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To Charge (For Content) Or Not To Charge, That Is The Question
July 24, 2009
Have an opinion? Add your comment below. -
"When a fellow says, 'It ain't the money but the principle of the thing,' it's the money."
-- Kin HubbardThere's a whole lot of talk about paid content going on. Most of it is coming from newspaper owners who still haven't figured out a way to replace the revenues they've lost from their shrinking subscription base and declining retail sales.
Newspaper owners, like a whole lot of people in the music industry (and elsewhere), still haven't figured out a way to harness all the possibilities the Internet has, so they are once again talking about paid content models that will generate new revenues. Evidently these newspaper guys haven't been following the trials and tribulations and losing battles of the music industry in their efforts to stop illegal downloading and file-sharing.
We all know that the best four-letter word in the English language is F-R-E-E, and since there's a few billion websites out there with loads of content and news, I think the real hopes of creating any models that might generate significant revenues from paid content are as well-founded as those once put forth from all the market-research people in Detroit who launched the Edsel.
I'm not saying people won't pay for something they want online. Even though people can steal all the music they want online, Apple's iTunes has sold over six billion songs. But Apple gave the consumers something they wanted: the iPod. (Now over 175 million sold) Once the iPod (and other digital music players that followed) became the music player of choice for almost everybody, Apple launched a great online store while the music industry stood by, watched, did nothing, and iTunes took off faster than Jay Leno did after leaving 'The Tonight Show.'
As I said in the newsletter last week: "Wired's Editor Chris Anderson was interviewed on TechCrunch about his new book 'Free' and said "You know, why do people buy music when you can download it for free? Why does iTunes exist. Because it's easier and safer and faster, not really because people feel some sort of moral obligation to pay for music. Ninety-nine cents doesn't matter as much as one-click simplicity. So they're not selling music. They're selling simplicity."... Has the music industry made engaging consumers a matter of simplicity? Hardly.
But even more important, if any company wants consumers to pay for any content, they should create something so exceptional that some people will do so without a second thought. Nobody is going to pay for anything they can get elsewhere for free, and assuming people will pay for news content at a particular newspaper site is as silly as believing Paris Hilton could pass the Jeopardy tryouts to be a contestant on the show.
There's an article in the news section below this week about Disney mulling a subscription model, and if they do so, I wish them the best of luck. If they make it work, it will be a surprise to all in the online community. But as we know by now, subscription models thus far haven't worked at all. (For a terrific analysis read "Paying For Online News: Sorry, The Math doesn't Work" here: http://tinyurl.com/crak6m ) Okay, Disney is an entertainment company, not a news company. So what. Should I start talking about all the reasons why people won't buy entertainment subscriptions online? The same logistical thinking that applies to paying for news content applies (in my opinion to any content).
I do believe there's an unlimited number of possibilities for any company to generate revenues online from the content they offer. Strategic partnerships are the easiest way, but there are so many possibilities. And I'm not going to offer them up here for free. I get paid for doing that. (Because I'm offering ideas, not content)
The questions that all content owners need to be asking themselves is, "How come my marketing and creative people haven't developed ideas to generate revenues online?"
Anybody who says they've explored all the options should be replaced. There's a whole bunch of young people out there with more ideas about what to do and what not to do online -- and many of them have better ideas than a lot of the high-paid marketing and creative people now employed. Those people should be echoing the words of Mel Brooks as Governor LePetomane in "Blazing Saddles:" "We have to protect our phony baloney jobs here, gentlemen! We must do something about this immediately! Immediately! Immediately!"
Immediately gentleman. If not sooner.
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THE 'A-SIDE' - TRACK 2
MORE ON THE MICHAEL JACKSON THING
After this week's sales, Michael Jackson's album sales are now up to 15.5 million. (And STILL not ranked on Billboard's Top 200 Album Chart)
The news also came this week that Sony Pictures has paid $60 million for the rights to release a movie of footage shot during Michael Jackson's rehearsals for his "This Is It" concert tour. The film is scheduled to hit theaters October 30th and there is also talk of a possible one-hour TV special as well that would use some of the footage and act as a pre-theater promotion. Hollywood analysts are saying that the film could gross as much as $300 worldwide (or more).
According to other Internet reports, AEG Live, which is said to have 80 hours of rehearsal footage at its disposal, and Jackson's family will split Sony's money, with Jackson's family receiving 90% of the fee and establishing a charity in the late singer's name.
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THE 'A-SIDE' - TRACK 3
WHITNEY'S BACK ... CLIVE DAVIS IS THE REASON
Rather than go into all the details about Whitney's new album, you can read all about what's happening with it as Clive Davis presents it to the public here: http://tinyurl.com/l3a8fx.
With contributions from Alicia Keys and Swiss Beatz, Akon, Norwegian R&B hitmakers Stargate, two tracks from R. Kelly, and a power ballad from Diane Warren, it looks like Whitney is (once again) going to be on the radio for a long time once the album is released.
Great artists who make great albums drive great retail. But more than that, a great artist like Whitney who makes such a great album such after a long absence, again reaffirms just how critical great A&R is, and how essential it is that the industry needs more great MUSIC people like Clive Davis who can make great records and create excitement when they get involved with a project.
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THE 'A-SIDE' - TRACK 4
WELCOME TO SHOW BIZ, PAULA
"There's no doubt about it, show business lures the people who didn't get enough love, attention, or approval early in life and have grown up to become bottomless, gaping vessels of terrifying, abject need. Please laugh." - Dennis Miller
Well, this week, Paula Abdul probably isn't laughing too much.
If you haven't heard, Paula might not return to "American Idol" for a ninth season. (Do I hear some of some of you out there shouting, "Yippee!"?)
It seems that the "Idol" producers haven't sat down yet to discuss Paula's coming back and/or a new contract.
Paula's manager gave an interview this week to the Los Angeles Times (http://tinyurl.com/nau7hz ) and said, "She's not a happy camper as a result of what's going on. She's hurt. She's angry. I find it under these circumstances particularly unusual; I think unnecessarily hurtful," he said. "I find it kind of unconscionable and certainly rude and disrespectful that they haven't stepped up and said what they want to do."
From the article as well, "The result of the stalled negotiations, David said, is that Paula is unlikely to be back on the show she's judged for eight previous seasons. "Very sadly, it does not appear that she's going to be back on 'Idol,'" he said."
Paula is telling her fans via her Twitter page, "Hey, guys, I have not made a deal w/ IDOL. Don't know how that rumor got started, but it's not true as I still haven't heard from the producers."
Whatever the outcome, perhaps Paula should remember what Woody Allen said about Hollywood, "Show business is dog-eat-dog. It's worse than dog-eat-dog, it's dog-doesn't-return-other-dog's-phone-calls."
Music Industry Seeks Cut of Pirate Bay Sale
CnetThe music industry will attempt to intercept any money paid to acquire the Pirate Bay, says Alex Jacob, spokesman for the International Federation of the Phonographic Industry, the trade group that represents the music industry worldwide.
Meanwhile, Global Gaming Factory, the company that said it would acquire the Pirate Bay for $7.8 million two weeks ago, has been touting a new business model for the file-sharing site, hiring executives like Wayne Rosso, the former Grokster president, to legally obtain content from film and music companies.
It remains to be seen if the sale will be affected by the IFPI's attempts to collect $3.6 million in damages that a Swedish court awarded the organization in April. The court found the four operators of the Pirate Bay guilty of copyright violations, sentencing each to a year in jail, and ordering them to pay $3.6 million to the IFPI. Jacob says that should the sale to Global Gaming Factory go through, IFPI will attempt to seize part of the money.
Read more about it by clicking here.
Indie Artist Borrows Something Old (Grace Slick) And Something New (Social Media)
Indie artist Michelle Mangione has teamed with former Jefferson Airplane lead singer Grace Slick to launch an online contest promoting her second CD. The marketing campaign taps search engine optimization (SEO), and Twitter, Facebook, MySpace and other social networking sites to give away a guitar signed by Slick.
Read more about it by clicking here.
Digital Music Suffering From Entrepreneur Drain
(From Cnet) -- Of all the losses suffered by the music industry, one of the biggest may be the fact that nearly all of the investors that once were building digital music services have moved on.
"There are not a lot of entrepreneurs involved in this space," said David Pakman, a music industry veteran and now venture capitalist at Venrock Associates. By Pakman's count, there have been 109 venture-backed digital music start-ups. Fewer than five, though, produced a substantial return, he said.
Read more about it by clicking here.
Southern Comfort Backs Playboy Web Music Series
"One of the key insights we've had is that adults 21-29, who are our target, are very interested in music as a cultural language," Lena DerOhannessian, U.S. marketing director for Southern Comfort, tells Marketing Daily. "We had been doing a great deal with our own music series, and what we wanted to do was take our association with music further."
Read more about it by clicking here.
Forrester: 2.2 Billion People Online Globally By 2013
Forrester Research on Tuesday projected that the Internet population will hit 2.2 billion people by 2013. Of that tally, 43% of the Internet population will be in Asia.
Read more about it by clicking here.
Kazaa To Insert Music Fees Into Phone Bills
The new Kazaa appears to be mostly a run-of-the-mill subscription music service, but it does add a few new twists. The one that stands out right from the sign-up phase is that subscribers can either pay by credit card or via their telephone company.
Read more about it by clicking here.
Apple Earnings Strong on Monster iPhone Sales Growth
TechCrunchApple coasted to another non-holiday record in terms of revenue and earnings during the second quarter, posting a profit of $1.23 billion, or $1.35 per share, compared with $1.07 billion, or $1.19 per share, a year earlier. Revenue rose 12% to $8.34 billion from $7.46 billion.
Indeed, Apple sold 5.2 million iPhones in the quarter, a whopping 626% increase over last year, when it sold 717,000 iPhones. This was still shy of the record for iPhones sold in a quarter, which happened in Q4 2008, when Apple sold almost 6.9 million iPhones. Siegler notes that the Q2 2009 numbers only include a few weeks of iPhone 3GS sales, as the 3GS went on sale in mid-June.
Read more about it by clicking here.
My Space Music: All About The Data
The music business discovered data only to show how bad it was getting," MySpace Music President Courtney Holt said in a talk on Tuesday morning. "The first time I was asked to get data when I was working at Universal (Music Group) was, 'How many songs are being stolen?'"
Holt was speaking at an event called the New Music Seminar, a day-long conference geared toward the artist side of the record business. The angle of the event was dealing with a paradox that has emerged in the past decade: The Internet has launched so many new channels for independent artists to emerge, but it's also become flooded with so many of them that it's not much easier for a band to make it big. And though Holt, who was the keynote speaker at the conference, talked more about his experiences as a music industry veteran than he did about his relatively new gig at MySpace, he did drop a few tidbits.
Read more about it by clicking here.
Video Pushing Mobile Broadband Use
Mobile data bandwidth use is up 30% worldwide during the second quarter, with increased video streaming on cell phones helping to drive growth, according to a new report. People tuning into shows and clips on sites such as Hulu, YouTube and MySpace via mobile devices pushed up video streaming nearly 60% during the quarter, mainly as a result of expanded smartphone use and a growing selection of mobile programming. "It's outgrowing any other application," said Jonathon Gordon, director of marketing for Boston's Allot Communications.
Read more about it by clicking here.
Disney Eyes Subscription Revenue Online
Bloomberg NewsWalt Disney Co. Chief Bob Iger on Wednesday revealed that the media giant is developing a subscription-based product for the Web, Bloomberg reports. Speaking at a Fortune magazine conference, Iger said, "We have ample evidence both in traditional and new media that people are willing to pay for quality, to pay for choice and to pay for convenience. And they are willing to pay for what they perceive as value."
He noted that while online advertising could also be improved, the company thinks subscription products look particularly promising. "It's wrong to assume that because there is a lot available on the Internet that is free that it will be hard to monetize," Iger said.
In the meantime, Disney, the world's largest media company, continues to put its television shows and movies online. It was the first company to sell shows and films on Apple's iTunes Store, and the first to put ad-supported prime-time TV programs on the Web for free. Most recently, Disney struck a deal to supply Hulu, the joint video venture from News Corp. and NBC Universal, with full episodes of certain TV shows as well as movies. Disney paid about $35 million to acquire a 27% stake in the online video site, now the Web's third largest after Google's YouTube and News Corp.'s Fox Interactive sites.
Read more about it by clicking here.
Apple Releases New Final Cut Studio
Apple introduced on Thursday a new version of Final Cut Studio, the company's high-end video production suite. The suite comes with six applications in all, including Final Cut Pro 7, Motion 4, Soundtrack Pro 3, Color 1.5, Compressor 3.5, and DVD Studio Pro 4. Most of the work in this release was spent on the flagship app of the suite, Final Cut Pro.
Read more about it by clicking here.
Social Networks Not Much of a Marketplace
A study, recently released by WorkPlace Media, outlines some of the hurdles facing major brands as they attempt to harness the worlds of Facebook, Twitter and MySpace, to create an impact with consumers. The study, which polled office Internet users, found that 55% maintained at least one social networking account. However, of those respondents, only 43% reported accessing their social networking accounts at work, and even for those with access, 78% reported spending less than 30 minutes per day on their site(s).
The overall impact of a brand's presence on social networking sites was shown to be minimal in terms of impact and perception. 96% of respondents said their opinion of a product brand did not change if that brand had no presence on a social networking site, and only 11% of social networking users reported following any major brand through a social networking site, and just 12% of respondents said their opinion of a brand changes if that brand maintains a social networking presence.
Stephanie Molnar, CEO of WorkPlace Media, says "When it comes to influencing brand perception and purchase decisions ... social networking ... has a long way to go." A recent Harris poll also supported this assertion, says the report, showing that word-of-mouth is a much stronger influencer than social networking.
Read more about it by clicking here. (And be sure to follow the link to 'Complimentary Research' in the article for even more in depth details)
OPRAH DOWN
In the last five years, Oprah Winfrey's viewership was gone down 32%, nearly a third from her heights. Her ratings for the week of July 4th were the lowest the show ever had since 1983. The show is currently in reruns and that accounts for some drop, but industry watchers are now wondering if the show has lost its utter dominance in the daytime talk show arena.
VELVET REVOLVER NOT CURRENTLY REVOLVING
In a new interview with Classic Rock Magazine, Slash confirms what fans have been suspecting over the past few months: Velvet Revolver still haven't found a new singer.
HALL OF FAME QUARTER-CENTURY CELEBRATION
Bruce Springsteen and the E Street Band, U2, Paul Simon, Metallica, Eric Clapton, Aretha Franklin, Stevie Wonder, Crosby, Stills, Nash and Friends and Simon and Garfunkel are among the legendary artists confirmed for a landmark two-night concert event celebrating the 25th anniversary of the Rock & Roll Hall of Fame October 29th and 30th at New York's Madison Square Garden
REZNOR QUITS TWITTER
Nine Inch Nails frontman Trent Reznor has officially closed his Twitter account. Reznor told his fans back in June he was quitting the microblog, but he sent out a few micros after that. Now, he has shut the door on Twitter.
KAZAA BACK FROM THE DEAD ... SORT OF
One of the most recognizable brands in the history of illegal downloading is due to officially resurface, perhaps as early as next week. Only this time the name Kazaa will be part of a legal subscription music service.
PASSING
Gordon Waller, the Gordon from the '60s duo Peter & Gordon, who had a huge hit with the Lennon/McCartney penned "World Without Love." Godron passed last Friday night in Norwich, Connecticut of cardiac arrest. He was 64.
Quotes of the week
"Just another ill-fitting piece in the puzzle that is her stalled, sloppy career."
-- People magazine's review of Lindsay Lohan's new direct-to-cable movie, Labor Pains, premiering this weekend"She's [been with] every hot guy from Brad Pitt to John Mayer. She's not tragic; she's amazing."
-- Kathy Griffin, sharing her perspective on Jennifer Aniston's dating history, to PEOPLE"My question is: How would HE know? What was he doing looking? And why was Conan [O'Brien] looking, too?"
-- Adrian Grenier, wondering how Entourage costar Kevin Connolly and the Tonight Show host knew he had stuffed his pants for a PEOPLE photo shoot as the Bee Gees, to PEOPLE
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Intellectual Property Rights As Fleeting As The Scent Of Jasmine, Mayfly's Wing In Autumn
BEIJING-Settling not on the industrious sons of China, nor on their ware-covered blankets, ownership rights of intellectual property fluttered silently by, unseen, on Monday, as does the gentle mayfly on a warm harvest-time breeze.
"Is this a pirated DVD of Transformers 2 dreaming it is an original? Or is it an original Transformers 2 dreaming of an adventurous life as a pirate?" a sidewalk merchant in Tiananmen Square whispered to a moment already gone, as his hands clutched some worldly illusion of the Michael Bay film. "Eight dollars. Plays anywhere in the world." In their great wisdom, the merchants also carried forth the ancient teachings of Zhuangzi-who spoke of how time is a riddle answered by eternity-to the equally fleeting earthly conceits of trademarked wristwatches, electronics, clothing items, Starbucks, and automobiles.
Read the rest here and laugh: http://tinyurl.com/lt5rf4.
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