Archive for: Digital
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,”
Paul Resnikoff of Digital Music News today posted this article on his blog, making the radical suggestion that the majors should seriously consider ditching CD’s as a major sales format, and concentrating on digital, thereby divesting themselves of the whole distribution network necessary to sell them. If they just stopped pressing CD’s all the shops, warehouses, trucks, box packers and smiling counter staff would suddenly become obsolete, bad for the truck drivers, and bad for the record companies in the short term, as they’d lose that income stream – but would such a ruthless move be good for the majors in the long run?
Looking at the storage formats that have waxed and waned over the history of recorded music, the eventual demise of compact discs seems inevitable; from wax cylinders to minidiscs, everything is replaced by a more convenient alternative. Even though this shift from physical to digital is a big one for the human mind to wrap itself around “But where is my actual music? My computer looks just the same as before” This will hold true of the CD just as it did of the horse-drawn carriage; people will stand around scratching their heads for a while and bemoaning the loss of work for farriers and the fall in the price of oats, but eventually we’ll all get used to having our music stored in a cufflink, or beamed into our brains from our mobile phone or whatever else is in store for us, and the CD will become what vinyl is now – a charming reminder of a less convenient, more physical age. Those companies that accept the decline of physical media and look towards maximising the advantages of digital music distribution (minescule distribution costs, instant worldwide availability, no cumbersome physical infrastructure etc. etc.) will be the ones that dominate the new era, and those that keep clinging to the old technology, will lose out in the future, no matter how strongly entrenched the current hardware seems.
Has European music startup Spotify finally worked out the online music business? Rumors surfaced today that the company is raising a new round of financing of $50 million or so, at valuation of $250 million.
The new financing will bring in new “strategic” investors, which include rights holders in other geographic locations, according to our source. And while new investors are balking at the $250 million valuation, strong demand from venture capitalists is supposedly driving this deal to a close.
The company has yet to launch in the U.S., but boasts 2 million UK users, its biggest market. They are also launched in Germany and Sweden. Users can listen to music for free on a downloaded application with advertising, or pay a premium fee to remove the ads. Some labels are supposedly making more money now from Spotify than iTunes in the markets the service is available.
We have previously reported on the U.S launch as well as their upcoming iphone application.
Other sources that are confirming the investment include: techcrunch, venturebeat, paidcontent, arcticstartup and musically.
It has been reported that US sales of recorded music will drop to $5.52 billion in 2013. This downward trajectory will extend a pattern that began in 2000, when physical sales started to decline after rising dramatically during the heyday of the CD.
The anticipation is now over, as music fans everywhere can now pay more for their favorite tracks on the iTunes Store. On Tuesday morning the iTunes store switched over to a variable pricing scheme with price points now at $1.29, 99 cents and 69 cents. This pricing model is aimed at increase the price of the most popular tracks on the iTunes store while at the same time decreasing the tracks that arent so popular.
Unsurprisingly, a number of top-ranked songs are now saddled with $1.29 tags. That includes the top-three most-downloaded songs, specifically “Boom Boom Pow” by Black Eyed Peas, “Poker Face” by Lady Gaga, and “Right Round” by Flo Rida. But a large number of popular tracks are retaining their 99-cent stickers, at least upon initial inspection.
There have been a lot of reports over the weekend about the demise of SpiralFrog. SpiralFrog was an ad supported music streaming and download service that never really took off.
Having raised as much as $12 million in VC and debt funding, the company made a splash in August 2006 (after 2 years in operations) when Universal Music made their entire music catalog available for free download through SpiralFrog, joined by EMI a month after. About a year after, SpiralFrog started handing out private beta invitations (what took them so long?)
Attorneys representing defunct music service SpiralFrog have notified investors not to expect any returns. Whatever money comes from liquidating assets will go to a group that loaned the company an “amount exceeding $34 million.”
Is this going to be the start of more ad supported music download and streaming services moving towards the deadpool? I can see Qtrax is going to now have a lot of trouble is this economic environment and Im sure they will be the next to be closing.
Music Ally has reported that over 445,000 people illegally downloaded the new U2 album. All these downloaded were alleged to happen between the 18th of February till the 3rd of March from BitTorrent sites.
The chart supplied by the company shows the spike in downloads following the album’s leak in February, apparently due to it being accidentally made available for sale on an Australian digital music store ahead of its official release on 2nd March.
The debate is always would these people have purchased the album if it wasn’t leaked on BitTorrent clients? No one can really answer that question, but I’m sure that certain sales would have happened because of this.
Overall this does make me think that the claims of the Pirate Bay in the last couple weeks that “80 percent of all their torrents are legal”, cant be true.
CNET and the Wall Street Journal are both reporting that Universal Music Group and YouTube are in final negotiations to create a new music videos website, with the working title of Vevo.
The site is intended to feature music videos, artist-related content and interviews. The aim of course is to bring in more high profile brands who arent necessarily interested in advertising on YouTube because of its user-generated content.
It has been mentioned by CNET that the three other major labels have all been approached to join the Vevo service. Im sure this would all work in the same way as Myspace Music in which the major labels all have an equity stake. Myspace Music has amazed me that so many independent labels have come on board with the solution, because they should realise that part of their profits are still going to the major labels. However, with Myspace Music most independent labels need to have their music on the site, so why not make some revenues in the process.
Over at MusicAlly they have pointed out that the new U2 album (No Line On The Horizon) is currently on Amazon’s US Mp3 store for only $3.99. However, because we are based in the UK there is nowhere we can get this album for so cheap, until now. Tesco has taken the step forward and is now selling the new U2 album in a week-long deal for ony £3.97.
This shows that the digital music store price wars are about to heat up! However, you will notice that iTunes never seems to get into these price wars.
We’re aware of the fact that we’re a small company compared to some of our competitors, but our cost to bands is also smaller than most of them. All of our major competitors make a charge for either uploading or hosting your tracks, subscription fees, renewal fees, charges for ISRC codes, different charges based on how many outlets you want your music to appear in, the ways they find of hiding new charges are as innovative as they are various.
We don’t charge you anything until you start making money. Uploading is free, hosting is free, picking different stores is free, in fact everything is free until you sell your first track, at which point we’ll take 10% of the revenue that comes back. You get to keep 90% of everything we make by working together. Ours isn’t the lowest percentage rate in the market: CDbaby offer 91% to their clients, but their upfront charges mean that not only do you have to get your credit card out of your wallet and pay them before you can hope to see any return from selling your music, but you’re also worse off with them than us until you sell more than ten thousand units. The same is true of Tunecore and Musicadium, and the Orchard never get close, as they take 30% of sales revenue for themselves AND charge you $90 up front.
Here’s a little table showing what you’d pay up front to distribute 2 albums over two years through some of the big distro sites (Musicadium deal in AUD, which I’ve converted at today’s rate of 1.549 to the USD).
And here’s another detailing the income you’d get from various levels of sales, again based on distributing 2 albums over 2 years to all the stores RouteNote deals with, with an average per track income of $0.65, which is what you get back from iTunes.
As you get up to the 5k mark, Tunecore begin to pull ahead, it’s all pretty even around 10,000 and there are undeniable differences in the revenue earned when you get up towards to 30k sales mark, but we’re cheaper all the way up there, and the money will only ever flow one way – to you – if you deal with us.
So why are we better than our competitors? For artists starting out on their own, who want to be in control of their own destinies until they can prove the worth of their music, who don’t want to spend up-front money, and who aren’t realistically looking for sales of thirty thousand records in the first year or two, we are cheaper, quicker and much more interested in the success of our artists, because we’re smaller and our own success is that much more closely linked to that of our musical partners (read some of our testimonials!).
We had a response from Musicadium about this post – querying the way we’d worked out the fees mentioned. Here’s how it works out, based on the figures here in their agreement:
2 x upload fee to more than 3 stores = 2 x $99 = $198
2 x barcode (UPC) generation = 2 x $39 = $78
2 x annual renewal fee = 2 x $20 = $40
198 + 78 + 40 = 316
$316AUD / 1.549 = $204.00USD
Although the exchange rate has probably changed by now…
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