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Free Music?
February 1, 2008
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"Artists make the vast majority of their money on touring and merchandise, not CDs. In turn, it is increasingly logical to believe that artists want to have their music reach the widest possible audience at the lowest possible price... ... meaning FREE."
-- Pali media and entertainment analyst Richard Greenfield, November 2007."The pressure is totally toward free," -- Ted Cohen, a music industry
analyst and former EMI digital music executive, at the annual Midem music
business conference this past week.I don't know how many people said that free music from licensed sources was inevitable the past few years, but it's no longer a "What if?" It's here and now, and might become more abundant if the model(s) provide satisfactory revenues for labels and artists.
Of course, that remains to be seen.
But now, a new online service, Qtrax, will try and make that model a reality. (See story below: "Legal File-sharing Service Touts Free Music With Ads" )
The service said it had been endorsed by the very same record companies -- EMI, Universal Music, SonyBMG, and Warner Music -- that have pursued file-sharers through the courts in failed attempts to prevent online piracy. But, perhaps they should have said they were still talking to these companies instead. Because when announcing the launch day for QTrax, QTrax didn't have actually have any of the Big Four companies, as EMI, Warner, Sony BMG and Universal all confirmed. Warner and Universal are currently talking to Qtrax.
QTrax execs responded quickly and insisted that they would not have launched the service without Big Music's backing, but they did admit the "ink hadn't dried" on some of deals. (According to one source, "The company had spent an estimated $1 million at a conference in Cannes trying to convince the industry that their site would help stem the flow of illegal piracy over the Web. ")The model is simple. Fans would be able to download and own songs for free provided they put up with advertising while searching the online service. But (and this is a BIG "but" if you ask me), music files would be protected by digital rights management and would be incompatible with Apple's iPod. (Qtrax is estimating they will offer a library of 25 million songs when fully operational)
With CD sales still in steep decline, any new model(s) that might provide solutions to diminishing online theft of music should be examined, and if they look like they can actually succeed, these models should be employed assoon as possible
Then there's the news that "Should troubled file-sharing site Qtrax, eventually strike licensing deals with the major music companies, it still may face a significant hurdle. Web Sheriff, a company representing music acts such as Prince Van Morrison, and The Black Crowes, has notified Qtrax that it shouldn't think about offering their music, photographs, or other intellectual property until it has secured the artists' OK. While Qtrax doesn't appear to have begun offering music downloads, there are photos posted to the site of artists such as the Foo Fighters, Daft Punk and Wyclef Jean. " (Source: http://tinyurl.com/26hgr7 )
Whatever Web Sheriff might or might not do, if Qtrax does get approval from the Big Four companies, and they in turn show their artists how they'll participate in revenues received from the service, I doubt many would hold back. Why would they? Any artists who believe rigid online control can salvage sales is sadly mistaken. No matter what Prince or anybody else tries to do, their music will still be downloaded illegally. There's no stopping it.
So again I'll say, whether or not this model flies remains to be seen. But it's a bold move to open another revenue stream for labels and artists. If it works, it's going to radically alter the way all music is being bought online, and it would most certainly put pressure on all online stores to lower prices even more, and the labels to do what they should have done several years ago -- drop CD prices. (As I've said repeatedly in past issues, if the labels have any desire at all to keep CDs in the marketplace longer, prices need to come down immediately. The failure of the industry to react to a changed marketplace will only result in more and more revenue hemorrhaging )
Free music may very well end up being what nobody expects -- a successful venture that creates new strategic alliances between music companies and online partners that results in a satisfactory symbiotic relationship.
Now we'll just have to wait and see.
Things are getting interesting.
And Now This...
If you haven't already read about it elsewhere, this past week in a speech at the Midem music industry convention in Cannes, Paul McGuinness, longtime manager of the band U2, called on Internet Service Providers to immediately introduce mandatory French-style service disconnections to end music downloading, and has urged governments to force ISPs to adopt such policies.
I'm happy I don't have to be politically correct when it comes to commenting on industry doings. I'm not looking for a gig, I don't accept advertising so I'm not beholden to anybody, the newsletter is free, and I can say what I want, and if people disagree, they can e-mail me and dialogue all they want with me. So here goes.
While Bono is out trying to save the world and hob-nobbing with President Bush, our planet's savior (a little humor there, folks), Al Gore, and other political celebrities, flies to Midem and makes a speech, which sounds like he might have gotten some help from the RIAA in drafting, and I wanted to go through the speech piece by piece with criticism, but I stopped after I realized if I pasted it all in the newsletter, it would have run over another four pages. So enough of that.
The full text of Paul McGuiness's speech can be read at the band's website:
http://www.u2.com/news/index.php?mode=full&news_id=2196
Read it if you care. I'll summarize here my criticisms of what Mr. McGuiness had to say.
First: I guess Mr. McGuiness is not aware of the fact that the video game industry now eclipses the music industry. Once he does, he'll probably suggest manufacturers stop making Nintendos, PlayStations and the Wii.
Second: Though he talks of his past admiration for Steve Jobs, I guess he'll soon ask him to stop making iPods and iTunes to stop selling tracks.
Third: Research this week came out that said online video sites accounted for 34 billion views in 2007. Those views come largely from the same demographics of people who used to buy CDs, but are listening to their music online or on their computers, while seeking visual entertainment.
Fourth: Calling on ISPs to implement controversial anti-piracy measures, including filtering their networks and canceling the accounts of people who upload copyrighted music, is simply not practical. ISPs are going to cancel their subscribers? What? If you can convince any company to cut its customer base, good luck. (And this isn't France. Thank God)
Mr. McGuiness is sadly out of touch with how far technology has come ... and there's no turning it back. Even if his ideal wishes could come true, the CD is a dead format, and people will always pirate music, films and now, video games. Steve Jobs knew that and he started iTunes with the hopes of grabbing some of the market from people willing to buy music, and he did it successfully as the labels watched their old models sink.
Fifth: He completely misses the point of Radiohead's online experiment. And nobody, certainly not McGuiness, has any idea just how many copies the band sold online and what revenues were generated. As a great marketing plan, it worked extremely well, and the band's new album debuted at #1 here in the U.S. even after all the downloads
Sixth: McGuiness is critical of these "tech guys" who he thinks are so much to blame for the state of the industry today. Really? If it wasn't for those "tech guys" at Apple, amazon.com and elsewhere, nobody would be buying music online; they'd still be stealing it because the labels still have done nothing to react to the changing marketplace except criticize Apple and sue downloaders through their wonderfully useless association, the RIAA.
Seventh: Mr. McGuiness, like many others, thinks that it is now the responsibility of digital leaders to come to the rescue of the music industry. Maybe they will. Maybe someday the label leaders and RIAA folks will seek to join with the best creative minds in Silicon Valley to seek mutually beneficial solutions. Something I've suggested hundreds of times. So why don't you ask the labels, Mr. Guiness, to be more proactive?
I could go on and on...but I think you get the point.
McGuiness closes with this, "There's more exciting music being made and more listened to than at any time in history. Cheap technology has made it easy to start a band and make music. This is a gathering of managers; our talented clients deserve better than the shoddy, careless and downright dishonest way they have been treated in the digital age."
Yes, there is more exciting music being made and listened to than ever before and it's easier than ever to start a band and make music. But guess what, all the artists who have done so and are doing that probably would not agree that they "deserve better than the shoddy, careless and downright dishonest way they have been treated in the digital age."
No. They embrace all the technology and all it has to offer. The Internet and whole "illegal downloading is killing our business" whine has gone on now for far too long. The music industry must learn to co-exist in a world where people will always download, but millions of others will still buy music when they perceive it has real value and is something they want to keep and not change monthly, as they do their cellphone ringtones.
Legal File-sharing Service Touts Free Music With Ads
From cnet.comQtrax, a new legal online file-sharing service that allows fans to download songs for free, said Sunday it will launch with 25 million to 30 million copyrighted tracks with backing from major labels. The free service will be funded through advertising revenue that Qtrax will share with the music companies.
Qtrax executives said the company's digital rights management technology will count the number of times each song has been played in order to fairly compensate artists and rights' holders, without restricting consumer use.
Read more about it by clicking here.
Sides Chosen In Royalty Tussle
From HollywoodReporter.comWASHINGTON -- Music publishers, the record labels and digital music distribution outlets began a three-way legal wrestling match Monday over just how much songwriters and the publishing houses should get paid for digitally delivered music. The case before a panel of copyright judges is different from the usual squabbles over money that pit the major record labels against new-media companies because it also features a family fight between the music publishers and songwriters and the rest of the music industry.
At issue is the so-called "mechanical royalty" -- payments made for copies of sound recordings, including those made by digital means, to songwriters and publishers.
Read more about it by clicking here.
Sony Ericsson Cuts Deals With 10 Music Labels
From cnet.comMobile phone maker Sony Ericsson said it had signed deals with 10 music labels to add content to its PlayNow service, which lets users download music via their mobile phones. Sony Ericsson, owned by Ericsson and Sony, said the deals added 5 million new tracks to its catalog.
Read more about it by clicking here.
The Life And Crimes Of The Music Biz
From the Guardian Unlimited.comThe record industry is careering towards meltdown. A good thing, too, says Simon Napier-Bell, after 40 years of working with its most notorious moguls.
The lobby of the Sony building in New York is 70-feet high and heavy with music business ambience -- gold records, photographs and the "Sony Shop of New Technology." Upstairs, the main reception is like the lounge of an exclusive club. Young people, dreaming of stardom, stand in wonder breathing in the atmosphere, looking at memorabilia -- platinum CDs, photos of stars, framed press reports, Billboard charts. For an aspiring artist or manager, just to step into the building is a thrill. The impression is of a corporation dedicated to the success of its artists, almost altruistic in its understanding of their needs.
Yet it's nothing but a flytrap. Artists go there dreaming of being signed. But out of every 10 signed, nine will fail. A contract with a major record company was always a 90% guarantee of failure. In the boardroom the talk was never of music, only of units sold. Artists were never the product; the product was discs -- 10 cents' worth of vinyl selling for $10 (10,000% profit, the highest mark-up in all of retail marketing). Artists were simply an ingredient, without even the basic rights of employees.
Recently, the Wall Street Journal investigated the industry and concluded that "for all the 21st-century glitz that surrounds it, the popular music business is distinctly medieval in character: the last form of indentured servitude."
Read more about it by clicking here.
Growth Of Video Gaming In 2007 Far Outpaces Movies, Music
From ArsTechnica.comAs a follow-up to my commentary last week about the dollars being spent on videogames, more info.
"The video game industry set the pace over all others in 2007, with record-breaking sales, off-the-charts consumer demand, and innovation reaching from galactic exploration to guitar simulation," said ESA CEO and President Michael D. Gallagher. In fact, videogame growth far outpaced that of other retail sector media, like movies and music. Console videogame sales surged 28%, while movie sales inched up 1.8%. Music, of course, had a terrible year, with sales down an estimated 10%.
Read more about it by clicking here.
Warner Bros. Sues Music Search Engine SeeqPod For Copyright Infringement
From MediaPost.comThe stock at WMG might be tanking, but in another legal move aimed at combating piracy, Warner Bros. has sued music search engine SeeqPod, alleging that the company is profiting from "mass infringement" on its site.
"SeeqPod is building a business on the backs of the expropriated copyrighted works of plaintiffs and other content owners," charges the lawsuit, filed recently in federal district court in California. Specifically, the music label alleges that SeeqPod wrongly searches for, and then lets users play back, a trove of copyrighted tracks and videos.
"SeeqPod searches for a particular type of content--music--that SeeqPod knows is overwhelmingly copyrighted," the complaint charges. "With simple clicks of a computer mouse, SeeqPod will play the work without authorization ... and will embed the link on social networking sites, like MySpace and Facebook, where the entire cycle of willful copyright infringement is repeated without end."
Read more about it by clicking here.
Labels: Set iTunes DRM-Free
Editorial by David Ross, MUSIC ROW PublisherUniversal, Warner Bros. and Sony BMG have been holding back DRM-free license approval from iTunes while extending that approval to Amazon.com and some other start-ups. Only EMI has offered its music in DRM-free, MP3 format to both vendors. This marketplace inequality appears to be a punitive measure against Apple, for refusing to agree to label demands for variable pricing and other issues. But if the license refusal is punitive, who is really getting hurt?
A great little editorial commentary by David, who makes the same arguments I've been making for quite some time.
Read more about it by clicking here.
User-Generated Video Expects 34 Billion Views in 2008
From The Center For Media ResearchAccording to a recently published market report from AccuStream iMedia Research, user Generated Video (UGV) scored 22.4 billion views in 2007, up 70% over 2006. Semi-professional content grabbed a 47.5% total share on MySpace TV, and the Screen Bites category on Crackle.com generated a 17.5% cumulative share of total views.
A more refined analysis, says the report, reveals average views per video of 10,695 in 2007. Crackle.com led the UGV group, averaging 216,596 per video, accelerated by its re-organization emphasizing category expansion and more professional content.
Read more about it by clicking here.
Say Good-Bye to Wi-Fi
Many of you are probably all pretty familiar with the hunt for a Wi-Fi hot spot when traveling away from your primary home or office network, but sometimes you just can't seem to snag a solid signal. USB modems and wireless cards work on cellular networks, and can get your laptop online almost anywhere. PC Magazine shows how these five devices can help keep you connected wherever you may roam.
Read more about it by clicking here.
AMAZON STORE GOES GLOBAL
Amazon.com said last Sunday it will begin an international roll-out this year of its digital music store that offers songs without copy-protection technology known as digital rights management. Amazon said it is the only retailer to offer DRM-free MP3s from all four major music labels as well as thousands of independent labels.
AND TOWER RECORDS SUNSET BLVD. STORE GOES BYE-BYE
Preservation of what once was one of the fabled Sunset Strip's most colorful places in West Hollywood is now a lost cause. Tower Records West Hollywood store, a landmark for over 35 years, will be demolished as a Chicago developer plans to construct a three-story, 52,000-square-foot combination office building, retail shop and health club on the site. And so it goes.
GRAMMY STUFF
Feist, Alicia Keys and Brad Paisley will be performing on the Grammy broadcast and presenters added to the list include Natalie Cole, Juanes, Cyndi Lauper, Bette Midler and Bonnie Raitt.
CONGRATS
CONGRATS #1 TO: Joel and Ethan Coen who won the top prize last Saturday at the Directors Guild of America Awards for 'No Country for Old Men.' CONGRATS #2 TO: To the cast of 'No Country For Old Men' who won the award for best ensemble cast at the SAG Awards last Sunday. CONGRATS #3 TO: To Gwen Stefani, who is pregnant with her second child with husband Gavin Rossdale.ZEPPELIN WILL FLY AGAIN
It looks like Led Zeppelin will get back on the road sometime late this year. Jimmy Page said Monday he was prepared to head on out on a world tour with his former band mates, Robert Plant and John Paul Jones, following the success of the band's reunion concert in London last month. However, the possible reunion tour probably wouldn't happen until September or later, due to Plant's conflicting tour plans.
THE WEEKLY BRITNEY SPEARS/TRAIN-WRECK UPDATE
Britney Spears was taken from her house by ambulance early Thursday. Los Angeles Police officers physically removed Britney Spears from her home and placing her on a "mental health evaluation hold," authorities said. Surprise, surprise. And more: The LAPD estimates that it incurred about $25,000 in expenses while escorting Britney from her Studio City home to the UCLA Medical Center psych ward. Just threw that in there in case you live in California and want to know how some of your tax dollars are being spent.
MATERIAL GIRL INDEED
Forbes has just come out with their list of 2007's 20 highest grossing female musicians: 1. Madonna - $72 million; 2. Barbra Streisand - $60 million; 3. Celine Dion - $45 million; 4. Shakira - $38 million; 5. Beyoncé - $27 million; 6. Gwen Stefani - $26 million; 7. Christina Aguilera - $20 million; 8. Faith Hill - $19 million; 9. Dixie Chicks - $18 million; 10. Mariah Carey - $13 million.
MATERIAL GIRL GETS TIMBERLAKE SUPPORT
Justin Timberlake and Timbaland will appear in Madonnna's video for the song "4 Minutes to Save the World," which they co-wrote and produced for her new album.
THE TOP DOWNLOAD
Avril Lavigne's "Girlfriend" has been named the Top Download of 2007 by the International Federation of the Phonographic Industry after fans around the world downloaded the single more than 7.3 million times in eight different languages.
NO RECESSION IN BRITNEY BIZ
Portfolio magazine estimates that Britney Spears is worth somewhere around $120 million to the U.S. economy, with about $30-40 million going to record companies, promoters and licensers and $75 million being generated by media companies who chronicle her every trainwreck ... er, move. And some people still wonder why a lot of the world thinks our culture leaves a lot to be desired.
ON THE ROAD AGAIN
Tom Petty & The Heartbreakers' will tour North America soon after their Feb. 3 performance at the Super Bowl halftime. Steve Winwood will be the opening act. Petty last went on tour in 2006 and back then, Petty told the AP that it could be their last. But, Petty said recently, "The band wants to go really bad, so we had a meeting about it, and we decided, why not?" Yes, that, and as Woody Allen said, "Let's not forget about the money."
ON THE ROAD AGAIN TOO
Alicia Keys announced plans for the 30-date U.S. leg of her upcoming 'As I Am Tour', which kicks off Feb. 25 in Europe. Keys will touch down Apr. 19 in Hampton, Va., and crisscross the country before ending up at New York's Madison Square Garden on June 18. The 28-year-old Grammy winner will perform Sunday during Fox's pre-game show live from University of Phoenix Stadium in Glendale, Az.
SHE NOT ONLY LOST A LOT OF WEIGHT, SHE LOST HER SHOW
TruTV announced that "due to the rebranding and programming focus of the network," TruTV (formerly Court TV) and Star Jones Reynolds have "mutually agreed to cease production of the Star Jones Show." The final new episode of the show airs Feb. 1. Uh-huh ... yeah. But, if the show was a ratings winne,r would they make that same decision?
Quotes of the week
"I have a soft spot for bad boys."
-- Pamela Anderson. Uh, exactly where is that spot, Pam?"There's a Starbucks in my OB-GYN's office. You can get a latte and a Pap smear at the same time. It's the weirdest thing."
-- Paula Abdul to More magazine. Actually Paula, YOU are the weirdest thing."New Rule: Stop saying that teenage boys who have sex with their hot, blonde teachers are permanently damaged. I have a better description for these kids: 'Lucky bastards.' ... If you ever hope to be a credible adult and want a job that pays better than .Minimum wage, then for G-d's sake don't pierce or tattoo every available piece of flesh. If so, then plan your future around saying, 'Do you want fries with that?' "
-- George Carlin, just two of his many "New Rules For 2008""It is a privilege to be an actor because... you know you really aren't helping anyone."
-- Jerry O'Connell, doing a Tom Cruise Scientology video parody on Will Ferrell's FunnyorDie.com"She has been to a psychiatrist ... I assume, is starting some kind of treatment."
-- Barbara Walters on 'The View' (her source was Britney's manager and alleged "very good friend" Sam Lutfi). Ms. Walters also reporting that Britney was having trouble sleeping and was suffering from "mood swings." Gee, really Barb? What a scoop!
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Jakob Dylan Still Not Convinced Father A Better Songwriter
LOS ANGELES -- Although his father, Bob Dylan, is widely considered to be the voice of a generation, Jakob Dylan, lead singer of folk-rock band the Wallflowers, said Monday he remains unconvinced that his father is the family's most talented songwriter. "I definitely think the verdict is still out," said Dylan, adding that time will be the ultimate judge of whether he or the elder Dylan will turn out to be more influential. "Sure, by the time Dad was 21, he had already written 'Blowin' in the Wind,' but let's not forget I'm only 38. I'm still maturing as an artist, and I have a whole notebook of ideas." Dylan added that he may have caused a greater stir in the music world than his father ever did when he was mercilessly booed for performing an acoustic version of "One Headlight" at Pennsylvania's Fayette County Fair in 2005.
AND...
Congress To Raise Alpacas To Aid Struggling Economy
WASHINGTON-Members of Congress assured Americans that they have a definitive plan for reviving the slumping economy when they unveiled on Monday a bold new fiscal stimulus package that calls for the purchase of a pair of alpacas.
Senate Minority Leader Mitch McConnell (R-KY) said the proposal, which is expected to solve the sub-prime mortgage crisis, boost consumer confidence, and pump much-needed liquid capital into the market, will be put into motion as soon as the first issue of Alpaca World magazine arrives and Congress has a chance to go through the catalog and select the perfect mating pair.
"We're confident that breeding alpacas will jump-start the economy and lift this nation out of debt once we get the start-up money," said McConnell, who insists the exotic livestock require very little maintenance and are of a gentler temperament than their cousin the llama. "All you need is a fertile male and a female in heat, and nature takes it course. Before you know it, the money is rolling in and there's alpacas everywhere."
Read the rest here and laugh: http://tinyurl.com/2cqote.
The Blogs
Check out a great blog by Jerry Del Colliano, the Director Executive Programs, Clinical Professor Music Industry & Recording Arts, at the Thornton School of Music,University of Southern California, by clicking here: http://www.insidemusicmedia.blogspot.com.
Box Office
Check The Daily & Weekly Box Office (and more film info) at: www.boxofficemojo.com.
TinyURL
Check out www.tinyurl.com where you can make a smaller URL that will work for any webpage you wish to link to or reference. (As you can see, I'm using it in my news stories above!)
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