Another Interesting Music Survey

One of the great things about the Internet is that there are so many media companies that do surveys so there's always something new to discover the thirst and demographics of music consumers. Here are some highlights from a survey that Myxer.com did. They're a site that supplies various media for the phone, which is important to remember as you read this. My comments in italics.

• The company found that 47 percent of the people polled still used traditional radio to discover new music. Wow, who would've thought. I guess they didn't get the message that radio is over. Or maybe they know something we don't.

• What's more, 45 percent reported that they discovered local music by radio, and only 31 percent discovered music by word-of-mouth. Is local music even played on the radio any more? I know that many stations have an hour a week that they allocate for local music, but that usually comes during the slowest possible airtime late on Sunday night.

• Believe it or not, 74 percent of its respondents by at least one CD a year. I guess the real question here is, "What are they buying and why?"

• 32 percent listened to music on their phones from 1 to 5 hours a week, and 26 percent listened more than 20 hours per week. Remember that this is a mobile-centric audience. 1 to 5 hours per week makes sense, but 20 hours? I guess that also ellicits the question, "Exactly what are they listening to?"

• 49 percent consume most of their entertainment on the Internet. This falls in line with other polls and studies I've seen.

• 39 percent attended 1 or 2 live events a year. This one is surprising. I would have thought the number would be a lot higher. If this figure is real, the concert business is in greater trouble than anyone thought.

This study is skewed because the audience is so targeted to mobile, but that still doesn't mean that some of the stats aren't surprising. It will be interesting to see how these numbers correlate with some of the new studies that are upcoming. I'll keep you posted.

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Music In The Cloud - 3 Companies To Watch

The "cloud" is a synonym for off-sight computer storage accessed by the Internet. So many companies have huge server farms with excess storage capacity that they're making available in order for you, your band, or your company to store your data securely. You actually do this already with any company that hosts your website.

But storing your music "in the cloud" is something new altogether. What that means is that all the music that you own no longer needs to be stored locally and can be accessed at any time from the secure cloud storage via the Internet.

So why is that useful? Right now, if you have 20 gigs worth of music stored on your laptop, you can only copy some of it to your phone and iPad, and if you have a desktop computer, that same 20 gig also has to be stored there, taking up twice the storage space. Wouldn't it be easier if you had all your music stored somewhere else that you could access at any time with any device connected to the Internet? That's the idea of music in the cloud.

While it's only a matter of time until iTunes and Amazon jumps into this area of the business, there a 3 companies that are already there. The following is from a 6/28/10 article in the Technology section of the New York Times by Brad Smith that describes what available in the cloud right now.

mSpot. A mobile media company based in Palo Alto, Calif., mSpot is rolling out a so-called “music locker” service on Monday. Users of the service can upload their music collections to the Web and stream their songs to any PC, Macintosh and soon, a variety of mobile devices (starting with Android; an iPhone app is on the way.) The first two gigabytes of storage (around 1600 songs) are free, and there’s a variety of fees for extra storage.

It seems to me that mSpot is taking a legal risk here: it has not secured special cloud music licenses from music labels and publishers. Darren Tsui, mSpot’s chief executive, says the company does not have to, since consumers have a “fair use” right to make a  copy of their media collection, and mSpot is storing separate copies of everyone’s songs in their own individual online locker. Still, Mp3Tunes.com, a similar service founded by music pioneer Michael Robertson, was sued by EMI back in 2007 and that litigation is still going on.

eMusic. The 12-year-old Internet music store has one of the most complex propositions in the digital music scene. Its 400,000 subscribers pay a set monthly fee, starting at $11.99, entitling them to download a certain number of songs per month at an average price that amounts to around half what songs cost on iTunes. The service is known for offering unencrypted music files from mostly indie record labels. In the last year, Sony Music, then Warner Music, agreed to license selections from their catalog to the service.

Though eMusic is not showing much subscriber growth, it says it is breaking even, and its private equity owners, Dimensional Associates, seem to have high hopes for the company. A deal between eMusic and the largest music label, Universal Music, for Universal’s back catalog, is “imminent,” said a person briefed on eMusic’s plans, who asked for anonymity because the discussions are confidential. This person said that the labels are increasingly giving eMusic the latest songs, not just back catalog. The person added that eMusic is also working on a cloud music service to let users access their music collections from any computer or mobile device. It could be introduced early next year.

Thumbplay Music: This New York-based company is more widely known for selling ringtones and video games on mobile phones. Earlier this year, it introduced a mobile music service for BlackBerrys and Android phones; earlier this month, it added an iPhone application to the mix. The service costs $9.99 a month and entitles subscribers to unlimited access to over 9 million songs from all the major and independent music labels.

Evan Schwartz, Thumbplay’s chief executive, calls this “the first cloud-based music service to be live across all mobile platforms.” Mr. Schwartz, who incidentally recently hired Pablo Calamera, former Apple MobileMe chief, as Thumbplay’s chief technology officer, concedes that Apple is the competitor to watch in the digital music market.  “The thing about Apple, though,” he said, “they will launch a cloud music service that only works on their hardware. That leaves wide open the other tens of millions of smartphones that are sold everywhere.”

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The More You Give Away, The More Your Sell

In yesterday's post I mentioned the strange fact that several studies and real life scenarios have shown the strange paradox of "the more you give away online, the more you sell."

Now comes word that thanks to the General McChrystal story, Rolling Stone sold at least 5 times the number of copies it normally sells even though it's available for free online at Time.com and Politico.com.

That's the reason why it's too early to give up on legacy media formats like CDs, newspapers and magazines. Consumers will never buy these in the amounts they previously have (other than an exception here or there), but they will buy them under the right circumstances, like the McChrystal Rolling Stone issue.

What's needed is a reset in thinking. If you think that you'll make the same kind of big bucks that were once made in those businesses, you're living on a false hope. If you think that you can make a business of it with more modest expectations, maybe you've got a chance. The strategy is to keep the costs as low as possible in order to be able to give some away, use it as promotion, and make it up on the subsequent and ancillary sales. That's what the record industry has done since the 30's with radio. Of course, you still need a product that people want in the first place.

Actually, magazines and newspapers have a much greater chance of surviving than CDs, which is a format that will die a lot sooner. Newspaper subscriptions aren't falling at the levels they once were. In fact, a few are even increasing, and people read the newspaper much more in Europe than they do here. If we should ever have a prolonged Internet outage for any reason, newspaper readership and subscriptions would shoot up overnight. Plus, the most in-depth and competent news reporting still comes from the major dailies.

E-readers like the iPad could soon mean a revival for magazines, providing they adapt to the format and charge a reasonable price. And certain high-end specialty magazines still do well.

Regardless, the basic premise still stands. In today's brave new world, the more you give it away online, the more you sell

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Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

5 Aspects Of The New Music Reality

During lunch with a friend today, he passed some scenarios by me for breaking a new act. One of the things he said seems to be what's now seems to be accepted industry knowledge, although I believe the logic is faulty.

"We're going to do vinyl and digital downloads but skip the CD. They're done." After discussing for a while what he was going to charge for the items, I told him my feelings on the matter.

1) Hoping to make money on any kind of music isn't living in reality, especially for a new artist that no one knows. That business model is dead and gone, even for all but the 1% (or less) of established artists.

2) Give your music away. That's what it's worth to most consumers - zero, nada - especially if they're not your fans. Music always has been a promotional tool for the artist, and the record label made most of the money anyway. Once you get over the idea that you can make money from the sale of your music, your mind will be free for other possibilities that can be monetized.

3) CD's aren't dead. They're a collectible, the same as a shirt or hat. The fact is that they're not the be all, end all to monetizing your brand the same we they used to be for because we've entered into the Music 3.0 era. It requires new thinking about what everything about an artist is worth.

4) But you can charge for a collectible. A collectible is a memento of a moment in time, and people will pay to relive that through an item that they'll buy. But you can't charge too much, especially in these troubled financial times.

One of the problems with most bands and artists is that they price their swag way too high. Who pays $10 dollars for a CD these days? Who's willing to pay $20 for a T-shirt? Even legacy artists with a really great brand and nicely designed merch have a problem at $35, which has become the norm at a concert.

Find out your costs, including tax, shipping, the commission you give to the swag salesman, and everything else that might be hidden, and mark it up by 20% - 25% at most. Especially if you're just starting out, think of these items as promotional. The fact that you might get someone to cover your costs and even make a little is a bonus. You can charge more later once you develop a rabid following that wants everything ever connected to you.

For CD's, either pull a Radiohead and let people pay what they want for them, or give them away. Once again, it's promotion. I'd rather people pay at least something because that way they've made a commitment to listening to it. A CD given away for free will most likely hit the garbage before it ever hits their ears.

As far as digital downloads, give them away for free on your website, and charge for them on iTunes, Amazon and all of the streaming networks too. Study after study has found that downloads sell better when they're available for free, as weird as that sounds.

5) Don't buy inventory. The days of order 500 or 1000 of anything are over. Get just enough to have a few on hand (like 10 or so), and order anything else on a as-needed basis. For CDs, you can order from 1 to 100,000 for a fixed fee of $1.75 from Kunaki.com. For all other merch, you can do the same at Zazzle.com or Cafepress.com.


We're living in the age of Music 3.0. It's time to take advantage of it.

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Follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.