Posts Tagged ‘music sales’

Music: Too Expensive to Be Free, Too Free to Be Expensive

Thursday, November 19th, 2009

Music: Too Expensive to Be Free, Too Free to Be Expensive

The Buggles' The Buggles’ “Video Killed the Radio Star,” the first music video played on MTV, applies as well to online streaming services now as it did to radio in the ’80s.

MySpace, rumored to be on the verge of purchasing the free music streaming site imeem, is struggling to keep up with its own payments to music copyright holders, according to a top News Corp executive — a problem that has plagued every other licensed free music service.

The digital music doubters could be right with the contention that advertising revenue can’t  cover the costs of licensing music. Meanwhile, illegitimate free music sources continue to proliferate, rendering paid music subscriptions irrelevant for most music fans.

Advertising was supposed to be music’s magic bullet, enabling fans to get the free music they’re going to find anyway while contributing at least something to copyright holder coffers. That dream is fading fast. As legitimate sources for free on-demand music dry up, fans will likely head back to file sharing networks, which is bad news for everyone involved in music — except for, perhaps, hard drive manufacturers.

Evidence and rumors are mounting to support the idea that free music websites are unfeasible.

    MySpace Music — the on-demand, ad-supported music service not to be confused with the band pages on the site — is losing money and could soon add subscription option. News Corp Digital head Jon Miller answered his own questions on the topic last week at a conference in Monaco. “Do I think the freemium model works, consistent with earlier discussions? Yes I do. Has that been figured out? No, it hasn’t, but it’s certainly something to look at,” said Miller. “Is [Myspace Music] profitable? No, it’s not. On an operating basis it’s getting in, but no, because of the payments due to the music companies.”

    Ad-supported music service imeem, which has been the subject of considerable speculation related to its running out of money over the past year, is reportedly in late-stage discussions to be acquired by MySpace, which has its own problems, as mentioned above. Like MySpace, imeem’s biggest challenge has been covering payments to labels.

    MOG, which planned to launch a free, ad-supported on-demand streaming service, decided that was impossible and went with a $5/month subscription instead.

    Spotify pushed back its U.S. launch to early next year, with CEO Daniel Ek admitting that when the service launches in the states, it might not be the same as it was in Europe where music fans enjoy a free, ad-supported version of the software or a 10-euro-per-month subscription option that removes the ads. A bundled version of the service that comes with your smartphone or ISP is an increasingly likely option.

    Google added play buttons to its music search results that allow anyone to listen to a song once for free through Lala or MySpace’s iLike service, after which they have to pay for it. If Google can’t figure out a way to support something with ads, it arguably cannot be done.

    YouTube remains the only licensed, free, on-demand music service that promises to break even, mostly because the visual nature of the services makes users more likely to encounter advertisements on the site. When the labels launch their Vevo YouTube spin-off, they hope to generate even more money from ads than YouTube does.

The upshot of the labels’ licensing demands: Music will continue its transformation into something that accompanies a visual element.

 

Source: Wired

Digital Music Sales Hit New High Marks

Sunday, November 15th, 2009

Analysis: Vinyl, Digital Sales Hit New High Marks 
November 11, 2009 - Digital and Mobile | Retail 

By Glenn Peoples, Nashville

Vinyl and single track download sales set new records last week, according to data from Nielsen SoundScan. The two events represent very different trends that were born from the rising popularity of digital music.

As of November 8, four artists broke Rihanna’s single-year digital tracks sales record of 9.9 million tracks: Michael Jackson (11.3 million tracks year-to-date), Lady Gaga (11.1 million tracks year-to-date), Black Eyed Peas (10.3 million tracks year-to-date) andTaylor Swift (9.98 million tracks year-to-date). The top three artists have already topped 10 million tracks sold this year and one, Taylor Swift, will surely pass the mark next week. Next week, sales of digital albums should surpass last year’s total of 65 million and sales of digital tracks should top the 1 billion mark.

Year-to-date vinyl record sales topped two million units last week, breaking the previous record of 1.9 million units last year. At the same point in time last year, SoundScan had tracked 1.5 million sales of vinyl records.

That’s roughly a 37% year-over-year improvement. Vinyl has come a long way from the period in the ’90s when it was a format that was almost exclusively used by underground rock bands and DJ-oriented genres. Many years passed when most artists - especially mainstream artists - did not have vinyl releases (many still do not have vinyl releases). Though it gained momentum towards the end of the decade, it wasn’t until the mid-2000s when new releases of all stripes were being released on vinyl, when it was seen as a purer way to experience music in an era of near-ubiquitous digital music. Labels started offering MP3 downloads with vinyl purchases, thus creating a great digital-physical combination. Today, consumers can find vinyl in both mass merchants and the usual Independent stores.

The two trends - digital sales on one hand, vinyl records on the other - could not be more different. For all the efficiencies of digital music’s distribution and supply chain, vinyl counters with an equally expensive and inefficient process. Yet, the two are on the rise.

There is no doubt digital formats represents the future of recorded music. iTunes is just the beginning. New types of digital services promise to change how consumers acquire and experience music. Yet the concurrent rise of digital and vinyl tells us this: Through their purchases of vinyl, a small yet dedicated group of music fans are showing artists and labels that digital does not fill all their needs.


Source: Billboard

Direct to Fan: Creating an Effective Offer Page and Fan Acquisition Techniques by Mike King

Thursday, September 17th, 2009

Friday, September 11, 2009, 2:57:23 PM | mkingGo to full article

Anyone that has been following music business trends for the past few years is likely familiar with the high profile direct to fan campaigns (campaigns that focus on the monetization of an artist’s fan base directly) that Nine Inch Nails, Radiohead, Imogen Heap, and others have been involved with recently. As Mike Masnick put it in his 2009 NARM Keynote, the recipe for effective direct to fan campaigns can be boiled down to: Connecting with Fans (CwF) + Providing a Reason to Buy (RtB) = $$$. Makes sense, right? The difficulties arise when you consider that there are 5 million bands on MySpace, all of which are vying for the consumer’s attention. It’s easy for NIN and Radiohead to connect with fans, the skeptics’ note, as they have had years of major label support and hundreds of thousands of existing followers to work with. How can a developing artist in this climate differentiate themselves from all the other bands out there?

The answer can be slightly more nuanced than Masnick’s formula above, and to me, is based on a four key elements: 1) setting up an effective offer page on your site that is tailored to your marketing goals and where you are in your marketing cycle, 2) expanding your digital touch points through creative fan acquisition techniques, 3) integrating your online and offline marketing towards the same goal, and lastly, 4) once you’ve created your groundswell of support and fans, integrating effective 3rd party digital and physical marketing, sales, and distribution (such as Tunecore) outlets into the mix. Let’s illustrate these elements with two examples.

Example 1: Fanfarlo

Creating an Effective Offer Page Tailored to Acquisition

Although they were supported by NME in their hometown of London (who have called their release “a carefully orchestrated treat”), and have some high profile fans in the members of Sigur Rós, Fanfarlo found that they were having a tough time breaking into the US market. Fanfarlo’s music is undeniably great (aside: the first step, of course, in any marketing campaign is to have great music. Without this, any DTF marketing campaign will fail), and as such, the plan for breaking Fanfarlo relied a lot on getting as many folks to experience their music as possible, with the end goal of gaining enough interest to pack the Mercury Lounge in NYC (300 capacity).

The band initiated their acquisition-based campaign by looking at what assets and connections they could leverage. Fanfarlo developed a low-cost video, dug up some unreleased tracks, and recorded new acoustic versions. Of particular note, the band’s management reached out to Sigur Rós, who agreed to mention Fanfarlo in one of their emails to their fans.

Prior to any outreach from Sigur Rós, the band knew it was crucial for them to create an offer on their site that would make their music as accessible as possible, while at the same time create a degree of urgency. Again, as monetization was not the driving force behind their campaign at this stage in their marketing process, Fanfarlo decided the best course of action for building up their base was to provide curious potential fans with the opportunity to purchase their record for $1.00 (for a limited time), in exchange for an email address (which provided the band with permission to engage with these fans directly at a later date). They band adjusted their site accordingly, employing best practices with SEO and Web IA, and created an offer page dedicated to highlighting their music and making it easy to purchase via one click off the offer page. This was the result:

Along with the redesigned offer page on their site, the band adjusted all of their social media pages (visibility on MySpace, Wikipedia, Facebook, Last.fm, iLike, YouTube) with appropriate offer copy/images, and links to the offer on their proper site. Once all the backend was done and Fanfarlo was ready for the traffic, Sigur Rós hyped the band in an email to their fans and Fanfarlo essentially had an “offer you can’t refuse” waiting for them. In exchange, the band built up their email list, created a viral buzz on their new record, and not only had enough interest to pack the Mercury Lounge in NYC, they had to upgrade to the larger Bowery Ballroom!

Example 2: The Lights Out

Expanding Your Digital Touch Points through Social Media & Integrating Your Online and Offline Marketing

All marketing campaigns are different, and not everyone has the luxury of having support from major bands like Sigur Rós. But no matter where you are at in your career, core marketing principals hold true, particularly when it comes to effectively using social media to engage your fans and building up your base. The best example of social media campaigns are creative ideas that leverage the viral nature of social media to engage fans and effect change in not only the digital world, but in a band’s physical campaign as well (which of course is still incredibly important to any overall marketing campaign).

The Lights Out is a Boston-based band working to raise their hometown visibility and acquire new fans to positively impact their touring base throughout the Northeast. On the heels of an oppressive heat wave in Boston in mid August, the band initiated a Slush Puppie “flash mob” online marketing campaign. The band found the appropriate location for the event via polling their Twitter followers:

Once the location was chosen, the band set up a Facebook event, which allowed them to update the status of the Slush Mob, get an idea on who was coming, and communicate directly with those that expressed interest.

The band then set up a Twitter hashtag (#), which organized all messaging around the event into a single live channel on Twitter search. The hashtag use also had the all-important added benefit of becoming a “viral generator” for the event, piquing the interest of the band’s follower’s fans, and influencing activity at a level outside of what the band could do with their fanbase directly.

Once the existing fans were engaged in the event, Boston-based bloggers picked up on it, the market’s alternative weekly featured info on the event, and popular Boston-based event and social media Twitterers did the same.

The band continued Tweeting from the event and after, and shared photos of the turnout using Twitpic:

So, what did all this mean to the band’s stated goal of raising their visibility and acquiring new fans?

The data:

• 20% increase in unique web site visitors

• 24 times increase in daily twitter followers

• 3,352 impressions from media coverage

• 66,160 impressions from Tweets and Retweets

• 195 impressions from Twitpics

• Approximate Total: 70,000 impressions

New fans also direct-messaged the band, telling them how much they enjoyed the idea/their music and expressing interest in attending future gigs. And because this social media campaign included an offline component, new fans were able to bond with the band in a more personal way.

Again, all marketing campaigns are different, and should be employed in a way that focuses on the strengths and opportunities of the respective band. The specific tools will certainly continue to change as we move forward, but the principle of determining your core goal and engaging / developing your fan base to reach this goal will not. What’s particularly exciting to me is that artists have the option to market and distribute their music directly, with less gatekeeper involvement, than ever before. We’re in the early stages of direct to fan campaigns, but I think it is undeniable that there is a tremendous amount of growth potential in the segment – and is an area that artists, managers and others (forward thinking, artist-serviced based companies, for example) have to look at very closely.

Various Music Format Sales

Tuesday, August 25th, 2009

From an email from New Music Strategies:


You’re looking at it wrong


Posted: 17 Aug 2009 02:23 AM PDT
This great data visualisation from the NY Times comes to us via a really fascinating website called Information is Beautiful. It represents the sales in billions of today’s dollars of the various music formats over time.

NY Times graph

They claim it represents the dwindling death knell of the music industry. That’s not quite right (even leaving aside the nonsense assertion that the record business = the music industry). While put together in aggregate, the overall graph would show a larger, fatter, longer increase and decline, what this graph does not show is equally interesting.

The trailing tail to the right of the graph seems to indicate the death of music business. But look to the left. This graph does not start at the beginning of the music business. And nor does it start only a short while after the beginning of the music business.

It starts in 1973.

I don’t know about you, but I was around in 1973. I wasn’t very old, but I was old enough to be aware of music. It had been around long before I had. And even though the graph would have been tiny – at least in comparison to the uncharacteristically massive spike in CD sales around 1999 – there was no crisis in the music business then.

My guess, in fact, was that there was opportunity. In 1973, the small numbers meant that people who sought to do new and interesting things were able to do those new and interesting things. Less was at stake (at least, in aggregate) and so people took risks.

New and innovative kinds of music flourished in the margins. Funk, disco, punk, psychedelic, metal, and reggae all started to emerge as significant forces from that decade. Lots of tiny labels did amazing and sometimes incredibly profitable things. 

Risk-takers were sometimes massively rewarded. Those who kicked at the edges often flourished.

Skip forward to 1999 – ten years ago now – and you witness the height of corporatism in the recorded music business. A world of a few stars selling millions of copies of safe and frequently dull music. But most importantly, the business people who were teens in 1973 were able to take the music they loved from their youth and turn it into a multi-billion dollar industry.

And while the interesting new genres have been created in the margins all through that history, it’s the forms (and their often watered-down derivatives) loved by those execs that have massively prospered through the recorded music boom era.

Of course, music didn’t start in 1973. Or 1923 for that matter – and nor did the ability to make money from it. The last 35 years provides us with an interesting historical anomaly as far as that graph is concerned.

The boom and bust pattern of each recorded music format adds up to an overall rise and decline of corporatism in the recorded music industries. Culturally, this could well be something to celebrate.

Personally, I’m hopeful for new and interesting musical forms and genres coming from the margins and being able to reach a significant audience.

It’s cheaper to experiment now. It’s easier to reach an audience than ever before, and the economics are such that you don’t need for corporations to be making billions in profit in order to make a decent living at it.

I’m not saying that this is the best time in history for music. I’m actually hopeful that we haven’t yet seen the best time for music. It’s even possible that the biggest selling record of all time hasn’t been made yet.

My point is that the graph above only represents a crisis for a particular way of organising music business, and not for music business itself – and certainly not for music.

In fact, if we’re clever about it, this might be one of those golden ages for musical culture that seem to coincide with the skinny bits of that graph.

Source: New Music Strategies


Information is Beautiful: death of the music industry

iTunes Swallowed A Quarter of US Music Sales

Monday, August 24th, 2009

iTunes swallowed a quarter of US music sales

 


One in four songs sold in the US are done so via Apple’s iTunes store, according to a new report

NPD Group’s MusicWatch division said today that while audio CDs remain the most popular format among music consumers, digital tracks notched up 35 per cent of all songs sold in the first half of 2009.

 

That’s a 15 per cent leap in sales compared with 2007 figures, and a five per cent jump on last year’s numbers.

NPD said that the iTunes store dominated digital music sales, accounting for 25 per cent of all songs sold in the US in the first six months of this year.

In 2008 it pulled in 21 per cent of all digital music sales, while in 2007 it grabbed 14 per cent of the market.

US retail giant Walmart takes second place in digital music sales, according to NPD. It raked in 14 per cent from downloads sold via its website as well as in store.

But iTunes outshines all other digital music retailers, where Apple leads the market by a hefty 69 per cent ahead of its rivals, said NPD.

Amazon’s MP3 store lags a long way behind the iTunes behemoth, gobbling up just eight per cent of the digital music market.

NPD garnered its findings from US consumers aged 13 and above, who reported their purchases of CDs, digital music tracks and albums sold a-la-carte, and wireless over-the-air transactions, excluding ringtones.

It didn’t reveal how many US folk took part in the survey, however. NPD also overlooked the impact illegal file sharing has on digital music sales.

Source: The Register

Internet Pirates All At Sea

Tuesday, April 28th, 2009

sailboat.jpg

-Here is a re-post about that thing we call - PIRACY!!!-

Friday, April 24, 2009 


Category: Music

Enforced regulation regarding internet piracy took a giant step
forward last week, with news that the operators of notorious torrent
site The Pirate Bay had been charged with digital theft by a Swedish
court, fined $3.6m and sentenced to one year each in jail.

The news was welcomed by the creators of Glasgow-based Kerchoonz.com,
the first integrated social networking and media site to legally
enable streaming and download of music, videos and on-line games
whilst paying the artists and creators of music.

Co-founder of Kerchoonz.com and renowned US artist Indiana Gregg, has
had personal conflict with The Pirate Bay. She says, “As a performing
artist myself, I take great offence with torrent sites making a profit
on the backs of musicians, who in turn, aren’t paid a penny. A small
number of torrent tracker sites, including The Pirate Bay, refuse to
do remove material on request and are arrogant enough to believe they
are above the law. Whilst I certainly would not wish anyone to be
incarcerated, this recent sentence sends a clear message to existing
and would-be file sharing hosts - illegal downloading is a crime, you
can be traced and sooner or later you will be prosecuted”.

Her argument isn’t that users should have to pay for downloads, quite
the opposite in fact. She reasons that users should be able to listen
to their favourite tracks for free, but that the artists should also
be given some form of payment.

Kerchoonz.com does just that. Scheduled to launch in June, it allows
users to access free downloads, whilst artists, whether
internationally acclaimed or as yet unsigned, are paid each time their
work is streamed or downloaded. Revenue gained by unobtrusive
advertising on the site is used to fund these payments, ensuring that
everyone benefits.

“Already over 32,000 have signed up”, says Indiana. “Although there
are obviously other sites out there who offer free legal downloads,
Kerchoonz.com is the first to absorb the offering into a social
networking environment, ensuring full integration with Facebook and
Twitter”.

It is inevitable that other, similar services will appear on the
internet over a very short space of time, as increasing numbers of
illegal file sharers are prosecuted or close down of their own accord,
before “The Internet Police” knock on their virtual door. This can
only spell good news for the thousands of artists who have, since the
dawn of the internet, been royally ripped off.

Kerchoonz, founded by Indiana Gregg and Ian Morrow in 2008, is a group
of veteran record producers, artists, songwriters, music and
technology industry professionals. Kerchoonz.com is a social
networking platform that allows free exchange of music, art, ideas and
entertainment. It enables fans to search and discover new music, play
games, meet people, watch and upload video, keep up with news and post
blogs.

Kerchoonz.com is an ad-funded model that allows artists and musicians
to be paid for their audio and video streams, as well as their free
downloads.doesn’t want to give their music away for free, they are
free to sell it and provide links to their on-line shop. But, they can
still opt to be paid for streams.

http://www.kerchoonz.com