The Next Era Of The Music Business

Regardless if you're a musician or music consumer, your music life is about to change. Slowly but surely digital music distribution has been evolving from downloads to streaming, but that transition has been really picking up speed over the last 12 months. With Spotify leading the way thanks to reams of publicity, more and more consumers are finding that the joy of renting music beats owning it by a long shot.

While it's been long rumored that Apple has their own streaming service up their sleeve, several developments reveal the change that is about to come.

First is the fact that Jimmy Iovine's Daisy project (named after the first computer generated song) just received a $60 million injection from the likes of Warner Music Group's owner Len Blavatnik, Fort Worth billionaire Lee Bass and Australian financier James Packer. This is a serious investment by some deep pockets that know what they're doing and don't like to lose. Then comes word that Apple's Tim Cook recently took a meeting with Iovine to be briefed on the project. Does that mean a collaboration? We don't know, but at the very least, Apple has a good working relationship with Iovine, since he was one of the first to sign Universal Music onto iTunes back in 2001. Together they'd be a powerhouse, a true 1200 pound gorilla. Chances are that Apple will chose to go it alone and just stay at 800 pounds though. It doesn't need a partner, but if there's something there worth buying, they have lots of money.

Then comes word that Google has been quietly making deals with all the major labels for their own YouTube-based subscription streaming service to be launched later in the year.

If all this were happening a couple of years ago we would've looked to only one of these prospective services to be left standing at some point, with the others falling by the wayside. But this is a different time, with the streaming business far more mature thanks to the likes of Spotify, Pandora, Rdio, Slacker, et al. It's now probably possible that all of these new services survive if they're at least half-way decent in their user operation and offerings.

This is definitely going to be a big win for consumers, with nearly an unlimited selection of songs available for a relatively small monthly fee (not sure what the price point will end up being, but $9.95 keeps being mentioned). Consumers are quickly seeing the advantages of renting their music.

It will be a different story for artists and songwriters however. By now everyone knows how little the royalty can be from a stream, with stories abounding about income lost by the writer and artist. Although a full transition to streaming will be a godsend for the labels, with steady monthly income actually bolstering their bottom line, you can bet that not much of that will trickle down to the artists - at least at first.

It's not going to happen overnight, but within a matter of time, you'll see the entirety of the management and law categories of the music business devise a better way to get paid, and eventually force the labels to fall in line. And when that happens, it will trickle down to the DIYers who insist on doing it their way. To what degree this all takes place, we'll have to wait and see.

While this blog is aptly named Music 3.0, we're about to see the next stage of the music business. Welcome to Music 3.5!

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The "Content 4.0" Concept

There's a new concept about our current state of online content that's been making the rounds called "Content 4.0" which breaks down nearly anything online into 4 major elements:

• Relevance
• Attractiveness
• Emotional Appeal
• Convenience

The idea is that we have to have all 4 in order for someone to respond to our content, which could mean anything from a Like to a purchase. Here's an interesting infographic that provides a number of examples of each element.

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The Art Of Asking

Love her or hate her, Amanda Palmer is the poster child for Music 3.0, where social media is at the heart of an artist's interaction with her fans. Regardless how you feel about her, you can't argue with her success.

Here's a video of AP's presentation at the recent TED 2013 conference entitled "The Art Of Asking," and it outlines her basic strategy. Fair warning - it's a lot more human than you might expect, and received a standing ovation from the normally jaded and tough TED audience.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

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

The Major Labels Go From 3 to 4

One of the former major players in the music business is back in the game. In a deal announced late last week, German multinational media group Bertelsmann has purchased the remaining 51% of BMG (Bertelsmann Music Group) from investment group KKR, bringing the company full circle and back into the recorded music business.

This is a big deal in that the Big 3 major record labels are now actually expanding to 4. Who could've even conceived that such a thing could ever happen, especially in these days of corporate consolidation?

BMG had been a major player in the record business for 30 years when it decided to sell of it's recorded music business to Sony Music and Universal Music Group starting in the mid-2000s. The company then transitioned into a "rights management" company by buying numerous publishing catalogs with partner KKR. Over the last couple of years, the company has made overtures to return to the business by making offers to purchase a number of record label assets, including those of Warner Music and EMI, but lost out on both accounts. In fact, it was only a couple of weeks ago that BMG purchased Sanctuary Records, home of Black Sabbath, Iron Maiden and Megadeath, from Universal.

That said, BMG has a new-found commitment to be in the recorded music business, and that's a good thing. More competition in this world is just what's needed when it comes to developing new talent and new industry blood.

The other thing that's attractive is that Bertelsmann is privately owned, with 80.9% owned by a private foundation and think tank founded by the Mohn family, with the family directly owning the remaining 19.1%. There's a wonderful freedom when you're not beholden to stockholders, Wall Street and quarterly reports.

The company said it's going to be aggressive moving forward, and this can only be positive for the music industry as a whole. Let's hope they bring in some fresh new forward thinking execs that know the ways of the Music 3.0 world instead of living in the past.

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Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

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

Global Best Sellers Of 2012

Think you know what the best sellers are from 2012? You might be surprised. Here are the worldwide single and album Top 10 thanks to the IFPI. Of course, expect these numbers to change in 2013 as streaming becomes more widespread. Music subscribers were up 44% last year to 20 million and download sales were down 12%, and if that continues, these charts will change forever.

Global Album Best Sellers in 2012

	Artist	Title	Total (m units)
1	Adele	21	8.3
2	Taylor Swift	Red	5.2
3	One Direction	Up All Night	4.5
4	One Direction	Take Me Home	4.4
5	Lana Del Rey	Born To Die	3.4
6	P!nk	The Truth About Love	2.6
7	Rod Stewart	Rod Stewart	2.6
8	Rihanna	Unapologetic	2.3
9	Mumford & Sons	Babel	2.3
10	Maroon 5	Overexposed	2.2

Source: IFPI

Global Singles Best Sellers in 2012

	Artist	Title	Total (m units)
1	Carly Rae Jepsen	Call Me Maybe	12.5
2	Gotye	Somebody That I Used To Know	11.8
3	PSY	Gangnam Style	9.7
4	fun.	We Are Young	9.6
5	Maroon 5	Payphone	9.1
6	Michel Teló	Ai Se Eu Te Pego	7.2
7	Nicki Minaj	Starships	7.2
8	Maroon 5	One More Night	6.9
9	Flo Rida	Whistle	6.6
10	Flo Rida	Wild ones	6.5

Source: IFPI

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Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

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

2012 Music Sales: No Reason To Celebrate Yet

In the last few days just about every print and online publication has had an article about the triumph of the music industry last year. It seems that sales were up for the first time since 1999, which no doubt is a good thing. But look a little closer at the stats and you have to come away with a "hmmmmm."

According to reports from both the international trade group IFPI and research company NPD Group, last year's sales jumped 0.3% to around $16.5 billion, and digital music, which increased 9%, represented 34% of that total. All well and good there.

Then you read that a lot of that was due to the fact that music piracy was down a lot last year:

• Consumers using P2P services to download music declined 17%
• The volume of illegally downloaded music files from P2P declined 26%
• Music files burned and ripped from CDs owned by friends and family fell 44%
• The number of files swapped from hard drives dropped 25%
• The volume of music downloads from digital lockers decreased by 28%
• 40% of consumers who illegally downloaded in 2011 stopped doing so in 2012

On the surface, all good news. By every account, music piracy is on the decline. But think about it - all this and total music sales only rose 0.3%?

Something's not working with these numbers, but I suspect it's the same as when the RIAA and IFPI were claiming that for every one sale, somewhere between 9 and 19 were pirated, depending upon the day and what side of the bed the researcher got up on. Let's face it, numbers like these were never dependable in the first place.

Here's something else that's scary. The biggest selling album of 2012 was the same as 2011; Adele's 21, this time with 8.3 million compared with over 18 million the year before. Once again, on the surface it's great that any album in the Music 3.0 age (soon to be Music 3.5 by the way) can sell this many, but bad in that there was no new album released in 2012 with enough juice to overtake it.

I don't want to come off like a naysayer, since I'm the biggest proponent that things aren't as bad as they're sometimes made out to be, and what we're living through is only the natural evolution of things. I'm just saying to always take industry numbers with a grain of salt.

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Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

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

The 6 Strike System Anti-Piracy System Goes Into Effect

A new strategy aimed at combating Interent piracy went into effect on Monday that could have violators having their broadband speed slowed to a crawl or lost altogether. The new Copyright Altert System, which is sometimes known as the "6 Strikes System," is a partnership between the entertainment industry and Internet service providers aimed at decreasing online theft of copywrited material.

The way it works is if one of an ISP's subscribers is accused of violating a copyright, he or she will be sent a series of warnings. On the sixth violation, the ISP is free to extend punishment.

This sounds pretty good on the surface until you find that each ISP has a different idea of exactly what that punishment should be. For instance, Verizon intends to slow the Internet connection for a few days while an arbitrator determines if a violation actually occurred, while TimeWarner will temporarily suspend the connection until the violator contacts a company rep and promises not to do it again (I'm sure that will work - not).

The fact of the matter is that this is too little too late. The music industry already is acknowledging that piracy is slowing thanks to streaming, and we've not even reached it's tipping point yet. In fact, music sales were even up slightly last year. And with the slap-on-the-hand punishment that the ISP's are suggesting, the only people who are going to get caught are a few kids who aren't smart enough to find their way around it, or haven't bought into streaming yet.

It is a great PR move however, as it makes both industries look like they're actually doing something to reign in the problem while slapping a mere bandaid on it.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

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

Cassettes Go To Prison

Cassettes may be an audio delivery platform from a different era, but just like vinyl, there's still a bit of life left. Believe it or not, there are still a number of indie record labels that provide limited editions of cassette releases (Baldy Longhair Records, Scotch Tapes, Cold Slice, to name just a few), but cassettes are now getting a new lease on life thanks to the New York prison system.

Now a New York marketing company that sells exclusively to prison inmates called Send A Package has made a deal with Universal Music Group to sell cassettes from artists like Jay-Z, 50 Cent, Nas and Jadakiss to the inmates of New York. While on the surface this sounds completely ludicrous, it becomes a well-thought plan when you realize that prisoners aren't allowed to have CDs. Cassettes however, are allowed, and Universal is more than pleased to supply them with their favorite hip-hop from the present and the past.

Send A Package is unique in that it allows family and friends to send gifts to prisoners that are pre-approved and not subject to search by prison security. It's also a place where inmates can buy anything from food to magazines to clothing. The company buys the cassettes from UMG at $6 each, then resells them to inmates for $13.

Believe it or not, cassettes are still widely used throughout the world as in many cases that's all that's available for music delivery. While that usually applies to what we would consider the third world, it just goes to show that there's still a little bit of the third world right at home, and that some formats refuse to die.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

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

Billboard Charts Now Using YouTube Data

It had to happen sooner or later. Billboard Magazine, the unofficial bible of the music industry, has finally incorporated YouTube viewership into the metrics that makes up their chart rankings. This means that each chart not only reflects digital and physical sales (once the only metric reliable enough), but also terrestrial radio airplay and digital streaming, which you have to admit seems to be a potent combination that at least theoretically makes up most of the modern measurements that can accurately indicate the popularity of a song.

Billboard's YouTube data is limited to only official videos from the artists and labels, but Vevo clips and user-generated clips that use the "authorized audio" can also be included. Authorized audio means that the video producer has permission to use the audio in their video. If a user generated video has a commercial at its front, chances are good that it's been authorized.

The decision seems to be already having an effect on the Billboard charts. "Harlem Shake" by Baauer, which went viral on YouTube, debuted at No. 1 on the Billboard Hot 100. Massive views on YouTube also helped Rihanna's "Stay" jump from 57th place last week to third place in the latest chart.

You've got to hand it to Billboard in that they've finally recognized the influence YouTube now has in our daily musical lives. It's the number 1 music discovery portal online (number 2 overall after radio), and a huge part of our current music distribution network. Incorporating it into the charts can only bring a more accurate reading of the popularity of a song.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

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

Warners Makes A Deal With The Indies, Or Does It?

The record label business as we know it has changed immensely in the last year or so and those changes continue to come hard and fast. Take for instance the fact that when Universal Music Group purchased the assets of EMI last year, they were forced by European regulators to sell off much of the catalog and several labels (including Parlophone, Chrysalis, and Virgin Classical among others) to Warner Music Group in order to make the deal.

Now it looks like WMG is getting the same treatment, as Merlin and IMPALA, two of the most powerful indie label trade groups, have been threatening to raise a fuss again with the EU regulators as they had with Universal/EMI and BMG/Sony before that. So Warners became proactive in the matter and announced an agreement with the two groups to sell or license "a significant portion" of that music to some of the indie companies (which were not specified) within those groups.

Now let's get this straight. WMG tells the trade groups it will help their clients make money, but lays out no specifics on how that will happen or with what companies. Doesn't this sound like a bait and switch where WMG makes a nebulous promise that it can easily forget about as soon as the regulators give their OK? Or, WMG can just give some token feel-good deals that doesn't substantially alter the status quo of either company.

This seems to be a classic deal to make everyone look and feel good, but without much substance. If I were one of the member companies of Merlin or IMPALA, I'd be upset. It looks like more of the same from the majors, but with the seal of approval from the organization that should be helping the indie label's cause. It should be interesting to see how this plays out.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

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

The Best Time To Send Your Newsletter

Just like there’s a best day to send your newsletter, there’s also a definite science behind the time of day to send your emails. It’s been studied extensively, most notably by Dan Zarrella and Pure360. In this excerpt from The Music 3.0 Guide To Social Media, we'll look at all the time periods in the day and evaluate email success in each. Remember that all times are Eastern Standard Time.

• Most opens occur between 5AM and 7AM. Most people check their email first thing in the morning even before they leave for work. Remember that open rates are as much as 53% higher in the mornings.

• 7AM to 10AM: The second most prevalent email opening time is at the beginning of the working day.

• 10AM to Noon: Consumers are not opening marketing emails, choosing instead to focus on work.

• Noon to 2PM: Consumers are unlikely to open emails during their lunch break, choosing instead to spend their time on news and magazine alerts.

• 2PM to 3PM: Right after lunch consumers remain focused on work, responding mostly to email offers related to financial services.

• 3PM to 5PM: Consumers start thinking about their personal situation and as a result, more emails relating to property and financial services are opened during this time period than any other.

• 5PM to 7PM: Consumers tend to open business to business (B2B) promotions during this period, but also open more holiday-type promotions during this period than any other.

• 7PM to 10PM: The time period when recipients are most likely to respond to consumer promotions is when they get off work.

• 10PM to 6AM: This is an email dead zone, as most sent during this period are ineffective.

Remember that these are trends and might not apply to your particular audience. The best way to proceed is to use these timings as a starting point, then experiment to see if another time works better. It's easy enough to schedule blog posts or emails to do so, just make sure that you have enough of a sample size before you make any ironclad decisions on exactly what's working.

To read additional excerpts from this and other books, go to bobbyowsinski.com.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

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

Fandalism: A Social Network For Musicians

Fandalism is an interesting network designed especially for musicians. It's not like ReverbNation or BandCamp in that it's not designed around the business of being an artist; instead it's more like a cross between YouTube, where artists can upload videos of their performances, and Matchmaker, where compatible musicians can find each other.

To register, you answer basic questions like where you're located, what instrument you play, your influences and musical history. You can then share your work through photos, videos, lyrics or Soundcloud audio. After you've set everything up, you can follow other musicians, give them "props" (likes), and send them private messages.

One of the cool new features on Fandalism is the ability to distribute your songs to iTunes, Spotify and Google Play. It's cheaper than either Tunecore or CD Baby in that you get unlimited uploads for only $19.95 per year, as compared to Tunecore's $29.95 per album per year or CD Baby's $49 per album per year (plus a percentage of the sale). Fandalism also gives you the first upload to iTunes for free.

There's been a lot of attempts to create a musician's network and none of them have caught on. Fandalsim already has over 550,000 members and has the feeling of something that is simple and non-intimidating enough to finally break through in a big way. Here's a video overview.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

Interested in the Music 3.0 archives? Buy The Music 3.0 Guide To Social Media. The best of over 800 posts.

You should follow me on Twitter for daily news and updates on production and the music business.

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