The plan to provide US students with compulsory flat-fee music finally has a name, it emerged this week. Choruss LLC will provide participating universities with a replacement for their current subscription services such as Rhapsody, and has the backing of the the EFF and the tacit support of the RIAA. That alone indicates the magnitude of the initiative. When have those two lobbying groups ever agreed on music policy?
music business
“We’re going to be last to market”: Chris Castle’s battle stories
bullient lawyer Chris Castle has a unique perspective on the Music Wars. A former Sony and A&M executive who “switched sides” to Silicon Valley, then found himself defending the original Napster, which he called one of the greatest inventions of the 20th Century. His clients range from technology companies to major recording artists. So to … Read more
How to destroy the music business
Put yourself in these hypothetical shoes for a moment. My goal is to make as much money as possible by doing as little work as possible. I have no creative talent except for generating and recycling marketing buzzwords. I have no technical knowledge or ability – but I can get my head around a Twitter feed. It doesn’t sound promising, but you’ll want in, I promise.
Now let’s imagine a business that can achieve our goals.
The natural place to start this business is on the internet – where one can harness the labour of millions of people and pay them sod all for their work. Under the smokescreen of “collective intelligence” or harnessing “the wisdom of the crowd”, we can keep our supply costs at zero. And if we can keep reminding these rubes that “power lies at the edge of the network” or “in the Long Tail”, they’ll produce lots of stuff for us for nothing, without complaining.
That’s the supply side sorted out. However, we need to attract an audience.
We know that the traditional vices – gambling and porn – will drive substantial traffic to our service. But gambling has regulatory issues – and porn takes us away from the mainstream. That leaves music – the stuff of life, and proven crowd-puller. So let’s make music the main feature of our service.
Baidu sorry for medical scam ads
Unlicensed music distributor Baidu has admitted taking money from unlicensed medical companies. Baidu dominates the search business in China, the bulk of its revenue coming from pay-for-placement in its search pages, which it calls “Page Rank Bid”. The company says it will now stop the practice, which accounts for 10 to 15 per cent of … Read more
Police vet live music, DJs for ‘terror risk’
A dozen London boroughs have implemented a “risk assessment” policy for live music that permits the police to ban any live music if they fail to receive personal details from the performers 14 days in advance. The demand explicitly singles out performances and musical styles favoured by the black community: garage and R&B, and MCs and DJs.
However all musical performances – from one man playing a guitar on up – are subject to the demands once implemented by the council. And the threat is serious: failure to comply “may jeopardise future events by the promoter or the venue”.
UK Music chief Feargal Sharkey told a House of Commons select committee that the policy had already been used to pull the plug on an afternoon charity concert of school bands in a public park organised by a local councillor.
“No alcohol would be sold, tickets were limited to three maximum, and the councillor offered to supply eight registered doormen. Police objected on the grounds that the names, addresses and dates of birth of the young performer could not be provided,” said Sharkey, speaking to the Department of Culture Media and Sport’s hearing on venue licensing today.
“Live music is now a threat to the prevention of terrorism”, he concluded.
The Long Tail can seriously damage your business
The most comprehensive empirical study of digital music sales ever conducted has some bad news for Californian technology utopians. Since 2004, WiReD magazine editor Chris Anderson has been hawking his “Long Tail” proposition around the world: blockbusters will matter less, and businesses will “sell less of more”. The graph has become iconic – a kind of ‘Hockey Stick’ for Web 2.0 – with the author applying his message to many different business sectors. Alas, following the WiReD Way of Business as a matter of faith could be catastrophic for your business and investment decisions.
Anderson bet that the orange portion – the “Tail” – has more value than the red portion – the “Head”. But it doesn’t.
Examining tens of millions of transactions from a large digital music provider, economist Will Page with Mblox founder Andrew Bud and Page’s colleague Gary Eggleton, looked to see how large and valuable the “Tail” of digital music may be. They produced a spreadsheet with 1.5 million rows – so large, in fact, that it required a special upgrade to their Excel software (and more RAM) – and the three revealed their work at the Telco 2.0 conference this week.
They discovered that instead of following a Pareto or “power law” curve, as Anderson suggested, digital song sales follow a classic Log Normal distribution. 80 per cent of the digital inventory sold no copies at all – and the ‘head’ was far more concentrated than the economists expected.
“Is the ‘future of business’ really selling more of less?” asks Page. “Absolutely not. If you had Top of the Pops now, you’d feature the Top 14, not Top 40.”
As Andrew Bud explains:
“The Long Tail’s argument is that the pattern of consumption for media is bent out of shape by the limits of the shops selling them. Digital media lets the nature of people’s demand flow free. Well, we now know what the shape of that demand curve looks like.”
Bud told the conference that the basic shape of consumer demand for digital music clearly fits the Log Normal distribution, “with eye-watering accuracy”. That’s no surprise, he says, because so many sales curves he’s seen over the past ten years follow this distribution.
“Now we’ve seen what happens when tens of millions of choices are thrown in the air and people can go pick them up. What was astounding was the degree of inequality between the head and the tail – by a factor of three. It’s specifically the Log Normal shape that leads to a rather poverty stricken Tail.
“There are Tails where the Tail lives as a kind of welfare state. Not this one. You starve in this Tail.”
Brown’s 1956 lognormal curve fits digital sales data much better than “The Long Tail”
This really isn’t the upbeat fairy tale message Anderson has spent four years selling on the conference circuit.
A new economics of P2P file sharing
What happens when you put three economists from the internet, telecomms, and the music businesses in a room and don’t let them out until they’ve agreed on something useful?
A paper published by the research unit of the British composers’ collection society today gives us a clue. The first results of a “knocking heads together” exercise, entitled Shadow pricing P2P’s economic impact, doesn’t offer any ready policy proposals – partly as a result of compromise – but it does offer a framework that’s better thought out than most attempts so far.
EMI’s £700,000 taxi bill
A report by Maltby Capital, the company created to acquire and run EMI, reveals that the British music giant is still spending money like a drunken sailor. A highlight of the out-of-control budget was £700,000 spent with just one London taxi firm.
“This was only slightly less than the bills of three investment banks, with 8-10 times more staff than EMI Music,” the report notes.
Cliff Richard not face of British music any more
The Monday morning after the clocks go back traditionally brings us very little cheer, but here’s one piece of good news – you’ll be seeing less of Sir Cliff Richard in the future.
Right-on Radiohead – the union busters?
The internet has been great for millionaire music performers and amateurs – it’s everyone else in between who gets screwed. Now we have Radiohead’s publisher Warner Chappell helping confirm the trend. The publisher’s head of business affairs Jane Dyball has divulged some information on the band’s “name your own price” offer last year.
Radiohead offered fans the chance to pay for a low-bitrate version of its new album In Rainbows, an album that was made available in various physical formats on indie label XL Recordings a few weeks later. Since the credit card processing fee could be set at zero, fans could preview and keep the album for free, while true mugs fans could pay twice: once for the preview, and again for the CD.
Not surprisingly, the avalanche of publicity for this brave move gave In Rainbows a huge boost – reversing a decade of dwindling sales for the band. Dyson said this week that Radiohead had sold 3.25 million copies, more than half of which (1.75 million) were physical CDs. 100,000 diehards paid £40 for the box set. This exceeds sales of 2001’s Kid A and Amnesiac and 2004’s Hail To The Thief. Only the band’s The Bends, a US hit in the early 90s, and the worldwide bestseller OK Computer did better.
There were other benefits to this go-it-alone strategy: since physical sales were handled by the Beggars Group’s XL label, an independent, Radiohead kept more of the revenue. The band didn’t have to pay overseas rates for revenue on digital downloads from their site, and cut out the retailer for those box sets, which were sold by Radiohead’s Waste Management operation. Dyball said the band saw more revenue from the “name your own price” digital download than it had from its final album with EMI. So the gimmick proved to be a resounding success for the band and their publisher.
But before musicians cheer too loudly, such success came at the expense of a hard-fought principle. The experiment was only possible because collective bargaining societies bent the rules to make it happen, bringing their own existence into question.
Let’s see why.