$120 a year

This is why I believe most people don’t pay for the streaming music services.

The data shows that $120 per year is far beyond what the overwhelming majority of consumers will pay for music, and instead shows that a price closer to $48 per year is likely much closer to a sweet spot to attract a large number of subscribers.

$120 a year is more than most people spend on music anyway.

MTV is teaming with Rhapsody for music discovery website

“This list is a pure hotness list,” Shannon Connolly, Vice President of Digital Music Strategy at MTV said in an interview with Wired.com. “We are intentionally presenting artists to the user that are high-ranking in velocity.”

I’m not sure I know what that means.

Velocity, in this case, means buzz — measured daily by incorporating feeds from Twitter, Facebook, and news sites from around the web. MTV is using technology developed by a company called The Echo Nest to determine the most buzz-worthy songs and artists on any given day.

Oh, ok. Like what The Hype Machine kinda already does.

The Brains Behind Bieber

Billboard interviews Scott Braun. Braun is Justin Bieber’s manager.

THR: What do you think is the biggest problem plaguing the music business right now?
Braun: A lack of understanding that we’re no longer a music business. We’re a multimedia business. We’re a branding business where the music, the songs and stars are the drivers, but at the end of the day, we have to be willing to open ourselves up to different revenue streams.

THR: Same question, but with the major labels.
Braun: They’re built on a structure that’s still based on a failing business. Doug Morris is a legend and what he did was incredible, and I think there’s some great new leadership with [Universal Music Group CEO] Lucian Grainge, but he has a tough job ahead of him. You see the moves that [chairman and CEO of recorded music for Warner Music Group] Lyor [Cohen] is making and he’s very capable. Barry Weiss is a brilliant guy who doesn’t like to lose either. There’s some good leadership out there and I think they’re heading in the right direction.

They also cover the difference between Bieber and other teen idols, his similarity to Michael Jackson (Jackson 5 Michael Jackson) and how Bieber got discovered. I had no idea he was found on Youtube.

No way – Business students cheat?

More than 200 students at the University of Central Florida have come forward to admit to cheating after their professor gave a lecture on ethics that has become a YouTube hit.

I don’t want to get all stereotypical (I will anyway), but considering the past 10 years with Enron, the financial crisis and oil spills, it’s not so difficult to assume that people interested in business are statistically more likely to behave unethically.

Makes me think of that scene in Back To School where Rodney Dangerfield goes back and forth with the professor about how things are actually done in the business world.

Amazon now sells watermarked MP3s

Wired previously reported that personally identifiable information wasn’t stored in Amazon’s MP3s. That doesn’t appear to be true anymore.

I saw “Music file contains unique purchase identifier” on Kanye West’s brand new My Beautiful Dark Twisted Fantasy released today for $3.99 on Amazon MP3.

The record company that supplies this song or album requires all companies that sell its downloadable music to include identifiers with the downloads. Embedded in the metadata of each purchased MP3 from this record company are a random number Amazon assigns to your order, the Amazon store name, the purchase date and time, codes that identify the album and song (the UPC and ISRC), Amazon’s digital signature, and an identifier that can be used to determine whether the audio has been modified. In addition, Amazon inserts the first part of the email address associated with your Amazon.com account, so that you know these files are unique to you. Songs that include these identifiers are marked on their product detail page on Amazon.com. These identifiers do not affect the playback experience in any way.

I think this is different than the Song ID left in the comments field of Amazon MP3s. It doesn’t appear to be available on every download available from Amazon. This is the first time I’ve ever seen it.

The Talk Show: Michael Jackson and The Beatles

During Episode 17: Magic Flute of The Talk show John Gruber and Dan Benjamin spend some time trying to figure out who actually owns the rights to The Beatles music, eventually linking to this Snopes article and still not having a clear answer.

The first sentence of the Snopes article really sums up what you’re in for:

This is one of those items which is primarily true, but the answer needs to be heavily qualified in order to avoid being misleading.

It’s not a simple answer because the music business isn’t simple.

Telecommunications company mysteriously shuts down offices

Regarding the recent closing of a call center (but I bet it’s a telemarketing company):

Colwell & Salmon received a $1.3 million tax credit from Michigan in January for the expansion of a call center in that state, according to the Michigan governor’s office. The project was expected to cost $4.9 million and create 502 jobs.

It could not be determined as of Tuesday afternoon whether that project went forward.

Only two comments, but both from people who interviewed or worked there. They say it was sketchy town.

Musicians, these are the people you’re trying to sell your music to

Screen shot 2010-11-03 at 2.59.11 PM.png

Transcribed:

Why would anyone buy music from iTunes. They rip off the artist and the customer. 1.29 for a song. There are so many ways to get music without giving apple 70 cents for every song. Piratebay is the way to go for sure.

If you released an album how much are you getting from the Pirate Bay?

  • From CNN (who should probably just disable comments entirely).

Taylor Swift will sell shitloads this year

From NPR:

Taylor Swift, one of the music industry’s biggest money-makers, released a new album Tuesday. Her label is so confident that Speak Now will sell well that it’s shipped more than two million copies to stores.

People who listen to Taylor Swift don’t know what P2P is. If anything, they may guess it’s like a PSP.

If you’re interested in hitting big in the recorded music retail model you need to consider becoming a country musician, making children’s music, or curating a movie soundtrack. The people who buy those don’t download music illegally. Just look at the charts.

Choice Paralysis

From Ted Eschilman’s column from the October 2010 Music Inc., comparing too many choices in a music store’s inventory to ordering sandwiches at Subway:

The other day, I was standing in line behind two elderly grandparents with four little kids who didn’t know what they wanted. Their indecision took an agonizing amount of time. Even though they marched off somewhat content with their lunch, I’m not sure the opportunity to create their own personal culinary art made the kids any happier than they would’ve been with spartan Happy Meals from McDonalds. Also, Grandma and Grandpa were thoroughly frazzled by the 20 questions required to make the tots happy. Six-inch? Twelve-inch? Wheat, honey, oat? Nuked or toasted? There were long pauses between each question.

Tetris Management

Sometimes businesses are managed the way a game of Tetris is played.

Take a blank Tetris board:

tetris_phase1.png

This is the best part of the game. You can go wherever you want. The whole world is at your fingertips. You’re completely in control of the way the company is managed.

This is the startup phase of your business.

You’re young, vibrant, and flexible. Things are new. They’re exciting. The current company environment, maybe even the market environment, is relatively simple and orderly. What’s your strategic plan? Get points!

Awesome. Let’s start laying down blocks.

tetris_startup2.png

Just about every block has a place during this phase. They all fit almost perfectly together.

Then what happens? The company starts getting bigger. You get more customers. It’s not just you anymore. You have people working alongside you, or maybe under you. In many cases the company has completely consumed your life, the same way the blocks have almost completely consumed the board.

But it’s OK, because things aren’t that bad. You’re still making a profit. You’re getting lots of points. But it’s more challenging now, because the blocks don’t fit together the same way they used to.

This phase, once the company has hit its stride, is like the REM sleep of the company lifecycle. It’s also the best position to be in during Tetris. Agile, yet profitable – still getting high scores. The business can even take risks to fill 4 lines at once.

tetris_doingfine_takingrisks.png

But there’s a threshold between this state and where your company’s strategic direction can go to shit.

Because oftentimes in Tetris, this happens:

tetris_ohshit.png

Dammit. I misplaced a block.

Could be a recall, maybe a PR disaster. Could be an incredible new challenger in the marketplace. Could be you were watching some competitor’s screen and forgot to pay attention to your own. Maybe your product or service just plain sucks. Maybe you hired somebody who isn’t all they’re cracked up to be.

Now every decision you make is because of this block. That goddamn misplaced block.

This is a pivotal step in the game. This is the point in Tetris where you stop setting yourself up for success. You stop paying attention to things like scores and levels.

You stop looking for where blocks should go and start looking for where they can go.

Of course, sometimes a company can recover from this misplaced block. No big deal. We’ll just work around the block, which will eventually go away as we eliminate lines. And if you can do that you’re back into that REM-like state of the game where blocks just seem to fit together.

But not most times. 80% of new businesses fail within their first year. They can’t work around the block.

That’s when this happens:

tetris_fffuuu.png

You go out of business.

So how do you avoid this? Only the absolute best players will never misplace a block. You (or your management) are going to misplace blocks.

Maybe you think like a Fortune 500 company and encourage conditions that give a bit of slack. You have enough security so that you can take risks that won’t be catastrophic. You play Tetris in a way that you’re never too close to the top of the board.

Could you break up that big game of Tetris that’s somewhere around levels 5 and ∞ into a bunch of smaller Tetris games between 1 and 4?

Or you could run your company in a way that’s not like Tetris. Maybe you run it like Starcraft.

About Recorded Music, Albums, Rdio, and Streaming iTunes

This is how I’ve been using Rdio:

bestcoast.png

I find an album I’m interested in and add songs I like to my Rdio collection. If I add enough songs to the collection, say half or more of the tracks, then I’ll go ahead and buy the album.

I find it’s better than listening to previews in iTunes or Preview.fm. I’ve purchased stuff from 30 second samples that I’ve regretted, but if I listen to the whole album I know exactly what I’m in for. Between this past weekend and today I’ve heard three albums I had to have that I may not have given full attention to without Rdio.

Which may be a little odd. Rdio, and other streaming services, could potentially serve completely as an iTunes replacement. Instead of buying these albums from iTunes and Amazon I could have just kept them at Rdio. Certainly we’re headed in that direction, simply because this is happening:

Vinyl > Cassettes > CDs > Downloads > Streaming

In the year 2000 CDs were still the norm, but downloads were on the horizon. Here we are in 2010 and downloads are the norm, but streaming is on the horizon. I think that by 2020 streaming will be the norm, if not sooner.

But today the reality is that iTunes is better for music playback than these services. It’s just a better experience. It’s so much faster to browse my collection in iTunes than Rdio or Mog. I get big album art. I get smart playlists. But I just can’t deny the appeal of $9.99 all-I-can-access approach of Rdio, even if it doesn’t contain a lot of music I know I want to listen to (everything on Warp, for example).

And that’s what’s a little troubling to me. There are some artists and labels that I think believe they’re better off without the streaming services. And who can blame them? They have a base that are still paying $9.99 for an album’s worth of tunes, so why should they cut their profits down by participating in streaming services?

One reason is that the people who’ll shell out that $9.99 are diminishing. Up until the late 90s / early 2000s, paying for recorded music was the norm, even if you ended up not liking it. But if you were born in 1992, and acquired your first albums around 2003, your concept of music consumption had a lot more to do with P2P or iTunes than a record store, or even a Target.

I think we kid ourselves when we proclaim that Nine Inch Nails and Radiohead adjusted to this without a problem. The thing we forget is that they were popular bands before their pay-what-you-want experiments. They came of age in the 90s, thanks to terrestrial radio, major label marketing, and MTV. Meanwhile, nobody brings up Saul Williams’s Niggy Tardust in this side of the discussion. Nine Inch Nails has gone on hiatus. Radiohead says they’re not doing albums anymore. No other major artist has done this model since then. Why is that?

“Well, why not just sell lots of merch?” Is this what albums have been reduced to? A loss leader for $20 t-shirts?

I, and others, still believe in the album as an art format. Among music fans there needs to be an understanding that spending $10 on an album results in more than 10 more MP3s on your hard disk. It’s an investment in the music you love. It’s the simplest, most efficient way of telling the market “I enjoy this. I want more like it.” If you don’t do that it will go away, or at least be a lot harder to find.

So rather than risk having digital tracks sit and collect dust, artists and labels are now considering streaming services to encourage discovery by listeners they’ve never had before. Plus, a few bucks from licensing for streaming is better than no dollars.

And maybe that’s a good thing, at least for listeners. Although it’s missing many of my favorite artists, I could surely live off of Rdio if I wanted to. There’s just SO MUCH STUFF available that I’d never run out of things to listen to. Which, in a way, is also its biggest flaw. Rdio, Mog, Spotify, all-you-can-eat streaming encourages perpetual music discovery, which means rarely returning to music you loved the first time around, or realizing the genius behind an album after the 3rd, 4th, or 5th listen. In its place you get a never ending search for serendipity.

The ideal version of this would be some sort of hybrid iTunes/streaming service. Take the local library idea that we’re used to from iTunes and other software and marry it to the on-demand streaming services like Rdio, Mog and Spotify, and let us pretend that the streamed stuff added to our collection is right on our hard drives. That way you can have the stuff that’s not on the streaming services, like your favorite local band, and the entire streaming catalog all in one location.

I think there’s a chance we may see that a week from today.

Imagined Negotiation Dialogues Between Labels and Streaming Services

Label: So let me get this straight. We currently offer our albums for download at $10 a pop.
Streaming service: Yup.
Label: And you’re proposing that we go in with you and a bunch of other labels to have our albums available on demand through the internet.
Streaming service: Yeah.
Label: At the same $10, which we would share with the rest of your partners, after you take your cut for administrative costs and other things.
Streaming service: That’s right.


I think this is why I can’t stream anything from Warp on Rdio.

Link: Coping With Fury at a Price Hike

Inc. Magazine profiles eMusic and the way they dealt with their price hike last year.

Stein knew there was only one way to prevent even more labels from jumping ship: raise prices for subscribers. He also knew that eMusic couldn’t get away with another price hike without offering something in return. He sought ideas from his executive team and eMusic subscribers, and he held a series of focus groups. All the feedback pointed in the same direction: eMusic needed to broaden its catalog. And given that eMusic had nearly exhausted the universe of independent labels, Stein says, “It was pretty obvious that in order to take a big swing, we needed to start working with the major labels.”

I think the price hike was the right decision for emusic. Surely their plans weren’t sustainable. I suspect I made emusic very little with my 90-track a month plan, or I costed them money.

But it doesn’t quite address why a customer like me, who had an eMusic subscription for about 6 years, decided to leave.

I didn’t quit eMusic specifically because of the price hike, but the price hike revealed it sucks doing business in credits. Tracking credits is not fun. Sometimes I’d download all but one track from an album because I ran out of credits. I wouldn’t be able to complete the album until the next month.

Let’s put it this way: I had a reoccurring task in Omnifocus to make sure I used up all my eMusic credits each month. That’s not fun. It makes eMusic plans feel more like making car payments than discovering new music.

eMusic felt like work. It was a job I liked enough to stick around for until they moved my desk next to a guy who talks on speaker phone all day. I still did the same kind of work, but the environment changed. And I got other offers.

So I quit the job.