stories filed under: "music"
iTunes Partners Starting To Get Fidgety
from the let's-go-month-to-month,-please dept
It's no secret that the entertainment companies have been less than thrilled with the power position wielded by Apple with iTunes. They've tried -- and failed -- to force Apple to change its pricing (even though that sounds quite a lot like price fixing) and they generally seem upset that Apple is getting all the credit for revolutionizing the digital music world, while people look on the big entertainment companies as out of step with what Americans want while struggling to hang on to an antiquated business model. With that in mind, it wasn't all that surprising last month to see Universal Music refuse to renew its contract with Apple, preferring to go on the equivalent of a month to month basis. Universal Music also didn't include Apple in its trial of DRM-free downloads -- which is doubly amusing since it was only following the stringent demands of companies like Universal Music that Apple agreed to use DRM. Now it seems that the separate company NBC Universal is following the lead of its former sister company. The company is refusing to renew its iTunes deal for offering downloadable NBC TV shows. Of course, this news also comes as we inch closer to NBC Universal's own video website, officially named Hulu so hoarding videos for itself may be part of the strategy (which would be typical backwards thinking, but that comes as no surprise). It looks like, once again, we're basically going to have a totally fragmented market for online video. That certainly wouldn't be good for Apple, but it would likely hurt NBC Universal too. In the meantime, though, Apple may be facing a challenge as more companies fail to renew their contracts. Update: Apple seems to believe that NBC Universal needs Apple more than the other way around. Rather than waiting for NBC to pull its shows, Apple has apparently kicked them off.Filed Under: itunes, music
Companies: apple, nbc universal
Sony Finally (Really) Dumps Proprietary ATRAC Format No One Wanted For Its Walkmen
from the what,-not-enough-rootkits? dept
It's been almost 3 years since Ken Kutaragi, then President of Sony Computer Entertainment, admitted that the company had made a huge strategic error in launching its digital music players and download store (Sony Connect) with its own proprietary ATRAC music format and DRM. Of course, admitting a mistake and actually doing something about it are two different things. A few different readers alerted us today that Sony is finally shutting down Sony Connect and ditching support for ATRAC in its new Walkmen, though they buried the details of it in paragraph 17 of a press release about the new music players. For those who had bought from Sony Connect and are now left with an unsupported DRM that won't be playable on any new music player... well.... you now have another reminder of why buying into DRM'd music is a huge risk. Sony is at least kind enough to explain to people how to get around the DRM using the standard cumbersome "burn to CD, rip anew" method, but that's definitely a pretty big pain for anyone who's purchased a sizable collection. Of course, that assumes that there was anyone out there who actually bought a sizable collection of music from Sony Connect and somehow that seems unlikely.Why Paul McCartney Would Have Been Better Off Giving Away His Latest Music For Free
from the promote-the-other-things dept
Earlier this year, we noted that Starbucks was going to start its own record label to sell CDs, with Paul McCartney as the first artist to release an album on it. This came after the relative success of promoting a few albums exclusively in Starbucks when they launched (on other labels). However, as Bob Lefsetz points out, McCartney's album looks like it's a money loser for Starbucks -- though McCartney likely made money from Starbucks who probably paid him a nice sum to put the album out on the new label. However, as Lefsetz points out, he could make a lot more in concert revenue much faster. Lefsetz goes on to point out what we've been pointing out for years: McCartney would have been better off giving away the music for free everywhere, and actually getting people to hear it. In fact, Lefsetz suggests that he might have put more effort into making better music if he knew that there was a much bigger likelihood that people would hear it and care about it. Where I disagree with Lefsetz is his belief that it makes sense to offer the music for free for now, while you still get a promotional bump just for announcing that you'll be giving away music for free, that it won't make sense in the future when lots of artists are doing it. Instead, it seems likely that more and more new models will arise, where the music acts as the promotion, and bands make their money elsewhere. The more popular and widespread the music is, the more opportunities there will be to make that money elsewhere. Once bands start seeing success using that model, more and more will pile on, and people will wonder why anyone pays just for the music if they're not given anything else of value with it.Filed Under: free, lefsetz, music, paul mccartney
Companies: starbucks
Canadians Figure Out How To Properly Release A CD
from the maybe-they-read-techdirt dept
There's a really simple strategy for bands who are worried about the "threat" of file sharing: embrace and add value. That means not freaking out about file sharing, recognizing it's going to happen anyway... and then coming up with ways to add value so that fans will want to pay you anyway. Back in July, Canadian band Stars battled the digital leak of its latest album, In Our Bedroom after the War, by releasing the digital version of their album 3 months early, thereby giving their fans a legitimate path to obtain the already leaked album. Rather than fret about how this would "hurt" them, as the actual release date approaches on September 25th, the band decided to give their fans a reason to buy the physical CD -- they're including a limited edition DVD that chronicles the the band's tour. It's fantastic to see glimmers of hope in the music industry -- from Hip Hop Artists to Trent Reznor. Perhaps soon the music industry will wake up and embrace the changes that are happening to them. At least they're trying now.Filed Under: cd, music, music downloads, recording industry
Latest Bogus Stats On Music Piracy Losses
from the do-we-really-need-to-go-through-this-again? dept
It's getting rather tiresome to need to debunk the bogus stats that come out every few months about the impact of "piracy" on one of the various copyright industries -- alternating between music, movies and software. What's most frustrating is that the press continues to take these studies at face value, and never once questions the most basic (and ridiculous) assumptions used to create the numbers. Take, for example, this report on the supposed impact on the economy of music piracy, put together by The Institute for Policy Innovation (IPI). It, like many of these reports,Filed Under: bogus stats, copyright, music, piracy
Companies: institute for policy innovation
UK VCs Fund Washed-Up Bands With Washed-Up Business Model
from the VC-core dept
Rock star involvement in the venture capital industry is old hat (see: Bono), but there aren't many examples of the opposite, VCs getting into rock. The Wall Street Journal reports on one UK VC firm that's taken to financing comeback albums from has-been rock bands, like UB40 and Prodigy. The firm sees itself as filling a funding gap brought on by the tough times facing record labels these days. It also believes that these albums offer steadier, more predictable returns than those from unknown bands. What's funny is that this is exactly the opposite of the typical VC strategy, which typically involves placing bets on lots of losers, with a few winners accounting for all of the profits. So far, it sounds like the fund isn't doing particularly well, though for now it's sticking with the strategy. There is certainly a lot of room for improvement in the record label model as it relates to funding bands, but it seems doubtful that simply replicating the traditional model with washed-up bands will yield great results. From VC guys, you'd hope to see something a bit more innovative, perhaps something along the line of Bowie Bonds. Peter Gabriel Bonds anyone?Piecemeal DRM-Free Efforts Aren't Going To Unseat Apple's Online Music Dominance
from the keep-trying dept
Universal Music announced a couple weeks back that it would begin selling DRM-free music -- but not through the iTunes Music Store, in a bid to undermine Apple's dominance in online music sales. As we pointed out, this wasn't likely to happen, since few people shop for music according to what label it's on, particularly when it's a huge one like Universal. The label now says that its unprotected tracks will be available from a few different sources: a new service called Gbox, and through Wal-Mart's online music store. Both will undercut Apple's price for DRM-free tracks by selling them for 99 and 94 cents respectively, but that's hardly likely to make a difference, particularly in attracting iPod users, nor will it help their businesses since the margins on digital music are already pretty thin. The problem remains that most people don't pay attention to what label their favorite performers are on. Saying "we sell DRM-free songs from Universal/EMI artists" isn't going to have much of an impact in getting people to switch from iTunes, but it does seem to illustrate that labels and other retailers are looking to compete with iTunes on this front, which should be good news for consumers. Still, the iTunes Music Store's dominance will remain until another retailer can somehow convince all the major labels and a wide array of indies to let it sell DRM-free music. As long as Apple's rivals can only use a piecemeal approach to get music they sell onto iPods, it's going to be a long, fruitless, uphill battle. Competing with iTunes on price is only part of the equation. Rivals have to also match its selection; then they have to worry about matching its ease of use as well.Filed Under: drm, music
Companies: apple, emi, gbox, universal, wal-mart
MTV Still Learning That Things Don't Come So Easy On The Internet
from the you-actually-have-to-offer-something-useful dept
MTV has had an awful lot of trouble over the years trying to become the MTV of the internet. It seems that the company rested on its TV laurels for way too long, and then totally misunderstood what the online world wanted, originally insisting that its archive of video would make it a player in the space. More recently, it tried to get into the music download business, but offered a me-too package that wasn't even remotely compelling. Almost no one used it. So, it should come as no surprise that MTV is now killing off its Urge music offering, that was launched together with Microsoft, and instead focusing on a new joint venture with RealNetworks' Rhapsody music service. Of course, once again, it's going to face the same questions as before about what differentiates this from anything else out there, and once again, it seems likely that MTV won't have a very good answer.Filed Under: downloads, music
Companies: mtv, realnetworks
Hip Hop Stars Understand The Real Business Models For The Music Industry
from the making-all-the-scarce-goods-valuable dept
It's funny every time we hear someone say that the music industry is in trouble. There's very little evidence that's true. More music is being produced today than ever before -- and plenty of people are still making a ton of money in the music business. What's actually in trouble is the traditional recording industry, which is quite different than the music industry. When we point out business models for musicians, we seem to get a lot of pushback, but there's more and more evidence that artists are successfully embracing the model we've put forth -- and they're raking in the cash doing so. Forbes just came out with a report about how much money the top hip hop artists are making, and they're doing quite well. However, it's not because of just the music, but how they've used the music to sell all sorts of other things.It's exactly the model we described (though, many could probably do even better if they further embraced freeing their music). The music itself is an infinite good and can be used to the musician's advantage to make scarce goods much more valuable. As Lea Goldman, the associate editor at Forbes who put together the story notes: "they are smart enough to know that it's not just about selling albums. That'll keep you going for maybe two, three years tops. It's about building an empire and plowing those earnings into lasting businesses that will generate income long after the music stops selling." For some artists, that means branching out into totally different businesses. When people attack the business model we've described, they snicker at "selling t-shirts." However, the article notes that hip hop artists are creating full lines of clothing that sell well and sell for a premium because of their association with the artist. Also, the successful hiphop stars all seem to recognize one of the key "scarce" resources they can sell: an association with themselves. Many of these musicians took in millions by doing sponsorships, by producing other musicians albums or simply by appearing on other musicians' recordings. So, can we now set aside the myth that the music industry is in trouble? It's only in trouble if you're solely in the business of selling plastic discs -- and that's because those discs are increasingly obsolete.
Filed Under: business model, hip hop, music, scarcity
