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Mobile Music 2.0

The numbers are starting to come in and it looks like the iPhone, iPod Touch and other mobile gadgets are having a significant economic impact on the music industry - beyond their ability to simply store and playback your MP3 files. The devices also allow music fans to listen to streaming music in realtime over WiFi and 3G networks. These are still early days, but uptake numbers are looking significant enough to drive more innovation and funding towards these kinds of always-on, feels like free music experiences.

Earlier this month, CBS Radio Interactive’s President David Goodman revealed to Billboard that ”I’ll have to get the figures for Last.fm, but at CBS Radio, about 7% of our audience is now streamed through an iPhone. We’ve had more than 4 million people downloading the app”. That’s a huge amount of market awareness and stickiness.

www.billboard.biz/bbbiz/content_display/industry/e3i8c26f2cd61d269b86a96cc04c05b6648

And today we’re reading that perennial underdog Pandora will soon start to see some black. Founder Tim Westergren told Bloomberg that he anticipates Pandora pulling in $40m USD this year - and levitate into profitability for the first time next year. The Panodora iPhone app is currently being downloaded 20,000 times per day right now. That’s a hella lot of new customers. 

www.wired.com/epicenter/2009/05/pandora-predicts-first-ever-profit-next-year/

The other thing to learn from this is to keep an open mind in regards to your business models and channel strategy. There are three kinds of markets out there: the market you think you’re in, the market you want, and the market you’re actually in.

 

More Tim here:
www.billboard.biz/bbbiz/content_display/industry/e3i9ba0bc99fcd0242ca2490e04eb04af28

Feeling optimistic about Music. ORLY ?

A few things came together over the past few weeks that have gotten me feeling optimistic about the recorded music business again. We’re starting to see how the next phase of revenue models are shaping up. Some are starting to gain traction and become mature platforms that music fans could start responding to in a meaningful way.

Signs of Life:

Facebook: Directly monetizing Facebook’s attention stream is still being worked on. The potential is obvious and astronomical. But the takeaway right now is about their adoption curve. When Facebook announced their f8 developer’s platform in May 2007, they claimed 23 million users per month and a signup rate of 100k per day. Today, according to Marc Andreesen, Facebook now has 175 million active users (half of which log on every day) and have well exceeded one million signups per week. It was recently reported that Facebook has just surpassed email as a total percentage of internet traffic. It now brings more users to such notable sites as PerezHilton.com, Dlisted, CafeMom, Evite, Tagged.com, and Twitter than Google does. 

America (and others) have just learned how to use a surprisingly complex technology platform within the span of a few months. This rapid adaptability will come in handy as we’re all forced to become more technological in order to be entertained.

LaLa: Totally decent user experience. Impressive inventory. Searchability is good, pricing model is aggressive and persuasive. Not sure how they’re going to scale up their own revenue over time, but the labels are happy. The one thing they did really right was not try to be iMeem. LaLa feels more like a useful device than a social destination. The iTunes experience is long in the tooth by now - people want more. Apple is vulnerable here.

Last.fm: The engineering team at Last.fm are very sharp and are solving really hard problems right now. Their track record indicates they’re open to sharing the fruits of their labor, so it’s safe to assume their solutions will benefit Music in general. The power of scrobbling can’t be denied. Perhaps not the mega hit that Facebook or even iLike are, but Last.fm provide something much more valuable: referential durability. They have built a potentially pivotal piece of the information backbone that will support the recovery of recorded music. Among the harder problems they’re solving: massively scalable data stores (via hadoop clustering) and more recently misspelled track and artist name reductions. One would imagine Last.fm providing a name and title lookup web service eventually. That would be a game changer. There aren’t many others out there able to both generate a clean taxonomy and provide a platform capable of keeping up with demand. Better data - better for Music.

MySpace Music: Newly relaunched, so to speak. Courtney Holt is no dummy. It’s easy to bash MySpace v1. But that was years ago now - and with some partnerish help from the Google, they’ve radically re-engineered their platform and have made solid improvements with their UE. If tweaked just the right way, MySpace could easily become another major music hang-out destination (along with iMeem and LaLa). No reason they can’t slowly take over most of the market share if they cultivate real music lovers and keep their tech under control. Don’t count these guys out. They are “re-emerging”  …with well over 100 million regular users. Good overview of the new MySpace Music at TechCrunch.

iPod/Blackberry/Android/Nokia: We have a healthy platform ecology here with big money being handed out to those who can best pull the mobile user experience out of the 1950’s. Apple hit this square on. The old guard have reacted surprisingly quickly and with real UE improvements. Android is the next disrupter of course. It will become the real value calibrator for the space. The more customizable and open it remains, the more the rest of the field will have to accommodate to stay competitive. The next big milestone for the non-Apple platforms will be to replicate or exceed the iPod/iTunes experience. Now that music is pretty much DRM free, this becomes a lot easier. Expect to see a lot more people throwing high quality media players into all sorts of devices. More players, more eyeballs, more monetization opportunities.

Last.fm Hack Day 2008

Earlier this month Last.fm held their first annual Hack Day where the pubic was invited to come show off their programing skillz in a room with other geeks and the Last.fm API. Winners are now listed in a shout out on Last.fm’s Blog.

My fave is the Perceptron’s Where To Live mashup that tells you where the best place to live is based on the current tour routing of your favorite artists.

 

Last.fm Hackday 2008 recap

Hypebot’s Music 2.0 By The Numbers

Sometimes there’s nothing like a nice compact list of lists. “Best-of” lists of lists are even better. Hypebot’s Bruce Houghton has collected a very nice survey of Music 2.0 tools, best practices, tools and deals that have appeared on his blog in 2008.

Highlights:

• 5 Lies Indie Musicians Tell Themselves
• Top 10 Issues Facing Music 2.0 - This was written back in May and almost nothing has changed.
• A list of 5 Unlikely Music Industry Heroes
• 100 Free & Affordable High A Low Tech Music Promotion Tips - It’s ready for an update, but this post remains one of Hypebot’s all time most popular.
• Top 10 Indie Music Marketing Tools.  There are too many new sites and services. These are where you need to spend most of your time.
• 5 Free Music Business eBooks. Not bad at a time when cash is tight.
• Top 10 Reasons Radio Stations Are Bleeding Money. A new post from our resident music philosopher Kyle Bylin.
• 5 Selfish Reasons Every Musician Should Rejoice That Barack Obama Is Our Next President
• The 10 Biggest Deals In Mobile & Digital Music and these are just the beginning…

Record Labels - Brand or Die

As an employee of a major label, I’ve had the label branding argument a few times.

My position is: Label branding doesn’t matter to the consumer - until it does. Meaning - if you conduct yourself right, market well, understand your audiences and messaging, attend to the sonic and visual quality of your product, consumers will start to pay attention to your mark. It matters. People do need filters.

Attention label folk: If you can’t market yourselves, how on earth are you able to effectively market your artists? A record label is a promise. It defines an aesthetic standard - a set of assumptions. If you keep your promises your brand builds equity. If you don’t, no one cares about what you have to say - everyone loses (label, artist and consumer).

Thoughts on Total Music

Eh… this feels like a half-baked solution to me.

Why rely so heavily on the hardware manufacturers? Isn’t it better to just fully license on behalf of the consumer through a PRO-like entity that takes payments from the network operators? Seems to me by involving hardware companies we’re inserting unnecessary friction into the process of consuming our licenses/products.

Why not let people listen in the formats and contexts they prefer - regardless of device? Do we really still think of localized on-demand libraries as stolen goods? We need to start thinking of them as unlicensed consumption. Involving the hardware layer for blanket licenses doesn’t address this legacy issue. Will Doug’s new gadget prevent me from playing songs I’ve already downloaded by P2P?

What’s my incentive for acquiring one of these new gadgets anyway, even if paid for by a hardware manufacturer? I already have an iPod - an iPhone in fact. The guy from Apple told me they expect to sell two million by the end of 2008. He was quickly proven wrong - turns out it’s probably going to be closer to four million - perhaps even more. Introducing a new gated piece of hardware is asking for failure. The tide is clearly moving away from such an approach.

As Gerd Leonhard says in his thoughtful and provocative new book, no one is going to make money inserting friction in the music consumption process. While we’re at it, here’s a full on plug for Gerd’s book:

The End of Conrol by Gerd Leonhard.

Listen to the podcast here.

Internet Radio Royalty Rate - the FAQ

The Wunderkinden over at Digital Music News have posted an excellent (if pedantic) FAQ about the proposed royalty rate changes for streaming Internet radio. It gives you a pretty good idea how very complex this whole issue is. This debate is also a good trial run on how a consumer compulsory licensing scheme might play out in the near future.

Read the FAQ here.

For the record, I am not per se against raising rates across the board - including Public Broadcasting. Music has real value and society ought to pay money to get that value if they choose to consume music. Raising royalty costs will ultimately shift the burden to advertisers, where it belongs. We are about to see an explosion in streaming advertising (so-call “pre and post roll” ad insertion). YouTube will lead the charge on this as they complete their court settlements with major content owners. Once they turn on the advert switch en mass, this sort of ad buy will become as ubiquitous as banner ads and TV commercials. As a lover of music, I would just assume get more money flowing towards licenses now rather than later.

The Public Broadcasting issue is indeed troubling. It does seem like they should catch some sort of break here. In my opinion this break should not come at charging them less than others, but by providing private and public subsidies to counteract the hike. Truth is this sort of Internet streaming model will soon become the primary means by which the Public Broadcasting audience consumes their content- so they need to reconcile their responsibility to bring fresh ideas to the people while empowering the technology to produce dollars to keep musicians economically viable. Note also that the hike only applies to music played via Public Broadcasting - not original spoken-word based content.

Bob Lefsetz on the EMI / Terra Firma deal

Bob’s note this afternoon was among his best. Reminds me of one of those creepy post-apocalyptic psychedelic sci-fi movies from the early 1970’s… the world he describes is compelling and not as far out as you’d think. His time frame may be a bit off, but not by much I suspect. Regardless, we are just now entering act three of the drama. The denouement is on its way:

http://lefsetz.com/wordpress/index.php/archives/2007/05/21/emiterra-firma/

Note from 2008-05: Having re-read the piece a year later, I can say much of it still seems to hold true. But one thing I can counter from personal experience is the manner in which Terra Firma have approached the problem of reinventing EMI. It’s fashionable right now to bash them as naive incompetents, but from what I’ve seen they really are trying to roll in the right fixes. So far their key hires and promotions have largely been spot on and inspirational to the troops. This re-org is unprecedented and much harder than anyone not involved with it can really appreciate.

I’ll let you know how it all came out a year from now…

Placebo - “Running Up That Hill” video

Wow - take a look at the video for Placebo’s cover of the Kate Bush classic “Running Up That Hill”. It’s made up of user supplied video clips of fans singing along. The contest was run using MotionBox’s mashup platform.

[myspace]vids.myspace.com/index.cfm?fuseaction=vids.individual&videoid=2029442826[/myspace]

Dan le Sac vs Scroobius Pip

“Thou Shalt Always Kill”

title=" target="_blank">youtube.com/watch?v=yoN6XfyQsr4

I know I know, it’s a Dylan rip. But it’s not really. If anything, it’s an homage. The guy’s good.. he’s fresh. Don’t be so jaded.