Jiwa is a music portal which has been launched in March. It’s noteworthy that a major label (Universal France) supports an online service which gives away music for free.

Playing Jiwa tracks is legal, because the rights have been cleared. Jiwa’s business model is based on collecting data about their users’ musical taste. The user profiles are sold to advertisers. A share of the advertisement revenues will be paid to the rights holders (e.g. the major labels). Finally the music industry has discovered the Free-TV business model on the Web!

Jiwa’s business model reveals only half of the story. Until today the rights collecting societies (e.g. CISAC) are managing the copyright for artists and labels. An author who is a member of a society will receive a small fee for every copy of his work, because the societies collect levies from the manufacturers of blank media (e.g. CDs, USB sticks) and broadcasters (e.g. radio stations). See this beautiful diagram illustrating the music business model published by De:bug some time ago.

The societies’ practice would lose it’s justification if users could pay directly for the rights to play and copy music. An open standard for micropayments like one that is developed within DMP could make them completely obsolete, because creators and end-users don’t need intermediaries to exchange “value expressions”.

However, in the case of Jira it is very unlikely that this development will happen. One of Jiwa’s business angels is the CTO of Fasttrack DCN, the company that developed the technical infrastructure for CISAC and BIEM. The collective management societies’ war chest is well stocked. Services like Jiwa can be considered part of their rearguard action.