They'll just let the little companies experiment and then come it
Based on what I've seen, the bigger companies wisely wait while someone else spends a bunch of money to test the market. Once it is shown there is money to be made, then the big companies have the resources to come in.
There really is no need to get there first as long as you can grab market share later on. And for mass market items, by the time average consumers are ready to purchase, they may go for a product from a brand they trust, even if that brand didn't come up with the idea initially.
You see it is sporting goods all the time. The boutique stores are the first to offer a new product, for a very high price. Then it goes to the sporting goods chains. And eventually the same technology hits the discount chains selling the product for 1/10 what the boutique stores were selling it for two years earlier.
Yes, I remember one time a musician I had helped considerably was doing a CD release party. I hadn't been involved with this particular project, but had done so much in the past and might have done more in the future that it was reasonable for me to assume I'd be on the guest list. The artist's inexperienced manager left me hanging on that one. While the artist interceded and said I would be on the guest list, it soured me so much on the manager that I backed away from pitching the artist to potential sponsors.
Yes, I could have bought a ticket, but on the other hand, my sense of protocol told me that the artists' team needed to know who acknowledge. If they were clueless on how to relate to current sponsors, they were likely to be clueless in terms of how to relate to potential sponsors.
2. To deepen the fan relationship. Granted, we're only talking 13 people here, but most have been fans for years. I genuinely enjoyed putting the CDs together for them.
Having been someone who has massively supported some musicians and athletes in multiple ways (e.g., sponsorship, free labor), I'd sort of expect a musician to give something like this to me as a token of friendship rather than something I would need to buy.
I'm curious about how musicians are addressing this. Most have a core of friends who have been there since the beginning. Some have always paid for show tickets and bought CDs. Others have been friends and in return hope to get free CDs and get on the guest list. Sometimes they get those freebies and sometimes they don't.
I think the most devoted fans who have access to the musicians think of themselves as friends. But when they discover that they aren't necessarily friends, just fans with money, it sometimes sours the relationship.
I see almost nothing being written about this, although anyone who has been involved in music, sports, or Hollywood knows there are entourages. Some have been there as friends since high school and others come along later in life. The lines between friendship and money get really tangled up.
I'm writing about some of this now, in gift economies. There's always been the matter of when is a gift a gift and when is it just a way to get something in return down the road.
So as musicians sell "extras" I'm wondering how they determine who gets the extra because they paid for it, and who gets the extra because they are friends or long time supporters. Psychologically there's a big difference between buying a one-of-a-kind item and receiving one as a gift from the artist.
Is music the service you only sell, like a doctor who will see you in his office for a fee? Or is it a gift where some people get it for free if you really like them and others have to pay because you see them as paying fans? Or do you have one level for paying fans and another level that isn't for sale because you only use those as gifts for family and friends?
Let's say that we reach a point where there are no fees and all recorded music is available to everyone for free. There's really no money to be made in delivering it because it will be a commodity and people will price shop: Should I buy that hard drive with every song ever recorded (the price to be determined by the storage device)? Should I have access to the cloud where all recorded music is stored (price to be determined by the access)?
You can see where I am going. The music itself will be so ubiquitous that it will be like the alphabet.
So any startup based on delivering music in exchange for subscriptions or advertising will likely be outdated quickly.
Where will the innovation come from? Most likely from those startups that provide companies like Apple and Google a way to exploit the music in some sort of marketable fashion. It could be in combining music with medicine to reduce the cost of health care. Or combining music with energy technology to somehow improve energy cost effectiveness.
Getting major label music for free won't be enough to help startups survive. And if that is what is preventing them from making it, they probably aren't visionary enough anyway.
Because cashflow is going to be a problem and there isn't a clear cut profitable music business model right now, I think there's a feeling that it will become a battle between Apple and Google because each has industry connections and deep enough pockets to keep tweaking the system until something works.
I didn't think YouTube was going to make it, and if Google hadn't bought it, I'm not sure it would have. But Google could afford to prop it up until it became the dominant force in music (yes, I think it is more important than iTunes).
Even without fees to the labels, many of the music startups were and are going to fail. Most of them are hoping for ad money, subscriptions, or both. And neither revenue streams are going to generate a lot of money.
There really isn't a good music business model out there right now. Sites that get money from the musicians are probably going to do better than any site that attempts to collect money from listeners.
Do I like the "pay a monthly fee and have access to every recording in the history of music" idea? Yes. But even if that all of those tracks are available for free, there might still be some hurdles to overcome:
1. Will consumers pay?
2. Who would collect the money and what would be the delivery system?
3. If all music is available to every startup for free, then competitive pressure will likely drive out most startups anyway. Each would compete with each other to offer the same services for lower and lower prices until we'd be back to a scenario where consumers can have the music for free and there's no money going to the startups.
Re: Re: Re: Re: Re: Re: Re: Just work with independent artists
My proposed solutions:
1. Be an interactive music site (then you don't have to deal with SoundExchange).
2. Only use music from artists/labels which don't ask for a royalty. If the major labels want to drive a hard bargain, don't use their music.
I figure that if the startups already know they have certain operating expenses in the form of payments to major labels and still proceed with that business plan and can't make a go of it, then that's too bad for them. And hooray for startups who base their plans on unsigned artists eager for the exposure. Help out the little guys. If the major labels go under because they don't play ball with the startups, is that really a big loss in the greater scheme of things? And if the startups can't make a go of it without the major labels, maybe they are still too tied to the music of the past.
A Short Explanation of SoundExchange and Why It is Important -- Music Business Heretic: "Why is SoundExchange so Powerful and where does it get its authority? SoundExchange is designated by the Libraian of Congress as the sole organization authorized to collect royalties paid by services who make non-interactive digital transmissions of Sound Recordings. The statutory authority for SoundExchange comes from the following two Federal Acts (The Digital Performance In Sound Recording Act of 1995 and the Digital Millennium Copyright Act of 1998) (essentially these two acts combined to grant a performance right for Sound Recordings)."
Re: Re: Re: Re: Re: Re: Just work with independent artists
Um. No. Well, technically you don't have to pay *sound exchange* but you do have to work out specific deals with anyone whose music you want to use which is not so easy.
SoundExchange only applies to non-interactive sites.
But my whole point was for music sites not to bother with the major labels in the first place. There's a ton of music that is freely available. Promote the future of music, not the past. If the startups are going under because of licensing fees, then use music that comes with no fees. There's a lot of it out there. And the unsigned artists will be very happy for the attention.
Re: Re: Re: Re: Just work with independent artists
I'm not advocating SoundExchange. Just trying to find some ways for startups to avoid licensing fees. It looks like you can avoid paying SoundExchange if you are an interactive music site.
Like I said, I'd recommend that more music startups deal exclusively with unsigned artists and small labels which freely provide their music.
I was just checking and SoundExchange only applies to non-interactive stations, essentially Internet and satellite radio. It doesn't apply to MySpace, for example.
A Short Explanation of SoundExchange and Why It is Important -- Music Business Heretic: ") What is SoundExchange? SoundExchange is a non-profit performance rights organization that collects royalties on the behalf of sound recording owners and featured artists for non-interactive digital transmissions, including satellite and internet radio as well as terrestrial radio stations who broadcast there AM/FM signal over a digital communication network ."
What I don't understand is why we don't have a service that only offers music from unsigned artists and those from small labels that will provide music for free.
Sure, I understand the appeal of being able to say you offer every song ever recorded (or as close to that as possible). But since the future of music appears to be without the major labels and there's a lot of good music available that isn't owned by major labels, why not just promote what is easy and cheap to obtain? Plus it makes your company look forward-thinking by working with the next generation of artists.
"By comparison, much pricier tickets for Dylan's concert the night before at the Fox Theater in Oakland sold out within an hour, fees and all.
Lefkowitz thinks a few factors worked against the 'ticketless' model, which admitted concert-goers on a first come first served basis.
'Some people may have been intimidated by the line,' he said. 'Some people maybe didn't like the idea of leaving home without a ticket; the uncertainty. Most of his fans probably have jobs so to get here before 6 or 7 p.m. was probably a stretch. It was challenging.'"
And the argument has been made that if there is a market for ticket resales at a higher price, then the original tickets were too low to begin with.
And what has been pointed out in some discussions about ticket resellers is that often they are actually doing the selling on behalf of the artist. The artist wants more money, but doesn't want to price the tickets so high. Therefore some tickets are immediately taken off the market, sold at a higher price, then the money goes back to the artist and/or promoter.
Another argument has been that ticket resellers provide a service by grabbing tickets on behalf of people who don't want to spend the time on the computer trying to get them. These busy fans would rather pay more money for them instead.
But now what has happened is that many concerts aren't selling out so prices are dropping and you can get discounted tickets directly from the promoter and ticket seller. The secondary market is getting killed because people are figuring out they can get tickets to some big name artists for as low as $10. In this economy the live music industry isn't the sure thing it once was perceived to be.
Maybe I'm the only one but I don't think I'm that odd.
I've been kind of amazed at how much info I can find via Google Book Search without having to actually see the book.
And that's why I'm also surprised when people say they are having trouble doing research because of copyright issues. I do a lot of research and between libraries and Google Book Search, I find the world of information quite accessible.
Now, because of how much information is online, I rarely need to go to a library anymore, and I have a university library within walking distance from where I live. Occasionally I will read a magazine online via my public library, but that has been all I have needed.
There are a few publications I don't get to see because there aren't any libraries subscribing and I don't want to subscribe personally, but if I used them everyday, I would subscribe.
There are venues that still sell tickets at the window. And for a lot of shows you can either head to the window in advance (which can be a problem if you live somewhere else) or you can take you chances and get them right before the show.
And actually we are reverting back to that sort of system anyway. As people learn they can often get tickets cheaper by waiting, they are learning to wait.
I've collected cash at the door for some shows. And I've stood by and watched as door guys did the same thing.
You won't likely have a problem as long as everyone waiting in line is likely to get in. There may be people who come after the show has sold out and they get turned away, but as long as everyone has a reasonable expectation of getting in, panic isn't like to set up.
But everyone's concerns about crowd control are likely to be very real if demand for tickets greatly exceeds capacity. You don't want to whip up the crowd into a frenzy.
You might want to give everyone who wants a ticket a number in advance (probably online), like you get at the motor vehicle department, so they know in advance if they can get a ticket.
Scalpers could probably get numbers, too, but if you required that a photo id must match the ticket holder, then perhaps you would reduce the number of people buying more tickets than they personally can use.
Some of this process already duplicates what ticket sellers do, but if you eliminated credit cards and everyone had to pay cash at the door, it should reduce some of the charges that come with ticket services.
But this gets back to some of the questions I asked during the Joe Pug thread. Even venues that sell their own tickets directly usually want a cut of the ticket. So you've got to work out a relationship not only between the artist and the fans, but also between the artist and the venue, and if there is a promoter, will the promoter need a cut, too? If the artist is taking the cash, then some of it probably needs to go to the various entities involved. If the venue is taking the cash, the artist needs to get paid. If the promoter is taking the cash, then both the artist and the venue need to be paid.
On the post: How Microsoft Missed The Disruptive Innovation In Paid Search
They'll just let the little companies experiment and then come it
There really is no need to get there first as long as you can grab market share later on. And for mass market items, by the time average consumers are ready to purchase, they may go for a product from a brand they trust, even if that brand didn't come up with the idea initially.
You see it is sporting goods all the time. The boutique stores are the first to offer a new product, for a very high price. Then it goes to the sporting goods chains. And eventually the same technology hits the discount chains selling the product for 1/10 what the boutique stores were selling it for two years earlier.
On the post: Rupert Murdoch's Anti-Fair Use Comments Used Against Him In Court Yet Again
Murdoch and money
Maybe that's not such a bad thing.
The Billionaires Bankrolling the Tea Party
On the post: Another Reason To Buy: A Unique CD For Fans That No One Else Will Get
Re: Friend vs. Fan
Yes, I could have bought a ticket, but on the other hand, my sense of protocol told me that the artists' team needed to know who acknowledge. If they were clueless on how to relate to current sponsors, they were likely to be clueless in terms of how to relate to potential sponsors.
On the post: Another Reason To Buy: A Unique CD For Fans That No One Else Will Get
Re: It's not just a wage
Having been someone who has massively supported some musicians and athletes in multiple ways (e.g., sponsorship, free labor), I'd sort of expect a musician to give something like this to me as a token of friendship rather than something I would need to buy.
I'm curious about how musicians are addressing this. Most have a core of friends who have been there since the beginning. Some have always paid for show tickets and bought CDs. Others have been friends and in return hope to get free CDs and get on the guest list. Sometimes they get those freebies and sometimes they don't.
I think the most devoted fans who have access to the musicians think of themselves as friends. But when they discover that they aren't necessarily friends, just fans with money, it sometimes sours the relationship.
I see almost nothing being written about this, although anyone who has been involved in music, sports, or Hollywood knows there are entourages. Some have been there as friends since high school and others come along later in life. The lines between friendship and money get really tangled up.
I'm writing about some of this now, in gift economies. There's always been the matter of when is a gift a gift and when is it just a way to get something in return down the road.
So as musicians sell "extras" I'm wondering how they determine who gets the extra because they paid for it, and who gets the extra because they are friends or long time supporters. Psychologically there's a big difference between buying a one-of-a-kind item and receiving one as a gift from the artist.
Is music the service you only sell, like a doctor who will see you in his office for a fee? Or is it a gift where some people get it for free if you really like them and others have to pay because you see them as paying fans? Or do you have one level for paying fans and another level that isn't for sale because you only use those as gifts for family and friends?
On the post: How The Record Labels Kill Off Innovative Startups With Ridiculous Licensing Demands
Let's jump ahead
You can see where I am going. The music itself will be so ubiquitous that it will be like the alphabet.
So any startup based on delivering music in exchange for subscriptions or advertising will likely be outdated quickly.
Where will the innovation come from? Most likely from those startups that provide companies like Apple and Google a way to exploit the music in some sort of marketable fashion. It could be in combining music with medicine to reduce the cost of health care. Or combining music with energy technology to somehow improve energy cost effectiveness.
Getting major label music for free won't be enough to help startups survive. And if that is what is preventing them from making it, they probably aren't visionary enough anyway.
On the post: How The Record Labels Kill Off Innovative Startups With Ridiculous Licensing Demands
Re: Lack of cashflow
I didn't think YouTube was going to make it, and if Google hadn't bought it, I'm not sure it would have. But Google could afford to prop it up until it became the dominant force in music (yes, I think it is more important than iTunes).
On the post: How The Record Labels Kill Off Innovative Startups With Ridiculous Licensing Demands
Lack of cashflow
There really isn't a good music business model out there right now. Sites that get money from the musicians are probably going to do better than any site that attempts to collect money from listeners.
Do I like the "pay a monthly fee and have access to every recording in the history of music" idea? Yes. But even if that all of those tracks are available for free, there might still be some hurdles to overcome:
1. Will consumers pay?
2. Who would collect the money and what would be the delivery system?
3. If all music is available to every startup for free, then competitive pressure will likely drive out most startups anyway. Each would compete with each other to offer the same services for lower and lower prices until we'd be back to a scenario where consumers can have the music for free and there's no money going to the startups.
On the post: How The Record Labels Kill Off Innovative Startups With Ridiculous Licensing Demands
Re: Re: Re: Re: Re: Re: Re: Just work with independent artists
1. Be an interactive music site (then you don't have to deal with SoundExchange).
2. Only use music from artists/labels which don't ask for a royalty. If the major labels want to drive a hard bargain, don't use their music.
I figure that if the startups already know they have certain operating expenses in the form of payments to major labels and still proceed with that business plan and can't make a go of it, then that's too bad for them. And hooray for startups who base their plans on unsigned artists eager for the exposure. Help out the little guys. If the major labels go under because they don't play ball with the startups, is that really a big loss in the greater scheme of things? And if the startups can't make a go of it without the major labels, maybe they are still too tied to the music of the past.
A Short Explanation of SoundExchange and Why It is Important -- Music Business Heretic: "Why is SoundExchange so Powerful and where does it get its authority? SoundExchange is designated by the Libraian of Congress as the sole organization authorized to collect royalties paid by services who make non-interactive digital transmissions of Sound Recordings. The statutory authority for SoundExchange comes from the following two Federal Acts (The Digital Performance In Sound Recording Act of 1995 and the Digital Millennium Copyright Act of 1998) (essentially these two acts combined to grant a performance right for Sound Recordings)."
On the post: How The Record Labels Kill Off Innovative Startups With Ridiculous Licensing Demands
Re: Re: Re: Re: Re: Re: Just work with independent artists
SoundExchange only applies to non-interactive sites.
But my whole point was for music sites not to bother with the major labels in the first place. There's a ton of music that is freely available. Promote the future of music, not the past. If the startups are going under because of licensing fees, then use music that comes with no fees. There's a lot of it out there. And the unsigned artists will be very happy for the attention.
On the post: How The Record Labels Kill Off Innovative Startups With Ridiculous Licensing Demands
Re: Re: Re: Re: Just work with independent artists
Like I said, I'd recommend that more music startups deal exclusively with unsigned artists and small labels which freely provide their music.
On the post: How The Record Labels Kill Off Innovative Startups With Ridiculous Licensing Demands
Re: Re: Just work with independent artists
A Short Explanation of SoundExchange and Why It is Important -- Music Business Heretic: ") What is SoundExchange? SoundExchange is a non-profit performance rights organization that collects royalties on the behalf of sound recording owners and featured artists for non-interactive digital transmissions, including satellite and internet radio as well as terrestrial radio stations who broadcast there AM/FM signal over a digital communication network ."
On the post: How The Record Labels Kill Off Innovative Startups With Ridiculous Licensing Demands
Just work with independent artists
Sure, I understand the appeal of being able to say you offer every song ever recorded (or as close to that as possible). But since the future of music appears to be without the major labels and there's a lot of good music available that isn't owned by major labels, why not just promote what is easy and cheap to obtain? Plus it makes your company look forward-thinking by working with the next generation of artists.
On the post: Stealth Mode = Miss The Boat Mode
Re: Where does Apple fit into this?
On the post: Stealth Mode = Miss The Boat Mode
Where does Apple fit into this?
On the post: Bob Dylan Gets Around Service Fees & Scalpers With A Simple Plan: Pay Cash At The Door
The concert didn't sell out
"By comparison, much pricier tickets for Dylan's concert the night before at the Fox Theater in Oakland sold out within an hour, fees and all.
Lefkowitz thinks a few factors worked against the 'ticketless' model, which admitted concert-goers on a first come first served basis.
'Some people may have been intimidated by the line,' he said. 'Some people maybe didn't like the idea of leaving home without a ticket; the uncertainty. Most of his fans probably have jobs so to get here before 6 or 7 p.m. was probably a stretch. It was challenging.'"
On the post: Bob Dylan Gets Around Service Fees & Scalpers With A Simple Plan: Pay Cash At The Door
Re: Nothing wrong with scalping.
And what has been pointed out in some discussions about ticket resellers is that often they are actually doing the selling on behalf of the artist. The artist wants more money, but doesn't want to price the tickets so high. Therefore some tickets are immediately taken off the market, sold at a higher price, then the money goes back to the artist and/or promoter.
Another argument has been that ticket resellers provide a service by grabbing tickets on behalf of people who don't want to spend the time on the computer trying to get them. These busy fans would rather pay more money for them instead.
But now what has happened is that many concerts aren't selling out so prices are dropping and you can get discounted tickets directly from the promoter and ticket seller. The secondary market is getting killed because people are figuring out they can get tickets to some big name artists for as low as $10. In this economy the live music industry isn't the sure thing it once was perceived to be.
On the post: New Research Suggest Google Book Search Helps Publishers A Lot More Than It Hurts
Re: Well...
I've been kind of amazed at how much info I can find via Google Book Search without having to actually see the book.
And that's why I'm also surprised when people say they are having trouble doing research because of copyright issues. I do a lot of research and between libraries and Google Book Search, I find the world of information quite accessible.
Now, because of how much information is online, I rarely need to go to a library anymore, and I have a university library within walking distance from where I live. Occasionally I will read a magazine online via my public library, but that has been all I have needed.
There are a few publications I don't get to see because there aren't any libraries subscribing and I don't want to subscribe personally, but if I used them everyday, I would subscribe.
On the post: Bob Dylan Gets Around Service Fees & Scalpers With A Simple Plan: Pay Cash At The Door
Re: tickets.
And actually we are reverting back to that sort of system anyway. As people learn they can often get tickets cheaper by waiting, they are learning to wait.
On the post: Bob Dylan Gets Around Service Fees & Scalpers With A Simple Plan: Pay Cash At The Door
This works best when everyone can get a ticket
You won't likely have a problem as long as everyone waiting in line is likely to get in. There may be people who come after the show has sold out and they get turned away, but as long as everyone has a reasonable expectation of getting in, panic isn't like to set up.
But everyone's concerns about crowd control are likely to be very real if demand for tickets greatly exceeds capacity. You don't want to whip up the crowd into a frenzy.
You might want to give everyone who wants a ticket a number in advance (probably online), like you get at the motor vehicle department, so they know in advance if they can get a ticket.
Scalpers could probably get numbers, too, but if you required that a photo id must match the ticket holder, then perhaps you would reduce the number of people buying more tickets than they personally can use.
Some of this process already duplicates what ticket sellers do, but if you eliminated credit cards and everyone had to pay cash at the door, it should reduce some of the charges that come with ticket services.
But this gets back to some of the questions I asked during the Joe Pug thread. Even venues that sell their own tickets directly usually want a cut of the ticket. So you've got to work out a relationship not only between the artist and the fans, but also between the artist and the venue, and if there is a promoter, will the promoter need a cut, too? If the artist is taking the cash, then some of it probably needs to go to the various entities involved. If the venue is taking the cash, the artist needs to get paid. If the promoter is taking the cash, then both the artist and the venue need to be paid.
On the post: New Book Shows How Our Common Culture Has Been Locked Up Via Copyright
Re: More on the concept of commons when it comes to physical property
Understanding Knowledge as a Commons
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