Carly Simon Sues Starbucks For Not Promoting Her Album Enough

from the hello-old-way-of-thinking... dept

Starbucks got plenty of attention a few years back for trying to start its own music label. We had hoped that maybe the company would try to do something unique and different with it, but, instead, it basically just tried to set up a conventional music label that was going to rely on selling CDs via Starbucks. Doing things the conventional way at a time when an industry is in upheaval makes little sense, and it didn't take long for Starbucks to dump the label. However, one of the last CDs it put out was by well known singer Carly Simon -- and Simon is now suing Starbucks for $5 to $10 million, using famed power lawyer David Boies.

While it does seem pretty clear that Starbucks didn't do all that much to promote the album after deciding to get out of the music label business, it's hard to feel particularly sympathetic to Simon. The same thing could have happened with any record label -- and given how many are struggling these days, it certainly could have happened. Furthermore, nothing in the article above suggests that Simon did anything to help promote the album herself or work on any aspect of the business model. It sounds like she just sat back and expected Starbucks to do everything and just start sending her checks. On top of that, the deal still included a huge advance (while she says not all of it was paid, the official advance was $575,000 -- hardly a small sum). And, again, her complaints of losing some money in the stock market, and owing money on one house in fancy Martha's Vineyard while being unable to sell her apartment in Greenwich Village (not exactly the low rent district) doesn't make her the most sympathetic of characters.

On top of all this she still sold 124,000 copies of the album.

Considering that only about 100 albums last year were able to sell more than 250,000 CDs, it seems like Simon should be thankful she was able to sell as many as she did -- especially given the fact that she seems to think Starbucks had the total responsibility for selling the album. This whole lawsuit seems to be a very old school recording industry artist mindset -- where the artist isn't expected to get involved at all, but just expects to sit back and get handed millions of dollars. Sorry, the market doesn't work that way any more, even if Starbucks is involved.

Filed Under: business models, carly simon, record labels
Companies: starbucks

The AP and News Corp DEMAND To Be Paid For Their Content

from the taking-aim-at-your-own-foot dept

At a media summit in Beijing this week, Associated Press CEO Tom Curley and News Corp CEO Rupert Murdoch declared that "It's time to demand payment for online use of content." This combative language rings ironic, considering the fact that without its content being published on "kleptomaniac" sites like Google News, not many people would even hear about this very article. As Weston Kosova at Newsweek astutely points out, if Rupert Murdoch truly wanted Google to stop "stealing" content, they could very easily stop that today with a simple robots.txt exclusion.

News organizations that are contemplating charging for access to their content might also want to stop calling their potential customers criminals -- that's really not great customer service. And after all, many sites, including Google, are already paying to license some of their content. So, instead of accusing customers of not paying enough, offering better reasons to buy would probably get more sites to pay up. But, that's hard, so jumping up and down and demanding payment in a juvenile manner is much easier.

However, perhaps this is all merely negotiation brinksmanship -- threatening to charge for access to their free content to see if anyone cares enough to pay. The problem is, if the search engines call their bluff and remove their content from their services, then the news organizations actually risk losing much more. As we've pointed out time and time again, news organizations like the AP have been continuing down this road of implosion, where they clearly don't seem to understand the nature of their own business. For example, the AP's obsession with creating a "news registry" that would enable the AP to track down "unlicensed" uses of its content hints at this fundamental misunderstanding. In his speech to the summit, Tom Curley said:

"Crowd-sourcing web services such as Wikipedia, YouTube and Facebook have become preferred consumer destinations for breaking news, displacing Web sites of traditional news publishers.

To turn the tide, AP is creating a News Registry -- a rights management and tracking system."

Really? The AP's response to people linking to and discussing AP articles is to go after sites for money? I am waiting to see which news organization will be the first to go after Twitter for payment for news tweets. Instead of focusing on how to demand payment for the distribution of an infinite good, news organizations should recognize the new opportunities afforded by the free distribution of their content and focus on how to build a business off their scarce goods.

Filed Under: business models, entitlement, journalism, rupert murdoch, tom curley
Companies: associated press, google, news corp.

Rupert Murdoch's Latest Foray Into Online News Business Models... Not So Ridiculous

from the hold-on-here... dept

We've chronicled Rupert Murdoch's flip-flopping on charging for news online (he originally claimed that free news made sense, and he wanted to free up the WSJ, but now says all of his news sites should have paywalls). And a bunch of folks have sent in Michael Wolff's Vanity Fair profile of Murdoch as a clueless luddite on the internet, and someone who doesn't seem to care about the important nuances of why or how charging for news might not make much sense. Wolff paints Murdoch as the type of guy who just thinks he can bully the entire market into agreeing that people should pay for news online. In that article, Wolff discusses the tension between the Times of London and The Sunday Times, which are separate operations owned by Murdoch, but share a web site. However, apparently that's changing, and Wolff presents it as an opportunity to start charging for The Sunday Times online, since it won't be "losing" anyone via putting up a paywall (the question remains if it would gain anyone).

And yet... the recent revelation of a new business model experiment by the two papers suggests an approach that is a bit more nuanced -- even if the (competing) Guardian's explanation of it isn't particularly enlightening. The plan appears to be not to charge for news but to charge for some kind of membership club which provides additional benefits, along with the paper. So, becoming a member gives you the ability to add certain "packs" of information to your paper. I'm not sure how compelling that is. However, it's also going to involve access to events and discounts on other goods and services (including Murdoch-owned satellite TV service, Sky+).

While it may depend on what's really included in this offer, initially it makes quite a bit of sense. It's not based on locking up the web content or limiting how it can be used, but in providing additional scarce value that people will buy. Who knows if this is an indicator of what Murdoch is planning -- but it's significantly different than a paywall, and a lot more reasonable, economically speaking.

Filed Under: business models, journalism, news, paywall, rupert murdoch, times+
Companies: news corp.

AP Wants To Charge For Scoops

from the not-quite-the-crystal-ball dept

The Associated Press is considering charging an extra fee for early access to its stories. The AP's Tom Curley believes that news organizations like Yahoo, Google and Microsoft, would be willing to pay a premium for a 20-30 minute head start on scoops. Now, lest some of you compare this product with Techdirt's own Crystal Ball offering, there is a key difference. AP's product depends on the timeliness of its stories, whereas Techdirt's stories are more focused on analysis -- we do not focus on breaking stories, but when we do, we do not hold them back for the Crystal Ball subscribers to view them. In any case, while this may sound like an enlightened idea for the AP, I'm not really sure it makes much sense. Currently, all of AP's licensees get all of the scoops at the same time, off the same wire. With this system, what the AP is doing is effectively weakening that existing product, and then creating a "new" product that, when the dust settles, is really what most of the customers were getting in the first place. It's not that the scoops are released 20-30 minutes sooner, but rather, if you don't pay the premium, you get the stories you would normally get later. Now, there's nothing wrong with this model, for example, stock quote services have long been able to charge more for real-time information, but for the AP to market this as a premium service seems like disingenuous marketing. Furthermore, given the AP's track record for trying to claim ownership over the news that it reports (like creating a DRM system for news), what happens when the now-hamstrung AP wire is scooped by a reporter who was tipped off by AP's own product?

Filed Under: business models, delays, journalism, news, scoops
Companies: associated press

What To Do When Artists Who Otherwise 'Get It' Freak Out Over 'Piracy'

from the wait-it-out dept

A few weeks ago, reader cofiem sent over a blog post from musician Darren Hayes complaining about recording studios shutting down and blaming "piracy" for it. This morning, our submissions engine is getting overwhelmed with submissions about Wil Wheaton's rant against someone who posted a copy of Wheaton's audiobook, saying the guy is "stealing" from him.

Of course, we see content creators complaining about "piracy" or falsely claiming that it's "stealing" all the time -- but these two cases are slightly different. They're both cases where the content creators seem to be folks who otherwise actually do seem to "get it." They both do an amazing job connecting with fans, and setting up smart "reasons to buy." Hayes, for example, created a DVD "collectors' item" to go with his latest album. And he has a fan club setup, that encourages fans to pay a small fee to get all sorts of valuable (scarce) extras, beyond just the music. Wil Wheaton, of course, has been online for ages, and really interacts with lots of fans, and when he released his audiobook he made it cheap and didn't put DRM on it at all.

In other words, these are both the sort of content creators who are doing all the kinds of "right moves" that we talk about all the time, and seem to be getting rewarded for it. So, of course, it's disappointing to see them overreact and go a bit on the ballistic side when they see people sharing their works in some format -- but it's not that surprising. It's a perfectly natural reaction if you're not immersed that deeply in thinking through the long term implications of these things to simply not like it when people treat your works in a way other than you intended. There's nothing really wrong with that.

However, the question then comes up about what should be done about it. How do you respond to such people? It seems the smartest thing to do is to openly explain the other side of the coin: how these efforts can be embraced to further all of the really smart things that these content creators have already done. It's about getting them to realize that as scary as "the new world" is, one of the things they have to come to accept is that they can't necessarily control what others end up doing with their works. They can't dictate the terms by which fans will be fans. But, what they can do is try to put in place systems and models that benefit them when such things happen. Use that free sharing to encourage people to become stronger, more committed fans, and open up new places and opportunities to potentially offer them a reason to buy -- on their terms -- down the road.

It's never a huge surprise when someone who hasn't thought through this stuff carefully starts ranting about pirates and "stealing." But when it's someone who otherwise seems to get it, the situation is more one of disappointment. However, in most cases, those folks are at least open to listening to reason, and listening to their community, who can explain back to them ways in which they can benefit, rather than complain or blame. And, in fact, with Hayes, it looks like he took some of his community's words to heart and noted that there can be future models where "piracy" isn't necessarily a huge problem (though he's still unsure of how it works). Hopefully Wil Wheaton will listen to his community as well -- and let them point out how many other authors who have put their works online for free have seen that it tends to increase their fan community and increase sales over time.

Filed Under: business models, darren hayes, piracy, wil wheaton

Steve Ballmer Declares 'Free Is Not A Business Model' -- Apparently Unfamiliar With Microsoft's Free Products

from the check-'em-out,-steve dept

Josh W points us to an article about Microsoft new mobile phone software that contains an odd quote from Steve Ballmer, responding to a question concerning Microsoft's plans to compete with Google's free Android mobile operating system:

"Free is not a business model," he said. "We are a commercial company, we will look to gain revenue and profit from our activities. You'll have to ask our competitors if they'll make money on free things."

Internet explorer. Bing. Microsoft's new security software. All free. All offered by Microsoft. Is Steve Ballmer admitting that he doesn't know about any of these things... or is he just expecting that the reporter and the readers of the article are flat-out stupid? Clearly, Microsoft seems to recognize that free is a part of lots of smart business models, so why is its CEO apparently acting clueless on this front? As clearly anyone who thought this through knows, free by itself is not a business model, but free, in combination with a larger business model often makes a lot of sense. That's what Google is doing, and it's what Microsoft is doing as well. So why is Steve Ballmer pretending otherwise?

Filed Under: android, business models, free, steve ballmer
Companies: google, microsoft

Another Author Notes That Giving Away His Book Increased Sales

from the piracy? dept

Dave points us to a recent interview with Lester Brown, who's been pushing for alternative energy for years. I'd actually heard about his book, Plan B 4.0: Mobilizing to Save Civilization a few months ago when someone pointed out that he was giving away his book for free, but I hadn't heard much more about it. Yet, in the interview, he mentions that the book can be downloaded, which appears to surprise the interviewer, who seems to assume that this means the guy is willing to give up revenue to get his ideas out there by noting "you do feel strongly about this." But then Brown points out that it's not hurting sales at all, but quite the opposite:

Dr. BROWN: No problem. Incidentally, "Plan B 4.0" is online at earthpolicy.org. It can be downloaded free of charge.

FLATOW: No kidding.

Dr. BROWN: Yeah.

FLATOW: Wow. You do feel strongly about this.

Dr. BROWN: Yeah. And it's interesting, people think this must reduce sales. In fact, it increases sales.

(Soundbite of laughter)

Dr. BROWN: Just between the two of us

Of course, this is hardly the first author to recognize this, but add another one to the pile. It's about recognizing that obscurity is a bigger risk that piracy, and then figuring out how to get more attention and then giving people a real reason to buy on top of that attention.

Filed Under: business models, ebooks, free, lester brown

Could Doonesbury Learn Anything From XKCD?

from the help,-I'm-trapped-in-a-newspaper-factory-with-no-business-model dept

Via Poynter Online, there's a recent interview with Doonesbury creator Garry Trudeau where he talks about his post-newspaper media plans and what he sees as his future options while newspapers face significant declines in their circulation numbers.

"Doonesbury" has been on the Web for 15 years, and the site actually makes a little money -- unheard-of for media sites. But it's not really a plan, just a presence. I don't believe there's anything I can do personally to prepare for a post-newspaper future, other than hope that the large media companies will come to their senses and form a gated Web collective along the lines of cable TV. They need to form a news utility, financed by subscription or micropayments because going it alone has been disastrous for all of them.

Trudeau continues on, saying that he believes that e-readers are promising because so many people are happy to pay for iPhone apps and Kindle content. He also says that his livelihood doesn't seem to be threatened in the short-term because only "big newspapers" with loads of debt are really going under -- and most small newspapers are still getting by and can support his line of work for the foreseeable future. But, essentially, Trudeau sounds like he's given up on his own plans for making Doonesbury into a business outside of syndication. (Or he's being much too modest about the "little money" he earns from his website, and he doesn't want to offend his current newspaper benefactors.) In any case, he seems to envision a giant news consortium that will be able to retain subscribers due to a form of monopoly advantage. And if that's really the future of journalism, that doesn't sound too promising.

Additionally, though, Trudeau asserts that the "Web is a lost cause" because everyone thinks content on the web should be free. But that statement directly contradicts the work of online cartoonists such as Randall Munroe and his xkcd webcomic (which just happens to be one of my favorite examples of a "free" online comic strip). Munroe has a significant following for xkcd and has proven that "free" can be a sustainable way to promote and publish his work. So can we help enlighten Trudeau? Munroe sells prints, t-shirts, a book, and even sponsored comics. Is there a path to becoming the "Trent Reznor of webcomics" for Trudeau? Or is there something unique about Doonesbury that makes it impossible for it to take advantage of "free" distribution?

Filed Under: business models, comics, doonesbury, garry trudeau, online, russell munroe, xkcd

Yes, The CPM Is Holding Back Online Advertising

from the time-to-get-rid-of-it dept

Last week, Shelby Bonnie, former CEO of CNET wrote a great guest piece for TechCrunch, where he suggested killing off CPM as a measurement for online advertising. I'd go even further, and suggest that the obsession with CPM has seriously harmed online advertising. The key point is the one that Bonnie makes first: if you pay for impressions, you create incentives to get impressions. But impressions, by themselves, are not particularly useful, especially when everyone making those impressions ignores the advertisement itself.

We've experienced this first hand. While we do offer some CPM-based advertising on the site, we've made it clear that such display advertising is a waste for most companies. Our audience doesn't pay much attention to it at all. Ad blindness is the rule. Instead, we always suggest to companies who approach us about advertising that they would get a much better and much more valuable bang for their buck by engaging our community via the Insight Community. Doing so isn't strictly "advertising," but it actually gets the attention and engagement of the smart folks who hang around here. And, on top of that, beyond just getting people to see your brand, the company actually gets something of value back -- insightful analysis from our community.

And yet... some of the people we speak to can't even comprehend how getting people to engage is smarter than just pushing annoying banner ads that will get ignored. You can always tell when you're dealing with that sort of person when they start focusing on how to calculate the CPM value of an Insight Community case. They ask how many impressions it will get. These are people who would much rather one million people totally ignore their ad, though it gets loaded in the background somewhere, than have a committed group of targeted individuals actually engaging with the brand. It makes no sense at all, but it's the type of conclusion people come to when they focus so much on CPM. When the CPM rules all, then all you get are impressions -- and there are all sorts of games sites can (and often do) use to boost impressions with totally worthless traffic.

Hopefully advertisers really are waking up to the pointlessness of CPM as a an ad measurement system, and really are interested in exploring true engagement. That would be a huge step forward in taking online marketing and advertising from the level its at today (which is mostly just replicating print advertising, but online) to where it belongs tomorrow: taking real advantage of the interactive nature of the medium.

Filed Under: advertising, business models, cpm

Billy Bragg's Backwards Approach To Helping Artists

from the blame-others dept

While I may be a fan of Billy Bragg's music, I have a lot of trouble getting behind his take on the music industry. Last year, we had a bit of a back-and-forth with Bragg when he suddenly wanted to demand a cut of Bebo's sale price to AOL, claiming that it was unfair since he had put his music on the site for free. When asked whether or not Bebo would have the right to demand some of Bragg's money if the company had flopped, Bragg didn't seem to have any answer at all.

That episode is a precursor to what appears to be Bragg's current position on the industry, which has a mix of good and bad. As with Bebo, he supports using new online services, and not being anti-consumers (good!). But, as with Bebo, he seems to want to demand entitlement to any revenue that anyone makes (bad!). It's entitlement society again. Rather than recognizing that the responsibility is on him -- and on other artists -- to come up with business models that work, he demands that others (and the gov't) create those business models and just hand him a check. It puts the responsibility off of him and onto everyone else, as if they owe him a business model.

On the one hand, he talks up how useful new technologies are for distribution and promotion, but then he immediately talks about "the damaging aspects of illegal downloading on the livelihoods of the creative community." It's only damaging for those who don't put in place a smart business model. As we've seen time and time and time again, put in place a smart business model that embraces file sharing, combined with good music and a strong connection with fans, and piracy isn't a problem. It's free marketing and distribution.

Bragg talks up the need to compete with sites like The Pirate Bay, but why isn't he looking at actually using The Pirate Bay to his advantage? Plenty of others are. Why does Bragg need to demand help from legislators?

Filed Under: billy bragg, business models, entitlement, file sharing