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The Paid Content Thing Again ... Murdoch Still Hopes It Will Work
June 18, 2010
Have an opinion? Add your comment below. 24 years working in executive promotion capacities at both Capitol Records and at Universal Studios' MCA Records. Recognized as one of the industry's top professionals.
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When a fellow says, "It ain't the money but the principle of the thing," it's the money.
-- Kin HubbardThis week from Bloomberg news this week: "The Times, the London newspaper owned by Rupert Murdoch's News Corp., is offering free tickets to 'Toy Story 3' or the chance of a weekend at the Grosvenor Hotel in Dorset to persuade readers to pay for news online. The newspaper this week began closing down its free website and will charge for access, mirroring a long-standing practice at the Financial Times and the Wall Street Journal. The New York Times Co. plans to do the same next year. Both concede the step will mean fewer readers. A drop in advertising revenue is forcing them to seek other, more steady, sources of income.
"We don't expect or require that all the people who do now will still look at it," said Daniel Finkelstein, executive editor of the Times in London whose online fee will be 2 pounds ($2.89) a week. "What's left is still a vast market."
Among the first general newspapers seeking to charge for online content, the Times and the New York daily are betting that a smaller number of committed, paying online readers may allow them to extract subscription fees and bigger advertising sales. Print ads in the U.S. last year slid 29% to about $24.8 billion, the lowest since 1984. With online ad sales holding up better, newspapers want to capture a bigger piece of that pie, even as they lose some readers.
"Obviously a huge number of casual readers will get their news elsewhere," said Paul Richards, an analyst at Numis Securities Ltd. in London. "What you'll have left is a core of readers that you can target more effectively with advertising and services. If you know who your readers are it's easier to monetize them." (Source: http://tinyurl.com/25f8nyu )
So the deal Mr. Murdoch is making is pay him for the news ... and get these freebies. The hope being once people are lured in they will continue to pay for content they can get from a variety of other sources online for free.
Back in July 2009, in commentaries titled 'To Charge For Content, Or Not To Charge, That Is The Question,' I wrote the following: "There'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 still hold that opinion until somebody creates a paid content model that generates significant revenues. But as I said back in '09, "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."
I don't believe something "so exceptional" will be created in paid news content offerings, unless the online readers consider reading the words of a particular journalist that much more valuable in delivering the news than someone else. In a world of 24/7 cable news channels, and hundreds of available news sources that are free, it's going to become increasingly hard to convince people to open their wallets and pay for content.
Things change rapidly online. As I also said back in '09, "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."
And ain't that the truth.
For those of you who missed it back then, I referenced these articles, and they both echo what I've been saying now for over two years about the paid content model.
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.
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THE 'A-SIDE' - TRACK 2
APPLE UPDATE ... NEW iPHONE SALES GO THROUGH THE ROOF
Apple Inc. said it will begin selling a "completely redesigned" version of its Mac Mini computer, adding the basic desktop model to the list of products it has upgraded or unveiled this year. The computer will start at $699 and is more energy-efficient than its predecessor and has stronger graphics capabilities.
Apple's new iPhone is (as expected) another sales success. From CNET, "Despite a disastrous preorder process Tuesday morning, enough people were able to place iPhone 4 orders that much of Apple's initial U.S. supply has already been accounted for. As of Tuesday evening, Apple.com now shows that iPhone 4 preorders will be shipped by July 2nd. The device actually goes on sale for the first time June 24th, and that was the expected shipping date for customers who placed a preorder earlier in the day. AT&T said it also can no longer take preorders for June 24th. AT&T is now saying, "Because of the incredible interest in iPhone 4, today was the busiest online sales day in AT&T history. As of Tuesday afternoon, customers who preorder iPhone 4 moving forward will receive their device on June 25th or later, depending on when the order is placed. "
In addition, AT&T said that it has suspended pre-orders of Cupertino-based Apple's new iPhone 4, a day after stronger-than-expected demand for the device overwhelmed the companies' computer systems.
Over 600,000+ iPhones were ordered on day one.
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THE 'A-SIDE' - TRACK 3
TWITTER TWEET THOUGHTS AGAIN
If millions of insignificant celebrity (and non-celebrity) Tweets weren't enough, now this: If Norm Levy has his way, marketers will start sending shout-outs right out loud to Facebook Fans and Twitter followers. Rather than a 140-character text message, ShoutOmatic's founder recently launched a product he describes as "a 30-second audible tweet." The apps lets people personalize audio messages to send in e-mails or embed on Web pages, Facebook status updates or Google Buzz and Twitter streams. The app, ShoutOmatic, lets people play the recording over and over again.
You can read more about it here: http://tinyurl.com/24xonzd
And Now For Some News ...
Google Music Store Might Launch This Fall
CNETThough iTunes is the leading online music store, Google isn't sitting on the sidelines.
According to multiple music industry sources, Google could launch a music service that offers song downloads and streaming music as early as this fall.
Google has already signaled that it wishes to give users of phones equipped with Google's Android operating system a better music offering. At Google's I/O conference last month, the search engine offered attendees a demonstration of a Web-based iTunes competitor.
Read more about it by clicking here.
Tom Petty Partners With Tribune Co.
CHICAGO TRIBUNETom Petty and the Heartbreakers, whose first album since 2002's "The Last DJ" is due out this week, have gone into business with Chicago Tribune parent Tribune Co. on an Internet venture.
A new Web hub, in partnership with TomPetty.com, will link off Tribune Co. websites -- including the Chicago Tribune's -- to provide access to aggregated and unique content; music videos and tracks from the new release, "Mojo." In select markets, it also will offer access to concert tickets and merchandise from the "Mojo" tour, which began June 1st near Denver.
"As MTV has faded and FM radio has become more and more musically limited, there's no clear promotional vehicle for musical artists of this stature," Lee Abrams, a longtime radio consultant who's now Tribune Co.'s chief innovation officer, said in a statement. "We think we can offer a new and different way for the greats of the music industry to connect with their fans."
Read the rest here: http://tinyurl.com/383dw8y
Read more about it by clicking here.
Vevo Passes Hulu In Audience
MEDIAPOSTWhen it launched with much fanfare last December, Vevo was billed as the Hulu for music videos -- the major music labels' answer to the premium video hub by NBC Universal, Fox Entertainment and ABC Inc.
Seven months later, Vevo has surpassed Hulu's audience and similarly attracted dozens of blue-chip brands with a lineup of star-laden, professionally produced videos. Vevo in April drew 43.6 million U.S. unique viewers, equal to a quarter of the total U.S. video audience and making it the fourth-biggest video property behind Google, Yahoo and MySpace. Hulu was No. 8, with 38.7 million.
Read more about it by clicking here.
Music Publishers Sue LimeWire
NMPAEight members of the National Music Publishers' Association (NMPA) today filed a lawsuit against LimeWire for copyright infringement of their musical works on a massive scale. NMPA President and CEO David Israelite announced the action today at the NMPA's Annual Meeting in New York City.
The plaintiffs -- EMI Music Publishing, Sony/ATV Music Publishing, Universal Music Publishing Group, Warner/Chappell Music, Inc., Bug Music, MPL Music Publishing, Peermusic, and The Richmond Organization -- filed the action against LimeWire LLC, Lime Group LLC, LimeWire CEO Mark Gorton, former COO and CTO Greg Bildson, and M.J.G. LimeWire Family Limited Partnership in the U.S. District Court for the Southern District of New York. The publishers seek both equitable relief and damages for LimeWire's knowing facilitation of copyright infringement through its web application.
Read more about it by clicking here.
Bright Future For Online Entertainment
MEDIAPOSTPeople worldwide will be looking toward digital technology -- particularly that which uses the Internet -- to serve their entertainment and media needs, proving once again the future is indeed digital.
According to PricewaterhouseCoopers' most recent "Global Entertainment and Media Outlook," expenditures in those categories are expected to increase to $1.7 trillion from by 2014 (from $1.3 trillion), with a compound annual growth rate of 5%. In the U.S., such expenditures will increase about 4% annually to $517 billion by 2014 (from $425 billion). Furthermore, by 2014, digital entertainment is expected to account for 26% of that spending, up from 19% in 2009.
Read more about it by clicking here.
RIM Readies New Touchscreen Smartphone And Maybe A Tablet
CNET & WALL STREET JOURNALWhile Apple and Google have been getting the lion's share of attention in the smartphone world of late, Research In Motion isn't going quietly, according to a report.
The Wall Street Journal reports that RIM has a new touchscreen version of its BlackBerry smartphone up its sleeve, this time with a slide-out keyboard.
Read more about it by clicking here.
A Third Of People On Internet Watching TV
MEDIA POSTWeb video isn't just for snacking anymore. A third of adult U.S. Internet users will watch full-length television shows online this year on a monthly basis, according to new data from market research firm eMarketer. That proportion is expected to grow to 39% next year as watching TV online increasingly becomes a mainstream activity.
Read more about it by clicking here.
Pandora's iPad Advertising
MEDIAPOSTInternet radio service Pandora has launched its own rich media ads for the iPad with Starbucks, Lexus, Budweiser, Chase and AT&T on board as initial sponsors.
The new ad capability extends advertising on the Pandora app from the Web to other portable devices including the iPhone to the new Apple tablet. The unit features animation, video and audio elements that users can interact with -- without leaving the Pandora iPad app, similar to Apple's iAd.
Read more about it by clicking here.
Public Radio And TV Partner To Create Digital Public Media Platform
MEDIAPOSTResponding to the increasingly cross-channel nature of media, the nation's top public radio and television networks have entered into joint partnership to create apps, Web sites, and other media platforms and services. The partnership -- which plans to increasingly involve the public as well -- combines audio, text and video content from every public radio and television outlet in the country.
Read more about it by clicking here.
You Tube Releases Online Editing
MEDIA POSTAttention all the amateur video makers: YouTube execs confirmed Wednesday that Google's video site plans to release an editing tool later today aimed at those who know little about editing videos. The tool will have editing features that allow people to trim videos and remove background noise, replacing the hum or buzz with music. That's for starters.
The free YouTube Video Editor tool will not require people to download complex software. The tool becomes perfect for those who take a quick video, find the first five seconds jumbled up, and want to trim it off quickly.
Read more about it by clicking here.
The Music Industry Past, Present & Future, And The Internet
I answer questions on EconTalkI 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.
Read more about it by clicking here.
LATTE & WIFI:
Coffee giant Starbucks said on Monday that it will begin offering free, unlimited Wi-Fi access through AT&T at all 6,700 of its U.S. company-owned stores beginning July 1st.
BUDDY FINALLY GETS HIS STAR:
From good friend Denny Diante comes the news that both Buddy Holly and Louis Prima will finally receive their stars on Hollywood Blvd. in September of 2011, which will coincide with Buddy's birthday.
DUKES OF SEPTEMBER REUNITES OLD FRIENDS FOR TOUR:
Donald Fagen, Michael McDonald and Boz Scaggs are hitting the road this summer nearly 20 years after their last joint tour. Calling themselves the Dukes of September, the longtime friends will share the stage for each full show and take turns singing.
HOW TO LOSE $750 MILLION IN SHORT TIME:
AOL is close to selling the online social network Bebo, which AOL acquired for $850 million two years ago, for just $10 million (or less) to Los Angeles-based digital media investors Criterion Capital Partners, according to TechCrunch.
PLANT HAS MORE JOY:
Led Zeppelin's Robert Plant will return with his first new album since his Grammy-winning collaboration with Allison Krauss, "Raising Sand," on September 14th. Band of Joy's self-titled disc features an all-star squad of musicians: Patty Griffin on vocals, multi-instrumentalist Darrell Scott, guitarist and co-producer Buddy Miller, drummer Marco Giovino and bassist Byron House.
AN APP FOR APPLE:
Apple on Tuesday released a free Apple Store application for the iPhone, which lets users place a pre-order for the new iPhone 4, as well as purchase MacBooks and other products available from the company's retail stores.
"THE HANGOVER" NOW #1 ON-DEMAND:
Last year's box office smash "The Hangover" is now the biggest film ever On-Demand pay services as well.
THE SOUNDS OF SILENCE:
Art Garfunkel's poor vocal health has forced Simon & Garfunkel to postpone their Old Friends reunion tour indefinitely.
DANCE LIKE THE KING OF POP:
An upcoming video game will test fans' abilities to emulate Michael Jackson's famous dance moves and nail his classic vocals on some of his biggest hits, Ubisoft announced yesterday prior to the 2010 E3 video game conference. The still-untitled game, it's reportedly simply called Michael Jackson: The Game, is due out by the holiday season
THE BEAT WILL MERGE WITH THE STREET:
Masterbeat, the operator of an online digital music community and download store, announced on Thursday that it will merge with AudioStreet, a network of music-related websites.
PASSING:
Country music singer and sausage company founder Jimmy Dean passed away at his Henrico, Virginia home this weekend at the age of 81. According to a brief statement by Jimmy's wife Donna, Dean died of natural causes Sunday night, June 13th.
Quotes of the week
"I've been here for two hours ... and I can tell you we are losing the war on drugs,"
-- Conan O'Brien deadpanned to the rowdy audience inside Bonnaroo's sweltering comedy tent Friday afternoon."How about Diddy dog food: Make your dog yap to a rap."
-- Diddy, joking about his next possible business venture, on Nightline"Will you just have my baby, and let's just get it over?"
-- Kid Rock, to Sheryl Crow while hosting the CMT Awards"Very Sonny and Cher, but Clay and Ruben."
-- Clay Aiken, on his upcoming concert tour with former American Idol castmate Ruben Studdard, on Chelsea Lately
Attention L.A. Promo Folks Looking For Work: Record Promoter & Phoner Booker
Record promoter needed, all formats, $30/hr, 20 to 40 hrs/wk Monday through Friday, with at least two years record promotion experience (indie, or label staff), to promote independent and unknown musicians for airplay.
Knowledge of adds and specialty a must; MB, BDS, ACQB helpful. Will also help with promotion of independent and unknown non-music phoner guests on talk stations. Must work from our Santa Monica office; no out-of-office work (just no way around this). Must currently live in Los Angeles area (no relocations). Shifts can start at 9am, although starting at 8am or 10am is possible. Site: www.Radio-Media.com.
Applications are taken by phone at 310-998-8305 x87 No walk ins.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Last Time Sources Checked This Still America
WASHINGTON-All across the country, from Maine to Mississippi, sources confirmed this week that last time they checked this was still America, and would remain America, like it or not.
Despite what the mainstream media would like sources to believe, those interviewed said Tuesday that, unless they missed something while they were sleeping, the United States of America had not turned overnight into some communist-type nation that didn't care about ideals like freedom, liberty, or democracy anymore.
"I've never been very good at geography, but I'm pretty sure this isn't China we're supposed to be living in," Denver resident Jim Sanborn said. "At least, I didn't see any tanks rolling down the street last time I looked out my window."
"Nope," added Sanborn, pulling back the curtain of his kitchen window. "Sure doesn't look like Beijing to me."
Read the rest here and laugh: http://tinyurl.com/24te6je.
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!)
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