Not to be outdone by streaming competitors Spotify, who are rumoured to have gained a new funding partner (and consultant) in the form of Napster/Facebook founder Sean Parker, MOG have announced second round funding of $10,000,000 dollars, which they plan to use to take the platform into Europe, as well as funding Stateside expansion. As things stand, the two competitors are entrenching in their home territories, but the date of their confrontation on one side of the Atlantic must be drawing closer, even though no dates have been mentioned by either team. MOG’s monthly subscription is less than half the price of Spotify’s, but Spotify has major label backing, plus a vocal and passionate fanbase. Pandora are keeping their heads down, and quietly getting on with dominating the internet-radio and car dashboard scene, but the clash between these two will likely define the major player in on-demand streaming. The future of this type of music consumption is far from gilt-edged, however, as Spotify are still struggling to up their paid (£9.99 a month) subscription rates to supplement their ad-funded service, while MOG are operating at about a 17% conversion rate from their free trial to a $5 a month subscription. Whether either of these approaches will be successful enough to fund them in the long term remains to be seen, but given the high level of uptake, there is certainly a market for on-demand. Who gets to service it is currently being decided.
Luxembourg’s biggest media star, Spotify has admitted a new investor to the fold, at least according to TechCrunch. Sean Parker was one of the founders of both Napster and Facebook, and would be Spotify’s first and only US investor. If the rumour is true, then it would not only help Spotify’s cash situation (always helpful), but also give them the inside track on running a music service in the States, and might give an indication that the launch of Spotify in the US is approaching.
In a flurry of activity over the week, Sellaband was attacked by pundits for failing to help Public Enemy fund a new album, put its site offline for ‘maintenance’, declared bankruptcy, was bought out, bailed out and replaced its CEO with the German entrepreneur heading up the purchase of the business.
Johan Vosmeijer (left) stepped down as Chief Exec yesterday, ceding the big chair to Michael Bogatzi (right), with a post on their blog saying that he’d been right all along, despite the difficulties his site has had:
There is no doubt in my mind that ‘crowdfunding’, as they call it, is a blessing for artists in the 21st century and that this concept has the potential to cure what’s been ailing the traditional music industry for so long. SellaBand is and will always be the first of its kind. I am proud to have been part of this very exciting journey from day one and because SellaBand will always be dear to me, I will stay active as a ‘Believer’ on the website and have offered to be on stand-by in case my assistance is needed. I am also very excited to announce that the man who has been standing side by side with me in those past 4 years, Dagmar Heijmans, will continue to be part of the new team and will work closely together with Michael Bogatzki, the new CEO of SellaBand GmbH.
All in all, today is a day of joy. Some other time perhaps, I will take a moment to look back and share my story with the outside world. Right now I only want to look ahead and hope you will all join me in giving the new team a warm welcome and find out what bright future still lies ahead for SellaBand.
Avoiding bankruptcy must be a pretty big relief… Bogatzki was similarly positive but more terse.
We will continue to advance this fantastic platform while acting in the spirit of the SellaBand community and its founders. We are thankful for the exceptional work of Johan Vosmeijer and his team.
Starting from today we proceed with this unique concept and maximize the potential of SellaBand with the trust and faith of all Artists and Believers. In personal I am proud to be part of this idea and I am aware of my responsibility for done work and successes. I will take care about the community and spirit of sellaband.com with your help and confidence.
The absolute best/worst of stadium and dad rock for you this week. It’s probably best to listen to this over your headphones, unless your co-workers have a good sense of humour, or are fans of falsetto, hair dye, facepaint and massive, massive guitars. The worst thing about it is that it’s brilliant:
Boston: More Than A Feeling
UFO: We Belong To The Night
Rainbow: Since You Been Gone
Journey: Don’t Stop Believin’
Asia: In The Heat Of The Moment
Guns ‘N’ Roses: Sweet Child O’ Mine
Bon Jovi: Livin’ On A Prayer
Toto: Hold The Line
Lynyrd Skynyrd: Sweet Home Alabama
Kansas: Carry On Wayward Son
UFO: Doctor Doctor
Alice Cooper: Poison
Scorpions, Berlin Philharmonic: Hurricane 2000
Ad-supported music and digital content service Guvera has set the date for going live in the States as 30th March. The service, named for the bloody-handed revolutionary icon Ernesto ‘Che’ Guevara [wiki here, tl;dr we should all strive for personal fulfilment and be nice communists, but sometimes it’s ok to shoot people in the head if they betray you] – aims to instigate a ‘revolution’ in the media industry by getting advertisers to pay for content delivered to consumers, who have chosen the advertiser whose branding they find least offensive/interruptive. This may not be quite the paradigm shift that they seem to think, but their beta service has been up and running for a couple of months in Australia now, and has been successful enough for them to roll out the full scale launch. They have deals in place with Universal Music Group, EMI Music and IODA offering consumers ‘free but paid for’ legal downloads from their full music libraries, but concerns abound as to whether they’ll be able to pay for them in the long term and on the grand scale that they hope for. Another streaming service in the States means that Spotify, bogged down making their platform profitable in Europe, will find the marketplace that bit more crowded if and when they finally get their stall laid out in the US, but they will have had the headstart in refining the user experience and gathering advertisers to their service. There is a future for online ad-supported music streaming, the appetite is strongly apparent, but it will be a hotly contested race to become the dominant provider, and Guvera have yet to prove themselves against the competition.
Smoke without fire, storms in teacups and cries of “Wolf” abound; despite all the discussion of and online about the potential sale of Abbey Road studios to try and help ease EMI’s cash crisis (yes, we squawked [should that be tweeted?] with the rest of the giddy hens), which included such notables as Sir Paul McCartney and the National Trust, there is no truth to the rumour that they are looking to sell the iconic recording venue – in fact they rejected an offer to buy it just last year…
In an interview with the LA Times, the guitar burning rock idol’s stepsister Janie Hendrix said that not only will there be a new album released this year, named “Valleys of Neptune” (based on recordings made in the early months of 1969), but that much more of his back catalogue has been licensed to feature in the next version of the game Rock Band. For some this is enough to suggest a full out branding exercise after the manner in which the Beatles were splashed all over the previous edition.
The game’s creators, Harmonix, were more reserved in their statement to Joystiq;
“While we have not made any official announcements regarding Jimi Hendrix and Rock Band, we are excited to say that we are in discussions to bring more of his music to our platform,”
Speaking at the World Mobile Confgress in Barcelona, Daniel Ek said that the average Spotify user has 15,000 tracks lined up across all their playlists – a huge number, showing a really deep engagement with the platform from its users. OK, adding tracks to playlists doesn’t cost anything, but it takes time and effort to build them… Spotify hasn’t had any problems gaining users, or with the enjoyment those users get out of the service, but they’re still struggling to get more of their users signed up to the premum subscription service. As it stands, their users aren’t making them enough money per head to make a fully open launch an option, and Spotify has had to limit their intake of new customers to stop their streaming and royalty costs down. Advertising revenues are rising though, and as revenues and subscription customers increase so will the long term viability of the platform. They must be champing at the bit to launch in the US, as their competitor MOG is making good inroads into the American market.
Seth Godin is a marketing guru and a regular feature on the panels at music industry exhibitions. In this in-depth interview he chats to Music Marketing’s David Hooper about the seismic changes that are happening in the music industry, and how you as a musician can best place yourself in the digital market.
Marketing statisticians Neilsen have released the results of a new survey concerning the consumption of online media. Asking 27,000 consumers across 52 countries revealed what we already knew; that most people don’t pay for their content online – Nearly eight out of every ten (79%) would no longer use a web site that charges them, presuming they can find the same information at no cost. Respondents were far more united (62%) in their conviction that once they purchase content, it should be theirs to copy or share with whomever they want. Less than 5% of people pay for blogs or radio online, 10% pay for magazine or newspaper content, and less than a third would consider doing so. Music and games do better, with around 15% of people confessing to have bought content online, and slightly more than half saying that they would do so.
Of course, this leaves a whole slew of other options, like buying physical products, or using ad-supported services, but it’s still a fearful prospect for the music industry, as well as othersand it doesn’t take into account the fact that people might not classify themselves as music buyers in any case, – if only half your potential market would consider buying online, and your physical sales are dropping then it’s easy to see why you might start thinking about selling off the family jewels.