A blog for musicians and music industry people. It is a free educational resource and it is also the way I advertise my music consulting services. I am an entertainment professional with deep roots in the music industry. Throughout my music career I have been a major label A&R representative, a music supervisor, an artist manager, a reality show producer, a bass player and the head of a digital record label.
Posts Tagged ‘Google+’
Industry insiders announced that video site Vevo is going up for sale. And Rhett Miller of the Old 97’s talked about the changing music industry and keeping a band together. Also, Google was said to be looking for a streaming music service to purchase.
Vevo Going up for Sale
Leading music video service Vevo has begun meeting with potential buyers and could be sold for as much as $1 billion. According to Business Insider, the company and its bankers are already taking meetings with a variety of media and tech companies that have expressed interest in buying.
Vevo previously aspired to turn itself into a major independent producer of entertainment and lifestyle programming. However, its efforts to transform itself into this type of entity through joint ventures with other organizations failed, and in early 2014, the company hired advisory firm Goldman Sachs and Raine Group to begin preparing itself for sale to an investor.
Vevo’s control over major label artist videos is attached to high ad rates, making it appealing to potential buyers. Vevo will likely make approximately $350 million in ad revenue alone this year and is YouTube’s most viewed channel.
Companies with their hat in the ring to buy Vevo include Amazon, Yahoo, Dreamworks Animation and Liberty Media. And several financial investors have also expressed interest in buying a stake: the Carlyle Group (a Beats Electronics investor) and AT&T investor Peter Chernin.
Vevo’s current owners include both Universal Music Group and Sony Music Entertainment. Google also invests in the company and valued it at $650 million in 2013.
Rhett Miller, on the Music Industry and Keeping a Band Together
Rhett Miller, leader of long-standing indie band the Old 97’s recently talked to The Columbus Dispatch about his 20 years in the music business. When asked how he keeps going, he admitted it can be challenging at times: “20 years into a band you sort of look at it and say. ‘This is great. Do I keep doing this? When is it enough? When do I go and try to get some sort of a ‘job’ job?’ For me, I’ve never wondered if this was the right thing to do. I’ve never wondered if I should quit. But I know that on paper this is not an easy job. It’s something that’s really kind of unrealistic, but I love it and I don’t feel I have that much of a choice … A working musician 20 years into a band in 2014, there’s not a lot of us. Most of the ones who are still doing it are the ones who’ve had a ton of success because to be able to do it on the level we have, which is pretty good – we can pull in 1,000, 1,500, 2,000 people, but nobody’s getting rich off of it — it’s just kind of a rare perspective.”
And Miller also said he fears what low music industry sales will do to young, career-minded musicians: “One thing I’m afraid of is that as the money falls out of the art, in general, more and more kids are going to look at this profession as something that’s not realistic as a life choice. I really want kids to know that you can do this. There’s actually a real thing that you can do with your life — is to be in a band and write songs.”
He was also asked how he has kept his band together so long. How has he approached running the Old 97’s that has helped keep them solid in a changing music climate that has broken up so many other bands? “I think a lot of it is I started so young and (bassist) Murry (Hammond) and I started together a long time ago. We figured out a lot of things a long time ago before we even put the band together. Ken joining the band and then (drummer) Philip (Peoples) following in with us, it’s a lot of picking people who are going to get along and care about each other.”
He added, “Also, you just learn. You’ve got to keep your ego in check. A lot of times there are things you want to say and you’ve got to just not say them. A lot of this band is about compromise and respecting the bandmates’ opinion. That’s why I make solo records. There are so many songs I really like. If somebody in the band didn’t like it … fortunately, they’re cool enough to let me do the solo records on the side.”
Google Eying Successful Streaming Music Services
Google is in the market for a streaming music service to boost its music involvement, according to sources. The New York Post reported that Larry Page is looking at companies including Spotify and others to weigh its options.
No official talks have begun, but a source admitted the company has been talking to banks about “how they’re shaping their future music strategy.” The company’s subscription music service Google Play Music All Access has been having some issues with branding, particularly because of its lengthy name and its lack of one famous spokesperson to help sell the product. However, Google’s wildly popular music video service YouTube is working on “Music Pass,” a streaming video subscription service that could launch as early as October.
Analysts speculate that Google’s best option would be to grab Spotify, valued at $4 billion, with 10 million paying subscribers. The service could also be available for purchase by the fall.
An unnamed industry veteran said, “The fear is that Spotify gets so big no one can catch them.”
A source close to the music team at Google said the team is strong and could have a shot at Spotify, Pandora, Rdio or Rhapsody: “They have a very robust team there. They’re thoughtful and disciplined, and they’re going to make a ginormous impact.”
A new study revealed that radio is still the most popular music discovery method. Also, the music industry rallied to put together a unified lobbying message. And Google, Apple and Amazon could be enhancing their streaming offerings in order to compete with Spotify once it goes public.
Radio Still Delivering New Music to Fans
Music fans still see radio as the main taste maker when it comes to discovering new artists and songs, according to a recent study conducted by Edison Research and Triton Digital.
Mashable reported that while Spotify, Pandora, iTunes and other digital music sources are growing, radio is still the most popular method for music discovery, with word of mouth via friends and family coming in second place. YouTube is the third most popular method, with nine-percent of respondents admitting they use it to find new tunes.
Data was collected from 950 American music fans over 12 who responded that keeping up with the latest music is “very important” or “somewhat important” to them. And 35% of Americans, who try to keep up with the latest music, consider FM/AM radio their number-one source to keep up with the latest trends.
The chart below, courtesy of Statista points out the top discovery sources.
Music Industry Working on a “Unified Message”
The president of the National Academy of Recording Arts and Sciences – the force behind the Grammy® Awards – Neil Portnow hosted a dinner in Washington on Wednesday for a collection of Capitol Hill’s most influential legislators – including House minority leader Nancy Pelosi and majority whip Kevin McCarthy – as well as music executives in order to encourage music industry players to put their differences aside and lobby under “a single message of fair compensation for all.”
The New York Times reported, executives are concerned that fighting among record labels, music publishers, artists, songwriters and others will prevent new legislation and regulatory reform that could help those in the music business get proper compensation for their work.
Portnow’s speech suggested that the conflicting messages coming from different parts of the industry have stalled and ultimately quashed campaigns to help bring in more money. He supported executives’ belief that one multi-purpose bill will help everyone.
Music groups are currently fighting for new laws and regulations to help their businesses grow and thrive in the Digital Age, but their methods have not been in alignment.
For instance, record labels have wanted to change federal laws that make AM/FM broadcasters pay royalties to publishers and owners of songwriting copyrights but not to record labels. But publishers have been afraid that giving more control to record companies might take money away from them. And radio broadcasters have also opposed record labels’ initiatives and thwarted them.
Groups across the industry have also argued about the amount of money paid out by streaming services like Pandora and Spotify. Federal courts regulate the royalty rates paid by these platforms, and publishers have complained record labels are taking too much of the revenue. Pandora’s financial statements showed the company pays approximately four-percent of its annual revenue to publishers and other copyright holders and over 50 percent to labels.
David Israelite, president of the National Music Publishers’ Association (NMPA) said, “While we and record labels may agree that Pandora should pay a maximum amount possible of their revenue for music, it doesn’t mean that we agree that the money should be split 13 to one.”
Publishers pushed for a new bill, the Songwriter Equity Act, in February. This bill would give rate-court judges the power to take the royalties record companies receive into account when setting publisher rates. Publishers have also been trying to get the U.S. Justice Department to amend the 73-year-old regulatory agreements that set the rules for PROs ASCAP and BMI.
Music groups also still hope for a review of copyright law, led by Republican Representative Robert W. Goodlatte and the chairman of the Judiciary Committee.
Record labels and publishers have frequently butted heads, but battles have become more heated as digital media has sparked an on-going decline in sales and disagreements over fair royalty rates.
Failure to streamline music licensing has also frustrated lobbyists and music executives. A failed attempt to streamline music licensing in 2006 created discord between songwriters and publishers. Ultimately, they could not agree on a stance, and the proposed bill expired.
Then, the Stop Online Piracy Act (SOPA) was introduced in 2011, supported by Hollywood movie studios and music industry groups. Ultimately, Internet companies like Google and Wikipedia fought against it and beat the legislation.
In light of the explosive success of music offerings from Pandora, Spotify and Google, industry leaders are renewing their resolve to cooperate.
Music attorney Chris Castle explained, “Generally speaking, most people are on the same side … The main concern is that we don’t allow the people who want to divide us from coming in and manipulating both sides against each other.”
Google, Apple and Amazon Rallying to Take on Spotify
Google, Apple and Amazon are looking to get more entrenched in the streaming music market and move away from the shrinking digital download market by enhancing their streaming offerings in order to compete with Spotify, which may be going public in the fall.
According to the New York Post, Google’s YouTube is working on launching a subscription streaming music service this summer. New YouTube head Susan Wojcicki will make the service available via its Music Pass app for Android mobile devices.
This service will be Google’s second entrance into the streaming market. Google Play has an All Access offering, which competes with Spotify, Pandora and others. YouTube’s new Music Pass will be $10 a month for the commercial-free option and $5 a month for an ad-supported version. Music Pass will allow users to continue to play music while toggling between email and other apps.
YouTube has more than one billion unique visitors each month, and many experts feel this sizable user base could help it give Spotify a run for its money.
A YouTube spokesperson did not fully deny rumors of the new service, but said, “We’re always working on new and better ways for people to enjoy YouTube content across all screens, and on giving partners more opportunities to reach their fans … However we have nothing to announce at this time.”
Apple is also reportedly talking to record labels about a streaming subscription offering under the iTunes brand. This would be separate from its iTunes Radio service.
An industry source declared, “Apple is further along than people are thinking … They have technology in place and can flip the switch at any time.”
Apple has been trying to come up with a way to get away from digital downloads in light of the changing global music business. Digital download revenue was down 2.1 percent in 2013, and streaming sales soared, rising 51 percent and hitting $1 billion, according to the IFPI.
Jeremy Silver, chairman of Musicmetric stated, “Downloads are declining … Very much it’s an indication of the mobile music market and a customer who wants on demand music at a great price.”
Amazon is also working with record labels to try to put together a music offering for its Prime subscribers.
And record labels are now supporting the growth of streaming music. The $120 annual amount a subscriber spends is more predictable than occasional album purchases.
Spotify is also competing with Beats Music, which has spent millions on advertising campaigns and nabbed 28,000 new users in its first month.
CEO of Rdio Anthony Bay clarified, “It’s very early days for music streaming. There are over one billion mobile users and 30 million music subscribers in the world.”
The RIAA issued a report accusing Google of failing to make good on its promises to punish pirate websites. And a survey showed continued sales growth in the musical instruments and equipment industry. Also, Billboard announced it will start incorporating YouTube plays into its Hot 100 chart formulas.
Google Breaking Anti-Piracy Promises
Google has not been making an effort to hide pirate sites, even though it promised the music industry six months ago to downgrade the sites in search results, according to a report filed by the Recording Industry of America on Thursday. In August, 2012, Google made an announcement saying it would look at the number of valid copyright removal notices for each site and create a new search algorithm that would make sites with many copyright complaints appear lower in search results.
The RIAA’s report last week stated it sees no proof that the new policy has actually penalized music piracy sites, and during the past six months, Google has received tens of millions of copyright removal requests. Steven M. Marks, RIAA’s general counsel said, “Searches for popular music continue to yield results that emphasize illegal sites at the expense of legitimate services, which are often relegated to later pages. And Google’s auto-complete function continues to lead users to many of those same illicit sites.”
Ben Sisario of The New York Times said the problems outlined in the RIAA report point to the two-faced company Google has built. One Google features an array of entertainment services that have licensing agreements with major labels, music publishers, movie studios and other media companies, such as YouTube and Google Play. And these features are becoming an integral part of the entertainment industry.
Google’s other side is its search engine, which has become “the road map to the Internet” people follow to find all content. Some of its methods are heralded by the entertainment industry, but a lot of them are not.
Google responded to the RIAA’s claims in a statement, saying that the company is making a serious investment in anti-piracy measures and will continue to work with the entertainment industry to offer more valuable content: “We have invested heavily in copyright tools for content owners and process takedown notices faster than ever. In the last month we received more than 14 million copyright removal requests for Google Search, quickly removing more than 97 percent from search results … In addition, Google’s growing partnerships and distribution deals with the content industry benefit both creators and users, and generate hundreds of millions of dollars for the industry each year.”
Musical Instruments and Equipment Sales Increasing in 2013
Consumer demand is increasing for musical instruments and accessories, said a January survey conducted by the top financing provider for music dealers GE Capital, Commercial Distribution Finance (CDF).
The survey revealed that 38 percent of its respondents are expecting an increase of five, to ten percent in sales this year, and 43 percent expect their sales to increase more than ten percent. The results showed that fretted instruments, keyboards, percussion and amplifiers will likely be the big sellers, representing 44 percent of revenue. And professional audio equipment will come in second at 37 percent.
Many brick-and-mortar retailers also seem to be growing their online presence, as 27 percent of respondents stated online sales will be between 15 and 45 percent of their business in 2013. Still, 36 percent said that online sales make up 15 percent or less of their business, and 17 percent have still not opened up shop online.
As more consumers head to the Internet to buy instruments and musical equipment, many retailers reluctant to create an online presence are concerned, with 40 percent saying they believe that online retailer and auction site purchases will affect the music industry significantly in 2013. And 19 percent are worried that reduced budgets for school music programs will affect their sales.
Most said they are no longer concerned about overall consumer demand for their products. Dave Wilson, commercial leader of CDF’s diversified products group said, “Like others in the industry, we’re optimistic about consumer demand this year … Although wholesale purchases were soft heading into 2013, we think that will turn around now that we’re seeing positive signs in the U.S. economy. Unemployment rates are declining, consumer confidence is improving and home sales are increasing, all of which are good news for sales of instruments and related products.”
In an attempt to help grow music education in U.S. public schools, CDF has been supporting Little Kids Rock, a program begun in 2008 that offers free instruments and lessons to students in schools without music programs across the country.
GE Capital’s survey included 104 retailers, manufacturers and distributors.
YouTube Will Factor into Billboard’s Hot 100 Chart
Billboard magazine’s 55-year-old Hot 100 singles chart will not incorporate YouTube plays into its formula, The New York Times said. Baauer’s viral video song “Harlem Shake” will debut at No. 1 this week as a result of the change.
“Harlem Shake” got little attention when it was offered up as a free download in May. But by last week, over 4,000 videos featuring fans dancing along to the song were being put up on YouTube every day.
And download sales and Spotify streams of the track also exploded. While Billboard had been planning to include YouTube in its charts for two years, it was the popularity of “Harlem Shake” that pushed it to update its policies immediately, according to editorial director Bill Werde: “The notion that a song has to sell in order to be a hit feels a little two or three years ago to me … The music business today – much to its credit – has started to learn that there are lots of different ways a song can be a hit, and lots of different ways the business can benefit from it being a hit.”
Billboard has also been making other moves to modernize the Hot 100. Aside from sales and airplay, it now includes data from streaming services like Spotify. In recent years, YouTube has been critical to making songs wildly popular many months before they get picked up by radio. Songs like Psy’s “Gangnam Style” and Carly Rae Jepsen’s “Call Me Maybe” provide solid examples. And so does Gotye’s Grammy-winning hit “Somebody That I Used to Know.”
“Harlem Shake” only had 18,000 downloads since its release in May. Once the tens of thousands of YouTube videos began to go up last week, it sold 262,000 downloads.
Billboard’s charts are based on data from Nielsen SoundScan, a company that has also been trying to update. When it first started in 1991, it offered up third-party sales data that changed the way record labels, retailers and others marketed and sold their products. Now Nielson also looks at radio plays and major streaming services. Senior analyst David Bakula said, “We want to measure how much consumption is going on, in whatever form a consumer chooses to consume something.”
Heather Fay is a Connecticut-based singer/songwriter. After going to school to become a filmmaker, she moved to L.A., where she began to work in TV and as a director, still writing and performing songs on the side. After moving back to the East Coast to start a family, she decided to pursue music full time. Heather’s music is a mix of Americana and folk/rock, and she writes of universal experiences and emotions. Her debut album Scrape Knee’d Girl is a warm collection of songs about themes surrounding heartbreak and hope. Most recently, Heather has gained recognition for being one of the first musicians to use the “Hangouts On Air” platform on Google+ to build a global audience for her music. In addition to performing Hangout concerts for her nearly 200,000 followers, She also hosts a series of open-mic Hangouts, which enable her to build an ever-growing network of musicians from around the world. Heather also plays shows in CT and New York City at venues including Rockwood Music Hall and the Living Room.
I recently had the opportunity to talk to Heather about her journey towards becoming a professional musician, her views on marketing and promotion as a DIY artist and how she has successfully leveraged Google+ to grow a global fan base.
Thanks so much for taking the time to chat, Heather. First of all, how did you decide to become a musician?
When it comes to music, I’m kind of a late bloomer. I was originally going to be a filmmaker. I went to film school and then went out to California and worked in TV and tried my hand at directing for a while.
One Christmas, while I was still in college, I asked for a guitar and got a little inexpensive Alvarez. I decided I was going to learn it. I signed up for a basic guitar class, went once and then left, because I just figured I could make pretty sounds on my own and didn’t really have time to take lessons. Of course, now I’m kicking myself for that, because I should know theory. But I could create pretty melodies and start writing a little bit, which was enough for me at the time.
When I was living out in L.A., I had friends who were doing coffee shop gigs. I saw what they were doing and thought, “I can write songs like this,” but never really pursued it. I kept writing throughout the years, but never with aspirations of becoming a rock star. It was just something I did as a creative outlet.
Then, years later, I actually shared a song with a friend of mine at work, and his reaction was really, really positive. He said he wanted to hear more and started spreading the word around the office that I was a songwriter. He was the one who first really put the idea into my head that I should do something with this and let my music out into the world.
I started playing a little bit around L.A., really just for friends. And then I found out I was pregnant, and my husband and I decided to move back East. For some reason, while I was pregnant with my daughter, my creativity was flowing like crazy. And I started putting songs up on MySpace and was contacted by a guy named Eric Lichter, who has a studio in Connecticut. And he invited me to come and work with him in his studio, where I did my very first real show as part of a concert series. And after I recorded my first album, I decided that maybe it was finally okay for me to start referring to myself as a musician.
What have your experiences been with marketing and promotion? It sounds like a majority of what you’ve been doing has been online based.
Social media and online platforms really lend themselves beautifully to someone who is a mother aside from being an artist. I’m not 20-years old and I can’t jump into a van with my band and tour the country for months on end to build an audience, one show at a time. Being a mom and a wife, I’m at a different stage in my life than a lot of musicians who are just coming into their own. I started by working with MySpace and submitting to Internet radio and doing some things with Facebook. I really am not great at Twitter, but I’ve been working on it. And there has definitely been an audience in these places, but it wasn’t until I started using Google+ that it really felt like the right timing, right people and the right phase in my career. That has been the platform for me, especially because of the Hangouts. The Hangouts allow me to play a show face to face.
How many people can see you play through that?
Google+ now has the “On Air” function, so I can hit a button, and I’m broadcasting to anyone on Google+ in the world who has the link and has my page. I think there are a few countries that don’t yet have the On Air capability. But I’m playing to people in Japan, Australia, Europe, India and all over. I can play a show while my kids are napping and reach a global audience.
A lot of people are on Google+. And many musicians have claimed that Google+ is not necessarily revolutionary. Why do you think this platform has worked so well for you?
There are a few reasons I think it’s worked well. First of all, people come to Google+ and put their content up, thinking that’s going to be enough. But the communities on Google+ are a little different from how they are on other social media platforms. Because they allow engagement and conversation, you really need to build relationships. So, you have to actually work at it. You have to have conversations with people and spend time in Hangouts meeting new people. You really have to put yourself out there and be involved and interested in what other people are doing. People are doing really incredible things on this platform.
So, I think the first thing you have to do to get the most out of Google+ is put yourself out there. You can’t just sign up like you might on Facebook, put your music up there, sit back and see what happens. The platform just doesn’t work that way.
And Google+ has recognized you as someone who is using it well.
I got on there right when it first started. And I was reluctant at first, because it just felt like one more thing I had to do on top of Facebook and everything else. But within the first week or two, I saw potential with the Hangouts and just really threw myself into it. As they were testing new features, I volunteered to help test them. And I think Google is looking for people who will use this platform in interesting ways, so being one of the first musicians on there, I had an advantage. I think they’ve really recognized how much it has been helping me.
In terms of numbers, I have 155,000 people, and growing in my circles. I know a lot of people say Google+ is a ghost town, but I am continuously reaching new fans from all over the world. It kind of blows my mind. A global audience is not something I ever thought I’d have.
Another thing I did when I first started using Hangouts is connect to other musicians in some meaningful ways. I really wanted to use Google+ to reach out to other musicians, because I just thought it would really be cool to start conversations with them and build a global network of other people like me. So, I started an “open-mic” hangout and invited other musicians so we could share our music. And I broadcast it, so I’m not only showcasing my music but other people’s music. It has built a real community, and I really would refer to that as the biggest mark I’ve made on the platform. I’ve played shows with musicians I’ve never met in person. And now I know that if I ever have the money to do a European or world tour, I have friends to gig swap with.
That’s another thing about being an independent musician: without this, I wouldn’t know where to start when looking for places to play around the world or musicians to play shows with if I were to tour. Now because of this, I have musician friends that can share booking information with me, and I can share my resources with them if they ever come to New York City.
Has your success on Google+ been based entirely on your participation in the different communities, or have you noticed specific things you need to do with details like profile design, etc. to get noticed?
In my opinion, the community scene is very visual. For example, there’s a huge photography and art community, so the whole platform is set up very visually. You open up your stream, and there are a lot of images going by. I’ve noticed that when you write something as an update, if you add a cool photo, people tend to be more interested than if you just put up text.
But also, content is incredibly important. I actually share who I am on Google+. On Facebook, I keep my identities very separate. There’s “HeatherFayMusic,” and then there’s my personal profile. But on Google+, I feel compelled to share who I am with total strangers. I’m of course cautious with what I present. But if I’m having a hard time juggling the kids and my music career on any given day, that is part of my journey as a musician. I am a mom and an artist, and sometimes that is hard. So, that might mean I post a morning photo of cereal spilled all over the kitchen with a comment about not having time to practice.
I think because of the Hangouts platform and that fact that you can build relationships so easily, it’s a really compelling experience. For instance, if I am having a real conversation with someone in Hangouts, they want to know who I am outside of just music. If I am being myself and sharing my story, people in my circles will be that much more invested in my success. I am able to build a stronger connection, because I can actually talk to people one-on-one and build a fan base with real interactions. And I think my fans really become invested in me.
That makes sense. A video is much more personal than a profile photo. Is there anything you can point to that you did on Google+ consistently that other musicians didn’t do that has made you successful?
As I mentioned before, I think the “open mic” Hangout was really the unique thing I did that didn’t exist before, but that other people really wanted. I think people enjoy sitting back and seeing who else is out there. I think that particular Hangout was what gave me a name on Google+.
Did that provide you with a good opportunity to market yourself to those other musicians’ fan bases?
I think so, and vice versa. Because, we would feature a musician as well on the open mic. So, we’d give someone more songs than everyone else one night and talk to them a little bit so everyone watching and participating could get to know them. There is a huge crossover of similar fans if you look at the circles of all the people that have participated in the open mics. And it makes you wonder if people feel like they have to ultimately choose their favorite artist – if there would be some sort of rivalry going on. But the community is really supportive of everyone, so there’s no need for anyone to play favorites. It’s really open to all different types of music.
To learn more about Heather Fay and listen to her music, you can visit her official website or check her out on Google+. You can also see her talk about her experiences using Hangouts On Air here. She is currently in the studio recording songs for her upcoming album, which will be released early 2013.
Artists, organizations and music companies addressed shifts in the industry this past week as analysts discussed why music in the cloud will be a necessary business model for Amazon and Apple and Shirley Manson of Garbage discussed why the band self released its first album in seven years. And BMI and the Radio Music License Committee finally reached a settlement agreement concerning their on-going court battle.
Will Music in the Cloud Catch on with Consumers?
On June 11, Apple finally announced it would be joining Google and Amazon in setting up the mechanisms necessary to stream songs from its own cloud. And on June 12, Amazon released information suggesting it would soon be reaching agreements with major labels that would finally allow its licensed cloud music service to fly. And Google continues to talk to labels about proper cloud licensing.
But according to CNET’s Greg Sandoval, consumers have not been clamoring to adopt cloud music, nor has this new business model been tied to more music sales. And industry analyst Russ Crupnick, senior vice president of the research organization the NPD Group said data continues to support this: “Despite the hullabaloo about cloud music, it hasn’t gotten traction yet … I looked at our latest numbers and unreleased data, and only about 6 percent of the Internet population has even used something like [cloud music].”
The data implies that music fans are satisfied with the options they already have. However, Crupnick stated that the real problem is likely that not many people have so much music that it has maxed out their local storage, which is the main reason they would opt to have files stored remotely. So, if the consumer isn’t biting, why are major music companies pushing so hard for the cloud?
The iPod could provide one answer, as it has been a huge hardware seller. Music fans have long wanted to be able to go mobile with their music, and Apple pushed ahead with it despite weak song sales and put all their money in it. And, digital music sales have exploded. And the iPod was prompted Amazon to expand beyond just being the Web’s top retailer into making hardware. So, Apple and Amazon could be looking at music in the cloud as the next big thing that consumers don’t know they want yet.
The cloud – which simply describes the place digital content lives on third-party servers – as a file storage system is not a new concept to those in the tech industry, but it is only about a year old to music fans. Amazon started offering cloud music through the unlicensed Cloud Drive and Cloud Player. Google then started its own service. And then Apple’s entered the market, the first to be completely licensed.
But many have continued to question the benefits of having a licensed cloud service. The only thing Apple was able to offer that Google and Amazon did not have was the “scan and match” feature. Apple could scan a cloud service user’s hard drive and grab songs from the iTunes library to put into the digital locker, which made getting songs onto the server easier for the music fan and helped save Apple from having to store a billion copies of one song.
However, because delivering one copy of a song to millions of users is a copyright violation, other benefits of a licensed service have emerged. Apple’s service provides free cloud storage for songs purchased on iTunes, but charges $25 annually to upload songs purchased from other music stores, grabbed from friends or from P2P sites. According to some experts, Apple struck up a sweet deal with the labels that allowed it to implement Match. Basically, for $2 per month, the company offers owners of pirated music a safe haven.
And, despite some of the data that has pointed to a lack of response among consumers, Apple’s iCloud has earned 125 million users since its launch six months ago. Still, the company has not released numbers about how many people are actually paying for the Match service. Insiders have stated that Amazon will likely start offering its own paid version of Match. But whether music lovers will actually respond to it is still unclear.
Shirley Manson, on Garbage’s and the Music Industry’s Shift
Garbage front woman Shirley Manson recently shared her thoughts about the shifting music business with Metro, according to the music ezine Live4Ever. Signed to Geffen with her band until recently, she said that the industry is “a shell of what it once was” because of its inability to adapt to the huge market changes of the past decade: “[It] hasn’t got its head around the fact a lot of young people don’t listen to the radio or buy records – the industry has been slow to adapt and [has] become a dinosaur.”
She went on to state, “When corporations become dinosaurs they get desperate and greedy and become involved in ugly practices.” However, she had positive things to say about the people that have remained to fight to create new business models: “The good thing about the collapse is it’s got rid of characters who have no interest in music. The workers left at the companies are passionate and care about bands.”
Garbage self released its first studio album since 2005, Not Your Kind of People, last month after an on-going battle with the Geffen label that led to a forced hiatus. In an interview with Billboard, Manson admitted, “We were just at odds with the whole system morally and intellectually … We were stuck with a record label who didn’t give two flying shits about us because they couldn’t get us on the radio. They were totally disinterested and washed their hands of us. We were constantly surrounded by such negativity that it just ends up eating away at the individuals in the band and we began to take it out on one another.”
Manson and her band mates decided to leave Geffen and take control of their own careers after the label turned down her plan for a solo album: “They thought it was too obtuse and too dark and they couldn’t get it played on pop radio and they wanted me to be the kind of artist to make big pop hits.”
BMI and The Radio Music License Committee to Reach Settlement
Performing rights organization BMI and The Radio Music License Committee (RMLC) – which represents most of the radio stations in the U.S. – finally agreed on terms for a settlement surrounding the fees payable by the commercial radio industry to publicly perform the 7.5 songs in the BMI catalog through 2016. While the settlement is pending Federal Court approval, it will finally end a legal battle between the two organizations that has been raging on since early 2010.
If approved, the new BMI license will cover January 1, 2010 – December 31, 2016 and will include a $70.5-million industry fee credit against payments in 2010-2011 and an improved fee structure with systems implemented that would provide easier revenue reporting for stations and space for analog and HD multicasting. It will also offer broader rights coverage to give everyone the freedom to explore new media platforms related to Internet websites, smartphones and other wireless devices.
If approved, the terms will go into effect immediately, though because of the large credit adjustment, many stations will have a balance and thus not have to pay through 2012.
BMI Senior Vice president of Licensing Michael Steinberg was excited about the idea of finally celebrating his artists’ contribution to radio: “BMI is so proud to represent the world’s best songwriters, composers and music publishers and their incredible contributions to the success of American radio. This agreement allows us to move forward without the cost and uncertain outcome of further litigation.” He added that while fees will be lower than expected, the return to a percentage-of-revenue license is a big win for artists and BMI that will help them earn more as the music industry expands into new territory.
RMLC Chairman Ed Christian stated, “It is a vote of confidence towards our industry that BMI has agreed to return to the history percentage-of-revenue fee structure … radio broadcasters will continue to nurture their longstanding relationships with the performing rights organizations. We will work together to solve mutual problems in an every-changing environment of both radio and intellectual property rights as it relates to authors, composers and publishers.”
This past week, the Future of Music Coalition released a study that revealed that DIY artists can be most profitable when they are organized, educated about business and seek out proper support. Also, digital music sales finally overtook the sale of CDs and other physical music products. Finally, an RIAA executive called Google out for its lack of commitment to helping fight digital music piracy.
Does Pure DIY Pay?
DIY artists without a support team make significantly less money than those who align themselves with competent managers, booking agents, tour managers and other music professionals, according to a recent study based on detailed interviews with musicians and the examination of actual tax filings and conducted by the Future of Music Coalition. The results revealed that those musicians who continue to do it on their own after breaking through the initial barriers of their career are likely leaving money on the table and stalling their careers.
The study results were originally delivered in April by Artist Revenue Streams co-director Kristin Thomson in a lecture “All You Need is Love … (and a manager, an accountant and a web designer). Making it as a Musician in an Increasingly Networked World.” The event was hosted by the Berkman Centerfor Internet and Society at Harvard University. The presentation not only broke down the reality of what musicians earn from three different areas – recording, composition and touring – but also revealed which team members that DIY artists hire stand to bring in the most money.
Thomson stressed that musicians must play three roles in order to reach their earnings potential. They must be composers/songwriters, recording artists and performers that actually tour and actively seek out live performance opportunities. This means they need an organized way to license their compositions, record, distribute and sell their sound recordings and a way to book shows and performances. And those that enlist the help of three essential team members – publishers, record labels (or an entity that performs the function of a record label) and booking agents – end up streamlining their business and being able to actually focus on the important task of making great music.
Composers and songwriters write music and thus need to find a way for their compositions to be licensed for use, which means they must focus on connecting meaningfully with recording artists, record labels, movie producers, cable TV shows and other places interested in recording or licensing their works. All of these connections can be made through a publisher.
And artists also need to go into the studio and record in order to tap into that essential income bucket. They can write their own songs or even cover songs written by other songwriters. And then, they have to find a way to get these recordings to their fans in order to earn money from them. Of course, as Thomson said, this has always been a record label’s job. Many savvy DIY artists have noted that record labels take a large piece of the wholesale price of their music, plus 50% of licensing deals. However, record labels have historically done more than take care of distribution, licensing and taking money from artists recordings. They also act as a source of cash to support more recordings and tours/performances and provide a built-in team to provide booking services, publicity and producers/engineers. And they can get music played on radio and organize press coverage way more powerfully than the typical pure DIY artist can alone.
And record labels give artists important legitimacy, because it tells the world these artists were of high enough quality that they were worth a significant investment. Record labels raise musicians’ profiles to attract booking agents that can bring bigger show payments, bigger tours and better management, thus often significantly impacting income lifetime income. However, many DIY artists have been reluctant to get signed, fearing they will lose control over their compositions and careers. Still, those that decide to add a record label – or individual professionals that can fulfill the many roles of a record label – to their teams end up finding more success financially in the long run.
Touring is the most cut-and-dried point of focus for an artist, because it involves connecting directly with venues and festivals. Performers and bands that hire booking agents – who take 10-15 percent of money earned from the tour – to negotiate dates and details with venues as well as ticket prices and the amount of money they will get paid find more money in their pockets. The Future of Music Coalition revealed that the booking agent actually has the most significant impact on income and often makes artists able to hire professional sound people.
As Thomson pointed out, the many functions of a high-quality support team can technically be carried out by the artists themselves if they are willing to spend significant time, make huge numbers of phone calls and send many emails to music industry people during peak office hours times. However, not many bands actually have the leverage these professionals have in the industry and also find themselves without the power to defend themselves or troubleshoot problems when the going gets tough.
Digital Music Finally on Top
Digital music service revenue finally overtook CD and record sales for the first time in Britain in the first quarter of 2012, according to figures released this past week by trade organization BPI. The amount spent on digital music was up 2.7% and was significantly impacted by tracks bought as downloads, paid-for subscriptions and ad-funded music services from streaming companies like Spotify, Napster and eMusic. The two artists that contributed the most to the rise were Lana Del Ray’s and Lady Gaga.
Digital singles have equaled huge revenue for the industry for quite some time, whereas entire digital albums have taken longer to ignite. And sales of CDs and other physical products – which were still represented the biggest revenue stream for recorded music last year have actually dropped 15 percent already. Thankfully, due to the overall sales growth in 2011, digital revenues can finally make up for this loss.
Geoff Taylor, chief executive of the BPI said, “This is a significant milestone in the evolution of the music business …the industry’s prospects for growth look brighter than for several years.” Still, he said the industry will have to see this trend continue in additional quarters in order to truly declare revolutionary change.
RIAA Leader, on Google’s Lack of Commitment to Protecting Copyright
Recording Industry Association of America EVP for Anti-Piracy Brad Buckles revealed what Google is actually doing – and not doing – to deter piracy in a blog entry posted Wednesday on the RIAA site. The entry was a response to Google’s recent publication of its “Transparency Report,” which showed how many requests the company gets from copyright holders requesting the removal of infringing material.
According to Buckles, Google affirmed its commitment to fighting piracy and eliminating search results that represent copyright-violating items. And he said, the fact that Google does continue to work to try to combat infringement – and openly share the steps they are taking to meet this end – is also positive. However, he stated, “… even more transparency is needed to fully understand the scope of the problem. Knowing the total number of links to infringing material available and the limitations Google imposes on rights owners to search for infringements reveals how meager the number of notices is relative to the vast amount of infringement.” As he noted, the fact that the first results that pop up when searching for the term “mp3” and “free download” are still copyright-infringing materials.
Buckles also pointed out that Google has continued to claim it processes huge volumes of infringement notices, yet data surrounding this is actually misleading. Also, the process of reporting is convoluted and puts a strict cap on the number of instances of violation a copyright owner can report.
Buckles presented five facts about Google’s policies:
- Copyright owners need to find infringements in order to notify Google of a problem. “But Google places artificial limits on the number of queries that can be made by a copyright owner to identify infringements.” And these limits compromise the integrity of Google’s take-down tool and neither allow Google to take down the large number of infringements, nor for copyright owners to fully protect their work.
- As long as limitations are in place, Google cannot get an accurate picture of the true scope of the piracy problem. Also, not only are piracy queries limited, but copyright holders are only allowed to ask Google to remove a certain number of links per day, despite the fact that Google has the resources that would allow it to manage large volumes of take downs.
- “The constraints Google has placed on the tools they promote to deter infringement are well below what is necessary to identify and notice infringements on the Billboard Top 10, much less the entire catalog of the American creative community.” Still, Google successfully found five million new illegal links but openly stated it only received requests to remove 1.2 million links from 1,000 people.
- The data Google actually is using to determine the percentage of a given site that is illegal does not fully capture the magnitude of the piracy problem: “… This number is misleading given the constraints imposed by Google on a copyright owner’s ability to find infringements and send notices to Google. If these constraints did not exist, how many more links on these sites might be identified?”
- Google’s data actually admits it is ineffectively measuring the problem and is often not keeping links down after they come down initially: “If ‘take down’ does not mean ‘keep down,’ then Google’s limitations merely perpetuate the fraud wrought on copyright owners by those who game the system.”
And Buckles stated he feels the solution is complex, but possible: “Google needs to take its commitment to fight piracy more seriously by removing the limits on queries and take downs, by taking down multiple files of the same recording instead of just one when a ‘representative sample’ of infringing files is provided to them, and by establishing meaningful repeat infringer policies.”
Last week, older artists and songwriters as well as analysts and legal experts discussed why induction into the Rock and Roll Hall of Fame and potential copyright amendments are keys to their continued success in the modern music industry. Also, RightsFlow was acquired by Google to help manage YouTube licensing.
Legendary Artists Look Towards Cleveland to Lengthen their Careers
How can older, established bands and solo artists compete with younger up-and-comers in today’s music business? The answer lies in being inducted into the Rock and Roll Hall of Fame, according to a recent article in The New York Times. Not only does recognition by the Hall of Fame bring immortality to many legendary artists, but it also could mean more sales and a bigger paycheck.
Many older bands and artists have been hit in today’s ever-shifting music industry, with sales dwindling and music fans gravitating towards younger acts. The net worth of the music industry is half of what it was ten years ago. To counteract this, every fall, managers and record labels fight to get their oldest artists nominated in hopes of them getting officially acknowledged as the “royalty of rock.”
Rewards for those that score a place can be huge. Weekly record sales for artists that are inducted typically jump between 40 and 60 percent in the few weeks after selection, says David Bakula, a senior VP at Nielsen SoundScan. A Grammy might help an artist sell more of a particular album, but Hall of Fame induction usually means more sales across an entire catalog.
However, the path to getting recognition in the Museum is not an easy and can take many years. And controversy has historically accompanied the process of selection. It starts with a nominating committee of 30 music critics, entertainment lawyers and recording executives who narrow the playing field down to 15 worthy artists. Then another committee consisting of 500 people that includes past winners chooses just five inductees. Artists cannot qualify for a spot until 25 years after their first recording, which means today, artists that started releasing music in the 1980s and earlier are eligible.
According to artists and others who have participated in and witnessed the induction procedure, there is a lot of backstage lobbying, and most of them are not even sure how acts get chosen during the first step. As an example, the Bee Gees were ignored 11 times before finally making it in 1997. And in spite of 27 studio albums and 45 years of non-stop touring, superstar Alice Cooper was rejected 16 times, finally being invited to join the ranks in 2011. As Cooper said, “I used to think when you got in, you’d understand how it worked, and how you get nominated – there would be a secret handshake, and there’d be a dossier about Area 51 and the president’s assassination.” However, nothing was revealed to him.
Rhino Records, in control of Cooper’s back catalog capitalized on his induction by running 30-second spots on TV during the induction ceremony and making Alice Cooper compilations, boxed sets and deluxe editions available both online and at physical retailers. As a result, in 2011, the number of young people attending his concerts increased significantly, and sales of his entire collection rose from 75,000 to 115,000 from 2010, to 2011.
And not only do record sales increase for inducted artists, but new, career-reviving opportunities appear. In 2009, now 74-year-old Wanda Jackson, “the queen of rockabilly” was inducted and got to collaborate on an album with Jack White as a result. Suddenly she was appearing everywhere, making television appearances and opening for Adele during her 2011 tour.
Labels benefit also, when awareness of some of their back catalogs is increased and people start buying older albums.
Those being inducted in 2012 are Guns N’ Roses, the Beastie Boys, Donovan, Red Hot Chili Peppers, Laura Nyro and the Faces. The official induction ceremony will take place in April, 2012.
“Funkytown” Songwriter is Leading the Copyright Fight
The emergence of a long-existing provision in U.S. Copyright Law could cause a battle between Minneapolis-based songwriter Steven Greenberg and the music industry. And this battle could cause other songwriters and artists to start a war. Greenberg was responsible for writing the 1980 hit “Funkytown,” which led to huge sales for Mouth to Mouth, the record by Lipps Inc.
Since the ‘80s, his song has been used in TV shows, films, commercials and stage productions. Greenberg also gets paid for the song being institutionalized in several museums around the world. While “Funkytown” has not been played as much as the most-played song in history – which is “Yesterday,” by the Beatles, at 7 million recorded performances – its performances are approaching two million.
While Greenberg has refused to discuss finances publicly, the royalties and licensing fees his song has generated throughout the years have provided a great source of income. However, Universal Music Group, who owns the song’s copyright, has made even more money on “Funkytown.” The label has taken most of the funds generated by the song.
A 1976 amendment to the Copyright Act could cause revenues to shift. The amendment allows song authors to take back ownership of the song’s copyright 35 years after its creation, and it applies to every recording released since January 1, 1978. And Greenberg is the first songwriter in the country to file a “termination of transfer” notice with the U.S. Copyright office. If he is granted the transfer, the copyright will revert from Universal to him in 2015.
Greenberg said, “I’ll then own my own copyright and I’ll be able to negotiate with anyone I want, therefore giving me a much, much better royalty rate, licensing, you name it … I just get a much better deal all the way around.”
If more artists take advantage of this provision, it could mean another massive blow for the music industry, which continues to reel from the digitalization of the marketplace. As Greenberg’s attorney, Ken Abdo said, “If you can imagine having the vault of the catalog of major hit songs from 1978 on – and there are many – start reverting to the authors, that’s going to eviscerate the economic core of many of these record companies.”
Experts believe that labels and publishers will fight, arguing songwriters are employees of their record companies, making everything they produce their employers’ intellectual property. Obviously, artists will maintain they are independent contractors who deserve to ultimately own everything they create.
If artists win this battle, in an increasingly DIY-favorable environment, many will take control of the sale and marketing of their music. However, others like Greenberg may allow their labels to continue to handle their song’s copyright with a renegotiated contract. Greenberg predicted an entirely new music business: “I think companies are going to pop up all around the country if this thing happens, and there already are companies [that administer artists’ copyright] … [These new companies] will do it for a lot less, and who knows, maybe they’ll do it better.”
Abdo also stated that music fans could be impacted when songwriters pursue this copyright transfer: “This potentially changes the entire economic environment for the purchase of music.” However, the full impact on every piece of the puzzle will remain unknown until Greenberg and other artists take their cases to court.
YouTube and RightsFlow Merge
The popular online video site YouTube acquired the New York-based royalties company RightsFlow on December 9 in order to help it identify the owners of music people use in posted videos. The deal was made to help YouTube better manage its relationship with content owners, who are not typically asked by video creators before their music is used for free.
RightsFlow is in control of a database of over 30 million songs and helps ensure artists get paid royalties when these songs are used. YouTube already has a Content ID system that identifies songs uploaded by its users, but until acquiring RightsFlow, it did not have a mechanism that could find the songs’ rights holders. Content owners will now be able to decide to take down videos that use their music, or leave them up and collect a share of ad revenue.
In a blog post, YouTube product manager David King said, “We’ve already invested tens of millions of dollars in content management technology … We want to keep pushing things forward.” He added that by acquiring RightsFlow, the company is enabling the chance for more music to be available on YouTube and for the platform to be a better way to launch new artists.
Official terms of the deal were not released.
(And if you are looking to get your cover songs licensed legally by Limelight/RightsFlow, you can link directly through the main page of the Musician Coaching site.)
Piracy took a hit this week as music industry professionals urged officials in the UK to block user access to The Pirate Bay. And the future of the music business was made clearer for fans and artists as analysts pointed subscription services as the catalyst for industry growth in the next few years and Rihanna’s manager expresses the need for artists to release more material to satisfy fans in the Digital Age. Also, Google+ finally started to roll out its business offering.
BT Group Asked to Shut Down Pirate Bay by Mid November
The British Phonographic Industry (BPI) – Britain’s recorded music industry trade association – sent a letter to the global telecommunications services corporation BT Group last week requesting that they block access to the Swedish site The Pirate Bay, the popular music, movie and software piracy website. BT Group had previously turned The Pirate Bay into an “over-18” site. But adult users can still contact their ISPs to unblock access.
A UK court ruled in late October that BT Group must deny users access to the file-sharing site Newzbin2. And many experts are saying that this ruling could set a precedent that could eventually strong-arm all ISPs into blocking any and all illegal file sharing websites. But according to Sam Gibbs of Gizmodo, who wrote an article about the ruling on October 26, if you are “tech savvy” enough to navigate usenet, you getting around blocks will not be that difficult, even with more strict systems in place on the ISP level: “When will content producers wise up and give us the content we want, in a way we want and for a price people are prepared to pay?”
Another Gizmodo writer, Gary Cutlack reported that Newzbin and its UK-based users have already taken steps to circumvent a potential blockade if there is an ISP block: “Newzbin itself claims that 93.5 percent of its active UK users have already downloaded the app in preparation for the block, which if it ever does start working, should ensure they can still queue up stacks of NZB downloads …”
In early November, Gibbs reiterated his position on the news of BPI’s request for a block and supported Cutlack’s comments. He stated that he was still in support of “give us what we want, at a price we think is affordable, and in the form we want it in.” He added, “Just like the case with Newzbin, IP blockade isn’t likely to impact those savvy enough to be using The Pirate Bay and BitTorrent too much … The creative industry bodies have to be seen to be doing something against piracy I guess.”
And it is not just writers and pirates who are rebelling against the creative industry. Recently, both BT and Ofcom (another British ISP) have stated their skepticism about whether web-blocking strategies are going to be the way to reduce piracy.
The letter from BPI is well-timed with U.S. copyright debates, as lawmakers continue to discuss new copyright protection laws and the possibility of getting rid of a Federal Communications Commission regulation that prevents ISPs from blocking and censoring information on the internet.
Pirate Bay owners were already prosecuted and found guilty of copyright infringement by the Swedish Supreme Court in 2009. However, the site continues to see high traffic, with a global Alexa.com rating of 79.
Are Subscription Services the Future of the Music Industry?
A market study conducted by the technology research company Gartner revealed that music subscription services will fuel profits in the music industry for the next few years. Spokesperson for the company Mike McGuire says that because the music industry has been going through a total revolution thanks to the rise of new technologies and the fall of physical media, “Music labels, artists, publishers and new distribution intermediaries are developing new business models to address consumers’ changing behavior.”
The industry analysis showed that the number of downloads from iTunes and other services is slowing as subscription services come into the picture. Gartner is predicting that subscription services will make up over $500 million in revenue for the music business, with downloads bringing in a little over $3.6 billion.
They are also forecasting that subscription revenue will grow over 50% in 2012 to bring in over $800 million, with download revenue increasing by only 6 percent. Subscriptions could make up over $2 billion in profits by 2015, over half of what is expected from traditional download services.
While the Gartner report exhaustively discussed challenges like diversification of services to please customers, access to cloud services and creating processes to help fans find new music, it failed to address the hot topic of copyright enforcement.
Artists Need to Be More Active, According to Rihanna’s Manager
Artists need to release more material to keep their fans happy, so argued Rihanna’s manager Jay Brown last week in an interview with the BBC about the 23-year old singer’s upcoming Talk That Talk album. The old music industry model was to have an artist release a new album every three, to four years. However, Brown stated, “Kids want new material all the time … I think you become disposable when you put out an album every three years.”
Talk That Talk is Rihanna’s sixth album since she debuted as a teenager in 2005. She has sold over 20 million albums globally and despite a heavy touring schedule, has managed to continue to produce one album annually with the help of mobile studios.
After stressing that Rihanna works so hard to produce new material because she loves to go into the studio and wants to give back to her fans, Brown asserted that, under the business models embraced by the old music industry, albums had become “bloated” with overly-long running times. He also believes that albums should be generally shorter in length, because otherwise, fans will end up skipping over tracks. He cited Sarah McLachlan’s 1997 Grammy-winning album Surfacing as a perfectly-paced record, with just 10 songs and a total running time of 41 minutes. And it was released at a time when labels were trying to over-stuff 80-minute CDs with music to try to make fans believe they were getting more for their money.
And in the past few years, the biggest sellers have been shorter albums, including Amy Winehouse’s Back to Black and Adele’s 21. Rihanna’s upcoming release is just over 35 minutes. However, Brown said, “When we were deciding the tracks to put on there, I wasn’t thinking about minutes and seconds … I just wanted to make sure it was all hits.”
Google+ Your Business Unveiled
Last week, e-mails started going out to Google users announcing the release of its new business offering “Google + Your Business.” Several celebrities and major companies like Anderson Cooper and Burberry have already started using the platform. And bands like The All American Rejects are already building their presence.
Google+ Your Business is a collection of tools and products that, in the music industry, could help bands connect with fans more personally and build their brand. Like regular Google+, the business edition allows users to host “Hangouts” to chat with fans and “Circles” to organize their fan base into targeted groups. It also offers increased ad capabilities and social recommendation features.