Canadian Music Collection Society Demanding Payment For 30 Second Song Previews

from the the-very-definition-of-promotion dept

Remember last year, when ASCAP and BMI suddenly started claiming that the 30-second previews in iTunes and other online music stores should count as public performances for which they should be compensated? Yeah, that didn't get very far, as the courts shut that down quickly. Colin Ross alerts us to the news that up in Canada they're going through something of a similar debate with the Society of Composers, Authors and Music Publishers of Canada demanding royalties for the 30-second previews. Back in 2007, the Copyright Board in Canada told the group to get lost but it's kept on appealing, and now the Supreme Court is going to hear the case. Hopefully, they took it to shut down this nonsense forever. 30-second previews are the very definition of a promotional good. Demanding payment by claiming they're a public performance goes beyond greed to an insane level of entitlement.

Filed Under: canada, music, previews, royalties

Indie Music Association Comes Out In Favor Of Seizing Domain Names Of Blogs That Promote Their Music

from the sad dept

If there ever were a group that should be embracing new business models and encouraging the music industry to look forward instead of back, you would think it would be A2IM -- the American Association of Independent Music. After all, they don't have the same legacy issues facing the big four record labels represented by the RIAA. Instead, they can be more creative and willing to experiment with what works well. In fact, over the years, we've noted some really cool and unique experiments done by lots of truly creative and innovative indie labels -- including many who are members of A2IM (and even some represented on A2IM's board).

Yet, we've noticed an unfortunate pattern. A2IM often seems to want to be the "mini-RIAA," frequently staking out identical positions on the issues, and simply adding a "me too" to whatever the RIAA says. Early on it came out in support of ACTA. It's also been involved in astroturfing campaigns in favor of 3 strikes laws, and most recently, argued against the concept of net neutrality (Update: to be clear, as Bengloff explains in the comments, they were only against specific aspects of a proposed net neutrality plan). The group's leadership has effectively admitted at times that they take orders from the RIAA. For example, on the issue of ACTA, A2IM's President, Richard Bengloff, admitted he had not seen ACTA, but supported it because the RIAA told him to.

The latest situation is particularly egregious. Jesse Townley, who runs the famed indie label Alternative Tentacles (Dead Kennedys, Jello Biafra, Butthole Surfers, etc.) alerts us to an email that Bengloff has sent out, urging indie labels to write to John Morton, the head of ICE, the Homeland Security group that seized all those domain names last month under highly questionable methods:

To Independent Labels, Creators & Service Providers who rely upon music having value:

For years we have called on government to help fight Piracy, including those websites that promote the devaluation of music and disregard the rights of creators by leaking music early and without permission. Both the Obama Administration and the Congress have started to provide creators much needed support in recent months. The U.S. Immigration and Customs Enforcement (ICE) Agency has taken aggressive action against infringing websites, recently seizing the domain names of 82 sites. Since then ICE, and its Director John Morton, have been taking heat in the blogosphere and in some print media for their actions. It is imperative that the music community let the Administration know just how vital ICE's actions are, and how much we appreciate them.

We need to show them some love for their action! PLEASE send a note to John Morton thanking him for what he's doing.

This letter, which also highlights a recent A2IM press statement, was sent to the Obama administration by A2IM today. They need to hear from our members across the country now!

Use the A2IM letter as a guide, but please personalize your letter... And express your support for the current actions of U.S. Homeland Security detailed in the attached link press release

Yes, you read that right. A2IM, which is supposed to represent independent labels, is supporting the government seizing domain names of sites with no due process, no First Amendment review. Even worse, as it has become clear, the "evidence" against these sites involved songs that were sent by the copyright holders, and the sites in question were well known within the industry for being key places to promote new music. In fact, some of them were near the top of Vibe's top hip hop blogs list, and were well known places for promoters, labels, artists and DJs to go to promote their works.

So why would an organization like A2IM come out in support of that? It seems that they've just decided to hop on the "blame piracy!" and "the government must save us" bandwagon, rather than actually helping their member labels adapt to the world we live in. Pretty sad when labels that supposedly represent the independent and innovative spirit run to Homeland Security to try to shut down some blogs. Why would any indie label want to support that?

Townley also was kind enough to share his response to A2IM, saying that "This flies directly in the face of record labels trying to be flexible & USE blogs for promotion, which all of us smart ones are doing (among many other things)." I doubt A2IM will listen, but maybe it's time for the really innovative indies to form their own group that doesn't focus on demonizing fans and treating them like criminals, but actually helps these labels and the artists they represent embrace new opportunities online.

Filed Under: domain names, indie labels, music, richard bengloff, seizures
Companies: a2im

Ok Go Explains There Are Lots Of Ways To Make Money If You Can Get Fans

from the everything's-possible dept

Over the last few years, we've covered many of the moves by the band Ok Go -- to build up a fanbase often with the help of amazingly viral videos, ditch their major record label (EMI), and explore new business model opportunities. In the last few days, two different members of Ok Go explained a bit more of the band's thinking in two separate places, and both are worth reading. First up, we have Tim Nordwind, who did an interview with Hypebot, where he explained the band's general view on file sharing:

Obviously we'd love for anyone who has our music to buy a copy. But again, we're realistic enough to know that most music can be found online for free. And trying to block people's access to it isn't good for bands or music. If music is going to be free, then musicians will simply have to find alternative methods to make a living in the music business. People are spending money on music, but it's on the technology to play it. They spend hundreds of dollars on Ipods, but then fill it with 80 gigs of free music. That's ok, but it's just a different world now, and bands must learn to adjust.

Elsewhere in the interview, he talks about the importance of making fans happy and how the band realizes that there are lots of different ways to make money, rather than just selling music directly:

Our videos have opened up many more opportunities for us to make the things we want to make, and to chase our best and wildest ideas. Yes, we need to figure out how to make a living in a world where people don't buy music anymore. But really, we've been doing that for the last ten years. Things like licensing, touring, merch, and also now making videos through corporate sponsorship have all allowed us to keep the lights on and continue making music.

Separately, last Friday, Damian Kulash wrote a nice writeup in the Wall Street Journal all about how bands can, should and will make money going forward. In many ways the piece reminds me a bit of my future of music business models post from earlier this year -- and Kulash even uses many of the same examples in his article (Corey Smith, Amanda Palmer, Josh Freese, etc.). It's a really worthwhile read as well. He starts by pointing out that for a little over half a century, the record labels had the world convinced that the "music" industry really was just the "recorded music" industry:

For a decade, analysts have been hyperventilating about the demise of the music industry. But music isn't going away. We're just moving out of the brief period--a flash in history's pan--when an artist could expect to make a living selling records alone. Music is as old as humanity itself, and just as difficult to define. It's an ephemeral, temporal and subjective experience.

For several decades, though, from about World War II until sometime in the last 10 years, the recording industry managed to successfully and profitably pin it down to a stable, if circular, definition: Music was recordings of music. Records not only made it possible for musicians to connect with listeners anywhere, at any time, but offered a discrete package for commoditization. It was the perfect bottling of lightning: A powerful experience could be packaged in plastic and then bought and sold like any other commercial product.

But, he notes, that time is now gone, thanks in large part to the internet. But that doesn't mean the music business is in trouble. Just the business of selling recorded music. But there's lots of things musicians can sell. He highlights Corey Smith and Smith's ability to make millions by giving away his music for free, and then touring. But he also points out that touring isn't for everyone. He covers how corporate licensing has become a bigger and bigger opportunity for bands that are getting popular. While he doesn't highlight the specific economics of it, what he's really talking about is that if your band is big, you can sell your fan's attention -- which is something Ok Go has done successfully by getting corporate sponsorship of their videos. As he notes, the sponsors provide more money than the record labels with many fewer strings:

These days, money coming from a record label often comes with more embedded creative restrictions than the marketing dollars of other industries. A record label typically measures success in number of records sold. Outside sponsors, by contrast, tend to take a broader view of success. The measuring stick could be mentions in the press, traffic to a website, email addresses collected or views of online videos. Artists have meaningful, direct, and emotional access to our fans, and at a time when capturing the public's attention is increasingly difficult for the army of competing marketers, that access is a big asset.

...

Now when we need funding for a large project, we look for a sponsor. A couple weeks ago, my band held an eight-mile musical street parade through Los Angeles, courtesy of Range Rover. They brought no cars, signage or branding; they just asked that we credit them in the documentation of it. A few weeks earlier, we released a music video made in partnership with Samsung, and in February, one was underwritten by State Farm.

We had complete creative control in the productions. At the end of each clip we thanked the company involved, and genuinely, because we truly are thankful. We got the money we needed to make what we want, our fans enjoyed our videos for free, and our corporate Medicis got what their marketing departments were after: millions of eyes and goodwill from our fans. While most bands struggle to wrestle modest video budgets from labels that see videos as loss leaders, ours wind up making us a profit.

Of course, that only works if you have a big enough fanbase, but that doesn't mean there aren't things that less well known bands can use to make money as well. He talks about an up-and-coming band in LA that doesn't even have a manager that was able make money:

The unsigned and unmanaged Los Angeles band Killola toured last summer and offered deluxe USB packages that included full albums, live recordings and access to two future private online concerts for $40 per piece. Killola grossed $18,000 and wound up in the black for their tour. Mr. Donnelly says, "I can't imagine they'll be ordering their yacht anytime soon, but traditionally bands at that point in their careers aren't even breaking even on tour."

The point, Kulash, notes, is that there's a lot of things a band can sell, focusing on "selling themselves." And, the thing he doesn't mention is that, when you're focusing on selling the overall experience that is "you" as a musician or a band, it's something that can't be freely copied. People can copy the music all they want, but they can't copy you. "You" are a scarce good that can't be "pirated." That's exactly what more and more musicians are figuring out these days, and it's helping to make many more artists profitable. And, no, it doesn't mean that any artist can make money. But it certainly looks like any artist that understands this can do a hell of a lot better than they would have otherwise, if they just relied on the old way of making money in the music business.

Filed Under: business models, experience, music, ok go, sponsorship, tours

Musician Releases Album And Explains Why File Sharing Isn't That Big A Deal

from the it's-all-good dept

Brian points us to a video from Charlie McDonnell, a musician/internet personality, who has just released a new album. The video, rather than just talking up the new album, is a four minute reflection on file sharing that covers the sorts of things we talk about pretty frequently, basically saying (1) file sharing isn't stealing, because no one's missing something (using a comparison to stealing Mars Bars) and (2) if you like the content, it creates new fans who will help support the artist in other ways: Again, nothing really new or different there but put forth simply and eloquently and interesting that it's done in conjunction with the release of his album, where he notes you can listen to the entire album for free and he's not going to be upset if folks get the songs from elsewhere, though he'd certainly like people to support him. You can hear the album below too, and it's internet geeky, so I figure folks around here might like it. The one thing that surprises me, though, is that while he's using Bandcamp to handle sales of the CD, he's not offering downloads via Bandcamp, where he could do things like offer flexible pricing. Instead, you have to buy it from iTunes. Kind of strange.

Filed Under: charlie mcdonnell, file sharing, music, reason to buy

Oh Look, Digital Downloads Aren't Saving The Music Industry

from the who-could-have-possibly-predicted-that... dept

About a year and a half ago, I gave a presentation at a music industry event, where one of the points I tried to make was that those who were betting on digital sales as a savior were making a fool's bet. However, many in the industry have been infatuated with this idea, even if the evidence always suggested that digital sales would only ever make up a small fraction of what CD sales used to bring in. Earlier this year, we warned that the growth rate was slowing, and now as we hit the end of the year, it's confirmed that while there's still some growth, it's slowed down dramatically. Betting on digital sales as the key business model for music is, and is going to remain, a mistake. There are lots of other opportunities to make money, but you have to think beyond just selling music.

Filed Under: downloads, music, sales

Historical Note: The Day Steve Jobs Dissed CDBaby

from the quality-songs dept

Derek Sivers recently had a wonderful post over at the Music Think Tank blog about the day Steve Jobs "dissed" him in a keynote speech. The full story is absolutely worth reading (Sivers, as always, is a wonderful story teller), but the short version is that a bunch of folks who represented independent musicians were invited to Apple soon after the original iTunes store launched (with mainly major label music). They weren't told they were meeting with Steve Jobs, but he showed up, telling them that the plan was to get "every piece of music ever recorded" into the iTunes store. Apple folks then showed everyone in the room how to upload tracks, and Sivers seemed disappointed that he wouldn't be able to just use the tracks they already had available, but would have to re-rip and re-enter data:

Then they showed the Apple software we’d all have to use to send them each album. It required us to put the audio CD into a Mac CD-Rom drive, type in all of the album info, song titles and bio, then click [encode] for it to rip, and [upload] when done.

I raised my hand and asked if it was required that we use their software. They said yes.

I asked again, saying we had over 100,000 albums, already ripped as lossless WAV files, with all of the info carefully entered by the artist themselves, ready to send to their servers with their exact specifications. They said sorry - you need to use this software - there is no other way.

Ugh. That means we have to pull each one of those CDs off of the shelf again, stick it in a Mac, then cut-and-paste every song title into that Mac software. But so be it. If that’s what Apple needs, OK.

After the meeting, Sivers wrote up the notes he took from the meeting and posted them to his blog... only to get angry messages from people at Apple about how the meeting was confidential (something Sivers claims he was never told). Either way, they got the contract from Apple, signed it immediately, and got to work. In realizing they had to rip and upload 100,000 CDs all over again, and that it was going to be costly, they asked CDBaby musicians to pay $40 to get their songs onto iTunes. Because of the iTunes activity, all the other major music services also asked for all of CDBaby's music as well -- Rhapsody, Yahoo Music, Napster and eMusic. Apparently 5,000 musicians paid the $40 and CDBaby started ripping all those CDs.

They ripped and ripped and ripped... and at some point realized that Apple had never returned the contract. Months went by. Sivers contacted Apple... and nothing. Finally, five months later, Steve Jobs did a keynote where he announced that iTunes was doubling the number of tracks available, from 200,000 to 400,000... and in the middle, he made a crack about how they were trying to be selective, focusing on quality, rather than quantity, and specifically noting that anyone could just pay $40 to have music uploaded to competing sites, but that Apple only wanted the best. Sivers realized: "Whoa! Wow. Steve Jobs just dissed me hard! I'm the only one charging $40. That was me he's referring to." You can see the clip below: Sivers took this to mean that, despite Jobs' original statements about wanting all songs in iTunes, this meant he no longer wanted independent music. Following the speech, he sent around a note telling everyone he was refunding the $40 fees, giving back the $200,000 -- much of which had been spent.

The very next day? CDBaby received the signed contract from Apple with details about how to upload their 500,000 tracks.

Filed Under: itunes, music, steve jobs
Companies: apple, cdbaby

As eMusic Embraces Major Labels, Its Indie Core Is Leaving

from the as-if-that-wasn't-predictable dept

eMusic built itself up on a reputation for being a great way to get access to all sorts of indie music. The service, which has been around for ages, and pioneered offering authorized DRM-free MP3s, worked by letting you pay a certain subscription fee per month, which allowed you to download a specific number of songs. Over the years, the price went up, which upset some users, but things really took a turn last year when the company suddenly decided that it absolutely needed the major record labels in its collection. It started with the disastrous idea of adding Sony Music tracks at the same time as a big price increase... and then quietly trying to remove features (and then more features) without telling people. It also appeared that eMusic was deleting comments from critics. While the company denied this, there was a lot of evidence to support the claim.

Since then, the company has also added music from Warner Music and (just recently) Universal Music... but it hasn't really helped. Its userbase has remained about the same, so if the new music is enticing new subscribers, they're being offset by defections. But, more importantly, it looks like some of the bigger name indie labels are pulling their music off the site, as they can't come to a reasonable agreement with eMusic.

So, if I'm reading all this correctly, it sure looks like the company did quite a deal: it signed up major labels to get music that most of its subscriber base didn't want in the first place. In doing so it took away lots of popular features and jacked up prices. Now, the service is losing the content of some of the biggest indie bands.

This seems like a case study in not knowing your own audience.

Filed Under: fans, indie, major labels, music
Companies: emusic

30,000 Musical Acts Are Making A Living... But Is That Good Or Bad?

from the sounds-pretty-good dept

We've pointed out in the past that one of the big "myths" that supporters of old industry (i.e., gatekeeper) business models like to express is that since not everyone is a success with new business models, it's proof that those business models don't work. Except, no one has ever claimed that embracing new models means you're guaranteed to be a success. All we've said is that if you embrace the models properly you can be better off than you would be otherwise. That doesn't mean you'll make a living. It just means that it enables you to make more than you would have otherwise.

Yet, for some reason, the strawman claim lives on. Witness, for example, the glee some industry supporters are expressing at the "news" relayed by Ian Rogers of Topspin (based on data from Ian Hogarth at Songkick) that "only" between 25,000 and 30,000 musical acts are making a "living," these days. This leads to the claim that these numbers are "depressingly slim." I'm not sure I believe that. First of all, that report (by Paul Resnikoff) misstates what was said in Rogers' actual talk: that 25,000 to 30,000 acts were making a living. Resnikoff changes that to 25,000 to 30,000 "artists." Since many bands include a lot more than one artist, the actual number of artists making a living is much higher. Second, no one seems to be stating how many acts were "making a living" before. Is it more or less? On top of that, this only counts "touring bands." There are plenty of people who make their living in music outside of touring -- and this count ignores all of them. Frankly, the 25,000 to 30,000 touring acts making a living sounds about right to me. But it's also worth noting that many of the new models are just starting to be understood, and just starting to be embraced in any serious manner (and, as such, some are making mistakes with them).

I'm reminded of the reports in the early 90s, as personal computers were becoming popular in companies, of studies that showed giving employees computers did not help company productivity. Of course, that was because many companies and employees didn't really know how to use them yet. Within a few years, no one was questioning the productivity gains allowed by computers. Watch the new business models more carefully, and watch as more people understand and adopt them, and then we'll see the old industry apologists start to run out of things to say.

Filed Under: business models, making a living, music

Musician: Sell Physically Attractive Objects Worthy Of Purchase; Let Free Music Drive Success

from the someone-gets-it dept

Hypebot points us to a great post on the new blog Pirate Verbatim, which posts quotes from various musicians about their thoughts on "piracy." One recent post is from musician Phil Elverum, of the bands Mount Erie and also The Microphones. His response touches on a lot of the themes we cover around here, including how giving away infinite goods for free can help you out by making scarce goods more valuable and desirable. The key part:

It seems pointless to try to stop the practice because it's a reality of the world we live in. People will find a way. It's not a bad thing. In fact, I probably owe like 80% of my success to the fact that people can hear my music for free to see if they like it. My approach to the question of making a living off this "work" has been to make physically attractive objects that seem worthy of purchase.

He also points out that this doesn't mean that everyone who downloads needs to buy something, but that it's their choice:

Of course there will be people who don't care about owning an object, or maybe don’t have any money, or maybe who live in Siberia, and so they can just find a way to hear it for free if they want to. I don't think there's an inherent moral duty for the listener to support the singer. In the broad historical perspective music is frivolous non-work and we are lucky to have time to make it at all. Those of us who are temporarily feeding ourselves by this activity are even luckier. The internet changed the world. Old ways need to adapt. There is a new way taking shape that no one knows yet. Trying to impose the old model of lucrative systems of parasitic labels, managers, agents, distributors, etc., on the new reality is a little blind.

It's always nice to see more musicians who seem to understand the key issues, and how to take advantage of them, rather than complain about them.

Filed Under: business models, free, music, phil elverum

Apple Tells Labels, Unilaterally, That It's Increasing Song Previews To 90 Seconds

from the who's-going-to-sue-first? dept

A couple months ago, rumors made the rounds that Apple was going to double the length of song previews in iTunes from 30 to 60 seconds. An expected announcement did not appear, however, apparently because the music publishers (who in the past have already claimed -- without success -- that Apple should pay performance fees on those 30 second previews) felt Apple first needed to get permission from them, as well as the labels. So it's interesting to see that, at least with the record labels, Apple appears to be taking an aggressive approach, sending out letters simply telling labels that their deals have changed and song previews will now be 90 seconds: It'll be interesting to see if Apple did the same thing with publishers... because you'd have to imagine that the publishers would quickly file a lawsuit if that's the case. According to Greg Sandoval, over at News.com, Apple is still negotiating with the publishers. That article includes a typically ridiculous quote from Rick Carnes of the Songwriter's Guild:

"It's like giving away ice cream samples--someone has to pay the cost," said Rick Carnes, president of the Songwriters Guild of America. "I think it would be a good thing for consumers to go to 90 seconds. But they're tripling the amount of time, and they want it for free. I think there ought to be compensation. I believe anytime you use music, you ought to reward the people making the music."

Does Rick really believe that? If so, the Songwriters should fire him as their leader. What he should be looking for is what will maximize the revenue overall, not what will maximize the revenue per use. If you get paid per use, and it means shorter previews -- but that means many fewer sales and less overall money for the artists, then Carnes with his "anytime you use, you pay" philosophy is doing serious harm to the songwriters. And, of course, the actual evidence goes against Carnes. Studies have shown that such longer previews increases purchasing, but the publishing folks and the songwriters like Carnes are more interested in licensing than in direct sales anyway (even if that's really short-sighted). It's too bad that the Songwriters Guild would be represented by someone without their best interests in mind.

Filed Under: music, previews, publishers, rick carnes, songwriters
Companies: apple