The The Times Have Already Changed: Music Biz Grapples With Next Steps

Midem, the  European music conference, issued a white paper this morning that makes for compelling reading for anyone looking at the future of the music industry.

I urge you to visit the Midem blog to dive in deeper.

For those of you looking for a bite-sized fix, here are quotes from 5 prominent digital music thought leaders:

Mark Mulligan VP Forrester Research:  “…in the post-scarcity period we are living in, experience is everything. Experience has become the killer product.”

Denzyl Feigelson Founder AWAL:  “Always have an eye to where the money is. Short-term or long term, if you’re building a community first, understand that the fans will come and then the monetization will happen. It’s very important in this day and age to really understand the economincs of where we are as an industry, and as consumers.”

Glen Barros CEO Concord Music Group: “…I think as an industry the music business has done a really good job of focusing on the artist and the creation of music, and it’s all about that, but has forgotten the other side of what we do is connect artists to the audience. Focusing on the audience is what I would look at : don’t ignore the artist, but honor the whole process…”

Alexander Ljung CEO Soundcloud:  “I think the future music landscape (and business built around it) will move very strongly in the direction of participation. Music is in a way a form communication and single-direction communication (and) can quickly become boring. Having a two-way dialogue is a lot more inclusive, so tools and business models that allow who we think of today as just “fans” get more involved and participate in the creative process will radically change the industry…”

Eric Garland CEO Big Champagne: “The music business has long been a misnomer. It describes a wide variety of businesses, which somehow depend upon, support, or intersect with music. In ten years, music will be everywhere, and its access frictionless, in a way that is still not quite (here) yet. How will people be listening and buying? Any way they wish. How will music businesses make money? On hardware and software, of course. Licensing. On experiences like live — and of course advertisers and sponsors will mine the strongest connections between artist and fans….”

The Final Take: Reading the full white paper, it becomes clear quickly, that things have changed. The sharpest minds in our business have accepted the change and are moving forward accordingly.  Great music and technology people move fast. It’s in their DNA, and generally it serves them well. From CES to the Verizon iPhone to Midem — we hardly have a moment to digest, contemplate, and then take decisive action. Grab that moment here and now. For he who gets hurt, will be he who has stalled. The times have already changed.

Extracurricular Spotlight — Slaughterhouse 90210

Sample

“We penetrated deeper and deeper into the heart of darkness”
— Joseph Conrad, Heart of Darkness

From time to time I’ll shine a spotlight on someone in the Digital Music world who is doing something extracurricular that kills.

Today’s spotlight shines on Maris Kreizman from eMusic.

Maris runs a great Tumbler blog — Slaughterhouse 90210.
The premise of her site is pure genius. Slaughterhouse 90210 juxtaposes screen shots of TV shows and movies with literary quotes from authors like Roth, Salinger, Steinbeck, Vonnegut, Doeskoefsky, and others.

Here are 5 examples to give you a feel for Maris’ approach:
Cosmo Kramer/Don DeLilo
Bart Simpson/John Steinbeck
Christopher Soprano/Flannery O’Connor
Madmen/Barbara Kingsolver
Beavis and Butthead/Nick Hornby

Lastly, check this LA Times interview with Maris regarding Slaughterhouse 90210.

Looking Forward by Looking Back — 1985 Steve Jobs Newsweek Interview

SAI recently ran a vintage Steve Jobs interview that I found insightful, and even kind of moving.

The original interview took place shortly after Jobs was forced out of Apple in 1985.

For any of us contemplating the basic entrepreneur vs. corporate issues such as “What do I want from work?”, “What am I good at?”, “Is my self-definition overly wrapped up in my work”?, “Can I live my values at work?” etc., this is a excellent read.

Excerpts:

Q. Is there an inevitable break between being an entrepreneur and a businessman? Are the people who get things going different?


A. I don’t know. You look back at the personal-computer industry, IBM and DEC and Hewlett-Packard weren’t the people that invented the personal computer. It took a bunch of rambunctious upstarts, working with very little resources but a certain amount of vision and commitment, to do it. And Apple has clearly now joined that status and the ranks of those other companies. It probably is true that the people who have been able to come up with the innovations in many industries are maybe not the people that either are best skilled at, or, frankly, enjoy running a large enterprise where they lose contact with the day-to-day workings of that innovative process.

Q. You still thought there was a chance they’d make an R&D group for Steve to run?

A. The hardest, one of the five most difficult days was that day John said at the analysts meeting about there not being a role for me in the future, and he said it again in another analysts meeting a week later. He didn’t say it to me directly, he said it to the press. You’ve probably had somebody punch you in the stomach and it knocks the wind out of you and you can’t breathe. If you relax you’ll start breathing again. That’s how I felt all summer long. The thing I had to do was try to relax. It was hard. But I went for a lot of long walks in the woods and didn’t really talk to a lot of people.

The Final Take: While the cult of personality around Steve Jobs can sometimes be a bit much, this flashback piece resonates.

Read the full Steve Jobs Newsweek 1985 interview here.

The Week That Was — The Pope, Glee, Intel, Dr. House, Styles of the Tech Stars.

Here, then, the week that was. January 28th edition:

All eyes were on Europe as the week started, as the technocrati descended on bucolic Cannes for Midem, and the Pope issued his Social Networking status update.

Tuesday took a less holy turn, with Glee creator Ryan Murphy telling Kings Of Leon “F**K You”, and not in a Cee-Lo kinda way. Oh, Mr. Murphy also called KOL “self-centered a******s” for those of you keeping track of that sort of thing. This all made Mark Mulligan from Forrester Research look positively cuddly by comparison, as all he did was tell the industry that the digital revolution had failed, and urged them to get cracking on some realistic deal making. I then wondered out loud if Mr. Mulligan was really Dr. House, and issued my diagnosis.

On Wednesday Intel got chipper about tech with new creative innovation director Will.i.am (who is no Prince, I can tell you), while the Decemberists scored their first-ever #1 album in Soundscan, where all of the sudden selling 90K+ albums almost sounded like a good number. We also got word, sadly, that country legend Charlie Louvin passed away at the age of 83.

Thursday saw a couple of think pieces: Is YouTube Bad For Music? & Freemium Fraying — The Hulu Question, and Coachella announced another sell-out.

The week came to a close with rumours still swirling on whether or not WMG was to be bought or sold, some thoughts on MySpace as digital’s Wacko Jacko, and the hope that strong digital minds like Jeremy Welt (SVP Warner Bros. — in Green Bay green) & Ted Cohen (Managing Partner TAG Strategic — in multiple scarves), help us figure this all out, no matter their Midem sartorial choices.

MySpace as the Man In The Mirror — The Music Biz Turns On Itself, Again.

Interesting back and forth regarding MySpace from a Robin Davey/Hypebot post this morning, entitled Why The Decline Of MySpace Is Great For Musicians”.

Spolier Alert:

Excerpt from the Robin Davey case:

Musicians are better off without MySpace… MySpace got bands into the mindset that music was worth nothing more than a friend request and a number of plays…MySpace is an extension of the dying major music industry. MySpace quickly got into bed with the majors, partnering with Interscope and selling out to Rupert Murdoch’s News Corp. They didn’t care about the importance of nurturing a career or promoting good music, they just cared about making money for themselves. Majors used it create a facade that the industry was vibrant again, and that they were at the forefront…….MySpace led bands to believe they didn’t have to do the hard work of getting out and building a live following anymore.

Excerpt from the rebutal from “Backstage Smarts” (a D.I.Y. touring musician):

As a member of a band who went national during the peak of Myspace (we’ve sold 70,000+ cds since then), I have to say that it did wonders for us, and I think the decline of Myspace seriously hurt the independent music community…..(On MySpace)People could post a song they liked on their page, and people would listen. We racked up over a million plays from this alone…..For a while, Myspace plays were just as valid as Sound Scan numbers. We were able to actually use them as leverage in negotiating our record deal. I could even predict how well a band we were playing with was going to draw based on their Myspace plays, and I was usually right…..But overall, I think there was way more net positives than negatives about Myspace for the music community, and I mourn the loss of it. I knew Facebook wouldn’t be as helpful to bands the first time I opened up our band’s Facebook page and had to ask, “Hey, where’s the music player?”

(To Hypebot’s credit, the layout of their comment feed is open, and facilitates this kind of healthy back and forth.)

I think it’s worth your time to read the full original post and response on Hypebot.

The Final Take: For the digerati, I’m not sure MySpace was ever cool. But if you think back to August 2006, as MySpace announced its 100 millionth account, MySpace was not only the biggest Social Networking site in the world, but arguably the single most coveted homepage for any contemporary artist.

Flash-forward to the present day —  significant audience, advertising and buzz are gone, and it’s become fashionable to pile on. As if we never, ever, coveted MySpace’s attention in the first place.

This scenario reminds me of  Michael Jackson. In 1982, Jackson released Thriller. By 1983-1984, Michael Jackson had won more Grammys and sold more Thriller albums than seemed conceivable. He may not have been cutting edge in any way, but he certainly was supremely talented, and he delivered the hits.

In the ensuing 25 years, Michael Jackson showed fewer moments of genius, and more instances of bizarre behavior.  At the time of his death in 2009, Michael was about as uncool as an unnavigable, spam-ridden, Tila Tequila MySpace page.

Then Michael Jackson passed, and many of us heard songs like Man In The Mirror, Off The Wall, Billy Jean, Smooth Criminal, etc. in a way that we hadn’t in years.

Perhaps those songs aren’t as close to my heart as ‘Here Comes Your Man” or ‘Skyway“, but I truly loved them. And they were good business.

I never spent a ton of personal time on MySpace. I’m not saying that to try to be cool, or to create some editorial distance — it’s just a fact. Maybe I was simply behind — at least behind on the Social Networking revolution to come.

But now I wonder — in an industry in dire need of geniuses and winners — if MySpace passes completely, who will look in the mirror and deliver the hits?

Freemium Fraying? — The Hulu Question.

Word from The Wall Street Journal this morning of strategic changes being bandied about at Hulu — the mostly free, online video service.

Hulu, co-owned by NBC Universal, News Corp and Walt Disney Co. carries a small amount of pure music programming, but is followed closely by Digital Music thought leaders. Many digital execs have pointed to Hulu’s approach of “Frenemies Providing Freemium” as a road map for the labels in their sculpting of new-model music offerings.

Today the WSJ reports the Hulu model may radically change:

Worried that free Web versions of their biggest TV shows are eating into their traditional business, the owners disagree among themselves, and with Hulu management, on how much of their content should be free.

News Corp and Disney are contemplating pulling some free content from Hulu and are also moving to sell more programs to competitors like Netflix, Microsoft and Apple, says the report.

And in what would be a major shift in direction, Hulu management has discussed recasting Hulu as an online cable operator that would use the Web to send live TV channels and video-on-demand content to subscribers, say people familiar with the talks. The new service, which is still under discussion, would mimic the bundles of channels now sold by cable and satellite operators.

The Final Take:  Despite their impressive usage statistics (over 1.5 billion videos viewed monthly) Hulu has struggled from a revenue perspective, at least in comparison to rival Netflix. Now, with owners Fox and Disney questioning the existing model, and with NBC being forced to relinquish Hulu management rights in the Comcast deal, agreement on a acceptable Hulu business plan seems to be fraying.

For the music industry, Hulu remains an instructive case study. Out of the gate, Hulu seemed to be a best case model for competing content owners rallying together to create their own high-quality, high-context, answer to YouTube and piracy. Additionally, it was perhaps the most interesting  marriage of a ad-supported-meets-subscription content play.

But now, with disruptions coming from a myriad of angles — the iPad, Netflix & the Comcast/NBC deal to name just three — it’s time for Hulu to nail their business plan for the web 3.o, and for the music industry to pay extremely close attention.

Read the full WSJ piece here.



YouTube Bad For Music? — A Deeper Dive

A couple of days ago Eliot Van Buskirk from Evolver posted an excellent piece on the question “Is YouTube bad for music?”
The piece was balanced, and tackled some interesting nuances.

A few of Eliot’s key points:

First and foremost, YouTube is an excellent resource for music fans. …you can find just about any song on YouTube — and watch the video to boot, assuming you even want to.

Clearly, YouTube does a lot for the music business, fans and artists. Music videos consistently rank among the most popular on the site. Even better, YouTube’s audio fingerprinting technology, Content ID, ensures that people can upload videos that would normally have to be deleted for copyright reasons, with associated royalties going to musicians and other copyright holders as part of YouTube’s Partner Program. Essentially, this does what used to be considered impossible: enabling copyright holders to profit from copyright infringement.

But on a structural level, the site’s success with music could have a big, negative side effect. YouTube’s comprehensiveness as a free music source might be hurting music subscriptions, and by extension artists, by offering users a free place to hear just about any song they want — the same core function for which Rhapsody hopes you’ll pay $10 per month.

Music fans love YouTube, present company included. I have yet to find anything better for sharing music on Facebook, and the site has brought me countless hours (days? months?) of musical enjoyment. But by giving both fans and app developers such an excellent free alternative to the subscription services that might eventually enable artists of the future to buy a new guitar or pay their rent, is it really doing music a service? When app developers create interesting new services, like the ability to share music with a fist bump, use YouTube videos rather than a true music service, are they helping or hurting music, artists, and ultimately, fans?

Final Take: Eliot makes an excellent case for the short term challenge that YouTube’s ubiquity has forced the industry to grapple with. For labels, artists and managers — figuring out exactly how to use YouTube is key. It’s only in the last year or so, that I’ve really seen truly strategic thinking drive these tactical decisions. Rights holders need to pinpoint what kind of videos amplify sales, community, and an artists brand. Here are just two examples of artists taking the YouTube functionality, and making it work for them:

Madonna talks to fans about her ‘4 minutes” video, while tidying up:

Taylor Swift’s “Break Up” Fan Video:

Conversely, rights holders need to understand what kind of unchecked uploading is likely cannibalizing sales. There are techniques to lessen those instances, and monetize that behavior — not easy stuff, but absolutely vital in this environment.  Understanding that the instant new music goes to radio or press, it’s likely to be on YouTube should be a given. If you haven’t already uploaded a YouTube “teaser” clip to herd that traffic–you’ve lost before you’ve begun. More broadly, artist by artist brand sponsorships and constructs like UMG/Vevo or WMG/MTV show the beginning of smarter macro thinking.

Eliot is also right that YouTube’s strengths present a first blush challenge for streaming subscription services like Rhapsody, RDIO, Mog, Slacker, or even, ironically, a possible Google Music launch. But this misses the bigger point –once fans discover a technology that delights them, then it’s up to new entrants to innovate and make experiences better, to compete. It’s going to take tremendous creativity and functionality for the streaming services to compete with YouTube, — but  moves like RDIO’s social elements, MOG’s editorial curation, and Rhapsody’s distribution deal with MTVN, offer hope.

So, is YouTube bad for music?  My answer is –No, not really.

YouTube offers instant access, time-travel, community and a multi-format experience. These are great things for music fans and could be great things for the music industry, but only if  new and innovative thinkers, wherever they may be, figure out how to make it all work.

Read the full Evolver piece here.

The Question Is How Fast? — Superchunk & Social Networking

I love Superchunk. Almost as much as I love The Replacements. To me, the two bands have always gone together. Their best songs share wry lyrics, anthemic yet melancholy melodies, and a unique sense of vulnerability.

Today, I stumbled upon the Superchunk song “The Question Is How Fast”, when using my iPod in Genius mode.
At exactly the same time, I was looking at this Social Networking chart from Fast Company (see below).

Synchronicity indeed.

(Had I been on Facebook in that moment, things really would have been freaky).

The matter is not where we go
But how long it will last
The question is how fast
This is not a test, it’s just an ask
And the question is how fast

The History of Social Networking
Via: Online Schools