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To Charge (For Content) Or Not To Charge, And More - #2
July 31, 2009
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"I think it's wrong that only one company makes the game monopoly."
-- Steven WrightAfter my commentary last week, I received a flurry of e-mails from readers both agreeing and disagreeing with what I had to say about those who actually believe that there are serious revenues to be made charging for online content.
I was going to address some of the questions many of you were asking me in e-mail when I saw a half-dozen new articles online telling me that even more media bigwigs think the free ride is over, and that we will all have to start paying for all the stuff we now read for free. As I said last week (about newspaper owners hoping that paid content models will help save shrinking earnings), "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."
So rather than go into your e-mails, I thought it easier to simply address the issues put forth in several articles with my commentary because the articles basically echo much of what many of you were saying.
First: In an article titled, "Media Moguls Rethink Web Advertising In Downturn" (Source: http://tinyurl.com/kpthse ), at the Fortune Brainstorm: TECH conference in Pasadena last week, Walt Disney Co Chief Executive Robert Iger opened a discussion about new ways to market to consumers, when he described himself as, "pretty bullish about what technology is going to allow in terms of behavioral tracking." (Tech genius Ashton Kutcher was also an attendee; see my 'Track 2' commentary below)
Note to Mr. Iger: Thrilled your "bullish about what technology is going to allow in terms of behavioral tracking," but the problem is online behavior is changing faster than Joan Rivers' face. If the Internet has taught us anything, it's the realization that what's hot today is over tomorrow. A minute ago, MySpace was the place. Now it's Facebook. Some say Twitter. Doesn't matter who is right. A year from now it will all be changed again.
In the same article, Jonathan Miller, head of News Corp's Digital Media Group, said he believes advertising is undergoing, "fundamental changes ... and you have to tease them out of the recession effects. "Marketing is on an arc to become more efficient. My dollar should go further. And that says the advertising pool may not grow at the rate that it's traditionally grown at, even out of this recession." Can I get a big Homer Simpson "Duh!" here, please?
In another article, Jonathan Miller, the News Corps. chief digital officer, said the Web "will become a have and have-not world" in which some companies have material people are willing to buy and others don't. He added that journalism would increasingly become a "paid model" on the Web, in the same way that News Corp.'s Wall Street Journal charges for online subscriptions. (Source: http://tinyurl.com/nntgy9 ) Note to Mr. Miller: Yes, it will be the have and have-not online world. Those companies who create online models where revenues can be generated from strategic partners and other ancillary revenue streams will have lots of people visiting their sites daily; those who charge for news content won't.
Then there's Barry Diller. In an article titled, "Diller Calls Free Web Content a 'Myth, Joins Refrain' (Source: http://tinyurl.com/ngrnko ), Diller -- the chairman and chief executive officer of IAC/InterActiveCorp -- said Web users will have to pay for what they watch and use, joining the refrain of media moguls who say an era of free Internet content is ending, and said it's "mythology" to view the Internet as a system of free communications. It is not free, and is not going to be."
In the same article Mr. Diller, Liberty Media Corp.'s John Malone and Walt Disney Co. CEO Robert Iger, "challenged the accepted model that consumers pay for Internet access and then content is free. Diller predicted there will be three revenue streams: advertising, subscriptions and transactions."
There hasn't yet been a successful subscription model that's generated enough revenues to be profitable, and I wish Mr. Diller and his associates all the best of luck. 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.
No matter what plans any media company has in place for paid content and subscription models, they all become as silly as the proverbial submarine with screen doors when one considers "darknets," intranets, off-line file-sharing, and the fact that you can't control anything digitally because those 1s and 0s that make up all the digital media are just too damn easy to replicate, hack, or get around in a myriad of ways.
Disney's Iger says, "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." Well, hell yes. The #1 thing people are most willing to pay for online via subscription content is porn. Other than that, I'm not seeing many other success stories.
Yes, there's iTunes. And a real success it is. As I've said too many times, nobody has been more responsible to get people to pay for music rather than steal it, than Steve Jobs.
And now the music industry wants to do even more with iTunes. (See the article below 'Music Industry and iTunes Trying To Reinvent The Album' and the links to other articles about the same subject.) Of course, if the music industry had focused on doing its own iTunes-like stores instead of suing people who download music for free at any one of a thousand websites, maybe, just maybe, the music industry would be further along in their development of future models for success.
I'm sure that every media company doesn't like the fact that they can't generate the revenues they should from their online models. I don't like it that as a writer, the web has diminished the value of paid content dramatically. But as Bruce Hornsby sang, "That's Just The Way It Is."
Yes, there will be people who will pay for content and subscribe to a Disney site, or any one of a hundred other entertainment sites. But the number of people willing to do so will pale in comparison to the number of people who will then seek alternative websites where they don't have to pay.
With the millions and millions of people online globally, one would think that the media companies would have their best creative minds working on NEW ideas for revenue generation. Putting a toll on the cyberspace highways won't increase traffic. It will make them surf other online roads that will lead them elsewhere.
Can any media company afford to take such a risk in this economy? No.
People have been online too long, and their habits are incredibly hard to break. They are digesting new content and new media as fast as Paris Hilton changes boyfriends. They view the Internet (whether we like it or not) as a business paid for by other people's money.
If the media companies think they can change that way of thinking, I think they are in for a very big surprise.
About five years ago, when I was consulting a media/tech company, the chief tech/creative man said to me, "Hollywood has no idea what's gonna' hit them in the next decade, but if they start working now with some good tech people who know how to make it all work online, they'll be okay I. But time is critical, the longer they wait, the harder it's gonna' be ... look at the labels in the music biz."
There are no easy answers. But thinking the paid content model is the answer is as far off the mark as thinking changing your lightbulbs at home to those energy-efficient spiral ones will actually do something to prevent global warming.
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THE 'A-SIDE' - TRACK 2
KUTCHER "INVENTED" TWITTER?
Ashton Kutcher was a Twitter advocate from day one. In a duel with CNN when the micro-blogging site started, Kutcher was first to get one million followers. He now has three million followers, which in my opinion, isn't saying too much about the people who use Twitter, is it? Ashton Kutcher? Huh?
In any case, at a recent talk at Fortune Magazine's Brainstorm Tech Con in Pasadena Kutcher said, "I started Twitter as a communication device to stay in touch with fans." Gee, I didn't know Ashton started Twitter, did you? Of course if he did, that would explain why so many other B-List, C-List, and D-List celebrities are using the site as well. (Source: http://tinyurl.com/lvcd7y )
Ashton even comments on his having more followers than CNN and says, "I'm shocked that an individual could have as much influence [in social media] than a media conglomerate." (Note to Ashton: If you want to dialogue, please use correct grammar. You should have said "I'm shocked that an individual could have as much influence [in social media] as a media conglomerate," or "more than a media conglomerate," depending on what you actually meant).
And Kutcher even opines about traditional media advertising and gives us these words of wisdom, "Banner ads are like billboards" and that entertainment and advertising "they are going to have to marry each other in a deeper way."
All this wisdom from a guy that does Nikon camera commercials on TV ... and not much else.
Music Labels And iTunes Trying To Reinvent The Album
Financial TimesEndeavoring to change buying trends on iTunes, Apple has tapped four top record labels to increase digital sales of albums by bundling an interactive booklet, sleeve notes and other features with music downloads.
As The Financial Times reports, physical album sales have fallen precipitously as music retailing has moved from compact disc sales in shops to digital downloads, while consumers are buying large amounts of digital music, but individual tracks rather than full-length albums.
In partnership with EMI, Sony Music, Warner Music and Universal Music Group, Apple working towards a September launch date for the project, which aims to boost interest in albums by bundling liner notes, photographs, lyric sheets and video clips with the music.
"It's all about recreating the heyday of the album when you would sit around with your friends looking at the artwork while you listened to the music," one exec familiar with the plans tells the Financial Times.
Read the rest here: http://tinyurl.com/m9rjf9 (Registration required, but free!)
Or read about it on Business Week here: http://tinyurl.com/myfnrd.
Or read 'Why Labels Want A New Album Format; on Cnet here: http://tinyurl.com/lnog8p.
Palm Strikes Back At Apple Over iTunes
It's the high-tech equivalent of Spy v. Spy. A week after Apple blocked Palm Pre users from sync iTunes files to their phones in the latest version of the software, Palm struck back. In a post on the company's blog Thursday, the company said its updated webOS 1.1 operating system "re-enables" media sync.
Read more about it by clicking here.
90% Of Young Adults Use Video-Sharing Sites
By mixing brain-eating aliens with the prospect of free network programming, Hulu's marketing efforts appear to be paying off as 35% of Web users now say they have viewed such content online. The use of video sharing sites currently outranks many other headline-snatching Internet pastimes among American adults, according to an April survey of some 2,253 adults by Princeton Survey Research International.
Read more about it by clicking here.
Rock Band Game Platform Opens To Indie Artists
(From Cnet) If you're an independent musician looking for as many ways to sell and promote your music as possible, and you or a friend has some experience with software development, you'll want to check out the upcoming Rock Band Network, for which Harmonix and MTV Games plan to begin beta testing in late August.
Read more about it by clicking here.
TuneCore Ties Up With Universal
Cnet's Matt Rosoff has written about TuneCore many times in the past: It's a service for independent musicians that submits their recordings to iTunes, Amazon mp3 and other big online stores -- and it's helping some artists make a good deal of money.
The fees are quite reasonable; they top out around $20 a year, although the precise pricing depends on what you're submitting and how many stores you want it in -- and artists have had some substantial financial success using it. Earlier this month, an unsigned hip-hop artist named Drake sold 300,000 copies of his single through TuneCore in just 14 days; The New York Times listed him as having the No. 3 download in the U.S. For those of you keeping track at home, that probably means the artist earned around $150,000 in two weeks--that's take-home money, not a label advance that needs to be earned back through future sales.
Read more about it by clicking here.
More Consumers Substitute Online TV For Cable
More bad news for the major TV networks. A growing number of recession-conscious Americans claim they are using the Web as a cable TV substitute, says the latest report by the Pew Internet & American Life Project. About 19% of Internet users surveyed say they visit video sites in a typical day, up from 8% three years ago.
More than one-third of Internet users claim to have streamed a TV show or movie online, versus just 16% in 2007, according to the report. And in these tough economic times, 22% of American adults say they have cut back or cancelled cable in the past year, while only 9% have cut back on paying for Internet services. Within the cable-cutting segment, almost a third -- 32% -- say they've connected their computers to their TV to consume Web video, a step that until recently has proven to be intimidating to most Americans. Overall, a total of 8% of Internet users claim to have connected their TVs to the Internet, according to Pew's report-the majority of which were men.
Read more about it by clicking here.
KILLERS DO EAGLES
The Killers will cover "Hotel California" and KT Tunstall takes on "Because the Night" for Decca's Rhythms del Mundo album Classics, a record that seeks to bring awareness to climate change.
THE ATOMIC DOG MAN GETS AN AWARD
George Clinton will be named a BMI Icon at the organization's annual Urban Awards ceremony Sept. 10th in New York.
BACKSTREET AGAIN
Backstreet's back ... again. Backstreet Boys' "This Is Us" will drop October 6th and feature Lady Gaga producer RedOne as well as T-Pain.
A GREENER SHADE OF ROYALTIES
Matthew Fisher, the organist on the 1960s classic song, "A Whiter Shade of Pale" has won a long-running legal battle for a share in the royalties for the tune. Fisher sued former Procol Harum bandmate Gary Brooker in the House of Lords, Britain's highest court.
GRETCHEN TO BECOME A LABEL HEAD
Gretchen Wilson plans to start her own record label, and she'd like to call it, naturally, Redneck Records.
DUBLINERS COMPLAIN
Dubliners angry over the around-the-clock dismantling of U2's monumental concert stage mounted street protests Tuesday, threatening the Irish band's plans for the next stop on their European tour. Several dozen residents near the stadium called off their demonstrations after delaying U2's initial convoy for several hours. More than 50 trucks eventually left with the band's instruments, stage, lighting and sound equipment, and massive banks of television screens, behind schedule for concerts Friday and Saturday in the Swedish city of Goteborg.
PHIL NEEDS A PILL
Just a couple of months into his 19-year sentence for the murder of Lana Clarkson, Phil Spector is "not doing great" in prison, his publicist tells the BBC, adding the producer was "very, very alarmed and scared at the notion of Charles Manson contacting him for any reason."
MORE SHAKUR
Yet another posthumous Tupac Shakur release is being planned, this time a September 13th compilation of his earliest recordings (when he was known as MC New York) called Shakurspear.
MICROSOFT RETAIL
The world's largest software maker, Microsoft, confirms it has signed the first two leases in California and Arizona as it follows Apple's lead and opens its own set of retail stores.
PASSING
Legendary jazz master George Russell has died at age 86 from complications of Alzheimer's disease. In 1953, Russell published The Lydian Chromatic Concept of Tonal Organization, a theoretical text credited with influencing Miles Davis' "Kind of Blue."
Quotes of the week
"I'm tired of people taking off their clothes."
-- Whitney Houston, on the music stars of today, at a listening party for her new album I Look to You"I don't know what you're on, but stop sending it to Paula Abdul."
-- Chelsea Handler, making a joke about David Hasselhoff - and the Idol judge - on her late night show"I don't know if I would do it because that is one of those awe-striking moments. Julie is amazing and I don't know if I could follow an act like that."
-- Cameron Diaz, on rumors that she will reprise Julie Andrews' role in the remake of "Sound of Music." No, Cameron, you can't follow that act.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Apple Claims New iPhone Only Visible To Most Loyal Of Customers
SAN FRANCISCO-In a move expected to revolutionize the mobile device industry, Apple launched its fastest and most powerful iPhone to date Tuesday, an innovative new model that can only be seen by the company's hippest and most dedicated customers.
"I am proud today to introduce to those who really, truly deserve it, our most incredible iPhone yet," announced Apple CEO Steve Jobs, extending his seemingly empty left palm toward the eagerly awaiting crowd. "Not only is this our lightest and slimmest model ever, but as any truly savvy Apple customer can clearly see, it's also the most handsome product we've ever designed."
The packed auditorium, which had been listening to Jobs in hushed reverence for several minutes, then erupted into applause, with hundreds of men and women suddenly jumping to their feet and shouting, "I can see it!" "Look, there it is!" and "God, it's so beautiful!"
Screams of "Of course, yes, I too can see the phone," were also heard at this time.
Read the rest here and laugh: http://tinyurl.com/nhktvt.
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