Why The Music Biz Missed Out On The Greatest Opportunity
September 2, 2011
"History shows that in the face of new technology, those who adapt their business models don't just survive, they prosper. Technology advances, and no laws can preserve markets that have been passed by."-- Google chairman Eric Schmidt, speaking at the 2011 MediaGuardian Edinburgh International Television Festival, where he gave the prestigious annual MacTaggart Lecture. The festival is attended by over 2,000 people with a business interest in television, including on-air talent, broadcasters, distributors, support services and digital innovators. (You can view his whole one hour lecture here: http://tiny.cc/66nr0 )
The above quote from chairman Schmidt just about sums up the thousands of words I've written in this newsletter since 2003, hoping to encourage labels to embrace the Internet as the greatest cost-efficient direct-to-consumer distribution system ever created.
With article after article, and quotes that echo what Schmidt said ("It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change." -- Charles Darwin; "If your environment is changing, you must change with it. If you don't, you perish." - Curtis E. Sahakian; etc.) I said too many times that once "Pandora's box" (the Internet) was open, there was no turning back the hands of time.
For awhile, some label executives thought they might be able to do that. Turn back the hands if time, that is. They were wrong.
For some reason, many label executives thought if they couldn't turn back those hands of time, they could stop the clock, so to speak. Get rid of Napster, Limewire, WinMx, and the multitude of other P2P websites where people all over the globe were downloading music every second of every day, and things might be alright again someday. They were wrong.
For some reason, other label executives thought the RIAA might be the industry's "white knight" by suing all the evil-doers who downloaded music illegally, and spending a small fortune wining and dining (otherwise known as "lobbying") politicians in Washington, D.C. to pass legislation on their behalf thinking that would actually help solve problems faster than working on creative solutions to use technology to the industry's benefit. They were wrong.
For some reason, many label executives blamed the sharp decline in album sales on Steve Jobs creation of iTunes because it allowed consumers to "cherry pick" songs. They were wrong. Had they focused on the sharp decline in the quality of the albums they were releasing and put more A&R focus on making albums worth the $10 consumers were paying, they would have sold a lot more albums (as the multi-Platinum success stories currently on the charts prove so well, even with illegal file-sharing still occurring.)
Had the labels created their own well-branded iTunes type stores, they would have generated more revenues themselves. With over 11 billion songs now sold, the change starts to add up rapidly. Is there any label out there that wouldn't want such a successful online enterprise today?
The Internet has created more new businesses and generated more revenues for any and all who have adapted their business models. Many of those who have done so, are reaping the rewards.
Back in April of 2004 I wrote "Music is a powerful force in all our lives. It really doesn't have any enemies. It has power to bring people together, unite people of different races, countries, religions, and it can reach out to us on the most personal and emotional levels. The industry needs to remember that at all times and focus on the BIG picture, survival in the future."
Yes, the industry is now doing that. After thousands of people in the industry have lost jobs. After dozens of labels have folded. After the decline in sales year over year for a decade. Now it's a matter of survival of what's left.
Investments in the industry's future should not be made in the RIAA and its current course of action. (Inaction would be more accurate)
The labels didn't grab the proverbial brass ring as they rode on their CD merry-go-round for a long time. They blew it.
But as technology develops and advances by the nano-second, it also creates new opportunities for those smart enough to explore "what could be."
THE 'A-SIDE' - TRACK 2
FACEBOOK TO LAUNCH MUSIC PLATFORM
Facebook intends to launch its long-rumored music service next month with Spotify, MOG and Rdio as three of the company's launch partners, Mashable has learned.
Read more here: http://tiny.cc/3sfn1
THE 'A-SIDE' - TRACK 3
When MySpace relaunches later this year under new corporate parent Specific Media and creative director Justin Timberlake, the former News Corp. social-networking site will emerge with new competitors like iTunes, Spotify and Vevo in its crosshairs.
Read the rest on AdAge here: http://tiny.cc/8fr8c
THE 'A-SIDE' - TRACK 4
A CALL TO CLARIFY COPYRIGHT LAW
Arguing that Congress has an obligation "to preserve fairness and justice for artists," the senior Democrat on the House Judiciary Committee has called for a revision of United States copyright law to remove ambiguities in the current statute about who is eligible to reclaim ownership rights to songs and sound recordings.
Read more on the New York Times here: http://tiny.cc/mcgqw
THE 'A-SIDE' - TRACK 5
I SAW A TABLET SOMEWHERE A LONG TIME AGO IN A SCI-FI FILM, DIDN'T I?
Samsung's latest salvo against Apple and its attempts at barring the company from selling its line of Galaxy phones and tablets in the U.S. involved a bold trick last week: Apple's iPad design patent should be tossed on the grounds that others have gotten there first. The proof for that claim? Science fiction, of course. (If you've seen "2001: A Space Odyssey," you saw a tablet in the film)
See what else might have inspired tech in real life. Read the rest on CNET here: http://tiny.cc/913d8
THE 'A-SIDE' - TRACK 6
THE WHOLE iTUNES STREAMING MUSIC THING
A developer beta shows iTunes will be enabled to stream as well as download music from Apple's servers without your having to upload each song. You can't do that at Amazon or Google.
Read the rest on CNET here: http://tiny.cc/93a7i
THE 'A-SIDE' - TRACK 7
AN APPLE EMPLOYEE LOST ANOTHER UNRELEASED iPHONE...NO, HONEST
In a bizarre repeat of a high-profile incident last year, an Apple employee has once again lost an unreleased iPhone in a San Francisco bar, CNET has learned. An investigation by SF police and Apple's security team is under way.
Either Apple has a high-rate of people who lose things, or somebody's idea of PR is becoming redundant.
Read about it here: http://tiny.cc/x036s
THE 'A-SIDE' - TRACK 8
AMAZON SEES THE FUTURE, KNOW IT'S TABLETS ... AND STARTS MAKING CHANGES
Sure to reshape the world of ecommerce overnight, Amazon will reportedly launch a new -- and what The Next Web calls "vastly improved" -- website in the not-too-distant future. Perhaps its biggest innovation, not only will does the new design look great on the desktop, according to The Next Web, "but [it] has been designed to appeal to tablet owners, signaling that the company could soon announce the launch of its own tablet devices."
So, what does the new Amazon look like? "Gone are the blue menus and buttons, making way for a slicker white and grey interface that reduces clutter and makes navigation a lot easier," The Next Web writes. Amazon will also take the relaunch as an opportunity to push its Instant Video, MP3 Store, Cloud Player, Kindle, Cloud Drive, AppStore for Android, Game and Software Downloads and Audiobooks -- as The Next Web notes, "all services that would be perfect for a potential tablet buyer."
Read the rest on NextWeb here: http://tiny.cc/fwjv7
THE 'A-SIDE' - TRACK 9
JUSTIN BIEBER, LADY GAGA, RIHANNA ... ALL TARGET OF PRACTICAL JOKE BY HACKER
An unknown number of popular music videos disappeared from YouTube on Sunday night and Monday, thanks to what appeared to be either a hack or prank.
Videos from Justin Bieber, Lady Gaga, Rihanna, and other popular artists that were associated with Sunday's MTV Video Music Awards disappeared from YouTube's site, as well as the Vevo channel, WebProNews reported. The reason? A copyright claim that was filed by a person or persons named iLCreative.
Read the rest here: http://tinyurl.com/44qm3ea
THE 'A-SIDE' - TRACK 10
BIT TORRENT NO LONGER #1
Despite its iconic status in the eyes of the entertainment industry, BitTorrent has been surpassed as the most popular way to share files on the Internet.
In fact, peer-to-peer networks no longer deserve their place in the bull's-eye of the anti-piracy target. BitTorrent is no longer the dominant player when it comes to file-sharing on the Internet. The five largest English language websites dedicated to swapping files are all related to centralized file-hosting services, also known as cyberlockers.
Read the rest here: http://tinyurl.com/3c47zrs
THE 'A-SIDE' - TRACK 11
FANS WILL MAKE NEW BEACH BOY VIDEO FOR 'SMILE' RELEASE
Fans are being invited to make the music video for an album that was recorded before many of them were born and that has never been released.
Everyone knows the songs, but hits like "Good Vibrations" and "Heroes and Villains" by the Beach Boys came from one of their most talked-about albums, but never really released in final form, "Smile."
There's a $10K prize package as well, so get creative. Read about it all here: http://tiny.cc/mz2nv
THE 'A-SIDE' - TRACK 12
SONY'S ANDROID WALKMAN
Sony Electronics, trying to advance its music players into the modern age of digital devices, showed a prototype today of a new Walkman based on Google's Android operating system -- and CNET got the first public look.
The Walkman prototype is designed "for music lovers by music lovers," said engineer Shinichiro Torii in an interview here at the IFA electronics show. But unlike the company's other Walkman products, it can go well beyond that by running the thousands of Android applications available today, making it a better match for Apple's iPod Touch as well as many competitors' smartphones.
Read more here: http://tiny.cc/u1h2v
THE 'A-SIDE' - TRACK 13
CHECK OUT MURFIE.COM
The 21st century has not been kind to CDs. Formerly the cash crop for record companies, these days the silver donuts are not only outmoded but also, for many, a pain in the ass. They take up space, cost money, the jewel cases are flimsy at best ... if you have an iPod, you get the idea.
But then along comes Murfie, an entrepreneurial venture spearheaded by University of Wisconsin Alum Matthew Younkle. Murfie seeks to lift the dust off your old CDs (or, more likely, your parents') by offering a cheap and green method to get rid of them while getting more music in return.
Read the rest of the article on The Badger Herald here: http://tiny.cc/mu2q4
VMA'S BIGGEST EVER:
The MTV Video Music Awards scored its highest-ever ratings on Sunday night, pulling in 12.4 million viewers for a show that featured Lady Gaga in drag, the revelation of Beyoncé's pregnancy and memorable performances by Kanye West and Jay-Z, Adele and Lil Wayne.
A STAR ON HOLD:
The announcement of Beyoncé's pregnancy at MTV Video Music Awards was a happy occasion for pretty much everyone except Clint Eastwood, who may have to put his remake of "A Star Is Born" featuring the R&B queen on hold indefinitely.
Even before Lady Gaga's performance art of an opening to Sunday night's MTV Video Music Awards, her new single "Yoü and I" was already surging up the singles charts. It rose 121 spots on the Ultimate Chart, from #140 to #19 as of last Thursday, most likely due to the video being released. (It has since tallied more than 16.4 million views.) After the VMAs, "Yoü and I" hit #8 on iTunes this week and jumped from #24 to #8 on Billboard's digital-songs chart, selling 109,000, an increase of 92%..
STING BIRTHDAY BENEFIT:
Sting will perform a special concert at the Beacon Theater in Manhattan on October 1st to celebrate the 25th anniversary of his solo career on the eve of his 60th birthday. The show, which will feature music from the singer's extensive body of work, will be a benefit concert for the Robin Hood Foundation, an organization that fights poverty in New York City. Sting's performance will also include a number of major guests, including Bruce Springsteen, Billy Joel, Lady Gaga, Mary J. Blige, Stevie Wonder, Herbie Hancock and Will.I.Am of the Black Eyed Peas.
Canadian broadcasters can go back to playing Dire Straits' 1985 hit, "Money For Nothing," the Canadian Broadcast Standards Council (CBSC) announced yesterday. The song was pulled from national playlists in January after a single listener complained about the use of the word "faggot" on Newfoundland radio station CHOZ-FM.
COEN BROTHERS NEXT ABOUT '60s FOLK SCENE:
The Coen brothers are going full speed ahead with Inside Llewyn Davis, a movie loosely based on the story of Dave Van Ronk, a central figure in the Greenwich Village folk scene of the '60s. The Coens' original screenplay will be heavily fictionalized, with a Van Ronk analog named Llewyn Davis struggling as a folk musician during the peak of the genre.
The Beach Boys' "Smile," the record originally planned as the follow-up to their 1966 classic "Pet Sounds" but scrapped mainly due to creative mastermind Brian Wilson's fragile mental health at the time, is set to be officially released for the first time as "The Smile Sessions" on November 1st. The record, which will be issued as a 2-CD set, double vinyl LP, digital album and box set, was carefully completed, compiled and sequenced by the surviving members of the band from the original master tapes.
BROWNE DOES WOODY:
Jackson Browne and Rob Wasserman are celebrating the 100th anniversary of Woody Guthrie's birth by releasing "You Know the Night," a new piece of music based on a 30-page notebook entry penned by the revered songwriter just after meeting the woman who would become his second wife.
Rdio, the on-demand and social music service from Skype co-founder Janus Friis, has taken steps to broaden its subscriber base by adding pre-paid cards as a payment method. Cards will be available as a physical rack card at Target, and as an e-mailed voucher through the Rdio.com site. A customer does not have to be a subscriber to purchase a card either way, and the pre-paid amount can be applied to any Rdio service.
NO MORE 99-CENT TV SHOWS SEZ APPLE:
Apple has killed off its TV show rentals after less than a year. Customers can still buy shows, but the less expensive rental option is no longer available. Movies are not affected.
MORE FREE PUMPKIN MUSIC:
The Smashing Pumpkins' Billy Corgan said the Smashing Pumpkins' latest free music initiative is the Smashing Pumpkins Record Club - or SPRC - a new project in which Corgan will dole out unreleased recordings from his extensive vaults.
LIL' WAYNE EQUALS BIG SALES:
Lil Wayne's new album, "Tha Carter IV," is expected to sell over one million in its first week at retail.
NO GO IN TOKYO FOR YOU TUBE VIDEO DOWNLOADERS:
Japanese record companies have filed a class action suit against MusicGate, parent company of TubeFire, for allowing users to download YouTube videos. The suit is demanding the site be shut down and that MusicGate pays 230 million yen (about $3 million) in damages.
George Green, 59, a classmate of John Mellencamp who co-wrote songs with him, including "Human Wheels," "Hurts So Good," "Crumblin' Down," "Rain on the Scarecrow" and "Key West Intermezzo," passed away after a long bout with cancer.
The Music Industry Past, Present & Future, And The Internet I answer questions on EconTalk
I did an interview about the industry and the Internet at EconTalk with host Russ Roberts. Russ is also a professor of economics at George Mason University, blogs at Cafe Hayek, and has written three novels that teach economics. He's also the co-creator of the Keynes-Hayek rap video. (And if your understanding of the economic meltdown that occurred needs to be enlightened, this video will do it)
In the interview we talk about the evolution of the music industry, the impact of the digital revolution, and I give my reasons for believing in the virtues and potential of the Internet in enhancing the music industry. I point out, as I have many times here in the newsletter, that the internet allows numerous artists to make money from their music and it can enhance revenues from live performances by expanding an artist's base. We also discuss the challenges facing record companies and I suggest that the full potential of the Internet as a distribution channel has yet to be fully exploited. There's a lot of ground covered, but based on the comments already posted of those who have tuned in, they've enjoyed it.
Read more about it by clicking here.
Quotes of the week
"The VMAs. one day a year when MTV pretends to still care about music. I'm drawing a line in the sand. F**k you VMA's."
-- Maroon 5 frontman Adam Levine, Tweeting his opinion about the MTV Video Awards broadcast. MTV replied via Twitter, inviting the pop star (who was not nominated this year) to tune in to the show. But Adam appeared to have no regrets about his fiery tweet, later posting: "still waiting to have my "jerry macguire mission statement moment of deep regret ... not happening. phew!"
"We're doing something for sure. I wouldn't be shocked if it was a tour and possibly an album. We'll have to wait and see. Nothing is on the books right now. With Fleetwood Mac, there's a lot of landmines out there politically and it's hard to get everybody on the same page at the same time - but I think this might be one of those years where everyone will want to do the same thing. Whatever that is."
-- Lindsay Buckinham, talking to Rolling Stone
"Mothers don't stop getting angry with stupid bigots who fk with their children !"
-- Cher, tweeing about those "stupid bigots" who have criticized the casting of her transgender son, Chaz Bono, on Dancing with the Stars.
"I am from New Jersey. My family is from Palermo, Sicily and I am not a singer or a model or an actor or anything. I am just a guy."
-- Lady GaGa, backstage at the VMAs answrering questions in her Joe Caleron character.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Danny DeVito A Lot Taller, Thinner In Person
LOS ANGELES-After a chance spotting of Danny DeVito at Los Angeles International Airport on Friday, vacationer Ted Appleby was surprised to find the actor to be a lot taller and thinner in person than he appears on screen.
Read the rest here and laugh: Click Here.
The BlogsCheck out Jerry Del Colliano's (the founder of INSIDE RADIO) daily blog, by clicking here: http://www.insidemusicmedia.blogspot.com
Check out attorney Ray Beckerman's website at: http://recordingindustryvspeople.blogspot.com where he prints news about the RIAA's ongoing activities
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