Don't Dismiss Musicians Who Forge Their Own Path

from the subjectivity dept

We recently wrote about Tom Silverman's interview where, in the course of "predicting" the future of the music business, he took some potshots at services like TuneCore for being just for "hobbyists." In that article, he basically said that TuneCore users were just "clogging" the system:

80 percent of all records released are just noise -- hobbyists. Some companies like TuneCore are betting on the long tail because they get the same $10 whether you sell one copy or 10,000. Who uses Photobucket and Flickr? Not professional photographers -- those are hobbyists, and those are the people who are using TuneCore and iTunes to clutter the music environment with crap, so that the artists who really are pretty good have more trouble breaking through than they ever did before.

As I noted in my original post on the interview, I thought Silverman was making a big mistake in dismissing those "hobbyists," since a bunch of them seemed to be making a decent living -- and the numbers were growing. I also found the "crap" comment to be pretty obnoxious. We see that type of comment here all too often. We'll point to some unique content creator who is doing something impressive, and the response (often from angry industry insiders) is that "yeah, but the content is crap." It's a funny sort of reaction. It's as if these people are so afraid that others with better business models will drive them out of business that they need to pre-emptively mock the quality -- even if the content seems to be exactly what a certain market is looking for. There are lots of content creators that we talk about whose content I don't personally care for. But my personal opinion on the quality of the content is meaningless. It's a question of personal tastes, and if there's an audience for the content, then, clearly something's working right.

I wasn't the only one who felt that the "cluttering with crap" comment was out of line. TuneCore's Jeff Price (who has been having quite a back-and-forth with Silverman lately) issued quite the sarcastic apology, while mocking the idea that only Silverman gets to decide what is quality music:

We're sorry that the fact that people are buying music from TuneCore Artists is stopping people from buying music that Tommy likes. If Tommy could only control what music you get exposed to you would be more inclined to buy his music. It's actually a brilliant strategy: limit choice, force the releases you want to sell down people's throats, control what music is exposed by the media outlets (like radio and MTV) and then take all the money from the sales that come in. Oh wait, my mistake, that's the way it was in the old music industry, and 98% of what the majors labels released failed. I guess limiting choice does not make music sell.

Price also points out that Silverman's claim that this is "clogging" the market is ridiculous. It's not like people can't find what they want. If that's a problem, it's a problem of filters, not a problem of too much music. I tend to listen to some fairly obscure music in some specific genres, and sure there are acts in those areas that I don't think are very good, but it's pretty easy to quickly figure out who is good and who is not and move on. Claiming that "bad" artists somehow hurt good artists is ridiculous. You hear it all the time in various industries, but it's the same silly story all over again. More content creators don't take anything away from good content creators. Good content creators can and do still thrive.

Filed Under: business models, labels, musicians
Companies: tunecore

Record Labels Put Out Misleading Study Trying To Get ISPs To Setup Broken Music Streaming Services

from the neutrality? dept

The record labels have been trying out all sorts of schemes for a while now to try to get ISPs over to its side in propping up their old business models, and the latest is pretty laughable. BPI at the behest of Universal Music, commissioned a study which suggests that ISPs can make a lot of money by offering music services to their users. No doubt. But that leaves out some rather pertinent details. For example: many ISPs have very much wanted to offer such music services, but have been blocked by the likes of (uh oh...) Universal Music and BPI. Funny how that works.

The problem, of course, is that the ISPs want to offer music services that people would actually use, and the record labels want to handicap the services to the point at which they're completely lame. So there's a bit of a stalemate there.

But the bigger issue is (reading between the lines here) what the record labels are really saying to ISPs here is: break net neutrality. That's because they're not talking about just any music service. After all, there are lots of music services out there that people can sign up for no matter who their ISP is. But what the labels seems to be suggesting here is that ISPs specify one special music service that locks in customers. That's why the report highlights that a music service can "reduce churn." Of course, the only way it does that is if it's locked to that single ISP -- and if your music is limited to you only as long as you're with that ISP. In other words: locking it down so that it's lame.

As if to make the point even stronger, though, BPI blatantly tells ISPs to break neutrality:

"It's increasingly clear that it isn't smart to be a 'dumb pipe'. This report shows that the revenue potential of digital music services alone makes sound economic sense for ISPs," said BPI Chief Executive, Geoff Taylor.

Being a "dumb pipe" of course is a well-known code-word in the internet world for a neutral network. So, really what the labels seem to be suggesting here is that ISPs break network neutrality for the purpose of serving up a preferred music service that locks you into that ISP. Apparently, no one who put together the study contemplated the fact that this might piss people off and make them look for ISPs that don't lock them in. Thankfully, it appears that some ISPs aren't biting:

"TalkTalk thanks the BPI for its strategic business advice. Though some may question the value of such insight from an industry which has failed to acknowledge the impact of new technology on its own business models and is pressing the Government to criminalise its biggest customers," a spokesperson told TorrentFreak.

Exactly. If the record labels were really serious about helping ISPs offer up music services, they wouldn't be blocking them at every turn. This report is a typical red herring.

Filed Under: isps, labels, lockdown, music, streaming
Companies: bpi, universal music

Spanish Indie Labels To Sue The Gov't For Not Stopping File Sharing

from the that's-one-strategy dept

We've discussed recently how Spain seemed to be one of a very small number of countries whose legal system seemed to be doing a decent job in responding to copyright issues. It has rejected three strikes, said that broadband is a basic right, said that personal file sharing is legal and even fined "anti-piracy" groups for "bad faith actions." Of course, all of those reasonable moves have made Spain something of a target. Industry lobbyists have convinced the government to propose new copyright laws.

But it's not just the big entrenched players. Reader Tor sends over the troubling news that a group of indie labels in Spain are suing the government for "negligence" in failing to stop file sharing. Specifically, they're really upset about the rulings that have found personal, non-commercial file-sharing is legal. They want the right to sue their biggest fans. Apparently, they haven't been paying attention to how that's worked (i.e., it hasn't) elsewhere:

"The measure would not resolve the most relevant problem, which is the actual impossibility of us taking civil action against those final users who appropriate music without paying, and systematically violate intellectual property rights," he adds.

"We think the Administration is responsible for our plight," says Carton. "We demand that the government take effective measures imminently to protect the rights and interests of the record industry, as well as the intellectual property rights of the agents that intervene in the creative musical process within Internet."

This is pretty disappointing. Last year, I actually bought a bunch of CDs (yes, physical CDs) from an indie label in Spain that I only heard about after a friend sent me some MP3s suggesting I might like a couple of the bands on the label. After checking out their websites (and being able to listen to some of the songs) I ended up ordering a bunch of CDs from the label. Just last week, I bought two more albums (downloads, via CDBaby) from the same label. Yet, according to these labels (and I can't tell if the label whose CDs I purchased is part of the lawsuit), they would have been better off suing my friend. Indie labels should be leading the way here: focusing on giving fans real reasons to buy, rather than suing the government for not putting up more protectionist barriers to pretend it can hold back what the technology allows.

Filed Under: civil lawsuits, file sharing, indie labels, labels, spain, suing fans

Wiggling Their Way To Musical Success Without A Label

from the it's-not-needed dept

Again, no one is saying that there's no place for music labels any more -- in fact, we think there's a huge place for them if they can help a band that doesn't want to build a business by itself. However, for bands that are willing to go entirely without a label, it's certainly possible to be a success (and, before someone misinterprets this, no one is saying success is guaranteed either). Tim Lash points us to a CNN interview with The Wiggles, the massively popular pop band for toddlers. The whole interview is interesting, but the most interesting part is the explanation of how the band went it alone. Two of the original members had been on a label-signed band before (The Cockroaches) and knew they didn't want to go through it again -- even though this was in the early 1990s, before the web and before all these alternatives had sprung up:

The model for nearly everything we do is self-financed. We own everything and create it ourselves.

We wanted to keep financial and creative control. The Cockroaches' record label had taken some control over their work, and we wanted to avoid that type situation. With our background, we know what's good for children and what's best for The Wiggles. No one else had done what we were doing.

While it sounds like, early on, the band handled the business on an ad hoc basis, they later got help from some business managers who have helped to guide the band's strategies over the years.

Of course, as with all of these examples, someone will certainly pop up in the comments and complain that there's nothing new or different about this story. And that's true. But that's the point. All of this could have been done years before, but it was much more difficult. What modern technology has done is made it much easier for musicians to control their own destiny, if they decide that's what they want to do.

Filed Under: business models, labels, music industry, wiggles

UK Record Label Boss Resigns From BPI/IFPI Committees Due To Mandelson's Digital Economy Bill

from the speak-with-your-feet dept

BPI and IFPI, lobbying groups that represent record labels, have been major supporters of Peter Mandelson's Digital Economy Bill, that will grant him powers to change copyright law at will, and to kick people off the internet based on accusations (not convictions) of file sharing. However, it appears that at least some record labels are realizing what an incredibly bad idea this is. EFF points us to the news that the boss of indie label Pure Mint Recordings has resigned from both the BPI and IFPI committee's he was a part of, citing his opposition to the Digital Economy Bill, and both organizations support of the bill:

Hall believes the proposed legislation has been rushed in a bid to get it through parliament before the next General Election, that it is in danger of disregarding some sacred legal principles (regarding process, presumption of innocence and burden of proof) and that it won't solve the record industry's piracy problems anyway.

In his resignation letter to the BPI, Hall writes: "I have enjoyed contributing to both [the BPI's] Rights [Committee] and the [IFPI's] ILC, but increasingly feel that my contributions are falling on deaf ears as an agenda has already been reached that I now consider is unmovable. As you know, I do not think the Digital Economy Bill is a sensible or well thought out piece of legislation. In my view it is being rushed through the last months of a parliament of an unpopular government and it is not legislation that I support".

Referencing clause 17 - the one that gives senior ministers the right to change copyright laws on whim - he continued: "I am particularly surprised that the record industry has chosen to endorse s.17 of the DEB, which I consider is wholly undemocratic and contrary to centuries of good practice regarding the forming of our copyright legislation. I also believe it may set a dangerous precedent going forwards (and could come back to haunt the industry)".

Filed Under: copyright, digital economy bill, labels, peter mandelson, three strikes, uk
Companies: bpi, ifpi, pure mint

Yet Another Music Business Model: Label Signs With A Band

from the fantastic dept

One of our regular critics here claims that part of what I talk about is killing off the record labels. Nothing is further from the truth, of course. I've spoken repeatedly about how I think there's still a tremendous space for smart record labels that get it to help musicians out in enabling these new business models. Some musicians may be able to do everything themselves, but I think most will end up in a partnership of some kind. That's also why I've discussed some newer labels that I think are doing unique and powerful things to enable artists to better connect with fans, and give those fans a reason to buy.

When I've pointed that out, however, some have responded that this just means I want the same status quo as before. But, again, that's incorrect. The way things used to be, was that the major record labels had all of the power. You basically had to sign a major record label deal to get anywhere, and since there are just a few majors, you were pretty limited -- and all of them took advantage of artists. They could do that because they had all the power, and they had a business model that only worked by putting ridiculous and oppressive terms on most artists, guaranteeing that few ever saw anything beyond their advances.

The big difference today? Thanks to new technologies and new avenues for both connecting with fans and transacting with them, the major labels don't have the same sort of power any more -- and artists can actually take back many of their rights, whether it's retaining the copyright on their songs, or negotiating deals that don't seem quite so much like indentured servitude.

And, in fact, we've been seeing more and more of that lately, with newer labels taking a much more innovative, musician-friendly, fan-friendly approach to things. Ian Rogers has a fascinating post that shows at least one situation, where the power structure has certainly shifted, as he read about how a label, Duck Down, had signed to Blue Scholars, a band. Note the direction. It wasn't that Blue Scholars had signed a label deal with Duck Down. Instead, Blue Scholars figured out a unique way to finance, promote and distribute its latest album. First, they did a deal with Seattle's Caffe Vita Coffee to finance the album, and to handle local distribution. The band is retaining all the rights to the music with control over how it's marketed and sold (and, they note, "given away"). Duck Down, though has been "hired" to help with the marketing.

This makes a lot of sense. Certainly record labels have a lot of experience and connections when it comes to marketing music and musicians. So leveraging those relationships makes a lot of sense. Giving up all control and rights just for that marketing expertise, on the other hand... makes less and less sense. So, no, I don't think record labels are going away. I still think there's plenty of room for them in the wider music ecosystem. But their role is changing, and the power shift is moving much more to artists and away from the labels. Some of the smart ones get it. But a few of the major labels certainly don't like this, which is why they fight so hard against the technology that's making this happen.

Filed Under: blue scholars, business models, labels, music
Companies: duck down

So Why Can't Major Record Labels Provide Accurate Accounting To Bands?

from the because-that-would-mean-paying-them-accurately dept

The more you learn about the way major record labels work, the more ridiculous it seems. Unlike pretty much every other creative deal making situation, musicians who sign major record label contracts basically hand over all their rights to the label. The label gets the copyright. It gets to determine the type of music the musician plays. It handles much of the marketing and promotion. And... the biggest thing of all is that it handles all the accounting and payments (if there are any). Over the years, that's resulted in many, many accusations from artists that the labels are flat out lying about how much an artist actually earns. That's why you hear stories of artists selling millions of albums and never seeing a dime in royalties or of artists suing record labels because of sneaky accounting tricks to hide how much an album has earned.

Dave Stewart, from the Eurythmics, has written an article for Billboard where he points out that any retailer in the world has access to amazingly detailed technology and tools to track transactions and settle details with credit card company merchant accounts. He notes how ridiculous it is that such systems have been available for nearly thirty years... and he still can't get an accurate transparent accounting of what a record label has sold.

In the past, the major labels could get away with this, because they were the only real game in town, if a band really wanted to get big. But that's changing. This, of course, is the major labels real concern over new innovations and technology. It's not piracy. It's that new technologies take away the biggest scam they've had going for ages: the ability to keep tons of money that never belonged to them. And that's changing. As Stewart notes:

In the future, all incoming revenue streams will be reported in real time, with transaction costs pre-defined and competitive with the market. In the old model, content distributors have been slow and/or reluctant to adopt new media. Distributors frequently take significant portions of creative control out of the hands of the artist, placing restrictions on format, functionality, interactivity and other components. Copyright controls inherently limit the models and methods of release and distribution of artist products. Digital distribution and rights management methods have failed to leverage technological and business advancements to serve consumer, artistic and corporate interests. With many distributors, the feedback loop on consumer usage is also limited. Buyer profiles, habits and usage patterns are not shared with artists, who are then forced to use other means (surveys, focus groups) to determine how their content is being received by the fan. Especially troubling is that, in many cases, artists are not entitled to any control over precisely what happens with their creative work, or to apply some of the new and innovative ideas in the digital landscape due to restrictions from rights holders. Digital media technologies for distribution, asset management, security and monetization have matured to the point that an easy-to-use, scalable, fully featured digital media gateway and financial tracking system is now possible and should be demanded by all artists.

Filed Under: accounting, dave stewart, eurythmics, labels, music

So Only When Piracy Gets Really Bad Will Record Labels Change Their Act?

from the just-wondering dept

Google is today launching a free, ad-supported music service in China, with the backing of more than 140 record labels, including the Big 4. The service sounds like exactly the sort of thing that people have been calling for since the Napster days: a search engine linked to a trove of music files, supported by advertising. Google's wanted to add some sort of music search to its Chinese product for some time, as it's been at a significant disadvantage to rivals like Baidu, which have the feature to thank for much of their success. The record labels say this is the first attempt to monetize online music in China, and mirrors moves by some movie studios to compete with piracy there with new products and services, rather than through lawsuits and lobbying. These efforts always give a nod to the rampant piracy going on in China -- acting as if it's a completely different environment than the rest of the world. So is the lesson here that only if piracy, or at least the labels' and studios' perceptions of it, gets "bad enough", will they do something positive, rather than sue people or try to get laws strengthened in their favor? Or is it only because those aren't viable options in China that companies try something different there? The fact that the labels are moving forward with this plan in China, given its reputation as the wild west of copyright infringement, undermine their contention that they can solve the supposed piracy problem with legal or technological means elsewhere. Furthermore, it exposes the reality that what's staring them in the face is a tremendous opportunity, not a problem.

Filed Under: china, downloads, labels, music, piracy
Companies: google

Terry McBride: Songs Are Not Copyright. Songs Are Emotions

from the getting-there... dept

Last year we wrote about a fascinating interview with Terry McBride, the CEO of Nettwerk Music, a Canadian record label that has proven to be quite innovative with its business models (and quite successful). He's really focused on helping musicians build up valuable brands, and then being able to make money off of those brands by being consumer-friendly, rather than consumer-antagonistic. One of the examples mentioned in that interview was a new album coming out where before the album was even released, the raw files were put online for fans to download and mix themselves. As he said, it wasn't "remixing," it was "premixing." And, the plan is to take the best of those and release the actual album in two formats: the official mix and the best fan mixes.

There's now another interview with McBride at the Future of Music site where he talks more about his vision of a music future where people effectively pay not for the music, but for the convenience of a "music valet" that does a better job organizing and finding the music you want when you want it. I'm still not convinced this is how things eventually work out, but it's certainly worth thinking about.

However, there are few statements McBride makes that are worth highlighting. First are two statements I agree with, and then one I don't:

People have always been sharing music. Why would I want to stop them? Why would I want to tell them what to do? The way to win was to get them to support my artists, not to force them to do it a certain way. I know I wouldn't like anyone telling me that.

This is a huge point that is so often missed by those in the industry who are focused on "protecting" and "control" rather than recognizing how people want to interact with musicians. The thing that I find most ridiculous from those complaining about file sharing is that they always make some statement along the lines of, "people who are sharing my files aren't fans, because real fans spend money." Of course, if that's true, what's the problem? The people who aren't fans aren't paying and (based on that statement) the real fans will pay. So, there's no problem at all...

Songs are not copyright. Songs are emotions.

Indeed. And that's the point. Do people pay for emotions? No. However, emotions will impact what people will pay for. However, despite agreeing with McBride on so much, I think he goes a bit off-track with the following:

Out of all of the sharing of music, who's making an economic return? Whoever is should then share that with all the people that allowed it to happen, creating a nice alignment of interests to grow any business. A lot of the providers have viewed music as free content, while at the same time paying for the cable content to grow their networks. They've been making money off the backs of the artists without any compensation for the artists at all. I think that's fundamentally wrong. I've also said it's fundamentally wrong to go after the consumers that are using that opportunity. That's not the right approach either. The phone companies and the cable providers have gotten away with murder in this whole situation.

This is the blame game and it's missing the point. The ISPs haven't "gotten away with murder." They've simply put in place a reasonable business model based on fundamental economics -- and there's nothing stopping plenty of others in the music business from doing the same. Demanding those who have figured out how to make money share with those who haven't isn't the answer either. There are business models that work just fine for those creating the music that don't require demanding anyone else share their profits. You just focus on coming up with real scarcities that give people or companies real reasons to buy and there are tons of business models that work.

Filed Under: business models, labels, music, terry mcbride
Companies: nettwerk

Terry McBride Explains How Nettwerk Puts Fans In Control

from the consumer-models,-not-business-models dept

Mark Glaser has an absolute must-read interview with music label Nettwerk's CEO Terry McBride. Nettwerk, of course, has been one of a few record labels that really understands how the market has been changing, and has moved aggressively to take advantage of that. The label, which represents some top artists like Coldplay, Barenaked Ladies, K-OS and Avril Lavigne, got a lot of press a couple years back when it agreed to pay for the defense of some folks who were sued by the RIAA for file sharing. But, much more interesting was how it was actively embracing the changing market while other record labels were trying to hold back the tide. I don't agree with everything McBride has to say, but he's a lot closer to understanding where the music market is heading than pretty much everyone else we've seen in the recording industry.

You should really read the entire interview, but a few highlights are things like where he points out that musicians and record labels should be selling the overall brand, not the music:

In the digital space, where you don't need to buy shelf space, if you create the right metadata behind what you're doing, and market it in an effective way -- you're not marketing the new album, you're marketing the brand.... Chad [Urmston of State Radio] just played to 2,800 people with a $25 ticket price in New York on the weekend. He's marketing a brand, he's not just marketing intellectual property. Now it all makes sense. He's happy, he owns his future, his audience has grown with him really well.

Which brings up the second key theme: growing the audience and having them connect more closely with the musicians, even to the point of having some say in what direction the band goes in. For example, he talks about originally letting fans design the t-shirts the bands would sell. While some band members didn't like the fan-designed shirts, they inevitably sold more than the band-designed shirts. So, they started taking that even further: releasing versions of the bands' music online for fans to remix. And, with the latest K-OS album, even releasing all the musical stems for remixing, months before the actual album is released, with a plan to then release both the artist mix and the best fan mixes as both physical and digital offerings:

You can even take it beyond that. With K-OS, we're thinking about having the audience vote on which 10 to 12 cities he plays in Canada. We might even take it one step further: pay as you go not as you enter. And maybe when you leave you get a copy of the fan mix for your donation, so there's karma pricing on the exit.

McBride also talks about where he thinks this is all going to end up, and he discusses a model that might sound sort of like the music tax we've been slamming, but in reality it's quite different:

To me, the future of music is really simple. It's cloud-based servers that have all of the music, TV, movies -- whatever it might be. Very rich application-driven PDAs, whether it's the iPhone or whatever else comes up, that has applications that I have yet to see. Like digital maids or valets, which go out and knows what your musical tastes are and your 20 friends, and finds that music and organizes it -- not the actual music but the metadata so you can pull it when and how you want it. You would have a $5 or $10 per month fee for pulling it down. And that's how it will all end up, because business cannot drive business consumption.

How free loses out is the applications and metadata that makes it really easy. I call it the "hassle factor" -- for $5 to $10 you get all the music you want without the pain of having to find it. So you get the new Killers album without even knowing the new Killers album is out, and it's automatically in your weekend listening folder because your digital valet got it for you. And if you want to know what your buddy Ken's listening to, then the valet checks out his playlist and copies it over for you.

I could see this happening to some extent. The difference between this and a music tax is (a) it's totally voluntary (b) it's about adding value beyond "free" that makes it worth paying and (c) what you're really paying for is actual scarcities: convenience and pointers to good music you'll really like. Of course, in the end, my guess is that eventually this would go one step further, where the service itself would be free, because musicians would find so many other benefits from being promoted through such a system (increased ticket sales, fan club subscriptions, etc...) that it would make even more sense for the whole system to be free.

Anyway, it's great to see real progress being made on business models in the industry, and this actually highlights (once again) why Warner Music/Jim Griffin's music license system just isn't necessary. The market is making things work without it. In fact, the key quote from McBride may highlight why Nettwerk is getting somewhere while so many of the old school labels are having trouble:

It's a business model and not a consumer model. And it's definitely not a psychological model. This is about monetizing consumer behavior and not about trying to control where they go.

He's talking specifically about "ad-supported" music, which I agree is a model that will never get very far, but the same thing pretty much applies to the old record label model, as well. These days, when there are real consumer options out there, you don't succeed by limiting what consumers do, you succeed by enabling them to do more. And, that seems to be exactly what Nettwerk is doing.

Filed Under: business models, labels, music, terry mcbride
Companies: nettwerk