THE MUSIC DOPE

It's Been a Long Time Since I Rock and Rolled

2011-10-05T13:33:00.001-07:00

Wow, so I guess the past five or six years have really flown by. Are you still out there? Probably not.

On a personal level, too many things to mention. But the main thing is that my passion for music really hasn't abated much. And thus, with a little bit of spare time on my hands, I guess I'll re-enter the sphere for awhile. Or should I be doing this on Tumblr? That's where all the hip kids are these days.

There's no need to serve any claim chowder at this point--it was easy to predict the implosion of the music industry, it was something that I have been doing ever since MP3s and the iPod showed up. The reality is that the Old Guard has taken a long time to die out. The music business has changed forever.

But it's still an incredible intersection of art and commerce. And it's still worth commenting on.

Mom and pop stores are dying.

2005-11-28T10:47:00.000-08:00

the Lowell Sun ought to put this prism (EVIL BIG BOX STORES ARE KILLING THE BIZ) on virtually every other retail sector.

This is not news, it is not a unique situation, and it's not even that sad. I'm sad for my friends who have seen their indie record stores go the way of the buggy whip, but the biggest reason for their demise has been a) their business practices and b) an obvious, enormous shift in the market that they cater to. Those that haven't made a concerted effort to go virtual aren't going to be in the game five years from now.

50 more CDs that won't be found on my year end lists. Or my gift lists.

2005-11-17T17:32:00.000-08:00

ony Releases List of 50 Rootkit Infected CDs

19 Albums that won't make my best-of list. Or even into my CD player.

2005-11-12T04:11:00.000-08:00

hypebot: At Least 19 Sony BMG Titles Including Trey Anastasio And Our Lady Peace "Protected" By Controversial Rootkit Software

And it's too bad, because I was looking forward to hearing the Coral's new album and also had interest in the Neil Diamond record as well.

It makes you wonder how Sony decided which ones get the rootkit treatment--I notice that the Bruce Springsteen "Born To Run" box set (to be released on Tuesday, November 15th) isn't on this list. Yet.

Digital music isn't saving the business

2005-11-08T04:40:00.000-08:00

but it's probably providing CPR.

Playing God with their music.

2005-10-17T17:33:00.000-07:00

Growing up, one of the things I always hated about LPs and cassettes was having to sit through a bad song (or, more than often, a bad side in order to hear other songs on the album. Of course, my own laziness often empowered those technologies to possibly makes me more patient with the album format (growers!), but I can easily remember one of the things that I most looked forward to with compact discs was the ability to instantly skip songs. And while CD players routinely came with programmability, it was always too much of a pain in the ass to actually do.

"Playing God With The Verve" reminds me of one of the great aspects of the digital realm: rethinking albums on the fly. Yes, you could do this back in the day by making a mixtape, but the immediate gratification is so much more appealing on iTunes and the like. In that article, Nick Southall talks about re-sequencing the Verve's Urban Hymns and subbing a few b-sides while clearing out the clutter. It's a novel idea, a one-up from simply unchecking the songs on an album that I don't want to hear in iTunes.

Similarly, Nate Patrin goes over some novel ways to use the iTunes smart playlists, taking a large dose of creativity from the creators and giving new life and new context to his library.

It's creativity like these examples that continues to push the old way of doing things out the door. Consumers are responding, the model is shifting, and those who embrace this opportunity will prosper.

The Apple Polishers - Explaining the press corps' crush on Steve Jobs and company. By Jack Shafer

2005-10-14T13:29:00.000-07:00

Jack Shafer hates all the good press that Apple gets. Even if it's deserved.

The Music Dope loves Apple for many reasons--quality products, a history of innovation, a brand that exudes passion and aspires for market dedication.

But every company apparently has it's haters, and Jack Shafer is really, really tired of Apple getting good press. You see, he's a media critic and therefore, he wants more criticism of the company.

It's the most boring argument in the world.

A few column ideas for Jack Shafer:

- The John McCain Polishers: the free ride afforded to the "Straight Talk Express"

- The New York Times Polishers: the syndicators of Paul Krugman and Maureen Dowd, who continue to publish dishonest and misleading discourse

- The Japanese Car Polishers: everyone knows that Honda and Toyota make cars that last longer because the press says so

- If It Bleeds It Must Lead: the mainstream media's obsession with violence and bloodshed

- Press Releases: the best source for business and political news

- Major Political Party Talking Points: how the front page is framed

- Union Polishers: the unions are working for the people!

OH, AND BY THE WAY MR. SHAFER: It's not lost on anyone that you are writing for MICROSOFT. What a dumbass.

what if the music industry went to music on demand?

2005-10-12T18:56:00.000-07:00

Comcast proposes DVD/VOD service

Get this: Comcast is going to offer video on demand for $17, and then will also send a DVD of the movie a couple of days later. "Instant rental with ownership."

God forbid anyone in the music industry think this far outside the box.

Why Everyone Hates The Music Industry

2005-10-12T12:03:00.000-07:00

TechWeb: Why Everyone Hates The Music Industry

Fredric Paul thinks that the record companies' "real problem" isn't that that the times are a changin' but that "everyone hates them."

Wrong.

Nobody except musicians, sympathetic writers, and the punk rock community hates the record companies. Consumers ("music lovers" to Mr. Paul), by and large, don't care much about the companies. They just want to buy or steal good music. They don't care where it comes from or how it gets there. They don't blame the labels for high prices. They blame BestBuy or some other retailer.

As an explanation, musicians hate the record companies because they are The Man. The naive, the stupid, and the willfully ignorant typically blame record companies for problems that are usually self-inflicted: knowingly signing bad deals, signing away control, etc. Sympathetic writers hear the same stories every day about the labels and perpetuate myth after myth without ever demanding accountability from the artists. The punk rock community, well, that's kind of a joke--of course they hate the labels. They want anarchy for everything!

Mr. Paul genuflects over a report pointing the finger at media "monocultures" from Forrester Research. Monocultures are not unique to media--the record companies are displaying classic mature industry behavior, something I've elaborated on many times over the past year. The behavior of the record labels is not surprising, it's academically predictable.

I Don't Need a Record Deal!

2005-10-10T07:26:00.000-07:00

More on the relationship between labels and fans

2005-10-09T04:50:00.000-07:00

My previous post addressed the chasm between labels and the fans they desire.

As financial pressure continues to force labels to focus on their core competencies (A&R, artist development, marketing, accounting, publishing, distribution, etc.) there is a growing sense that labels are letting a large opportunity pass them by: instead of building a closer relationship to consumers by whittling away at distribution barriers, labels seem content to let new barriers be built. iTMS, MySpace.com, and other entities are growing in influence and are becoming another middleman for the labels to deal with, despite low barriers to entry and relatively easy duplication. And it's a crucial element of customer control that the labels are unbelievably giving up with barely a fight.

The relationship between the label and the consumer

2005-10-07T14:04:00.000-07:00

Glenn at Coolfer recently responded to my post that took him to task on a post he made:

"He thinks the music industry figured out at some point that it doesn’t need a middleman, that is can sell its music directly. Coolfer can’t go along with that one. Labels, I’d bet, understand very well that their role is not to own the entire supply chain but to encourage efficiencies in its role in the supply chain. Music groups don’t own Best Buy or Target, and they won’t own celluar carriers. They’re going to have to live with their role as the content provider. And I think they know and accept this."

I thought (and think) Glenn is wrong about this; his comments regarding my post inspire a more thorough explanation. Glenn equates iTMS with other brick-and-mortar retailers like BestBuy, but it's simply inaccurate to afix the same label. Yes, they both have arguably the closest contact with the consumer, but that doesn't mean that they have the same relationship. And to my point, the physical relationship (B&M outlets) is deteriorating rapidly into commodity and loss-leader business (the vast majority of sales is now through the big box stores) with iTMS paving the path to digital distribution. Also to my point: the competitive advantage held by Apple is small because the barriers to entry are so low. Yes, Apple is a strong brand but as of now they are using hardware to control the content, something that historically has never been a long lasting competitive advantage. Duplicating Apple's offering at iTMS is simply too easy, and it won't be long before the labels simply partner with any DRM-compliant distributor.

As for distribution in general, the labels have frequently gotten involved though never much on a grassroots level. The reasons for this are obivous: the capital investment is enormous, it's outside their expertise, etc. But technology changes all that. There was a time when major labels actively developed a branding-type of relationship with the end user--Sire, Arista, Geffen, etc. once used their stable as a key marketing element, building their reputation on their roster and developing brand equity. Small labels still do this to a large degree, and with such a low barrier to entry in distribution, it seems obvious that the independent labels will foster the most endearing relationships with their customers. And with mom and pop record stores dwidling every year, who can blame them? It's a little disingenuous to assert that "selling directly to the consumer is hardly a core competency of any record label" when every label spends millions on marketing. "Selling directly" at a big box store means "putting product on the shelf" and accepting payola in the Sunday circulars. The relationship between those customers and their retailers is almost exclusively based on price.

Which is why now, more than ever, marketing at a major label is just as important as A&R. The greatest record in the world will stiff without support, and we all know that massaging the market is essential. That's why one of the core competencies at a major label is marketing--reaching the end user is driven not by iTMS or WalMart but by the labels. To that, why would the label want to let other barriers come between themselves and their customer? 50 years ago, it was obvious why: getting physical distribution was very expensive and far outside a label's core competency. Technology's changed all that. Apple has proven that there is strong demand for digital distribution, and the barriers to entry are relatively low. Why let Apple play gatekeeper (or any of the others racing to get into the game)? Labels spend millions driving people to the digital doorway, then are happy to let someone else get a cut for...hosting servers? Simply put, I'm not convinced that Apple's role as retailer is a) unique or b) essential or c) difficult/expensive to duplicate.

iPod Nation

2005-10-07T05:43:00.000-07:00

Digital sales triple to 6% of industry retail revenues as global music market falls 1.9%

Who are the defenders of the compact disc? Does this make you optimistic about the DVD music format?

from the article:

- Physical music sales in the first half of the year, by contrast, fell by 6.3% in retail value to $US 12.4 billion, and by 6.6% in units, compared to the same period of 2004.

- In North America the US saw a drop in physical sales of 5.3% in value and 5.7% in units, but a counterbalancing strong increase in digital music sales. Sales of single track downloads alone in the US were up almost threefold in the first half of 2005 compared to the same period in 2004, totalling 159 million (Nielsen SoundScan).

Recording Industry vs The People

2005-10-03T17:53:00.000-07:00

Recording Industry vs The People purports to be a "blog devoted to the RIAA's lawsuits of intimidation brought against ordinary working people."

I guess that sounds good, although I'm not sure what "ordinary working people" actually is.

But am I the only one that thinks it's a little odd that a group of lawyers (who publish the blog) are essentially complaining that people who knowingly break the law are undeservedly punished? Isn't this the same as having a blog that complains about speeding tickets?

Coolfer thinks that it's "science fiction territory" to suggest that the labels want to eliminate a middleman like iTunes Music Store.

2005-09-30T13:18:00.000-07:00

Glenn over at Coolfer misses the boat.

The economies of scale in brick/mortar distribution and digital distribution aren't comparable at all--all that's required are server farms and software--which is why it isn't science fiction to suggest that labels might be able to ultimately eliminate Apple. The headaches of physical distribution are legendary, entrenched, have long reaction times, and are getting more expensive. Digital distribution is exactly the opposite--it requires far less capital investment, is scalable (and also generally less expensive with more traffic), and trends well with customization. Customization, as you may know, is a signifier of a mature industry and a leading key to profitability.

There is only one reason that the labels have not immediately overthrown physical distribution and pushed hard on the boundaries of digital distribution: piracy fears. Thanks to Napster (and now Apple with iTMS), consumers have already begun a rapid change to digital distribution. We're waiting for the labels to fully embrace it, and when they do, they will work hard to eliminate any and all middlemen.

$1.9 billion spent on TV product placement

2005-09-22T04:07:00.000-07:00

I've asked this before, but what's the difference between this and payola? Please answer at once, Elliott Spitzer.

R.I.P. R.L.

2005-09-05T05:01:00.000-07:00

Goodbye and farewell, Mr. Burnside.

The future of radio is going to be very, very measured.

2005-08-26T17:17:00.000-07:00

Emmy Advanced Media: Do You Really Want To Know?:

"The lingua franca of the television media business is Nielsen Ratings, but if the box is opened, that will immediately change. Good, bad, or indifferent, a common currency and common unit sizes make intelligent negotiations possible. How will the world of media look when every buy has a census-based, quantitative measurement attached to it?"

The above quote references television, obviously.

But clearly, radio will follow. Precise measurement is getting closer, not farther away. And it serves to figure that in less than a decade, Arbitron isn't going to be working off of a bunch of pitiful telesurveys.

There will be culture shock and rebellion when this first happens, and after that, radio (if it's even recognizable as a form of mass media) will recover.

The economic effects of piracy on the music industry

2005-08-25T05:15:00.000-07:00

The Long Tail: "Just enough piracy"

A very interesting post on digital rights management (DRM):

The first is about the user experience: Any protection technology that is really difficult to crack is probably too cumbersome to be accepted by consumers...

...The second reason the quest for zero-piracy is a mistake is an economic one: piracy can actually let you raise your prices.

The discussion that follows gets much more interesting in the comments down. Spend some time at this link and I promise you'll understand both sides of the piracy/DRM problem.

The real piracy problem is overseas and always has been.

2005-08-25T05:07:00.000-07:00

One in three music discs is illegal but fight back starts to show results

If no one owns the music, then where is the value?

2005-08-23T09:58:00.000-07:00

The concept of copyright continues to be attacked, mainly by the owners of existing copyright(s) who created/purchased property under current copyright assumptions. They fear a future where their property will be stolen, so they want their ownership fortified.

Jeff Jarvis is arguing that these people are losing the battle, and will lose the war in the somewhat near future.

He says that the ultimate value of content ("pre-recorded music" for those of us cluttering up the music business) either reflects trust or represents trust outright. That somehow, there's something less and less tangible (or taxable) about a recorded performance. Or an image. Or any entertainment. That, what we all find value in, is a guarantee of entertainment.

The philosophical discussion at the above link makes a lot of sense"

Content is transient, its value perishable, its chance of success slight. You think your article or book or movie or song or show is worth a fortune and in a blockbuster economy, if you were insanely lucky, you could be right. But now anyone can create content. And thanks to the power of the link — and the trust it carries — anyone can get the world to see it. Is some of this new load of content crap? Sure. Lots of content in the old media world was crap, too. But don’t calculate the proportions. Look instead at the gross volume of quality: There’s simply more good stuff out there than there could be before. And it can be created at incredibly low or no cost.

There is no scarcity of good stuff. And when there is no scarcity, the value of owning a once-scarce commodity diminishes and then disappears. In fact, it’s worse than that: Owning the content factory only means that you have higher costs than the next guy: You own the high-priced talent or infrastructure while your new competitor owns just her own talent and a PC...

...But in this new age, you don’t want to own the content or the pipe that delivers it. You want to participate in what people want to do on their own. You don’t want to extract value. You want to add value. You don’t want to build walls or fences or gardens to keep people from doing what they want to do without you. You want to enable them to do it. You want to join in.

And once you get your head around that, you will see that you can grow so much bigger so much faster with so much less cost and risk.

So don’t own the content. Help people make and find and remake and recommend and save the content they want. Don’t own the distribution. Gain the trust of the people to help them use whatever distribution and medium they like to find what they want.

I just don't understand how anyone could make money on this--charging for trust when the replication costs are so astoundingly low and trust being a bit, well, liquid in the beginning--and I'm sure that Jeff Jarvis' response would be, "Well, the people that figure that out will be the ones who make the most money."

Warner to launch unconvincing gimmick called "e-labels"

2005-08-23T04:52:00.000-07:00

Billboard PostPlay: Warner To Launch "E-Label":

"Edgar Bronfman Jr., Warner Music's chairman and CEO, said Monday that the new mechanism will be called an 'e-label,' in which artists will release music in clusters of three songs every few months rather than a CD every few years.
He was speaking at a conference...The e-label will permit recording artists to enjoy a 'supportive, lower-risk environment' without as much pressure for huge commercial hits, Bronfman said. In addition, artists signed to the e-label will retain copyright and ownership of their master recordings."

What exactly is the motivation for Warners on this?

Assuming the deal with the artist is typical, Warners will pay an advance, pay for recording costs, and have to gin up marketing costs every few months (advertising? publicity? tour support?) to support multiple yearly releases. Oh, and they don't retain ownership, which currently is something that the labels are iron-fisted about retaining. Add in to that the low margins for products like iTunes tracks.

Under these assumptions, there is simply no reason to think that Warners will give any sort of priority to an e-label. This announcement sounds like a stupid promotional ploy.

Mossberg (Wall Street Journal) on why renting music is the new 8-track

2005-08-22T13:55:00.000-07:00

The Mossberg Report -- Personal Technology from The Wall Street Journal.:

"The biggest problem with renting is that if you stop paying your subscription, even for one month, all the songs you've ever downloaded--going back years--will become inert and unplayable. Rental song files are rigged with computer code that requires a monthly digital confirmation the renter is continuing to pay. Without that, the song files die.

An iTunes user could pay $500 to acquire 500 individual songs (buying whole albums is somewhat cheaper) over two years, and those songs are always hers and will always play. By contrast, a Yahoo user might download 500 rental songs over two years for just $120 in subscription fees, but the songs will become unplayable unless she pays hundreds or thousands more in subscription fees over many years, even if the fees rise."

The only way around this would be something like hymn, which decrypts iTunes music files.

Do not ever enable this woman.

2005-08-20T05:05:00.000-07:00

Courtney Love is a liar, an addict, a waste of marginal talent, and an embarassing waste of resources.

Who the hell signed Love to an alleged one-off deal to Virgin a few years ago? Does that person have a job?

It would be nice if the grownups in the music industry would start treating their rosters like valuable investments instead of whimsical, disposable unit shifters. How many more drug-addled losers do we have to watch fall apart publicly, when all along there has been a record label backing their downward spiral? People like Courtney Love shouldn't be trusted with anyone's resources. People like Anton Newcombe shouldn't be backed with anyone's money. People like Pete Doherty shouldn't be allowed near anything of shareholder value. Whitney Houston shouldn't be supported in any way until she's proven clean. With the music industry's bottom line where it is, it's time to take a stand against the idiocy that is label-enabled addiction and abuse.

You can't lose music sales that you never had

2005-08-19T07:15:00.000-07:00

Church of the Customer: More on the marketing world is flat:

"'For almost every musician, the number of sales they lose because people never hear of their album is far larger than the sales they'd lose because people can get it for free online,' Doctorow says. 'The biggest threat we face isn't piracy, it's obscurity."

Actually, I just switched out "writer" for "musician" and "book" for "album." But you get the picture.

Ah, so this explains why music sales are down

2005-08-19T07:11:00.000-07:00

This guy comes up with a list of questions questions that inadvertently describes much of the downturn in music sales. It can be described in one word: information.

We all know that we live in the information age. Well, most of us know that. Most of us use email every single day, the web, and have a vast number of entertainment options closely related to technology.

This deluge of information gives music consumers much more than a major label could. Consumers have wrested control from the major labels. Major labels do not control information about their acts, and they've more or less given up trying--witness the abysmal major label-run websites. Major labels barely control retail pricing anymore--the big boxes sell below MSRP and the labels can't do anything about it. Major labels were built from the ground up to control marketing, and struggle to let things happen any other way. And it's not just the majors--many indies are stuck in the same pattern of confusion. Also, to be fair, forces outside the labels (the RIAA, etc.) form constraining industry boundaries.

Are niches more profitable than hits? YES.

2005-08-19T06:48:00.000-07:00

The Long Tail begs the question, answers.

The graph from the Long Tail explains music retailing very well. And unless you're willfully ignorant, it provides a crystal clear window to the future: digital distribution is going to eat retail alive, and along the way virtual storefronts are going to kill off brick-and-mortar stores.

The death of mom-n-pop record stores was seen as another sign of The Man winning circa the mid-90s. Back then, the big box retailers like Wal-Mart, BestBuy, and Circuit City started selling compact discs at a loss, which killed off independent stores with alarming speed and greatly weakened the ones that have survived to this day.

Given the data at hand--the Long Tail analysis of the DVD market is directly comparable to what's happening in music retailing--it will be very interesting to see how many independent record stores will be able to survive the next 5-10 years. The outlook is grim at best, unless of course some decide to expand their offering into, say, coffee.

Indie record stores are essentially looking at a future where they exist for reasons of nostalgia. Kids (tweens/teens) are growing up without indie record stores and are nearing the point where most of their music purchases are done online. The primary customer of an indie store is going away--even those of us who grew up going to one find it much more convenient, efficient, and economical to order off of the web.

One would think this transition to digital would be good news, news that would be embraced completely by the major label system. But so far, due primarily to encompassing fears of piracy, labels have watched culture changed from the sidelines. Their label brands have disintegrated and rapidly are fading into the ether. Their organizational structures are unweilding, entrenched in business practices that are decades old, and many industry leaders are blissfully unaware of the technological options integrated into today's teenagers.

As I've noted many times in the past, the music industry is in the classic throes of a mature (and declining) market. Margins are weak, cumbersome conglomerations are ineffective, and innovation among the market leaders is non-existent. The biggies are simply not nimble enough to change with the times, and they're so entrenched that they can't muster the courage to fight for the future. And it all makes sense given the risk: nobody wants to go down with the ship. Meanwhile, people like Jason Flom are getting kicked from the ship, ready to watch the carnage from the sidelines.

The major label system tries to win with homeruns, and any other base hits are regarded as either lucky (bands that get ignored by the label but don't manage to kill off their fan base in the process) or inconvenient (acts that steal precious company resources when projected double-platinum only manage platinum.) Meanwhile, the indie system keeps coming and coming. True, labels like Matador couldn't do it without a significant form of physical distribution, but that's going to change in the coming decade. Smart kids are starting labels, and they're planning and building for the day when they don't have to pay RED or anyone else to assure that product is in the stores. And that's why niches are the future.

Bad news for the FreeFiona conspiracy theorists

2005-08-16T16:09:00.000-07:00

Fiona Fashions A Different 'Machine':

"But in truth, Apple was not happy enough with the Brion-produced versions to release them. In April 2004, she sought out Elizondo, who played bass on two songs from her 1999 album 'When the Pawn...,' to help her re-imagine the material."

The indie press (and now, of course, the Internet) is always eager to seize upon the instances of major label jobbery on an artist. And there are many, many examples of major label stupidity when it comes to career management. But it looks like paranoia got the best of them on this one.

Meanwhile, why is an artist with a history of miserable live performances and unstable outbursts even supported by Epic? Her last album, the one with the high-school gimmick title, came out five years ago at the very end of the alterna-revolution. And as Billboard reports, there idea of live dates to promote this album and Apple's career sound like more of a hope than a plan. This is a classic example of an artist who should be whiling away on an indie instead of wasting hundreds of thousands of dollars on a major. Cut her loose, Epic. You'll both be happier.

Payola

2005-08-16T15:31:00.000-07:00

Eliot Spitzer, in his thinly disguised run for governor, has evidently won a few more admirers by getting Sony BMG to essentially pay a fine for bribing radio stations.

I really don't see what the fuss is all about. In the end, it seems that a lot of people, including an allegedly smart guy like Spitzer, have no idea how business operates.

In the radio business, paying for favortism is called payola. Sometimes it is in the form of paying a pre-arranged dollar figure for a number of spins, and sometimes it's just greasing the powers that be with free trips and other swag.

In the retail business, paying for favortism is called "business development." Sometimes it is in the form of paying for pre-arranged distribution arrangements--thousands of new products are developed every year for grocery stores, yet a fraction of 1% ever make it to market simply because shelf space cannot be purchased--and sometimes it's just greasing the powers that be with free trips and other swag.

Frankly, spending money to develop relationships happens in almost any market. The moral and ethical standard seems based on the acceptable transparency of the promotional spending than anything else. Payola--in some form or another--is always going to be with us. There are always going to be ways to influence a playlist at a radio station with money or other spiffs, and there's no way to prevent it. None. That people get so alarmed about actual money being passed between a label and a PD but accept other relationship-enhancing transactions to continue unabated seems a Victorian-era moral relativism. As the Financial Times' Thomas W. Hazlett notes, "competition will perhaps come to entail ever more innovative compensation schemes. Look out for record labels that have plenty of job openings available for friends and relatives of radio station insiders."

Meanwhile, the influence peddlers in Washington, DC continue to operate without restriction--the market restriction is geared towards our elected representatives and not the lobby groups. Hundreds of millions of dollars are spent on lobbying, and interest groups essentially write the majority of spending bills that come before Congress. This is exactly the process that occurs on a statewide level and indeed, in most municipalities. While it's sad that the music business continues to be plagued by outright pay-for-play, Spitzer should next turn his attention to the corruption at the statehouse and indeed, New York City with more influential results.

Rent-a-tune: it's not gaining traction in the market, yet some observers still yearn for it

2005-08-16T14:05:00.000-07:00

Coolfer (and many others) keep chiding Apple for abandoning a successful strategy in favor of a losing one.

says Glenn Coolfer:

Why wouldn’t Apple want to introduce a music subscription service? Maybe it’s for the same reasons the music industry is slow to move away from its CD-dominated business model: Fear in the uncertainty, fear of giving up its bread and butter. For a change, says the article, Apple will let somebody else innovate and then play follow-the-leader.

Let's consider the facts, then consider Apple's strategy:

* Apple has achieved market dominance with their current service
* No subscription service has had anything close to the traction of an own-by-song model
* the other competitive subscription services rely on Microsoft's DRM, an arguably inferior technology

Apple's strategy was based on customer research and market knowledge: music lovers want to own their music, a claim that Steve Jobs has repeated on the record many times. The entrenched culture of music ownership is not rental, and this culture is at least 80 years old (longer, if you consider that buying sheet music, not renting it, was the industry standard prior to the advent of the phonograph.) This is not a defensive strategy motivated by fear. It is a logical way to meet the market's expectations. There is no reason to want Apple to abandon the current ownership business model with iTunes, unless of course the market undergoes a large shift in behavior. And in that case, it's also perfectly logical for Apple to let someone else commit massive resources to fundamentally changing the market.

What the subscription model people continually avoid is the ultraslim margins involved--rental price points are severely undervalued and almost certainly will need to rise. Imagine this: you like the hundred or so songs you download and have to pay $240 per year for the next ten years just to keep listening to them--if the company you're renting them from goes under, you're screwed. You're locked into paying whatever the subscription is, even if it goes up, forever. It's a bad deal, and consumers recognize this.

Fairplay (i.e. Apple) is the growing industry standard.

2005-08-15T07:28:00.000-07:00

MacDailyNews notates the losers in the war; Betamax, 8-track, and 78 rpm standard bearers join in the alligator tears

Money quote:

"It's the losers (Napster, Microsoft, Sony, Creative, iRiver, RealNetworks, etc.) that are whining. Not music buyers. Not music player buyers. Not Apple. Apple is too busy selling iPods and music online to care about the losers' sour grapes."

When Microsoft develops industry standards--including standards that the market accepts, validates, and essentially ratifies--it's okay. But when Apple does it, somehow it's bad? This chorus of crying is coming from losers who think that OpenSource is still the answer. It's not, when it comes to DRM.

"New Revenue Models" or "Old Ideas With New Names"

2005-08-15T05:55:00.000-07:00

The only "new" revenue models being developed for the music industry are directly related to technological advances.

Consider Coolfer's recent post:

Coolfer: Labels Look To New Models: "Coolfer readers have known this for some time. I've discussed the various revenue streams outside of album sales: album downloads, single downloads, music and video streaming, ringtones and music DVDs. Staggering the release dates of ringtones, singles and albums is sensible strategy. JupiterResearch analyst David Card said 'windows is more the natural order of things, with multiple packages and multiple release times.'"

Downloading revenue is in its infancy, and unfortunately, the context of this promising technology is hogtied to current distribution--it's not profitable yet because there is a cash cow (CDs) and other entrenched options already in place.

But going after alternative revenue streams has been a component of successful music managers since, well, forever. And rather than focus on the slim margins associated with downloads (and ringtones) just because the participation is going upward rapidly, more profitable areas of revenue such as television advertising, song placement, artist placement, and other promotional concepts not directly tied to sales. Yes, we can all anticipate a future where downloading/streaming/video is profitable, but that can only come at the abandonment of CD distribution. Enhancing the value proposition of music is probably more what Coolfer is intimating here, not exploiting other revenue streams.

As for the multiple windows concept, well, that's old news, too (with the exception of the ringtones phenomena.) The industry's always staggered release dates with singles and albums (and radio), so adding ringtones to the mix hardly seems like any degree of intellectual insight. Of course it's the natural order of things when that's the way things have been done for the past four decades.

I'd have been impressed with a more novel discussion of these issues, such as: what is the impact of digital distribution on windows releasing? How long will people want Muzak-sounding ringtones before they can hear the real thing, and is that a legitimate window? What would happen if there were no windows? In the age of digital duplication how secure is the windows release system? What is Jupiter Research learning about the fad of ringtones? Can margins and price points be increased in downloading or ringtones?

Music industry worried about CD burning

2005-08-15T05:17:00.000-07:00

USATODAY.com - Music industry worried about CD burning

As well they should be.

When I was an undergraduate, I lived in a fraternity house with 40-50 other members. It was common for members to copy a CD with an audio cassette. It was never a case where one guy bought a CD and then everyone copied it to their own personal cassette tape, but I'm pretty sure that "sharing" is a lot more common these days in settings such as this.

Let's consider the source of this story: the RIAA. And let's consider the RIAA's misguided past, the organization's penchant for blaming the industry's massive piracy problem on kids instead of pointing their resources and fingers at the real problem: global piracy. The reason the Industry needs copy control mechanisms is to fight piracy overseas, where it's arguably a much larger problem.

UPDATE: The Big Picture: More RIAA sponsored nonsense debunks the CD burning issue succinctly.

A layman's description of rent vs. own model of digital distribution

2005-08-10T06:36:00.000-07:00

Downloadable music business: Rent, lease or sell? - Technology - International Herald Tribune

Without a major shift in paradigm--music ownership is at least three generations old now--renting or leasing of music is going to be a hard sell. Renting/Leasing's major hurdles:

1) physical portability
2) technological entrenchment of competing design (ownership)
3) culture barriers directly related to the product
4) emotional barriers related to the product
5) financial barriers to the business model i.e. do you think an artist is going to be happy that people only have to pay $10 a month to download thousands of songs? Someone (like me) should do a NPV of renting a library vs. owning one.

So, what are you listening to? How did you hear about them?

2005-08-08T10:06:00.001-07:00

When people find out my occupation, many will ask, "So, what's really great?" Many times a discussion will ensue, generally beginning with me never being able to remember whom I'm currently really raving about. But many times, the discussion will turn on, "How did you find about about them? Are they on the radio? Did you see them play out?"

There are sights on the web that puport to link musical interests...you enter an act's name, the site tells you other acts you might like based on that. Other sites purport to show band lineages and the like. But that really doesn't turn the lens on your own collection that much, in as far as it doesn't show your own lineage to that act...I'm on a lot of promotional lists for labels, so I get music sent my way all the time, and that clouds the issue a bit as well. There are many acts who've lost their lineage to me in the sands of time. Still, with all that's been written about the Internets and the impact of technology, I wonder how much it's affected my musical preferences--I grew up in a small, rural town where my musical options were essentially limited to two rock stations. I didn't have MTV or a record store (the nearest was 40 miles away) and my record collection back in the mid-80s reflected that.

Anyway, here are ten random albums from this year (in no order, and by no means will they necessarily be on my favorites list by the end of December), and how they came into my life. I suppose that it would be nice of me to post MP3 samples as well, but that's too much hassle.

The Hold Steady - Separation Sunday
I've read Michaelangelo Matos' blog since it debuted, pretty much. He's a writer from Minneapolis with a Prince fetish, and while we don't share too much musically, he's always raved about this band called Lifter/Puller (which disbanded, moved to Brooklyn, and became The Hold Steady.) I never bothered to check out their work, but Matos really raved about this one and I finally caved. If their back catalog is anything like this album, then they are one of my favorite bands of the past five years.

...Trail of Dead - Worlds Apart
I reviewed their first album in 1998, and hated it. I hated their name, I hated the music, I hated it all. I gave them another chance in 2002 when their flack sent me Source Tag & Codes and I accidentally played it...ended up enjoying that album a lot, just in time to find Pitchfork on the bandwagon. In some ways I was excited about Worlds Apart, and I actually pestered the label far in advance to get it. It's ultimately disappointing.

Amy Ray - Prom
Daemon (Ray's label, literally) sends me a lot and most of it is average. The heart is there but the fact is that I don't think much of it. Her last solo album was noisy and far from Indigo country, but I didn't love it as much as I'd hoped. But Prom is stellar, a set of songs that sort of revolve around being gay in high school. This was sent to me far in advance, and I've enjoyed it a lot.

Bob Mould - Body of Song
Mould's output since Husker Du is completely underrated; that he's still known for what amounts to be poorly recorded versions of arguably very good songs is kind of funny to me. His first solo album is still his high water mark, but Body of Song is a fantastic comeback for a guy who looked like he'd lost his way on Modulate. I heard that this leaked, and I ran it down on a P2P network, which is something I haven't done in years. Mould was PISSED about this happening. I don't blame the guy. Really, I don't. But, I don't feel too sorry for him. He is in total control of his career, and it's time we stop pretending that advance copies of albums are necessary AT ALL. They aren't, Bob. Get over it. And that's what leaked. It's high time that artists start repaying their fans first--someone explain to me why we treat an album release as a movie premier, anyway? This same thing happened earlier this year with Sleater-Kinney and they are just as ignorant. The Mould reaction was disappointing in that you would think he would know better. Stop giving out your music first to everyone but your fans and the problem will disappear. And yeah, I got a legitimate disc from Yep Roc six weeks later.

The Jayhawks - Live From the Women's Club, Volume 2
Yep, I had to buy this. The Jayhawks essentially self-released this disc to sell at shows; the first one they did was a big hit that got bootlegged and sold on eBay until the band realized what they had on their hands. It's funny--you'd think a band on a major label would be selling exclusive stuff on their website as well as selling it at shows. The idea that it makes a show more valuable if you can only buy stuff at the show is laughable in the Internet Age.

John Cougar Mellencamp - Small Town (acoustic version)
While I wish iTunes sold songs in lossless quality, it's nice to avoid crass commerical cash-ins by being able to buy "re-issue only" tracks on the Internet. Now, if only this was standard practice.

LCD Soundsystem - s/t
There is this website called I Love Music and it's basically a message board type of site that a lot of music geeks and writers around the world participate in. Some of the most knowledgeable people, and some of the most curious. The near universal acclaim for LCD Soundsystem made me seek them out despite the nature of the music. And frankly, I wasn't disappointed. It's good. (See also: M.I.A., the Mountain Goats.)

Joy Zipper - American Whip
This is an American duo whose release only saw its debut in the United States this year, while this was released last year in the U.K. Odd that they are more popular outside of their own country, but it's not as rare as you might think. This was send my way blindly by an editor and I ended up interviewing the band for a feature. By the time the article ran, Joy Zipper had already released their follow-up album to American Whip. In Europe, of course. Why oh why can't iTunes et all solve this problem so I don't have to shell out $25 for the import.

Sufjan Stevens - Come On Feel the Illinoise!
I vaguely remember reading about this guy and thinking he was some world music artist (gringoism alert!) and dismissing him entirely until Largehearted Boy started pimping his praises. I got an advance and have been happily ever after.

Moonbabies - War On Sound EP
Coolfer's four-word description led to a website streaming preview and a call to the publicist. A great tip-off for a band I'm really excited about right now.

The Path of Least Resistance and why it's changing the fundamentals of the music business

2005-08-08T10:06:00.000-07:00

Mark Cuban, basketball guy, has been talking about the path of least resistance, and how, as a consumer behavior, it affects things.

And oh how it also explains a lot of things that are happening in the music business. How is that?

The path of least resistance lets me now:

- avoid nasty indie record stores
- find nearly anything I want and order it instantly
- find nearly everything I want and pay much less
- purchase one track at a time for dirt cheap
- makes my entire collection portable AND in higher quality
- allows me to have most of my music anywhere I want it
- buy tickets in advance without having to wait in line
- aggregate many opinions about something before buying
- barebones distribution costs
- lower marketing costs
- lower cashflow requirements
- lower breakeven points
- lower barriers to entry
- more efficient use of time

All of this comes from technological advances, advances that, on the surface, might appear to be paths of more resistance. But they're not. These choices are so obvious that they are the paths of least resistance. The problem is that so many people are in denial of this.

Mark Cuban: why oh why won't he spend his money on fixing the music industry

2005-08-01T19:35:00.000-07:00

The definition of insanity.. The Music Industry - Blog Maverick

He's at it again, and yet I'm pretty confident that no one who matters is either reading what Cuban has to say or taking it seriously.

But he strikes upon a key to marketing in general:

Insanity is ignoring year after year, the demographics with more money than time. Those who aren’t willing, or don’t have the time to troll through the net to figure out which network has the most music to download, searching for songs, picking out which peers to try to download from and then hoping it all worked out right. Those who would prefer to just buy music in the easiest way possible so they can get on with enjoying their music and their lives. Isn’t that why we buy bottled water? It’s easy and convenient?

College kids, arthouse kids, urban white kids, and high school students are the biggest consumers of music. They're also the poorest. So is it any surprise that the digital revolution exploded in their demographic? Nevermind that they had fast, free Internet to burn at all the universities--when I was an undergraduate back in the 80s, CDs were passed around the fraternity house on a daily basis in order to copy via cassette tape.

This demographic DOES however also tend to spend money on live performance. They buy the T-shirts. They go to the all-ages shows. They created the underground, the punk scene, and the college town tour circuit in the 80s that led to mega careers for REM and U2.

This group of people will want to consume massive amounts of music no matter the barriers, whether it's DRM or anything else. They ride the paradigm shift of digital distribution every day, and, like getting penny pitchers for a $5 cover, they aren't going to abandon the binge.

Cuban also points out that the labels are pissing their brands down the drain. All the old timers in the music business LOVE to crow about the good old days, when Arista and Warners and all the rest were a stable with a meaning. This was true for the majors and the indies, where you would buy EVERYTHING on Twin/Tone just because you loved the Replacements or you'd trust anything on Geffen because the Eagles were on there. Instead, Cuban notes, it's the download services and digital interfaces that are doing all the branding now...Amazon, eMusic, iTunes Music Store, etc. are all very concerned with being a part of the equation. It's sad--you go to most major label websites and it's a vomitorium of bad flash, six thousand points of promotion, and virtually NO IDENTITY. Those major label corporate websites look like the sausage factories that we think they are, pimping the whore of the day on the front page and little else. No exclusive content, DRM coming out the ass...NO VALUE, NO REWARDS. Just flackery of the worst kind.

I've long said that the music business isn't ruined, that the majors actually are sitting on a load of opportunity if no other reason than they have cash flow and reserves to try to shoot the moon. The problem is that no one really has the balls to do it--everyone's afraid of a big misstep that will ruin the company. But in the face of ANOTHER signficant decline in business, by the time anyone has the courage to take a big risk, there won't be enough resources left to fund it.

a comment worth reading

2005-07-28T14:53:00.000-07:00

Coolfer notes Pitchfork's review of Diamond Nights

this, from the comments section, is spot-on:

the indie scene and the insufferable element it fosters has always existed to validate egos that were tarnished by the more "popular" elements of high school. Maybe Sonic Youth loved and loves Sabbath but in the beginning (and now, to a large degree) they still self-identify with indie, not the mainstream. The most active, vocal supporters of indie have ALWAYS looked down at bands that attracted any sort of frat attention, and immediately cry "sellout" the second that an indie band crosses over from obscurity to the mainstream (R.E.M., Nirvana, Pumpkins, etc.) It's the indie losers who are the credibility police, not Joe Six-Pack.

It's also this breed of indie-centric buttholes who make an exception for mainstream hip-hop, which, in case you don't know, is full-on frat party music and has been since the Beastie Boys in 1986. Whether it's fear of being branded a racist or something altogether different, your average indie record store clerk will be happy to profess love for Kanye, 50 Cent, etc. despite the massive marketing effort and total rockstar sellout nature of hip hop. Because, you know, you gotta stay hip with the kids, even if the misogynist overtones are loud and clear, as long as it isn't Limp Bizkit.

And if we need any further proof of the truth in all this, look at the disdain that the indie community has for modern country music: unless Nashville comes out with something novel like an African American rapping on a mainstream country song (note the notice Big & Rich and Cowboy Troy seem to get in indie circles), it's cast aside as something basically irrelevant.

There's no such thing as a big open tent in the indie community, there never has been, and it's been purposeful. That's because "different" always equals "somehow better" to these people. It is an insular culture that absolutely fosters exclusion in an attempt to keep the jockos far, far away. Without this perverse attitude, people wouldn't have to worry about having "guilty pleasures". They'd just listen to what they liked.

the sky is falling; living in an ecosystem of one

2005-07-26T03:16:00.000-07:00

In Praise of Ecosystems

It's actually fairly surprising that something so dim could find its way to publication.

The assertion that Apple operates in a closed system completely ignores the iron fist that Microsoft has on the rest of the market. Since when is Apple's DRM (FairPlay) any different from WMA? The only difference is that in this rare occasion, Apple controls the market instead of Microsoft.

The logic of this article suggests that if Apple will fail with the iPod, then so must Microsoft.

The Mercury Prize has jumped the shark

2005-07-19T11:14:00.000-07:00

Coldplay???????

An interesting (if hard to read) article on why micropayments won't work in music

2005-07-15T07:58:00.000-07:00

upay: micropayment barriers

Scroll about a third of the way down to avoid the icky graphical boxes. The text gets better from there.

Music Kiosk

2005-07-15T06:46:00.000-07:00

Music Kiosk Provider Burn-A-Song Selects SyncCast to Power New CD Burning Service

Questions:

#1 - Can I bring my iPod to Burn A Song and just download to that?
#2 - Why would anyone want to bet the farm on yesterday's technology knowing that implementation and market acquisition will probably take a couple of years(burning CDs)?

Answers:

#1 - No, this technology is wedded to Windows Media. It's as much as a closed system as iTunes.

#2 - This idea will ultimately fail.

Observations:

It's not a bad idea entirely to offer music at a variety of retail locations i.e. you hear a song in Abercrombie that you like, you want to buy it immediately rather than go all the way home and download it from iTunes.

A better solution would be to be able to purchase the song at the store and have either a) the song emailed to your home or phone or b) be able to download it immediately to your iPod.

Instead, we have a company embracing old, rinkety technology in an era where the burn rate virtually ensures failure.

the Digital Music Age as a subject of peer review

2005-07-14T05:02:00.000-07:00

First Monday Special Issue Number 1

An essential compedium of digital music links, these articles are peer reviewed.

JD Considine weighs in on long album reviews

2005-07-12T20:42:00.000-07:00

Resonance: Who Likes Short Shorts?

“This is where I’m obliged to play the heretic, because while there are many things wrong with music criticism today, short reviews is not one of them. Much as I would like to believe that great insights are being choked off as the average review’s word count declines, my experience is that the opposite is true. Less really is more.”

Now, if only someone could tell Pitchfork this.

Single song downloads triple growth to 6 percent of overall music sales

2005-07-11T19:07:00.000-07:00

Billboard PostPlay picks up from Yahoo that digital distribution is not some sort of geek fantasy. It's happening, the data is here, and critical mass isn't far off.

Notably:

“The data confirmed that Internet users are moving away from piracy on peer-to-peer networks and gravitating toward pay-per-download sites like Apple's iTunes.”

Technorati Tags: digital, distribution, downloading

Mark Cuban says the podcasting fad is the same as the streaming fad

2005-07-10T17:38:00.000-07:00

And he's right.

It's nice that Apple is putting a face on podcasting.

But as Cuban notes, the tail is very long on podcasting, just as it was with RealAudio streaming back in the late 90s. Hey, anyone can do it, right?

Streaming is still a nice concept--you can still pick up radio shows even if you are out of range. I can listen to Jim Rome or Rush Limbaugh on my computer, streamed live daily if I want.

So in that sense, podcasting is nice because it gives a Tivo feature to streaming. But if Jim Rome or Rush Limbaugh or Howard Stern or Mancow or whomever thinks I'm going to pay for a podcast--when I can listen to it for free--, they're nuts. Because "free" still trumps "having hours of a talk radio show on my computer or iPod to wade through every day.

Similarly, it's easy to see how podcasts could turn into RSS feeds. I follow over 90 feeds every day, or at least try to. But I can skim through and ignore things that don't interest me. A podcast of even a half hour presents a far bigger problem, let alone a three hour podcast of someone like Jim Rome. I'd have to spend a lot of time on the fast forward button, and as anyone with an iPod knows, that's not really part of the aesthetic of using an iPod.

That unique streaming didn't catch on--quick, name someone making money from their streaming stow--tells me that podcasting may suffer a similar fate.

The market has spoken.

2005-07-10T04:43:00.000-07:00

Washington City Paper: Ad Nausea: "We're left with this sad fact: The only high-profile rock criticism consistently worth reading can be found in a magazine whose mascot is a fop looking at a butterfly through a monocle. The New Yorker published a Lethem memoir about listening to Brian Eno that offered more insight into its subject than any of his so-called criticism. And the magazine respects in-house rock critic Sasha Frere-Jones enough to give him room to write long. He's allowed to follow his ear, covering everything from semi-obscure grime to MF Doom to Keren Ann, all of which he's required to make accessible to an audience that's probably more likely to buy The Mussorgsky Reader than any book about Wilco.

Even better, he doesn't blow a big word-count on recollections of high-school dances or dedications to Billy Corgan on his birthday. He's become one of the most thoughtful rock commentators around, and he's never even written a novel."

This an article decrying the lack of good, extensive rock criticism--kind of ironic to blow 1,000 words on the subject rather than use the space for, well, a long review. A few comments:

First, I'd say Robert Christgau has proven that penetrating insight on an album can be done with a few hundred words.

Second, the market doesn't want long criticism. A signficant reason for this is the utter lack of need for 1,000 or more words of in-depth wankery on 99.99% of the 40,000 titles released every year. Most of pop music isn't high art, even incidentally--it doesn't command in-depth, exploratory criticism, it doesn't inspire it, and even when it does, there's no market for it. There is so much being released that most reviewing outlets defer to quanity of reviews in order to cover a wider scope. This is a logistical issue as much as anything else.

Third, most critics are so busy trying to wade through the avalanche of records put in their mailbox that they don't have time to spend a couple of days writing one review that won't get read.

Recorded Music Sales Decline As Downloads Gain Traction

2005-07-10T03:58:00.000-07:00

Billboard PostPlay: Recorded Music Sales Decline As Downloads Gain Traction

via a shrill site called "boycott riaa".

The fat lady has been summoned to serenade the compact disc. She's not singing, but she's warming up.

More on the digital future and where opportunity lies

2005-07-07T19:58:00.000-07:00

The Long Tail: Updated music data: "The result of these two trends--online expanding, offline
contracting--is that the market is shifting even more towards niches.
Last year music that wasn't available at Wal-Mart accounted for 23% of
Rhapsody's business. Now that's 28%. Some of this is due to the
statistical effect of Wal-Mart carrying fewer CDs and the vertical line
below shifting to the left, but even at last year's level Rhapsody is
seeing demand shift gradually towards the niches (its 50% line, where
half the demand is ahead and half is below, has shifted from rank
12,000 to 12,500). "

To add to my previous post: what does Rhapsody have that it's competitors (current and future) don't? What does Wal-Mart have? The barriers to entry are so minor, it's easy to assume that it won't be long before anyone with a customer base will be able to sell music online. Lifestyle shopping.

Why doesn't Google sell music? Yet?

2005-07-06T14:04:00.000-07:00

Target Aims At Music Subscriptions - Forbes.com

Digital distribution is flattening barriers to entry, those strategies of market deterrence that were once reserved for companies who could afford expensive, worldwide physical distribution.

So if Target wants to get into the biz (following Apple, Microsoft, WalMart, Yahoo, Napster, eMusic, etc.) then isn't digital distribution simply the leveraging of an existing (effective) brand. In other words, if Target then why not Abercrombie & Fitch or any other mall retailer? Why not your local record store? In fact, why isn't your local record store teaming up with Apple in an alliance to distribute iTunes? Because in order to be an effective digital distributor, all you need are eyeballs.

Think about it: you can already use ITMS Link Maker to push vistors to your music. And you can use the iTunes Affiliate Program to make money off of it. While the return isn't good, that's not really the point anyway given that the investment is so low. The point is that the paradigm is shifting, the early adopters are giving way to the next wave of users. And when that happens, you're going to shop at the store with the library that fits your sensibilities best or the one that has the best relationship with you. Because everyone will be able to sell everything.

The most important concept in the music industry...

2005-07-05T04:47:00.000-07:00

...is the Long Tail. The concept--essentially mass customization and the resultant mass of niches in its wake--is fully explained here in The Long Tail: FAQ.

The author, Chris Anderson (an editor at Wired), originally wrote about the The Long Tail in his magazine and it generated lots of interesting response, including a lot of denial from people who are intent on applying the "homerun" strategy to the music business. The digital revolution has eliminated or greatly reduced several key cost factors in making music (distribution, recording, etc.) and the Long Tail does a fairly good job of explaining the resulting opportunties.

Simply put, if you haven't read the article yet, you need to. It's the future staring you right in the face.

NY Times: Grokster decision doesn't matter

2005-07-04T06:12:00.000-07:00

The Imps of File Sharing May Lose in Court, but They Are Winning in the Marketplace

The money quote: "Last week's Supreme Court decision 'will have little or no effect on file sharing,' said the project's founder, Ian Clarke, who is based in Edinburgh. American companies hoping to commercialize file sharing might find life more difficult, Mr. Clarke said, but companies based elsewhere, or anonymous software creators uninterested in profit, 'will continue to work on new, faster, and more powerful file-sharing applications, for as long as there is a public demand.' And in the borderless, largely ungovernable world of the Internet, it's that public demand that ultimately dictates the future."

New Trends In The Music Industry

2005-06-30T09:38:00.000-07:00

Billboard PostPlay pokes out some good stuff gleaned from this.

The report starts off with the obvious: that stopping P2P sharing is like trying to keep teens from drinking alcohol. It's a battle for the witless.

Next, the report talks about alternative revenue streams currently being pursued by record labels. The longer people cling to this nostalgic idead that major record labels should be run by music lovers, the more the real problem will fester. The real problem is that the industry is mature in the midst of revolution. Big labels used to be big bank accounts for artists who needed the financial backing to undertake the expensive process of making and distributing a record. As this report notes, labels are increasingly functioning as marketing companies; how long until a savvy, established artist simply hires a marketing firm instead of an entrenched label to make distro happen? The White Stripes or Beck, who can and do record on a budget, probably don't need to be paying for A&R services. They'd be better off with a boutique shop who just cater to marketing and nothing else--distro is only about three years from making this a reality.

Podcasting: the revolution that isn't. Yet.

2005-06-29T04:05:00.000-07:00

People such as Bob Lefsetz are very excited about iTunes version 4.9, which makes a big deal about Podcasting.

As usual, Apple's embrace of Podcasting isn't unique: they're just a huge company with a huge marketing budget, which allows them to market much more precisely to the masses. That they're bringing attention to a new technology is good news. That Podcasting is anything great is debateable

The Tao of Mac agrees with me. I really don't get the immediate appeal of Podcasting. Yet. It's supposed to be like Tivo for your radio--you can record radio broadcasts and then play them back at your leisure.

But what's new about that, really? And where's the demand for it?

I've been able to stream (and record) "The Morning Becomes Eclectic" for at least five years now, for example. Subscribers to Rush Limbaugh or Jim Rome have had the same opportunity. As for radio, isn't the point of buying your own music to be able to play what you want, when you want to? Other than a handful of notables, are you really excited to hear DJ patter? You think you're gonna be more informed by Nic Harcourt than, say, all the RSS feeds on music websites?

And if you've ever actually listened to a podcast, you'll see that so many of them are bad--the playlist might be passable but the DJ usually is horrible. Yep, for some people "subscribing" via podcasting to Limbaugh or Franken or Stern might be relevatory, but as of now, there doesn't seem to be a "killer Podcast" out there, one that will bring critical mass and a change of paradigm.

Radio, rest safe. You've probably dodged the bullet. Temporarily.

The ballad of the serious fan

2005-06-27T20:34:00.000-07:00

I write today in what began, at least, as a conflicted mixture of resignation and alarm. Probably you do not recognize my name, but it' both embossed and encoded on my credit card, so possibly you should. I have been one of the staunchest defenders of your copyright ever since the virtualization of music distribution began to challenge them, and I've been one of your most dedicated personal patron since I was old enough to spend my own money. Originally I was a customer of necessity, of course, but I'm a computer and interne professional for a living, and have been fully aware of every iteration of the technical possibilities for acquiring music without paying for it. An yet, I have continued to pay. In a single year, not too long ago, I bought 1000 CDs, and most of them were yours. I continue to pay still. I bough two CDs this week, and will almost certainly buy more than 100 over the course of this calendar year. I have paid for legal downloads, as well. have stubbornly forgiven you your trespasses against everyone you nominally serve, and kept supporting the idea of music as a Big Business. have never condoned your numeric monopolies and tasteless denominator-lowering, but I support the dream of musicians being able to simpl make music for their living, rather than operating themselves as a business, and somewhere far back in history that was what Industry allowed
But I have also now started stealing your music...

Please read the rest of this post.

And then remind me why I should be spending hundreds of dollars on import or out-of-print items--buying them second hand from sellers who make an enormously larger profit than the copyright holder.

Grokster loses, surprising only the willfully blind

2005-06-27T19:07:00.000-07:00

Most people who follow case law saw this coming, although as Billboard PostPlay notes, the unanimous decision is a bit of a surprise.

So since this blog is about the business of music, how will the Grokster decision affect the industry?

Not much. This is pretty much a non-story, other than the fact that the Court a) heard the case and b) they sided with copyright holders instead of the company who designed a product specifically to cheat copyrights. On face value, who believed that the Court would side with Grokster?

Granted, some of the dialog in the Court Opinion hints at how the Court and the law will test the facilitation of copyright infringement, but even with that, case law will need to be developed before we can turn the FBI loose on all the bad guys. And of course, that sidesteps the obvious: when P2P sites spring up in China, all bets are pretty much off. The FBI can't do anything about, say, BitTorrent tracker sites and it's still pretty unlikely that a court is going to be able to issue a subpeona with any teeth. Who will they go after if they can't get the IP host?

Heh. That's the next big question, and likely, law enforcement woudl turn to ISPs. But that's proven very difficult before, and there's really no sense in believing that technology won't continue to sidestep efforts to curb P2P use.

And we all know that piracy is a much, much bigger hole in the dam than college kids ripping tunes in the U.S.

It's been noted before, but did anyone wonder why Microsoft wasn't in on Grokster or any of the other lawsuits against P2P? You'd think a company with that kind of resources would be a little angry at the P2P sharing of Office, XP, etc., a practice that has been going on since at least 1996 online and even further back when there were plenty of software makers who designed apps for duplicating software. The software companies are losing millions on P2P but they were mysteriously silent throughout this. Hmm. Hmm. Hmm.

Copyright is a slippery snake and getting much, much more slippery. All attempts to control P2P have miserably failed. The Prohibition movement is failing. At what point do we decide that if copyright laws are basically uneforceable, do we start to consider alternatives to DRM? Or are content companies simply waiting for a DRM silver bullet to save themselves?

The iTunes Phone

2005-06-26T18:35:00.000-07:00

Billboard via Reuters: Cingular Considering Launching iTunes Phone

Hmmm.

The RAZR's been an undisputable hit for Motorola, though CEO Ed Zander told the Wall Street Journal last week: "In terms of the bottom line, sure we sold a bunch of RAZRs in the second half of the year. But in terms of the overall number of cellphones sold worldwide it was a very small fraction of it. What it really did do though was get Motorola in the minds of a lot of people around the world for being cool again.

This means that there's a lot of critical mass to be made before a $500 phone replaces the iPod and your current phone and iPod. Because right now, this is another paradigm jump for consumers. Oh sure, it makes sense to reduce the number of gadgets by combining them. But with a high price point, unproven reliability/useability, we're kind of in Apple Newton territory here.

Look at it this way: what competitive advantage does Apple, Motorola, and Cingular get out of this? Or more importantly, what is the replicability of that advantage?

2005-06-26T18:15:00.000-07:00

Haloscan commenting and trackback have been added to this blog.

a temporary thanks to Blogger for the pics

2005-06-24T18:47:00.000-07:00

one of my favorite albums of the year

PWC studies the present for the future and finds that downloads and phones are where it's at

2005-06-22T17:07:00.000-07:00

Variety.com has the press release from PricewaterhouseCoopers

PWC says that digital delivery wil be 37% or more of all music sold by 2009--that's just four years away.

Consider the status of digital music four years ago; consider the number of homes with broadband four years ago (less than 10%); consider the number of portable digital music players four years ago (hardly any); consider the price of computing power four years ago (computers routinely shipped with 20gig hard drives); consider the economy four years ago (headed downward towards a recession that would be spiked by 9/11); consider mobile phone technology or even PDA technology four years ago.

Imagine then, if you actually paid PWC for this report that basically gave you the obvious. Imagine then, what PWC was reporting in 2001 and what sort of predictions they were making. Nobody--not PWC, that's for sure--foresaw the success of the iPod or iTunes. But combine the changing paradigm (digital delivery being accepted as the norm) with lower computing costs, greater broadband penetration, and a hungry market for portability and it's pretty obvious that PWC is erring on the conservative side with a figure of 37%.

Bob Lefsetz asks questions. He's supposed to be influential.

2005-06-03T12:16:00.000-07:00

CelebrityAccess >Knock, knock, knock, knock, knock, knock, knock, knock, knock. Is anybody home?

There are a million obvious answers to the questions that Lefsetz poses. But the problem with all the obvious answers is that they involve a massive change in fundamental business operations, a change that would be expensive and risky. For example, Sony simply can't license everything they own: there are a million legal hurdles in the way, hurdles that a) Sony cannot control at all or b) hurdles with no economic incentive. If some washed up rocker or his lawyer won't sign off on a copyright, Sony can't open up some scarce B-side from 1972. Blame the labels all day long, but the legal fees (i.e. time needed to decipher multiple copyrights) alone are an enormous impediment to monetizing the money chain. Even with a huge investment in shaking out copyright issues, a case could be made that shareholders would get more value out of investing in new talent. Maybe the labels are better off just giving up on monetizing back catalog, rarities, etc. and instead, focusing assets on the future: write deals that embrace secure sharing, anticipate copyright issues for the next decade, and try to control the future instead of gerry-rigging copyright to capture water that's clearly over the dam.

The Big Picture: MPAA does the heavy lifting RIAA refused to do

2005-06-02T09:10:00.000-07:00

The Big Picture talks about 35% of the CDs sold worldwide are illegal copies.

The RIAA is arguably spending millions (actual cost, opportunity cost, etc.) fining college students and others who illegally share files.

Meanwhile, labels are giving up 35% of sales to counterfeiters. Millions of these CDs are outside our borders, but for decades, illegal CDs have been sold on the streets of major cities. Every day of the year.

I'll never open up a watermarked CD you morons

2005-05-25T05:27:00.000-07:00

I've avoided writing about this for at least a year, and was very close to posting about it when I got the new 30 Seconds To Mars album sent to me from Virgin a few weeks ago. But with heavyweights like New Yorker music critic S/FJ and Seattle Weekly music editor
Michaelangelo Matos weighing in, I guess it's time to open fire.

30 Seconds To Mars is a barely known, average band fronted by actor Jared Leto. I am not interested in this band at all, yet for some reason Virgin has sent me the advance album without my requesting it. Time and time again I have implored labels to not send me crap like this: the major acts with major publicity dollars behind, I am always at least slightly interested in and expect to receive advance copies.

And yet you would be surprised how often I have to ask for the big releases--the releases like Coldplay with HUGE promo budgets. I've pimped Coldplay for years, interviewing the band multiple times and have been among their earliest supporters. But while the label will send me every Tom, Dick, and Harry release on the roster that is begging for attention, I have to pick up the phone and beg for the Coldplay advance so that I can run a review in time for the album's release.

All that comes with the game, it's all part of doing business. I accept that I'm not Rolling Stone and thereby getting the major releases 3 months out.

But when a label like Virgin sends me the new 30 Seconds To Mars album with a threatening memo and sealed, watermarked promo CD I have to laugh aloud.

The memo contains a bunch of corporate-lawyer bullshit, telling me how if I upload it to a P2P network I will get my knees smashed in and thrown into jail blah blah blah. I get that--I don't use the P2P networks and never have. All that's common sense.

But it's this line that makes me pissed: "In fact, these CDs are supplied on the condition that they not be sold, altered, transferred or copied in any way (including, by CD burning, loading them onto a computer or uploading to the Internet."

How stupid are these people?

Very few music people I know listen to their music only on their stereo anymore. In order of usage for me: computer, iPod, car (via iPod), home stereo. This factoid is probably true for 80% of the writers I know, and probably true for 50% of the people I know who aren't writers. iPods are everywhere, and some of the earliest adopters were people in the music industry.

GET A CLUE VIRGIN: PEOPLE HAVE TO LOAD CDs ONTO THEIR COMPUTERS TO GET THE MUSIC TO IPODs.

Laughably, this isn't the new Radiohead album, an album I'd probably be tempted to break the seal and load onto my computer despite the threats. It's from an average band with a vital need for people to actually listen to it.

Writers and other connected music people get sent dozens of CDs every week. We're simply not going to put up with this kind of bullshit.

A tangible point is that the need for "pre-release" albums is barely justifiable in the first place. If the label is worried about leaking advances, all they have to do is not issue advance music. Old habits die hard, but the labels need to wake up and notice the change in culture.

EMI alleges a digital future

2005-05-25T04:17:00.000-07:00

From an EMI press release: "Digital sales rose over 300% to $90.9 million. Said a Barclays analyst, 'Digital should support group sales and margins over the next few years, although at this stage it is difficult to quantify by how much and whether the growth will be able to totally offset the decline in physical sales.' EMI had this to say: 'Our strategy remains to deliver our music content to consumers in any form, at any time and in any place.'"

They could start by actively developing their entire catalog to digital but it would shock me to know that they are actually doing this.

You're going to see lots and lots of executives at the labels saying things like this over the next few years, but with ledgers what they are at the biggies, there's not going to be much of a committment to digitization. After all, there's not really a rush: the major labels can rely on third parties like Apple to digitize and plunder catalogs to servers. Meanwhile, they can continue to vaguely support the compact disc industry with third-party toys like DualDisc with very low investment. They can have their cake, decorate it, then eat it too.

In other words, there's really no pressing need for the major labels to fundamentally change their industry in the near future. As large corporations, they are risk averse and enslaved to their stockholders and the major investment houses. Shareholders want growth and in that, prefer rapid growth in the short term. Many artists and commentators reduce this element of capitalism to something akin to evil or malice towards artistry; rather, it's more a comment on how musicians are willing to whore themselves to the process. In fact, it's the artists themselves that drive the equation--connecting art to consumers requires transaction, and as long as the creators align themselves with the major labels revolution will be slow coming.

Coolfer: Buzz Bands Gone Wild

2005-05-25T03:57:00.000-07:00

the new contributor over at Coolfer hits a homerun. If Randy Reynolds has this kind of juice with every post, Coolfer is instantly much, much better.

Says Reynolds:

"PS: Rumor has it the Arcade Fire's pub advance is somewhere in the numbers of $850,000. That's a massive figure for an indie rock band on an indie label with only one record to date."

Indeed. Arcade Fire's live show isn't mind blowing and but their buzz (thanks mostly to Pitchfork media) was very strong last year. It's surprising that a publishing company sees so much potential--gold record numbers???--in such a quirky band with no discernable personalities. This isn't Bright Eyes, where a precious lead singer has star appeal and good looks. Arcade Fire is much more akin to the Decemberists in that context.

Nanomarkets are the future of music

2005-05-24T05:57:00.000-07:00

Entrepreneur.com sees the forest for the trees: "What Lies Beneath"

You can crow all you want about the power of the major labels and current distribution system. You can make a pretty solid claim that CDs will be with us, powerfully, for at least five more years.

But if you're banking on mega-hits--hit albums that serve the mass market--to salve your shareholders, you're probably going to fail.

Mass customization is the future, and technology is the reason. Sure, there is a market for the masses, but it's dwindling on every single front. The opportunities of the future in the music business are in exploiting niches, the nanomarkets described in this article.

The DIY spirit lives on, empowered by cheaper technology and an ability to develop reliable fanbases that has not previously been present. There's probably not critical mass yet, but music listening culture has changed enough in the past five years to see that the next generation of teenagers will only respond to a customized offering. We don't need to hash over the obvious opportunities for brand and band building that the Internet affords, both in and because of the World Wide Web. We need to continually focus on the bigger picture, the picture that says a few dozen bands that shift 25,000 units can be an attainable, desirable, profitable model. Let the grandslams (4x platinum) come as they may; loading the bases should be the goal.

WSJ: "Adding Music Players to Cellphones Won't Be IPod Killer Some Think

2005-05-24T04:45:00.000-07:00

Stating the obvious.

There are two problems facing developers who want to make an all-in-one gadget, and a third that isn't so obvious.

1 - hardware architecture is fairly closed on small, portable devices such as cellphones. There's almost no standardization involved, with the exception of headphone jacks (and even there, there are different sizes of those.) Save for Bluetooth, which allows a phone to connect to a computer, every manufacturer has a different scheme for display, power, etc. This makes hardware more expensive and less inclined to smoothly connect to a media hub. Beyond that, you start having serious technological issues and useability issues: music players drain power fast, size issues (an iPod Mini is a pretty big phone by today's standards), etc. Theoretically, music transfer could work on a wireless standard with the providers hosting everything but right now the technology's not nearly ready; if you can't lock a signal 100% in a subway or use it in an airplane, you're not going to have many people excited about a product like this.

2 - software architecture is driven by hardware to a large degree, and thus, building software to handle music is also complicated. It's not tough to write software that will play MP3s but none of the phone companies are aligned with a major musical distributor. At this juncture, the easiest way to facilitate music to a handset would be through Apple's iTunes--it's the largest, most robust, most popular system out there.

3 - what is the market for this product? As long as you could cram all the features of an iPod Mini into a phone without changing its size, there's a market. But if not--and right now, the hardware technology isn't there to do it--then you're going to alter the iPod paradigm and risk alienation and adoption rates. The joy of the iPod for most people is having all their music with them all the time, not having a gig on a card that they have to transfer back and forth. People will want to drop their phone in a recharging cradle, hit "sync" and keep their music collection fluid.

And that's really the bottom line on this argument: the expectations for using a phone as a music collection are founded on making the experience better, not more complicated. I've already got a phone that can play MP3s, and I'm only limited by the size of the multimedia chip. I can get a chip that's as large as an iPod Mini (4 gig) but at $250 it's cost prohibitive. So I've got that hassle and even worse, the hardware/software on the phone really isn't consumer friendly at all. I'd want a scroll wheel before I'd ever consider leaving my iPod at home.

Why would anyone ask for sex advice from people who never get any?

2005-05-23T05:03:00.000-07:00

Stunning article idea of the month at Nerve.com: "Sex Advice From . . . Music Critics"

It must be a slow news day over there.

How Movie Studios Make Money, and How Record Labels Coul

2005-05-23T04:30:00.000-07:00

Edward Epstein has a nice chart about the revenue stream in the film business.

If you're blissfully unaware, the major film studios haven't been making more than 50% of their film revenue in theaters since 1980. Huge weekend openings are merely marketing primers for the DVD and television market. Theaters, with their exorbitant exhibition fees, are inefficient and extremely vulnerable to shifting culture: Mark Cuban is planning on releasing films via DVD, HDTV, and in theaters the same day and acclaimed director Steven Soderburgh allegedly just signed a six film deal to do essentially the same thing. Make no mistake, technology is forcing this equation even if it has to drag the major studios into the new paradigm against their will.

There is an undeniably strong change underfoot in the music business as well, though the labels and their entrenched interests are trying to distract your attention from the obvious by pimping things like Dual-Layer CDs. The flat-earth squad, who bleat that legal digital downloads are still a miniscule profit center for the music business, pretend that triple digit growth in downloading and the massive amount of illegal P2P sharing do not threaten the compact disc.

This sort of myopia is stunning, really. The technology is already there to deliver albums on chips: it would be easy for the labels to invest in a system where they simply sold an iShuffle-like device with album(s) loaded on it. The compact disk, with it's inefficient use of batteries and bulk and skipping and reliance on laser alignment is already an LP to most tweenagers--most see a CD as a delivery device to their home computer.

CDs are dead, and major labels are not far behind.

2005-04-14T10:01:00.000-07:00

Jeff Jarvis gets it. He sees the future for what it is. Do you?

Are you in denial about the coming decade?

Jarvis points out that "aggregation is the new scale" or, as I'd put it, "the reason digital distribution is changing everything."

Scale--the theory that size matters--is the building block of aggregation, for small scale begats limited aggregation. But today consumer scale (from a digital perspective) has achieved critical mass. The emergence of profitable niche has stretched the long tail and taken the fat end of the market with it. It's obvious that as soon as some copyright issues are resolved, the music industry is going to explode.

As Jarvis alludes, mass customization is upon us, from Nikes to Barbies. It's even upon us in the music business, except that it's still underground and basically uncaptured. The massive success of iTunes hints that customization will fuel opportunity sooner rather than later.

How To Win Friends and Influence People in the Music Business

2005-04-07T10:46:00.000-07:00

David Lowery sets the record straight.

Wired says discs are dead

2005-04-07T10:27:00.000-07:00

Another epitaph for the spinning coaster.

By hardwiring manufacturing costs into the system, discs obstruct market evolutions like flexible pricing or small-profit releases that appeal to niche audiences.

Hardwiring also constricts format, which, given the overwhelming demand and current conversion to digital, is a non-starter. The latest generation of music buyers--the tweens--already see digital distribution as the norm, not the future.

The countdown for the extinction of CDs is about to begin

2005-04-06T20:34:00.000-07:00

Cuban says it's about to begin, but I think it began two years ago.

So many good things.

...Loss leaders like Walmart and Best Buy can cut their music square footage by 90 pct and sell more music at lower prices. Their inventory carrying costs will go to zero. If someone wants the CD, they can go home and burn it after docking their MP3 player to their PC. Believe or not, the labels will make more money this way because they will make these big boys committ to minimum guarantees at levels they are at now, and all that money after the artist cut, will go to the bottomline.

Everything about the economics makes absolutely perfect sense for the music labels, the retailer and the customer.

The only question is who will be the first label to crack and offer this and how soon will it be. Of course the cynics will say that this won’t ever happen, but I’m not buying it. It’s too much cash up front for the labels to say no to. It also makes too much business sense.

When it happens, the music industry will EXPLODE and sales and profits will go through the roof.

Why? Because stores can be smaller, physical inventories minimal to non-existent, and an entire segment of middle infrastructure on both the label and retailer side for ordering, delivering, warehousing, duplicating, returning, and forecasting of product can be eliminated.

Most importantly, that money can be spent to develop, market and promote music so that more and more people can experience it, and also, just in case hell freezes over, be used to lower the price of music to consumers

Once that first label, or the first organized group of indies goes purely digital at retail, then the countdown for the extinction of the CD begins. T-minus 5 years from that first day, and your CDs will be sitting right next to the LPs your dad and mom collected when they were kids.

Until then, if Im a band selling on my own, I’m carrying a laptop to every show, and charging 5 bucks to drop a show on an IPod. Call it concertpodding.

If I’m an indie record store, I’m making sure that all music from the labels you support is available for direct to player. I’m offering every song as Ipod or MP3 player ready to anyone who walks in the door with their Ipod and wants to leave listening to the music.

It’s money in the bank.

Mark Cuban tests the RIAA logic…

2005-03-30T10:34:00.000-08:00

The guy's grammar doesn't hint at his brainpower, fortunately.

Cuban points out the red herring that the RIAA has pimped for the past five years: it seems logical that illegal downloading may be at least partially responsible for lower sales but there's still no convincing proof.

He then points out that...

"DVDs - Huge Increase in Sale
Digital Photographs - Huge Increase in Sales (see corbis and other outlets)
Video Games - Huge Increase in sales
Software - Not huge increase percentage wise, but increases in actual dollars… I couldnt find a specific reference. Anyone have one ?
Ringtongs - Huge increases in Sales"

It's not that the RIAA is totally wet on this matter, it's that their argument isn't convincing and worse, it's the linchpin of their competitive strategy.

And THAT'S why people keep breaking the law. The RIAA is effectively fighting not only a changing market, but a much more pervasive changing of our culture. That culture is not rooted in theft, it's rooted in convenience and other obvious appeal.

iTMS is going to sell 350 million songs this year. That's a phenomenally huge number, one that's increased fourfold in only one year.

Billboard has questions, I have answers

2005-03-22T04:56:00.000-08:00

Billboard PostPlay: Can The Music Industry Make More Money from Digital Downloads Than It Does from CD Sales?

"Could a similar type of unexpected result also happen again as the music industry morphs towards downloads, subscriptions file-sharing, and secondary sales of used media files?

The culture shift has already happened. The tween demographic is trending towards an absolute preference of downloads or, to be blunt, anything but CDs as the standard music delivery system. A Discman is bigger than PSP, bigger than a cell phone, and not nearly as reliable. The transition to cellphones by pre-teens has already exceeded expectations, and with a large number of cellphones already capable of playing music via memory cards, the only people who think that CDs will be relevant in a decade are the people who still cling to vinyl. Yes, the standardization of CDs (and vinyl) will result in a lasting market, but that market is dwindling.

Exactly what is the opportunity cost of trying to keep distribution control?"

This is the question that no one has answers to, or at least answers that will satisfy a CFO sitting atop a large conglomerate whose main asset is catalog.

How long until this catches up to Apple?

2005-03-16T11:35:00.000-08:00

Boing Boing: Apple steals iTunes customers' paid-for rights to stream

For all the good press the iTMS receives, it's pretty rare that negative press ever focuses on the moving goalposts at Apple Computer.

The value proposition ($.99 per song) has changed, for the worse, ever since the iTMS has opened. Your rights as user of downloaded tracks are shrinking--less burns, streaming restrictions, etc. There are "workarounds" to all these issues, but from a distance, things aren't getting better (still can't buy lossless tracks, if your purchased tracks get erased they are lost for good, etc.)

This strikes me as an opportunity in the making. Instead of fortifying the offering, Apple is weakening it.

Coolfer: sipping the DualDisc Kool Aid

2005-03-11T10:52:00.000-08:00

a thimble from Wharton doesn't get it: ""'The industry aspires to get back to the point where people’s physical collection of albums is their prize asset as opposed to junk on a hard drive.'"

Let's consider the value proposition for the consumer of a DualDisc vs. the cynical longview:

SACD (and more) quality on side A
Was or is there a demand for more storage space by musicians on the current medium (compact discs)?

flip the disc and voila, gigs of goodies
What is the value proposition of giving one CD (dualdisc) vs. packing two pieces (a CD and a DVD), especially considering the packaging marketing advantages? The add-on style of packaging is a very effecient communicator. DualDisc means larger stickers to tell the story, or expanded Digi-pak schemes. Where's the big advantage of DualDisc again?

it's physical product! Like, with album art!
Uh, isn't it digital technology that makes this all possible? Isn't it then subject to pesky technologies such as BitTorrent? Is a broader bandwidth more or less likely in the next couple of years? What's the impact of impending broadband on cellular and wi-fi?

Yep, it's nice that there's now another physical distribution opportunity for the labels. But--if the past, and present, judging from the DD titles that are on the kickoff list--this will probably be another opportunity to rape and pillage catalog, not develop new artist or more importantly, confront the future head on.

Coolfer's very, very hesitant to admit what is going on beyond label myopia. After all, the post kicks off with "I don't see physical products going away any time soon," said Universal Music Group marketing VP Paul Bishow in an article about the hopes the music industry has placed in a new technology. Not long ago, such a statement would have been laughed at. That was before the introduction of DualDisc, a format that combines CD and DVD content on one disc.

You think Bishow would dare make a different call? He's head of marketing in a fading industry, a mature industry that is showing textbook signs of collapse. Not only that, but has anyone checked how easily p2p and iTunes have destroyed the market for physical singles? That market is over, over, over. How was it accomplished? Because on broadband, it takes barely a minute, if that, to download a song. Five years from now, and probably more like two, it's going to take seconds to download a song, maybe a minute to download an album. Five years from now, multi-terrabyte hard drives will be standard--a DualDisc will be smaller, in comparison, to a floppy disc of today. It may have moved the spotlight back to temporary products, but there's not one kid in America who is going to think twice about DualDisc. And if you're not marketing to teenagers right now, your head is in the sand.

Home Networking is the future right now.

2005-03-10T07:57:00.000-08:00

50 Million homes will be home networking this year.

I did it last year, for the express purpose of making my large music collection (thousands of CDs) as easy to use as Tivo. I don't have the same graphical user interface (it's not on my TV) but it's at least as organized and nearly as easy to use as Tivo.

Still, in order to playback my DRM'd AAC files on my stereo over a network (tracks I bought from iTunes), you have to either jump through hoops or go the jHymn route. Guess which route I took?

This is another issue of copyright stubborness that will be crushed in the coming two years--consumers think that when they buy a song or a DVD, they should be able to watch it how they want to watch it. They think that if they buy a CD, they should be able to load it into their computer so that they can play it on the stereo all over the house. They don't understand or agree that DRM is a reason to make AAC impossible to play over a network. Consumers think this is bullshit. And as the price of hard drives continues to plummet, consumers will start ripping all their DVDs to their computer because it's a MILLION TIMES EASIER TO ORGANIZE AND STORE DIGITAL INFORMATION ON A COMPUTER THAN FILLING UP ENDLESS CABINENTS IN A LIVING ROOM.

This is so ingrained in the culture that "market forces" like DRM are going to be a serious hurdle for all involved. It is vital that the entertainment industry focuses on relieving consumers of this sort of hassle, or they will simply turn to alternative sources like Napster.

The Big Picture: The False Mathematics of the RIAA

2005-03-10T07:49:00.000-08:00

Now here's an article that should appear in the Wall Street Journal. Ethan Smith, are you listening?

I just realized that The Big Picture had fallen off my newsreader when I updated a few months ago. And most of the time, the guy doesn't comment on music--he's more of a finance/econ kinda guy.

But this post is relevatory, the kind of banner that should be waved in the executive suites of every major label. The RIAA, in a classic case of blind devotion to its client, hasn't seen the forest for the trees in five years, as the above post illuminates.

As I've said over and over, there is a compelling, very real interest in controlling copyright. But culture has been revolutionized by p2p networking, and it continues to spin the old school around in circles. The only way to address the problem (lost revenue, which, The Big Picture mostly dismisses) is not to try to fight something that's already happened, but to try to plan for the next war. And that war is not going to be over p2p networks or secure transfer of copyright via DRM. You should be obsessing about new revenue streams and not old ones.

The utter failure of DRM

2005-03-09T04:52:00.000-08:00

TidBITS: Why DRM Offends the Sensibilities:

"According to Professor Burk, the peer-to-peer tracking company BigChampagne has found that it takes about 4 minutes after release for a song using copy-prevention technologies to appear on the file sharing networks. "

If you are a content owner, step back for a minute and consider how this affects your business plan and business model--not only in the short term, where you actually have legal recourse, but in the long term, where years of p2p sharing have fundamentally changed culture.

This is good news for the major labels. Assuming, of course, that they'll hear it.

2005-03-08T06:09:00.000-08:00

A lot of famous recording studios are closing.

Like the film studios, the major labels will, at some point, have to address the absurd costs in making hit records.

The labels, acting as banks (or, in some cases, loan sharks), have long put up ridiculous recording advances and spent hundreds of thousands of dollars to make records. Functioning as holding companies, the labels look more like venture capitalists than anything else.

Changing technology is going to improve the bottom line, assuming that labels will notice the reduced recording costs. Labels have two values: their cash flow and their marketing expertise. A&R is a frivilous, unmeasureable competitive advantange and shouldn't ever be considered a key asset to a label--the failure rate is simply too high among acquisitions. Marketing, however, is more easily measured. Labels should be looking to improve in this area, trying to emulate the Proctor & Gambles of the world instead of wasting money buying name producers and exorbitant studio time.

Hunter S. Thompson: A mile wide and an inch deep

2005-03-07T12:53:00.000-08:00

He perverted the whole concept of "writer is the star"

The elephant in the room when it comes to Hunter S. Thompson is that he was an asshole with no regard for rules. He was an asshole on the level of, say, Anton Newcombe (drug addled, overrated leader of the Brian Jonestown Massacre) and just as overrated.

Thompson coasted on his schtick, which amounted to getting wasted and then writing about getting wasted. Yes, there were some erudite revelations from time to time, but he wrote for the drug generation and they swallowed him hook, line, and sinker.

Snarling rhetoric--Thompson's only formidable weapon in his arsenal--is the discourse of a bar or a prison, and just as entertaining. For while Thompson dared call a spade a spade, his lack of subtlety repelled people more than it drew them in. He made up shit on a regular basis yet never tarnished his legend status. What does this tell you about the writing profession?

Andrew Lack doesn't like the new cultural model.

2005-03-04T04:57:00.000-08:00

Speaking at the Billboard Music & Money Conference, he gives a nod to the next few years: lots of lawsuits and criminal charges.

So, it looks like (arguably) the biggest force in consumer entertainment (Sony) is going to play the piracycard.

Which is a fair, legitimate card to play.

The biggest problem the content holding companies (the labels and studios) are going to have is the way they educate consumers on what piracy is.

The biggest tangible financial and intellectual property drain is going on outside U.S. borders. China, Russia, places that are larger, developing markets with vast potential compared to the United States. Is peer-to-peer a piracy problem here in the U.S.? Yes, but in the long term the problem is much, much smaller. And in the short term, it's a complicated issue--simply saying it's an issue of stealing hasn't worked for five years and it won't work well in the future. Technology is going to force labels and studios to change the model.

The labels and the studios need to protect their intellectual property in the context of current laws, yes. But they way that they do this is very important. If domestic consumers only read about kids and 50 year old soccer moms getting arrested, the P.R. battle will continue to be an abject disaster. All owners of intellectual property need to band together and start developing a plan to address worldwide piracy first, and consider the domestic problem secondarily.

And you'd think the gaming industry--a much, much bigger industry than music, Mr. Lack--would be a pointman on this issue. Microsoft has a huge, demonstrable problem with piracy in China. Software piracy in the U.S. is a historical problem--serial numbers and code cracks are still circulated widely, and it's been going on since the mid-80s, long before the Internet ever showed up. How does that factor into everything, especially given that virtually every pieces of software is vulnerable to this?

Lack says it's not the fault of the young, and that we have to educate them. True. But that "we" is the parents and not the role of Sony playing bad cop to kids. They don't give a shit what Sony or Lack think. The entertainment companies, who have shot themselves in the foot for the past five years, need to wake up. The Hilary Rosens of the world have led this battle with astounding incompetency, and instead of reversing cultural trends, it's embedded them.

Lack complains again and again about how piracy has devastated the industry--do we really want to get out the growth charts, Andy? Are you ready to see a graph of music sales compared to the teenage population over the past 20 years? The focus on piracy--that word in particular--needs to be aimed at third and second world countries. Does Lack think that massive celebrity salaries are part of the problem on a project that flops? Or how about the $500K that is routinely spent on record marketing? Or the same amount spent on production, while indie kids can get a project out the door for less than $50K? Start lowering your production costs, put stars on your payroll, and pay them only points. There are a myriad of problems in the entertainment business, but now that a new fundamental problem has shown up, no one seems willing to confront existing ones.

Browsing is out, filtering and recommendation is the next phase

2005-03-03T09:33:00.000-08:00

Gerd Leonhard at Sony states the obvious

And then there's this from Mike Gaumond, VP & GM, Motorola Media Solutions, speaking on a panel [paraphrase]: "I think a model which allows consumers to discover new music and then acquire it is the best business model. No one does it well yet: Apple's music discover function, or anyone else's, sucks."

Uh, yeah Mike.

Except that Amazon's referral, er, "discover function" is pretty damn robust, market proven, easily duplicated, and more or less used by Apple at iTMS. As in, "People who bought this track also bought these tracks." I don't have click-through statistics for either Amazon or iTMS, but I'm pretty sure that in between that and lists and lists and a host of other novel filters (hits, mixes, playlists, exclusives) that the filtering system is getting some heavy use.

Gaumond, who works for a phone hardware company, probably thinks that the key is being in a club or a bar or a schoolyard and being able to have peer-to-peer interaction that results in filtering or more real-time recommendations. In other words, you're at the bar and hear a great song on the PA, you can push a button on your Motorola phone and download it. Or, your friend at lunch casually mentions a great new track or new jingle or whatever, and you can just turn on your Motorola phone and grab it. That's a nice pipe dream, inhibited only by technology but so obviously likely to come in the next few years that it's fairly embarassing to describe Apple's current function as "sucking."

Coolfer takes on the download pricing trial balloon

2005-03-01T11:18:00.000-08:00

He unfortunately blames Apple for the pricing system.

Coolfer's the best industry blog, even the best industry website aside from the Velvet Rope.

But he's a little off base when it comes to download pricing.

Coolfer correctly points out that Apple's iTunes Music Store success is largely due to factors other than pricing--namely the iPod and the overall user experience. If anything, iTMS is a lot like Amazon.com in that the user experience transcends pricing as long the pricing is reasonable i.e. market rate. Price would be the premier sales driver if another vendor was selling songs for $.49 per track. That's not happening, and that's also where Coolfer misses the boat.

Apple has repeatedly stated that they're not making much, if any, money on the iTMS. It's pretty much an open secret that Apple is paying $.65 or more per track, which, at $.99 retail only leaves a 50% markup to find profit after expenses. Slim pickin' for sure; if it were easy money then why would the labels bother licensing Apple in the first place? The value of the portal (iTunes) isn't all that established.

There's no evidence that Apple is insistent on the pricing system, given that Apple probably does all the work for no direct profits off of sales. So Coolfer raises a good point--that pricing should be unhinged from $.99--but he assigns blame in the wrong direction. It's the labels and the copyright owners that have the largest bearing on pricing. And it is those two groups that see the greatest benefits from economies of scale, not Apple. Imagine the margins on any track available on iTunes that was released before, say, 2002. Virtually none of the $.65 label/copyright cost is new--it's all a unique revenue stream with no marketing or manufacturing cost. All gravy.

Coolfer's right that a multiple-tiered pricing scheme is attractive. But it also completely ignores the emotional premise and key marketing angle of iTMS--that people go there for the singles, not the albums. So even if you want to buy off an established catalog--Journey's "Open Arms", for example--why should Apple charge less? The market value is arguably the same as buying a new 50 Cent track. And even in the case of a greatest hits, many of those compendiums have a lot of clunkers.

Daring Fireball: Subscription Small Print

2005-02-10T11:21:00.000-08:00

I've argued previously that subscription based services will not work, and this guy agrees.

But he doesn't point out:

- it's a cultural issue, as Steve Jobs has noted time and time again. People like control and ownership of their music. It's personal to them. They relate to it much differently than they do, for example, movies. It's used differently. And right now, the subscription model is not very portable at all--the shift towards home entertainment servers is particularly damning in this area.

- entertainment culture is moving towards personalization and greater customization. This is predictable vis a vis the age of the entertainment industry and subsequent markets. Cable television is slowly being pushed out by on-demand, Tivo, and other methods of time shifting. This shift will result in less demand for a subscription model and will encourage a more customized model. So if the entertainment business is moving this way, music will follow if by default.

Yet another sign that the iPod has won.

2005-02-05T15:43:00.000-08:00

Targus CD Wallet, 208 Disc Capacity at CompUSA.com is selling for about $5 after a rebate.

If you don't need the liner notes and you don't need the jewel cases, then clearly you don't need the CD player.

The continuing saga of a good magazine gone bad

2005-01-21T13:38:00.000-08:00

The Killers have been the "next big thing" since a year ago.

Nothing wrong with putting a band like this on the cover, Sia.

But it would have been more fitting last year, like, when they were actually on the rise.

There was once a time that SPIN was edgy and on the tip of good things. Now, it's a magazine that caters to the fringe of Rolling Stone readers. Proving once again that hitting the great pasty middle is not only easy but safe.

And it's also a reason that the Internet is making music magazines so irrelevant.

The best album review of the year. So far,

2005-01-21T05:29:00.000-08:00

Shaking down Conor Oberst in the best way possible. Thank you, Keith Harris.

Guy Oseary's "On the Record"

2005-01-19T13:11:00.000-08:00

It's fairly easy to hate Guy Oseary--this is the wunderkind who found himself head of A&R at Maverick Records at the age of 19, just in time to get on board the Alanis fame train and enable Candlebox to become a one-hit wonder. He's dated Paltrow and Demi Moore, he's a man about town, and he's more or less "graduated" to the movie business.

His new book is grating in this context, for it's hard not to feel some condescension in its premise: he "wanted to write a book" so he came up with the idea of sending the same dozen or so questions in his Rolodex. "Over 150 of the most talented people in music share the secrets of their success," says the book's tagline. And share they do. Oseary has enlisted all his friends to help us be like them!

Too bad much of the book sounds like my father talking. Or your father. Esteemed advice such as "work hard" clogs the book, and by the end it's pretty obvious that there's no secret door to walk through in the music business. Other than the one marked "Don't Step On Your Dick," of course.

Yet in that regard, it's thematically sound. Hard work IS the way to get ahead. The industry wouldn't have such a bad rap if more people did work hard. But the entertainment industry, with its diamond dreams and overbearing beauty quotient, has never been much of a mediocracy.

So while Oseary's done a pretty good job of tracking down some stars--never mind that Oseary's way too young to be lumped with a lot of the execs he interviewed--the book is a shallow read.

Dell's Kevin Rollins pokes head in sand, puts foot in mouth

2005-01-18T11:13:00.000-08:00

20 years of success with the Walkman, a success that enabled Sony to grab the wide middle of consumer electronics, is totally ignored in Round Rock.

"It’s interesting the iPod has been out for three years and it’s only this past year it’s become a raging success. Well those things that become fads rage and then they drop off. When I was growing up there was a product made by Sony called the Sony Walkman – a rage, everyone had to have one. Well you don’t hear about the Walkman anymore. I believe that one product wonders come and go. "

The iPod has been the hottest consumer electronics product for over three years now. Line extensions (the iPod Mini and the iShuffle) have been successful without cannibalizing the original. The iTunes store--which sells songs that are onlyplayable on an iPod and won't play on a Dell MP3 player--sells a million songs per day.

This product--the iPod--is now 25% of sales at Apple after three years.

This product--the iPod--quickly blew away everything Dell's offered in the same category, despite Dell's price wars. It's beat up Dell without the advantage of Dell's built in market base.

Kevin needs some humility, or at least the sense not to talk out of his ass.

Tarzan Economics

2005-01-17T06:45:00.000-08:00

An older but essential perspective on the music industry.

"The war is over. I call it Tarzan economics. They think they have to cling to a vine of revenue because it's the vine they're used to, and if they let go they fall to the jungle floor. You very quickly grab the next vine, but until it's there for you, you cling to the one you've got. It's a question of timing - when that vine will appear. We live in a time of transition.

They need to make the fundamental realization that control is not going to come to their rescue. We in the arts like to believe in the deus ex machina - this machine that in the third act of the opera that comes down and rescues the heroine from the flames. But there is no deus ex machina.

Lawyers and technologists continue to sell this snake oil of control, whether it's from the court and the police [RIAA legal jihad], or whether it's coming from technology [DRM]. Bill Gates for one has worked hard to convince people that the fat lady is going to be rescued by the machine. Once you reach the realization that it isn't going to solve our problems, then you begin to embrace the alternatives.

The publishing people know this, and they're quick to realize this. They were quick to recognize Napster. So we're left with a group of sound recording owners that's looking for a few more years of this resistance against the onslaught. But the war is over."

Griffin, Lessig, et al all buy into this same concept that since we can't control anything anymore, we should just quit trying. Or, essentially that a cost-benefit analysis would show that we'd be better using resources to find alternatives than wage a costly legal war. And clearly, it's an appealing sidestep of morals.

Copyright laws are hardly a point of moral relativity, and it's sad to see so many intellectuals dumb down theft to something that can only involve physical products. These people probably argue that only the "public" should own "art", that the Mona Lisa is everyone's. That DaVinci's personal drawings and diaries are the property of "the world" and too great a treasure to be hoarded. But you simply can't extend the argument to its end--at some point, theft is theft. Some art was not intended to be art--consider the demos of Dylan or the Beatles that were never officially released. Or the artwork given by Picasso as a personal gift to a friend. Or any creation that is used in ways that were unintended by its owner. That's the underlying problem right there, that music (or any art) is created under certain parameters or legal understanding. The point of creation endears certain rights that shouldn't be weakened down the road without express permission of the creator. And if we're so willing to dumb down intellectual theft, why are we so unwilling to dumb down physical theft? At some point this issue must be confronted in a more intellectual manner.

Still, Griffin is correct that the hand is being forced for cultural change. The point going forward is that owners of intellectual property need to focus on protecting the past and giving in to the future. This is what Griffin and Lessig never seem to address very competently--that you can't pretend the past doesn't exist simply because the future appears more compenent or reasonable.

the Incubator System

2005-01-15T04:37:00.000-08:00

Coolfer mentions the latest spin from the Bunny.

This little ploy has been debated since early fall over at the Velvet Rope. You can't blame the major labels for this kind of thinking--business is not very good as the industry continues to wander towards decline.

The problem is that variations of this have been executed before--vanity labels, you'll remember, contained much of the same premise. And majors have set up distribution deals with some of the indies in hopes of essentially getting the same thing: hot acts whenever they become hot. The thinking goes that Warners can be the major leagues and have the indies as a lucrative farm system.

But that's more or less the way it is now--it's just that Warners will not want to be saddled with signing bonuses or any other contractual obligation that isn't favorable. And of course they shouldn't want these kinds of things. The problem is that a) no indie label of note will sign away things valuable things i.e. catalog to participate, b) why would an indie label want to get in bed with the competition, and c) this all looks like suspicious window dressing while other strategies within the label are being employed.

Coolfer is the best music biz blog.

2005-01-14T19:03:00.000-08:00

If you haven't been reading Coolfer, it's probably about time to start.

Granted, like most blogs, it's more of an aggregator--more linkage than insight--but I like it that way. The linkage is pretty great; admittedly, I envisioned this blog very similar to Coolfer but realized that I wouldn't have time to do a good job. So while you get my opinion, get your news from Coolfer.

A few sage guidelines for publicists in the music business

2005-01-14T18:55:00.000-08:00

OK, so maybe this new little blog called Promocopy isn't so mighty.

And maybe the audience for it isn't all that big.

But it's about time somebody started making fun of the spam eminating from the major labels.

DISCLOSURE: I've been moonlighting as a freelance music writer for a decade, just little stuff here and there (alt-weeklies, 'zines, a mag every now and then.) For those of you who are currently calling this your career, I'm proud of ya. I just can't imagine the compensation is worth the aggravation. I keep it as a hobby, and that way I'm never too let down by all the morons involved.

(Wow, did I just refer to publicists, managers, flacks, and artists as morons? Luckily I'm not biting the hand that feeds me.)

But since this blog is about the business of music, here is some business advice for the flacks of the world:

1. Don't send me shitty music unless I specifically request it.
You would think this would be obvious, but amazingly, some artists are so clueless that they authorize their flacks or street team or whomever to send me really bad stuff. I am not going to listen to an album I've never heard of on a label I've never heard of that was sent to me by someone I've never heard of who will never follow up with me anyway.

2. Send me music that I specifically request.
What's so hard about this one? One week, Flack is sending me mass emails about a band that she knows I don't give a shit about and then the next week I request the kit of an artist in her stable and my email goes unanswered.

Yeah, you'd think this was only a problem at the majors. Nope. It happens with many if not most indies, too. Matador, spinART, and other indies of note routinely blow me off. Never mind that I've pimped many of their acts in the past.

I'm not talking about begging for the new Radiohead months before it's out. I'm talking about minor league acts, acts that need all the publicity they can get. There's no point in naming names, but I'd really love it if someone from V2 would start replying to my emails so I can start pitching Brendan Benson's new album.

3. Send out promo discs that have blank album art. Send pictures of the album art and liners with the kit.
SubPop has done this forever. It's smart, and self-explanatory. And the end of physical product is definitely on the horizon.

But if you think you have to send out promos that are essentially the same as the retail version of the product, then stop drilling holes in the cases and stop putting "THIS IS A PROMOTIONAL COPY ONLY--NOT FOR RESALE" stickers everywhere. Because when you do that, it makes it a lot harder for us to sell them on eBay or at the corner bong/music store.

4. Return phone calls.
Why do i have to remind flacks to do this?

5. DON'T EVER GIVE ME AN INTERVIEW WITH THE DRUMMER YOU DUMBASS.
The reasons are obvious for this, flack. There are lots of nice drummers in the world, but most have no personality or little to do with the songwriting. Most of all THEY DON'T SELL MAGAZINES OR NEWSPAPERS.

Every year some flack says they are getting me the frontman and when the phone rings, the drummer is waiting. This happens once a year, out of perhaps two dozen interviews. Every single year. And don't get me started about saying you'll get me the front man and then, after I sell the story, you give me the bass player. Yep, that happens once a year, too.

6. Don't tell me I have 20 minutes, then start the interview late and cut me off after 12 minutes.
Happens more than once a year.

7. Nobody reads realllllllyyyyyy longggggggggg spam emails.
There are several publicists who send out mass emails that read like press releases.

An email is NOT a press release. You must be more succinct, flack. You must--get this one--customize from time to time. What? You don't want to customize 200 emails? Then don't send a mass email like that, unless it is very brief. Because we're not reading them.

Example: Let's say you're pimping the new Doves album, which is coming out in March.

Email Title: new DOVES album to be released March 25
Email Body: Two sentences why I should know about this band.

8. Follow up, follow up, follow up.
If you are a flack working for me, I expect you to be working. This means doing things like sending out personal emails, working the grass roots, sending out kits and then following up by phone or email until you get a response.

There is a very strong tendency in the music business to keep waitstaff hours and blow off details. I loathe people like this, especially flacks. I don't care if you don't think I'm important, but don't half-ass it if you're going to engage me.

9. Don't lie.
If a band sucks or you don't like what they do, then admit it.

10. Buy me a drink.
Most writers are living right near the poverty level, and if they're freelancing they probably don't even have health care. Maybe they don't deserve anything better, but always buy writers booze.

Dissing the iPod shuffle

2005-01-13T04:48:00.000-08:00

Creative CEO Sim Wong Hoo doesn't get it.

"We’re expecting a good fight but they’re coming out with something that’s five generations older. It’s our first generation MuVo One product feature, without display, just have a (shuffle feature). We had that — that’s a four-year-old product. So I think the whole industry will just laugh at it, because the flash people — it’s worse than the cheapest Chinese player. Even the cheap, cheap Chinese brand today has display and has FM. They don’t have this kind of thing, and they expect to come out with a fight; I think it’s a non-starter to begin with."

The problem with Creative products is that a) their hardware has only recently had a passable design and b) their software has always been bad. And the guy is forgetting that Apple is selling one MILLION downloads a day from the iTunes Music Store. His product--the entire line--cannot play iTunes songs.

The other problem is that Creative declared war on the company that basically raised the tide in the MP3 player market--massive sales of the iPod no doubt have spurred sales for Creative. That, and given that Apple is a billion dollar company with 65% of the MP3 player market, you'd think this guy would pause to think before speaking.

Apple is going to sell at least 1,000,000 of the iShuffle next year. And the marketshare will come from Creative's back pocket unless music distribution changes.

Just like their computers, Apple is presenting a closed system and it is welcomed on the market. It makes Apple vulnerable to novel technology, but they've clearly won this generation's VHS/Beta battle.

BuzzMachine... by Jeff Jarvis

2005-01-12T17:23:00.000-08:00

What kind of pressure will this put on the recording industry?

If you're younger than 40 years old, and gainfully employed in the music business, you should be reading this post by Jeff Jarvis and carefully considering the implications.

I've warned you before that kids younger than 10 will likely never pay for a CD on their own, or if they do it will be rare occasion and a pain in the ass that they resent.

The first generation of pure downloaders will also likely be the first generation to have total control over their video ingestion.

In case you've been sleeping at the wheel for the past decade, video-based entertainment (games/DVDs/Tivo) is voraciously devouring leisure time among teens. Music is still important, but it's more and more a pasttime of background. Prior to TV, MTV, and the Internet, kids had to use their imagination with musicians, and the mystique was a compelling compulsion to buy.

Not any more.

If you are an artist, how will this even greater demand on visuals affect you?
If you are on the business side, how are you going to stay on the leading edge or at very least, keep yourself from being run off the road by technology?

Once again, let's apply modern business principles to the music business:

The Industry is mature and will face decline sooner rather than later. The classic symptoms--price wars, massive conglomeration, commodification of product, lack of innovation, etc.--have been giving their telltale signs for a decade now. The big three or four labels are far too entrenched in defensive warfare to see or even react to what's going on around them.

Which is why some risk taker, a person in the mold of Richard Branson or Mark Cuban, is going to be the innovator.

Moore signs of record store doom

2004-10-24T05:02:00.000-07:00

A VC: Should WiFi Be Public Infrastructure?

It's happening. WiFi hotzones are rapidly becoming a reality--if I had the time today I'd look up the growth and give a percent change, but take my word for it that the phenomenon is real.

And once WiFi becomes ubiquitous, the CD as we know it will disappear from relevance. The CD has already gone the way of the stamp among anyone below the age of 14--the newest music-buying generation doesn't want to buy CDs at all.

The subscription model

2004-10-24T04:58:00.000-07:00

Satellite radio is putting a hard drive on their receiver

Tivo for your radio.

If you had Tivo for your radio, why would you ever purchase a CD?

How will the RIAA address this? Well, it's fair use recording of the satellite signal for sure. So there's not really much for consumer rights issues. But if you were the RIAA, why would you authorize your signal to be transmitted like this via XM?

The RIAA needs to address this immediately.

This guy thinks we should abandon DRM

2004-10-20T11:59:00.000-07:00

It's not going to happen anytime soon.

But you should read this just to provoke fresh thoughts.