-
A New Study: Lack Of Innovation ... Not File-Sharing ... Are The Real Problems For Record Labels
May 7, 2010
Have an opinion? Add your comment below. -
"The entertainment industry will have to work actively towards innovation on all fronts. New models worth developing, for example, are those that seek to achieve commercial diversification or that match supply and end-user needs more closely. In such a context, criminalizing large parts of the population makes no sense. Enforcement should focus on large scale and/or commercial upload activities ... Introducing new protective measures does not seem the right way to go..."
-- Professor Nico van Eijk of the University of Amsterdam. van Eijk finds, once again, that file sharers aren't just consuming copyrighted material voraciously, they're consuming all media voraciously (especially concerts, films and games).A BIG thank you to reader Jon DeLong for sending me this story on TechDirt (http://tinyurl.com/3y2tb2w ), that references the Ars Technica article as well. (http://tinyurl.com/2dowhsc )
The results of the new study, "Legal, Economic and Cultural Aspects of File Sharing," can be read in entirety here: http://tinyurl.com/26cg4qu
The study concludes (among other things) there "isn't a clear relationship" between the decline in sales and file sharing, while also finding that fear of evolution prevented the recording industry from adequately adapting their business models to the broadband age. While the recording industry is having problems, argues van Eijk, it has less to do with file sharing, and more to do with the fact they've been "abstaining from innovation" -- as the study phrases it:
"Turnover in the recorded music industry is in decline, but only part of this decline can be attributed to file sharing. Conversely, only a small fraction of the content exchanged through file sharing networks comes at the expense of industry turnover. This renders the overall welfare effects of file sharing robustly positive."
Of course, readers of this newsletter for some time will find much of the conclusions in this new study the same as others I've reported on over the past several years. (Just last week, I posted a link to Jerry Del Colliano's article, "Rethinking Illegal File Sharing." at: http://tinyurl.com/27o3t4r )
I did a word search to count the number of times I've used the word "innovation" in the newsletter since I first started it eight years ago. I stopped counting at a hundred.
In the very first issue of the newsletter back in 2003 I wrote the following in a commentary about the impossibilities of trying to stop the illegal downloading of music, "Any software programmer will tell you the hard core (ugly) truth is this: Anything that can be encoded digitally can be decoded and replicated with a little work. It's time the labels recognize this fact, accept it, and now spend time brainstorming on how new revenue streams can be created within the framework of all the technology at hand."
NOTHING has changed that fact, and if labels had asked the same question and others like it, way back then, they might not have spent all the time and money suing people via the alleged industry association, the RIAA.
I've also printed several times in the newsletter this quote from Apple CEO Steve Jobs, "Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations."
The problem is the music industry didn't embrace technology when it started to move faster than Paris Hilton changes boyfriends.
This new report, which I'm sure will be attacked by IFPI the RIAA and others, should be read by every major music industry executive. They aren't going to like what they read, but digesting it all might make them realize their future lies in creating solutions for the future that lies ahead for all digital media.
-----------------------------
THE 'A-SIDE' - TRACK 2
APPLE SELLS 1 MILLION iPADS
Apple Inc. said Monday that is has sold 1 million of its new iPad tablet computers in the month after its launch, meaning it's been selling more than twice as fast as the iPhone did when it was new.
"One million iPads in 28 days -- that's less than half of the 74 days it took to achieve this milestone with iPhone," said CEO Steve Jobs. Demand keeps exceeding supply for the tablet, he added.
Read more about it here: http://tinyurl.com/36z9z7j or here: http://tinyurl.com/2b3rdzm
AND... from CNN, 'Can Anyone Compete With Apple's iPad' here: http://tinyurl.com/29klgtf AND... From FORTUNE, 'How The iPad Gobbles Up Netbook Sales; here: http://tinyurl.com/26ckrtg
-----------------------------
The Music Industry Past, Present & Future, And The Internet
I answer questions on EconTalk
I recently did an interview about the industry and the Internet at EconTalk with host Russ Roberts. Russ is also a professor of economics at George Mason University, blogs at Cafe Hayek, and has written three novels that teach economics. He's also the co-creator of the Keynes-Hayek rap video. (And if your understanding of the economic meltdown that occurred needs to be enlightened, this video will do it)
In the interview we talk about the evolution of the music industry, the impact of the digital revolution, and I give my reasons for believing in the virtues and potential of the Internet in enhancing the music industry. I point out, as I have many times here in the newsletter, that the internet allows numerous artists to make money from their music and it can enhance revenues from live performances by expanding an artist's base. We also discuss the challenges facing record companies and I suggest that the full potential of the Internet as a distribution channel has yet to be fully exploited. There's a lot of ground covered, but based on the comments already posted of those who have tuned in, they've enjoyed it.
You can listen to the interview (it runs a tad over an hour) or download it here: http://tinyurl.com/y9f3tld
And Now For Some News ...
The News Corp. Backs A Digital Music Start-Up...Read This
FT.comThe News Corp is backing an ambitious digital music start-up that is promising to combat piracy by shifting the burden for paying for music to device manufacturers and broadband providers, giving consumers free, legal access to an unlimited number of tracks.
The US start-up, called Beyond Oblivion, is in talks with record labels, PC and smartphone manufacturers and network operators in preparation for an autumn launch.
Adam Kidron, its founder, told the Financial Times that Beyond expected to pay out well over $100 million in royalties to music companies within five years, but believed it was ultimately possible, via its potential agreements with device manufacturers and the music industry, to add $10 billion or more to last year's global digital music revenues of $3.7 billion.
Read more about it by clicking here.
Apple Folds LaLa, But Has Other Plans
Wall Street Journal (et al)Lala -- the cloud-based music-streaming service that Apple bought late last year -- is going bye-bye at the end of May. In its place, industry watchers are predicting that Apple will launch a cloud-based iTunes.com -- the mere implication of which has serious implications for the digital music business.
"Apple's decision to close Lala isn't much of a surprise, as Lala never found much of a foothold as a stand-alone music service," writes CNet's Media Maverick blog. "The real prize for Apple was the company's streaming technology ... Apparently, Apple is considering a plan to offer iTunes users the ability to store digital copies of their music and videos on the company's servers and then be given the ability to access their media via any Web-enabled device."
It's about time, writes paidContent. "Against both the web and subscription rise, iTunes' a la carte reliance looks archaic and one-dimensional, tooled for a market that's plateaued." Upon the news of Lala's demise, TechCrunch asked: "Will Apple be the first company to turn online music subscription services into a sizable business?"
Read more about it by clicking here.
EMI Stuff
TimesOnlineGuy Hands has 12 days to persuade investors to stump up fresh funds for EMI or risk losing control of the troubled music group, home to top acts such as Coldplay and Katy Perry.
A handful of the largest backers of Terra Firma, Hands's investment vehicle, have given verbal commitments to contribute enough to plug the latest breach of its borrowing agreement with Citigroup.
Read more about it by clicking here.
ASCAP Collections Top $995 Million in '09
Ascap.comASCAP said it collected over $995 million in royalties on behalf of its 380,000 songwriter and music publisher members in 2009, and paid out $863 million to members.
"Music is performed more often, in more places, in more ways by more businesses than ever before. That expanded music use, combined with dramatic ASCAP Membership growth, market share increases and effective strategic management have led to stunning revenue and distribution growth for 2009," said ASCAP CEO John LoFrumento.
Read more about it by clicking here.
Musikpitch Creates Online Marketplace For Custom Songwriting
Marketwire.comMusikpitch brings the power of Crowdsourcing to custom songwriting; connects Talented songwriters with companies and individuals who need custom music. It is turning the songwriting business inside out with the launch of an online marketplace for custom songwriting. The new site gives music supervisors, corporate brands and others access to a largely untapped pool of songwriting talent, while simultaneously empowering the songwriting community with a brand new market for their music making talents.
Read more about it by clicking here.
Who Rules Web Video?
TechCrunchYouTube aside, video sites experiencing the most success are those run by broadcast TV networks and Web-only media brands, followed by magazine sites and music labels. That, according to a new joint report from Brightcove and Tubemogul. Newspaper sites, meanwhile, are lagging when it comes to both total video views and growth. In terms of how people are finding these videos, just over half -- 51.75% -- are navigating directly from the publisher's main site. After that, Google search is the next biggest source of video-viewing traffic -- 38.92% -- followed by Yahoo -- 5.58% -- Bing -- 2.29% -- while Facebook barely shows up with just 0.40%.
Twitter is smaller still, but, as TechCrunch notes, "People who find videos are more engaged than any of these other sources of traffic, on average watching videos longer across different media categories." During the first quarter of quarter of the year, the Broadcast TV networks sampled in the study streamed 380 million videos, with Web media brands trailing right behind with 326 million video streams.
Read more about it by clicking here.
Smartphone Sales Increase
NocoThe global smartphone market saw its best quarter in nearly three years, according to new findings from research firm Strategy Analytics. Global smartphone shipments jumped by a whopping 50% to 54 million in the first quarter -- up from 36 million year-over-year.
Nokia, for one, shipped a record 21.5 million smartphones, which gave it a dominant 40% market share. Beating out Apple's 16.4% market share, Blackberry-make RIM accounted for a 20% market share in the first quarter. Separately, IDC reported that the broader mobile phone market grew by 21.7% to 294.9 million during the first quarter -- up from 242.4 million units during the first quarter of 2009. Not bad, considering that the mobile phone market had actually declined 16.6% during that quarter from the previous quarter in 2008.
Read more about it by clicking here.
FCC Wants To Keep Broadband Deregulated
The Washington PostJulius Genachowski, chairman of the Federal Communications Commission, has indicated he wants to keep broadband services deregulated, according to sources, even as a federal court decision questioned the agency's ability to be a strong watchdog over the companies that provide access to the Web.
The FCC currently has "ancillary" authority over broadband providers such as Comcast, AT&T and Verizon, and must justify actions over those providers. Last month, the U.S. Court of Appeals said the agency had exceeded its authority in 2008 when it applied sanctions against Comcast, casting doubt it could create a "net neutrality" rule. Google and public interested groups say the rule would protect consumers from business decisions that destroy Web competition and access to Web apps. Genachowski is expected to respond soon to the court ruling.
Read more about it by clicking here.
Federal Appeals Court OKs Unmasking Identities
Wired.comEven though the RIAA announced in December 2008 that it would end its litigation campaign against individual file-swappers using the "John Doe" filing strategy, after suing some 35,000 consumers, a federal appeals court is blessing the legal process by which the recording industry and other content owners unmask the identities of alleged peer-to-peer copyright infringers.
The decision by the 2nd U.S. Circuit Court of Appeals is believed to be the first appellate court to sanction a process that has ultimately hauled tens of thousands of alleged P2P infringers into court, (.pdf) many at the request of the Recording Industry Association of America.
"They have upheld the RIAA's legal strategy," said Richard A. Altman, the New York attorney who brought the court challenge.
And so it goes, so it goes. More industry money wasted on lawsuits filed by the RIAA that have accomplished not one thing.
Read more about it by clicking here.
NATALIE COLE TO BE HONORED BY SOCIETY OF SINGERS:
President/CEO of the Society Of Singers, Jerry F. Sharell, announced that Natalie Cole will receive the Society of Singers' annual ELLA award during the organization's annual gala at the Beverly Hilton on June 1st. Doris Day will receive the inaugural Legend Award, while veteran back-up singer Billie Barnum will receive the Voice Award for her contributions. Other scheduled performers include Gladys Knight, Kenneth "Babyface" Edmonds, Macy Gray, James Ingram, Dave Koz, Patti Austin and Nikki Yanofsky. For info, go to http://tinyurl.com/28g8aw4 or call (818) 995-7100 for the org, which was co-founded in 1984 by Ginny Mancini and Gilda Maiken Anderson, offering emergency financial support for vocalists and scholarships in the vocal arts.
TWITTER IS SO YESTERDAY, SAYS MAYER:
John Mayer is considering dropping Twitter for Tumblr, a shift that may involve deleting about 3.2 million fans. "I just think Twitter as a form of communication, I think it's over to be honest with you," Mayer said.
BLACK-EYED PEAS NOW HOLD DIGITAL RECORD:
The Black Eyed Peas' song "I Gotta Feeling" became the best-selling song in digital history last week. It has sold 5,561,000 digital copies, surpassing Low by Flo Rida featuring T-Pain.
YOU TUBE STATS:
YouTube delivered video to more than 135 million viewers in March, reaching three of every four online video viewers at an average of 96 videos per person, according to comScore. More than 180 million U.S. Internet users watched online videos last month, up 3.5% sequentially.
IRON MAN UNLEASHED ONLINE:
"Iron Man 2," the film sequel from Viacom's Paramount Pictures based on the Marvel comic franchise, found its way onto file-sharing hub The Pirate Bay last weekend, a week before the film's North American release, CNET News.com reported.
TOM PETTY DEAL:
Concertgoers purchasing a ticket to an upcoming Tom Petty and the Heartbreakers show will receive a free digital copy of the band's upcoming album.
BRITNEY TELEPHONED FIRST:
A leaked demo recording of Britney Spears singing Lady Gaga's "Fame Monster" hit "Telephone" hit the web last week and exploded virally with people listening. It obviously didn't make Britney's "Circus" album ... and now that it's yet another #1 for Lady GaGa.
SIRIUS POSTS SERIOUS GAINS:
Satellite radio company Sirius XM Radio said Tuesday that it swung to a first-quarter profit as subscriber growth and hints of rising consumer spending lifted results. The posted a profit of $41.6 million, or 1 cent a share, compared to a loss of $238.8 million, or 7 cents a share, a year earlier. Revenue rose to $663.8 million from $587 million.
PASSING:
The music industry lost two great people this week -- both were gentlemen, great professionals, and both were loved by all who knew them, or had the pleasure of working with them.
Peter Lopez, one of the most-respected and well-known entertainment lawyers in the country, was found dead of a self-inflicted gunshot wound. Over the past two decades, Peter has represented some of the biggest stars in the world as well as numerous major corporate clients. California Governor Arnold Schwarzenegger appointed Peter Lopez to the California State Athletic Commission in 2007, and more recently the Director of the California Exposition and State Fair Board. He was married to Catherine Bach in 1990, and they have two children. Peter was 61.
Bob Mercer, a well-loved music industry veteran, the British CEO of the NOW compilation business in the U.S., died on May 5th, 2010 after a battle with lung cancer. He was 65. He is survived by his wife Margie and son Jackson.
Bruce Resnikoff, who worked with Bob at UMe: "It is with great sadness that I tell you that our good friend and former co-worker Bob Mercer passed away earlier today, with his wife Margie and son Jackson at his side. Bob had recently been diagnosed with advanced lung cancer and had been hospitalized for the past week or two. As those of you who knew Bob would imagine, he fought until the end with the same spirit, passion and courage that he always exhibited. Bob was a big part of the team that created UMe when Universal and PolyGram merged in 1999. He created and led our UTV Records label and for the past few years had been the leader of the partnership that creates and releases the Now branded records. More than that, over the past 40+ years, he was also one of the most vibrant and charismatic people the music industry has ever seen. He was truly one of a kind and will be sorely missed."
Quotes of the week
"I am addicted to Nicorette Gum...It's like a party in my mouth. It's like fireworks, and I'm just like, 'Oh my God, I'm talking a million miles an hour.'"
-- Non-smoker Jessica Simpson, revealing her addictive habit, on The Tonight Show"I don't think you should be saying anything is "like a party in your mouth"... people might get the wrong idea"
-- Jay Leno, in response to Ms. Simpson's comment."I thought she was singing 'Like A Persian.' I wasn't quite sure what a virgin was."
-- Zooey Deschanel, on Madonna's iconic hit "Like a Virgin," to the UK's The Guardian
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Nation Demands Fresh Celebrity Meat
HOLLYWOOD, CA-Like famished dogs salivating before a warm and steaming carcass, a coalition of bloodthirsty Americans demanded this week that the entertainment industry provide them with newer, fresher celebrities to mercilessly devour.
"Our most sumptuous celebrities have been picked to the bone," a statement by the group, Citizens for Renewed Celebrity Consumption, read in part. "We can no longer subsist vicariously on the travails and public deteriorations of Lindsay Lohan and Britney Spears. These fetid idols are mere shreds of their former selves, and we, the American entertainment consumers, grow ever hungrier for a new crop of stars on which to feast."
"We need meat!" the statement continued. "Raw, bloody meat!"
Read the rest here and laugh: http://tinyurl.com/2bchnla.
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.comWebsite
Check out attorney Ray Beckerman's website at: http://recordingindustryvspeople.blogspot.com where he prints news about the RIAA's ongoing activities
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!)
-
-