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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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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Measuring Engagement

Here's the final parts of an excellent post from The Social Media Examiner, this time about measuring engagement.

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How many people actually did something with your message?

This is one of the most important measurements because it shows how many people actually cared enough about what you had to say to result in some kind of action.

Fortunately engagement is fairly easy to measure with simple tools such as Radian 6, Biz360 and TweetEffect. These metrics highlight who you want to target to retain on social media channels.

For a starting list of key performance indicators for engagement, this post by Chris Lake is a great start.

• Twitter: Quantify the number of times your links were clicked, your message was retweeted, and your hashtag was used and then look at how many people were responsible for the activity. You can also track @replies and direct messages if you can link them to campaign activity.

• Facebook: Determine the number of times your links were clicked and your messages were liked or commented on. Then break this down by how many people created this activity. You can also track wall posts and private messages if you can link them to activity that is directly tied to a specific social media campaign.

• YouTube: Assess the number of comments on your video, the number of times it was rated, the number of times it was shared and the number of new subscribers.

• Blog: Evaluate the number of comments, the number of subscribers generated and finally the number of times the posts were shared and “where” they were shared (i.e., Facebook, Twitter, email, etc.). Measure how many third-party blogs you commented on and the resulting referral traffic to your site.

• Email: Calculate how many people opened, clicked and shared your email. Include where the items were shared, similar to the point above. Also, keep track of the number of new subscriptions generated.

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Measuring Influence

Once again, here are parts of a post from The Social Media Examiner that discusses social media measurement. This time, it's all about influence. You can have lots of friends, fans, readers, and whatever else you want to call them, but if you have little influence with them then are they really your fans?

Although the article discussed companies and brands, I've changed it a little to better represent music.

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This category gets into a bit of a soft space for measurement. Influence is a subjective metric that relies on your band's perspective for definition. Basically, you want to look at whether the engagement metrics listed in the first article are positive, neutral or negative in sentiment. In other words, did your campaign influence positive vibes toward the band or did it create bad mojo?

You can also use automated tools like Twitalyzer, Social Mention, Radian 6 or ScoutLabs to make it a little easier, but ALWAYS do a manual check to validate any sentiment results. Influence is generally displayed as a percentage of positive, neutral and negative sentiment, which is then applied in relation to the engagement metrics and to the metrics for reach where applicable.

A great application for influence is to look at the influence by those who engaged with your band in the above categories. Do you have a nice mix of big players with large audiences engaging with your band, as well as the average Joe with a modest following?

If not, your influence pendulum may be about to tip over, because it’s important that you spend time engaging with both influential users and your average user. Note: many of the automated tools that track sentiment and influence are not free. And many times, you will need a combination of tools to measure all of the different social media channels.

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Measuring Social Media Exposure

Here's a part of an excellent post from The Social Media Examiner regarding measurement of social media exposure. Measurement is one of the wonderful things about the age we live in, as now we have access to information that we've never had before. Measurement is more than a luxury though, it's a necessity if we're to take advantage of social media.
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How many people could you have reached with your message? In social media, this measurement is about as reliable as a print magazine’s circulation, but knowing your potential audience does have value because it represents your potential sales lead pool.

Unfortunately, as of the writing of this post, some of these metrics have to be accounted for manually, so you’ll have to balance the level of effort to track the metrics versus the value you’ll receive from them to determine their importance to your overall strategy.

A good example of where there can be unreliability in social measurement is when isolating unique users for each of your metrics. You want to avoid counting the same person twice in the list below, but realistically it’s difficult to do.

These measurements highlight the number of people you’ve attracted to your brand through social media. To mitigate the potential for duplication of users, track growth rate as a percentage of the aggregate totals. This is where you will find the real diamonds.

• Twitter: Look at your number of followers and the number of followers for those who retweeted your message to determine the monthly potential reach. You should track these separately and then compare the month-over-month growth rate of each of these metrics so you can determine where you’re seeing the most growth. A great free tool to use for Twitter measurement is TweetReach.

• Facebook: Track the total number of fans for your brand page. In addition, review the number of friends from those who became fans during a specified period of time or during a promotion and those who commented on or liked your posts to identify the potential monthly Facebook reach. Facebook Insights provides value here.

• YouTube: Measure the number of views for videos tied to a promotion or specific period of time, such as monthly, and the total number of subscribers.

• Blog: Measure the number of visitors who viewed the posts tied to the promotion or a specific period of time.

• Email: Take a look at how many people are on the distribution list and how many actually received the email.

Tomorrow we'll take a further look at some of the details of the article.

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An Interview With Publisher Richard Feldman

Time for another excerpt from my Music 3.0 Internet Music guidebook. Here's a bit of the interview with Richard Feldman. A very successful songwriter and producer with platinum and #1 records to his credit, Richard won a Grammy in 2005 for producing Toot’s and the Maytals "True Love." Richard is a principle in a music library/placement agency called ArtistFirst Music, and is the president of the Association of Independent Music Publishers. Richard gives his perspective on publishing in Music 3.0.


What’s the difference between music publishing today versus the way it used to be?
There are many differences but you’ve got to look back at publishing from the beginning to understand them.

In the beginning publishing meant receiving a percentage from the sale of sheet music at first, then from other physical products like piano rolls, and from there vinyl to cassette to CDs to MP3s. This is called a mechanical royalty and results from a sale of a song. Another source of revenue for songwriters ad publishers is performance income. This started out as a payment for a live rendition of a song, then evolved into payments from broadcasting the song on radio and television. The performing rights organizations (the PROs) collect this money from the various radio and TV broadcasters and distribute it to their writers.

There is another source of revenue that has basically saved the publishing industry and this is called a synchronization license. A sync license is required if you use music commercially with moving pictures, and for that there is a negotiated fee. So while mechanical royalties from record sales have gone down, income from sync licenses has gone up. From the early 60’s till the end of the century mechanicals ruled, but that game is over. In 1998 there were over $13 billion in records sold. In 2008 that number is just over $8 billion. And not only that, since it’s a singles market, getting a song on a record doesn’t mean what it used to. But amazingly publishing income has pretty much increased with performance and sync income making up for the loss in mechanical income.

Why has sync income increased? 
There are many reasons, but the most obvious is that there are so many more broadcasters today. Where it used to be only the big 3 networks (NBC,CBS, and ABC), now it’s more like 300 with all the cable networks, so there are more sources of income than there were before and on top of that there is performance or back-end income that is paid when they broadcast the show. As a result, you have the increase in these sync fees offsetting and sometimes exceeding the loss of mechanicals. Publishing is really the last man standing in terms of making money in the music business, and still one of the few ways left to monetize intellectual property.

Is there any money being made online?
Yes, but there are challenges. Besides the biggest eternal problem of competing with what people can download for free, streaming isn’t really working as a business model for the publisher. It’s making some money, but unless you’re the guy getting mega-streamed, it’s just a game of pennies. In fact, it can actually cost a publisher more to collect than he receives

Here’s what I mean. If a song is played on the radio or television or sold through i-Tunes, the income statement is pretty basic and from one source. In the case of performance, it’s even easier because half gets paid to the publisher and the other half gets paid directly to the writer, so there’s only the accounting expense of one statement split up among the owners of the publishing.  But when a digital track is sold or streamed, all the fees go to the publisher and the publisher is responsible for paying the writer.

With streaming, a publisher might have many sources he collects from but the total amount turns out to be very little because streaming pays very little per stream (how about 18 one/hundredths of a cent per stream). So you could have 100,000 people streaming your song and you’re not going to make enough for a Big Mac. In fact, a publisher I know finished his accounting run with a report as big as a phone book yet the total was only about 12 bucks in royalties. So a publisher with a co-pub deal pays the writer 50% and then takes his portion of the publishing which would end up being a whopping $3. Now figure you’re paying someone $20 per hour to produce the statement and you see how it actually costs more to produce the statements than they are worth! Of course there are some artists who cut through with a huge volume of streams, and other sources like ringtones still bring in big money, but it’s getting more like third world countries with a small upper class, no middle class, and a huge group who makes very little.

For a while, everyone thought digital distribution might be the answer to the industry’s problems, but the problem is that streaming and digital downloads don’t pay enough even with zero distribution or inventory costs involved. And what happens when you fill the bucket up with the Long Tail items? It really doesn’t make sense to a publisher from the accounting perspective because what’s happening online is a disruption of the one time golden idea that you have to buy a whole album to get the one song that you liked. The music industry has gone back to a singles business again.

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Top 10 Social Media Websites And Forums

I found this post on the Drop Ship News blog and it mostly pertains to e-commerce, but we can still learn a lot from hit. Some of these are not a surprise but there are some that are under the radar. The following is from data acquired from Marketing Charts and Hitwise and represents the current top 10 social networking sites and forums.

1. Facebook: 54.90%. Are we really surprised to see that Facebook is the Numero Uno social website? Probably not. With over 500 million members and still growing by leaps and bounds, Facebook is incredibly popular. Make no mistake about it, Facebook appeals to younger members, but there is also a large demographic of older members as well.

2. YouTube: 16.02%. Another hugely popular site, especially since online video viewing is HOT. Nowhere close to Facebook’s market share, but definitely nothing to sneeze at in terms of a good place for social media marketing.

3. MySpace: 11.9%. This may come as something of a surprise to people who thought that the popularity of MySpace was waning. There is also an International version of MySpace, as well as a Latino version.

4. Twitter: 1.07%. Really? Can this be true? One would think that considering the tremendous popularity of tweeting and Twitter, it would have commanded a heftier percentage of the market share, but apparently not. Who knew?

5. Tagged: 1.01%. This one bills itself as being all about social discovery, meeting new people and staying in touch with people you already know.

6. Yahoo! Answers: 0.91%. You might no think of this as a social community, but it is certainly a community with a large member base. The benefit here to someone wanting to use this site for social media marketing is that by answering questions asked by other members, you can achieve varying levels of expertise until you are deemed an expert in a category, which could be helpful in establishing yourself as an authority in your niche.

7. Yahoo! Profiles: 0.62%. Basically a place to post your Yahoo profile and share it with other Yahoo members.

8. MyYearbook: 0.61%. This one does seem to be geared more toward a youthful audience, and might be worth your while for marketing if this age group is your targeted demographic.

9. Windows Live Home: 0.46%. Okay, this one is more or less a place to bring Windows Live services together, all in one place.

10. MocoSpace: 0.34%. Again, seems to be mostly for a young age group. It probably gains much appeal by being accessible on mobile devices.

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Festivals Score Big While Concert Attendance Down

The concert business is in real trouble. Industry gadfly Bob Lefsetz wrote  in his newsletter yesterday that uber-promoter LiveNation has cancelled 200 shows this summer because of poor advanced ticket sales.

We're in a recession, people don't have the money, they're not interested in many new acts and everyone's seen all the classic acts before. There's no incentive to pay an inflated ticket price laced with service charges, extra parking fees and outrageous beverage and swag prices.

But there's one area of the business that's hitting  it out of the park in terms of attendance and that's the festivals. Both Bonnaroo and Coachella were major hits this year despite higher prices and I think there's a major factor involved.

Festivals match the new listening habits.

Music fans no longer listen to an entire album, they listen to singles. It's Short Attention Span Theater for music, which is the perfect mentality for a festival attendee. There are usually multiple stages, so if you don't like one act, go find another that suits you. Pretty soon another act will be on to check out anyway.

Of course, a festival is a big band for the buck as well. Multiple headliners over several days with a lot of up and comers? For many, it's heaven. Of course, the conditions aren't as civilized as a concert at a modern venue, but for many, the communal nature of the event is just icing on the cake.

Europe already has many more festivals than the US, but expect that to even out over the next few years. For the concert industry, this may be on the only growth area available.

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Is The TJ The New Voice Of The Artist?

I just read about MTV's search for a an official twitterer, which they're calling a TJ (you know, Twitter Jock) and I think it's a brilliant idea. No, not because they're hiring someone to be their Twitter voice, but for creating the title.

Until now, anyone who twittered on behalf of an artist or corporate entity was viewed as more of a surrogate who did the job because the artist couldn't or wouldn't. Fans were usually upset when they found out that it wasn't the artist, and if they knew it was the surrogate up front, they took the communication lightly.

By giving the job an official name, the position now has some status that the fan or friend will hold in a greater esteem (as long as the job is done well, that is). It's exactly the position that's been needed in a band or artist's online presence.

So hat's off to MTV. You've created something greater than you know.

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Top 15 Worst Website Practices - Part 2

In the last post we looked at the site practices that both search engines and visitors really hate, today we'll look more at what's more or less invisible to the visitor, but can penalize your search ranking. Your search engine rank is where you come up on the results page when someone does a search for you.

In this case, we're going to use a hypothetical band "Emerald" as an example (sorry if there is a band already called Emerald, but you didn't come up high enough in the search results for me to find you.)

8) You don't use the band name in the URL. If you can't buy emerald.com, .net, .org, .us, etc., URLs, then your url should at least have Emerald somewhere in it like, "emeraldband.com," "emeraldtheband.com", "emeraldbandchicago.com."

9) You don't use the band name in the title tag. The title tag is what come up on the top of browser page. In the case of this blog it says, "Music 3.0 - The Blog Behind The Book." To be really search engine friendly, you'd put something like "The Emerald Band From Chicago."

10) Your title tags are the same for all pages. If you have 18 pages on your site and they all have the same title text, you've robbed yourself of an excellent SEO opportunity. Each page is unique and title tag should be treated that way and directly apply to the uniqueness of the page.

11) You use superfluous text in your title tags. The use of "Welcome" may be the worst offender. A tag that says, "Welcome to Emerald" doesn't give the search engine much to go one (at least it has the name in it.) What would be better is something like, "Emerald - The Best Band In Chicago." That accomplishes 3 things - it states the name of the band, the fact that you are a band, and that you play in Chicago.

12) You incorrectly use anchor text. Anchor text is the text that is hyperlinked. Search engines love it when it actually describes something. Using a phrase like "click here," misses an SEO opportunity. For example. Good - "Here is the first part of the Top 15 Worst Website Practices." Bad - "For the first part of this article, click here." The first one is description and search engine friendly, the second isn't.

13) You use too many keywords. It was once thought that that you should include every possible relevant keyword that you can think of in your keyword metadata area. As a result, you'd find sites that would have 100 of them, but soon Google caught on and changed the rules. The problem is that Google now only recognizes the first 4 or 5, and may even penalize you if you use a lot more, so limit yourself to the best ones. Check these articles out called Finding Keyword Phrases, Finding Keywords With Google Suggest, and Finding Keywords With Google's Wonder Wheel (notice the anchor text?).

14) You practice "keyword stuffing." Keyword stuffing means that you use your keywords at every opportunity in the text on your page. Once again, Google doesn't like this and will probably even penalize you if you use a particular keyword more than 5% (some say it should even be as low as 2%.)

15) You use irrelevant keywords. Let's say that Emerald is a cover band and plays a lot of Beatle's songs. If you use The Beatles as a keyword without using it in the body of your text, it's considered irrelevant and may get you penalized. That's to keep you from loading up on the most popular keywords of the moment in order to send a lot of traffic your way. Doesn't work, so don't try it. If you use a keyword, it better be mentioned in the text somewhere for maximum SEO effect.

There are a lot more examples than the 8 included here and in the last post outlining the first 7 worst practices (anchor text again), but if you master these first, most of the others will probably take care of themselves.

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Top 15 Worst Website Practices - Part 1

With so many band and artist-centric sites like MySpace and ReverbNation around these days, it's easy for a band to believe that a website presence isn't required, yet it's an important piece of your online strategy. Your website is directly under your control, can be customized specifically for your message, and you never have to worry about a hosted site going out of business or changing the terms of service suddenly one day in the future.

That being said, there's a way to build it that's very friendly to your fans, visitors and search engines, but unfortunately not everyone chooses that route. So if you're about to build your own site or if you have one already, take a look at the following practices that are guaranteed to turn off your visitors. You know what they are yourself because you probably see them on other sites every day, but that doesn't mean you should emulate a bad practice.

Not only do many of the following aggravate people, but they're death to search engines. If you want fans to find you, make sure these are avoided.

1) Pull-down boxes for navigation. Designers love them, visitors hate them, search engines can't read them. Stay away.

2) Flash animation. Looks cool, but sometimes people just want some info and not cartoons. Search engines can't read any of the info in a Flash movie so they're a waste of time and money.

3) All graphics and little text. Search engines love text. Visitors love text. Pictures are nice, but use them in moderation.

4) A "splash" page. A splash page is an opening page with a movie or flash animation and no information. The whole "Enter Here" thing is so Web 1.0. There's no info for a search engine to grab and your visitors hate them. Avoid at all costs.

5) Frames. Again, so Web 1.0. Sites with frames went out a long time ago. Get with the times and dump these babies.

6) Pop-ups. It doesn't matter where they come from or if they're selling something or not, everyone hates them.

7) Dead links. This is just poor website design. It happens to everyone at some point, but remember that both search engines and visitors hate them.

Tomorrow we'll look at poor site practices 8 through 15, focusing more on search engine optimization.

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