A Chunk of History: The Medieval Roots of Digital Publishing

One of the wonderful paradoxes of the digital era of media is its retrograde quality. We tend to think of inventions like the internet and peer-to-peer digital networks as apotheoses of modern communication, but their economic impact on many media industries has been to unravel their modern industrial structures and to resurrect many of their pre-industrial, folk foundations.

Nowhere has that been more true than in the case of music. MP3 files, P2P networks, and now streaming have blown up the multi-song bundle we called the album — and the profit margins that came with it — and restored the single to prominence, as it was in the days before the invention of the long-playing record (LP).

The much-derided phenomenon of unlicensed “sharing” of music over P2P networks also carries echoes of music’s past. Until the Gramophone and the Phonograph made private performances of music practical, music was almost always shared, in the sense that it was usually experienced as part of a public performance. While the industrial technologies of recording and playback made private performances lucrative the instinct to share music never really went away. Read More »

Autumn Of The A&R Man

The International Federation of Phonographic Industry (IFPI) this week released its biannual Investing in Music report and the numbers raised quite a few eyebrows. According to the report, record labels worldwide invested U.S. $4.5 billion last year in A&R ($2.8 billion) and marketing, ($1.7 billion), representing 27 percent of their total revenue, more than the pharmaceutical, aerospace, or technology industry spends on R&D in percentage terms.

His_Master's_VoiceThat represents an increase of 12 percent and 6 percent, respectively, over 2013.

Particularly eye-opening was the report’s claim that it costs a label anywhere from $500,00 to $2 million to “break” a new artist in a major market like the U.S. or U.K., factoring in the “upfront” costs of artist advances, recording, music video production, tour support, and marketing and promotion.

The report is clearly meant to bolster the case for the continued relevance of traditional record companies amid the simmering industry debate over whether artists still need a label deal, given the availability of cheap, DIY recording technology and the myriad independent distributors, aggregators, marketers and other service providers offering to help artists bring their music to market. Read More »

Video: RightsTech Summit Keynote Conversation With Benji Rogers

RT Summit 3PledgeMusic CEO and founder of the DotBlockchainMusic project Benji Rogers was interviewed by Robert Levine, author of “Free Ride” and a former executive editor at Billboard, during a keynote conversation at the inaugural RightsTech Summit on July 26 in New York. Among the topics they discussed was the potential for blockchain technology to create an immutable but endlessly updatable ledger of “digital truth” regarding the ownership and priority of sound recordings and musical compositions.

Co-produced by Concurrent Media Strategies and Digital Media Wire, the RightsTech Summit brought together over 100 senior media and technology executives, thought-leaders, entrepreneurs, and artists from across multiple media and entertainment industries for a wide-ranging discussion of technology innovation around the registration, management and licensing of media rights on digital platforms. The next RightsTech event will be held in New York in September in conjunction with Digital Media Wire’s New York Media Festival.

Video of Benji Roger’s keynote is available here. We’ll have audio from several other sessions from last week’s Summit up shortly.

(Video courtesy of SlidesLive).

The Fault In Our Stars: Lessons From The 2015 Box Office

Economists have long recognized that the sports and entertainment industries exhibit elements of what University of Chicago economics Sherwin Rosen called the economics of superstars in his classic 1981 study, in which small differences in talent or popularity can lead to outsize differences in returns. Anyone who reaches the NBA, for instance, is by definition an elite athlete. But Star-Wars-Force-Awakens1if the superior skills of a LeBron James or Kobe Bryant added a mere 2 points per game on average to his team’s total, in a league where the average point differential per game is 0.06, over the course of a season they could easily add a half a dozen or more wins to the team’s record, making the difference between first place and missing the playoffs. Given the financial payoff for the team’s owners of reaching the playoffs, James and Bryant are worth almost any price, as in fact their salaries reflect.

Similarly, there are many talented performers in the entertainment industries. But people tend to prefer to listen to the same music and see the same movies as their friends. So if their friends start to listen to Adele or Taylor Swift more than other artists, even by a small amount, that difference in popularity is quickly amplified through network effects to where Adele and Swift tower over others in the charts and can command almost any price for their concerts. Read More »

Licensing Music Streaming’s All-Of-The-Above Business Model

There’s an old adage in business that there really are only three fundamental business models in the world: I pay, you pay, or somebody else pays. Music streaming services have been built on each of those.

Music has been bundled in with other services at no apparent additional cost (I pay); it has been offered as a subscription service (you pay); and it gangnam1has been made available for free, supported by advertising (somebody else pays). Increasingly, however, streaming services are looking to multiple business models in search of still-elusive profits.

The latest case in point: Pandora. Originally an ad-supported internet radio service, it spent $450 million last month to acquire music concert ticketing and promotion service Ticketfly. This month it dropped another $75 million to buy parts of paid-streaming service Rdio at the latter’s liquidation yard sale. Read More »

Live Music’s Long, Strange Trip Over The Top

Live music has been on a bit of an over-the-top roll lately. The five shows in the Grateful Dead’s Fare Thee Well tour, which wrapped up in Chicago over the weekend, together racked up more than 175,000 paid live streams, making it easily one of the largest paid live music events ever to go over the top. Archived shows will be available through August 5, which will push the combined live and on-demand numbers even higher.

Though major festivals like Coachella and Bonaroo draw bigger online live audiences, those shows are free; the Dead shows cost $79.95 for the full, five-day run (individual shows were less). Archived shows will remain available through August 5, which will push the combined live and on-demand PPV take even higher.

Grateful_DeadWhile the Dead may be sui generis when it comes to pay-per-view streaming, live music streaming in general is attracting new interest from both startups and established players in the concert business.

This week brought word of a partnership between Verizon Digital Media Services and LiveXLive to live stream at least three day-long festivals this fall in the U.S. and internationally.

Launched in May, LiveXLive is a subsidiary of hedge-fund backed Loton Corp., created to pursue what its founders believe is a growing opportunity in live music streaming.  While live-streaming music festivals obviously is not new, LiveXLive’s is thinking much more ambitiously. Read More »

Sony’s Stake in Spotify Challenged in Lawsuit Claiming Artists Are Robbed 

Sony is now being sued for self-dealing on the allegation that its equity position is harming 19 artists like Kelly Clarkson and Carrie Underwood. The lawsuit asserts that Sony negotiated the stake, and is also taking advertising income from Spotify, in lieu of demanding fair-market royalty rates from the streaming company. An additional claim for breach of good faith and fair dealing essentially frames what’s happened in the recording business as a diversion of money that would otherwise be going to artists.

Source: Sony’s Equity Stake in Spotify Challenged in Lawsuit Claiming Artists Are Robbed – The Hollywood Reporter

Swift Action: Reverses Royalties Rule on Apple Music 

Less than 24 hours after chart-topping singer Taylor Swift criticized Apple for not paying royalties to artists during the three-month free-trial period for its new Apple Music service, the company’s chief content czar signaled the policy has been reversed via Twitter.

Source: Apple Responds to Taylor Swift: Reverses Royalties Rule on Apple Music | Variety

Spotify downloaded over 5 million times on PlayStation devices 

Spotify said that the 5m downloads in such as short space of time “makes this the quickest launch adoption rate in PlayStation history”.Since launch, users have streamed over 785 million tracks on PlayStation 4 – equating to 42 million hours of listening.

Source: Spotify downloaded over 5 million times on PlayStation devices – Music Business Worldwide

Spotify, Mum On Funding, Announces 20M Paying Users, 75M Overall, Touts $3B Paid Out To Artists

Streaming music service Spotify is not confirming the reports today about its latest funding round, but it’s putting out some of its own news: the company today announced that it now has 20 million paying users, and 75 million overall.It also updated its numbers revealing how much it’s paying out to artists from streams on its platform to $3 billion to date, with $300 million in the first three months of 2015. The update on royalties is timely considering the antitrust investigation currently hanging over Apple Music in the U.S., which alleges that the iPhone maker is colluding with record labels on pricing.

Source: Spotify, Mum On Funding, Announces 20M Paying Users, 75M Overall, Touts $3B Paid Out To Artists | TechCrunch

Spotify Raises $526 Million Amid Battle With Apple 

Spotify has closed a massive new round of funding from a wide range of global investors who are betting it can fend off a new threat from Apple. The music-streaming company closed a $526 million round of funding valuing it at $8.53 billion, said a person familiar with the matter. The financing, which The Wall Street Journal first reported on in April, closed on Tuesday.

Source: Spotify Raises $526 Million Amid Battle With Apple – Digits – WSJ

Universal Music Appears to Be off the Hook in States’ Probe of Streaming Services 

The world’s largest music company apparently is no longer a target of an ongoing antitrust probe of the streaming music business. The New York State’s attorney general posted a letter from Universal Music Group attesting that it isn’t doing anything illegal to block consumers’ access to free music streaming services, a sign that the label proved to state antitrust investigators that its conduct did not stifle competition.

Source: Universal Music Appears to Be off the Hook in States’ Probe of Streaming Services | Re/code

Apple Makes Music Fans An Offer They Might Refuse

As expected, Apple’s new music strategy is to try to be all things musical to all people. Or almost all people.

The newly christened Apple Music, unveiled Monday at the World Wide Developers Conference, includes a $10 a month streaming service that offers on-demand access to Apple’s 30 million song library, along with cloud storage and playback of your own music collection and the option to let Apple’s experts curate personalized playlists for you. It also includes a free, ad-supported internet radio service featuring featuring celebrity DJs and what Apple is billing as the world’s first 24-hour global radio station, Beats One. It also includes a reboot of Ping, Apple’s failed social media platform, now called Music Connect and featuring artist pages.

Apple_Music_iPhoneYou can also, of course, continue to purchase downloadable tracks and albums from the iTunes Music Store.

About the only thing Apple Music does not have is the sort of free, ad-supported on-demand tier that has helped make Spotify the world’s largest on-demand streaming service.

The lack of a free on-demand tier is partly Apple’s preference: It didn’t spend $3 billion to acquire Beats’ subscription-only music service last year to get into the free streaming business. But no free tier was also part of Apple’s pitch to the record labels, publishers and artists, all of whom have been agitating to get more people paying for music online, notwithstanding consumers’ demonstrably limited appetite thus far for paid streaming: Give us what we need to crush our rivals, Apple suggested, and we’ll do for paid streaming what they couldn’t. Read More »