Tag Archives: music

Music 2019

Ten years ago the RIAA fought the decrease in sales of music CDs by different means, including: taking their customers to court, lobbying to have the ISPs stopping Internet Access to anyone who shared music files, and imposing taxes to any device able to store or play music, assuming everyone was in piracy.

Ten years later, all these actions from RIAA seem ridiculous. In 2019 music is no longer sold in discs or in any physical format. All music is distributed online and, to what would have been a surprise for RIAA in 2009, for free. Artist distribute their tracks freely online, and encourage their fans to share them with their friends.

Social Networks like Facebook, MySpace, uTube and Amazon.net play now a central role in the music industry. All artists compete for attention and try to influence others to become fans. Becoming a fan of a band gives the user access to their songs, to their music videos and to buy their merchandise online.

Artists get the ad revenues from their sites, and more substantial revenues for the $0.99 monthly fees that the SuperFans (premium fans) pay to have access to exclusive content around artists, such as interviews, live chats,  or clips behind the scenes. Superfans enjoy other benefits, including discounts in tickets for live concerts.

In 2019, the labels and the RIAA have almost disappeared, and artists now deal directly with their audience, thanks to the social network platforms that manage the SuperFans subscriptions, as well as the online purchases.

Now there is a huge amount of semiprofessional artists that generate some revenues from their creations. Still there are a few celebrity artists that command hundreds of thousands of SuperFans.

Music did survive the era of the Recording Labels. The new Online Music era is more democratic in who gets the attention, and has removed inefficient intermediaries between artists and fans.

Cartoon found via Wired.com

This post is a prediction of what could be written in ten years from now about the Music Industry. Soon another post about Movies in 2019.

Free Music Pays Back

Last weekend while walking in a mall, I saw a record shop that was playing in their big plasma screens a live concert from Celine Dion. When I saw it I wondered who can be interested in having this DVD? I am not specially keen on Dion, so you can imagine that the idea of purchasing it was never in my mind. A couple of days later I saw a TV add of Dion’s DVD, and thought, why not downloading it with eMule. Celine Dion World Tour will be soon in town, so why not see what the show is about.

Clearly I would have never bought the DVD in the record store. Yet, the curiosity might have made me spend one hour of my time to watch the downloaded concert.

What would Celine Dion prefer? Shouldn’t she prefer that I watch her downloaded show for free, and maybe get interested to go to her concert?

Last.fm says that free music leads to increase sales of songs: Free music encourages sales
“Last.fm’s on-demand service, which lets users play any particular song, only allows a user to stream a song in full three times. After which, they’re prompted to purchase the track through one of the affiliate services. […] Since the service launched, Last.fm users are purchasing 66% more albums than before.”

With the huge amount of information we are exposed to and the increasing fight for attention, the music industry is short-sighted not to see that it is already a privilege that we lend our ears and our time to listen to an artist. Artists should encourage to have their music available to as much people as possible, including those who would have never bought their music in the first place.

Record labels adapt to new order

MySpace has struck a deal with Universal Music, Sony BMG and Warner Music to create a joint venture for a Music Site. EMI is reported to be still in negotiations. The labels would take a minority stake at the spin-off of MySpace Music service.

TechCrunch was the first to disclose the deal, an provides some financial details:
“The new company will […] get a cash infusion of $120 million or so from parent company News Corp, and distribute that $120 million to Sony BMG, Universal Music Group and Warner Music Group. In return, the litigation will be dropped and the labels will give streaming and downloading rights to their catalog to the new entity”

The New York Times gives some highlights on what the service will look like:
“Visitors to the site will be able to listen to free streaming music, paid for with advertising, and share customized playlists with their friends. They will also be able to download tracks to play on their mobile devices […] in competition with similar services like Apple, Amazon and eMusic.

A subscription-based music component, where users pay a monthly amount for unlimited access to downloadable tracks, is also being considered […]

[…] tickets, T-shirts, ring tones and other music merchandise will also be available.”

Labels seem to finally surrender to the new order created by Internet and mp3, even if it is as result of a litigation.

Music existed long before the record industry, and it will live long after it’s dead

“…music existed long before the record industry was born, and it will live long after it’s dead”. This was a wise comment in the agitated discussion that followed Mike Arrington post The Music Industry’s New Extortion Scheme.

I can only agree with Mike position and the comment against those who claim the music creativity is at risk only because of the new Internet order.

Music existed well before labels. Mozart did not signed any contract with Decca, and created wonderful music. Labels grew powerful and rich only because they controlled the distribution when it was constrained by the scarcity of ’shelf space’, and the cost of vinyls and CDs. Now, distribution costs are marginal or zero. Any talented guy can produce video and music from his bedroom, and can distribute it freely.

Look at the Photography industry. Now you can find excellent pictures for presentations, websites or brochures at Flickr with Creative Commons license. Don’t we have now more and better choice than when only pros could sell pictures?

Music labels will transform or die, and music will live long after that.

The right price for downloads and rentals

The Music and Movie industries are across a major transformation. The technological disruption brought by Internet and Mp3 requires a sharp disruption in their business model too.

In the past, consumers were hostages of labels and studios, that were able to set the price for CD albums and DVD films well above what consumers would have liked to pay for the content. Consumers accepted those prices only because CDs and DVDs were the only means to get the content, and we were taught by labels and studios that these supports were that expensive. This is why CDs and DVDs were initially much more expensive than vinyls and videotapes.

Now Internet (P2P) and digital encoding (mp3, aac, XviD, h264) enable virtually no-cost distribution of music and films, without the need of physical costly discs. This is a fact that the Music and Movie industries need to make work in their favour (and in consumer’s), instead of fighting against it.

One of the things they are not getting right is pricing for the new model of downloads and rentals.

Labels and studios compare the price of downloads with that of Audio CDs and DVDs, without realizing that consumers never paid that price because they considered it fair, but only because that was the only option. With almost no cost and no intermediaries compared to CD or rental DVD model, why do they insist on a price that seems unfair to end-user and encourage piracy?

For years consumer electronics companies and telcos have used the “peel-the-onion” principle to price innovations. e.g. the first mobile phones were terribly expensive and targeted the richest executive segment, so that telcos could optimize margins on an initially scarce number of handsets. As bigger volumes of phones are available, the price is reduced only to address the next segment. Similarly, Plasma/LCD are reaching the masses once the manufacturing economies of scale enable a lower cost for the physical goods.

Music and Movie industry sell digital content and do not have the limitation of scarce physical resources. Therefore, it does not make sense to peel-the-onion. They should be targeting the widest possible audience, as users already have all the infrastructure (PC, Broadband, iPod) required for the new distribution model.

Seth Godin provides wise advice to movie studios on how to approach the on-line movie rentals market in his post How much of digital? Seth says “…the market is too small right now for the price to matter. What matters is whether you can build an audience that is in the habit of paying you, an audience that wants to hear from you, an audience that you can build a business on“. Seth suggest a price of 50 cents per rental, enough to establish a pay-content behavior and low enough to develop a wide audience and discourage piracy. Once the user behavior is established, prices for blockbusters or new titles could command a premium.

There are better ways forward for the entertainment industry, other than taking customers to court. They just need to accept the industry is going through a major disruption, and act.