Music Industry Archive

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The Secret Demands Of Record Labels

By
Andy Yen
– Posted on December 19, 2011Posted in: Music Industry

Michael Robertson of MP3Tunes on the otherworldly demands the major record labels have for digital music services:

With most other businesses, if a supplier makes unreasonable demands, a retailer can turn to other providers. Since copyright law gives record labels and publishers a government-granted monopoly, no such option is possible with music. Digital vendors have only two options: Accept the terms or not include those songs in their offering.

It’s a ridiculous situation that innovative companies like Spotify are beholden to such lazy companies as the major record labels. The terms of their deals are so laughably one-sided that it’s almost unbelievable. Could you imagine going into a “normal” business negotiation with these?

Hopefully, as time goes on, and the majors’ artist rosters dwindle from relevant new acts eschewing them, the tables will turn. Yes, the majors’ will always have their catalog, but if things continue on their current path, they may be forced to license out the catalog at a discounted rate in order to stay relevant.

via GigaOM.

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The Death Of The Music Industry Chart

By
Andy Yen
– Posted on February 17, 2011Posted in: Music Industry

I’m seeing this chart being passed around the last couple of days. Other than the CD sales peaks clearly being an aberration for the recorded music industry, I’m quite surprised that digital sales have picked up a significant amount of slack. Just from eyeballing, it looks like in 2009 digital sales made up about $2.5 million. Keep in mind this is 2009, when Amazon MP3 didn’t sell albums for $3-5 each. It boggles my mind the number of people who have bought digital albums or tracks from the iTunes store. I could never get behind paying what would amount to a convenience tax for digital files when I could own a CD and make them myself.

Imagine if the RIAA went digital in the late 90’s, early 00’s. To borrow an Arcade Fire lyric, they’d have mountains beyond mountains.

chart of the day, music industry 1973-2009, feb 2011

via Business Insider CHART OF THE DAY: The Death Of The Music Industry.

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Let’s Hold Off On The Ping Hyperboles, Please

By
Andy Yen
– Posted on September 26, 2010Posted in: Music, Music Industry, Technology

Over the weekend, Apple released an update for iTunes (10.0.1). In addition to various bug fixes, Apple made a couple of changes to Ping that make the service a bit more usable.

Users can now “Like” or “Post” about any song in their iTunes music library that’s available for sale in the iTunes music store. There’s also a Ping sidebar on the right hand side of your music library that displays recent activity from your friends.

Apparently, tech pundits and bloggers are rejoicing that Ping is finally a viable music social network. TechCrunch’s MG Siegler declared Ping as “A Thousand Times Better.” CNN’s article headline read, “Let Us Now Praise Ping 10.0.1.”

I’m sorry, I wasn’t aware of the rule that making your product marginally usable by its intended audience deserves effluent praise. It’d be like heaping hallelujahs onto your new bank for finally allowing you to deposit money. Next thing you know, these guys are going to be sending gift baskets to Toyota for putting functional brakes in their cars now.

Dave Winer was a little more reserved in his praise, but still decreed that “Ping now is beginning to actually be a social network for music.”

Really? Well I guess that’s kinda true. Maybe like how Antoine Dodson is beginning to actually be a musician with his Gregory Brothers produced song.

Sure, these are improvements to the experience, but they should have been there at launch. Apple’s made some other improvements since launch, such as improving the spam filtering and adding back and forward navigation buttons for Ping – but again, these “upgrades” should have been in place from day one.

Apple’s made no improvements to Ping that warrant another look at the service as an useful music discovery tool. You still can’t listen to full songs that other people are talking about. You still can’t access Ping from a web browser. Hell, you still can’t even import your friends from Facebook or any other source yet.

I’d say call me when Apple starts remedying the ten issues I called to attention at launch, but you know what? Don’t even do that. Don’t mention anything about Ping to me again unless it demonstrably shows value equal to or greater than last.fm or Pandora as a tool for discovering and sharing music.

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Ten Reasons Why Ping Is Currently Useless To Music Fans

By
Andy Yen
– Posted on September 5, 2010Posted in: Features, Music, Music Industry, Technology

It just goes to show how accomplished a salesman Steve Jobs is with his introduction of Apple’s iTunes-based social music network, Ping, this past Wednesday. From the way Jobs presented the service, many people felt Ping was the future of music consumption and interaction, calling it a “Myspace, Facebook, Twitter, <insert internet juggernaut here> Killer.” In fact, I believe my initial reaction during the presentation could be paraphrased as “gave me an erection.”

It turns out that all anyone got out of Ping so far was a severe case of blue balls.

If you’re a music fan and you’re wondering if Ping is worth your time, it’s not. You’re much better off with Pandora or last.fm right now. They offer music discovery options that make Ping look like BP of music sites. Don’t bother signing up if you don’t have an iTunes account. If you are already signed up, I guess it couldn’t hurt to opt in to reserve a name/profile just in case Apple improves the service, but no one would blame you if you didn’t care.

In it’s current incarnation, Ping is utterly useless for music consumers and here are ten reasons why:

Read the rest of this entry »

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Mandatory FM Radio In Cell Phones – Is This So Bad For Consumers?

By
Andy Yen
– Posted on August 23, 2010Posted in: Music Industry, Technology

Arstechnica had an interesting article on a potential compromise between traditional radio broadcasters and the RIAA to get radio to start paying for the music it plays on the air.

Right now, radio stations only pay royalties to the original songwriters for the music that goes out over the air, not to whoever owns the actual performance of the song. (This is a key distinction because usually the record labels own the performance recording rights, not the artist.) If the labels have their way, radio will be forced by Congress to start paying up.

The interesting thing is that the compromise isn’t exactly between just radio and the record labels. Broadcasters want Congress to mandate consumer electronics manufacturers to include an FM radio chip in every portable device sold in the US.

(cue to a shot of tech companies going “whaaa?” with a surprised look)

“The backroom scheme of the [National Association of Broadcasters] and RIAA to have Congress mandate broadcast radios in portable devices, including mobile phones, is the height of absurdity,” thundered CEA president Gary Shapiro. Such a move is “not in our national interest.”

“Rather than adapt to the digital marketplace, NAB and RIAA act like buggy-whip industries that refuse to innovate and seek to impose penalties on those that do.”

Now, it’s quite obvious with declining record sales and radio ratings that the NAB and RIAA are on sinking ships. I get that it’s a patently absurd mandate to place on tech firms who shouldn’t have to worry about bailing out the flailing radio and records industries.

But from a consumer perspective, would you really mind having access to an FM radio on your iPod or cell phone? I mean let’s put aside the fact that most terrestrial radio stations put out some poor product. (With a larger audience, maybe more programming chances could be taken. Playlists could widen. Songs could repeat less in a given time period.) Sometimes it’s just easier to put on a radio station and just start listening to music than it is to create a playlist on your own.

Say you’re bored waiting somewhere where there’s no cell reception. Chances are that you’ll still get FM radio reception at the least. It’s old technology, but it’s still probably more reliable than AT&T’s network. Entertainment problem solved.

Of course, this all goes out the window if our iPods and cell phones are suddenly $20 more to buy. But how much can an FM tuner chip cost these days?

All things being equal as a consumer, I feel that it’s a “why not” option for mobile devices. I haven’t had a portable radio since high school. Sometimes I wish I had one, especially when there’s a ball game to listen to and I’m not home. As long as our devices look, function, and cost the same, sure, put an FM tuner in there. We got nothing to lose, right?

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Ticketmaster “Full Disclosure Pricing” Does Not Actually Disclose All

By
Andy Yen
– Posted on August 23, 2010Posted in: Music Industry

I recently read the Lefsetz Letter about Ticketmaster CEO Irving Azoff announcing new “Full Disclosure Pricing”  on Twitter:

@irvingazoff: New TM full disclosure pricing! http://www.ticketmaster.com/event/0D00448D1A496EA9?brand=&tm_link=tm_homeA_g7&hot_ticket_brand=home

Now that’s a little thin on explanation so here’s Irving shedding a little more light on the matter:

“Correct.  Since acts, promoters and venues are fighting full disclosure all-in pricing that consumers want, TM is unilaterally doing this.  Needless to say a major promoter has already written to us demanding we stop. Go ahead and print if you want Bob.   Thanks.  Irving”

Cool, so now we get to see how much show prices really are without having to go through the song and dance of pretending to buy a ticket right?

Not exactly.

While each event page now shows a price including “fees”, there’s no mention of the “order processing charge” that will get tacked onto your order once you actually get down to putting on your billing info. This charge is roughly around $4-$5. (In Irving’s Carrie Underwood link above, it’s $4)

But that’s not all.

I bought a pair of Arcade Fire tickets for the Los Angeles show last week and not only was there a $4.80 “order processing charge” for a pair of tickets, Ticketmaster was now having the gall to charge $4 for “standard mailing.”

[rant start]

That’s right, we’re now charged an absurd $4 to be mailed tickets via a 35 cent envelope (I know because I’m staring at a ticketmaster envelope postmark right now). The “free” standard mail delivery option used to be the only thing I could mollify myself with if I bought tickets for a show months in advance. Now I don’t even have the option to pay $2.50 for the privilege to print my own ticket. The cheapest option was a $3 fee to go to a Macy’s or some retail outlet and have them print out tickets for me.

Are you kidding me? $3 to make an out of the way trip to a retail outlet to have them print out something for me?

Mr. Azoff, go back and hide the fees from me until the end step if it’s going to end up costing me an extra $4 to buy a 35 cent postage stamp. What’s next, a $2.75 fee to send them a Self Addressed Stamped Envelope for them to mail my tickets?

[/end rant]

Don’t get me wrong, the idea of a “Full Disclosure Pricing” sounds swell to me as a consumer. I’d love to eyeball an event page and be able to figure out if I can afford to go or not without 5 minutes of fumbling with Captcha work. Perhaps this is how Ticketmaster should have done business from the beginning. Regardless, with the way Mr. Azoff talks about it, you’d think that Ticketmaster had unilaterally cut fees to the consumer by 75% or something equally revolutionary. Now wouldn’t that be something to get excited about.

Let’s not get ahead of ourselves, though. I do realize that Ticketmaster is walking a tightrope with event promoters, venues, and artists in terms of who gets paid what and how much. But please, if you’re going to advertise “Full Disclosure Pricing”, try to actually disclose the final price before trumpeting yourself as a hero of the consumer.

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Pottycast #10 – Digital Music With Gregg Ogorzelec

By
Andy Yen
– Posted on June 3, 2010Posted in: Music Industry, podcast

The Pottycast is back! This week I’m joined by A&R Producer and digital music industry veteran, Gregg Ogorzelec. We talk about how online tools have changed the landscape of the music industry over the last decade and look ahead to a “cloudy” future.

Download the MP3

Subscribe to the Pottycast using the links below.

itunes

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Justice Department Opens Inquiry On Apple iTunes, Who’s Shocked?

By
Andy Yen
– Posted on May 26, 2010Posted in: Music Industry

There’s an article in yesterday’s New York Times about the Department of Justice opening an inquiry into Apple’s “bullying tactics” in digital music sales.  The biggest example given of said “bullying” was threatening the record labels if they worked with Amazon:

In March, Billboard magazine reported that Amazon was asking music labels to give it the exclusive right to sell certain forthcoming songs for one day before they went on sale more widely. In exchange, Amazon promised to include those songs in a promotion called the “MP3 Daily Deal” on its Web site.

The magazine reported that representatives of Apple’s iTunes music service were asking the labels not to participate in Amazon’s promotion, adding that Apple punished those that did by withdrawing marketing support for those songs on iTunes.

First of all, I find it deliciously ironic that the record labels are now the victims of bullying.  Secondly, is anyone actually surprised by these tactics?  Maybe I’m just jaded, but when I worked in radio implicit threats were an acceptable tool in the arsenal for record promotions.

Record Label: “If you don’t play this record by <insert new band the label is trying to break>, don’t expect to get <multiplatnium selling artist>  for your summer festival show.”

Those words were never said explicitly, but the general idea was understood.  It also worked the other way:

Radio Station: “You gave <competing station across town> an exclusive interview with <large band>? Don’t expect to get airplay for <your next baby band>.”

Tit for tat business tactics may not be the nicest or most optimal solutions, but they’re human nature.  We get wronged; we want revenge.  New girlfriend sees you talking to another chick at the bar? DOGHOUSE.  The same thing is essentially going on here with Apple, Amazon, and the record labels.

Granted, those were bygone days in which both parties had leverage on each other.  It was a symbiotic relationship; a give and take among equal powers.  Now, it seems as if Apple has all of the power here.  The record labels are so desperate for iTunes’ short-term sales that they’ll acquiesce to these types of demands and whine to Mommy (the DoJ) about it.

At the end of the day, I think this is an irrelevant battle. Inquire and regulate all you want, but you can’t change human nature. On top of this, I don’t see digital a la carte sales being the music market of the future. We’re seeing consumer excitement shift more towards cloud/subscription/social services.

But that’s a discussion for another day.

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What Is The Rolling Stone Thinking?

By
Andy Yen
– Posted on May 19, 2010Posted in: Music Industry

I thought that terrible piece on how the Black Eyed Peas was the #1 reason to be excited about music was the most insulting thing the Rolling Stone had done to music lovers this decade.

I was wrong.

I received the above email earlier today.  Apparently, I forgot I had subscribed to The Rolling Stone (and it’s email newsletter) many years ago.  I can deal with the unwanted email; I probably should have double checked the newsletter preferences more closely.  But to squander a communication attempt with a former subscriber on this tripe?

Come on.

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Internet Radio Royalty Bill Passes House

By
Andy Yen
– Posted on September 29, 2008Posted in: Music, Music Industry, Technology

to live and fight another day

CNET reports that the Webcaster Settlement Act has passed the House of Representatives unanimously.  Only the Senate now stands in the way of internet radio broadcasters and business viability.

According to the article:

Webcasters are fighting for the right to negotiate with the music industry to reduce the royalty rates they must pay to stream music over the Web. Any deal must be approved by the federal government.

It’s sad that it’s even gotten to this point.  The revised royalty rates from last year that put webcasters into this situation in the first place were completely unreasonable.  Now they are fighting for the right to negotiate?  With the music industry?

Granted, one would assume that the record labels themselves would see the futility in forcing internet radio out of business and would negotiate reasonable deals if the bill passes.  However, why did they allow SoundExchange to enact such ridiculous rates in the first place?  The fact that any deal must be approved by the federal goverment adds unnecessary red tape to the process.

Unanimously passing the House is a good first step; it appears as though the bill will get enacted.  At the end of the day, though, it’s still a workable solution.  Just not a very elegant one.

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