Thursday, October 14, 2010

Top 13 Things Discovered In The New Digital World

If you've never read Paul Resnikoff's Digital Music News, then it's something worth checking out. Paul's a great writer and reporter with some pretty good industry sources, so he always has the latest details on the digital music world's breaking news. He's insightful too, and often offers an extremely cogent insight on the the digital music world's troubling trends as he sees them. Here's a post from the other day that I thought was particularly on the mark.

The Top 13 Things We've Discovered In the Digital New World...

Here are the top lessons the music industry has 'discovered' in the early days of this 'digital new world'.  

(1) It's really, really hard to sell music to fans online. Whether the iTunes Store or Rdio, getting fans to allocate even modest amounts of their income to music is an extremely difficult challenge. Competing with free has proven a hard game indeed.

(2) But it's not as hard to engage fans, as long as they're not paying. In fact, they love music more than ever! Welcome to the Digital New World riddle.

(3) DRM is an awful idea, at least for downloads. Other platforms like YouTube, subscription services, and streaming radio are still fair game.

(4) Sound quality doesn't matter. At least to most fans. That would explain why few have complaints with MP3s, though Jimmy Iovine and T. Bone Burnett have serious problems with the fidelity freefall.

5) An official release date means very little. Almost everything is leaked in advance, and even half-baked copies find their way online long before a scheduled drop. 

(6) Licensing content is a great way to squander an investment. VCs are largely out of this game, though others are still slogging through horrific licensing processes and nosebleed costs (ie, Spotify).  Or, running the red light and dealing with the consequences (ie, Grooveshark).

(7) Email addresses are more important than Facebook, Twitter and MySpace connections. Or, at least that's what pros like Ian Rogers (of Topspin) are saying. Sounds a bit counterintuitive, but according to what rulebook?

8) If you're hot right now, just wait 5 minutes. Attention spans are shorter than ever, and fan relationships with bands can be fickle and short-lived. 

(9) Direct-to-fan distribution is a seriously double-edged sword. Sure, you can create powerful direct-to-fan relationships, but so can millions of other bands. Welcome to the horrific content glut that results from digital democracy.

(10) There's an app for that. Good luck selling ringtones or OTA downloads on a mobile device. But those that understand app culture have done well, including Tapulous, Smule, and T-Pain. 

(11) 360-degree deals can really kill your musical mojo. We're just starting to see some of the problems associated with these label land grabs. Smart artists like Arcade Fire and Metric are rolling their own multi-national deals, though sometimes the 360-degree paycheck is worth the handcuffs.

(12) Digital disruption is not just for record labels. Nearly every other sector - including publishing and touring - are also trudging through tough transitions.

(13) The music is still the most important thing. Artists over-dialed into their Twitter followings and play counts are often missing the most important part of the equation.

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.

Wednesday, October 13, 2010

The New Marketing Trifecta

Here's a great chart that illustrates what's become known as the new "marketing trifecta" in the Music 3.0 age.

If you read this blog often then you know that I'm a big proponent of developing and nurturing an email list, which is outlined as one of the spokes of the trifecta by this graphic. If you're not involved in social media (the second spoke) than you're missing a huge opportunity to connect with new fans and existing ones. And since everyone has a cell phone these days (the third spoke), how can you not use it as a marketing tool?

Here are a few interesting items from the graphic:
  • 97% of all households use email 
  • 66% of all marketers now use social media as part of their overall campaign strategy
  • 75% of all households connected to the Internet use some form of social media
  • 91% of email campaigns also use Facebook as part of their campaign, 83.9% on Twitter, 48% Linkedin, 34.3% YouTube, and 3.7% Foursquare
  • There are 285 million mobile devices in use in the United States (that's over 91% of the population) and 70 million of those are Smartphones
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.

Tuesday, October 12, 2010

The Music Industry Loses a Big Case

The music industry (which amounts to the major record labels) has long wanted your local ISP (Internet Service Provider) to bear the brunt of what amounted to their failings. For instance, the industry wants the ISPs to do their enforcing by cutting off the service of any subscriber involved in the industry's definition of piracy. They also want the ISPs to collect a tax on every subscriber to pay for their estimated loses to piracy, a practice that the services continue to resist.

Now comes word that a giant Irish ISP called UPC has won a landmark legal case against all four major music labels that may be a precedent for similar action here in the US. Warner Music, Universal Music, Sony BMG and EMI Records wanted to force UPC to implement a "three strikes" (the third time your caught you're cut off) system to combat copyright-infringing, music file-sharing Internet users subscribed to the ISP.

The Irish High Court has ruled that the laws that forced the ISPs to identify and cut off service to their customers were not enforceable in Ireland.

Although the court agreed that illegal downloading was bad for the record label's business and "ruins the ability of a generation of creative people in Ireland, and elsewhere, to establish a viable living,"any kind of forced enforcement by an ISP was not provided for in Irish law. The court ruling did leave some wiggle room for all involved though, but any changes must still come from a change in Irish law.

Although the labels have not been able to force a similar kind of enforcement in the US, RIAA lobbyists are furiously working behind the scenes to get new legislation passed. Luckily, there's a lot more pressing issues on congressional plates these days.

You can read more on the story here.

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.

Monday, October 11, 2010

New Survey Predicts Radio's Future

A new study by Edison Research called "The American Youth Study 2010" examined the media and technology habits of 12 to 24 year olds in the US. The first part of the study looked at music discovery and consumption habits of this group and is titled "Radio's Future."

Here are a few of the significant findings:

1) 12-24 year-old Americans reported Internet usage of two hours and fifty-two minutes per day, roughly triple this age group's reported usage from 2000 (59 minutes).

2) Radio continues to be the medium most often used for music discovery, with 51% of 12-24 year-olds reporting that they "frequently" find out about new music by listening to the radio. Other significant sources include friends (46%), YouTube (31%) and social networking sites (16%).

3) 20% of 12-24s have listened to Pandora in the last month, with 13% indicating usage in the past week. By comparison, 6% of 12-24s indicated they have listened to online streams from terrestrial AM/FM stations in the past week.

4) More than four in five 12-24s own a mobile phone in 2010 (up from only 29% in 2000), and these young Americans are using these phones as media convergence devices. 50% of younger mobile phone users have played games on their phones, 45% have accessed social networking sites, and 40% have used their phones to listen to music stored on their phones.

6) Music tastes have shifted among 12-24s over the past decade: those radio listeners who indicated that Top 40/Pop stations were their favorite have more than doubled, while Alternative Rock stations were selected by half as many listeners in 2010 as in 2000.

7) Today's 22-34s have significantly changed their media consumption habits since the first study in this series 10 years ago. In 2000, 44% of 12-24s most often began their day by listening to the radio. Today, radio continues to lead, with 29% of that same cohort (today's 22-34 year-olds) reporting that radio is the medium they use most in the morning, while Television (25%) and the Internet (23%) have gained significantly.

Providing that none of this data is skewed (no guarantee there), radio is currently listened to more, and has a greater influence, than anyone thought. Not only that, the type of music being listening to by the group (Top 40) is a surprise. All that being said, I'd like to read the entire survey myself before drawing too many conclusions, but the points above sure are interesting.

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.

Sunday, October 10, 2010

9 Reasons Why People Don't Buy Downloads

We all have our theories as to why consumers buy, or don't buy, digital downloads. Most of us are guessing or going by a gut feeling, but occasionally we hear from someone that has some real data that confirms our assumptions. At the Digital Music Forum West in Los Angeles last Wednesday, NPD Group analyst Russ Crupnick gave these 9 reasons during his presentation:

1) People listen to AM/FM radio instead

2) They prefer to own the physical CD

3) They're spending less on entertainment

4) They don't listen to music on their computer

5) They're satisfied with their collection

6) They don't spend as much time listening to music

7) They don't own a portable digital music player

8) They don't feel comfortable using their credit card online

9) They don't think that downloads are a good value, their afraid of spyware/viruses, downloads are too expensive, or they have no time to learn about new music (that seems like 4 reasons to me).

All that being said, Crupnick also noted that among the 13-25 set, price and access to shared music files rank higher than the rest of the population.

There's not much mystery here except for the order (number 2 seems too high to me), but now there seems to be some quantifiable evidence to what we all thought.

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.


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