Ibiza
By Bob Lefsetz - Lefsetz Letters
That's where I am. For the IMS (International Music Summit), the kingpins of dance music, EDM or as Shelly Finkel informed us, ECM, "Electronic Music Culture," which is what they call it at Live Nation.
Which is going deep. They just bought Insomniac. They don't want to be left out. Is EDM the future?
Interesting question.
The most fascinating panel so far was at the very beginning, wherein Kevin Watson presented the statistics. He said they were going to be posted on the IMS website (http://www.internationalmusicsummit.com), but what I didn't know is they're gonna charge for them, which is a big mistake, isn't that how the labels got in trouble? Then again, those who need to read 'em can afford 'em and probably won't do so anyway.
Information, it's the essence of the modern world. But not the music business. The music business is built on B.S. Smoke and mirrors. Otherwise known as lies. That gig that sold out, it didn't. That album that sold millions, it didn't. And if a statistic is visible, like Twitter followers, they employ companies to muck them up, drive them up, so they ultimately become meaningless. Tell the label how many Facebook likes you've got, they don't care. Online statistics are a way for nobodies at home to feel glorious. It's a way for those not good enough at sports to get a trophy. But if you think amassing followers online is the key to long term success, you've never heard of Tila Tequila.
So what did I learn from the report?
1. 72 million people watched the Tomorrowland after movie (http://www.youtube.com/watch?v=UWb5Qc-fBvk). You know, the ad that plays AFTER the show is over. Huh? Everybody thinks a show is an evanescent thing, one and done. But that's not true at all. You're in the longevity business, the repeatability business, the excitement business. You want people to feel they've missed out, that they need to go next time. Every act could do this, create a compilation of what they did on tour. But they don't, because they can't see the immediate benefit. That's shortsighted. These videos are glossy and titillating and better than most stuff Hollywood releases. It's the "Real World" on steroids. You want to go hang out, rub bodies... Yes, live music is about the experience, and you've got to make people want to go.
2. "The largest EDM clubs in Vegas make over $600m pa, with two huge additions arriving in 2013."
XS does over $80 mil
Marquee, almost as much
TAO, a bit over 60
Heard of these places? Probably not. And that's just the point. As aboveground as EDM has become, it's still underground. Because it doesn't appeal to the mainstream media. The talent isn't made up of photogenic paraders, there's no drama and the reporters hate the music. Which is why EDM is burgeoning. It's owned by the young. It's a perfect medium for today, not dependent upon recordings and based on the unstealable live experience.
As for Vegas... Is it the new Ibiza?
Well, Ibiza has got Ushuaia.
Huh?
Check it out: http://www.ushuaiabeachhotel.com
This is where you want to go. Take a look at the pics. If you don't feel the bodies, if you can't see the sex, you're deaf, dumb and blind. And it's far from free, there's plenty of money to be made, selling not only music but a full experience, like hotel rooms.
Then again, Pacha blinked. In case you missed it, read the "New York Times" story:
"Trouble Stalking Night-Life Paradise": http://nyti.ms/10H3V34
The guy from Pacha on the panel today gave no additional insight. But the club took itself out of the game almost instantly. It's like Katy Perry going back to Christian music. We'll see if it lasts.
As for the Las Vegas/Ibiza war... Ibiza benefits from having a short season. Being all about the music. But never underestimate Vegas, the desert capital has the money.
As for clubs being the new venues...no one imagined playing rock in arenas and stadiums.
3. The Global EDM Industry is now worth over $4.5 billion.
Wasn't the music business supposed to be dead?
Well, it just got reinvented.
As for that 4.5, the lion's share is live, which is 2.5, brand sponsorship and production hardware and software are .75 and recorded music is 1.25. In other words, if you're looking to recorded music to make you're nut, you're looking in the wrong place.
Live Nation has it right, it is a culture. With everything the bankrupt rock culture once possessed. It's for the fans. It's deep. You can feel it. It's not fly by night. Will it last forever?
OF COURSE!
Will it be as big as it is now?
Questionable...
Turns out it's a hits business. Guetta's crossed over, and now Calvin Harris has too, with 400 million YouTube views and Spotify streams, 7 million sales in the UK and USA, 1 million plays on SoundCloud and an estimated 500 million torrent downloads. Yup, free music can be good for you. But the main point is it's now the aggregate, sales numbers are not everything, you've got to look at the total picture.
In order for EDM to continue its victory lap, it needs not only its Donna Summer, but many more. It's started. But when you turn on the radio and hear EDM music regularly, you'll know it's here to stay.
Otherwise, it's a scene. And scenes come and go, sometimes overnight.
Like the Irish guys I had lunch with told me... Dance is dead in clubs there. Fans want to see bands, like Imagine Dragons. But festivals are all about DJs. They're thinking the bubble might be close to bursting.
And then there's the DJ/fan relationship. It's key. The business people are trumpeting branding, all those endorsement/advertisements with the private jets and high rolling lifestyle. That worked for hip-hop, but that's a different culture. English agents thought it was putting a barrier between act and fan. That it was death. In other words, are we returning to a music culture? People get enough money culture in the rest of their lives, they might not tolerate it in dance.
But I will tell you the excitement of being here is palpable. No one's bitching, the music is pumping, the scene around the pool is enticing, I'm all ears and eyes.
P.S. There's an app: https://itunes.apple.com/us/app/international-music-summit/id646200913?mt=8 Just like Twitter, don't think of apps as moneymakers unto themselves, but a way to service your fans. Furthermore, many more people downloaded the app than are attending the conference. Yes, you can play at home. Don't think of apps as being long term, but rather short term information. An app for this tour...next year you create a new one. If you can't stand in the audience and pull up information about what you're seeing, the promoter did not do his job.
Whose right in our Brave New World?
By Ben Challis - The 1709 blog
Copyright reform is perhaps surprisingly high on the political agenda. But why shouldn't it be? Most of us love books and magazines, films and plays, music, television and games. But we have shifted away from a world where distribution had a cost, and copies had a cost – at least in terms of time and effort to produce and and/or a monetary cost. We all know the Internet changed that. We now have a brave new world where multiple copies can be made with little effort and often no cost beyond a file upload – and we have pitted the giants of the content industries – film and television companies, newspaper and book publishers, photo agencies, games and software producers, record labels and music publishers, against the technology companies – internet service providers, search engines, content aggregators, website hosts and technology companies - new, disruptive technologies – with some, like Sony, Apple and even now Google, with a foot in both camps.
During her testimony to the House Subcommittee on Courts, Intellectual Property and the Internet Committee on the Judiciary, Maria A. Pallante, the US Register of Copyrights at the United States Copyright Office, explained “The law is showing the strain of its age and requires your attention. As many have noted, authors do not have effective protections, good faith businesses do not have clear roadmaps, courts do not have sufficient direction, and consumers and other private citizens are increasingly frustrated” and that the US needed “the next great copyright act” which Pallante said is needed as consumers are increasingly “accessing content on mobile devices and fewer and fewer of them will need or desire the physical copies that were so central to the 19th and 20th century copyright laws.”
It’s not just one issue – digitization is the main driver, but there are other reforms that have been suggested: clarifying the scope of exclusive rights; revising exceptions and limitations for libraries and archives; addressing orphan works; accommodating people who have disabilities when they access content; providing guidance to educational institutions; exempting incidental copies in appropriate instances; updating enforcement provisions; providing guidance on statutory damages; reviewing the DMCA; assisting with small copyright claims; reforming the music marketplace; updating the framework for cable and satellite transmissions; encouraging new licensing regimes; and improving the systems of copyright registration in the USA. The Hargreaves review of copyright in the UK provided a similar if not identical list of issues that needed to be addressed - and progress has already been made on the creation of a “copyright hub” and a Digital Copyright Exchange to promote digital licensing. The UK Government has said that it will support the reform of IP laws ,and highlighted the need to progress this, saying in particular that: copyright exceptions covering limited private copying should be introduced to realise growth opportunities; The introduction of an exception to copyright for search and analysis techniques known as 'text and data mining' needs to be introduced; Copyright exceptions to allow parody should also be introduced; the Government would support introduction of an exception to copyright for search and analysis techniques known as 'text and data mining' and would support establishing licensing and clearance procedures for orphan works.
Elsewhere in Europe, Spain is working on a new anti-piracy law which will be robust enough to keep the country off a U.S. watch list of copyright violating countries. The Copyright lobby group the International Intellectual Property Alliance (IIPA) has recommended the United States Trade Representative put the country back on a so-called “watch list” after removing it last year. Countries on this list can face trade sanctions from the United States if they do not crack down on piracy.. Spain had already passed their anti-piracy law - the so called ‘Law Sinde’ which was designed to crack down on websites popular with Spaniards for illegally downloading free movies, music and video games. But under the law, the burden is on copyright holders to lodge complaints with the government, which is slow to act against websites allegedly violating copyright. The new draft bill takes on board recommendations from the IIPA and others to speed up the process of going after the problem websites. The draft law clarifies that Spain will go after "linking sites" that direct people to content on other services and establishes fines for companies that advertise on piracy websites. It also includes measures to block piracy sites from using payment services such as credit cards The bill, currently receiving public feedback, will be redrafted to go to parliament for debate. The minister said he expected it to be adopted by the end of the year.
The Spanish copyright lobby wants the bill to give the government power to shut down sites quickly where illegal activity is detected. "We want legal protection comparable to any other property right," Carlota Navarrete, director of the Coalition of Content Creators and Industries, said.
Not surprisingly, in the USA the Motion Picture Association of America (MPAA) is already lobbying. According to the MPAA, its member companies “welcome a continuation of the ongoing discussion of the importance of copyright” : a memo circulated by the MPAA "unapologetically" stated that any debate should easily conclude that copyright law ”encourages and rewards creativity and breakthrough innovation". But is it fit for purpose? Are laws passed by sovereign states even relevant in a market increasingly dominated by a world wide web which knows no boundaries or territorial exclusions? Some have even said that 'copyright wars are damaging the health of the internet'.
And the lobbying isn’t just from the ‘pro’ copyright camp. In the USA Mark Zuckerberg and other technology leaders, including LinkedIn founder Reid Hoffman, Dropbox chief Drew Houston, Reed Hastings, CEO of Netflix, Microsoft boss Bill Gates and Eric Schmidt, chair of Google, have set up a new high-profile advocacy organisation. The group, called FWD.us has enlisted the help of Washington DC-based lobbyists and communications people on both sides of the political divide – although initial reports were not about copyright – they were about immigration and education; "To lead the world in this new economy, we need the most talented and hardest-working people. We need to train and attract the best. We need those middle-school students to be tomorrow's leaders" Zuckerberg said in an opinion piece published in the Washington Post. But watch this space .......
In Europe the technology companies have had a mixed bag of results in the courts. In the UK, Mr Justice Arnold was issued blocking orders ordering ISP BT to remove access to the infringing Newzbin sites in Newzbin 2 (Twentieth Century Fox Film Corp & Ors v British Telecommunications Plc [2011] EWHC 1981 (Ch)). The European Court of Justice took a different approach in 2011 in Scarlet v Sabam where it ruled against the proposed widespread and indiscriminate filtering system which would require constant monitoring at the expense of the ISPs under Article 15 of the Electronic Commerce Directive 2000/31 and Article 3 of the Enforcement of IP Directive 2004/48 which provides that “IP remedies “shall be fair and equitable and shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays”. Bearing in mind possible human rights issues, and citing the Promusicae case, the court commented that the protection of IP rights “must be balanced against the protection of other fundamental rights”. One comment at the time was that the Court’s decision was “hugely important for the openness of the Internet, and therefore for the fundamental rights value and the economic value of the Internet.”
Indeed the UK's Supreme Court have just echoed these thoughts in NLA v Meltwater saying the question being whether the copies made on users' computer screens and hard drives when they access and read content online are temporary for the purposes of Article 5.1 of the InfoSoc Directive meant that "the issue has a transnational dimension and that the application of copyright law to internet use has important implications for many millions of people across the EU making use of what has become a basic technical facility. These considerations make it desirable that any decision on the point should be referred to the Court of Justice for a preliminary ruling, so that the critical point may be resolved in a manner which will apply uniformly across the European Union".
And that’s where we still are: Its balancing rights – the rights of content owners to protect their rights and their business models - the rights of artists, musicians, dramatists, writers to be paid – the rights of technology companies to promote new businesses and not to be unfairly fettered – the rights to a freedom of expression – and the rights of consumers and individuals to protect their personal data and their freedom to receive or impart information in a free, open and neutral internet.
Most recently organisations representing Europe’s communications industry have urged the European Commission not to change the 2004 directive on the civil enforcement of intellectual property rights (IPRED). The Commission have recently closed a public consultation on proposed changes. The group, which is made up of Cable Europe, ECTA, ETNO and EuroISPA, represent the telecommunication and mobile telecoms operators, Internet Service Providers and cable companies in Europe and the group warned that “introducing stricter enforcement through increasingly restrictive technical measures” would have “a chilling effect” on innovation, consumers’ confidence in digital products, freedom of communications and Internet openness.
The group is particularly worried that under a revision of the IPRED directive, ISPs “may be ordered to implement unspecified, disproportionate and possibly repressive technical measures in a blanket fashion against their customers.”
The consultation on IPRED, which closed March 30, has proved controversial. Many civil liberties activists believe the questions were biased in favour of copyright holders. Blogger Glyn Moody wrote “This is the worst such consultation I have ever seen. The questions are badly worded and it’s only too easy to tick a box that causes you to miss dozens of important questions. This flows from the totally biased way the consultation has been framed: it’s clearly aimed at holders of intellectual monopolies who want to enforce them more strongly,”
Monica Horten, a visiting fellow at the London School of Economics, agreed saying “All of the questions are addressed to rights-holders and ask only for their viewpoint. There is no place for non-rights-holders, who could be ISPs, to write a response” in an online opinion piece.
This may well be the reason the electronic-communications industry group decided to write its own appeal to the Commission. In it, the group warned that filtering copyrighted material may be “incompatible with fundamental laws of privacy around data protection.”
The industry group also referred back to the ECJ’s decision in Scarlet v Sabam and questioned whether such filtering methods are even effective, given that such measures can be quickly and easily circumvented. Instead, the Commission should urge copyright owners to develop new business models that “embrace the Internet revolution,” the group said.
Disruptive technologies always promote change and usually throw a spanner into the workings of traditional business models: Think of digital cameras and their effect on market leader Kodak's business. Catastrophic. Think of encyclopaedias and Wikipedia. Think of telephones replacing telegraphy. And once the new technology is in place, as one of our comments noted recently, it's almost impossible to get back to the 'good old days'. Adapt or die. But never has change been driven so quickly - and nor have the technology innovators grown so quickly: the behemoths of Google, Amazon, Apple and Facebook now financially dwarf traditional business models such as the recorded music business and music publishing - and have ever increasing clout. And whichever side of the divide you sit on, one thing is clear - copyright law, whilst not broken in my own opinion, is clearly struggling.
Recent spats such as the Google Book Search litigation, the recently reported action by collection society Access Copyright in Canada against York University, the criminal and civil actions against platforms such as The Pirate Bay, the high profile prosecutions of file swappers such as Joel Tenenbaum and Jammie Rasset Thomas, The Viacom v YouTube and GEMA v Youtube cases, The ReDigi and Usedsoft cases, Meltwater (both in the UK and now the USA) and other aggregator vs content owner disputes and the MegaUpload case are just some of the many many examples of the courts being asked to adapt the law to meet innovative - but disruptive - uses of new technology. And the backlash is that consumers are often legitimately confused - asking questions like "why cant I format shift?" and "why don't I own the music downloads I paid for?". Legislation crawls along behind: in the UK content owners remain critical of the Government as key parts of the Digital Economy Act remain unimplemented, but are France and New Zealand's 'Three strikes' laws really appropriate in the digital age? The DCMA seems to have rapidly outdated after it's short history - is 'safe harbour' in 2013 really a suitable doctrine fit for use in 2013 - surely business models are very different to when the doctrine was was envisaged in the late 90s? Was ACTA really that bad? Is term extension something that makes any sense now? Does the Pirate Party have a valid role in politics?
Questions, questions, questions - but beneath it all are some fundamental principles and some fundamental freedoms which apply to digital natives and digital immigrants alike - and to those on both sides of the divide.
http://www.pcworld.com/article/2034133/industry-group-attacks-eu-plans-to-overhaul-copyright-enforcement-law.html
http://www.reuters.com/article/2013/04/12/us-spain-intellectualproperty-idUSBRE93B0LY20130412
Xbox Music
By Bob Lefsetz - Lefsetz Letters
Streaming won.
That's right. While you were lauding the sonic quality of CDs, bitching about Spotify payments and repeating endlessly that no one wanted to rent music, technologists, not married to the past, enmeshed in a sphere of creative destruction, necessary in order to win, saw what the people wanted before they knew it and delivered it.
The number one music service today is YouTube. Can a dedicated music service supersede it?
The iTunes Store has peaked. It's just a matter of when Apple goes into streaming. The Cupertino company has a long history of following the innovation of others with a more highly refined product. And if you don't think they can do this, you haven't employed Spotify search. In a world where Google delivers exactly what you want instantly, yes, usually the first hit is the desired one, it's frequently impossible to find what you want on Spotify. You think it's not there, then you change search terms and voila! It's as simple as the lack of a single play repeat button in the app... Apple gets the little things right. They provide all the solutions we need right up front. At least this was all true before Steve Jobs's unfortunate demise. If Apple gets beaten on streaming music, if it fails to corner this market, you know the company is past its peak.
Yes, it's not about Microsoft triumphing in the music sphere. Good luck to them. Let the best man win. But it is about bringing subscription services front and center. Just like all Blu-Ray players come with Netflix apps, music apps will be part of future operating systems. Will third party delivery services survive? Jimmy Iovine tied in with HP for Beats, he'd better do so soon with MOG. Then again, HP's in trouble, when the PC business is cratering and they've got no viable tablet strategy.
Spotify was the pioneer.
Oops, Rhapsody was the pioneer. But Rhapsody could not see that a free tier was necessary to adoption. Dope would have a small percentage of its penetration if the first hit was not free. A lousy interface and a lack of experience by the public held back Rhapsody. Then again, maybe Rhapsody was just too early. (I.e. see Apple above re timing.)
With Xbox Music the old world has been put to bed. People expect the history of recorded music at their fingertips. If your business model is based on scarcity, you're screwed.
And there are cultural issues too. If you're not insanely great, despite your music being available, it will probably be ignored. Because why listen to crap when excellence is right next door, a click away?
Xbox Music is like Netflix streaming. They had it for years before everybody caught on. And what sold Netflix streaming? Word of mouth! Yup, advertising does not sell new technology and services, only early adopters spreading the word. In other words, you'd be better off reading "The Tipping Point" than getting a job at an advertising firm.
I'm not saying subscription streaming services will triumph overnight. But just like digital photography, something that was heralded for a decade before it peaked, in seemingly a day, streaming will take over. Sales will not fade that same day, but will diminish quickly. And just like with digital photography kids now take thousands of pictures a year, more people will listen to more music.
Will they listen to your music?
Mm...
You think it's still about getting signed, getting on the radio, as if old media is gonna be king forever. That's like saying people will use MS DOS forever. Like saying no one needs a smartphone. Like saying desktops will not be impacted by tablets. Radio ceased long ago being anything but a delivery method, there's no soul except on talk radio. You can get the hits elsewhere.
Record stores have already disappeared. Those that still exist sell tchotchkes.
Apple's hottest laptops come without disk drives. So if you think there's a future for CDs...
And the newest laptops have less storage than before. Because what you need lives in the cloud.
We're in an era of access.
You're in the business of creating demand. In a world where everything is available essentially for free at people's fingertips. How can you motivate people to check you out and continue to listen?
If you hype something bad, you've lost credibility. If something's not great, it won't be listened to again. It's not like buying an album and playing it ad infinitum because you can't afford new music.
And if Apple can break up iLife, allowing you to buy only the components you need, via digital download, what makes you sure people still want the album, especially its weaker tracks?
You can follow the horse race. You can bet on whether Microsoft ends up owning music or not.
You can marvel that music is now a feature as opposed to a stand-alone item.
You can complain that you're making less initially from a stream than you did from the sale of an album.
Or you can recognize that the future is here, creative destruction is a way of life, and you're best to learn how to play by the new rules and anticipate future changes.
Sure, people are going to lose their jobs. Winners and losers will be realigned.
But if you don't think this is a heyday for listeners, you don't have ears.
Seeking a Global Solution for a Global Problem: Collective Licensing
by Laura Grivainis Thorne - TheMusicVoid
TMV’s UK Staff Writer Laura G Thorne was on hand for the latest debate on the subject of collective licensing, hosted in London by 2Pears under their Music 4.5 brand (“bringing together music tech start-ups, serial entrepreneurs, investors, artists, band managers and key industry players to share knowledge, discuss strategies for business success, debate market trends and evolution”).
In 2011, Music 4.5′s “Death of Collective Licensing” event drew a capacity audience of senior industry figures to examine issues related to rights management, revenue collection, copyright infringement, and the development of databases and unique identifiers to aid in the licensing of music and other content, as well as the accurate reporting of such activities.
A year later – last Friday, the 29th June – 2Pears convened a similarly august group to discuss how things have changed since then. Speakers included Nic Garnett, IP specialist and former Director General of IFPI (International Federation of Phonographic Industries); Mark Isherwood of Rightscom; Frances Lowe, Head of Regulatory & Corporate Affairs, PRS for Music; Paul Jessop, former CTO of IFPI & the RIAA, Davin McDermott, Director/Head of Music RSM Tenon, and Tom Frederikse, Partner, Digital Media/Intellectual Property, Clintons among other panelists.
Nic Garnett opened the discussion by providing a framework describing the challenge at hand, quoting from the executive summary of a recent directive issued by the European Commission, paraphrased here: the need for collection societies to adapt to the needs of a single market, and to provide rights holders the means to exercise more efficient control of their works, making licensing easier as well as compliant with the standards of the digital world. Of course an essential precursor to the realisation of these objectives is the availability of complete and accurate data to identify digital works, without which any initiative will ultimately be doomed to fail. This provided the perfect segue for speaker Paul Jessop, ex IFPI CTO, and currently a principal in his own firm, County Analytics. Quoting Rudyard Kipling’s poem The Elephant’s Child (I keep six honest serving-men (They taught me all I knew); Their names are What and Why and When And How and Where and Who), Jessop delved into the types of identifiers currently in use and the databases that have been created to manage this information, asking and answering questions such as “Who needs identifiers? Who is building registries? Who would use registries?” and so on. Examples of currently used identifiers include ISRC for recordings, ISWC for works and ISNI for artists; databases include the Global Repertoire Database, which was initially conceived by the EU Commission in 2009 to “investigate how a GRD for musical works might be created and deployed” (and ultimately will include a “Global Release ID” or GRid). as well as proprietary databases such as Gracenote, Nielsen and Decibel.
As with many complex problems, the devil lies in the details, and there are many. Progress can seem glacially slow. The technology now exists to move and track huge amounts of data. However, as Tom Frederikse of Clintons observed, “The problem is not the technology, it’s that the stakeholders aren’t working together,” continuing, that it would be a long time before the people representing those interests say, “I need to cut off my finger to save my hand.” Frederikse also commented on the secret agreements negotiated by collection societies with Google covering YouTube, a familiar déjà-vu going back to last year’s panel (and beyond).
Frances Lowe of PRS & fellow panelist, singer/songwriter Kirsty Hawkshaw, along with Frederikse, considered the subject of collection societies, governance and accessibility, moderated by new media attorney Rick Riccobono. As Lowe affirmed the PRS allegiance to core principles of transparency and efficiency, she was challenged by Hawkshaw, who stated that the data she’d received from PRS & PPL was inaccurate, and she had lost significant income due to mistakes in registrations. The subsequent discussion revealed possible confusion as to which works were royalty-bearing and which were not, but what was clear – and broadly recognised – is that errors are not unusual for numerous reasons, improper reporting not the least among them. (If there was any doubt about how this could happen, Jessop offered the example of 100 ways to report Guns N Roses’ “Knockin’ On Heaven’s Door” – computers don’t make educated guesses, so each of these variations generates a separate entry that then has to be reconciled.)
A panel with Ed Averdieck (CueSongs), Chris Jackson (Meta Broadcast), Peter Bradbury (BBC), Sem Bakker (Rohe Advokaten) and Mark Isherwood considered trends in music licensing, and were asked by moderator Nic Garnett their opinions on where the industry stands now, and where they see it going in five years’ time. Isherwood was blunt: “What needs changing is the infrastructure to manage copyright…it is no longer fit for purpose.” The BBC’s Bradbury saw “huge changes to online and mobile,” while license for broadcast and performance has largely remained static. As far as the future is concerned, more fragmentation was anticipated, with a need for greater flexibility in terms of opt-ins and opt-outs. Averdieck quoted the example of Phillip Glass, who said of collection societies, “they’ll protect me into obscurity.”
Whenever an existing business model is in flux and challenged by new technologies, there will always be those upstarts who seek to bypass the traditional infrastructure altogether. Presenter Tom Högland of Swedish company Epidemic Sound is one such enterprise. Offering production music for broadcast and other uses, they operate independently of any collection society, and control all rights of the compositions they represent. Clients pay a subscription fee, but are not subject to any further royalties. While one can see the attraction of this proposal for some uses, Epidemic doesn’t deal in back catalog, so if you are a high-profile brand looking to associate yourself with a name artist, Epidemic’s offering – at least of yet – may not be the solution for you.
China is an important emerging market, and those present had the opportunity to hear from internet entrepreneur Jun Wu, CEO of R2G, the developer of the “first centralized music distribution platform in China promoting the consumption and monetization of legitimate digital content.” Wu estimates the value of the music market in China to be between $80-120 million dollars US, but it is one where piracy is rampant, and identifying authentic, original content remains a problem. Audience member Peter Mason of PPL queried Wu as to the percentage of music content in China made up of local repertoire – as it turns out, 90% of music content is in the Chinese language, with 5% Korean and Japanese, leaving only 5% of the market for Western music.
Presenter Davin McDermott, ex Warners and EMI Finance and currently Director/Head of Music at financial services and investment consultancy RSM Tenon, cut through much of the chaff by bringing the perspective of the potential investor into the room. For McDermott, getting a “perfect agreement” or getting caught up in “antiquated, legacy models” was all part of the problem, rather than the solution. The sense was that the music industry is still engaged is still rearranging deck chairs while the ship is sinking, rather than grasping the importance of bringing money into the sector, and finding ways to encourage prospective investors, who are often “frightened off” by the lack of transparency.
What’s evident is that there are significant hurdles left to clear before the concept of a global music registry becomes a reality. While there are very smart people making this objective their life’s work, they answer to various constituencies, with their own territories to protect. Opportunities pass by; new ones emerge. So it goes.
Innovation
By Bob Lefsetz - Lefsetz Letters
"The Voice" has not broken a single act worldwide. Despite the onslaught of publicity, the only people who have benefited are the judges. You see the contestants are just like the show, they're me-too. And we haven't had an "American Idol" star since... Well, Kelly Clarkson is a worldwide star, Carrie Underwood made it in country and means nothing outside the U.S. and Daughtry has faded and if you think that guy Scotty means something, you probably believe country stars write and produce their own records.
In other words, conventional wisdom is wrong. You're railing against TV reality shows and they're meaningless.
But it's not only television that's me-too, it's record labels, it's the whole damn business. People keep doing it the way everybody else is doing it, not expecting a different result so much as being desirous of getting the few conventional scraps left in this business, radio airplay and record sales...in an era where electronic music is burgeoning and recorded music sales are irrelevant.
"Q: Hyundai has pushed the envelope in its car designs, and other companies are just now catching up with the Elantra and Sonata. How did you pull that off?
A: It just takes courage and a willingness to take risks. So with Sonata, the conventional orthodoxy in the industry was midsize cars should be styled conservatively. This is typical market research talking.
Q: Why would you take a risk on design when it was conventional wisdom not to?
A: Products starting with the '05 Tucson and the '06 Sonata were designed in a safe and conservative manner. It didn't move the needle in terms of sales. You go through that and you finally see the pattern. You can't just accept safe."
That's John Krafcik speaking, the CEO of Hyundai Motor America.
Hyundais used to be a joke. Jay Leno said you could double a Hyundai's value by filling it up with gas. Now Hyundai sales are burgeoning, they're the most feared major car company.
It's kind of like BMW. A perennial also-ran to Mercedes-Benz, BMW hired Chris Bangle, revolutionized design, conservatives were in an uproar but now BMW is the dominant luxury car company. It took a risk.
Are you taking a risk?
Mainstream music is so long in the tooth, it's a wonder it hasn't gone to the government for a handout. Wait, IT HAS! The content industries are lobbying all over the world for three strike rules, other ways to constrict the public. Once upon a time didn't music LEAD the public?
That's why I'm so excited by the electronic scene. They're making it up as they go. And all the old players are looking through twentieth century lenses, employing metrics that don't apply.
If you have a hot product, people want it.
But it's got to be different, it's got to challenge conventional wisdom, it's got to appeal to people's hearts more than their pocket books.
Otherwise how to explain Apple's huge success in China? It's not like the iPhone is cheap over there. We've been hearing about that market forever, but only Apple and a few car companies have cracked it. Apple's success was due to excellence. Think about it, what musical act do we want to export to China, which one will wow them? None of the usual suspects, that's for sure.
And nobody wants to go over there, to try and set a fire. Nobody wants to learn about the new ways, nobody wants to explore, they just want to do it the same old way to dwindling returns.
Music is a second-class citizen because it stopped innovating. It's no different from GM. Similar to Kodak. If you keep on doing the same thing you end up in the dustbin, the public ignores you and moves on.
Music is first and foremost about innovation. Taking risks, creating something new that strikes people's hearts. And now it's easier than ever, with all the tools at the fingertips of the proletariat. But the proletariat is in most cases dumb. Just complaining that it's been locked out of the major leagues. It's like a young fighter complaining about corruption in boxing when all the action's in the UFC.
Yup, the UFC killed boxing. By breaking all the rules, by being different, by appealing to the audience.
If you think music appeals to its audience, I'm laughing.
Here you've got an entire industry with contempt for its audience. Music is overpriced and producers can't stop railing about theft. Concert tickets are stratospheric and you can't get a good one. Do you really think going down this road is going to pay dividends?
In Person: Hyundai's Krafcik steered it from joke to contender: http://bit.ly/IxF363
Recipe for succes
By Bob Lefsetz - Lefsetz Letters
1. PRACTICE
You need neither talent nor skill to succeed in today's music business. If you look good enough, we can fix your voice in the studio. And we can get others to write your songs. But the more weapons in your arsenal, not only the longer your career, the greater your options.
Learn how to read music and play one instrument, if not more.
2. RECORD
Recording comes before playing live because you don't need an audience to do it. Whether done alone on a Mac or an iPad or with your group in a studio, getting your music down "on tape" allows you and others to critique it. It's a static document from which you can learn. It's kind of like videotape in sports.
You should not see recording as a one time thing, but as an ongoing activity. To not only learn about your music, but to make you comfortable with the process.
3. DECIDE ON THE MUSIC YOU WANT TO MAKE
Do this after you start recording, after you woodshed.
There are two options. Making the music you want to make and making music that you think you can sell. They oftentimes are not the same.
4. DECIDE WHO YOU WANT TO SELL THIS MUSIC TO
If you're looking for a major label deal, you must make the kind of music labels sell. And you must know that record companies are first and foremost businesses, they are not museums. If you don't think you can make a record company a lot of money instantly, don't bother knocking on the door. Labels don't want to hear about artist development, they want instant profits, no matter what they say. Don't try to sell quantum physics to a baby. Don't try to sell work boots to a runway model. Know who your audience is.
4.A. IF YOU'RE SELLING TO A LABEL...
Make it easy for them, don't make them connect the dots. Your demo must be slick, ready to be on the radio in its present form. Sure, they might re-record or remix it, but don't count on a label to have vision.
Visual materials help.
And so does an audience.
But be professional. Your goal is to make the label salivate, desirous of being in business with you.
5. IF YOU'RE NOT SELLING YOUR MUSIC TO A LABEL...
And you shouldn't be doing this if you're not making Top Forty music. Oh, you can sign with an indie, but know you'll probably have trouble getting paid.
Indies are poorly capitalized. They don't have the relationships of majors. They promise a lot and deliver little.
Of course there are exceptions, but discover if the label you're interested in truly is one or you just need to make a deal to feel good about yourself, to impress your mother.
We're living in the era of control. Give up just a teensy-weensy bit of it and you might never gain success. The suits never see it your way. If you think they do, you are one or have never been in business with one.
5.A. YOU MUST BUILD AN AUDIENCE
This is where the games truly begin. Unless you're a famous actress or sleeping with the producer du jour, no one in the business wants to pay attention to you unless you've got an audience.
And the new metrics no longer count.
MySpace could be gamed and so can YouTube and Facebook. High online numbers never hurt, but no one with the money to invest in you is going to believe them on their surface. They want to show up at a gig and see it packed. In multiple cities. They want to know you've done the work.
And you might ask yourself if I'm doing all the work, what do I need them for?
And that's a very good question.
5.B. BUILDING THAT AUDIENCE
It all comes down to the music. Doesn't matter what you look like or who you know, here's where the rubber meets the road. Music is something you hear, yours has to be really damn good to connect, exceptional. It has to be so good, that if someone listens to it they want to tell everybody they know about it. Click on the random tracks in your own library, do you want to sell this stuff to everybody? Now you're getting the idea.
The more people playing, the harder it is to win.
Good is not good enough.
You've got to be great.
5.C. ASSUMING YOUR MUSIC IS GOOD ENOUGH
You must make it available. It's got to be buyable, streamable and listenable for free. You've got to make it easy. Don't make the mistake of thinking about money up front. Money comes last in music, especially in today's world. You don't want to sacrifice millions to make $10,000. Are you in it to be a world-beater? Then you must work for free for eons. Every dollar you do make must be reinvested. If you're not thinking big in music, you won't be.
5.D. PLAYING LIVE
You've got to. Because the days of huge recording sales are done, live is where the money is. Play anywhere and everywhere people will have you. If you're good, the audience will spread the word.
5.E. MERCH
Must be available at every gig. It's a souvenir. People want to invest in you. Have everything from posters to vinyl to CDs. You're selling badges of identity.
6. TRACTION
If you've got none, and you're questioning whether to give up, do so.
Traction is an indicator of whether you're on the right track. You've got to gain a foothold and increase your audience. And you can't do this artificially. Only you know if you're going forward. If you're delusional and want to continue with no traction, that's your choice.
7. BE A LIFER
There's no cashing out in music. It isn't like Instagram selling to Facebook. If you're not planning to play forever, stop now. Because it's probably gonna take forever for people to learn who you are and embrace you. With the cacophony of information today it's harder than ever to get noticed. Sticking around counts for a lot. The longer you're in the game, the better the chance you might get lucky.
8. PUBLICITY
Works less than ever before. Works on a train-wreck level, like with Rebecca Black, but if you're the beneficiary of this kind of exposure, milk it for as much as you can right away, because it ain't gonna last.
The audience is sophisticated, it knows hype, and it ignores hype.
Not only does print mean almost nothing, TV isn't much better. If TV counted, all those contestants on "American Idol" and "The Voice" would be winners, but almost none of them are.
If you get a placement, enjoy it, just don't try and convince yourself you've made it.
9. CONCLUSION
YOU CAN MAKE IT!
But you can win the lottery too.
But the lottery requires no skill. Music requires a ton of skill as well as luck.
Keep practicing, keep innovating, keep learning, keep changing.
And know that the odds of you being successful are infinitesimal.
Because being successful is not solely about being talented and believing in yourself, but perseverance and personality. Can you play, write and sing like Elton or Gaga and still make friends with everybody you meet, so they'll want to work for you?
So much of success is psychological and personal. Are you a winner? Do you have charisma? Do people want to hang on your every word? Do girls want to sleep with you and guys want to confess to you and vice versa? If you or someone in your band doesn't have this magic amalgam of personality, chances are you're not gonna make it.
Steve Jobs inspired belief. We can deconstruct his personality flaws all day long, but he got people to work extremely hard for him. Can you inspire people to work just this hard for you?
Kenny Rogers’ Lawsuit Shows The Many Ways That A Major Label Screws Artists (Even The Big Ones)
Music Industry - Mike Masnick
from the here-we-go-again dept
We've seen this many times before, where famous musicians are totally screwed over by the major labels. A bunch of folks have sent over a summary of Kenny Rogers' lawsuit against Capitol Records (EMI), which highlights the levels to which Capitol Records went to not pay Rogers. The central facet of the lawsuit is similar to that of lawsuits that a number of artists have been filing, concerning whether or not iTunes transactions are sales or licenses -- for which massively different royalty rates apply.
However, there's plenty of other crazy things in the lawsuit, most of which involve an "audit" that Rogers requested from Capitol in April 2007... and which took until March 2009 to complete. Yes, it took two years. For a basic audit just to make sure he was getting the money he was owed. Oh, and the audit showed that he was not getting the money owed. From there, things got worse... with all sorts of stalling and foot dragging, finally resulting in the lawsuit. That stalling included repeated promises to resolve the problems and pay up. Rogers was told at times that the company was "still ironing out a few things," and then later found out that the people he'd been negotiating with were no longer at the company -- replaced by a lawyer who just told Rogers that he would be happy to work with Rogers to "promptly try to resolve the Rogers audit" -- nearly two years after the audit was completed and four years after it was requested.
Among the problems in the audit are a bunch of unprocessed royalties that were put into a "suspense" file for no reason. These kept $76,956 from Rogers. There were also actions in foreign territories where Capitol appears to have ignored the royalties it's supposed to pay Rogers. There were also things as simple as just not reporting royalties on money from record club sales. The company is also accused of playing some tax games to double count taxes to avoid paying royalties. There's also the fact that Capitol charged Rogers the full amount for a video production to his own expenses (i.e., money they'd "recoup" out of his portion of royalties), but they ignored their own contractual agreement that only 50% could be expensed that way.
Then there's the fact that Rogers wants his cut from the money Capitol has received in various lawsuits -- those against Napster, Kazaa, AudioGalaxy, Grokster, BearShare and others. As we've noted in the past, the labels have bent over backwards to avoid paying out such money to the actual artists -- but Rogers wants his piece:
Such lawsuits have resulted in Capitol Records receiving monies from entities such as Napster, Kazaa, Audiogalaxy, Grokster, BearShare, and others. Capitol Records has refused to provide Kenny Rogers with an accounting regarding the amounts actually received. A portion of the monies received by Capitol Records is attributable to the Masters and Kenny Rogers is entitled to that portion of Capitol Records receipts. Capitol Records refusal to account to and pay that money to Kenny Rogers has resulted in Kenny Rogers suffering direct financial harm in an amount that cannot be determined until Capitol Records provides a full, fair, and accurate accounting.
There are a few other charges as well, but those are the big ones. None of this, of course, is to say that it's "ok" to infringe because the major labels are somehow "bad." But it does show just how ridiculous it is if anyone assumes the majors represent the best interests of artists in any way.
Eliminating Piracy
By Bob Lefsetz - The Lefsetz Letters
There's a belief that if we just quashed piracy, eliminated all free access to music, coffers would fill once again, musicians would be rich and we'd enter a new golden age.
But that's hogwash.
1. Music competes.
With not only video games and movies and TV, but the Net and everything on it. People have a limited amount of time and money, who says they're going to spend it on music?
2. Ubiquity is dead.
Once upon a time, the three TV networks commanded 90% of the viewing audience. Now the five reach twenty-odd percent, the rest is split amongst a zillion cable channels. So if you believe if we eliminate piracy suddenly albums are going to sell ten million again, you're dreaming.
3. Not all piracy is a substitute for purchase.
Read this article, "How Copyright Cons Congress":
http://bit.ly/xwukik
The numbers being thrown around are fictitious.
4. Piracy might be the downside of the Internet, but there are many upsides, direct contact with the fan and the ability to expose new people to your wares, and all of this can be done FOR FREE! We're building a new ecosystem, because the change in infrastructure demands it. Piracy is just one part of the picture.
5. The way out is to license the piracy, find ways for people to pay. Been noticing all the ads on YouTube lately? That's how they do it, they entice you for free and then you end up subscribing. Kind of like cable, the price never goes down, only up, but until there were web alternatives, subscriptions only went UP! Free streaming services are about getting people hooked on legitimate, legal systems and then converting them to paying customers once they're obsessed. You might like Spotify on the desktop, but you can't use it on your mobile unless you pay.
6. Information Is Beautiful
If one more ignoramus emails me this chart I'm gonna explode. Do you believe everything you read in the newspaper? Did the American government blow up the Twin Towers? Are you one of those people who only cottons to information that supports their cause?
Read this e-mail:
"I work for an indie label with a direct deal with Spotify. With all the articles lately about how Spotify is bad for the artists I did some calculations on the royalty reports we get and it turns out for the US premium subscribers it pays out MORE than Rhapsody or former Napster. About 50% more. Yes the free tiers are in the hundredths to thousands of a penny but if a consumer is that cheap then they probably aren't downloading from iTunes.
Also my new favorite artist I have listened to the one track that hooked me over 100 times. Which at a premium subscription is more Net than a download of one track.
Please withhold my name/email due to privacy concerns in the off chance you use it."
Bingo! It's about converting people to become premium subscribers. And if this happens, there's plenty of revenue. Just don't assume it'll all go to a handful of artists who'll be as rich as in pre-Internet days and realize we've shifted into a LISTENERSHIP model. Doesn't matter if someone bought it, it's if they USED IT! Isn't that a much fairer way?
7. You bought the damn Les Paul and Marshall, don't complain that there's no one paying to record you. If you can afford the aforementioned equipment, you can buy some software (you already own the computer!) and make your own damn record. As for promotion... Those acts the majors hype don't last and they release ever fewer of them. They're heading straight for the cliff, you want to hitch yourself to their wagon?
8. The Internet has made scalping ubiquitous.
Yes, ticket prices have gone up because there's a marketplace to buy them. No Internet, no StubHub. And you might say that the acts don't get any of this revenue, but some do! They scalp their own tickets or employ I Love All Access. Furthermore, all the data possibilities are why promoters can afford to overpay acts/give them all of the ticket revenue.
9. Legacy acts
They may be complaining that they've got no recorded music revenue, but the Net is keeping them alive. Sure, there's some radio airplay, but without easy availability/access to their music online would all those classic rock acts be moving as many tickets? NO!
10. Eradicate piracy and it's going to be that much harder to break an act. We go back to the winner take all system. People will only buy what they hear/are exposed to, which will in many cases be the tripe that is foisted upon us by the major labels, the Top Forty fodder. It'll be all beat-infused crap all the time, because people won't be able to trade free music amongst themselves.
I'M NOT SAYING MUSIC SHOULD BE FREE!
Do you think you're paying when you watch sports on ESPN? YOU ARE! Approximately five bucks a month, whether you watch it or not. The key is to make music listening feel free, even if it's not. We're on that road, but too many musicians want to kill it, because it's a nascent business. It's like killing the iPod because it didn't work on Windows and there was no iTunes Store. It's like doubling down on Kodak because you don't own a digital camera and who'd want to shoot pictures each and every day other than a professional?
We finally have the tool for success, the way out, streaming services, but you want to kill them. You'd probably eat a cookie today rather than forgo it and have twenty tomorrow.
Killing piracy kills the music business. It cuts down on listener experimentation and innovation. Who's gonna make something that radio won't play if there's no free listening and sharing online?
Just because the new world doesn't look like the old world, don't dismiss it. Sure, a bunch of people may have lost their jobs at the label, but a bunch more gigs were developed in tech. And now so many bands need a webmaster. What did that guy do previously? Certainly not work at the computer-averse label.
We cannot go back to the past. However much you might have loved the pre-Internet era. So can we all agree to march forward and say yes instead of no, admit that certain behaviors cannot be eliminated and therefore must be corralled to our benefit?
Network thoughts
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