Music 3.0 Music Industry Blog

Thursday, June 23, 2011

Who Uses Social Networks?

A few days ago I quoted some stats from the Pew Internet & American Life Project regarding Facebook use. Today we'll look at some of the other interesting tidbits that came from the studio regarding social networking. It really gives you a good idea of exactly who is using the most popular social networks.

92% of those that use social networking use Facebook, 29% participate on MySpace, 18% are on LinkedIn and 13% use Twitter.

Overall social networking usage has nearly doubled from 2008 to 2010. Back in 2008 26% of adults were utilizing a social networking service (SNS) whereas 47% of adults were using a SNS in 2010.

Only 18% of Internet users over the age of 35 used a social networking service in 2008, but by 2010 that number was up to 48%.

The average age of an adult SNS user jumped from 33 years old in 2008 to 38 years old in 2010

Social networking users skew female. A notable change showed the discrepancy actually grew from 6% more females in 2008 to 12% more female social networking users in 2010.

The average MySpace user (32 years old) is younger than both the average Facebook user (38) or Twitter (33) user. LinkedIn skews the highest out of all the networks with users having an average age of 40.

LinkedIn is the only social network that has more men than women and the disparity is rather large, with men nearly doubling the number of women. Twitter, on the other hand, is almost exactly the opposite of LinkedIn with woman making up 64% of the total users.

African-American users have the lowest presence on LinkedIn, making up only 2% of the total users. The highest saturation of African Americans is on MySpace with 16% of the total users.

Hispanic users are not prominent on social networking services either. LinkedIn is comprised of only 4% Hispanics, compared to the approximate 14.5% Hispanic makeup of the national population. Hispanics do however make up 12% of both the Twitter and MySpace user base.

LinkedIn is far and away the most saturated site when it comes to white users, who make up a whopping 85% of the user base.

While Twitter finished in last place out of the four main sites, the frequency of use of Twitter is quite high. Facebook leads the pack in frequency of use with 52% of users checking at least once a day, but Twitter is close behind with 33% of users checking in on a daily basis.

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Wednesday, June 22, 2011

Could This Someday Be An Alternative To Ticketmaster?

I'm all for anything that can make concert or gig ticketing more fair and efficient. Just about everyone except Ticketmaster employees hates the current system, with the "convenience charges," the extra charge for printing your own tickets, and the general perceived contempt for the customer.

If there was an alternative, I bet it wouldn't take long for venues, promoters and artists to switch. Now maybe there is.

A company called Gigswiz is trying to build an alternative way to ticketing as they try to bring the process to social networks and reward artists for direct contact with their fans. Recently they even implemented a Fan Loyalty program with British band Human League, where the band was able to pass on ticket discounts to the fans.

The way it works is artists sign up to GigsWiz Backstage and connect the service to their Facebook and Twitter accounts. GigsWiz then automatically promotes all upcoming gigs with ticketing links, for which the artist or band gets credit. Event organizers can also create events on the GigsWiz Tickets service so that they can reach a band’s fan base.

In addition to those updates being pushed automatically to social media channels, GigsWiz provides embeddable widgets and Facebook apps for artists, promoters and venues that list upcoming gigs and link directly to a page to purchase tickets. The artist is awarded anywhere from 5 to 20% commission on the sales, which they can either keep or give back to their fans.

I'm sure Ticketmaster isn't shaking in their boots, but here's hope that Gigswiz gets a foot in the door and gives the market an alternative. We really need it.

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Tuesday, June 21, 2011

Comparing The Music Services

My buddy Gary Myer sent me this chart the other day. It's from an LA Times article about the competition that Spotify will have when it's finally able to operate in the US. As you can see, one of the things that both Spotify and Rdio have going for them is the fact that they have your music available in the cloud and on-demand at any time, plus streaming radio service. The downside is that they're subscription services that charge you a monthly fee to listen on your computer, and about double the normal fee to add mobile access as well. iCloud will be a single charge per year.

Will this make a difference to the consumer? Will iCloud add radio streaming (don't see why not as you can get it with iTunes now)? I guess we'll have to wait until both Spotify and iCloud are available to actually see.

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Monday, June 20, 2011

How People Use Facebook

Last week Pew Internet & American Life Project, a project of the Pew Research Center, launched a detailed report on how social networking affects our lives. Among the things it detailed is just who is using Facebook and how they use it.

First of all, the most active Facebook users tend to be women. 19% of women update their status at least once a day, while only about 11% of men provide daily status updates.

Breakdown of Friend Relationships
The report also found some interesting info about friend relationships.

22% people from high school
12% extended family
10% coworkers
9% college friends
8% immediate family
7% people from voluntary groups
2% neighbors

Some of the most interesting stats that prove social networks are more than just online relationships are:

Only 3% of users’ Facebook friends have never met in person. While 89% of all Facebook friends have met in person more than once.
Internet Users are more trusting of others than non-Internet users. Facebook users are over 3 times more likely than non-internet users to agree that “most people can be trusted.”

Comments And Likes
According to the report, Facebook users are not only active in posting, but in interacting as well. For instance:

22% of users comment on another’s post or status
26% of users “like” another user’s content
15% of users update their own status
20% of users comment on another user’s photos

In addition to commenting and updating statuses, Facebook users do “like” quite a bit of content.

44% of users in the 18-22 age range “like” content on a daily basis.
Men are less likely to “like” Facebook content than women. 20% of women “like” content several times a day compared to just 9% of men.

That said, private messages are not frequently used. Only 38% of users claim to use Facebook’s private messages at once a week or more.

Facebook is truly a community, but you respond to your friends in your community differently than in real life, as the report shows. With that in mind, remember to be mindful of what you're posting and how you treat your online friends. They deserve the same respect as if they were in the room with you.

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Sunday, June 19, 2011

The 25 Highest Paid Musicians And What It Means For Music

Forbes Magazine recently presented their annual financial ranking of musicians in their Celeb 100 issue, and while it may look as business as usual for a bunch of high visibility names, there's actually some good news for the music business in the numbers.

While the list has its share of the musical old guard with names like U2, Bon Jovi, Elton John, AC/DC and The Eagles, the good news is that there are so many newer and more diverse acts on the list than in recent years. That's especially good news for the concert business, who've been accused of recycling the same old acts because there were no news ones that could pack the house. Apparently that's not the case anymore as Justin Beiber, The Black-Eyed Peas, Michael Buble, Katy Perry, Taylor Swift and Usher prove that there are viable new acts that people will pay their hard-earned dollars to see. And while the charts seem to be dominated by women, gender-wise that's not the case on the big stage, with only 5 acts being women. It's diverse too, with 10 rock acts, 6 country acts, 5 r&b/hip-hop acts and 4 pop acts.

Here's their list.

1. U2 - $195 million
2. Bon Jovi - $125 million
3. Elton John - $100 million
4. Lady Gaga - $90 million
5. Michael Buble - $70 million
6. Paul McCartney - $87 million
7. The Back-Eyed Peas - $61 million
8. The Eagles - $60 million
9. Justin Bieber - $53 million
10. David Matthews Band - $51 million
11. Toby Kieth - $50 million
12. Usher - $46 million
13. Taylor Swift - $45 million
14. Katy Perry - $44 million
15. Brad Paisley - $40 million
16. Tom Petty & the Heartbreakers - $38 million
17. Jay-Z - $37 million
18. AC/DC - $35 million (tie)
19. Beyonce Knowles - $35 million (tie)
20. Sean "Diddy" Combs - $35 million (tie)
21. Tim McGraw - $35 million (tie)
22. Muse - $35 million (tie)
23. Rascal Flatts - $34 million
24. Kenny Chesney - $30 million
25. Rihanna - $29 million

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Thursday, June 16, 2011

The Lesson Behind Rebecca Black Pulling "Friday" From YouTube

Today comes the news that Rebecca Black’s “Friday” video is no longer available on YouTube. No great loss there, but what is intriguing is that apparently the video was pulled due to a copyright claim filed by Rebecca Black herself. While it’s not exactly clear what's behind this, the video had amassed 167,370,534 views before it was taken down.

The second interesting piece to this is that ARK Music Factory, the company that produced the song and video, had experimented with a $2.99 YouTube rental earlier this week. From a sales perspective, this was about 150 million views too late, but that's not the point. Regardless if you like or abhor the song, there's a bigger lesson here.

Just a little background: Rebecca's mother paid ARK Music Factory $2,000 to produce the song and video. As these things go, no one expected anything other than a vanity release with a few thousand views if she was lucky. Much to everyone's surprise, the video blew up, went viral and was quite the rage for about a month or so, although more for the general awefullness (is that a word?) of the song and video than anything else.

Now here's where the business part of it gets intriguing. If ARK/Rebecca had the presence of mind to set up as a YouTube affiliate after they saw it blowing up, it's possible that about $100,000 could have generated from adverts (which is a pittance for 150 million of anything). It's also rumored that there was about 300,000 digital sales of the song (although there's no way to verify that), which would've brought in about another $200k. The big question is - who got the money?

This is where the lesson comes in. Was the $2000 Rebecca's mom paid ARK a buy-out? If so, what did it buy out? Who owned the song? Who owned the publishing? Was there even a contract that stipulated any of this? Did ARK or the Black's try to get around a signed agreement?

Without knowing any of the details, on the surface it seems like ARK wanted to generate some last minute revenue so they slapped a $2.99 rental on. The Blacks, unhappy with their end of the payout, retaliated by filing a copyright claim to take the song down. YouTube doesn't necessarily care who owns the rights; all it cares about was that someone claimed copyright infringement, so they play it safe by taking action, so the song came down.

So the lesson? This is a highly unlikely scenario that probably won't be repeated for a long time (at least in this fashion), but it's always, always, always best to have these things worked out ahead of time just in case some unforeseen success occurs. Establishing ownership of any intellectual property up front is by far the least painful scenario in any creative venture - even one as far fetched as Rebecca Black's "Friday." You've been warned.

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Wednesday, June 15, 2011

Should Lip-Syncing Videos Be Illegal?

One of the things that non-musicians love to do is make videos where they lip-synch to their favorite song. And it's not just kids either; there may be as many 30 year olds as 8 year olds doing it. While this all may seem innocent enough, it's actually a copyright violation, and the new U.S. Senate bill 978 would toughen the copyright laws and make it illegal to upload lip-synced videos.

Just as an example, this kid has over 40 million views for his lip-sync of Katy Perry's "Teenage Dream."

Up until now most record labels would let a lip-sync like this one slide or at worst issue a take-down notice where YouTube or the posting service would delete it. However, the new bill would take the penalty a new level, like up to five years in prison, even if you're not making any money!

There are several schools of thought on this:

* From the record label: "This is a copyright violation. They're illegally using our song without paying us."

* From the Music 3.0 artist: "This is great promotion. Fans like my song enough to make like they're singing it."

* From the fan: "I'm just having a little fun. I'm not making any money on this and I'm not hurting anybody."

Which one do you agree with?

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Tuesday, June 14, 2011

Don't Forget Transaction Costs

Recently I had a discussion with a friend about exactly where the money goes when iTunes takes their fee from a sale. For each $0.99 song, it's estimated that Apple pays $0.70 to the major labels (which is over 85 percent of their sales), and $0.60 to $0.65 to independent labels. This means that the average price per song is approximately $0.69, of which Apple keeps about 30 cents from every sale.

This might seem like a huge amount but what everyone forgets is that this isn't pure profit; Apple has costs too. There are network fees, transaction fees, and general administrative expenses associated with operating the iTunes Store. It's believed that the network fee is about $0.05 per song, which includes the delivery fee and the hardware and software to facilitate delivery, and the operating expenses are a little less than $0.05 per song, based on the relatively small number of Apple employees that are believed to work on iTunes.

That leaves the biggest and most overlooked cost of all - the transaction cost. This is the amount that the bank charges for the privilege of using a credit card. It's believed that when iTunes first started this cost was as high as 24 cents per sale, which left Apple with a mere penny or two of profit for every sale. It's now believed that they've brought this cost down to about a dime, which still leaves a profit of about 10% (or 10 cents) on every sale, which is far below what the perception is.

The point of all this is that transaction costs are frequently overlooked when doing business, and they are the secret expense that eats your profit. If you take credit cards for merch and music, I guarantee that's it's costing you way more than what a giant like Apple can arrange.

All credit cards charge you multiple fees. First of all, there's a monthly transaction that's a minimum of $20 (usually more), a "gateway" fee of between $5 and $20, and a monthly minimum transaction total. Slip below that total and you're charged a penalty.

Then there's the transaction costs per sale, which can go from $.20 to as high as $.35 (it's usually higher for an Internet transaction), plus a charge of between 1.5 and 3% of the total of the sale. Add all that up and it means that if you only make a dozen or so song sales a month, you've actually lost money. Even if you've met your monthly minimum, you still may be only making less than half of a $1 sale thanks to the transaction costs involved.

Hopefully these transaction costs will soon come under control as micropayment fees become more widely available. This is were the traditional bank costs are bypassed, and only a small fixed fee per transaction is paid. Paypal has recently instituted a system of micropayments, and I've written about more about other possibilities in other blog posts. Check out my recent post of Square for a good example of this type of fixed transaction fee.

So be aware of your transaction costs in order to be sure that you're earning exactly what you think.

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Monday, June 13, 2011

Has Facebook Peaked?

Facebook is supposedly getting ready to go public in early 2012, but it can't come soon enough if the numbers from Inside Facebook are correct. It appears that even though world-wide Facebook numbers are surging towards 700 million users, the numbers are dropping in the US and Canada.

It seems that the United States recently lost nearly 6 million users, falling from 155.2 million at the start of May to 149.4 million at the end of it, which is the first time the country has lost users in the past year. Canada also fell significantly, by 1.52 million down to 16.6 million, but the United Kingdom, Norway and Russia also all posted losses of more than 100,000.

All of these countries were first adopters of the social network, and could also be the first to shed users to another network (just what is not apparent yet). The site notes that by the time Facebook reaches around 50% of the total population in a given country, growth generally slows to a halt, which is what's apparently happening. As you can see from the chart on the left, there were a number of countries that gained users, but these were all developing countries.

What does this mean? Facebook isn't going away anytime soon, but there are some people that either can't see the point or just plain don't like it. That's always been the case, it's just that it's been a little more so last month. If we see the numbers trend like this for a few more months then we'll know something big is happening, but for now, it's Facebook business as usual.

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Sunday, June 12, 2011

10 Ways Musicians Can Use QR Codes

It took some time but QR codes look like they're finally catching on. If you don't know what a QR code is, it's the symbol on the left, and it's actually an analog web link. Just scan it with you phone or iPad and you're sent automatically to the webpage.

Recently Bruce Houghton over at the great Hypebot blog posted the 10 creative ways that musicians can use QR codes. The original article is here.

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Inspired by Clyde Smith's Guide To QR Codes For Musicians, I wondered about how indie musicians might use these scanable graphics that link the offline and online worlds. Marketer and artist Erica Glaser had already created a strong list of 50 creative uses for QR codes that's geared to filmmakers and visual artists as much as musicians, but she provided the spark that led to my own list of 10 Creative Ways Musicians Can Use QR Codes:

Connect a gig poster with a place to buy tickets
Connect posters to a video or track that "sells" the band
Connect your t-shirt to your web site
Connect a t-shirt or poster to a free download
Connect a poster to your online store with a discount
Connect a poster to your Facebook page
Connect signage on stage and merch table to mobile firendly site with email signup
Connect your CD cover to an email signup
Connect a CD cover to bonus content
Offer a free track to retailers who include you name and a QR code connecting to a tweet-for or email-for-track landing page

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Thursday, June 9, 2011

Music Distributor Rankings

Ever wonder which online music distributor is the most influential? Of course we know that's iTunes, but it's a big world out there and you'd be surprised all the other services that have huge customer bases. Here's an overview from Digital Music News regarding the state of music monetization.
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These are the stats we've been able to confirm; please share if you've got more numbers.

(1) iTunes
* Paid Song Downloads: 15 billion, cumulative since mid-2003 (source: Apple, shared this week.)
* Broader Story: Annual gain-rate of about 4 billion; iCloud $25 annual subscriptions start this fall.

(2) Spotify
* Paying Subscribers: 1,000,000+ (per Spotify, as shared early March, 2011)
* Subscriber Mix: Roughly 10 percent are paying; Spotify says the number is closer to 15 percent when measured by active users. Within paid tiers, 90% appear to be paying full premiums (source: Digital Music News, citing statements and information from European partner sources)
* Royalty Payouts: 43 million euros ($58.5 million) in 2010 (source: Spotify, shared with ballade.no earlier this year).

(3) Sirius XM Radio
* Paying Subscribers: 20.6 million (per first quarter company disclosures). Ranking: Sirius is the third largest entertainment-related subscription service in terms of subscribers, trailing Netflix and Comcast.

(4) Pandora
* Registered users: 90+ million (per SEC filings, June 2nd.) Of note: Subscription and other premium payments accounted for 13.6 of total revenues, according to February disclosures. Pandora has counted more than 10 billion thumbs, though they are not yet profitable (as of April, 2011).

(5) Rhapsody
* Paying Subscribers: 750,000 (per Rhapsody president John Irwin, January 20th). Of note: Increase of 100,000 since April, 2010; awaiting half-year updates (company is preparing to announce a major increase, according to conversations with the company).

(6) Slacker
* Paying Subscribers: 'Well past 300,000' and growing (source: Slacker, to Digital Music News on Wednesday.)

(7) eMusic
* Paying Subscribers: 400,000 (per eMusic disclosures to Digital Music News, November 15th). Of note: Zero subscriber growth since 2007.

(8) Rdio
* Paying Subscribers: Company will not disclose to Digital Music News.

(9) MOG
* Paying Subscribers: Company will not disclose to Digital Music News.

(10) Vodafone UK
* 100,000 paying music subscribers (per Vodafone content services director Lee Epting at MidemNet 2011). Of note: Global goal is 1 million by 2012.

(11) Napster
* Paying Subscribers: 760,000 as of the Best Buy purchase (May, 2008). Current number unknown, likely smaller.

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Wednesday, June 8, 2011

3 Ways To Screen Your Followers

When it comes to social networking, not all fans are created equal. Some are stalkers, some only want to build a large friend list and could care less about you, some will never use the service after the first week, and others want things from you that go above and beyond the typical follower relationship. That's why you have to screen your Facebook Friend requests when possible. After a couple of, shall we say, unsavory experiences, here's what I do.

1. Ask yourself "How Do I Know You?" Even if you have 25 mutual Facebook friends, there has to be something more to be sure the connection is right for both of you. Unless there's a referral from a a most trusted friend, I automatically go to step 2.

2. Check out the bio, photos and posts. I always look at someone's bio first to see if he or she is in the music business or some other business that I'm in. If I can't tell from that, then I move on to the photos. If I see something like the person on stage or in the studio, you're in. If there's nothing to indicate we have a connection of some sort, then I move on to the posts. Again, if you have some posts that indicate we have a professional connection in some way, you're in. If all I see are posts about your personal life, you're not.

About the worst thing is someone who has no history of posts, won't let me see their info unless we become friends, or only has some goofy profile picture that tells me nothing about you. Next!

3. Keep it professional. If you're using social networks as a promotional tool, you've got to keep your posts professional for the most part. It's okay to post something personal, and your fans certainly want that, but never get too intimate regardless of how tempted you may be. A certain congressman just found that out the hard way.

It goes the same for your fans. If someone is coming on too strong, it's time to unfriend them. If a "friend" is coming into town and wants to meet, check them out thoroughly first. No background info, no coffee or lunch!

While we're on it, let me give you a few criteria I use when people email me to ask for help. I love to help people and I'm always there for anyone that asks, but there are a few times when I hedge a bit. The main one is "I'm doing a project for school and......." and suddenly there are 20 questions, or only one that's so broad it can take an hour to write a reply. I'm not going to write your paper for you unfortunately. Usually what I say is, "This is too complicated to write in an email. Here's my number and the best time to call. I'll tell you all you want to know then." I figure that in 15 minutes on the phone I can be a lot more helpful than taking an hour out of my day to write a reply that might not answer the question properly. It's funny though, people rarely call. Once again, I'd love to help, but I'm not going to write your paper for you.

So this is the criteria I use for accepting Facebook friends, which I've found to work very well. If I haven't accepted your Friend Request, now you know why.

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Help Support This Blog

Thursday, June 23, 2011

Who Uses Social Networks?

Wednesday, June 22, 2011

Could This Someday Be An Alternative To Ticketmaster?

Tuesday, June 21, 2011

Comparing The Music Services

Monday, June 20, 2011

How People Use Facebook

That said, private messages are not frequently used. Only 38% of users claim to use Facebook’s private messages at once a week or more.

Sunday, June 19, 2011

The 25 Highest Paid Musicians And What It Means For Music

Thursday, June 16, 2011

The Lesson Behind Rebecca Black Pulling "Friday" From YouTube

Wednesday, June 15, 2011

Should Lip-Syncing Videos Be Illegal?

Tuesday, June 14, 2011

Don't Forget Transaction Costs

Monday, June 13, 2011

Has Facebook Peaked?

Sunday, June 12, 2011

10 Ways Musicians Can Use QR Codes

Thursday, June 9, 2011

Music Distributor Rankings

Wednesday, June 8, 2011

3 Ways To Screen Your Followers

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