Partly because of my general work as a Futurist, and partly because of my role as Co-Founder and CEO of MusicAPI provider Sonific I have been very busy analyzing social networks, blogs, and other self-publishing platforms, and their importance to the music (and media) business. I will be publishing the results as part of my new book (The End of Control), soon, but my summarized conclusion is that this is the birth of the next Iteration of Radio that we are witnessing here. If you recall, Radio was first based on 'pirated' un-licensed content, too, unwanted and hated by the record labels and music publishers, since they considered it to replacing solid revenue streams (performances and sheet music, mostly) that they were counting on and did not want threatened (much like CD and download sales, today!).
But then, 100s of stations were launched, Radio became something that everyone loved and used (yes... because it 'feels like free' ) and they all used whatever music that wanted without a definitive license (if any), and guess what: after ten years of just standing by and not giving their blessings the music companies finally had to agree that Radio was, indeed, driving sales of music and that it should therefore be allowed to exist. The irony, of course, was that the labels did not even manage to get ANY revenue share from the radio operators; only the publishers did (in the US that is). Would they have gotten substantially more if they had agreed on a revenue share right from the start; before those radio networks became the driving force behind music sales? You bet! So here is my urgent appeal to the record labels: license the social networks with a blanket, full-length-track (streaming) revenue-share-based license NOW, and get your foot in the door before it jams up, and before they can successfully argue that you need them more than they need you. Mark my words: streaming music on-demand, fully interactive, fully-shared-enabled, full-length-tracks, will become a default setting on the social networks, regardless of the record industry's 'permission-denied' tendencies. And we are already talking over 220 Million people, 700+ sites and services, growing something like 250% every year. Billions of $$ in revenue shares from ads, upselling, bundles... And we certainly wouldn't mind if you tried this with Sonific, first, either :)
Fred Wilson: I" think Rhapsody (or a service like it) is the future of music. It won't be long until we can connect to the Internet from anywhere and when we can, there will no longer be a need to have files stored locally on any device (ipod, computer, laptop, music server, etc). We'll just log into whatever music service we use, decide what we want to listen to, and the music will start playing. That's how it works in my home already"
My comment: agreed but this is precisely why we won't be able to distinguish between streaming and downloading any more. All-pervasive wireless broadband will kill the idea of 'listening only' versus getting a copy / paying for a digital download. Access will trump ownership. Therefore, the labels must monetize ACCESS first and foremost, and only THEN the copies. Remember the roots of Rhapsody are in online radio, and imho that is what needs to be offered first: 'feels like free' on-demand streaming, based on community and advertising support, and only then move into ownership propositions.
Fred Wilson: "...Offer a subscription plan that incorporates an eMusic style DRM free music download service. For those people who do want to continue to own music, Rhapsody should offer "sample and own' plan. For say, $20/month, you get unlimited listening plus 30 downloads a month. And Rhapsody will know what you are listening to and can recommend what those 30 downloads should be..."
My comment: yes, that would be nice, but people are just not going to pay $20 a month for digital music access - at least not at the entry level. $1 / week is more like it, and 'feels like free' is what we need to shoot for, imho. That means ad-support etc, or something like cableTV where we just accept that we are paying (and it kind of becomes automatic). I think Amazon will do this very soon and that will be a real problem for Real. I love Rhapsody too but the labels have really screwed this up for a looooooong time.
On Fred's other points, I totally agree - I just think that, again, music needs to be more like a utility, like water, something that everyone pays for and everyone uses, but that does not create individual payment points everywhere. Based on this ubiquitous access to music, imagine all the stuff you could add value with, and upsell. Read this and watch these.
Some of my favorites: "Four out of every ten social network users have music embedded in their personal profiles, rising to 65pc among teenagers. Russell
Hart, chief executive of Entertainment Media Research, described this
phenomenon as "the democratisation of the music industry... "Social
networks are fundamentally changing the way we discover, purchase and
use music," he said. "The dynamics of democratisation, word of mouth
recommendation and instant purchase challenge the established order and
offer huge opportunities to forward-thinking businesses."
My comment: You can say that again! Yet, I don't see a concerted move from the labels to just offer a default license for the use of streamed tracks on these networks, in exchange for a share of revenues. This sounds like a great job for the PPL, or Soundexchange - but once again, the only thing you hear from them is that they don't have the mandate for this, and on and on and on. My prediction: on-demand streaming of each and every song will be offered, licensed or not (more likely, NOT, since there are already 50+ apps that do this without a license!), on all of these networks (and there are already approx. 750 of them, estimated to grow to over 5000 within 12 months), and if the labels think they can just deny this license by their usual 'permission not granted' approach, in order to extract larger sums of $ out of the market, they will just put another nail in their coffin. Because today, non-participation means that everyone just routes around you!
"There has been a significant increase in the
preparedness to download illegal music by teenagers and people in their
20s," he added..With margins on CDs declining while
the growth of legal downloads slows and piracy rises again, the music
industry is under pressure to find better ways to distribute its
content. John Enser, head of music at Olswang,
said: "The music industry needs to embrace new opportunities being
generated by the increasing popularity of music on social networking
sites. Surfing these sites and discovering new music is widespread with
the latest generation of online consumers but the process of actually
purchasing the music needs to be made easier to encourage sales and
develop this new market."
My comment: The biggest trend here is ACCESS REPLACING OWNERSHIP. People go to those networks and LISTEN before they will consider buying anything (IF the buying of digital music was even attractive which it is clearly not, right now). And THAT needs to be monetized. Incidentally, that's what I am shooting for with Sonific..!
Fred Wilson says: "And I share Jason's frustration with Facebook. It's just not my world. The web is my world. Blogs are my world. Flickr is my world. Twitter is my world. Facebook aggregates all of those features, wraps a social network around it, and provides a turnkey solution. It's better in many ways. But when you make it easy, you get overload. And that's what Jason is facing. And that's what I am facing..."
There may be such a thing as TOO MUCH ATTENTION - I have not made up my mind yet and have just started to get into Facebook, so... let me know what you are thinking.
"In two years, file-sharing has the potential to be 100 times as fast and enabled on every single device, not just computers, according to Gerd Leonhard, CEO of Sonific.
"To some degree, P2P is a bit overrated -- USB (universal serial bus) and IM (instant messaging) are much more widely spread than P2P, mostly because industry players are sitting on top of ISPs," Leonhard told TechNewsWorld.
People are sharing wireless networks and kids are flocking to IM -- and possibly abandoning e-mail, he said.
"They're using Skype and IM; this whole sharing thing is going to be completely crazy with mobile wireless broadband," Leonhard said. "You have to license the network." Limitations should not be placed on computers and networks, he added.
"It has to feel like a free embrace, like water or electricity. ... There are much smarter ways of charging for service and content," Leonhard pointed out. "Initially, cable fees were $10; now they're $72, so the potential for up-selling is there." If the sharing stops, it may kill the music business, he said. "When the fan/user/listener stops engaging with the music, it's all over," said Leonhard. "Today, you urgently need a canvas for music not a one-way product (such as the CD)."
"CD-swapping service Lala made national headlines a few weeks back with its decision to offer up full streaming access to complete albums
from major labels. The catch? There was none; the service would be
free, the content would be legal (and paid for; the company estimated
it would cost them $140 million for two years), and iPod users could
load their player from the Web (for a fee)..... Then came the day the music died.Users noticed the disappearance first, complaining in company forums
that full-song streaming had disappeared from the site and that only
30-second samples were available (unless one owned the album in
question)...."
Again, one wonders why there isn't a default license in place that allows social networks and online communities to use full-length tracks that can be streamed on demand - I bet there is a ton of $ there.
But this is exactly why my own company, Sonific, has been licensing all the music directly from labels and aggregators - we now have over 200.000 tracks that can be used as free music widgets in 42+ platforms, and on our website; and we will be offering radio/playlist functionalities shortly as well, and a lot more really cool features... stay tuned.
In any case, if you like(d) imeem and lala... well, do try Sonific (if you can stomach the lack of major label hits, for now ;).
On May 30 / 31 I was invited to attend the first Copyright Summit in Brussels, Belgium, organized by some friends of mine on behalf of CISAC (the RIAA equivalent of the copyright societies /PROs / MROs). I moderated a panel, too, and quite enjoyed it... but more on that later.
This event was basically a constant succession of hot and cold showers (albeit most of them were on the chilling side): on the one hand, copyright societies, composers and various intellectual property functionaries (and boy, did that label apply - even Charles Aznavour was turned into a shining example of righteousness!) constantly lamenting how badly things were going because the Internet really is just a giant rip-off machine (this, of course, was always and without fail linked to the instant urging for more protection); on the other hand some lonely but outspoken and 'keen-to-help' technologists, visionaries, consultants, entrepreneurs and Music2.0 advocates (I guess I did fit in there somehow, myself;) that tried to insert some sort of reality-check into the proceedings.
At one point I felt that one might as well summarize this entire conference like this: "PLEASE try to get it - the utter control of this ecosystem is OVER. Finished. The Past. You need to move forward and make money in a new way. Go and DO IT. NOW."
This thought, I felt, was somewhat echoed by Andre LeBel, CEO of the Canadian Society SOCAN and without a doubt one of the most forward-thinking people as far as PROs go - Andre was one of the few PRO speakers that did not just dwell on 'we need more protection' but instead urged his peers to change, and to change fast. Somehow it seems that Canadians are always ahead in these things, and open - why is that?
Unnervingly, at times the event felt like most people on the stage were shooting to stage a mutual love-fest with their peers in the audience, and other times it felt like a stoning was immanent (particularly when Larry Lessig entered the stage - I really thought he did a great job defending the Creative Commons initiative considering that the audience basically told him to stuff it and stop talking about it in public: "it makes life harder for us to have you out there saying these ludicrous things..."). Still, Larry did a great job, as usual - I just wished he would have had more time and a better moderator. The UK Register has some juicy comments, here - as usual, good stuff, Andrew O.
Below is a short video with some excerpts of Ben Verwaayen's keynote speech (yes, the CEO of BT... at a Copyright Event!) which I thought was very much spot-on and quite daring given that the audience consisted mostly of fairly up-front and ready-to-blast-you copyrightists and people that want to see 'their IP rights defended'. Sorry for the abrupt cut btw, my my new NokiaN95 could not be kept steady any longer ;)
From the program: "I've Seen The Future" - prominent new media industry leader Ben Verwaayen outlines the key technology changes ahead. How are technological changes going to affect the entertainment industries? How will they affect the way creative works - such as music or films - are licensed, produced and disseminated? * Ben Verwaayen, Chief Executive, British Telecom (UK) My favorite quotes from his speech: "...because the consumer of today is no longer the consumer you're used to..." ... "The question is not where the value was yesterday but where it is today".
The Hollywood Reporter comments: "Verwaayen flatly rejected suggestions that operators like BT need to
compensate rights owners because they provided the infrastructure for
online piracy. "It's nonsense," he said. "It's the same issue in many
industries: Is one responsible for the problems of another? If you
think someone else will solve your problems for you, forget it -- it
won't happen." The Register comments here.
I think Ben's speach was great because he really cranked up the opposition in the audience, most of which apparently believed that telcos should just pay for the music their users get on the network, and thereby solve everyone's problem (no... we are not talking about a flat rate here... we are talking penalty).
And somewhat surprisingly to me, a really great contribution was made by Billy Bragg, (in)famous for his run-ins with Myspace who high-lighted some of the great advantages that the Internet has brought us, and successfully bridged the gap between the techno-phobic crowd and the rest of the audience. "As Artists we have to find a way to get together.... technology and the audience are well ahead of us" Well done Billy!
John LoFrumento, CEO of ASCAP, delivered a good example of playing to the crowd but otherwise was unfortunately not adding much value: "this is stealing... and hurting a lot of people". These kinds of utterings could be heard from many panelists and speakers and panelists, over and over again, thereby, I guess, enhancing the opportunities for some good mutual back-patting... you cry for me - I cry for you. Congratulations. I think it would have been much better to have some honest conversations about CHANGE and why it's needed, and why it's urgent (which is something I dare I say I tried during my panel... hope I achieved it at least some of the time).Download john_lofrumento_copyright_summit
Unfortunately, the 2nd day at the conference was somewhat ruined by a ueber-ludicrous flyer that some ASCAP people passed out at the entrance - a bizarre cartoon-one-pager called Donny the Downloader which depicted a freaked-out musician that's working in a fast food joint because the very people that order food from him have just been free-loading his music instead of paying for it. A scan of this flyer is below. Sorry, ASCAP and everyone there that is doing a great job to bring real change into the organization - but this kind of thing is just SO utterly simplified and makes you look deeply ridiculous - it's hard to believe that you would even consider publishing something like this. It's not the free downloading that's hurting the composers and publishers - it's the industry's (and that means labels and publishers) refusal and / or inability to license music on different terms than they're used to. Get with the program and enforce participation not punishment - You can't outlaw 90% of the population. I, and many people next to me, were amazed at the idiocy behind this flyer - it reads like something from 1999! WHERE have you guys been?
All in all, though, it was still a very interesting conference - mainly because I learned a lot (even though I had to have my flame shield on most of the time), and got to talk to a lot of people that were very sure of what they do, and that always makes for interesting conversations. The organization was flawless and even though I wished there would be been fewer yes-sayers and more speakers that pushed the envelope and questioned the comfortable 'we just need more protection' attitude that prevailed through-out. But then again, it was a CISAC show... right?
Update: just found this video on YouTube - the opening speech by Prof. Christian Bruhn (Chairman of CISAC). Listen, smile... or cry?
Here is my final comment, somewhat shortened by the IHT Reporter that is referring to our interview:
"Gerd Leonhard, chief executive of a digital music start-up and author of "The End of Control," said he believes that the existing structure has outlived its usefulness, and - at a time when royalty-payment functions can be automated - he gives the collecting societies no more than three or five years of life..."
The Wall Street Journal has some good comments
on the Yahoo / Gracenote lyrics service that was recently launched.
Their main beef: you can’t copy the lyrics. Quote : “But lyric sites
are also an example of how disappointing the Internet can be…” This is
indeed a very interesting dichotomy: while the publishers indeed think
that they have made a major step forward, and Gracenote
has done a fantastic and probably very painful job of getting them to
agree to this, the average internet user is STILL going to be
frustrated, as this is yet another example of ‘wanting to retain control when there is really none left to speak of’ i.e. wanting to turn the web into a READ-ONLY culture (as Larry Lessig puts it so deftly). This is not Gracenote’s or Yahoo’s fault, of course, it’s the Publishers that need to make this shift: Engage not Enrage.
Seriously, I mean, if I can use my Mac screen-capture tools to do this
why would I not be allowed to copy and paste the lyrics - this is like
stream-ripping of online radio stations: it’s just not going to be a
big deal if you are concerned about monetizing your creative assets.
And you certainly cannot plug that analog hole, ever.
One has to wonder why Warner Music just does not seem to have the guts to do what needs to be done to remedy their 'shrinking pie' problems. Well, here it is, again:
1) Sell music in an open format that works on ALL devices, with flexible pricing (that is more $ and less $!), and in bundles / subscriptions / packages. Make music ubiquitous, sell it everywhere, anytime, to anyone, bundle & package - take a page from Amazon!
The key is to make your music available widely, and without all the buts and ifs, and with open and fair licensing standards.
2) Offer fair agency deals to new artists, make them (and their managers!) more responsible for their own success, but take 25%-50% of all revenues that flow from the artist's brand. Move beyond music as the single money maker -it's a MULTI MEDIA world now... right? - and PLEASE get off the 'selling copies' paradigm and into 'selling access & services'. Make a larger pie instead of quarelling over who gets what of the quickly-shrinking pie you have now.
3) Reduce marketing costs by 60% by diving into SYNDICATION of content - let the users / fans / listeners / PEOPLE do your marketing for now. Give up 'pie in the sky' of total control over distribution and get the revenues flowing again.
And of course: first of all, admit you were wrong about DRM, about taking your customers to court, about trying to force the music fans and users into submission - and then get ready for a new flood of revenues. And yes - you may need to slim down to 30-50% of your current size, and get people aboard that know what's real and what's not.
"As part of WMG's ongoing transformation to a music-based content company, we are realigning WMU.K. to most effectively organize our resources," the company said Friday. "The music industry is undergoing fundamental changes, and we are adapting our business accordingly, channeling our resources into growth areas, managing costs and investing in new business initiatives."
Bizarre! To the guys at those labels: it's not eMusic ist's the USERS who are demanding these prices per song, and therefore impacting how much you are making. Ask THEM to pay you more - not eMusic. iTunes pays more because IT SELLS IPODS on the back of your music, and therefore does not care to make real $ with selling it. Wake up and smell.... the flat rate, which is your best possible future.
Victory Records' Tony Brummel first raised the issue in early April when he pulled his catalog from the service after eMusic introduced the Connoisseur Plan, which offers existing customers 300 downloads a month for $75 -- or about 25 cents apiece. The most eMusic subscribers pay per track is 33 cents under its plan that charges $10 per month for 30 downloads.
After factoring in distribution costs and other expenses, some labels receive as little as 12 cents per song in profit, sources say -- far less than the 60 cents to 65 cents per track received from iTunes.
The service counts more than 13,000 indie labels as partners, and, at the moment, complaints about the revenue share seem constrained to a disgruntled few
Now this would be interesting. Google keeps kicking the pants of MSFT, and Yahoo's hope of staying and / or re-becoming the growth engine of the web has not panned out - to put it mildy. This would be the end of Yahoo as we know it I guess - but maybe a good deal for its shareholders, since the alternative (going it alone) will get harder and harder for Yahoo, imho. I'll be watching. Reports: Microsoft Eyeing Deal to Buy Yahoo - News and Analysis by PC Magazine.
Techcrunch has a very selection of comments on this whole debate - see below. and smile (or cry?).
EMI, Apple To Sell DRM-Free Music for $1.29/song. Personally I think this is a great first step - and this Rome won't be build in a day / month / year.
The growth in digital music failed to compensate, with album sales dropping by 10% overall.
My take: digital music is growing at a mere fraction of its true potential. Remove the crapware aka DRM and go for 100% open formats, offer flexible pricing and bundles, and finally give the user what they REALLY want, and you'll see a new boom in music commerce.
I still think this is wrong - all these users and 3rd parties have BUILT Myspace,too, rather then just blocking them why don't they take them in and make some deals?
This development is worrying, for sure. Rather than going for a revenue share that could be added to a minimum fee (per channel, or per user?)
, the proposed rates will simply make webcasting utterly impossible. Keeping in mind that - unlike traditional radio - the costs of providing streams actually go up proportionally with the # of users, too, these licensing costs would be commercial suicide.
So where does that leave webcasters: direct licensing (tedious but maybe a good alternative), move to different countries? Be sure to check the comments - some good stuff here. But once again: here is another example of killing the golden goose. Arghhh!
Those fees will add up quickly for larger webcasters; the Radio and Internet Newsletter (RAIN) calculates that, assuming that the average station plays 16 songs per hour, sites would have to pay "about 1.28 cents" per listener per hour using the 2006 rate, and would owe this retroactively, in addition to licensing fees going forward. RAIN's math indicates that the rate would render Internet radio unsustainable, or at the very least, more ad-laden than terrestrial radio -- and that's before the songwriters' licenses are taken into account:
"Even adding in ancillary revenues from occasional video gateway ads, banner ads on the website, and so forth, total revenues per listener-hour would only be in the 1.0 to 1.2 cents per listener-hour range. That math suggests that the royalty rate decision — for the performance alone, not even including composers' royalties! — is in the in the ballpark of 100% or more of total revenues."
An interesting development, see the link below. The heads of IMPALA (the European independent music organization) are now just fine with a merger of 2 majors (EMI and WMG) if WMG will also fund the development of the new independent ueber-licensing agency MERLIN. In other words, if WMG pays some hefty $$$ to the indies, then a previously much bedeviled merger is just fine with them. Wow!
This poses an interesting question: if SonyBMG pays IMPALA some nice $$, too, would their objection to that merger be withdrawn, as well? I guess money can solve a lot problems - but I do wonder: ARE they opposed to a merger of 2 majors because they really pose a monopolistic threat, or are they NOT? Or is this all just postering... - maybe they can chime in here. As to MERLIN - which in principle I would agree is a huge step forward provided that they don't end up operating on the same paradigms than the Majors -, does it really needs WMG's $$ so badly - there should be other good sources of cash out there, imho.
IMPALA said it had an understanding with Warner that Impala would support any tie-up in return for support for the independent sector. Warner’s press release says that they will be “providing specified funding for (but taking no equity participation in) the recently announced Merlin initiative, the new global digital rights licensing platform established by the independent music labels to represent the world’s independent music sector.”
Update: Paid Content has a good comment on this, here
"2007 is the year that all of the recording
companies will drop the pretext and just sell the music in an open
format," says Gerd Leonhard, a music industry futurist at
www.musicfuturist.com...The music industry has never been an equal marketplace, says industry futurist Leonhard. It's been three or four companies with complete control over the production and artists. They reap "obscene" profits for doing little more than finding the artists.
Now, it's anyone's game. One solution Leonhard suggests is creating digital music subscriptions. Let people download what they want, when they want it, for one flat monthly fee, much like cable television or satellite radio. All of it, though, points further and further away from music retailers. "The problem is," Leonhard says, "they've been on the receiving end of what the recording industry is doing wrong."
Mobile phones are proving the savior of the struggling music industry and could be the vital springboard needed to propel the business finally into digital sales, industry experts have said.
GL: yes, totally agree, but NOT with DRM on those files and those phones. Isn't going to happen. No phone manufacturer or wireless operator in their right mind will go for a mobile music service that is based on DRM'ed files. It's a death wish - see MusicNow, MyCokeMusic, OD2, Virgin Digital. Drop the DRM, offer flexible prices and nundles, and then graduate to a flat rate, and you'll see this business explode!
"In June of 2006 consumer agencies in Denmark, Norway, and Sweden charged that Apple was violating contract and copyright laws in those countries by not enabling customers to purchase, download, and play tracks from iTunes on their non-Apple portable players. A Norwegian official today revealed that French and German consumer groups have joined the Scandinavian countries in their efforts to pressure Apple..."
Here is my take on this: Apple could have cared less about having any DRM on their itunes store - after all, they don't sell DRM, they sell HARDWARE (and then... some music). It's the LABELS who asked for it, and it's the labels that should solve the problem by dropping the stiffling DRM requirements. If they went for an open MP3 format (which they must do, asap, anyway), iTunes would just be one of many online stores and destinations that could sell music, but of course ipods and macs and iphones would still sell just as much as today (in fact, probably even more). In my view, going after Apple for not having an open standard is understandable (and obvious) but it's really the labels that should be forced to open up their licensing policies. DRM is killing the market for digital music; it's a simple as that.
Open formats, flexible pricing, open licensing standards - and we would have another huge growth spurt in digital music. Listen to my podcasts or watch my 2007 predictions.
"The International Federation of the Phonographic Industry, or IFPI, said it would take action against internet companies that carry vast amounts of illegally shared files over their networks. It stressed that it would prefer not to pursue such a strategy and is keen to work in partnership with internet providers.
John Kennedy, the chairman of the IFPI, said he had been frustrated by internet companies that have not acted against customers involved in illegal activity. He warned that litigation against ISPs would be instigated "in weeks rather than months". Barney Wragg, the head of EMI's digital music division, said the industry had been left "with no other option" but to pursue ISPs in the courts.
The IFPI wants ISPs to disconnect users who refuse to stop exchanging music files illegally. Mr Kennedy said such activity is in breach of a customer's contract with the ISP and disconnecting offenders the IFPI had identified would significantly reduce illegal file sharing...."
Let me see if I get this straight: the record labels have STILL not worked out a realistic model that can really monetize the tremendous and surging interest in music. They STILL prefer control and denial over revenues. They STILL bang their heads against the wall try and sell only crippleware and DRM'ed files viax iTunes, Napster, Rhapsody (which, btw, next to no-one is buying: witness all of the windows DRM-based services are slowly shutting down, see AOL Music, Mycokemusic, Virgin Digital...) - and pretty soon, with various ad-supported services that will also fail miserably as long as they sell crippled files - and they STILL don't get that they are killing the market by not offering something that people would actually want to buy. They STILL market music like it's 1982, they STILL want the radio guys to be crippled or go away (see the debate on the new Perform Bill in the US, i.e. on using DRM in radio (!!!) and the broadcast flag discussion, and the mind-bending lawsuits against satellite radio service XM, in the U.S.).
So now they want the ISPs to patrol the web and see if someone downloads something they have not (and never will) sanctioned. In other words, enforce their failed and antiquated business models via a web police squad that they won't even pay for. Now, if that's not Orwellian, I don't know what is! The absurdity is beyond description.
Here is my message to John Kennedy (I don't think he reads blogs but ... maybe someone can print and fax it to him :). It's time you understodd that the world has moved on since Total Control of music was doable, and a bunch of guys determined what the artists, the distributors, the retailers, the radio stations, and ultimately the consumers, could do and not do. It's now the USER aka the consumer that has the power, and they aren't buying the crippled stuff you want to sell them. Period. Not because they are evil and not willing to pay, or looking to steal, but because the VALUE isn't there. Because you are trying to sell them less value, less options and less usage rights, for more money! The ISPs need to get a blanket license so that anyone can use the music, under a flat fee and revenue sharing agreement (such as Playlouder in the UK is suggesting), not be penalized for their very existence. And the record labels would make a LOT more money, too!
It is utterly disturbing that the industry and people like John Kennedy are STILL pushing this disconnected, ill-informed and bizarre agenda, while at the same time it is perfectly clear that digital music is NOT going well, that sales are slowing down, that the consumers aren't convinced that the current offerings, and that $2 Billion in sales in 2006 could have been $20 Billion if the industry gave the users what they really want: open and fully compatible formats, flexible pricing and bundles, easy and instant access, and fully interactive and sharing-enabled online and mobile platforms.
What has to happen before you guys get it? EMI sold to private investors? Myspace signing major artists for direct deals? Google offering direct distribution to millions of bands? 50% of the staff fired at major labels around the world? I have a hunch of where you will be going but... where have you BEEN the past 12 months??? Watch this video of my predictions for 2007 ;). Or listen to my podcasts?
The LAT always has good coverage on tech and music, and the headline of this feature is a bit confusing. While digital music is growing, indeed (how could it NOT?), it is by no means making up for anything - and it shouldn't, either. It's a whole new cup of tea! Given that the industry is asking the USER / Buyer / consumer / music fan to spend more $ on something with less value (i.e. with DRM, with severe device restrictions, with fair use castrations ;) it is amazing that any music is sold AT ALL. imho. Digital music a success? A victory over filesharing? War is peace and peace is war. One can only imagine how much music could be sold if it was in an open format and competitively priced. Drop the BS and and get with the program, and see this industry EXPLODE (rather than implode which is what we have now!).
But some analysts said that the 65% growth in downloads paled in comparison with the 150% rise in digital purchases a year earlier, a sign that the industry could be in for tougher times.
..."
"The major labels are further exploiting such fast-growing products as mobile ring tones to diversify music sales. Digital recorded music accounted for 16.3% of Warner Music Group's total domestic recorded music revenue in the fiscal year that ended Sept. 30, 2006, up from 7% the previous year. "We like the fact we have a business that is growing, albeit incrementally," said John Esposito, chief executive of WEA Corp., Warner Music Group's U.S. sales and marketing company..."
Funny - it looks to me like you value CONTROL more than you value growth - as long as you can control the artists, the distributors, and the USERS / buyers, everything is fine, isn't it. Or maybe not?
