Did LimeWire Shutdown Increase Music Sales? Part II

from the checking-in dept

Earlier this year, we noted how copyright maximalists were celebrating the fact that according to one (historically untrustworthy) analytics firm, file sharing had taken a massive drop following the shuttering of LimeWire. Of course, I pointed out at the time that those celebrating this were (yet again) focused on the wrong question. So often we hear copyright maximalists talk about how "piracy" must be stopped, but they never seem to want to discuss whether or not that will make people buy again. So, we looked at some of the data provided by some who did believe LimeWire's shutdown had increased sales, but it came up a bit wanting. Still, I'm all about data, and if there really is data supporting the claims that LimeWire's shutdown resulted in increased sales, it might make me reconsider my position on the wisdom of taking legal action against operations like LimeWire.

So, with the recent settlement in hand, it seemed like as good a time as any to look into the data. Of course, it also helped that Capitalist Lion Tamer sent over the latest stats from Nielsen, noting that music sales are up in 2011.

Boom! Case closed. LimeWire's shutdown saved the music industry. Right? Well, actually, no. Doesn't look like that at all. In fact, Nielsen doesn't even mention LimeWire's shutdown in its note about this, attributing much of the increase to the Beatles finally coming to iTunes. And, actually, if you look at the same Nielsen reports going all the way back to 2006, they show music sales going up each year. It's just that more of it is single tracks, rather than full overpriced albums. It looks like the same is true of the latest data as well. If anything, the data suggests a noticeable slowdown in the growth rate. That is, sales are only up 1.6%, this year, which seems significantly down from the growth rate in past years. In 2006, the growth rate was 19%. In 2007 it was 14%. In 2008 it was 10%. In 2009 it was 2.1%.

Perhaps there's some other data to be found, but it's hard to see how there's much of an argument that the shutdown of LimeWire, even if it really did cause file sharing to drop massively, then resulted in an increase in music sales. Kinda makes you wonder about those claims from the RIAA about just how much LimeWire had to do with their problems.... It also explains why the labels were happy to settle for $105 million after claiming trillions in damages from LimeWire. Even the industry seems to know that it's not file sharing that's the real issue.

Filed Under: music, sales
Companies: limewire, nielsen

The Music Industry Is Desperate For A Few Good Technologists

from the oh-really? dept

Earlier this week I attended the latest version of the always excellent SF Music Tech conference, that always tries to bridge the gap between the music industry and the tech industry. The two sides are often seen at odds, even though I think that's a simplistic (and often just incorrect) assessment of the situation. Whenever I attend events like this, I try to wait until the end of the day to see if there were any particular themes that became clear over the course of the event. This time, what struck me, is how much technologists are in demand from the music industry folks. On one of the early panels, someone spoke of the need for better communication between techies and music folks (and someone else mentioned the general culture clash, and the inability to understand each other). However, where it really became clear was in the various meetings and one-on-one conversations I had throughout the course of the day. It was really stunning. I've never had so many "music" related companies all ask me (variations on) the same question: "Do you know any good technology people who might want to come work for us." By the end of the day I was laughing every time someone asked me that question. It seems clear, these music startups are all desperate for tech help.

I'm curious as to why this was so pronounced. It could be that (as always!) good techies are hard to find. These days, there's tremendous demand, and the magnetic pull of jobs at Google, Facebook and Twitter often feels like it's sucking dry available technologists for startups. But, at the same time, I also wonder if the music industry's history in the tech world is impacting things as well. The history of music-related startups is littered with companies sued by record labels or crushed by overly burdensome rules. I would bet that a lot of smart techies recognize this, and don't want to touch anything that might involve having to go up against (or even "partner") with the legacy music industry. There's plenty of interest in music, but working in music innovation just seems like a hassle that's probably not worth it for many technologists who have other options.

It seems like yet another unfortunate legacy of the industry's decision to treat the changing marketplace as an "us vs. them" sort of thing.

Filed Under: developers, music, tech

Dan Bull Auctioning Off A Custom Song On eBay

from the nicely-done dept

We've written about singer Dan Bull a bunch of times, including doing a case study on him and highlighting a few of his songs, including Death of ACTA and Dear Lily, both embedded here:

Beyond singing about copyright issues, and releasing his stuff for free (though I bought his album), it appears he's experimenting in other areas of business models as well. For years, we've pointed out that one of the key "scarcities" that can be sold is the creation of new works. This is a point that confuses many, since a song is not scarce once created (and made available in digital format). But the creation of a new work is very much a scarcity. Dan seems to recognize that and is running an experiment in which he tries auctioning off the creation of a new song on eBay. Since eBay auctions disappear, here's a screenshot: The text reads:

Hello, my name is Daniel and I make songs. You can see my stuff by typing "Dan Bull" into YouTube. I've decided to find out what my music is really worth so I'm sticking myself on eBay. The winning bidder will receive:

One song on any topic of your choice, written, performed and produced by Dan Bull. Duration: 2.30 - 3.30 approx. I will liaise with you via e-mail if there any specific details you wish to include in the song. You will be free to use and redistribute this song in any way you wish, however I reserve the right to do the same. The song will be delivered to you in MP3 format within 14 days of the winning bid.

Get bidding now, because this may never happen again. Love from Dan :) x

Pretty cool experiment. We'll be interested to see how it turns out...

Filed Under: auction, creation, dan bull, music, scarcity

AC/DC Says Their Songs Will Never Be Available For Download; Rest Of Internet Laughs

from the that's-not-how-it-works dept

Capitalist Lion Tamer points us to the news that the band members of AC/DC are standing firm in saying that they will never allow authorized versions of their music to be sold online for download. The logic here seems to be entirely lacking. The band claims that it's because they want people to listen to the whole albums, not just tracks, but if that's the case then they should just release the whole album as a single track. The fact is that anyone who has their albums can choose to listen however they want. And any time one of their songs is played on the radio, only one song is heard -- yet you don't hear them talk about boycotting radio. But, of course, the bigger issue is that it's silly to not offer an authorized way for people to pay you for your music, when the alternative that plenty of people will choose, instead, is to simply download unauthorized versions where the band has no say at all.

Filed Under: ac/dc, downloads, music

EMI Dumps ASCAP For Digital Licensing

from the ouch dept

Well, this is interesting. When Guy Hands had bought EMI years back, there was hope that, as an outsider, he might come in and shake things up in a good way. That didn't happen, and after a massive flop, Hands lost EMI to Citigroup earlier this year. And, yet, now it appears that EMI is finally making some interesting moves. First up: it's pulling back its digital rights from ASCAP and is going to license them directly. That's a huge hit to ASCAP (who will undoubtedly downplay the significance, though it really is huge). This also should ease the licensing of EMI's catalog, since it's all going through a single company, rather than having to involve multiple companies. I wouldn't be surprised to see others go in this direction as well. Of course, some musicians might not like it, as ASCAP tends to be a bit clearer in its royalty statements than many of the labels, but this is a big potential issue for ASCAP.

Filed Under: digital, licensing, music, publishing, rights
Companies: ascap, emi

Chinese Gov't Promises (Again) To Punish Baidu For Music Downloads... Despite Baidu Winning In Court

from the how's-that-work-now? dept

Ah, Baidu. Back in 2005, we discussed how the company's main reason for success as a search engine was in its music download efforts, and wondered if its planned IPO would force it to curtail searches for music downloads. Since then, there have been a series of lawsuits against Baidu... but (somewhat surprisingly) the company won in court. Of course, that didn't stop the recording industry from still demanding that Baidu ignore the court ruling.

Well, now the Chinese government is getting involved, and insists that it's going to punish Baidu for its music download services. There still remain some questions about how involved Baidu really is in the music downloads (i.e., research suggested that it was actively involved in hosting the files and regularly hiding them in new -- but easily findable by Baidu -- places every time a takedown was issued). However, we have seen this game before. The Chinese government has slapped Baidu on the wrist in 2008 and in 2009 for similar or related issues, but never really did much. I'm guessing that once again this is more of a PR move to satisfy US diplomatic pressures.

Of course, even odder is that beyond the fact that the government is going to sanction Baidu despite it winning its court case, the article notes that Baidu has actually "reached an agreement with the Music Copyright Society of China (MCSC) to pay fees to the MCSC for every song downloaded using Baidu." That certainly suggests that Baidu has figured out a way to go legit... so why announce punishment now?

Filed Under: china, copyright, music
Companies: baidu

We May Have Unbundled The Music... But We've Smartly Bundled The Music Experience

from the doing-it-right dept

Ian Rogers, from Topspin, has an absolutely fantastic blog post on the question of "unbundling" and "rebundling," in the music business. What kicked it off was David Pakman's writeup about how unbundling the album into songs that can be purchased individually may have had the biggest impact on the record labels' bottom lines -- much bigger than unauthorized file sharing. It goes on to talk about the economic impacts of unbundling in a variety of industries. It's a good read.

Rogers picks up on this, and notes that plenty of people agree with this point, but they may be missing out on the fact that while this aspect of the music business may be in the midst of a massive "unbundling," other parts are seeing themselves bundled in highly profitable ways:

A new, more positive story is emerging. As artists get their arms around all their rights and build direct relationships with their fans we’re seeing artists’ output RE-BUNDLED into higher value packages and average revenue per transaction greater than those delivered by the Compact Disc. Instead of selling their art across a variety of channels (CD at Best Buy, digital download at iTunes, t-shirt at Hot Topic, ticket at Ticketmaster, and vinyl at Amoeba) artists are able to bundle their collective output into a single direct-to-consumer sale where they are the retailer (and pocket half the retailer margin, too). It’s true the CD was an incredibly efficient product with massive distribution (the move from “record stores” to big box retail in the 90s was a large contributor to the bubble you see in the above slide) with an average revenue per sale of greater than $10. It’s also true both piracy and individual track sales have unbundled the product and driven the average revenue per transaction for most artists to less than $3. But at Topspin we see people selling new bundles, different from the CD and as a result very high revenue per transaction:

We've seen this before. And, obviously, I've spoken about this for years now. There are all sorts of opportunities, and those opportunities often come in recognizing how to best bundle scarce and non-scarce goods. This is why I think it's important to recognize the differences between what Pakman is talking about and what Rogers is talking about. Pakman's discussion on unbundling is focused on taking apart artificial bundles that were put together due to the inefficiencies of the technology at the time. You put a bunch of songs together on an album so you could distribute (and sell... and promote) them all together in one shot.

What Rogers is talking about, however, is a more natural bundle. Rather than a bundle borne out of the inefficiencies of existing technology, the bundling he's talking about is bringing together natural bundles of products that fit together smartly in packages that give fans real options -- and which are done for the overall convenience of fans and buyers, not the convenience of retailers and middlemen. That's a key difference and we're going to see more and more of it in a variety of industries. The bundles that will disappear are the bundles that were done to help serve the middlemen, and what will replace them (much more profitably and economically efficiently) are bundles that help serve the end user/buyers.

In the case of music, what's happened is that the unbundling is of the album, which certainly many music fans enjoyed, but which was often seen as inconvenient for the fans who just liked a few songs. What the new bundles are about is not about bundling music per se, but bundling the full music experience, which is what the industry should have been selling all along...

Filed Under: bundles, business models, experience, music, unbundling

Weird Al Denied Permission To Parody Lady Gaga... Releases New Song For Free Anyway [Updated]

from the fair-use-doesn't-need-permission dept

Updated this story to make it clear that it was Lady Gaga's manager who apparently failed to forward the song to Lady Gaga for permission.

A few weeks ago, in discussing the takedown on Dan Bull's "Death of ACTA" song, some of the discussion in the comments turned to parody in music and whether or not Weird Al has to get permission for his parody songs. What was noted is that he does ask for permission, but almost certainly doesn't need it. He appears to have now put that to the test somewhat. A bunch of folks are submitting the news that Lady Gaga's manager snubbed a permission request from Weird Al, but since she had asked to first hear the song before giving her permission, he already had it done and released the song anyway... for free, on the basis that he was protected by fair use. As a side note, the report (from his agent) notes that this is only the second time he's been refused, with the other time being (you guessed it) from Prince:

Justin wrote to me last night: "You're going to love this. Lady Gaga denied Weird Al the right to release his parody of BORN THIS WAY, only the second time in his career that he's been denied [ed: the other refusal came from Prince]. But he recorded the track at her request as a part of the approval process... the first time any artists has made that request. She summarily passed without comment. So instead of selling a couple hundred thousand or a million copies... he gave PERFORM THIS WAY away for free to his 2 million followers on Twitter."

Of course, it's nice to see him stand up for his fair use rights. The post script to the story is that after this got so much attention, Lady Gaga's manager finally caved and got Lady Gaga to grant permission. But it's really unfortunate that we still live in "permission culture" where people feel the need to ask permission to create culture.

Filed Under: fair use, lady gaga, music, parody, weird al

Prince Claims When Someone Covers Your Song, The Original No Longer Exists

from the prince-world dept

Ah, Prince. The artist, who is notoriously controlling concerning his own music, has apparently decided that the latest evil in the world is cover songs and the compulsory licenses that make them possible. As you may or may not know, it's legal to do cover songs, because of compulsory licensing laws that say as long as you pay a set fee, you can cover any song (why such laws don't apply to samples is weird, and leads to the bizarre situation in which it's legal to cover an entire song, but do just a second of the song and you may be in legal trouble). Either way, Prince is not a fan. In an appearance on the George Lopez show (embedded below), Prince comes out against the entire idea of cover songs because, apparently, it destroys the original:

Prince: I don't mind fans singing the songs... My problem is when the industry "covers" the music. See covering the music means that your version doesn't exist anymore. A lot of times, people think that I'm doing Sinead O'Connor's song and Chaka Khan's song when in fact I wrote those songs. And it's okay when my friends ask to do them, but there's this thing called the compulsory license law, which allows artists, through the record companies, to take your music, at will, without your permission. And that doesn't exist in any other artform, be it books, movies -- there's only one version of "Law and Order' (crowd laughs). There are several versions of "Kiss" and "Purple Rain."

George Lopez: There should be only one version of music.

Prince (sarcastically): You would think... (crowd laughs)

Hmm. Well. So, apparently Prince's version of "Purple Rain" no longer exists. I had no idea. As for Prince's final point, why would you think that? Why is there a problem of anyone doing a cover? Rather than the original no longer existing, it actually exists more, in that more people are aware of and interested in the original.

Of course, all this made me curious. Surely, Prince has covered others songs before. And, in fact, he has. Many, many, many times. Some folks on the Prince fan boards have made a nice list of all the many songs that Prince has apparently "destroyed" of other artists by covering them either for albums or live shows. Of course, perhaps he did this out of spite for those other artists. In fact, Prince has been accused of covering the Foo Fighters during his Superbowl performance to "get revenge" on the Foo Fighters for covering one of his songs. Some revenge. "Destroying" their original song like that in front of the largest TV audience around. Must suck.

Filed Under: compulsory licensing, covers, music, prince

Gorillaz Don't Just Ask Fans To Remix, But Offer Them A Full Specialized Synth App Too

from the a-step-up dept

Tons of artists now release stems of their music for fans to remix. It's pretty common to see "remix" contests as well. Still, it's pretty interesting to see how some bands are taking it even further. Eliot Van Buskirk alerts us to the news that Damon Albarn's "virtual band" project, The Gorillaz, have teamed up with Korg to offer a special KORG iElectribe Gorillaz Edition for the iPad. The regular iElectribe is just an iPad synthesizer, which people seem to like. But the Gorillaz edition has a different (more fun, more Gorillaz-style) user interface design (making it look like it's been around the block and run over by a truck or two along the way), along with a ton of presets using music from The Gorillaz' latest album. So, instead of just giving people stems and telling them to remix, this is almost like an album bundled with its own synth tool in one package. I expect we'll start seeing things a lot more advanced than this. Why release just a plain old album when you can start to enable your fans to do much more with your music?

Filed Under: gorillaz, ipad, music, remix, synth