Coolfer

MySpace Preview Fatigue

Thu, 20 Nov 2008 16:53:45 -0600

MySpace album exclusives are kind of a big deal (in some circles) but do most people care? The majority of people who have gone to Guns N' Roses' MySpace page for the exclusive streaming preview of Chinese Democracy aren't sticking around long. The number of streams falls as you get deeper into the album -- and it's a sharper drop than I would have guessed a big preview would get. Fatigued from those six-minute epics? One or two tracks enough to satisfy curiosity? Could be plenty of reasons. One is the first track on an artist's MySpace page tends to play as soon as the player is loaded.

Paul McCartney's latest project, The Firemen, has an exclusive album stream at its MySpace page. Not too many listens, and fewer people are sticking around to hear the end of the album.

Here are the two albums side by side. The Firemen streams have been normalized so each track's stream can be compared as if both lead-off tracks have an equal number of streams. The Guns N' Roses album has one more track than the Firemen album.

[music jobs] The Beggars Group & Matador Records is seeking a Paralegal

The Album Unbundled -- And What to Do About It

Thu, 20 Nov 2008 11:36:35 -0600

In a perfect world (from the artist point of view) bands would sell only albums. More revenue than what they get from unbundled albums. But that's not how the world works any longer.

Music Week has a report on a Music Tank panel titled "Lets Sell Recorded Music" in which renowned artist manager Peter Jenner lashed out at the changed brought by iTunes. The store, he said, has "had the disastrous effect on the record industry of debundling the album" and letting fans choose two singles instead of a full album.

That's pretty much the conclusion I came to in a quick-and-dirty Excel computation of album-for-tracks substitution. Since the launch of iTunes, the loss of every additional album (beyond the rate of loss before iTunes launched) was replaced with 1.38 track downloads.

At the same time, Jenner and others discussed the access music charge, a fee that would effectively act as a blanket license for downloading. Andrew Orlowski of The Register wrote about the discussion and has some comments. The incentives created by such a license are a hotly debated topic. I don't think creating a pool of money and then disbursing the money based on share of download would kill the industry. It might not be the best plan, but it wouldn't kill all incentive to create music. The more popular, better marketing music would be downloaded more often and, accordingly, get a greater share of the pool. Websites and services would be created to fit the likes and needs of consumers (a metal site for metal fans, something like iTunes for mainstream listeners who want a nice storefront). A voluntary fee seems more likely to create the best incentives to create and compete on behalf of the consumer. An involuntary fee could have all sorts of unintended consequences.

I do agree with Orlowski that the access music charge is a comforting idea for those in the industry eager to turn around revenues. That comfort may lead to unwise decisions. Once you go down the path toward an involuntary music tax (that's really what we're talking about), you may not be able to come back.

[music jobs] New York University is seeking a Department Chair for The Clive Davis Department of Recorded Music.

Thursday Business Links

Thu, 20 Nov 2008 09:08:22 -0600

• Taylor Swift's Fearless moved 592,000 units in its first week and debuted atop the album chart. Sales for the week were 8.9 million units -- a good sum, but down 24% versus the same week last year. (Billboard.biz)

• Microsoft has added ten untethered downloads per month to its Zune Pass subscription (which goes for $15 per month). That must have been some focus group. I'd opt for a lower price, but I didn't as much as pass around a survey. (Press release)

• Rumors that three majors are in talks with iTunes to sell MP3s, and Universal Music Group will soon sell MP3s through the Zune Marketplace. (CNET)

• Have iPod sales peaked? "Wall Street expects Apple to ship 18.6 million iPods this quarter, according to Piper Jaffray analyst Gene Munster. That would represent a 16% year-over-year decline." (Alley Insider)

• A profile on the Country Music Association and how it has helped the genre over the last 50 years. (Wall Street Journal)

[music jobs] Boosey & Hawkes is looking for a Royalty Tracker.

Hustlin' for Pennies

Wed, 19 Nov 2008 17:57:44 -0600

David at Digital Audio Insider has a post about his band's first CD Baby royalty statements with payouts from Lala.com and Verizon. Lala.com paid out about 0.55 cents (pre-CD Baby fee) per stream while Verizon paid out $0.85 for a song download.

Lala.com has on-demand streams, the kind that demand a larger royalty. Non-interactive streams pay less.

[music jobs] New York University is seeking a Department Chair for The Clive Davis Department of Recorded Music.

D2C Part III, or Using Technology to Stay Ahead

Wed, 19 Nov 2008 17:50:47 -0600

As another follow-up to yesterday's post on a speech by Ian Rogers (Topspin Media, ex-Yahoo Music) about, for lack of a better summary, the future of music, here's a link to coverage today at TechCrunch. Skip the post and go straight to the commentary. You get everything from (paraphrasing loosely here) "Technology will kill labels -- Kozmo.com should have been the next eBay" to "Less popular music is less popular because it sucks." And plenty of opinion in between. Rogers even left a comment.

What is missing from the discussion is the competitive role technology will play for music's middle class. Forget any Utopian ideas of a growing, more self-sufficient middle class. I understand that may be difficult when we're frequently presented with success stories big (Nine Inch Nails) and small (Josh Rouse). But don't forget the stories of mediocrity and failure. There are plenty of them. Case studies and success stories sell a product and a vision. They do not accurately represent the entire marketplace.

The best assumption is -- short of the emergence of government endowments and grants for everyday musicians -- the middle class will stay about the same size, and consuming spending on music will stay about the same. Given those assumptions, middle class artists will use digital technologies in heightened competition with other artists. New tools aren't about growing the middle class, they're about enabling a portion of artists to divert money away from other artists. Today's ease and low cost of production and distribution have lowered the barriers to entry. Naturally, the market will see an influx of new entrants. The barriers to success, however, even modest success, are still there.

[music jobs] The Beggars Group & Matador Records is seeking a Paralegal

D2C Part II

Wed, 19 Nov 2008 12:36:27 -0600

As a complement to yesterday's post about a speech by Topspin's Ian Rogers, here's a link to a post about the Grammy conference a few weeks ago by Echo's Mark Montgomery. He has some advice on how to get started for artists not yet ready to join a company like Echo. On a smaller scale, artists have all sorts of tools available to them. And increasingly they have companies such as Topspin. An excerpt:

if you want to be kanye or bon jovi, the path is much different that if you want to be over the rhine or slaid cleaves. I don't believe that anyone sets out to be "small", but, getting to a self sustaining business is much different than being on the cover or rolling stone and playing the garden.

After the chat about philosophy, Mark breaks down steps for artists to get started. These are called "buckets" these days, I believe: the music, the brand, the hub ("blog like a fiend"), communicate (outbound messaging), monetize (e.g., digital distribution), social networking, advertising and analyzing, and touring.

[music jobs] Boosey & Hawkes is looking for a Royalty Tracker.

Jupiterresearch Predicts Swell in European Consumers Paying for Digital Music

Wed, 19 Nov 2008 10:27:27 -0600

paidContent UK has info from a new Jupiterresearch study that predicts a large increase in pay-for online content.

"While free content will continue to dominate, as overall online audiences for all content categories continue to grow, so the number of European users willing to pay for content online will grow at an even greater rate."
That will mean paid content could pull in €5 billion in 2013, from €1.4 billion last year.

That sounds like salvation for formerly premium publishers who had come out from behind their pay walls just in time for an advertising recession. But what’s driving it? A seismic shift in the number of people who will begin paying for music, Jupiter says. Though freeloaders outnumbered paying listeners by 53 million to 6.9 million last year, by 2013, it’s reckoned European efforts to drive consumers to legal downloads will see payers in the majority - 63.7 million against just 55 million.

So Jupiter figures a 823% increase in the number of consumers who pay for media will result in a 257% increase in revenues? That means many new customers will be good for very little revenue. And music will be driving this? Jupiter puts music's share of European pay-for media right now at 29%, or €714 million, and says it will grow to 51%, or €1.45 billion, in 2013. That's a revenue increase of 103% over five years, equal to a 15.2% compounded annual growth rate.

The revenue estimate looks to be fair. But where are the new customers going to come from? (And how many will be lost to ad-supported services?) Traditional MP3 stores still have plenty of growth in them. Mobile subscriptions and ISP-based subscriptions should experience strong growth -- more in number of subscribers than revenue per subscriber. ISP-based subscriptions and similar MP3-based subscriptions are the wild card and it's too early to tell which want those will go.

[music jobs] Boosey & Hawkes is looking for a Royalty Tracker.

Wednesday Business Links: TN Anti-P2P Law Has Big Price Tag

Wed, 19 Nov 2008 10:01:21 -0600

• Tennessee's college anti-piracy law will cost $13 million in the first year and about $2 million thereafter. (Ars Technica)

• The new dance branch of William Morris has some new clients: Chemical Brothers, Underworld, The Prodigy, Sandra Collins, The Orb and Mark Knight. (Music Week)

• A profile of Yahoo Music under the leadership of Dave Goldberg. "Instead of selling songs, Yahoo is trying to build a diverse community of music fans. That involves redesigning the site, adding concert information, music blogs and video playlists." (Fortune)

• Indie label Anjunabeats says it is the first indie to sign an ad revenue-sharing deal with YouTube. (Marketing Week)

• A closer look at digital rights management. "...as the debate continues over who bears the ultimate burden to police the Web for material that infringes copyright, the content owner or the hosting Web sites, digital fingerprinting and content identification technologies are becoming a helpful tool in streamlining the process for both parties." (New York Law Journal)

• The Zune gets a price cut, more social features and a few new free games. (VentureBeat)

• Magnatune has added new twists to its business model: $5 for streaming or $10 for unlimited DRM-free downloads. Good model, great prices, but needs better tunes and more of them. (Magnatune blog, via ReadWriteWeb)

• The Streetlight Records in Noe Valley is closing. (SF Weekly)

[music jobs] Boosey & Hawkes is looking for a Royalty Tracker.

D2C...New Hope

Tue, 18 Nov 2008 11:40:44 -0600

Last week I started a post about direct-to-consumer sales and relationships. It was prompted by a post about Ian Rogers (of Topspin Media) and a speech he gave at the the Grammy MusicTech Summit in Seattle. Also part of the post was Live Nation's plan to sell downloads directly from artist web pages -- an inevitable development but not terribly exciting. But I never finished the post, so I'm doing it now.

A guy at Topspin emailed me to let me know the slides from Ian's speech are posted at the Topspin blog. I'm not going to summarize the thing for you, but I encourage you to read it. What Topspin and similar companies are doing is bridging the gap between artist and consumer, changing the relationship, selling products in different ways and finding new possibilities.

I don't think the "old model," as Ian calls it (high volume, low margin) will be replaced by the "new model" (low volume, high margin), or that mass marketing products are likely to disappear (if music, why not every other mass marketed consumer product?). Judging from his comments, Ian doesn't believe it either. He sees a shift away from the old and toward the new -- not one replacing the other -- as Topspin aims for the "entire middle class of artists" for which the old model doesn't work. Some artists will want to sell millions of albums and they will trade a low royalty rate for full arenas. But technology and entrepreneurs will bring new ideas and artists will have more options and tools. It's an exciting time.

[music jobs] Boosey & Hawkes is looking for a Royalty Tracker.

Hulu Ignores Long Tail, Does Quite Well

Mon, 17 Nov 2008 17:04:53 -0600

The Financial Times reported today that Hulu, the joint venture video streaming site created by News Corp and NBC Universal, will soon pass YouTube in revenues. Hulu, which provides free, ad-supported streams of many popular television shows and movies, is available only to U.S. users and is expected to generate $70 million in 2008. YouTube is expected to have revenue of $100 million this year. Hulu does not traffic in user-generated content and has only six million users. YouTube has 83 million users in the U.S.

The implications for music are obvious. Monetizing the long tail through advertising is a challenge -- once you get beyond a certain level of decent popularity, the content is all but worthless to advertisers. If that content is licensed, the service provider will have to pay for each view. A percent-of-revenue deal would be better in this case since advertising revenue varies across content. If payouts to content owners are fixed, the less popular titles -- a sizable number in aggregate -- could easily result in a net loss after operating expenses and royalties. MediaMemo has more on the companies' differences in profit margin and operating margin.

[music jobs] Boosey & Hawkes is looking for a Royalty Tracker.

2008 Olswang Survey Offers Insights Into Digital Behaviors

Mon, 17 Nov 2008 14:32:01 -0600

The Olswang Convergence Consumer Study 2008 was released today. It has some great insights into the downloading, purchasing and listening behaviors of British consumers. The survey reached 1,162 respondents -- 235 between the ages of 13 and 15, and 927 adults. Download the 55-page report (PDF) here. The music section starts on page 29 of the PDF document.

Respondents most frequently listen to AM/FM radio (62%) and CDs (54%) at least once a week. The third most frequent way to listen to music was listening to tracks ripped from a CD to a PC (44%). Listening to downloaded music and streaming music came in at 28% and 26%, respectively. A majority of two groups -- classified by Olswang as "tech laggards" and "kids" -- listen to CDs on a CD player at least once a week. A majority of both groups also listen to tracks ripped from CDs at least once a week.

Only 22% of the "laggards" listen to digital music on a portable device (that number is 81% for kids). The main reason given in focus groups was plain ol' disinterest. Laggards tend to listen to radio much more than other groups. For some in the kids group, YouTube has replaced radio as a form of discovery.

For all that music listening, only 14% of respondents said they purchase downloads once a week (and 10% said they download from illegal sites once a week). While record labels may shudder at knowing 10% believe the statement "Stream/download music illegally" best represents them, 39% chose "Don't obtain illegal online content -- it's wrong" while 36% chose getting caught or poor quality as reasons for not downloading or streaming from illegal sites.

[music jobs] New York University is seeking a Department Chair for The Clive Davis Department of Recorded Music.

Monday Business Links

Mon, 17 Nov 2008 12:07:57 -0600

• With the hiring of former Coca-Cola executive Rafael McDonnell to head up brand partnerships, licensing and synchronization, EMI continues its streak of hiring outside of the music industry. (Billboard.biz)

• Digital distributor IODA has partnered with Japanese distributor BounDEE. (Press release)

• Using old media to promote musicians and albums. James Taylor on QVC? I missed that one. Said a QVC director of marketing, "The CD business is shrinking every year, but it's still a substantial business out there, and we want our share of that." (Denver Post)

• Can "Guitar Hero" save the music industry? The author, the worldwide games portfolio manager for Xbox Live Arcade, seems to think so. But I must point out his scant anecdotal evidence says very little about the ability of "Guitar Hero" to help much beyond a handful of established superstars. A bump in download sales is nice, but it's not a game changer in and of itself. A surprisingly poor argument from a respected, intelligent blog. (Freakonomics)

• Contrary to some opinions, Comes With Music, and all new and future mobile services, will not be torpedoed by sinking handset sales. CWM is an experiment. Next year's revenues were going to be light even in an absence of a credit crisis. The experiment will continue. Kinks will be worked out. Consumers will continue to be educated on such services. CWM will be a better service by the time the economy starts to turn around.

• The French recorded music market dropped 13.9% in trade value in the first nine months of 2008. Digital was up 52.6%. (Billboard.biz)

• The Philadelphia Historical Commission has granted a building permit that will allow the renovation of the Boyd Theatre, which has been closed since 2002. The developer making the renovations says it has an agreement with Live Nation to let the promoter purchase the theatre. (Philadelphia Business Journal)

• An interview with Tom Conrad, CTO for Pandora Media. On record labels, "I don't know that those individuals -- who are compensated for their ability to put the screws to everybody who wants to use music -- I don't know if their perspectives are particularly changing." (Internet Evolution)

[music jobs] Boosey & Hawkes is looking for a Royalty Tracker.

Music Jobs: Royalty Tracker, Department Chair, Mobile Account Executive, and More

Mon, 17 Nov 2008 06:26:10 -0600

Here are some recent posts from the Coolfer Music Job Board:

Royalty Tracker at Boosey & Hawkes; New York, NY.

Chair, The Clive Davis Department of Recorded Music at New York University; New York, NY.

Mobile Account Executive at Sony BMG Music Entertainment; New York, NY.

See more great music industry jobs at the Coolfer Job Board

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[music jobs] Boosey & Hawkes is looking for a Royalty Tracker.

The Modern Music Company Takes Shape

Fri, 14 Nov 2008 12:33:49 -0600

Vivendi released its Q3 earnings yesterday. Here is the 11-page press release (PDF). The results show how a successful modern music company is taking shape. Universal Music Group's acquisitions in music publishing and merchandise are being integrated, digital is growing and all three are helping to offset the decline in both album sales and CD sales. It is optimistic but cautious about new revenue models (e.g., MySpace Music, Comes With Music). Just as important is UMG's market share gains as some of its major competitors have allowed themselves to lapse.

UMG revenue dropped 6.2% in Q3 (a 1.1% increase at constant currency) and dropped 3.8% to €3.142 billion in the first nine months of 2008 (a 3.5% increase at constant currency). Big gains were made in EBITDA, which rose 21.8% to €408 million in Q3 and 29.6% through September. Revenue for the first nine months of 2007 was €3.265 billion and EBITDA was €335 million. Revenue for the first nine months of 2006 was €3,298 and EBITDA was €433 million.

Through nine months, digital revenue increased 33% at constant currency (digital revenue was up 47% for the same period in 2007). CFO Phillippe Capron called it a "good performance" that was "very sound," and he underlined cost constraints and gain in market share. Emphasis has been on digital growth and cost reductions (which will continue into the future). BMG Publishing assets have been brought to UMG Publishing's higher level of performance. Global margin for publishing is above 30% for the period under review.

Vivendi expects slight growth in revenue and EBITDA in Q4.

Capron mentioned MySpace Music ("it may be one of the ways of the future") and Nokia's Comes With Music only briefly and mainly to point out how the company is seeking ways to replace lost revenue from physical format sales. Analysts were interested in Vivendi's outlook, but no hint of expected revenue from these new models was given.

[music jobs] Boosey & Hawkes is looking for a Royalty Tracker.

Coolfer

MySpace Preview Fatigue

The Album Unbundled -- And What to Do About It

Thursday Business Links

Hustlin' for Pennies

D2C Part III, or Using Technology to Stay Ahead

D2C Part II

Jupiterresearch Predicts Swell in European Consumers Paying for Digital Music

Wednesday Business Links: TN Anti-P2P Law Has Big Price Tag

D2C...New Hope

Hulu Ignores Long Tail, Does Quite Well

2008 Olswang Survey Offers Insights Into Digital Behaviors

Monday Business Links

Music Jobs: Royalty Tracker, Department Chair, Mobile Account Executive, and More

Recommended

The Modern Music Company Takes Shape