Despite Reports, Don’t Look For Pandora To Be Acquired Anytime Soon

Is Pandora really up for sale? If it is the timing is extremely curious.

Pandora was said to have begun talks with Morgan Stanley to help it find a buyer, according to an initial article by the New York Times, although the talks were deemed preliminary and had no guarantee of a deal. If you look deeper into the company’s pros and cons, a sale looks a lot more fantasy than reality though, at least in the near future. 

While much of the press has focused on the financial part of a possible sale, let’s look at what may be some of the more intriguing aspects of a possible sale.

Where’s the match? 

There are only a handful of deep-pocket companies that might take a even cursory glance at a Pandora acquisition, but most are not a good fit. For instance, Google’s name is frequently mentioned as a possible Pandora suitor, mostly because of the synergy with it’s ad network, since most of Pandora’s revenue comes from ads. That said, there’s really nothing about Pandora that Google doesn’t either already have, or can’t get for less money.

Apple is another that doesn’t need what Pandora has to offer. It already has the same infrastructure for its iTunes Radio, and chances are that most of Pandora’s subscribers are already iTunes users. There’s not much that Apple would find attractive.

iHeart Media could probably find a space for Pandora among its current online radio properties, but the company reportedly has a huge amount of debt and would find it tough to swing a sale that would probably cost it around $2 billion.

Some think that Samsung might be a fit based on the company’s need to keep up with Apple in the smartphone market. The problem is that it already has a similar service in its Milk Music which hasn’t gotten any traction in the U.S. Pandora could instantly give it that traction, but to what end? Does the addition of an on-board music app make that much of a difference to the average smartphone buyer? In a word, no. Samsung would be better off pouring that $2 billion or so into R&D than adding a music app that could be obsolete in the blink of an eye.

Then there’s Amazon. I’ve been predicting for the last year that Amazon would be the next deep-pocket company to enter the streaming music market in a big way, as it’s basically there already with its Amazon Prime Music service for its Amazon Prime members. Reports have recently surfaced that the company is getting ready to introduce a mainstream streaming service not tied to Amazon Prime, and Pandora could actually be a useful addition if that were the case.

Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

5 Bold Music Business Predictions For 2016

The new year is upon us, which means it’s time to look into the crystal ball to foresee what might happen in the music business in 2016. Here are 5 predictions that may not be very popular, but might end coming to pass.

Prediction #1: Pandora goes global
One of the most significant and generally overlooked moves of 2015 was Pandora’s bid on some of Rdio’s streaming assets out of bankruptcy. While this move is still contingent on the court, acquiring this infrastructure will allow Pandora to become an interactive service like Spotify, and allow it to begin servicing other markets besides the United States as a result. With a solid 80 million user base in the US alone (which is what Spotify has globally), setting up shop worldwide will allow Pandora to become a true rival to Spotify.

Prediction #2: Vinyl shows its last big growth spurt
Vinyl sales have seen double digit growth for about 5 years and that will continue in 2016 as well, thanks to increased pressing plant capacity brought about by newly manufactured presses (the first in over 30 years) and widespread availability of turntables so buyers can actually listen to their purchases. Although sales will continue to increase beyond 2016, they’ll be much more modest as the number of new buyers diminishes due to saturation of the market. 2016 will be the last year of the true vinyl “revival.”

Prediction #3: Amazon Prime Music makes a move
Amazon Prime Music has been a minor add-on to a Prime subscription until now, but that doesn’t mean that Amazon isn’t taking music streaming seriously. The company has  all the infrastructure it needs to launch a mainstream music-only service, and 2016 will be the year it does so. Amazon has also been dipping its toe in the water of becoming a full-fledged record label with its occasional offerings from Amazon Acoustics, which could potentially signal what might be a major part of the service and could be a differentiator in a crowded market. Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

As Always, Female Buyers Still Fuel Pop Music Sales

What do Adele, Taylor Swift, Ed Sheeran and Sam Smith have in common? Most of the buyers of their albums are female, according to an article by Hannah Karp in the Wall Street Journal based on data from a number of market research firms.

While this info is probably no surprise to music execs who’ve inherently known this for decades, the new-found ability to have a greater understanding of an artist’s fans syncs more with the conventional industry wisdom than previously thought.

Take Adele, for instance. First of all, she’s an artist that goes completely against the grain of what the music business currently considers a pop star. She’s a full-figured women who has a relatively small social media footprint and no bombastic big-production stage show, yet she’s been crushing sales records by doing it the old fashioned way - with great songs and performances.

If you look closely at the demographic profile of her fans though, the sales records begin to make perfect sense.

According to the article, a Nielsen study funded by Sony Music found that 62% of Adele’s fans are female, between the ages of 25 and 44 years old, and have children. In other words, they’re soccer moms. What’s more, a majority of them work in the health care industry, drink light beer and Aquafina water, and are 80% more likely than average to read Parents magazine, for whatever that’s worth. To take it a step further, 28% of her fans are in the 50+ age bracket, according to music consumer research company Music Watch. Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

YouTube Red May Not Be Attractive To The Exact Audience It Seeks

YouTube finally announced its new subscription service today, and although the new Red service is somewhat different than last year’s beta test of Music Key, the basic concept still holds true - you now have the option to pay for something that’s widely available for free.

YouTube Red is slated to launch on October 28th, and will bring ad-free viewing at a cost of $9.99 with a free one month trial period. Red will only be available in the US at first, with a world-wide rollout to come in early 2016.

Getting people to pay for something that they’ve been trained to get for free may not be easy though, if my small sampling is any indication.

During a presentation I gave to a class of about 40 college students yesterday, I asked them how they consumed their music. Just about all of them said via YouTube and Soundcloud (Spotify and Apple Music had only one student subscriber each). 

When asked how many would pay if it were ad-free, the group erupted into laughter and indicated with a no-doubt-about-it “no” that they wouldn’t consider paying for the privilege anytime soon (to be fair, one student did say that she might consider it).

If that’s any indication of the widespread feeling of the age group, then Red may not be much of a player with the exact demographic that it’s aimed at, at least when it comes to music. Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

Pandora's Ticketfly Purchase Good For Artists And Shareholders

Streaming music service Pandora reeled off a blockbuster purchase yesterday, coming to an agreement to acquire the online concert ticketing service Ticketfly,

The company announced that it purchased the ticket company with a combination of cash and stock amounting to around $450 million. Ticketfly’s gross revenue was around $500 million last year which resulted in net commissions of around $35 million. The company, which specializes in selling tickets for small to medium size venues, has shown some significant growth in the first half of 2015 with a net of around $55 million. 

The purchase could be classified as a coup for Pandora, as it moves the company into an area ripe for disruption that also puts it in a position to finally turn a profit.

Concert revenue has become the major source of income for many top tier artists, more than making up for the losses incurred when the industry switched to digital music. The problem is that the areas of music discovery (mostly radio) and consumption via streaming music services haven’t integrated very well with the concert industry, which means lost revenue opportunities. Artists below the superstar level have yet to benefit to the same degree from the increased concert revenue as well.

Only about 20% of the US population attended a live music event last year, according to the giant concert promoter LiveNation. The reason that the figure is so low isn’t because fans have an aversion to crowds, but mostly because they’re not aware that their favorite artists are performing near where they live.

Having Ticketfly as an integral piece of Pandora may be an answer to this dilemma. 

While Pandora has yet to turn a profit from its music service, one thing it does boast is close to 80 million active users. Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

People Still Not Willing To Pay For Music Subscriptions

Despite all the hype over the entry of Apple Music into the streaming music arena, people are still hesitant to spend money not only on Apple Music, but any streaming service. That’s the conclusion of the latest edition of Nielsen’s annual Music 360 report.

While every day there are new articles regarding the growth of streaming music, it turns out that good old fashioned radio not only refuses to die but is actually growing in importance in regards to consumers discovering new music. Music 360 found that 61% of people say they discover music that way, which is up from 57% in 2014. 

On the other hand, only 27% of consumers said they discovered new music via a music streaming service (and that includes YouTube).

This shows that the much talked about migration to subscription music isn’t the exactly the flood that was expected by now.

One of the major reasons for the slow start is price, an opinion that industry analysts have long held and was born out again in Music 360. According to the study, the top three reasons that consumers gave for not subscribing was that services are too expensive (46%), they can stream music for free elsewhere (42%), and they didn’t think they’d use a service enough to justify the spend (38%).

Although the current $9.99 per month seems like an ideal number in terms of the music industry’s wants and needs, that figure doesn’t seem to correspond to what consumers have in mind.

The general feeling among industry analysts is that $3.99 to $4.99 is a much better ballpark for a monthly price. It’s an easier psychological barrier to breach, and addresses two of the three objections sited in the report. You might feel that your 10 bucks a month is being spent unwisely if you only listen for a few hours during that time period, but it doesn’t hurt nearly as much at half that price. 

The chances of getting just about any music licensing body to sign off on a $4.99 per month price seems to be somewhere between slim and none at the moment though. Even the mighty Apple couldn’t negotiate a reported $7.99 per month price, which signals that it’s going to take some time before a continued low adoption rate causes a re-think of that position. Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

What’s Really Behind Pandora’s Ad-Free Day

Pandora has announced that it will celebrate it’s 10th anniversary on Wednesday September 9th with a day that’s free of ads for its freemium tier. While many will look at what’s being called “Listener Love Day” as a nice gesture to celebrate a decade in business, there may be more to it than meets the eye.

While a day without ads might give Pandora’s freemium listeners (who make up 95% of its active users) a sample of what the premium paid-subscriber tier is like, it can also be viewed as an all-out effort to get at least some of those users to finally buy in.

Pandora currently has about 250 million subscribers but only 80 million are active, according to the company’s own numbers. Of those, just around 4 million, or 5%, have chosen the $4.99 per month ad-free premium tier (and many of them subscribed at the previous $3.99 level). This ratio has been surprisingly steady throughout its history, and the service hasn’t proven that it has the ability to up the conversion rate.

What’s even more out of balance is that those 5% of paid subscribers are responsible for just over 20% of Pandora’s revenue for the first half of 2015, according to the company’s Q2 financial statement.

In comparison, Spotify has around 75 million users and about 20 million are subscribed to the paid tier, which is more than 26% of active users. Those subscribers are also willing to pay twice as much at $9.99 per month. Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

Why Ian Roger’s Departure From Apple Music Puts It In A Bad Place

It’s been reported today that Apple Music executive Ian Rogers has left the company to pursue other interests in an “unrelated industry.” That bodes ill for Apple as Rogers was the operational brains behind both Beats Music and its transition to Apple Music.

Rogers has been a long-time digital music insider, having run Beats Music, Topspin (a direct to consumer marketplace for artists and bands) and Yahoo Music. He’s also one of the smartest and level-headed guys in an industry with a dearth of those attributes.

It’s been long speculated that Rogers was a key ingredient in Apple’s acquisition of Beats. Jimmy Iovine may be a vaunted music exec, but he’s been compared to a New York street hustler by many that have done business with him through the years. Dr. Dre is great producer, but he’s seen as a marketing foil for Iovine. Together they were able to turn some cheap Chinese headphones into gold thanks to a licensing deal with Monster Cable, then flip it for a huge profit to Apple.

Rogers was the guy behind the scenes that quietly created the Beats Music service, which was always going to be limited because of the Beats brand and its tie-in with the headphones. He had his finger on the market and the down-in-the-trenches everyday music consumer much more so than Iovine or Dre ever did, and that’s one of the reasons why Apple bought the company. He was just the kind of guy they needed to run the next iteration of iTunes.

I had the pleasure of hearing Rogers speak many times and even interviewed him for a previous edition of my book Music 4.0: A Survival Guide For Making Music In The Internet Age. I always came away much more enlightened than before, both in local and global views of the music market. Ian knew his customers very well, the tools they were using, and the music they were listening to. Read more on Forbes. 

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

Can 1 Trillion Streams Save The Music Business?

It’s funny how all the players in the music business are faced with the same questions when it comes to streaming distribution. Are all streams being counted? How many actually generate revenue and how much is it? Is the revenue actually making it to the right places?

Artists, bands, musicians, songwriters, managers, labels and publishers ask these questions every day and the answers they receive are often vague, or worse, contradictory. 

Take for instance the latest data from a survey conducted by Next Big Sound that counts the number of streams for the first 6 months of 2015. The company found that there were 1,032,225,905,640 (or 1.03 trillion) song plays on Pandora, Rdio, Spotify, SoundCloud, Vevo, Vimeo and YouTube during that period.

Now what’s interesting is that this is only a partial list of streaming services with significant subscriber bases. iTunes Radio, Deezer, Slacker, Rhapsody and Google Play, among others, weren’t included, so this total could actually be low.

Now here’s where the confusion comes in. Nielsen Music’s mid-year report states that there were only 135 billion on-demand streams during the first half of the year. This was based on data from AOL, Beats, Cricket, Google Play, Medianet, Rdio, Rhapsody, Slacker, Spotify, Xbox Music and YouTube/Vevo. 

As you can see, only Rdio, Spotify and YouTube/Vevo were included in both surveys, but doesn’t that 135 billion figure still feel a little low? Some discrepancy is understandable due to the fact that Nielsen only included interactive services and not radio-like services like Pandora, but a difference of a factor of almost 10 screams out that something’s not quite right here.

Then there’s the question about getting paid, because after all, 1 trillion is a lot of streams. 

It would be nice if there was a single rate that each and every stream was worth regardless of the streaming service that it came from, but unfortunately it’s not that simple. 

For instance, interactive streams where the user can actively choose which song is streamed (like Spotify) pay a higher rate than non-interactive streams that are more radio-like (like Pandora). Plus the free tier of both pays less than the premium subscription tier. To make it a little crazier still, different countries may pay different rates, Spotify pays what amounts to a bonus for greater market share, YouTube pays less than them all, and some views might not pay anything. Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

Smartphones And Concerts Are Tied At The Hip

If you’re like me you’re probably wondering why everyone is looking down at their phones during a concert instead of at the action on stage, but it’s something that’s becoming more the norm and will probably be increasing in the future. And that, it turns out, is going to be a good thing for artists, bands and brands everywhere.

According to an article in Billboard by Donnie Dinch, Ticketfly (the online ticket source where Donnie is General Manager of Consumer) tasked Harris Interactive to conduct a poll asking how people used their phones during a concert or event. What they discovered is beyond interesting.

First of all, 31% of Millennials (18 to 34 year olds) use their phones for half the concert or longer, while only 15% say they never touch it while there. That’s a lot of time to be looking at a small display while the main event is happening in real life, so what are they doing exactly?

It turns out that most of those phones are being used for recording the show, but not so much as a historical document as stoking the FOMO (Fear Of Missing Out) fires of their friends. This applies to 40% of the females (as compared to 24% of males), who also share their posts on social media 59% of the time.

All interesting, and maybe a little sad, but the fact of the matter is that there’s a large number of attendees glued to their phone, yet hardly anyone is actively taken advantage of it.

This could come soon thanks to the new Bluetooth beacon technology that companies like Apple and Marriott are employing which automatically send push notifications to smartphones in the vicinity, providing the users with product information, flash sales or deals. With a few well-placed beacons around a venue, there could be an opportunity to sell some merch in a fast and easy way. Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

Apple Music’s Beats 1 Radio Pros And Cons

Now that Apple’s new streaming music service Apple Music has officially launched, perhaps the biggest question remaining is how much the Beats 1 global radio station will add to it. If you haven’t checked it out yet (and you probably haven’t since it just live yesterday), Beats 1 operates 24/7 from Los Angeles, New York and London and is said to eschew the commonly used radio consultant data used by just about every terrestrial radio station these days in favor of the tastes of the DJs playing the music.

So what does that mean exactly? If we look at the big picture for the success of the station there are a number of possible pros and cons.

Beats 1 Pros

• Both terrestrial and online playlists are so tightly controlled today that you basically hear the same songs anywhere you go. Beats 1 can break this logjam with some fresh new music that can make listening to radio an adventure again as it was before consultants ruled.

• Beats 1 is free and available to everyone. You don’t have to be an Apple Music “member” to access the station, which is great for both exposure and an introduction to potential new customers for the service.

• It differentiates Music from the rest of the streaming pack. At least at the moment, there is no other streaming service that offers a similar feature.

Beats 1 Cons

• The big one is actually more of question as it’s the great unknown - Do people really care about curated content and music discovery from a non-interactive stream? And, do they care enough about it to make a difference? Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

Like A Coiled Snake Spotify Strikes Back At Apple Music

If you thought it was a coincidence that Spotify released new and much improved subscriber numbers directly after the big Apple Music announcement at its World Wide Developer Conference, then you haven’t been paying attention to what many are calling the “Streaming Wars.”

At least in the short term, Spotify is still the market leader in the interactive music streaming space, and the company did its best to put an exclamation point on that fact by providing a lot of new information, strategically waiting a day for the Apple Music furor to die down a bit to steal a little thunder for itself.

At the end of last year, the company touted 60 million total subscribers, with 15 million of them paying the going rate of $9.99. That number far outpaced its closest rival in Deezer, with only 6 million paid subscriptions, and others like Rdio and Tidal that fall below the 1 million mark.

But Spotify’s new user numbers show a striking increase in a short time, with the company announcing it now has 75 million users, of which 20 million are now paid subscribers. This makes the company a major player even when compared to the non-interactive streaming side of things, as Pandora only sports 79 million total users, with the vast majority of those using the free tier. 

While user numbers are solid proof of growth, another part of the same announcement may be even more important. The company also reported another round of funding for $526 million, which places its valuation at around $8.53 billion (keep in mind that it has yet to turn a profit). 

Among the partners that invested in this round include Swedish telecommunications firm TeliaSonara AB and Abu Dhabi’s sovereign wealth-fund, so there are some deep pockets with a large stake in the company’s success. Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

I Hope Apple Kills Free Streaming, But Not For The Reason You Think

There have been multiple reports over the last few days that the Department of Justice is looking into the accusation that Apple is pressuring the major record labels to end their license agreements with music distribution services offering free tiers. The European Union has a similar investigation underway, so there must be some fire under all that smoke.

This comes before the speculated introduction of Apple’s new streaming service, which is widely anticipated for the Apple Developers Conference next month. Eliminating the free tier of the competition, especially Spotify, presumably puts Apple in a stronger position to regain its dominance in music distribution, a status that has slipped in recent years.

While Apple may be pushing hard for this to happen behind the scenes, chances are it’s a long shot and here’s why.

1. Just the fact that the DOJ is looking into the allegation will stop this thing in its tracks. The major labels have never been bastions of fair and balanced dealings and the last thing that the big players in the industry want is the Feds snooping around. While they may or may not be complicit on this issue, who knows what else may be uncovered during an investigation? That means that you’ll soon get directives from high ranking music execs for their business affairs departments to drop this issue like a hot potato. 

2. Does Apple really believe that eliminating the free tier will actually increase its subscriber numbers? First of all, to assume that the next incarnation of iTunes Beats (or whatever it will be called) will have all Spotify users immediately want to suspend their subscriptions and switch to iTunes is delusional at best.

That’s assuming a lot considering that the company has a pretty poor track record of late with its music software. While the early editions of iTunes led the way in user friendliness, lately the app feels old and bloated, with features that are more like attachments rather than integrations. Likewise, iTunes Radio wasn’t exactly the runaway hit that everyone expected. Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

Instagram @Music Community Tries To Succeed Where Twitter Failed

Instagram has announced a new community dedicated to music and musicians called @Music, in an effort to leverage the platform’s user interest in the topic.

Unofficially, music has always been a large part of Instagram, accounting for an estimated 25 percent of all the platform’s activity. Recognizing this, Instagram executives have instituted this official music category as well as a number of subcategories as well.

For instance, #LocallySourced is designed to cover unsigned artists and bands (which will be handled by a team of curators), #15SecondLessons will include short music performance lessons, and #DoubleTrack covers musicians interests outside of music. 

The account, which was announced this morning on the Instagram blog, will update six times a week with an emphasis on unsigned acts. This might be deemed an unusual tactic as the music portion of Instagram is currently driven by music superstars like Beyonce (with 30.8 million followers and the platform’s most followed artist), Arianna Grande (30 million), Selena Gomez (28.9 million) and Taylor Swift (28.2 million). Read more on Forbes.

---

Any purchases made through our Amazon links help support this blog at no cost to you (just click here).

Digital Music And Physical Sales Now At Equal Strength

The IFPI, the organization that represents record companies across the globe, just released its annual Global Digital Music Report showing that worldwide digital music sales equaled physical sales for the first time. Digital revenues grew 6.9% last year to $6.9 billion USD, which represents 46% of total revenue, exactly the same as physical sales of CDs and vinyl.

Overall, the global revenue for music stayed roughly the same in 2014 as the previous year, coming in at $15.03 billion, which was down just 0.4%. Still, some might consider that a victory considering that digital music sales continue to increase at a level that offsets the decline of physical sales.

A data point that jumps out of the report is that the number of paying streaming subscribers now tops 41 million, which represents an estimated 46% increase. This brought in around $1.6 billion in revenue, or about 26% of the digital market.

What's interesting about the subscriber number is that many feel that it's just the tip of the iceberg when it comes to tapping the potential streaming market, since the report sites another 100 million users now subscribe to a free music streaming tier as well.

According to the IFPI report, a commissioned study undertaken by Ipsos across the top 13 music markets found that only 35% of Internet users accessed a free streaming service in the last six months. That leaves a lot of room for growth. Read more on Forbes.

---

You should follow me on Forbes for some insights on the new music business, Twitter and Facebook for daily news and updates on production and the music business.

A Bank Starts Its Own Streaming Service, And It Might Make Sense

What do you think your reaction would be if I told you that a major banking institution just started its own music streaming service? If you knew anything about the music business, chances are you'd be incredulous. With all the existing competition in the marketplace and some deep pocketed players about to re-enter the sector in a big way, at first look this move seems to be somewhat misguided, especially for a major bank.

There may be one place where this action defies common wisdom however, and that's in Brazil.

Billboard recently reported that Brazilian banking giant Banco Bradesco (#63 on the Forbes Global 2000) entered into a partnership with Universal Music Group to create a new streaming music service exclusively for its credit card holders.

Now, read that again and tell me what your reaction is. I bet at least part of it is, "Why?"

On the surface this seems like a crazy move, but that's because we automatically think of the music industry of the United States as a reference point. The reality is that Brazil is a different animal completely.

According to the IFPI, Brazil is the ninth largest music market with $228 million in total revenue last year. It's also still a young market when it comes to streaming, even though most of the major players have launched there. Read more on Forbes.

---

You should follow me on Forbes for some insights on the new music business, Twitter and Facebook for daily news and updates on production and the music business.

Google Lays The Groundwork For Its YouTube Music Key Launch

When Google announced last November that it was rolling out a new YouTube subscription service in 2015, the major questions were when and how much. It now looks like we're getting closer to having at least one of those questions answered if yesterday's email to YouTube content creators is any indication.

While the email doesn't specifically mention the awaited Music Key service, it does lay the groundwork for it, asking its content partners to agree to a new terms-of-use contract that specifically mentions an ad-free subscription version of YouTube.

According to the email:

"We’re excited to build on this momentum by taking another big step in favor of choice: offering fans an ads-free version of YouTube for a monthly fee. By creating a new paid offering, we’ll generate a new source of revenue that will supplement your fast growing advertising revenue."

When the new terms are accessed via the Partner Creator Studio Dashboard, the most significant paragraph is one regarding the split of subscription revenue. Read more on Forbes.

---

Help support this blog by using our Amazon link at no cost to you. 

Apple's New Streaming Service May Have A Rough Start In Europe

Regulators in the European Union may throw a roadblock into Apple's upcoming launch of its new streaming music service.

Reports from both the New York Times and Wall Street Journal have sited multiple sources that say that the computer giant is increasingly under examination in Europe in its dealing with record labels. As a result, EU regulators have sent questionnaires to major labels and other streaming services regarding their dealings with Apple.

The supposition is that the tech giant hasn't been entirely truthful with the record labels in the past and regulators want to get to the reality of the situation before the new streaming service is launched. The streaming network is expected to be part of iTunes and is based upon the infrastructure of Beats Music, which Apple purchased last year.

There have been reports that Apple has been pushing the labels hard for a new deal that would enable the company to lower the monthly subscription rate for the upcoming service from the industry standard $9.95 per month to $7.95.

While $4.95 is thought to be the pricing sweet spot, major label licensing deals have made that price point impossible except for limited feature tiers or introductory pricing. Read more on Forbes.

---

You should follow me on Forbes for some insights on the new music business, Twitter and Facebook for daily news and updates on production and the music business.

Will Vessel Video Service Make The Same Mistake As Tidal?

Even though many in music hate to acknowledge it, YouTube really runs the music business these days. Multiple studies have found that most discovery of new music online is the result of YouTube, and that the percentage of use increases as the age demographic gets younger.

For that reason, YouTube is a big target for new and existing music services alike. Every entrepreneur wants a piece of those total eyeballs. The problem is that many focus on the wrong part of the equation in an effort to get a competitive edge.

Vessel is a new video network started by two former Hulu executives and backed by Amazon's Jeff Bezos to the reported tune of $75 million. The service hopes to lure users away from YouTube (especially millennials) by giving its subscribers exclusive access to videos not found anywhere else online for a window of up to 72 hours in return for a monthly fee of $3.

The company seems to be basing its success on a strategy of attracting high quality creators by offering them a better deal than they're currently getting anywhere else. This includes 60% of the subscription fee and up to 70% of the advertising revenue for a video that's released on Vessel before another service.

According to the Wall Street Journal, this means that the revenue could go as high as $50 per 1,000 views, a figure that soars past the $6 per 1,000 paid by Vevo and $2 per 1,000 paid by YouTube.

The generous terms has lead to partnerships with Warner Music Group, A&E Networks and YouTube multichannel networks Machinma and Tastemade, according to a New York Times article. Read more on Forbes.

---

You should follow me on Forbes for some insights on the new music business, Twitter and Facebook for daily news and updates on production and the music business.

The Lowly CD Still A Big Part Of The Music Business

All of the music industry news for the last year or so has been directed at oncoming music streaming steamroller and the downfall of the music download, but what's interesting is that our good old physical CD still remains a huge part of the music business. The latest report from the Recording Industry Association of America (RIAA), the music industry's trade group, shows the 2014 sales of the bright and shiny disc at $1.85 billion, or about 27% of the total U.S. recorded music revenue.

There's no denying that CDs are on the way out, with unit sales falling another 16% in 2014 from the previous year. It's true that it's just a matter of time before the format goes the way of the vinyl record (although there's been a recent resurgence), the 8 track tape and the cassette. What's interesting is that the 144.1 million CDs officially reported as sold by the RIAA in 2014 doesn't represent the real total by a long shot.

The CD sales listed in the annual revenue statistics revolve around sales reported via Nielsen Soundscan, the retail system that registers the sale at the point of purchase by scanning the barcode.

While that's most likely the majority of CD sales sold at retailers and online giants like Amazon, it isn't all of them though. CDs sold by artists and bands at their gigs or on their websites aren't counted. Neither are CDs sold at worship events. And of course, bootleg CDs aren't in those totals either. In fact, there's a huge underground economy still based on the CD that just doesn't register on the RIAA's radar.

That said, the CD business is falling and when it finally hits the ground, it won't be able to get back up. In 2014, streaming revenue from services like Spotify and Pandora overtook CD sales for the first time, ringing up $1.87 billion in revenue. Read more on Forbes.

---

You should follow me on Forbes for some insights on the new music business, Twitter and Facebook for daily news and updates on production and the music business.