The Top Amazon Holiday Audio Product - The Turntable

One of the more interesting aspects of the vinyl revival is the fact that so many buyers don't actually play them, instead considering the purchase more as a collectible.

That seems to be changing in that manufactures have reintroduced turntable models that had previously been discontinued, and it's pretty easy to find one to buy from a variety of retailers.

Even more evidence that vinyl is now being listened to is the announcement from Amazon that it's top selling electronic item over the holidays was a turntable.

The Jensen JTA-230 3-Speed Stereo Turntable was the model of choice, probably because it's an all in one unit with built-in speakers, a USB port for converting vinyl records, and aux input for a connect a digital media player. Of course, the price was right as well at $50.

While this is far from a high-end unit, the hot sales mean that at least some vinyl fans are finally listening to their round pieces of plastic.

What's the second best selling electronic item?  The Yamaha RX-V677 7.2-channel Wi-Fi Network AV Receiver, which features built-in support for Apple's wireless AirPlay protocol, allowing users to transmit music from an iPhone, iPad, iPod touch, Mac or Windows PC.

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Where Are People Buying Their Music?

There's still a lot of physical music product being sold despite what you might read, but the places that people are buying it is changing.

According to Soundscan, retail stores are selling less and less, but some of the slack is being taken up by non-traditional retailers like Amazon, which grew 8%.

Retail chains, mass merchants like Wal Mart, dowload stores, and mom & pop stores all saw their sales decrease last quarter.

Overall, CD sales are down 10%, but still sold a healthy 82.6 million, and vinyl sales still continue to surge, up 32% to 8 million sales.

Physical product is far from dead, but it's certainly decreasing at a rapid rate.

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Amazon Prime Coming On Strong As A Streaming Service

Means More Revenue For Artists And Songwriters

I've been saying for months to watch out for Amazon's music streaming service, and now there's some data to back that up.

According to a report by market-research firm Parks Associates that was sited in Billboard, 66% of the 97 million U.S. households with broadband connections listen to a streaming audio service. 40% of them use a free service, while 26% listen to a paid streaming service.

Here's where the data gets interesting. Amazon Prime Music has the lead with about 10% of those households that subscribe to a paid service, followed by Pandora One at 6%, Spotify Premium at 4%, SiriusXM Streaming at 4%, iTunes Match at 2% and Google Play Music at 2%.

Amazon Prime has an estimated 40 million domestic subscribers, according to Consumer Intelligence Research Partners, although some figures reach as high as 90 million. Whatever the number, it's large and now it appears that many of those customers are beginning to discover the value of Prime Music, which is part of the Prime subscription.

Amazon Prime has been completely under the radar when it comes to the streaming music wars, but shouldn't be underestimated. Amazon's a huge company with deep pockets, and ultimately may be the only company that can ultimately take on Apple, Google and maybe Spotify.

The one downside to Prime Music is that it's catalog is relatively small at 1 million or so (most other services are 25 million plus), and doesn't have the latest hits. That may not be a factor as the customers using it may not ultimately care.

The point is that Amazon Prime is becoming another viable revenue stream when it comes to streaming music.

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Amazon Now Selling Concert Tickets With No Extra Charges

One of the things that everyone hates is the service charge attached to a concert ticket when you buy it from a broker and even directly from the box office.

Amazon may finally put an end to that as it's trying to get into the ticketing business, promising full transparency and no extra charges in tickets purchased from the site. In a pilot program launched on Amazon Local, the company is selling tickets to the Bestival shows on the Isle of Wight in early September.

Amazon will offer more shows in the UK through the end of the year, then after the bugs are worked out, will roll it out to the US as well.

One of the little known secrets in the concert industry is that it's not the venues or promoters inserting this extra charge though - it's the acts themselves. Instead of raising the ticket price to where it seems too high, it feels more acceptable if there's that service charge on the back end.

Many acts actually hate the idea of doing that to their fans, and these are the ones that usually allow paperless ticketing, a practice that has yet to gain tracktion in the industry.

If Amazon ticketing catches on, it might finally put a stop to the insane extra charges that we so reluctantly pay.

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Twitch Launches New Free Music Library For Games

Gamers really love Twitch, the leading video platform and community that allows them to broadcast, watch and chat about gaming. Many even consider it the center of the esports industry. That said, it's a huge platform that's somewhat underground unless you're an active gamer.

A big problem that viewers have had is that many times the audio in a gaming video would be muted because of the copyright laws regarding the music. In other words, a video of someone playing a game would violate the music copyright of the game because the video didn't have the rights to play it.

Needless to say, watching a video without the sound isn't remotely the same experience so Twitch has done something about it by making a library of 500 royalty-free songs available to play when that situation occurs.

The library leans towards EDM and features songs from both Skrillex and Steve Aoki's record labels as well as many indie labels. Aoki already has a relationship with Twitch, having performed the platform's first live concert in 2014.

Twitch, which is now owned by Amazon, plans to make music more prominent in the future by adding a new Music category for performances, and has even entered into an agreement with Beatport to host a channel.

YouTube went through a similar a similar problem with its Content ID feature before granting blanket licenses from major labels to video creators, and Twitch now hopes that the library will get around the same problem just as seamlessly.

Who Will Be The Last Streaming Service Standing?

Reports last week that Google is in talks to acquire Songza, a six year old music curation and streaming service, show that an industry-wide rollup in streaming services is now in real possibility. This is on the heels of Apple snapping up Beats Music recently, and may be a sign of things to come in the sector.

Although Songza is a relatively minor player in the space with only 5.5 million active users, it does show that the major players are interested in acquiring infrastructure or feature parts they don’t currently have in order to quickly compete with the other major players. Songza is known for its music curation, which could be immediately integrated into Google Play Music All Access (perhaps the world’s worst brand name) in order to compete with an anticipated new Apple streaming service. Beats Music’s main feature is also curation, and having Apple jump out in front with that feature would require Google Play to catch up even more than it has to already.

It’s still unclear whether curation is the killer feature that music consumers want though. A trusted source has always been the key to popularizing new music, from radio DJs to MTV to music critics, but as of yet no single curation source has risen above the rest online as the de facto standard. In fact, it can be speculated that curation doesn’t actually matter much at all, given the fact that Beats Music subscriber numbers are so low at between 110,000 to 250,000, depending on what you read. It was the feature that the service hung its hat on, yet it wasn’t something that consumers flocked to when it became available.

That said, there are indications that we’re beginning to see what has been predicted as a slow rollup of smaller streaming players that will eventually leave only the major players of Amazon, Google and Apple, and maybe one or two of the smaller ones, standing. Read more on Forbes.

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Beyonce Fights Back Against The Amazon/Target Boycott

If you’ve been following the marketing strategy used by team Beyonce on her latest self-titled album, you know that it’s been quite clever so far. To recap, the Beyonce album was released on the unsuspecting public without any advance marketing fanfare whatsoever, which caused a bit of a commotion as that fact was trumpeted far and wide by bloggers and news organizations (including me, I should add).

Of course there’s always more to the story and so it is here. The album was released as a digital-only product, with a one week exclusive going to iTunes. This didn’t sit well with retail giant Target, who refused to sell the CD when it was released as a result. A few days later, Amazon joined the boycott on the CD as well (although it still sells the download). 

Even though Beyonce set an iTunes record with over 600,000 digital album downloads, having the number 2 and 3 retailers boycotting your physical product could put a crimp in your long term sales. So what did Beyonce do? She went on a shopping trip to a Tewsbury, Massachusetts Walmart on Friday night, announced to everyone over the store’s loudspeaker system that she was there to buy her album, then gave out approximately 37 grand worth of $50 Walmart gift cards to everyone she saw in the store.

Most of the press covered the move as Beyonce being nice to a bunch of people she didn’t know, but there was actually a grand design behind the shopping appearance. One was a subtle reminder to her fan base that even if you couldn’t find her CD at Target or Amazon, it was readily available at Walmart. She also sent an unmistakable message to Target that said, “If you cross me, I’ll give all of my attention to your competitor instead.” Read more on Forbes.

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

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

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Top 10 Best Selling Vinyl Records

Amazon recently presented a report that stated that vinyl sales are up 745% since 2008. One of the reasons the company feels that sales are up that drastically is because of its Autorip service, which provides MP3s of the tracks of the vinyl album, so it's like getting two products for the price of one. Here are some interesting Amazon vinyl facts.

Best Selling Genres
Rock - 55.6%
Miscellaneous - 19.2%
Pop - 9.8%
Urban - 4.3%
Dance - 3.9%
Folk - 1.7%
Blues - 1.5%
Easy Listening - 1.5%
Jazz -1.5%
Reggae - 0.9%
Classical - 0.1%

The shock here is not that rock leads the pack, but how poorly jazz and classical sales are, considering that vinyl is a centerpiece of the listening experience of both genres.

That said, here are the top 10 best selling vinyl records of last year.

Best Selling Vinyl Albums In 2012
1. Blunderbuss - Jack White
2. Abbey Road - The Beatles
3. Babel - Mumford & Sons
4. El Camino - The Black Keys
5. Sigh No More - Mumford & Sons
6. Bloom - Beach House
7. For Emma Forever Go - Bon Iver
8. Boys And Girls - Alabama Shakes
9. 21 - Adele
10. Bon Iver - Bon Iver

The surprise here is that both Mumford & Sons and Bon Iver both had two records in the top 10, and that Abbey Road is still popular after all these years.

Google Launches A New Streaming Music Service

Yesterday Google introduced its new streaming music service called All Access, but surprise, surprise - it's not the same one that's been rumored for months.

Previous reports had it that Google's new service would be built around YouTube, which made a lot of sense since the majority of people discover new music through that video service anyway. It seems that both services will live in parallel, the difference being that All Access will be subscription only with no free tier. Users will have to pay $10 per month for the service ($8 if you subscribe by the end of June) with a 30 day free trial.

While we don't know for sure what's in store over at YouTube, We do have a little more information about the list of All Access features. It appears to combine your personal music collection with any available tracks in their catalog into a single searchable library, and of course, Google excels at search so everything should be easy to find. It also has auto-recommendation-based radio stations that allow you to customize your playlists.

A couple of things about Google All Access are very interesting:

1. Google beat Apple to the punch. The tough part about launching any kind of digital music service is making a deal with the major labels. The fact that Google accomplished this before Apple probably means that the labels pushed for a better deal and got it. This had the dual purpose of stymying Apple's attempts as well, as the company has reportedly only recently upped the terms of what they were willing to pay, and still haven't completed deals with Warners and Sony.

2. There's another service vying for marketshare. Although Amazon is king of the hill in terms of online retailers, their music site hasn't made nearly the mark that was anticipated, especially when you consider the marketshare that Android phones enjoy. As more and more consumers discover the joy of accessing music versus owning it, the marketshare that it has (about 13%) could shift in a hurry, especially if Apple doesn't introduce its service in the short term. Google as a behemoth company stands on the same ground as Amazon, and could easily eat their digital lunch and maybe Apple's too when it's all said and done. After all, they have an installed base of all those Android phones.

As has been the theme here lately, we're witnessing a big change in the music business occur right before our eyes, and it's going to be better for musicians in the long run. Today every artist and songwriter complains about the meager revenue they receive from streaming, but remember that as of now it's only expected to total $1.7 billion at the end of 2013. Considering that iTunes throws off twice that in royalties to the major labels alone every year, you can see where this is eventually going to go. Unfortunately, no royalty details were mentioned during the announcement yesterday (no surprise there).

Streaming probably won't replace the income of the glory days of CDs, but things will eventually be better than they are now in the transition period from one distribution method (downloads) to another (streaming).

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The Value Of A Fast Page Load

We live in a very impatient world and that impatience could cost you fans, users or sales. A study created by the OnlineGraduateProgram.com found a number of startling facts about our desire for online speed:

• 1 in 4 people abandon a web page if it takes more than 4 seconds to load.

• 50% of mobile users abandon a page if it doesn't load in 10 seconds.

• 40% of mobile shoppers will abandon an e-commerce site that doesn't load in 3 seconds.

• Google found that slowing search results by just 4/10ths of a second would reduce the number of searches by 8 million a day.

• Amazon estimates that it could lose up to $1.6 billion a year because of as little as a 1 second web page delay.

This means that you can't count on our ever expanding bandwidth for your site to load fast, you still must optimize it for speed, because tenths of a second count more than ever. This is one of the reasons to get a pro to build you website in order to be sure to get efficient, streamlined code. Page loading has become so much more than slimmed down graphics files these days.

A couple of other quick facts; the majority of Americans will not wait in line longer than 15 minutes, and half of them would not return to an establishment that kept them waiting. But we didn't need a study to tell us that.

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

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 Cyber Fab 4

When it comes to what we'd call the "modern" businesses of today, there are 4 giant players that dwarf everyone else: Apple, Amazon, Google and Facebook. Although these "Cyber Fab 4" do most of their business online (Apple is the exception that we'll cover in a bit), they threaten the existence of a group of giant traditional businesses in a wide range of industries, as outlined in the infographic below.

By the way, which of the 4 has a different business model from the others? It's Apple, which basically uses its software to get you to buy their high-margin hardware. It's hard to say that that's a better business strategy, but it sure is working well for them as some analysts predict their stock will go to $500 soon.

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

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

Prince And Gaga Prove The New Music Business Model

By now I'm sure that everyone's heard about Lady Gaga selling 1.1 million copies of her "Born This Way" album last week. On the surface this seems like a huge number, especially for an artist these days, but there's more here than meets the eye.

First of all, the digital sales were about 660,000, but 440,000 of them came from Amazon's two day $.99 promotion. This set a one-week SoundScan record for most digital sales, and became the eighth best-selling U.S. digital album of all time. But the significant thing here is the price, 99 cents, which we'll get to in a minute.

Next in the news was the fact that Prince just ended his 19 day run playing the Forum in Los Angeles. What's significant here is that the majority of the tickets in the 18,000 seat venue were priced at only $25.

Why is that important? Because it shows a new trend in the entertainment business were price is a motivating factor in purchases.

Way back before music became the commodity that it is today, everyone felt they got a fair value when purchasing either an album or a concert ticket. The price was cheap enough that if you bought something that you didn't like, you didn't feel ripped off or filled with buyer's remorse. It was easy enough to buy the next album or a ticket to the concert without feeling it in your pocketbook too much.

Of course all this changed when Wall Street became involved in the music business after it smelled big money in the 80's. The prices for premium artist's CD's were double what consumers were used to paying for vinyl records, so if you bought one that you didn't like or only had one good song on it, you indeed felt the financial pain of a near worthless purchase.

Likewise for concerts. It was nothing for a music fan to go to several concerts a month during that era. They were cheap enough that you didn't feel like you'd have to miss lunch for the next two weeks to pay for it, and you felt comfortable about spending money to see a new unfamiliar act.

Of course that all changed when the price of tickets, concessions, parking and service charges went to the sky. Music lover's buying habits slowed to only a show or two a year instead of every month. In it's greed, the industry tried to milk every single dime from the consumer at the expense of a making them a returning customer.

With Gaga signing on for the Amazon promotion, it proves that consumers are more price conscious than ever with music, and will buy in large number if the price is right. With Prince lowering the ticket price to $25, and doing a good business in doing so, it proves that people will still show up if the price is right.

Although the numbers are unofficial, it seems that prince sold as few as 6,000 seats on some nights, but that's still enough to make money since both his and the venue's overhead was amortized over the number of dates played. Gaga still sold more than 500,000 albums at $13 to 16, despite the 99 cent promotion (although her number have steeply fallen since), once again proving that online, the more you give it away (or almost give it away), the more you sell.

It's about time that the industry learns that price is a barrier to sales. It's hard to believe they didn't know that in the first place.

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

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

Check out my Big Picture blog for daily discussion of music, recording, and production tips and tricks.

Taylor Swift's New Sales Strategy

Taylor Swift is using an interesting sales strategy for her new album, "Speak Now." You can download all 14 songs from Amazon for only $3.99, while the CD is available for the now standard $9.99.

Then if you head on over to iTunes, the download price is $13.99 for all the entire album, or $1.29 per track. It will be very interesting to see the breakout of which distributor actually sells more product.

That being said, it's probably not so much about the pricing strategy as it is about Swift's popularity, since the album is expected to sell more than 1 million units it's first week out. That would be a record for a country album, and a most rare sales occurrence these days.

Despite all the gloom and doom around the music industry, this performance proves that there's still an audience willing to purchase music if it's a product they like.

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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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iTunes Still Growing

According to a new report by Billboard Magazine, iTunes's market share has actually increased in 2009 to 26.7% of all music sold in the United States (research firm NPD says it's 28%). That's up from 21.4% in 2008 and more than double the 12.7% the company had in 2007.

Of course, iTunes is the largest music retailer in the United States by far, with 2nd place Wal-Mart at 12.5% and third place Best Buy at 8.7%. The iTune's increase was no surprise since both Wal-Mart and Best Buy are decreasing the number of CD's that they sell and well as the floor space.

Amazon keeps on growing with 7.1% of total sales in 2009 (for the record, NPD also states that Amazon has now tied Wal-Mart at 12%). Surprisingly, it's online Amazon MP3 store has only 1.3% of the market, but that's still good enough for 10th place.

As you can see from the numbers, the days of the "big box" retail stores are coming to a close, at least as far as music is concerned. That's OK because the big box stores were actually one of the reasons for the independent record store decline. With the big box stores taking up so much of the market share before iTunes (mainly because of their loss-leader deals on hit CDs), the life-blood of the industry, the local record stores, were left to die on the vine. This is just another of the many mis-steps of an industry that seems hell-bent on killing itself.

What's going to happen in the future? It should be especially interesting to see what iTunes offers later in the year. Some say it'll be a cloud-based service based upon the infrastructure of Lala, which Apple purchased earlier in 2010. Will that change the dynamics of music retail? Probably no more so than the way the trend is going already.

One thing to remember is that even though mainstream retail of physical product (CD's) is declining, that doesn't mean that CDs are going away any time soon (yes, eventually they will, just not as soon as some predict). What never shows up in the sales numbers are amount that's sold at gigs, which are substantial when you add them all up.

That being said, don't look for big changes at least through the end of the year.

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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.