For online music services, an endorsement from colleges is the kiss of death.
This month the victim was Ruckus Network, which more than 200 colleges had signed up with to provide a free and legal alternative to unauthorized file swapping.
Without warning, the online jukebox stopped playing last Friday afternoon. The moment reminded some officials of two years ago when another company, Cdigix, abruptly announced the end of its college-focused music service.
The Chronicle tracked down a Ruckus official, who confirmed that the company has played its last tune. “We did shut down the service, and we are closing down the company,” said the official, who spoke on the condition of anonymity to avoid angering his superiors. “We had a pretty good audience, but ad dollars are much fewer and farther between than they were six months ago, and with an ad-supported music service like ours, it became an equation that wouldn’t compute.”
The recording industry has long pressured colleges to hook up with Ruckus, or something like it. When Cary Sherman, president of the Recording Industry Association of America, testified in 2007 at a Congressional hearing on “Piracy on University Networks,” he named Ruckus specifically as something colleges should provide.
In fact, the industry liked it so much it bought the company. Last year Total Music—which was created by Sony BMG Music Entertainment and Universal Music Group—purchased Ruckus. Total Music was reportedly working on a music store that would compete with iTunes, Amazon, and other online music retailers, but that project is also dead, according to a blog post by Jason Herskowitz, an executive who led the short-lived project. (An official for Sony reached by The Chronicle this week said that the company refused to comment on Total Music.)
But while the music industry failed to create a legal alternative to file swapping, it did succeed at something else: convincing Congress that colleges had to do something about music piracy. A new provision in the Higher Education Act renewed by Congress last year requires colleges to offer alternatives to illegal downloading—though exactly what that means is still unclear. Will pointing to the iTunes store be enough to satisfy the requirement? The U.S. Department of Education is just beginning to draft specific regulations (The Chronicle, February 13).
Compliance Challenge
An agreement with Ruckus would most likely have been an easy way for colleges to comply. “If the regulations say you have to offer a service, what if there is no service?” asks Kenneth C. Green, director of the Campus Computing Project, which issued a report in October on the cost to colleges of dealing with online downloading. “OK guys, you said, Go here,” he said of the music industry, “but it’s no longer here—give us a little bit of guidance.”
Cara Duckworth, a spokeswoman for the recording industry, said the group is still pondering what it will recommend next, but she noted that there are plenty of legal music stores. “The shuttering of one online music service should not be a justification for schools to get lax on the promotion of legal services,” she said.
She blamed illegal downloading on campuses for killing Ruckus. “It’s difficult to compete with illegal free services,” she said.
But the Ruckus official told The Chronicle that the company’s biggest competitors turned out to be other free but perfectly legal options, including online radio services like Pandora and free music videos on YouTube.
Or maybe students just didn’t like the Ruckus service, which some college officials called overly restrictive. “The truth is it was never a very good service,” said Gregory A. Jackson, vice president and chief information officer at the University of Chicago, which chose not to use Ruckus because he said the music could not be moved to iPods or burned to CD’s, and the service did not work on Apple computers. “They were sort of living as if the market was two or three years ago, but the market has moved on.”
At this point, it’s safe to say that the whole business model for campus music services isn’t working, and it’s time for something completely different.
One radical new idea was discussed at a meeting last year of the Joint Committee of the Higher Education and Entertainment Communities, which, as the name suggests, mixes college officials and music-industry executives.
The group was told that record companies, including Warner Music Group, are considering a system in which colleges would pay into a voluntary collective license based on how much music was being downloaded on each campus, says John C. Vaughn, executive vice president of the Association of American Universities and a staff member on the joint committee. Essentially, the record companies would legalize file trading. “There are systems out there that allow you to track the movement of these copyrighted works, and each time it’s downloaded,” a fee could be assessed, he said. Unlike with services like Ruckus or Cdigix, students would be able to do whatever they’re now doing with music—except someone would be paying the bill for them (or a college could pass it along in a student fee). Colleges wouldn’t be telling students where to get their music.
This may never happen—but Mr. Vaughn said that college officials are most excited about such new approaches.
“Universities are eager to find something,” he said, “because despite what critics say, university officials are not comfortable with unauthorized activity going on on their campuses and would like to find a workable legal alternative.”
