I think the question is: is there any reason to expect music to be "worth" more than other types of online content?
Meanwhile, the typical song is longer than 3 minutes. The user also must actively find the artist and seek out the song (rather than say mindlessly clicking a link from Digg because they're bored.)
Comparing a pageview to a song play is not a good analogy.
On a side note, I'm starting to get tired of all the anti-media view on YC. Group-think is very dangerous. There are a lot of insightful comments here but I make myself take everything with a grain of salt because of the social dynamics of the community.
The article mentions that the top artist was Lady Gaga. Why didn't Lady Gaga start self-publishing on Lulu.com? She would have been able to keep ALL her CD and concert revenue. Information wants to be free!
Contrary to the popular belief here, record companies DO add value. Gaga signed with Def Jam at the age of 19 after L.A. Reid heard her (who is responsible for building the careers of Mariah Carey, TLC, OutKast amongst others). She cut her teeth on writing and producing music for established artists before going out on her own.
I don't want to split hairs - yes, obviously, a song is not identical to a page view - but at a very basic level, both songs and web sites are content. They both cost money to produce, promote, and distribute.
My point is that while $0.16 CPM is low, it's the same order of magnitude as other online content. I don't think $1 CPM would be unreasonable, and that's not a huge difference.
Contrary to the popular belief here, record companies DO add value.
I never said they don't. I'm not really sure what that has to do with what I'm saying.
Where's the sweet spot? Serving music has got to cost much more than serving a jpg ad, but maybe less than or equal to a flash ad (depending on the song and ad of course). I could very well be wrong about that though.