Bridging The Streaming Music ‘Value Gap’

The global music business offered up two cheers this week for the first signs of life in the recorded music business in nearly a decade. According to International Federation of the Phonographic Industry’s (IFPI) latest global sales report, total recorded music revenue grew 3.2 percent in 2015, to $15.0 billion, the biggest jump since 1998 and the only growth since 2012, when sales ticked up 0.3 percent.

The overall growth IFPI_YouTubecomparisoncame entirely from digital sources, particularly streaming revenue, which jumped 45 percent over 2014, to $2.9 billion, or 19 percent of total revenues. Physical sales continued their decade-long slide, falling another 4.5 percent, buoyed somewhat by the continued renaissance of vinyl.

The strong streaming numbers were not evenly distributed, however. Subscription streaming revenue accounted for $2 billion of the $2.9 billion total, as the total number of paying subscribers reached 68 million, while industry revenue from ad-supported streaming amounted to a mere $634 million, despite more than 900 million listeners worldwide.

The report referred to the mismatch between consumption and revenue to artists and labels as a “market-distorting value gap,” that must be closed, echoing comments last month by RIAA CEO Cary Sherman. Read More »

How Twitter Beat Out Rivals For NFL Deal

Twitter this week landed streaming rights to a 10-game package of Thursday Night Football games next season for a surprisingly modest $10 million, edging out rival bids from Verizon, Amazon and Yahoo, at least one of which reportedly came in 50 percent higher than Twitter’s offer. Another rival, Facebook, reportedly dropped out of the bidding last week over objections to the advertising framework imposed on the deal by the NFL.

Twitter, in fact, will get minimal advertising rights as part of the deal. As a technical matter, it will be rebroadcasting the CBS and NBC feeds of the nfl_gamegames, which the networks will also be streaming over their own, authenticated TV Everywhere platforms as part of their $450 million deal to broadcast the games, and the networks will be handling the bulk of the ad sales for both broadcast and digital channels. Twitter will get a little bit of inventory around the margins to sell, plus some pre-game, player-created spots on Periscope. The deal is basically a $10 million brand-building exercise for micro-blogging and live streaming platform.

The games, in fact, will be available for free, without authentication, both on Twitter’s own platform and across its entire, syndicated global footprint.

That last point was obviously critical for the NFL, which has been working feverishly to expand its audience outside the U.S. and sees streaming as a way to reach potential fans in territories where broadcast rights would be a tough sell. Read More »

We’re All Netflix, Now

On April 10th Showtime will make all 13 episodes of its new Steven Soderbergh series “The Girlfriend Experience” available on its VOD platform in a single, binge-ready dump. So too will Starz, with all six episodes of the new Andrew Dice Clay comedy “Dice,” as the pay-TV networks increasingly ape the strategy pioneered by Netflix.

They don’t have much choice. Bingeing is how Americans watch TV now. According to Deloitte’s latest Digital Democracy survey, 70 percent of viewers admit to binge-watching, defined as viewing three or more episodes in a single sitting, and one in three say they binge at least once a week. The average number watched during a single binge, fact, is an astonishing five episodes, which in the case of a drama series could easily eat up four or five hours. Millennials in the survey average six episodes per sitting.

We binge-watch so much TV in fact that we’re making ourselves anxious, depressed and lonely, according to a separate study by researchers at the University of Toledo. Yet our appetite is only growing. According to Deloitte, all age groups in its study binged more in 2015 than they did in 2014.

The seemingly irresistible trend, however, poses a dilemma for traditional linear networks. Making new series or seasons available for bingeing risks undercutting primetime ratings. Read More »

The Accidental Blockchain Evangelist

PledgeMusic founder and CEO Benji Rogers did not set out to become the leader of a movement when he posted his now-famous essay last November describing how the blockchain — the technological underpinning of the cryptocurrency Bitcoin — could be used to untangle the notoriously Byzantine world of music licensing and payments. It was more a thought experiment than a business plan. But his ideas struck such a chord in the industry that Rogers has been thrust into the unwonted role of leading spokesman for the use of blockchain in the music business.

PledgeMusic CEO Benji Rogers

PledgeMusic CEO Benji Rogers

“I could never have imagined that the article I wrote would have the impact that it has,” Rogers would write a few months later in a follow up post. “In the short time since it came out, I have been overwhelmed by offers to speak publicly, offers of help and even offers to fund ‘what you are building.’ So I need to be clear here before we begin: this is not something that I am building.”

There are many in and around the music industry who would like to try, however.

By putting the blockchain at the center of his proposal Rogers helped spark growing interest in the industry in using the technology to bring transparency to the famously opaque world of music rights, where simply identifying who owns a musical work or recording, and who is entitled to be paid for which uses, can be near-impossible, keeping works out of the hands of would-be licensees. Blockchain was a major topic of discussion at this year’s SXSW conference, where it bore for full slate of panels. Read More »

Fighting Fraud And Piracy With Blockchain

Anyone who has ever posted a photograph or original piece of artwork on the internet knows that credit is fleeting. No sooner is it pinned, retweeted or shared then any metadata or watermark linking it to its source is stripped away or simply left behind as it spirals across social media platforms. By the time it reaches the end of the viral chain, even if someone wanted to offer proper attribution that information is all-but impossible to find.

A growing number of entrepreneurs are starting to tackle the issue of digital attribution and authentication, however, by leveraging the Bitcoin screenshot-www.verisart.com 2016-03-24 18-34-07blockchain. This month, New York-based Blockai and Los Angeles-based Verisart went live with new services that allow creators to register their works on the blockchain to create a permanent, indelible record certifying their patrimony and ownership.

The startups join a growing list of blockchain-based authentication services targeting the graphic arts, including Monegraph, ConSensys, ascribe, Stem, Mediachain and others. Just as the blockchain provides an open, self-verifying and decentralized ledger of Bitcoin transactions, it can also be used as a self-verifying database of other types of time-stamped events, such as the registration of a copyright. Those records, moreover, can contain a variety of kinds of data, including a hash of the work itself, the metadata to be associated with it, and information about permitted uses. Thus, any new instance of the work without that metadata would not match the original record and would be shown to be a copy. The permanent records also make it possible to recover the metadata even after it has been stripped away through subsequent uses of the work. Read More »

Vizio Gives Its New TVs A Mobile Heartbeat

For people who still want to watch TV programming on a big-screen TV, cutting the cord means accepting a series of kludges. You can use the built-in apps on your smart TV to stream Netflix, Hulu and other popular over-the-top channels, but you’re still stuck navigating through menus and login screens using a point-and-click remote that’s often less functional than an ancient cable remote navigating a grid-style program guide.

You could buy a new Apple TV device with it’s sleek-looking, touch-based remote, but you’ll still be scrolling through menus and fumbling through on-screen, point-and-click keyboards. You can use a Chromecast dongle, and do your navigating on a mobile device, but Chromecast basically just turns the TV into a dumb display. Your mobile device isn’t really talking directly to the TV — the dongle is simply discovering your tablet or google_chromecast_2_hdmi_port_thumbsmartphone inputs by virtue of being on the same network and then fetching the content requested itself — which introduces latency between command and response. And if you need to answer your mobile phone in the middle of a show it can interrupt your cast.

But the biggest problems with most connected TV streaming platforms, whether embedded in the TV itself or implemented in a set-top box, are that their operating systems are generally static and the apps you use are no one’s priority.

TV makers are not really OS companies, and their streaming platforms show it. The UIs are primitive, and the OS functionality is limited by the computing horsepower — often not very much — built in at the time of manufacture. Since people generally don’t replace their TVs very often — certainly compared with how often they upgrade their phones — OS upgrades are limited to firmware updates, which don’t happen very often. Read More »

Why Sean Parker’s Screening Room Could Succeed Where Others Failed

Efforts to shorten the theatrical window by enabling early in-home availability of movies have a poor track record in Hollywood. DirecTV’s effort in 2011 to offer movies in-home 60 days after their theatrical release for $30 quickly foundered, despite the support of four major studios, largely because the studios, fearful of retaliation from theater owners, didn’t shorten the window enough to persuade consumers to shell out the high ticket price. Digital HD, heavily promoted by 20th Century Fox, offers movies in home three to four weeks before their DVD/Blu-ray release for a premium price, but support from other studios has been spotty and DHD has had negligible impact on consumer behavior.

home-theater-lightingEfforts to eliminate the exclusive theatrical window altogether, such as Netflix’s insistence on making its original feature films available on its streaming service the same day they’re released in theaters, have been met with a near total freeze out by theaters, and no major studio has dared try.

It’s no surprise, then, that the new proposal from former Napster co-founder Sean Parker and Prem Akkaraju to offer movies in-home day-and-date with their theatrical release for $50, through a platform called The Screening Room, has sparked controversy in the Hollywood. Art House Convergence, which represents 600 independent theaters, released an open letter to the industry decrying The Screening Room concept.  “We strongly believe if the studios, distributors, and major chains adopt this model, we will see a wildfire spread of pirated content, and consequently, a decline in overall film profitability through the cannibalization of theatrical revenue,” the letter said. “The theatrical experience is unique and beneficial to maximizing profit for films. A theatrical release contributes to healthy ancillary revenue generation and thus cinema grosses must be protected from the potential erosion effect of piracy.” Read More »

Apple-Dubset Deal Marks A Rights-Tech Milestone

Apple Music this week tapped rights-tech developer Dubset Media to manage clearances and royalty payments for DJ mixes and other mashups, opening the way for thousands of hours of user-generated content to be made available legally on the streaming service.

The deal, which relies on Dubset’s proprietary technology for identifying the individual tracks used in extended mixes and making payments to the appropriate rights owners, marks a milestone for electronic dance music (EDM) and other types of derivative work, such as DJ mixes and remixes, which have become hugely popular with music fans but until now have largely been kept off the major streaming services due to the difficulty and Andy_Moor_DJ_2010complexity of clearing the rights for the dozens of tracks they typically include. Instead, most EDM and DJ mixes wound up on platforms like SoundCloud , which until recently had no licensing deals in place with music labels or publishers, or on underground streaming services that are less particular about copyrights.

“Our genre has grown hand in hand with the rapid growth of streaming and digital services yet, despite billions of online plays, most of our creators and rights-holders earn very little for their efforts compared to their ‘pop’ peers,” Association of Electronic Music CEO Mark Lawrence told Music Business Worldwide in response to the Dubset announcement. “This is the first move to correct the imbalance.”

But the deal also represents a milestone in a growing effort, both in the music business and in other media industries, to bring technology to bear on complex rights-management problems to try to open up new, more efficient and transparent channels for exploiting and monetizing media content rights. Those rights-tech efforts could eventually prove as disruptive to the business of owning, using and licensing media rights as technology has already proved to the distribution side of the business. Read More »

Turning Contracts Into Code: Why SoundExchange’s ISRC ‘Lookup’ Tool Matters

SoundExchange, the digital performance royalty collection agency, along with the international record industry association IFPI, this week unveiled its long-awaited portal that allows users to look up the IRSC number for nearly 20 million unique music recordings, along with associated metadata.

The lookup tool has been in the works for years and its launch represents an important milestone in the music industry’s often fitful effort to bring its scattered record-keeping up to date with the myriad ways music is used and consumed today. The database can be searched by track title, artist Music-Dials-Guitar-Case-Moneyname, release (i.e. album) title, version, recording date and file type. Metadata can be downloaded and incorporated with playback applications by digital music services.

The International Standard Recording Code (ISRC) system was established as an ISO standard for assigning unique identifiers to individual sound recordings in 1989 and is overseen by IFPI, the international federation of national recording industry trade associations. Compliance with the system was for many years spotty, as record companies continued to rely on their own in-house systems for identifying and cataloging recordings. Since 2006, however, the use of ISRCs has grown more consistent and widespread, thanks in large measure to Apple’s insistence that labels provide ISRC numbers for every track sold through the iTunes Music Store. More recently, streaming services such as Spotify and Pandora have embraced ISRC to track song-plays for royalty purposes. Read More »

AT&T Prepares To Flex Its OTT Muscles

AT&T announced this week that it plans to take DirecTV over-the-top later this year through a multi-tiered streaming service that will be available to wireline and wireless broadband subscribers regardless of provider.

The top tier, to be called DirecTV Now, will feature “on-demand and live programming from many networks, plus premium add-on options,” which sounds more or less like Dish Network’s Sling TV OTT service. A mid-level tier, called DirecTV Mobile, will offer a stripped down video lineup and a “mobile-first experience.” A third, ad-supported free tier, called DirecTV Preview, will offer a “millennial focused” grab bag of digital-native content along the lines of Verizon’s Go90 service.

cable_TV_not1The announcement itself was no big surprise. AT&T obviously didn’t spend $48 billion to acquire DirecTV just to be in the satellite TV business — a business with little if any organic growth left in it — and extending DirecTV’s business onto broadband and wireless platforms is an obvious strategy. What is a bit surprising is the timing of the announcement.

As of now, AT&T has no programming lineups to announce for any of the tiers, no pricing information and no exact start date. And according to a Wall Street Journal report, negotiations with the networks to secure streaming rights have just begun. Read More »

Voices Raised Over Librarian of Congress Nominee

The Librarian of Congress is not generally considered a controversial post within the government. There have only been 13 of them in the Library’s 216-year history, which tells you something about the urgency with which Congress has historically regarded the appointment.

The job is largely administrative, charged with overseeing the libraries vast collection and providing research assistance to Congress. But it also

Dr. Carla Hayden

Dr. Carla Hayden

has some policy-making authority, exercised most prominently in recent decades through its oversight of the U.S. Copyright Office, which is a division of the Library.

Under Section 1201 of the Digital Millennium Copyright Act the Copyright Office must conduct a triennial rulemaking proceeding to determine whether certain types of copyrighted works protected by access control technologies (“technical protection measures”), should be exempted from the DMCA’s ban on circumventing such measures in certain circumstances.

The process has, among other things, led to recognition of a right to unlock a cell phone so it can be used on another network and to circumvent DRM on DVDs for certain teaching purposes, and the right to circumvent DRM on ebooks to allow them to be used with screen readers to assist the visually impaired. Read More »

Paramount Needs A Strategy, Not a Strategic Investor

Under pressure from investors to “do something” about its plunging share price, Viacom has agreed to sell a minority stake in Paramount Pictures in hopes of boosting Wall Street’s valuation of the studio, which has lagged its peers for much of the past decade. But CEO Philippe Dauman has made it clear he intends for Viacom to remain in firm control of Paramount and is interested only in “strategic” partners.

“We have received indications of interest from potential partners seeking a strategic investment in Paramount Pictures and I have decided to pursue discussions with a select group of potential investors,”  Dauman said in a statement. “In this time of change and enormous opportunity in tom_cruise_MIour industry, a partnership will bring significant benefit to Paramount and Viacom, both strategically and financially, provide new opportunities for Paramount’s employees and talent, and enhance long-term value for all Viacom shareholders.

“Paramount Pictures has been a leading motion picture studio for more than a century and is among a select few that has significant reach and scale, a deep library, a robust pipeline with proven global franchises, and a high potential television production operation,”  Dauman added. “In addition, the value of motion picture content continues to increase with the explosion of screens and the rapid expansion of the global theatrical market. This is the perfect time to explore new strategies to capitalize on Paramount’s content expertise and global platform, maximize opportunities for its continued growth, and unlock the value of the business for the benefit of shareholders.” Read More »

FCC Goes Searching For A New Set-Top Box

At a press conference following the Federal Communications Commission’s 3-2 vote Thursday to launch a formal rulemaking proceeding aimed at unlocking the set-top box FCC chairman Tom Wheeler emphasized, as he has since announcing the proposal last month, that nothing in the proposed new rules alter existing licensing or content-protection agreements  between networks and pay-TV providers or disrupt existing advertising models.

Federal Communications Commission (FCC) Chairman Tom Wheeler gestures at the FCC Net Neutrality hearingOn the contrary, he said, “the rules will require that the sanctity of the content is passed through” unaltered to any new device or app used by consumers to access pay-TV content. That includes, he went on to clarify, the network’s channel position, the content recording rules and the unadorned, original ad load.

“Nobody’s going to be replacing ads, or doing any kind of split screen, with ads on one side, or putting a frame around the content and putting ads around it; none of that,” he said. “The sanctity of the content will be preserved.”

In fact, it’s not clear from his comments what, exactly, Wheeler hopes or expects anyone to be doing with the newly open standards for set-top boxes, assuming the rules ever gets that far through the likely gantlet of lawsuits and foot-dragging  (the formal Notice of Proposed Rulemaking the commissioners voted on has not yet been published by the FCC). He took pains at Thursday’s hearing to make it sound as if nothing much would change about set-top boxes at all under the new rules apart from the manufacturer’s name plate, going so far as to put up a pair of identical slides purporting to show before and after schematic drawings of how consumers would access pay-TV content. Read More »