Music Industry Archive

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Hell Has Frozen Over

hell frozen over

Wired’s Listening Post reports that Warner Music has a plan to charge people a flat fee on the ISP level for the right to download unlimited amounts of music on p2p networks without the threat of litigation.

wat.

I’m still in shock. Hath mine own eyes deceived me? Is this really happening? Someone should check on Bob Lefsetz – he might be in cardiac arrest right now.

Coming back down to earth, it looks like the plan is not very well thought out yet and there are a lot of questions still to be answered.

What is known is that Jim Griffin has been hired by Warner to create “an ASCAP for the internet, collecting fees from ISPs and divvying them up among rights holders.” In the same way that diners pay restaurant’s music licensing fees with each dish they order, ISP customers would pay a bit more per month for the right to download as much music as their hard drives can eat.

The very notion that someone at Warners gets it is pretty shocking to me. Yes, this is a solution that should have been put in place a decade ago, but as I’ve said before, this sort of rational thinking from a major label was unfathomable to us in the industry even just a scant year ago. There’s still the problem of getting the rest of the labels on board, but I’m pretty confident that once one of them has a good plan of execution in place, the rest should fall like dominoes.

Bravo Warners, bravo.

Read more [blog.wired.com]

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Rumor: Apple Considering An Unlimited Music Subscription Option For iTunes?

itunes unlimited music
Several other blogs have picked up on the Financial Times story today that Apple is talks with the major labels in offering an all-you-can-eat music consumption option for iPod/iPhone users through iTunes.

I was actually just wondering about this earlier in the morning as I read Tycho’s latest Penny-Arcade post. It isn’t the best solution for the music-savvy since it most certainly would involve DRM and less than optimal encoding/bitrates. HOWEVER, there are just so many iPod/iTunes users out there that even a DRM hobbled unlimited music subscription model HAS to stick with a significant number of people, right?

Past research and consumer data has “shown” that subscription models have not resonated well with the public. But what if that’s just due to a small userbase? Keep in mind, only Windows Media devices currently have access to subscription music. Who knows how the general iPod owning public would respond to such an offer?

My money’s on it being a raging success.

Read the Financial Times article (warning: requires registration) [ft.com]

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The Raconteurs Announce New Album, Follow Trent Reznor’s Lead

raconteurs

Taking a page out of Nine Inch Nails’ recent simultaneous announcement/release of their new album, The Raconteurs have announced that their new album, Consolers of the Lonely, will hit every possible outlet next Tuesday, 3/25.

“Album” meaning: full length vinyl, CD and digital formats; and “everywhere” meaning: local mom and pop Indie retailers, corporate superstores, supermarkets, iTunes, Amazon, the band’s own website and any other location that could get the record up and going this quickly

Personally, I think this would have had more impact had the announcement been day and date with the actual release, but it’s still a great development for the music industry. The tired old model of promoting an album months in advance via radio singles, press reviews, etc. of the actual release needed to go. As a music fan, nothing pissed me off more than reading and hearing about new material that I couldn’t own. That frustration often led people to pirate leaked copies of records because, well, that’s the only way you could hear the new material! Along with providing a good alternative to pirating new material, simultaneous availability also brings a bit of excitement back to the music industry, something that it sorely needs.

Hey, if it works for Apple and Nvidia, why not for music as well?

Read the full press release for The Raconteurs’ new album [idolator.com]

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Limewire Launches Irrelevant Digital Music Store

limewire fail
It looks like Bob Lefsetz’s favorite P2P software solution has decided to go legit.  Limewire has opened up a digital music store with a virtually no differentiation from the other music solutions out there.  They’re selling tracks a la carte for $0.99 while also offering eMusic-like monthly plans consisting of 25 tracks  for  $9.99 and 75 tracks for $19.99.

A quick search for The Decemberists yielded a disappointing result of only two tracks.  If Limewire is not offering anything new in terms of music availability or price, what’s the point of even investing the capital to launch the store?

P2P blog reports:

the company has plans to integrate context-based links into the client itself so that people who are searching for a certain song will have the option to buy it legally.

If I’m pirating music and I feel guilty about doing it, I guess I could see how this could theoretically be a convenient way to “go legit.”  However, in reality, I just don’t see this being practical.  Most of the music that is pirated (read: music people have heard of) isn’t even available for sale on the Limewire store.  Discerning users would rather buy from an established store with greater selection or just buy the CD.

Also, if this is Limewire’s main differentiating feature from the competitive digital music retailing market, they’ve got a lot more problems than worrying about the generosity of music pirates.

Read more about Limewire’s store launch [p2p-blog.com]

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I <3 The Music Industry

peter rojas zing

paidContent‘s Joseph Wiesenthal was in attendance at a SXSW panel this week entitled “Ad Supported Music, A New Hope For The Industry?” when things apparently got a little chippy. Peter Rojas of RCRD LBL and Interscope’s Ted Mico got into what could only be described as a sexy male catfight:

As for the ‘old’ digital model, he [Rojas] suggested that the only people he knows who buy tracks from iTunes are people who get giftcards from grandparents for Christmas. By this point, audience members started getting agitated. One screamed out something about Rojas disregarding intellectual property.” Mico suggested that it was silly for Rojas to disclaim the traditional model since he called his site RCRD LBL (it’s pronounced ‘record label’) “It’s obviously a bow to the past.. The idea that oh it’s a blog and oh it’s radically different is bllsht.” Then Rojas returned with: “The different is is that we make money.” (Zing!) Mico: “You’re (still) selling music!”

I love it! This is the kind of stuff we need to see more often in the music industry. It’s a good change of pace to have a little mudslinging soften the apocalyptic overtones I always hear whenever someone talks about the industry. I’m disappointed I didn’t get to make it out for this. Those of you who who avoid the panels at SXSW, who’s laughing now? Would you rather hear grown executives sling potty at each other or see Indie Xerox Band #23?

Someone tell me there’s a panel with Bill Nguyen from lala.com and Bob Lefsetz PLEASE!

Read an account of the panel [paidContent.org]

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Trent Reznor Makes A Nice Chunk Of Change From “Ghosts”

trent reznor money hat
The Nine Inch Nails camp has reported that first week cumulative sales of all “Ghosts I-IV” SKU’s have totaled 781,987 units with total revenues of $1,619,420.

A pretty good haul for our buddy Trent if I don’t say so myself.

If we google first week CD sales numbers for the last three Nine Inch Nails records, (Year Zero, With Teeth, The Fragile) we can see that they each sold between 200,000-300,000 copies. (Apologies for not having exact numbers, my SoundScan access expired) Already an impressive feat for Ghosts as its first week numbers almost triple any one of the previous records.

“But what about the free downloads skewing the numbers?” you may ask.

At the end of the day, what matters most to the artist? Money. Ghosts‘ $1.6 million take goes ALL to Nine Inch Nails (yes, then they have to pay for bandwidth, manufacturing, distribution, and whatnot). Contrast that with the horrid cuts that major label contracts give to an artist on CD sales (normally $1-$2 per record sold, not including advance repayments). Say Trent made $2 per record for one of his last 3 records. At an average of 250,000 copies sold, he would take in $500,000 from first week sales. That’s almost one-third what he’s pulling in now from Ghosts!

If you were a major artist, which way would you want to sell your record?

Granted, time will tell if Ghosts will have staying power and continue to take in revenue. A big chunk of that $1.6 million was due to the $750,000 from the “ultra limited edition” that will never be sold again. However, my intuition tells me that the costs in recording this latest all-instrumental album were much less than a traditional nin album and that Trent probably already has a good return on his investment already.

It’ll be interesting to see how this model works with other artists or even a “real” Nine Inch Nails album. But from the looks of things, Trent is onto something here.

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Lee Abrams Leaves XM Radio For Tribune Co.

Legendary insane broadcaster Lee Abrams has left XM Satellite Radio almost a decade after helping to found the company.  He’s taken up a position as Chief Innovation Officer at embattled media conglomerate, Tribune Co.

I’m not so sure how this will work out, given that Abrams has little to no experience in the journalism world.  However, I can see how Tribune would be desperate enough to gamble on Abrams pulling a miracle out of his hat, given their struggles as of late.  My gut tells me that Lee’s time may have passed though.  This was a man that once told our radio station that we needed to airdrop a million dollar bills onto Giants Stadium in order to grab the attention of our listeners.

…right.

At least he can’t do much worse than the hapless Cubs.

Read more about Lee’s departure [washingtonpost.com]

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Neil Gaiman Knows The Meaning Of Free

Neil Gaiman has been my favorite contemporary fiction author ever since I was captivated by The Sandman in the early 90’s. Recently, he and his publisher have put up his most defining literary work, American Gods, in its entirety for free online (I recommend you give it a read, it’s wonderful!). Apparently, he’s gotten some flak from some small bookstores who believe that move will be the death of them if authors everywhere started putting up digital copies of their books for free. Neil, on the other hand, appears to have read Chris Anderson’s Free! article and understands the current marketplace climate:

Just as a bookseller who regards a library as the enemy, because people can go there and read — for free! — what he sells, is missing that the library is creating a pool of people who like and take pleasure in books, will be his customer base, and are out there spreading the word about authors and books they like to other people, some of whom will simply go out and buy it.

If you have the time, I suggest reading his full reply to the letter – he’s got some pretty insightful thoughts on the process of building a customer base with “free” content.

The music industry could stand to learn a thing or two from this affair.

Read Neil Gaiman on giving away free content [neilgaiman.com]

Read American Gods online [harpercollins.com]

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All You Need Are 1,000 True Fans And You Can Quit Your Day Job

Kevin Kelly has a great post over at his blog on a possible new business model for artists. The basic idea is that in order to make a living as a musician, you need 1,000 true fans who will buy anything you put out. This number increases proportionally with the more people you have in your group.

While “1,000 Fans” is more of a catchy nomenclature than a hard and fast rule, the general idea is very intriguing. We’re truly moving away from a superstar-only oriented music industry into a more niche-based one that can accommodate many successful artists.

Read “1,000 True Fans” [kk.org]

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The Apocalypse Is Nigh

Wired’s Listening Post has an excellent bullet point interview with Sony BMG executive, Thomas Hesse, about the current state of the music industry and what the future holds. Surprisingly, Hesse has some genuinely insightful thoughts on the state of the industry.

Here are some highlights:

  • Connected CDs are going to be a huge thing. Half of people put CDs in their computers, mostly for ripping, which is great, because they purchased the music legally. At that time, there’s a chance to connect with the user, sell more music, merchandise, etc. There are both promotional and upsell opportunities there.
  • The biggest opportunity we have is to create an access model for the consumer where the consumer can consume music in a virtually limitless way by purchasing some kind of subscription or device that comes with access to the music. Those are the most exciting, and are gaining traction. Various models are being debated right now. The mobile phone will play a critical role, and the device will play critical role.
  • There are so many options for consumers. We must be bold enough to throw out some of old models.

I gotta admit, the last place I expected to hear some rational, well-thought out analyses on the music industry’s current plight was from a Sony BMG executive. Mr. Hesse has managed to make me start to take the major labels seriously again. I don’t agree with everything he says in the interview, but he has enough good points that he has my respect.

Read the rest of Hesse’s interview [wired.com]