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To Charge (For Content) Or Not To Charge - #3, Welcome To Reality, Mr. Murdoch, And Web Basics
August 7, 2009
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"I think it's wrong that only one company makes the game monopoly."
-- Steven WrightAs expected by many in the media biz, this week "Rupert Murdoch has vowed to charge for all the online content of his newspapers and television news channels, going well beyond his prediction in May that the company would test pay models on one of its stronger papers within the year." (Source: http://www.ft.com/cms/s/0/7f6edc2c-821f-11de-9c5e-00144feabdc0.html )
From the article, "We intend to charge for all our news websites," Mr. Murdoch said.
Rupert is obviously mad at the just-released earnings report, News Corp.'s newspaper division saw operating profit nosedive 63% to $96 million -- while the whole company, including 20th Century Fox and HarperCollins, posted a fiscal fourth-quarter loss of $203 million, or 8 cents per share, for the three months ended June 30. In stark contrast, a year earlier the company reports profit of $1.1 billion, or 43 cents per share.
As I said in my previous commentaries regarding charging for paid content, "Why they think people will pay for what they can get elsewhere for free is beyond me. Once again, I wonder if these gentlemen have been following what happened to the music industry."
Of course, what happened to the music industry is happening now to video content.
There's a report this week that says, "It is difficult to imagine the public tolerating a return to paid content for video genres that are currently ad-funded." (See the linked article below, "Video Consumption Goes Up, Willingness To Pay Down," or the linked article below "One Third Of All Online Videos Are Shared")
Obviously, Mr. Murdoch and others who will follow his lead, think that there are enough people willing to pay for news content to make going to a paid content model profitable. Obviously, Mr. Murdoch and others who will follow his lead, have absolutely no sense of the online habits of the younger generations already online.
For over a decade tens of millions have downloaded music from P2P sites (despite the best efforts of the RIAA) and now millions are starting to do the same with movies as well. Why anybody would believe these same people will eventually grow into paid content users is beyond me. And for news, no less, not entertainment. Newspaper circulation is down not only because of the Internet, but because less people are reading in general. The publishing industry is in the same situation as the music industry as book sales decline year over year. (A Google search of "'declining book sales" brings back over 2.8 million results)
From an article titled "The Secret To The Paid Content Model? It Doesn't Exist" (http://tinyurl.com/m9djc2 ), the following:
"If all major publishers colluded over charging for content (which is as likely as the other suggestion: that they all 'withdraw' their content from Google News...) there will still be bloggers and news outlets that would soon establish a large audience because the offer it for free. It reminds me a little of the Nash Equilibrium from Economics 101. Yes, all publishers would do better by charging for content. But no, it won't happen, because someone won't charge and will therefore win market share. As far as I can see, the fundamental issue with paid-content is that for most publishers, it just won't work...User behavior and expectations are incredibly difficult to change. We now expect content to be free.
Rupert Murdoch can talk up the paid-content model all he wants, but it is not convincing anyone -- apart from a few newspaper executives who think they can change deeply-ingrained consumer behavior. The circulation department has never been the main profit centre of newspapers. That's always been the job of the sales floor. And so it should remain. Circulation should be as high as possible, to allow the salespeople to create as much value as possible for products and services needing an audience...By charging for content that is ubiquitous, publishers simply start a race to the lowest price, which is over before it has even begun."
In another article, "Paying For Online News: Sorry, The Math Just Doesn't Work" ( http://tinyurl.com/crak6m ), writer Matt Lageveld literally does the math and proves that traffic and advertising revenue will fall faster than subscription revenue will rise if news sites start charging for their content.
Of course, if I'm wrong and the online habits of people change and they actually start paying for news content (har-har-hardee-har-har), then it would mean all online content (video, audio, the works folks) sites would all end-up charging users. The chances of that happening are about as good as General Motors making money this year.
The Internet, as any web marketer learns in Web Marketing 101, is all about basics. The most essential in my opinion are: a) Ubiquity: The way to maximize any website is to utilize the "web" and make "all roads lead back to Rome" -- your website. The only way to do that is be everywhere you can online and let as many become aware of your online presence as possible; b) Engagement: Without engaging your audience, your website and whatever model you have to generate revenue is just another store sign on the cyberspace highway. No engagement, no audience; c) Uniqueness: What are the discernible differences between what you are offering online versus your direct competition.
All of these basics can be employed successfully to generate revenues for any website online, even those offering news content.
There are already too many websites offering content online for free, and with the explosion of free online video content by almost every TV network, new revenues and strategic partnerships are being created daily that will become models for future operating plans.
Good luck to Mr. Murdoch and his followers. I think they are in for a very rude awakening.
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THE 'A-SIDE' - TRACK 2
JERRY DEL COLLIANO'S 'FIX FOR THE MUSIC INDUSTRY'
Once again, Inside Music Media's Jerry Del Colliano, has written another great article.
He talks about how viral promotion via YouTube could just be the thing that labels are missing completely. And with one particular wedding video racking up over 16 million views (yes, that's right 16 million!) and using Chris Brown's "Forever," he gives a good example of just how successful it all can be.
Read it here: http://tinyurl.com/nzxzvj.
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THE 'A-SIDE' - TRACK 3
THE PORTRAIT OF A YOUNG ARTIST, KAT PARSONS, AS A SUCCESSFUL INDEPENDENT
One of the things I most enjoy about doing the newsletter is dialoguing with my readers everyday via e-mail. Many turn me on to great new music by new artists, or artists that are independent and not yet signed to a label.
A couple of years back, I received several e-mails from readers in the Los Angeles area about an artist named Kat Parsons. They had seen her at a local venue and bought her CD "No Will Power" and they asked me if I had heard about her. (Hundreds of Kat's fans stepped up to finance the recording of "No Will Power" and they raised over $18,000 in pre-orders )
I had not heard about Kat, but I went to her website www.katparsons.com , sent her an e-mail requesting a copy of the album and since then we have dialogued occasionally. "No Will Power" is about the unraveling of a romantic relationship at its every stage, not necessarily in chronological order and features performances by musicians who have recorded and toured with Sarah McLachlan, Liz Phair, John Mayer, Steve Vai and Junkie XL. I recommend the album to anybody who enjoys great songwriter/singers that pack so much emotion into their songs. I highly recommend it to any label A&R people who are looking for talent.
Kat's story is that of an extremely talented young independent artist who has resulted in success some artists signed to major labels have yet to enjoy.
Kat has also appeared on the cover of Music Connection Magazine, in Billboard, The Washington Post, Boston Globe, Chicago Sun Times, The Onion, Campus Circle, and was CDBaby's front page Editor's Pick. Kat has been played on KCRW, WRNR, WBEZ, KLOS, WLUW, and was "Most Played" (Slot 1, 2 AND 3) on XM's Unsigned Radio. While touring in the U.S. and Europe, Kat has opened for and/or played with Billy Corgan, Maria Muldaur, Dave Mason, Jonatha Brooke, Lori McKenna, Shannon McNally, Jim White, The Fixx, The Knack and Charlotte Martin. Endorsed by Yamaha ("Influential Emerging Artist"), Audix, Parker Guitars and ASCAP-recommended, Kat has performed live on MTV (performed her original music with Ryan Cabrera), QTV, WGN Morning News, Good Morning Arizona and Fox TV, among others. Award winning -- DIY Runner Up Album of the Year, Acoustic Live Grand Prize, Pantene Pro-Voice Semi-Finalist, Winner Guitar Girls Songwriting Contest, Chick Singer Night Finalist, and Honorable Mention in the International Songwriting Competition -- she's been featured on United/Ted Airlines "Hear it First" in-flight programming, Yahoo's 100 Concerts, was chosen as one of 10 indie artists across the U.S. for Ford's Fusion car campaign, and has a feature on AT&T's Blueroom Site. In a series on YouTube, Kat reached #3 Most Viewed & Most Subscribed Musician's Channel and was the first featured independent artist on The Grammys/The Recording Academy's WhatstheDownload.com.
Recently Kat was in the studio recording a song with T-Bone Burnett and has been performing across the US, in Japan, Thailand, Vietnam, and Australia in support of her album.
I wanted to dialogue with Kat, and in-between her gigs on the road, she took the time to answer a few questions.
SM: First of all, thanks for taking the time out of what appears to be a very busy schedule to talk to me. Tell us a little about your background ... when did you decide that this is what you wanted to do?
KP: My immediate and extended family are all musicians. My dad is a professional opera singer, his three sisters are choir conductors ... my grandma and grandpa were in a bluegrass band and my mom was a singer-songwriter and now performs jazz regularly. My brother plays a plethora of instruments, my mom's two sisters are singers/dancers/actors, so it was a pretty natural avenue for me. I am really lucky to have the support and understanding of my family. We know how the ups and downs of music-as-a-career can feel and I get to connect in the most joyous way with them through singing.
SM: From what I've seen posted on your website you are one very busy lady ... how have you managed to secure the touring schedule you have and in so many countries?
KP: I've been walking through the doors that open! Some of the international dates have been at hotels through a booking agent who found me on MySpace. Otherwise, most of my performances are organized by fans and myself ... people who have seen me play and bring me to their country, their home, and host concerts.
SM: You went about raising money for the "No Will Power" album via your fans. What gave you that idea, and what were the results?
KP: Another songwriter, Jenny Bruce, shared the idea with me and I ran with it! The results were beautiful ... over $18k raised and a really warm feeling and connection with my fans.
SM: How long did it take you to record the album, and what was your studio experience like?
KP: My first album was recorded in a day and mixed and mastered in a second day. My recent one, "No Will Power," took four months. They were two very different experiences!
SM: One only needs to listen to 'No Will Power' to understand it's a very personal and passionate album. The songs deal with relationships and I imagine the inspiration for these great songs came from a lot of personal pain, something that always seems to reverberate with almost everyone who has been through a similar situation. After listening to it, I immediately felt it was one of the most revealing album about relationships since Bruce Springsteen's 'Tunnel of Love"
KP: Wow, that is so nice, thanks ... I'm happy that so many fans have told me they can relate to many of the songs in the album.
SM: Once the album was completed, did you do all the set-up for online promotion, distribution, etc. yourself?
KP: I hired a PR Company: Luck Media & Marketing, for five months and between them, my manager and myself, we spread the word. The distribution came through Cleopatra Records, which is the home of punk bands, which I am not, but felt cool by association! I wasn't actually looking for distribution, but they were great and put a little advertising behind the release as well. I don't think distribution makes much sense unless you have money to advertise and promote. That is, if no one knows your music, it doesn't matter if it's in the store. I still sell most of my records at live shows.
SM: How did you first go about getting bookings and how do you do it today ... is it different from when you first started?
KP: Not really! I describe it to non-musician friends as a similar process as applying for a job. You send your bio, music, cover letter, etc. and then politely follow up! It's only different now because I know many of the venues and have a relationship with them from having played there in the past.
SM: It's obvious that today's independent emerging artists have all used the Internet to let their voices be heard, but it's extremely competitive out there, so what do you do to separate yourself from other artists online?
KP: I don't know! Do I? :)
SM: Do you write your songs primarily on piano or guitar? Do you have any preference?
KP: Recently, mostly piano ... my songs on piano tend to be sweeter, but the songs on guitar can be toe-tapping.
SM: What artists do you admire?
KP: Everyone of them! Whatever stage we are in, I think it is brave to share. I love Bruce Springsteen, Patty Griffin, Bonnie Raitt, Frank Sinatra, Feist. I've been into Paramore lately.
SM: I see you're still on the road ... when do you think you will record your next album?
KP: I am working on it now!
SM: Again Kat, thanks for your time!
KP: You're welcome. Thank you and may the force be with you.
How a Small Music Magazine Cracked Wal-Mart
Alternative Press, a relatively obscure music magazine, is appearing in Wal-Mart stores across the U.S. this summer. The publisher has partnered with Sony's RED distribution group to produce a one-off title called Summer of Rock, which includes a CD featuring music from 20 bands. The publication is distributed via Wal-Mart.
How did they pull it off?
Read more about it by clicking here.
BigChampagne Releases Music Biz News Aggregators
(From Big Champagne) Beverly Hills, Calif. - BigChampagne, a provider of analytical data on digital media consumption, on Wednesday announced the launch of a new, free platform that will offer information about the sale, broadcast and consumption of popular entertainment media.
Read more about it by clicking here.
Digital Music Market Singing That Old Ad Song
(From eMarketer) -- Free is still better than a fee. Since Napster and the advent of peer-to-peer sharing, the music industry has been frustrated by consumers operating outside legitimate channels.
Ad-supported models may offer a solution. The "TEMPO Digital Music Discovery & Purchase Process" report from Ipsos MediaCT shows that in late 2008, only 19% of U.S. digital music consumers participated in the fee-based market (that is, iTunes or Rhapsody). The ad-supported market, represented in this study by MySpace Music, is already bigger than that, with 22% of respondents.
"The ad-supported models are proving to be an effective means of expanding the broader, legitimate market beyond just the fee-based realm," said Karl Joyce, the report's lead author.
Read more about it by clicking here.
Microsoft's Zune HD Delivers
It's not going to crush the iPod Touch -- a product that for all intents and purposes is more mobile computer than media player -- but it's safe to say that the Zune finally has the power to make good on the promise of delivering one of the richest music experiences on a portable device.
The Zune HD feels expensive, solid and sexy. The metal enclosure is a little more angular than the curvy chrome of the iPod Touch, but feels just as nice and has the advantage of laying flat instead of teetering around.
Read more about it by clicking here.
Online TV Sneaking Up
According to the latest ChangeWave survey of business professionals between the ages of 45 and 63 on TV viewing habits vs. home Internet usage, these Boomers spend more free time online than they do watching traditional TV. And, by a five-to-one margin, Boomers are watching less traditional television than they did a year ago. Among this group, 62% say it's because they're not as interested in what's on TV these days, and another 26% say they're spending more time surfing the web.
Read more about it by clicking here.
A Third Of All Online Videos Are Shared
Marketers eager to exploit the Web's viral potential will be interested to learn that a full one-third of all videos are shared online. That's according to a collaborative study to be released Thursday by Yahoo, market research firm Interpret LLC, Warner Bros. Media Research, Havas Digital, and Omnicom's PHD.
What's more, viewers are twice as likely to ignore TV ads as online ads, and are 28% more likely to pay attention to online advertising, according to the report. Online video already accounts for nearly 32% of all time spent online by video viewers, while approximately 70% of respondents report watching online videos both at home and at work.
Read more about it by clicking here.
Firefox: 1 Billion Downloads And Counting
I don't know how many of you readers use Firefox, but it's by far my browser of choice. At about 8 a.m. PDT Friday, Firefox crossed the billion-download threshold -- a notably large number for Mozilla's open-source Web browser, but one that doesn't tell the whole story.
Firefox fans love their statistical milestones, and Mozilla enjoys fanning the flames by providing plenty of opportunities for self-congratulation. In 2008 was the Firefox Download Day, with more than 8 million downloads in 24 hours. Next came the Firefox 3.5 debut and its download tracker.
Firefox has truly achieved real success, eating steadily into Microsoft Internet Explorer's dominant market share to become the second-most used browser. The newest version is downloaded between 40 and 60 times a second worldwide at present.
Read more about it by clicking here.
Video Consumption Goes Up, Willingness To Pay Down
While consumers can't seem to get enough online video, their willingness to ever pay for the bulk of it remains remote, according to a new report from eMarketer. "It is difficult to imagine the public tolerating a return to paid content for video genres that are currently ad-funded," said Paul Verna, eMarketer senior analyst and author of the report.
Read more about it by clicking here.
The iPhone Backlash
Fast CompanyApple's rejection of Google's Voice application from its App Store has made some of the technorati, including TechCrunch's Michael Arrington, so angry that they've vowed to ditch the iPhone altogether. The editors at Fast Company were so moved by the decision, that they decided to publish seven reasons why iPhone users should make AT&T and Apple "suffer for their sins.
Read more about it by clicking here.
Google's On2 Acquisition to Have Major Impact on Web Video
Silicon Alley InsiderGoogle this morning announced the relatively small (for Google, anyway) acquisition agreement of Web video software firm On2 Technologies for $106.5 million. The deal is expected to close in the fourth quarter.
Silicon Alley Insider's Dan Frommer thinks this could have massive implications for the Web video industry. "If the deal goes through, and Google does what we think it will --open-source On2's tech and push it everywhere -- Google won't just control the world's top Web video site, YouTube, but the technology behind the industry, too."
Read more about it by clicking here.
BEYONCE DOES BILLY J
If the track list for an upcoming platinum edition of Beyoncé's "I Am ... Sasha Fierce," as posted by ThisIsRNB, is correct, the singer will be including a cover of Billy Joel's "Honesty" on the September 4th CD/DVD set.
FOR THOSE OF YOU WHO WERE WAITING FOR THIS NEWS
Natalie Imbruglia is returning in October with "Come to Life," which includes three tunes co-written with Coldplay's Chris Martin, NME reports.
A WARRANT FOR A WARRANT
Warrant's ex-frontman Jani Lane has been sentenced to two days in jail, 36 months probation, alcohol education classes, community service and a fine stemming from a June DUI, TMZ reports.
RED HOT CHILIS READY TO COOK
The Red Hot Chili Peppers have tentatively scheduled October '09 to reconvene after a two-year hiatus since their tour for 2005's Stadium Arcadium, drummer Chad Smith told Billboard. "It'll be two years in September, so now we're ready," Smith, who is currently drumming for Chickenfoot, said of the hiatus. While Flea and guitarist John Frusciante will probably bring some musical ideas, the band expects to carve out songs through jamming and improvising.
KARA SI, PAULA NO
It's official: Kara DioGuardi will be returning as a judge on American Idol, Fox confirms. Paula Abdul is bye-bye.
WARHOL'S JACKSON UP FOR GRABS
Andy Warhol's 1984 portrait of Michael Jackson will go up for auction in New York after a showing at the British Music Experience, the BBC reports. Warhol was commissioned to create the portrait to celebrate Thriller's record sales.
KID ROCK TO ROCK FOR GOOD CAUSE
Kid Rock will headline a $100-a-ticket benefit supporting the Institute for Music and Neurologic Function (IMNF) at New York's Terminal 5 on September 2nd.
PERRY READY FOR ANOTHER SOLO
Aerosmith's Joe Perry will release his fifth solo record, "Joe Perry ... Have Guitar Will Travel," in November
LENNON BIO
Nowhere Boy, a film about John Lennon's early years, will close out the Times BFI London Film Festival in October. The film traces the Beatle's Liverpool childhood with his mother and aunt.
$99 iPHONE 3GS ON WAY?
Currently, you can get the 8GB version of the older iPhone 3G for $99 with a two-year contract. But rumor has it that an 8GB 3GS may be right around the corner--and it may also cost $99.
PASSING
John Hughes, the producer, writer and director whose 1980s films such as "Sixteen Candles," "The Breakfast Club," "Some Kind of Wonderful," "Ferris Bueller's Day Off" and "Planes, Trains, and Automobiles" has died, according to a statement from his representative. He was 59. Hughes died of a heart attack while taking a morning walk in Manhattan, according to the statement.
Quotes of the week
"I'm an artist; I'm not going to use trigonometry."
-- 16-year-old Taylor Momsen, on why she is passing on the traditional college experience, to Teen Vogue. A) The word "artist" is subjective, Taylor; B) Make sure you at least know basic math so when being an "artist" doesn't pay the bills you can to balance a checkbook."With sadness in my heart, I've decided not to return to 'Idol.' I'll miss nurturing all the new talent, but most of all, I'll miss being a part of a show that I helped from day 1 become an international phenomenon. What I want to say most is how much I appreciate the undying support and enormous love that you have showered upon me. It truly has been breathtaking, especially over the past month. I do without any doubt have the BEST fans in the entire world and I love you all."
-- Paula Abdul, tweeting on Twitter to her fans. Sadness in her heart, and surely in her checkbook. Now, let's just hope all the drama about Paula leaving isn't one big concocted PR stunt."We are so happy to welcome back Kara for her second season with 'Idol.' She is a breath of fresh air and her passion for music and her understanding of talent is invaluable. This show is all about discovering new talent, and Kara's championing of Adam Lambert is proof positive of her great instinct."
-- "American Idol" Producer Simon Fuller, confirming that DioGuardi will be back as a judge on the show.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Criss Angel's Nephew Forced To Sit Through Another Lame Mindfreak
EAST MEADOW, NY-Sixteen-year-old Jake Howell groaned and rolled his eyes Monday evening as he was subjected to another embarrassing performance by his uncle, famed illusionist Criss Angel. "When I was younger, it was cool when he'd crank up some thrash metal, cut open his forearm, and remove a penny he'd just swallowed inscribed with my initials, but now I'm just like, come on, leave me alone and eat your dinner like a normal person," said Howell, who has requested he not be seated next to Angel during Thanksgiving this year. "I don't know how much longer I can keep pretending like he's freaking my mind." Debbie Howell, Criss' sister, added that while she too finds her brother's antics tiresome, she's just grateful he finally has a job with health insurance.
THE RADIO INTERVIEW on 'THE AMERICAN PERSPECTIVE' - From newsblaze.com
"Steve Meyer is on the front line of global music sales and distribution which he expects will soar to pocket-bursting levels. What's more, he shares his insight and ingenuity with us. Steve gives us both historical perspective and futuristic vision as he chats with Judy about the love of his work, trends of the business and his personal points of view about success, happiness and blending life with the lust for life. Steve joins Judy and helps us discover the thrill of having it all with a sense of balance and purpose. "
You can listen to an interview I did with Judy Piazza of 'The American Perspective' by clicking here: (It runs about 15 minutes)
http://www.thesop.org/index.php?id=10306.
The Blogs
Check out Jerry Del Colliano's (the founder of INSIDE RADIO) daily blog, by clicking here: http://www.insidemusicmedia.blogspot.com