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Music

On-line Royalties Exceed CD Shortfall

Posted by Andrew at 3:17 AM on March 15, 2010

The UK’s Performing Rights Society (PRS) announced their financial results for 2009 today and for the first time, the growth in royalties from on-line music exceeded the fall in revenue from the sales of CDs and DVDs.

The PRS reports that on-line revenues in 2009 grew to a little over £30m, which was an increase of just under £13m, but revenue from CDs and DVDs fell by over £8m.  This is the first time that the growth in on-line music has overtaken the fall in the sales of traditional media.

 The PRS is the approximate equivalent of ASCAP in the USA and total revenue for the year was £623m, a growth of 2.6%.  Most of the PRS’ income comes from other sources, such as licence fees for broadcasting and playing music in shops and other businesses.  Recorded media such MP3s, CDs and DVDs is actually the smallest of four revenue streams.

Regardless of what we might think of organisations like the PRS, ASCAP, MPAA, etc., I’m pleased to see these results.  First of all, it will make a musicians and music publishers take the on-line sales of music more seriously if the revenues from on-line sales are (potentially) greater than CDs.

Secondly, it would appear that easy availability of competitively price music appears to be making it less attractive to “pirate” music.  Of course, this is conjecture and probably has much to do with MP3 players extending to social groups who are not technically-savvy.

Thirdly, while I’m not privy to the exact royalty percentages taken by the different formats, it perhaps indicates that even during an economic downturn, people are still buying music.  Perhaps on-line music comes off better, as it’s easier to buy a 99p track than a £10 CD.

Finally, it’s probably not good news for the few bricks’n'mortar music stores which still sell CDs and DVDs.  If Amazon has already eaten their lunch, it looks like iTunes and their ilk will be taking their breakfast too.

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Illegal Downloaders Do Spend More Money on Music

Posted by Andrew at 4:42 AM on November 4, 2009

The London-based think tank Demos has concluded that illegal downloaders spend more money on music. The headline figure, based on the survey of over 1000 people between 16 and 65, is that the average spend per annum on CDs or vinyl was £75 (GBP) for file-sharers compared with only £51 for all surveyed.

The notion that illegal downloaders actually spend more money on music has always had its supporters but it’s good to see that this can now be backed up with some hard data, at least for the UK. However, there’s some much more juicy information, but remember that this is representative sample of the online population, not the whole population and not just music aficionados or games players.

69% of those questioned had used official or legal sources for music such as iTunes or YouTube. Physical media still dominates purchasing with 65% having bought CDs or vinyl against 33% who purchased downloadable music.

A third had used peer-to-peer technology or search engines to find free music but only 9% actually confessed to illegal downloading. Almost everyone knew that sharing purchased music was not “fair use” but 81% of people who had purchased their music thought that “fair use” should include the ability to move the music between different players easily.

47% would be interested in a monthly subscription service with the optimum price point being £5 per month but it would have to be simple and convenient to use.

There is only a slight male bias of 57%:43% in illegal music downloading (which is far less than I would have expected) and 46% gave “because I can” as a reason for doing it. (I think in the old days, this would’ve been known as “troughing”).  Unsurprisingly, two thirds of this group also engaged in the illegal downloading of movies, games and other software.

The full “Digital Music Survey” is available to download from the Demos website and it’s a fascinating read into the state of music consumption.  Recommended.

Note for readers – as far as I’m aware and I’m not a lawyer, the UK does not currently have a “fair use” provision in its copyright legislation.

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Swapping Out My XM Radio for a Zune

Posted by fogview at 12:48 PM on June 30, 2009

Zune-playerI’m a long time XM Radio customer, starting over five years ago with a $9.95/month plan. Since the merger with Sirius, I’ve seen my plan increase to $12.95/month. A few days ago I received an “Important Information About Your XM” email from XM Radio saying that my monthly rate will increase by $1.98/month for a “U.S. Music Royalty Fee.” (I guess they didn’t make it $2.00 because they thought I would notice the increase.) So, now it will cost almost $15/month for a service that has increased 50% over the past five years. This is after the merger with Sirius that was going to make the service more affordable for everyone.

After the iPhone 3.0 launch, I found a free Sirius/XM application for the iPhone that allows you to stream Sirius/XM channels. I though this would be a great thing until I found out that this free application requires you to be a Sirius/XM subscriber and to play an additional $2.99 for a “Premium” upgrade.  This would push up my monthly cost to $18!

So where does the Zune come into all this? I purchased a Zune when they first came out and used it for a while but it was replaced by an iPod Nano and iPod Touch. The Zune desktop software (Windows only) is now up to version 3 and Zune software has much improved. The Zune Pass is a monthly subscription service that gives you unlimited access to music in the Zune Marketplace for $14.99/month. In addition, you can download 10 DRM-free songs each month.

I mainly use my XM Radio to listen to music in car and I’m thinking I can save some money and get 10 free songs a month by switching out my XM service for a Zune Pass. By bringing back my Zune and signing up for a monthly Zune Pass, I can download lots of music on my Zune for trips in my car and build up my DRM-free music collection (for use on my iPod). As an added bonus I can download and play songs on multiple (Windows) computers. I generally use my Mac for day-to-day use, but I also have a couple of Window machines nearby, so this is not a problem.

I think Satellite Radio is a great thing and would love to keep the service but I feel it’s pricing itself out of business. Before you had a choice between two satellite radio services but now we are down to one, and a costly one at that.

Now, if I can just figure out where I put my old Zune player and hope that it still works.

73’s, Tom

 

 

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Why I Like Amazon Music

Posted by susabelle at 6:26 AM on May 20, 2009

I have been a consumer of Amazon MP3’s for at least two years.  Probably longer.  I choose to buy music through the Amazon MP3 downloader above almost anything else.  One simple reason:  no DRM.

Amazon MP3’s can be downloaded for great prices, and they can then be burned to a CD, moved to an MP3 player, transferred to another computer, whatever you want to make your listening easier.  With iTunes, if I download a song or album, I have to use it on that machine, or on my iPod, but can use it nowhere else.  In our house, there are four people, 7 computers, and four MP3 players, only one of which is an iPod.  iTunes may have a great selection of music, but because there is no flexibility in use, iTunes is pretty much useless to me.

From Amazon last week I downloaded an album of 50 kid songs for my 7 year old.  I burned them onto CD and placed them on her computer so we could update her MP3 player when she is ready for new music.  I also downloaded two jazz albums for my own use, burned them to CD for my archives and also uploaded them to my iPod.  And I downloaded an album of circus music for my husband that he will use for background music when doing shows.  I burned them to CD and they are now in his show trunk.  And finally I downloaded the latest Green Day album for my 15 year old.  She immediately put it on her MP3 player.

I paid $23.95 for all of this music.  The same music on iTunes would have cost well over $100, and the songs would have all had to go on my iPod.  With Amazon, I can download whatever I want and give it to whichever family member is desiring it, and save it to whatever device I choose.  This flexibility pushes Amazon to the top of my list when it comes to music accumulation.  I live in constant fear that I will lose my downloaded iTunes music in a computer crash or iPod failure.  With the Amazon music, I know it’s always there, in multiple places, and that if I crash a computer or my iPod, I can still retrieve my Amazon downloads either from the CD I put them on for archives, or by logging into Amazon from another computer and re-downloading them (for free).

Another bonus for using Amazon?  They often have freebies, or 99-cent album sales, or special deals (I got the Green Day album for 5.99 as a deal of the day).  When it comes to pinching a penny, I’m an expert, and I definitely take advantage of Amazon’s specials and sales.

To be fair, I have also tried eMusic, and while it’s a great service with decent prices, selection is rather limited and can keep me from using that subscription enough to make it worth paying for.  Perhaps when they are further developed, they will be a better service.  eMusic downloads are also DRM free and can be burned to CD or uploaded to any type of MP3 player.

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Is P2P the new music marketing arm?

Posted by todd at 5:32 AM on February 22, 2009

When U2’s new album was “accidentally” released on an Australian website of Universal music a week before its official release I had some immediate suspicions. This is not the first time a U2 album has hit the download sites before its official release. In fact the previous album, ‘How to Dismantle an Atomic Bomb” got out early after Bono played his stereo too loud and a passing fan recorded a few tracks.

The outcome of the previous incident was U2 getting the biggest first week sales they ever had with 840,000 copies sold in the US alone and triple platinum within a month, a feat their previous album had taken over a year to do. One thing that had been clear to a lot of people that paid attention to what was really happening, was that for a some types of music, P2P really helps sales.

In the case of U2, the press that accompanied the leaking of the 4 tracks helped to create a buzz that definitely contributed to some booming sales. I would not have been surprised to learn that the pre-releasing of the new album was part of a marketing campaign by Universal. Then my suspicions really got aroused when Sony decided to get in on this trick with iTunes Norway posting a Kelly Clarkson album a couple of weeks before release. This puts it on the verge of moving from a co-incidence to a trend.

I expect to see more of this. It may become the modern equivalent of when bands used to slot a new song into their live set to excite the fans, or the bootleg albums that used to make the rounds. While the press these issues engender will fade as it becomes more common, this tactic will go right to the fan base and rev them up for a great opening for a new release.

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RIAA to Cease Prosecution of File Sharers

Posted by Matthew Greensmith at 10:42 AM on December 21, 2008

The RIAA has decided to cease prosecution of file sharers directly, and instead force ISP’s to become the new copyright police.

The RIAA wasn’t even able to truly determine if people were sharing music, so a ginormous ISP is supposed to be able to figure it out?

I have BitTorrent loaded one one of my machines. I’ve used it to make large files of my own creation available to people who need it (most notably my work on adaptive technology) and used it to download similar materials. I’ve also used it to retrieve a working copy of software that I own but that the CD has been damaged.

Is ATT, my ISP, going to know I’m using BitTorrent legitimately, or are they going to assume that because my music library also exists on the same computer that is running BitTorrent, that I must be an illegal music file-sharer?

This isn’t helping anyone; the RIAA is just trying to find more effective means to catch people doing what may be legitimate work. It just gets scarier, doesn’t it? My BitTorrent machine is offline right now, not because of this, but because we are having new flooring put in the room where it resides. I’m debating on a complete uninstall of BitTorrent before I put that machine back on the network.

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Budget MP3 Players

Posted by Matthew Greensmith at 7:08 AM on October 15, 2008

As the holiday season approaches, I’m starting to look at technology toys as gifts. Since I have teenagers, and a barely-technologically capable husband who want the same fun toys I have, I’m currently looking at ways to give them the toys without the expense.

I’m cheap like that.

I’m also a practical thinker. If I bought them all $300 iPods, they’d all be broken within a month and I’d be out quite a bit of money. But if I can go cheaper on MP3 players, but still give them some of the features they are looking for, then if they break in a month, I’m not as bad off as I could be.

My 15 year old daughter’s old Creative Zen bit the dust last week, and my 18 year old son’s relatively new Creative Zen is showing signs of death. My husband thinks podcasts are cool and he wants to have his own player so he won’t have to listen to them on the computer. What’s a geek-girl supposed to do?

Go out and snap up some 8 gb Sandisk Sansa players. At less than $150 apiece, these are a reasonable and functional alternative to my more expensive iPod. For a geek like me, 8 gb might not be enough, but for my family, who only want to listen to music and carry around a few photos, 8 gb is plenty.

There are other cheaper alternatives out there, and most these days feature at least a display screen, and some even have video features. Here are ones I’ve found, in no particular order:

The Sandisk Sansa Fuze. 4 gb of storage, plays videos, has a voice recorder, and a built-in FM radio. Retails at about $100

Creative MuVo T200. 2 and 4 gb models, color screen for navigating, has a voice recorder and built-in FM radio. Plugs in like a thumb drive so needs no cables. Retails at $50 and $70, respectively (by size).

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How to fight The RIAA

Posted by shane at 8:06 PM on October 2, 2008

It seems like the RIAA is unstoppable in its crusade to sue music lovers into oblivion. They are using the courts to get their way with ridiculous judgments being handed out. A single illegal downloaded song can cost a person thousands. The RIAA really does not want to go to trial; they hope to scare people into paying up when threatened with a lawsuit. Most people will just pay up to avoid the extra hassle of facing a trial. I am not advocating stealing music because I believe it is stealing when you take something without paying. However the music industry (not all artists… look what Radiohead did) is being bull headed instead of changing with the times. And these judgments are not punishment that fits the “crime” There is no way that a few songs should cost as much as they do in penalties. The question is what can we do to destroy the RIAA.

I don’t think trying to pass any laws will help because the lobbyists are more incentivized than voters. They make money to get laws passed or to prevent laws from being enacted. Voters are just regular people with jobs & real lives. We don’t have time to know every single detail of what to vote on and when to do so. It is a very difficult thing to make changes through the voting booth. Tough but not impossible I know. Maybe a better way is to wreck the chances of any jury awarding outrageous cash to the RIAA & other such scum based groups. One way to do that is FIJA (Fully Informed Jury Association). Basically the Constitution set up the average person to be the final branch of government. We the People are the final road block to oppressive government. If lawmakers pass bad laws which are ruled on by corrupt judges then the jury becomes 12 super powerful humans that can do good. FIJA looks to educate Americans on a jury’s role in trials. Now this not mainstream stuff & judges will actually throw people off juries if they are found to be members of FIJA. So it is not going to be something that the powers that be will endorse, but the Constitution is supposed to be the highest law in the land. The concept is that a juror can not only find a defendant not guilty based on the evidence but also based on the fact that the law is BAD. The jury is in control. No really, they are. No matter what the judge tells them to ignore or base their findings on, they have the final say. So if I were on a jury and I knew I could prevent a real injustice from happening I would think it was my duty to do the right thing. If the word could be spread about FIJA then juries everywhere could be used to do away with bad judgments like what the RIAA goes after. This is a big task I know but I see no other way because the RIAA will not stop until someone stops them over & over again.

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The DRM Revolution Continues!

Posted by geeknews at 4:07 PM on May 21, 2008

The war to free the music rages on…and we’re winning, folks!

Earlier today, Napster announced the launch of their MP3 store, which they claim to be “more than 50% larger than any other MP3 store and boasts not only the largest major label MP3 catalog in the industry, but also the largest library of independent music available anywhere.”

Napster says the vast majority of the over 6-million DRM-free tracks will be available at 256kbps bitrate and include high-resolution album art. Most MP3s are priced at 99 cents with albums running $9.95.  Napster’s on-demand subscription services remains unchanged.

There is now more DRM-free music available to the masses than before the demise of the original Napster. home.napster.com

This article was submitted by Matthew as part of a contest we are having on my podcast.

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The economics of art

Posted by todd at 6:46 AM on January 30, 2008

It looks like Q-Trax might be dead before it starts. This is a disappointment as I truly believe it could have been a service that was good for the music industry, artists and consumers. In a comment to my article Peter J made some good points about the impact to GNC if its content was available for free (i.e. without GNC advertising) through another source. If this happened it would indeed reduce the return to Todd as the people that consumed the content elsewhere would not come to GNC to see it.

This analogy does not work so well with music though, primarily because music (ideally) is art not information. While they are both to some extent intangible, art and information actually have radically different economic aspects. The value of the information is the information itself, once you have it you have it. While you may look at other sources for confirmation, you only need to be exposed to the information once to gain the full value you can from it. Thus it is important for a blog like GNC to tightly control its content in order to ensure that it receives the economic benefit of that informations consumption.

Art works differently as the value gained to the consumer is in the act of consuming. It is therefore common that repeated consumption will not reduce the joy (value) of consumption. Indeed the better the art the more likely repeated consumption will actually increase the value the consumer gets from the item. This is why record companies are willing to pay radio stations to play their songs, they know that repeated listening will increase the chances of a listener buying the single or album. What record companies actually sell is not the song, but the convenience of listening when and how you want.

Once you realise this it becomes obvious why what the RI is doing is so idiotic. They need to be looking at any way they can increase the amount of free listening that potential consumers can do, striking a balance between this and restricting the methods those consumers can use.  Things like the Qtrax service, Internet radio, podcast/vidcast backing tracks are all perfect for this.  Then the product they actually sell should be as convenient as possible to allow them to realise the most value.  Instead they try to limit interaction with the art at every turn, and try to limit the convenience of the consumer that pays them money to gain convenience.

They are a bunch of morons and their inability to grasp the basic concepts of their product and market is the main reason their profits are shrinking at a time that there is more money being spent on leisure than ever before.  RIP big label music, you are about to miss one of the best opportunities to revive your market available and we will all be better off when the small label becomes the force in the music industry again.

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A rhetorical question for the music industry

Posted by todd at 5:58 AM on January 14, 2008

Sony could not help but hear the commentary on its decision to release DRM free music in the worst way possible, just about every media outlet and blog panned them severely. Less than a week later they have announced they will be also releasing DRM free tracks on Amazon.com. If I was Best Buy, Target and other retailers I would be a bit annoyed (to say the least). It is a better move by Sony though.

While I am not rushing out to get the new Britney Spears album, it is again annoying that they have released to a store that is US only.  If they want to limit themselves to only 25% of the market when they could scale with miniscule-to-no incremental cost then far be it for me to call them crazy.  It does bring to mind the whole iTunes or Amazon decision the big labels seem to be making.  My question to the music industry is:

Would you sign an exclusive contract for your entire catalog with a single, or limited number or retail chains to sell your CD’s?

Not in a million years, so why do that online?  If you told the product manager of Sony PlatinumPass that he could only stock those cards in one store he would laugh at you and call you a moron, yet the actual product it represents is limited in its available channels.  Oh irony, thy name is again the recording industry.

Your product needs to be where your customers are, not where you want them to be.  If the customers are on iTunes you need to be there.  You bent over backwards when WalMart presured you on price because you realised this but are blind to it online.  In the context that the last decade since Napster started this is not an unexpected thing.  The story of the recording industry over that time has been about them trying to control a market rather than serve their customers.

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A Merry Christmas for some

Posted by todd at 4:01 AM on January 2, 2008

I hope everyone that was celebrating holidays had a great time. With 42C heat New Years in Melbourne was as much an endurance event as a celebration (110F for the unmetricated). The music industry did not enjoy a Merry Christmas with revenues down 20% over the last holiday season. The reasons for this will surprise no-one. A move to online purchases has been accompanied by a decline in album sales, with people more likely to cherry pick the good songs out rather than pay for the poor filler songs quickly put together to fill up the album by the release date.

The smaller and boutique music labels may still strive for the album nirvana of “All killer, no filler!” but in the world of the pop charts, there is no focus on making a good album. Writing a good song is not easy and in a short sighted world it is not economical to waste those resources on a single new artist. Better to give them one or two “hit” songs and fill up the album with cheaper material. If the artist manages to make it past the first album and get a big enough following they can put more effort in to a known return from a bigger fan base.

I say in a short sighted world because although it has given record companies more control over their artists (and hence the money) in the short term, they have changed the dynamic of at least part of the industry. The relationship with the artist is what drives people to purchase everything they produce, and that is created by the emotional connection between the person and the music. It is hard to do this with a single (although definitely does happen) and much easier to do this with a well thought out, artistically crafted album that you can play over an over.

I am probably starting to sound a bit like a grumpy not-that-old-yet man. I discussed this infomally with somem friends as we sweltered through the new year, and while we remembered some of the hit songs from our youth they did not bring back the memories of the time like the albums. We recalled artists like The Knack, Carl Douglas, Toni Basil and The Buggles we wouldn’t dream of buying anything more than the one memorable song each of them put out. Meanwhile most of us spoke of a concert that we had recently attended or planned to attend of an artist that while aging had touched us in our youth through one or more albums. The Cure, Neil Diamond, The Police, Black Sabbath, David Bowie and even one mention of Bon Jovi, although most of the bands we wished would tour are not likely to. All the people in this group were Gen-Xers, but if you have a similar discussion with your own friends I am sure you will get similar discussions with sligthly different bands.

Art is an emotional thing, and does not sit easily with commercialisation, and cannot be built on an assmbly line. In trying to control the industry the record companies have messed with the art and alterred the connection between artist and fan. This is starting to effect their sales and will likely continue to. The problem for the industry is that the top 100 is where the youth enter the market. Boomers and Gen-Xers continue to buy music today because of their emotional connection to the medium. If the current generation do not develop that bond, where will the music industry get its growth from in the future.

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One by one they fall

Posted by todd at 5:37 AM on November 15, 2007

And realise that fighting your customers is not good for business.  Warner Brothers now joins EMI and a limited Universal in recognising that the goal of a company should be to make their product easy for customers to use, and allow them to use it as much as they can.  Warner CEO Edgar Bronfman claims the music industry was wrong to start a fight with consumers.

Reports from PC Pro and TechCrunch.

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