either.  Someone would have to buy them i think because if not, the music industry will have destroyed all of the mechanisms it uses to distribute content.

Your comment is very indicative of what a lot of consumers think I suppose.  Consumer perception is the whole problem actually.  There are at least 2 whole generations of people that think music should all be free and think that buying music to "own it" is ridiculous.

Until that changes (if ever) stealing and streaming are the only models that these people accept as valid.  But both produce zero or near zero revenue for all involved.  Which makes them unsustainable.  Thus the whole point of this thread:  Streaming companies all lose money. 

Except youtube.  Which is kind of a sideways musical theft company that has monster ad revenue and pays musicians a laughable commission on playing their music.  It's no surprise that many consumers not willing to download pirated music go straight for youtube as their musical source of choice.  Meanwhile it starves musicians of revenue and pumps up youtube's, and keeps the consumer blissfully listening to terrible quality music of any type they want "for free".

I personally do not think that the music industry "destroyed" it's distribution.  They allowed it to happen by not reacting quickly enough.  They did NOT create this problem.  ...and by the way, you can still purchase CDs in many places, including the biggest consumer electronics retail store chain the US.  Most stores that *only* sell music are gone of course.   Where I live there are a few independent "record stores" that mostly survive because vinyl records are the new cool thing for people under 30.  There are many online avenues for buying CDs.  I still buy several per month from various places.  But I don't expect that model to be the model of the future.  The genie is out of the bottle and will never go back.

Brian.
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BillT

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Re: The Music Business
« Reply #20 on: October 05, 2017, 10:46:35 am »

How would everyone consume music?  I don't see rows of CDs being sold at big box stores like there used to be, and I don't hear much about online music stores anymore either.

Astonishing. In the last couple of weeks I've bought about 30 CDs and probably over 200 in the last year, mostly from Amazon, but there are a few other online CD retailers; really easy to find if you care to look.

I'm mainly interested in classical music which, even in the days of LP, has been appallingly badly served by the big retailers. As a general rule anything apart from pot boilers was special order so there was no reason to use brick & mortar retailers once CD was established and you didn't have to return bad pressings.
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jachin99

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Re: The Music Business
« Reply #21 on: October 05, 2017, 12:59:58 pm »

I know you can still buy CDs, and I still do but like you were saying about consumer behavior in general most people use streaming, and if it keeps up for another five or ten years there will be an entire generation of people who won't really know much about CDs because they didn't grow up buying them.  Its not common to buy 30 CDs in a week or even one.  I think CDs on Amazon and you tube would be my fallback also but I haven't bought a CD in a while either.  There is also FM Radio, which I use everyday.  For what its worth, I would be willing to pay a few bucks more a month to keep Spotify alive also.
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blgentry

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Re: The Music Business
« Reply #22 on: October 05, 2017, 01:50:07 pm »

I know you can still buy CDs, and I still do but like you were saying about consumer behavior in general most people use streaming, and if it keeps up for another five or ten years there will be an entire generation of people who won't really know much about CDs because they didn't grow up buying them.

That's already happened.  I know lots of people that have never purchased a CD. 

Quote
I think CDs on Amazon and you tube would be my fallback also but I haven't bought a CD in a while either.  There is also FM Radio, which I use everyday.  For what its worth, I would be willing to pay a few bucks more a month to keep Spotify alive also.

So why and how do you use MC?  It's primarily for music files that are local, like CD rips; not streaming.  I know MC is capable of interacting with various streaming services and webcasts, but that seems to be a fringe use case.

Brian.
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JimH

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Re: The Music Business
« Reply #23 on: October 05, 2017, 01:56:37 pm »

So why and how do you use MC?  It's primarily for music files that are local, like CD rips; not streaming.  I know MC is capable of interacting with various streaming services and webcasts, but that seems to be a fringe use case.
Just so you're aware of it, JRiver has built and supported complete music services in the past.  Beginning with Best Buy and MTV. 
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blgentry

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Re: The Music Business
« Reply #24 on: October 05, 2017, 01:58:39 pm »

^ Hmm.  I knew you guys had built windows programs for those two mega-companies.  I thought it was desktop only.  I didn't realize it encompassed the whole thing end to end.  Neat.

Brian.
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JimH

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Re: The Music Business
« Reply #25 on: October 05, 2017, 02:01:29 pm »

In those cases, we built the front end.  We've done the back end for others.  But that's off topic.
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jachin99

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Re: The Music Business
« Reply #26 on: October 05, 2017, 02:21:04 pm »

That's already happened.  I know lots of people that have never purchased a CD. 

So why and how do you use MC?  It's primarily for music files that are local, like CD rips; not streaming.  I know MC is capable of interacting with various streaming services and webcasts, but that seems to be a fringe use case.

Brian.

I use it from time to time for video.
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RoderickGI

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Re: The Music Business
« Reply #27 on: October 05, 2017, 05:33:34 pm »

If I had to guess, Microsoft might be the one to acquire Spotify, especially since they're replacing the Groove Music with Spotify.

That would be pretty cool to me, and it might be a huge selling point for MS in general.  Or MS would try too hard to Tailor it to whatever business model kick they happen to be on at the time and destroy it.

Don't expect Microsoft to buy anything like Spotify. They are backing away from the consumer market as quickly as they can without completely destroying their reputation. Dropping Groove Music is an example. They have abandoned their "Microsoft Band" sports activity watch line, without ever announcing it. They have all but abandoned Windows 10 Mobile, while denying it. The current CEO wants Microsoft to be a service provider to businesses, and nothing more. I'm not surprised that a company like Microsoft is allowing a CEO to rape and pillage the company to his own benefit when it has been done so often in other businesses and markets to their huge detriment, but I am disappointed.

In fact, I would not be surprised if consumer version of Windows 10 become so unusable in future that they lose their whole installed base in home PCs. All while showing better profits because they have cut costs from all operations to the bone, and initially they will be profitable serving business, until that bubble collapses. Remember IBM? Microsoft are too big to fail? Yeah, ever heard of Kodak? I worked for them, and saw from the inside how badly they had their heads in the sand over digital photography.

Anyway, a little OT, but the point is, streaming is a bad business model at the moment, because users want free music and won't pay enough to sustain it, and no one such as Microsoft is going to step in and magically make it work. I wish they would, but the middlemen who hold the rights to music also keep all the profits. Because that is what they have always done, and will do until the inevitable crisis in the music business hits.
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stewart_pk

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Re: The Music Business
« Reply #28 on: October 08, 2017, 08:24:56 pm »

Anyway, a little OT, but the point is, streaming is a bad business model at the moment, because users want free music and won't pay enough to sustain it...

If this is the case then all forms of music distribution are a bad business at the moment, agree? So why is streaming being singled out in a thread like this?
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JimH

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Re: The Music Business
« Reply #29 on: October 08, 2017, 08:32:47 pm »

Because our customers would like us to provide more streaming options. 
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stewart_pk

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Re: The Music Business
« Reply #30 on: October 08, 2017, 08:44:36 pm »

Because our customers would like us to provide more streaming options.

But why not answer that by saying "Apple will not play us and Spotify has licensing issues so it's impossible from the two biggest players." ?
This is the far more important reason is it not?
Because even if it (streaming) didn't struggle, even if it was ridiculously profitable, you still couldn't provide anything anyway.
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JimH

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Re: The Music Business
« Reply #31 on: October 08, 2017, 09:43:08 pm »

If it were ridiculously profitable, we'd probably do it.

It isn't.
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stewart_pk

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Re: The Music Business
« Reply #32 on: October 08, 2017, 10:09:27 pm »

If it were ridiculously profitable, we'd probably do it.

It isn't.

Oh, so you can do it.

OK, but are you really sure Apple Music isn't profitable right now?
Honest question which I don't know the answer of but I'm presuming YES unless proven otherwise.

Do you really think streaming services are going to retract and not grow?
I read a recent article that said that Spotify add on average 20,000 new songs to their catalog daily.
It goes without saying that CD sales are declining and shops are closing and have been for quite some time.
Oh and downloads are looking like old hat: https://www.theguardian.com/business/2016/dec/26/spotify-music-download-apple-itunes-streaming-vinyl with some suggesting they could die before the CD.
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mwillems

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Re: The Music Business
« Reply #34 on: October 08, 2017, 10:56:02 pm »

In fact, I would not be surprised if consumer version of Windows 10 become so unusable in future that they lose their whole installed base in home PCs.

It's humorous because browser tracking stats show linux adoption up significantly this year, and, based on the shift, it looks like it's cannibalizing users from Windows. Not most of them of them, but a percentage point or two which is huge when your market cap was a few percent to begin with.  I'm one of them.  Windows 10 was the last straw.  I literally only keep a windows machine around for JRiver's TV functionality (and superior video rendering, but I would be willing to eat the loss of MadVR to get away from admining Windows).  If the linux version of JRiver ever hits 100% feature parity with windows I'd be gone and never look back.

Realistically, I know that most of the change in browser stats is likely chromebooks eating Microsoft's lunch in the education market, but ChromeOS is still a linux distro so I'll take it  ;D
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Hendrik

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Re: The Music Business
« Reply #35 on: October 09, 2017, 01:57:12 am »

Oh, so you can do it.

Not with the current situation (because those companies don't want to), but if it were really profitable, those streaming companies would likely be far more open to allowing third-parties to integrate with them more openly. As it stands, they have to keep a tight control over their system to get that bit of money they can out of it, so only very locked down/closed systems are allowed any integration - and MC is too flexible for that.
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Hendrik

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Re: The Music Business
« Reply #36 on: October 09, 2017, 02:17:24 am »

Even if they were to care, they would never allow a very flexible integration. We tried before, and even almost finished one, until they then wanted to control the user-interface and similar restrictions, which we were just not ready to do.

There is also a big difference between commercial use and personal/free use. Spotify for examle used to have a SDK called "libspotify" which was available for non-commercial use (they discontinued it, though), but if you have a commercial player you have to work directly with them, and they'll only allow it if they like it.
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RoderickGI

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Re: The Music Business
« Reply #37 on: October 09, 2017, 03:30:30 am »

Realistically, I know that most of the change in browser stats is likely chromebooks eating Microsoft's lunch in the education market, but ChromeOS is still a linux distro so I'll take it  ;D

The Pixelbook is looking pretty good right now.

Also, Microsoft have finally admitted they have dropped Windows 10 Mobile: https://www.theverge.com/2017/10/9/16446280/microsoft-finally-admits-windows-phone-is-dead
The article (or comments) includes discussion about Microsoft not being consumer focused, which keeps this post almost on topic.  ;D
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What specific version of MC you are running:MC27.0.27 @ Oct 27, 2020 and updating regularly Jim!                        MC Release Notes: https://wiki.jriver.com/index.php/Release_Notes
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The JRMark score of the PC with an issue:    JRMark (version 26.0.52 64 bit): 3419
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astromo

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Re: The Music Business
« Reply #38 on: October 09, 2017, 04:45:48 am »

Apple only plays with itself.

I make no apologies for my irreverent sense of Australian humour but this one cracked me up ... <insert suitable forum acronym> ... this entirely encapsulates my regard for that outfit (even though I give the full credit for the fact that their stuff does work, I just am averse to a business model that treats the customer as a fish in a barrel to be shot at).

Jim, I'll never forget this gift you've provided me. Christmas has come early for me this year.

On topic, I simply haven't bitten by the streaming bug. It might be limiting my musical appetite. When I can get back to the live music scene I will. Family life has it's limits in the interim.

PS: if you need an explanation of why I found Jim's comment a bit of a giraffe, I'm sure jmone can help
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JimH

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Re: The Music Business
« Reply #39 on: October 09, 2017, 06:18:47 am »

Not with the current situation (because those companies don't want to), but if it were really profitable, those streaming companies would likely be far more open to allowing third-parties to integrate with them more openly. As it stands, they have to keep a tight control over their system to get that bit of money they can out of it, so only very locked down/closed systems are allowed any integration - and MC is too flexible for that.
I believe it's related to the license terms they are required to accept with the major record labels.  The labels don't want them to set up shop and offer the music to other businesses.

In any case, until it settles down, we're not going to waste our time.
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