Journalism, or irresponsible rumour-mongering?

TechCrunch, one of the Web’s top tech blogs, sparked a firestorm of criticism with a recent story about — the popular music-sharing network that CBS acquired last year — by reporting that the service had turned over a pile of user information to the Recording Industry Association of America. The story turned out not to be true, and co-founder Richard Jones responded with a blistering denial, in which he said that TechCrunch was “full of shit.” Plenty of people on Twitter and elsewhere have been using the piece as a stick with which to beat TechCrunch, arguing that the report was irresponsible and the blog has lost all (or most) of its credibility as a result, etc. (some good perspective from MG Siegler here).

Pretty open and shut, right? After all, Erick Schonfeld relied on an unidentified and third-hand source (someone with a friend at CBS, who said they were upset by the handing over of data). The more I thought about this story, however, the less comfortable I felt joining the crowd with torches and pitchforks outside TechCrunch’s door. Was the story clearly wrong? Yes. How closely did Erick check the source? We don’t know. But what we do know is that Erick tried repeatedly to get a comment from the company, and got a one-liner dismissal (which he included).

Continue reading tries the subscription model

For a Web company, the downside to getting acquired — as was by media giant CBS last year, for $280-million — is that you have to actually start making money, and that means coming up with a business model that will satisfy the guys in suits. I think that, combined with the lame demands of the major music labels, explains a lot about the news out of about their new subscription service.

The upside of the new features? Music from all four of the big record companies will be available. The downside? You get to stream songs just three times — accompanied by advertising, of course — before you get the corporate “up-sell” offer, in which Last tries to convince you to pay for the subscription version of the service, which apparently features unlimited streaming (no word on downloads).

As Adam Ostrow at Mashable notes, the advertising-supported streaming is similar to the model used by Imeem. But will really be able to make enough from that approach to pay the labels for every stream? Colour me skeptical. I don’t know exactly how much the labels charge for a stream, but I’m betting it’s a lot. The other question, of course, is whether subscription-based streaming will work at all — if I were Rhapsody or Napster I’d be worried about eating into a market that doesn’t show much sign of actually growing, last time I looked.

Note for Canucks:

You’re out of luck. It’s available in the U.S., the UK and Germany (why Germany?), but not the Great White North.

Giants go startup shopping

I’m still trying to recover from the incredible two days that was the mesh conference, and will be posting updates and links to video, blogs, photos and reviews as I come across them, but in the meantime here’s a cross-post from my Globe and Mail blog in which I try to catch up with two of the many tech deals that occurred while I was en-meshed:

It’s been a busy week in tech-land, as media and Internet giants have been snapping up Web startups like kids in a candy store. CBS, which only just finished buying the financial video-blogging show known as Wallstrip (created in part by Toronto venture capitalist and hedge fund manager Howard Lindzon) is paying $280-million (U.S.) to acquire, one of the most popular online music tools around today. And as has been rumoured here and other places, eBay — which paid $2.4-billion or so for Skype not too long ago — is buying StumbleUpon, a Canadian creation that was based in Calgary before moving to the Valley.

snipshot_e4box9t9f1k.jpgStumbleUpon is what you might call a “serendipity engine,” in the sense that it randomizes the Internet by serving up web-pages from a vast catalogue of user submissions, either sending you to a completely random page or choosing a random one from a category of your choosing. Users — of which there are about 2.3 million now — can then vote on whether they like the site or not. I have to confess that I still don’t see how it’s going to fit into eBay’s traditional auction business, but someone at Seeking Alpha has done their best to put together a convincing argument here., which is similar to another site called Pandora, allows users to set up a profile with their favourite music (including their iTunes playlists) and then share that with others. The site then recommends new music based on similarities between their selections and those of people with similar tastes. By contrast, Pandora uses advanced algorithms to determine similarities between songs, and then recommend new ones based on those attributes (there’s a good discussion of the differences between the two here).

Scott Karp has some thoughts on the deal as a sort of Hail Mary play by CBS because of its radio assets, and there’s a post from one of the founders here. In case you are keeping score at home, according to the Times of London ( was created in London), the three founders will get approximately $38-million each from the deal.