Archive for: digital music
Head over to the Midem blog and watch an interview in which Ed O’Brien discusses how they made a success of releasing ‘In Rainbows’ independently of any record labels, and what that success meant for their band.As one of the most important ‘game changing’ releases of recent years it’s interesting to hear O’Brien tell the big labels to sit up and take notice. Of course Radiohead had the benefits of already having been made famous working with record labels (XL, TBD, Parlophone, Capitol), and the novelty and notoriety of being one of the first big acts to give their music away, but there are lessons to be learnt.
On Tuesday, M.I.A. tweeted a link to a music video without explanation, and the press (don’t make me say Blogosphere) jumped on it, full of speculation about what it could possibly be. Oddly, it turned out to be a new song called “Space Odyssey” that’ll be on her forthcoming album.
No big surprises, really. Every album release seems to be preceded by more or less official leaks these days, so why was thins one paid so much attention? It came on the back of some controversial statements that MIA made against the New York Times’ recommendation of holidays in Sri Lanka (where she’s concerned about civil violence), and it had both the seal of official approval and the element of mystery to it, to encourage speculation and conversation.
Replicating this buildup of momentum is possible even on a smaller scale. Any glimmer of notoriety for your band that can be tied into a current issue and subverted to your own purposes. Try and tie these things in to the release of your own new bit of hot content and you should see interest snowballing; people love following links, and the more meat you can put around an issue, the deeper people will explore it.
Not satisfied with signing up it’s music and video content to the most successful US video streaming website of 2009, Vevo, WMG has done a deal with internet TV streaming site Hulu for access to the same content.
The agreement brings an artist-focused online video experience that features music videos, artist interviews, live concerts and rare behind the scenes footage from WMG’s world-renowned artists and labels including Atlantic Records, Rhino Records and Warner Bros. Records.
This is a pretty agressive drive towards monetising WMG’s content online, and a sign the big 4 are beginning to adapt and respond to the loss of physical sales and the rise of file sharing, instead of just digging their heels in and waiting for the courts to prosecute a solution for them.
Internet radio has had a couple of boosts recently, first the deals that Pandora struck with Ford and Pioneer to get their service into thousands of car dashboards, and now web radio/streaming service Jelli getting funding from a group of tech savvy investors including Josh Kopelman of First Round Capital, Zappos.com COO Alfred Lin and Apollo Group founder Peter Sperling. Jelli streams music online through its own ‘stations’ 24/7, and already has content deals in place with a large number of FM and AM stations, mostly through a partnership with Triton Digital, whose air-transmitted station affiliations leading into 2010 now exceed 5,000 – up 50 percent from a year ago. Jelli’s system allows users to upvote or downvote songs on a particular channel, the most popular of which get onto the playlist and go out in real time. This has been proven to work on the web, and now Jelli are taking over slots on air stations, such as San Francisco’s 105.3 fm. Users do have to be logged in to vote on tracks though, so if you’re in the car listening you need to have someone to put your votes in using your iPhone…
Live Nation’s shareholder’s have voted to approve the merger between their company and Ticketmaster. You can read the SEC filing here – the news was at first positively recieved, but now indications are that the stock market is going slightly cold on the two closely linked companies, with a 2% fall yesterday.
The Performing Rights Society for Music is replacing current head honcho Jeremy Fabinyi on 25 January with Robert Ashcroft, a former Disney and Sony exec. Ashcroft headed Sony’s network services division in Europe, and its mobile products arm in the US.
The PRS is hoping that years of music and tech experience will help them meet the challenges of the digital age, we’ll have to wait and see whether old media sensibilities are adaptable enough to keep the rights agency in the rapidly changing game.
Record label Kudos has written a long and detailed post that goes over a lot of the things that we usually discuss on this blog – they make a few good points, and it’s nice to hear someone else thinking along the same lines as us. In brief they state that the music industry has got to work on changing the 95% of music downloads that don’t make them any money (i.e. Pirate downloads) to being legal, money generating downloads, and that the way to do that is to create software that delivers the service the consumer wants, and at the same time delivers revenue to the rights owners.
“Historically, technology was developed by The Producer, and served The Producer.
Today it is often developed by The Consumer to serve only The Consumer.”
An important trial regarding the illegal online distribution of music in the States has reached the next stage of the argument – there’s no longer much discussion about the fact that duplicating music over the net without rights holders permissions is illegal. Inevitable, perhaps, but certainly a clear violation of intellectual property law. What’s now being put into question is the appropriateness of the massive damages that are being sought by the record labels from individual file sharers.
In 2007, Jammie Thomas was sentenced to pay damages of $222,000 for 24 counts of infringement ($9,250 per infringement). Later, a retrial was granted, and in June 2009 a jury returned a similar decision, but with increased damages of $1.92 million ($80,000 per infringement). In July last year, Boston Student Joel Tenenbaum was also found to be willfully infringing, and a jury awarded damages of $675,000 ($22,500 per infringement). These vast sums were awarded by the American courts as ‘punitive’ damages – fines intended to deter others from repeating the criminal behaviour rather than as a straight like-for-like compensation for the actual, direct cost of the criminal action.
The amount of lost revenue from a stolen CD is pretty easy to calculate; the shop you take it from loses out on the sticker price, but if that CD is then made available to share over the net, who is responsible for the thousands of copies that may arise on people’s computers? Each individual that makes a copy can (at a stretch) be said to have stolen a product of the same value as the CD, but is the uploader responsible for the actions of the other offenders? Granted, if no-one uploaded the music, you’d be forced to go and buy it if you wanted to listen (assuming it’s not on Spotify or Last.FM of course), but the uploader of a track doesn’t actually make those thousands of copies; they just make it possible for them to be made. A slim distinction perhaps, but an important one; it could be (and is being) argued that ISP’s and torrent tracking/sharing websites are equally complicit in these piratical crimes. If this is the case, is it right to bring down the hammer of justice so hard on the single individuals that are caught and prosecuted? A lottery of punishment that victimises the few for the crimes of the many doesn’t seem a just way of combatting piracy…
Part of the motion that Tenenbaum’s lawyer’s have filed with the District Court of Massachussets, quotes a precedent from the US Supreme Court; “few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process.” Compensatory damages being the direct making-up-for-loss costs, and punitive damages the deterrent. To fall in line with that Supreme Court ruling, the direct damage Tenenbaum caused would have to be the equivalent of stealing $75,000 worth of music (at a 9x multiplier), and Jammie Thomas would have had to have left the record shop with $213,000 worth of CD’s in his backpack! Whatever the result of the retrial request, it seems somewhat academic in the specific case, as I can’t imagine a student can lay his hands on $675,000 to pay the damages.
As you may have read here on our blog Terra Firma are suing their advisors/lenders Citibank for perpetrating a fraud against them – essentially Terra are saying that Citibank mislead them about the amount of competition there was for the record label’s purchase, the benefit to Citibank being more than £92 million in fees and lending them £2.5 billion that they claim they didn’t need to borrow. The plot thickens when you realise that EMI was in a huge amount of debt to Citibank, among others and that it was in danger of defaulting on the debt if it wasn’t rescued by a purchaser. The specific accusation is that a Mr. David Wormsley, a Citi employee who was advising Terra Firma told a rather significant pork-pie in an attempt to prevent Terra from dropping out of the bidding for EMI, precipitating a ‘busted auction’ – something that would have massively decreased EMI’s stock price, and thus the value of Citi’s asset, as well as EMI’s ability to repay any value that was still outstanding in their loan from Citi.
These accusations may be coming from a party that is desperately trying to shore up a huge investment in a failing company (look at EMI’s previous 10-K’s for an idea of their year on year losses), but they are pretty frightening for the big 4 labels – file sharing may finally be on the wane, with big torrent trackers like Mininova and The Pirate Bay being forced to go legit, but costs at labels are still outstripping income, and copyrights on some of their biggest selling artists are going to begin running out over the decades to come: the first Beatles song will come out of copyright in the EU in 2012 (unless there’s a change in the law).
Apple, eMusic and some other download stores are breaking ground in making online music profitable, but there are indications that even iTunes market share is dropping – innovation is happening with streaming services like Spotify entering the fray with big-label backing, but the true form of digital music in the decades to come is as yet undecided. I wonder if EMI will be there to see the changes happen.
Imeem is still waiting for a signature on the deal selling the all-but-defunct company to Myspace – and the writing is far from on the wall as to how successful the integration of the two company’s software and customer bases could possibly be, especially when you take into account MOG’s recent and Spotify’s impending US launches of their streaming music services. Will anyone go to a band’s myspace page to listen to a few tracks if they can just hear the whole catalogue for free on Spotify? Perhaps not, but Myspace must still consider they’ve got a great deal, considering that Imeem spent at least $25 million on building their brand, technology and user base, and the sale price is rumoured to be as low as $1 million. According to Digital Music News, it was a legal dispute with our digital distribution competitor the Orchard that finally pushed the ailing social network over the edge and forced the negotiation of a sale:
“We held an emergency board meeting to shut everything down,” one executive told Digital Music News. “The [Orchard] lawsuit was definitely the final nail.”
Subsequently, other executives close to the situation confirmed the decision. “They just ran out of cash, it was just a cash thing,” one executive shared, also anonymously. “The potential liabilities – $150,000 per stream – could get astronomical. [Imeem] thought they had a case, but they couldn’t afford to fight it.”
I think it’s a shame that Imeem has been forced to give up their autonomy, but the fact of their acquisition by Myspace shows who got the model the right way round; Imeem couldn’t stay afloat because they couldn’t afford to pay for the licensing costs of the music they were using from the advertising they sold, and because they were not efficient enough in properly securing the rights to use it, hence the court case threatened by the Orchard, whereas Myspace gets everyone to sign up their music for free – read their sign-up agreement again – and their proposition snowballed, a little free music, and a few million users kept growing until they had every major act and every teenage girl in America signed up. The combination of huge traffic and no licensing costs meant that they were able to pocket all of their ad revenue, but they are not as attractive a proposition to the artists and record labels as there is no revenue coming back to them in the same way that Spotify sends money upstream per play, unless, like the major labels, you’ve got enough clout to demand a revenue sharing deal. If MOG or Spotify can find a way to include the band info and minor social element that Myspace provided, or perhaps team up with Facebook to provide music streaming and playlist sharing then Myspace will be blown out of the water – regardless of which little social startups they squash into their business in the meantime.
Head over to the Midem blog and watch an interview in which Ed O’Brien discusses how they made a success of releasing ‘In Rainbows’ independently of any record labels, and what that success meant for their band.As one of the most important ‘game changing’ releases of recent years it’s interesting to hear O’Brien tell the big labels to sit up and take notice. Of course Radiohead had the benefits of already having been made famous working with record labels (XL, TBD, Parlophone, Capitol), and the novelty and notoriety of being one of the first big acts to give their music away, but there are lessons to be learnt.
