What exactly IS “the music industry”?

This article from The Motley Fool (“Why the Music Industry Desperately Needs Apple”) provides a pretty limited, loose definition of “the industry” – digital downloads and monetized streams. As for “who” is the industry, this article seems to posit that labels are the primary players. In an environment where streaming is taking bite-sized chunks out of digital downloads (sales from the iTunes store were down 13%-14% in 2014) and recorded music has lost it’s monetary value (no scarcity = no value), this article laments the downfall of the industry and calls for disruption. Industry disruption IS happening, albeit the speed of progress is lagging behind that of massive transformation in music content and consumption. As the pool of streams inevitably grows larger, the revenue stream of all those micro cents will turn in to big $$ (for an independent artist, it only takes 14-20 streams to equal the royalty revenue of a single download), and as brands align more authentically with artists, more dollars will flow through the ecosystem. If labels are “the industry”, then yes, the industry may be dying. For artists, however, and players that are innovating beyond the Apple ecosystem of “download and/or stream”, the future is bright.

The balance of power in the music industry is a mess…

By George Howard

Good article (link below) regarding the balancing of royalty payments on streams. It’s a good opening for me to continue a discussion I began last week (see this article on Neighboring Rights) about some music business essentials. In that article, I mentioned that the music business has two dominant copyrights. One is the copyright in the song itself; referred to as the “composition,” and denoted by this symbol: (c). The second is the copyright in the recording of the song; referred to as the “sound recording,” and denoted by this symbol: (p).

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MUSIC SPONSORSHIP IS ON THE RISE

The music industry is no doubt in a transition.  Since 1999 recorded music sales have seen a drop of 50% while live events and tickets sales have grown 40%.  In 2012 concerts represented $4.3 of the $7 billion dollars in music industry revenues.  Brands have noticed the trend.  From 2003 thru 2010 music sponsorship at live events have doubled from $574/m to approx. $1.2/b.   According to Joe Frog from Red Frog Events in LA Weekly last year “There’s a trend in multi-faceted, social events and people are more willing than ever to make sure they don’t miss out”.  As recorded music sales fall artists are going to need exposure more than ever…

By Carlos Diaz

ARTISTS NEED MORE CHANNELS THAN JUST STREAMING TO MAKE A LIVING…

Determining what an artist makes on the streaming service Spotify is not an easy equation.  According to a recent report by Spotify & explained  by ARS Technica artist pay is determined by Spotify monthly revenue, artist streams vs total streams, % negotiated that goes to master owners, and lastly the artist’s royalty rate.  Of this equation Spotify keeps on average 30% & 70% goes the publishing owner typically the label.  Since Spotify payout formula is an ecosystem it costs new artists when big acts put out a hit.  It clear new artists need many different channels to be successful like terrestrial radio, live acts, merch sales, etc…

PEPSI ESTABLISHING ITS OWN DISTINCTIVE VOICE

According to Javier Farhan, Head of Music for Pepsi  “as brand managers we need to be more ‘brand makers’,” he mentioned. Pepsi knows it needs to own the content and story that’s told about their brand. A great example of this is Pepsi Pulse that attracts millions of visitors.  Brands can learn a lot from Pepsi.  There is no better content than music and especially when you’re trying to have a meaningful conversation with consumers…

http://www.warc.com/LatestNews/News/Pepsi_develops_its_brand_story_.news?ID=33710

AWESOME MUSIC MARKETING BREAKTHROUGH FOR JIMI HENDRIX BIOPIC

The Jimi Hendrix film could be the future of film soundtracks.  David Hazan & XLrator Media have teamed up with streaming service Rdio to create a music experience that hits moviegoers before and after the film.  Bloggers were selected across the US to interview talent and create playlists for readers.  As you read about the music you can hear the personalized soundtracks…

http://www.hypebot.com/hypebot/2014/10/immersive-music-marketing-breakthrough-for-jimi-all-is-by-my-side-and-rdio.html

pandora

THE RETENTION OF LISTENERS IS CRITICAL TO PANDORA AND OTHER STREAMING SERVICES

Pandora has recently launched a branding campaign for its thumbs up/ thumbs down ratings feature. In addition Google is now making suggestions in its streaming service & listeners can request playlists for specific activities like mowing the lawn. Due to an increased competitive market, streaming services are going have to continue to innovate and forge a personal connection with their listeners & the music they want to hear.

http://www.mediapost.com/publications/article/236899/wary-of-rivals-pandora-to-boost-marketing.html

TAYLOR SWIFT’S METAL MACHINE MUSIC: HOW ARTISTS GET SCREWED BY LABELS AND THEIR LONG-TERM CONTRACTS

By George Howard

I’m sort of surprised that no one (that I’ve seen at least) has compared Taylor Swift’s “Eight Seconds of Static” (see the article on this below) to Lou Reed’s Metal Machine Music. If you’re not familiar with Metal Machine Music, it’s a double album Reed released in 1975 that, to many people (present company excluded – I love it) sounds like a wall of noise/feedback.

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MUSIC BUSINESS 101 – UNDERSTANDING COPYRIGHT: NEIGHBORING RIGHTS

By George Howard

I’m digging the article from the INgrooves newsletter that was re-blogged by the always great Hypebot (and linked to below). There are some good strategies, and I admire anyone with the fortitude to step into the breach of complexity that is “Neighboring Rights.” My concern – having stepped into this breach a number of times myself – is that without sufficient understanding of some fundamental issues, artists won’t be able to benefit as much as they might from this type of very good information.

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STREAMING WARS: DEEZER’S DEAL WITH SONOS AIMS FOR AUDIOPHILES

By George Howard

I’ve tried the Deezer service out. I was able to do this because they made a deal with Sonos, where those with Sonos gear (and if you don’t have Sonos gear, I’m not sure we can still be friends) can gain access to Deezer’s high-end (and higher-price) service. It’s a good gambit; people who have Sonos clearly care about sound quality, and thus represent a good match for Deezer who are trying to distinguish themselves from the ever-increasing pool of streaming services out there.

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