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The Online Music Biz Is About To Get Googled
September 10, 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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"There's no dearth of music available on a computer right now, but Google can still have an impact on the cell phone or any connected device."
-- Larry Kenswil, a former Universal Music executive who is a counsel at Loeb & Loeb.There was big news this week in the industry. Google is stepping into the digital music waters.
From the news story below, "Google Gets Ready To Launch A Music Service": "The music industry hopes to benefit from a battle for control of the mobile phone and computer desktop between Apple and Google as both technology giants go head-to-head in a wide range of media and consumer technology areas including online TV and movies, mobile phones, software and even advertising." ( http://tiny.cc/bcqup )
I have little doubt that up in Cupertino, CA, by the time the news about this all leaked out to the public, Steve Jobs and his Apple team were already aware of it. Google's Android operating system is picking up a whole lot of the smartphone market share out there against Apple's iPhones, so I have little doubt that all in Cupertino have had their competitive "radar" up and running on this for sometime.
Like General George Patton, one has to believe that Jobs and team have subscribed to the philosophy "know what your enemy is thinking." Like Patton also, Google knows that in battle the key strategies to employ are adequate preparation time, exposure time, and the moment of attack.
All the major labels and the music industry as a whole are thrilled to see Google make this move, and all agree that competition in the online music market is a good thing. With Apple's iTunes the worldwide leader in online sales of music (as the article states. A "Seven-year dominance through iTunes Music Store, which accounts for 70% of all U.S. digital music sales"), and the worldwide brand associated with music (how could it not be with over 200 million Apple iPods out there?), nobody has yet come close to what Apple has accomplished. Most people believe if anybody has a chance at expanding the online music retail market, they will need a whole lot of money and resources to do so. Google, of course, has both.
The "of course" there is the whole oncoming cloud-based services issue. Cloud computing (as reported in the newsletter weeks ago) is going to be the primary way your PC will be operating in a decade. (The simple definition of cloud computing from Wikipedia, "Cloud computing is Internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on demand, like the electricity grid. Cloud computing is a paradigm shift following the shift from mainframe to client-server in the early 1980s.")
Apple had already bought cloud-based music company LaLa Media last December and closed it in April (also reported in the newsletter back then) , and many watching expected Apple-branded cloud service announcement. As of yet that hasn't happened, but companies don't buy other companies to lose money. They either buy them to break them up into little parts and sell them for more than what they originally purchased a company for, or because they have something else in mind. What is it? I don't know, but pay no attention to that man behind the curtain, for right now Steve Jobs is the Wizard of Oz in technology land.
Steve Jobs has said, "You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new."
Maybe Apple's already building something new to compete with Google's coming service. Maybe their Ping announcement last week was the beginning. Whatever happens, the online music space is going to heat up very soon.
Consumers everywhere will benefit from it.
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THE 'A-SIDE' - TRACK 2
THINGS MOVE FAST THESE DAYS DEPT: APPLE'S PING GRABS ONE MILLION USERS IN TWO DAYS
Apple said that more than one million iTunes users joined its new Ping music-focused social network in the 48 hours following its launch last Wednesday.
That's Ping going bang!
You can read more about it here: http://tiny.cc/3dmho or here: http://tiny.cc/9rugf
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THE 'A-SIDE' - TRACK 3
THINGS CHANGE DEPT: ONCE UPON A TIME THERE WERE ACTUALLY VIDEO STORES
Remember when you went to your local Blockbuster Video store to rent the hottest movies just released on VHS? Then on DVD?
Blockbuster recently filed bankruptcy and has all but disappeared from the brick-and-mortar retail world. It's Netflix and Redbox now.
And speaking of Redbox, in celebration of its one-billionth movie rental, Redbox launched a "Thanks a billion" promotion, which grants users a free one-night movie rental and includes a sweepstakes to win other prizes. Redbox, the unit of Coinstar that operates a network of automated DVD rental kiosks, announced that it hit the 1 billion rental mark to consumers over the holiday weekend.
That's right, one billion rentals.
The key to survival in this fast-moving digital world we live in? Once again: innovation.
A better idea was created and the marketplace reacted.
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THE 'A-SIDE' - TRACK 4
FROM INSIDE MUSIC MEDIA: RIAA TO RADIO: $100 MILLION NOW, $2 BILLION IN 10 YEARS
Another great article by Jerry Del Colliano this week.
In this one he talks about how the NAB and RIAA are both planning on getting a whole lot of money from radio stations if the new royalty taxes are imposed.
Check it out here: http://tiny.cc/z55ls
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The Futurehit.DNA Challenge
Good friend Jay Frank, the Senior Vice President of Music Strategy for CMT (who oversees music strategy as it relates to all of the network's on-air and digital music initiatives across all properties, including CMT, CMT.com, CMT Mobile, games, touring and other businesses), is a reader of this newsletter, and the author of the book that provides a songwriting compass, Futurehit.DNA. Jay stands at the forefront of the new music industry with his theories on the elements of a hit song; Futurehit.DNA is a must-read for all songwriters everywhere.
Now artists have the opportunity to put the ideas Jay describes in Futurehit.DNA to music as part of the Futurehit.DNA Songwriting Challenge. Jay will give three top-notch submissions featured placement on his blog, futurehitdna.com and his social networks. One Grand Prize winner will receive a career-changing opportunity to receive an hour-long consultation with Jay on what makes their tune hit-worthy and what next steps are appropriate. Entries for this unique contest are available until October 1st.
"People don't listen to music the same way anymore," says Frank, "and they certainly don't discover music the same way anymore ... If artists aren't going to pay attention to that, then they are going to lose out on the key methodology that people utilize to find your music. You have to play into the way technology works by saying to yourself, 'How do I listen to this when it comes through on that technology? How does it sound when it first comes in that way?' Those are the artists that are going to succeed moving forward."
To get your copy of Futurehit.DNA or submit songs to Jay for consideration, please go to www.futurehitdna.com.
And Now For Some News ...
Google Gets Ready To Launch A Music Service
REUTERSGoogle plans to launch a music service as early as December, and the company's vice president of engineering Andy Rubin is leading licensing talks with the major labels on the download store and cloud-based locker service,.
Though Google hasn't signed any licensing deals yet with record labels, "the labels are getting excited about the prospect of its entry to the business and what competition with iTunes could mean for the industry."
Read more about it by clicking here.
Analyst Predicts Apple Could Sell 28 Million iPads In 2011
APPLE INSIDERYikes. Analyst Maynard Um with UBS Investment Research predicted in a note to investors this week, that Apple would sell 28 million iPads in 2011. "Sales of traditional notebooks appear to be feeling pressure from the iPad, causing a scramble by vendors to launch iPad-like tablets," Maynard wrote, calling the estimate "conservative."
He cautioned however that he was not convinced the iPad was "purely cannibalizing" notebook market share. (Of course, if it does sell anywhere near 28 million, it's sure going to cannibalize something out there!)
Read more about it by clicking here.
Wilco's Jeff Tweedy Talks About The Whole 'Yankee Hotel Foxtrot' Thing
ROLLING STONEI've written several articles in the past about how Wilco's "Yankee Hotel Foxtrot" (YHT) album (the group's biggest selling album) was rejected by Reprise, and how Jeff Tweedy took matters into his own hands and then put the album online so Wilco fans could download it for free. It became one of the most downloaded albums ever (that can be tracked anyway), and was later picked up for release by Nonesuch.
This meant, as the article says, "the parent, Warner Bros. Records, paid for the album twice." It also meant that despite the downloads, a whole lot of music consumers paid for the CD when it was released. (Tweedy has said in various interviews "The Internet is not the enemy.")
Here is a short interview with Tweedy, one of the best singer/songwriters today, that was done just a few weeks before the YHT album was finally released.
Read more about it by clicking here.
UMG's Court Victory In Eminem Royalties Case Overturned
BLOOMBERGThe Universal Music Group "lost a federal appeals court ruling over royalties from Apple Inc. iTunes downloads and mobile-phone ringtones in a lawsuit brought by the Detroit producers who helped launch rapper Eminem's career."
And yes, Universal will appeal.
Read more about it by clicking here.
Amie Street Acquired By Amazon
PAID CONTENTAmie Street, a well-known online indie music store, has been acquired by Amazon.com (Amazon was a leader in Amie Street's first round of funding about three years ago)
Amie Street's founders plan to concentrate on social music streaming service, Songza.com. The streaming service is currently in beta.
Read more about it by clicking here.
YouTube Ads Are Turning Videos Into Real Revenue
NEW YORK TIMESMore than one-third of the two billion views of YouTube videos with ads each week are from videos that are uploaded without the copyright owner's permission, but left up by the owner's choice.
Those two billion views, a 50% increase over last year, according to the company, are just 14% of the videos viewed each week on the Google-owned website. But that's enough to turn YouTube profitable this year, analysts say.
Read more about it by clicking here.
A&R Worldwide, AllAccess.com To Launch Worldwide Radio Summit
ALL ACCESSThe 1st annual Worldwide Radio Summit, a virtual "United Nations of Radio," is set to take place April 29th-30th, 2011 at the brand new W Hotel in Los Angeles.
The architects behind The Worldwide Radio Summit include the influential independent international talent discovery, development and consulting firm A&R Worldwide -- producer of MUSEXPO, which celebrates its 7th year with conventions on three continents (North America, Europe and Australasia) -- and the world's largest online radio/music industry information and news resource, AllAccess.com
The event will spotlight the most important issues impacting radio today, as well as focus on the future of this crucial broadcast medium. A wide array of radio power players and the world's most innovative and influential programmers, DJs and technology experts will address new ways to reach consumers, the radio's influence across multiple platforms, social media, new business models, new technology, streaming advances, radio device development and creative programming.
Read more about it by clicking here.
Live Streaming Video Usage Jumps 600% in Past Year
COMSCORENearly a decade before anyone had heard of YouTube, the first viral video spread among snickering teens and procrastinating college students. Discovered via direct download links and embedded QuickTime players, Trey Parker and Matt Stone's "The Spirit of Christmas" not only launched what would soon become the popular animated series "South Park," but also reinvigorated an entire cable network.
A lot has changed in last 10+ years. YouTube, once maligned for its streaming quality, can now pump out videos in 4K (for the uninitiated, that's 4x the pixels of broadcast/cable HD), most online TV programming can be found in HD, and even the cheapest camcorders have the capability to upload a HD video.
Now more than ever, live online video sites are willing to build out their technology infrastructure to provide a better user experience.
Read more about it by clicking here.
ANOTHER 'KILLER' FLICK:
Director Terrence Malick ("Badlands', 'Days of Heaven') is reportedly working with actors Brad Pitt and Natalie Portman on a biopic about Jerry Lee Lewis.
STERN SERIOUS ABOUT LEAVING SIRIUS?
Howard Stern opened up about his future after his five-year contract with Sirius XM expires at year's end, saying he's "pretty sure" he'll leave the satellite radio giant and perhaps pursue an Internet venue.
ANOTHER SIGN THAT CIVILIZATION AS WE KNOW IT IS DECLINING:
A full 3% of Twitter's server infrastructure is dedicated to pop singer Justin Bieber, according to a tweet from a Web designer citing a source within the company, Mashable reported.
iTUNES NUMBERS:
iTunes currently has 160 million users worldwide (Source: MediaTel, September 2010)
ATTENTION ASCAP MEMBERS:
Performing rights organization ASCAP on Wednesday announced a partnership with TuneCore, a service that helps artists distribute their works through digital retailers like iTunes. Check it out here: http://tiny.cc/3gwr0
POLITICALLY INCORRECT MORRISSEY:
Morrissey has found himself embroiled in controversy after referring to the Chinese people as a "subspecies" in an interview with British poet Simon Armitage.
GLEE STUFF:
The season-two premiere of "Glee" on September 21st, will feature renditions of Jay-Z's "Empire State of Mind," Lady Gaga's "Telephone," Travie McCoy's "Billionaire" and Poison's "Every Rose Has Its Thorn," according to Rolling Stone.
YEAH, WE KNOW:
Though it has been reported for weeks all over the Internet and elsewhere, this week Kara DioGuardi made a formal announcement saying she would not return to "American Idol" as a judge.
THANKS, BUT BYE-BYE:
Jane's Addiction and Duff McKagan have parted ways, just five months after the band recruited the former Guns N' Roses bassist to record their new album.
PASSING:
Mike Edwards, a founding member of the Electric Light Orchestra, was tragically killed last Friday when a bale of hay rolled down a hill and collided with his car. The force was so great that it caused him to swerve into another car on the road.
The Music Industry Past, Present & Future, And The Internet I answer questions on EconTalk
I 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.
Quotes of the week
"He's never seen me naked, nor will he after those comments."
-- 'Mad Men' actress January Jones, shutting down her rumored boyfriend Jason Sudeikis after he revealed a little too much about their relationship."I'm just using 'Conan' and dropping the 'O'Brien' because I want to get away from the whole Irish thing."
-- Conan O'Brien, after revealing the title of his new TBS show via YouTube, in a press release."She had not seen it but now thought it was gum."
-- Paris Hilton's alleged explanation for the cocaine found in her purse, from an officer's report of the drug bust. (This qualifies for this week's blonde-joke)"In my fantasy world ... I would wear just headdresses and run around in body paint and a glitter diaper."
-- Ke$ha, sharing her dream wardrobe, to MTV.
The B-Side - 'Blips'
THE ONION (www.theonion.com) STORY OF THE WEEK:
Neighbors' Wi-Fi Password Must Be Something Good
CHICAGO-After exhausting all the obvious candidates, laptop user Ted Murphy concluded Thursday that the Wi-Fi password of the Ostermann family next door must be something pretty good.
Read the rest here and laugh: Click Here.
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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