Bad Idea: Internet Service Providers Should Assume Most Digital Locker Content Is 'Illegal'

In an interesting blog post, James Firth discusses a comment from music industry analyst Mark Mulligan, quoted in a BBC story about the digital locker site Hotfile: 

On Techdirt.

Putting Spotify on the Spot

There has been some criticism that Spotify doesn't really bring in much money for the artists concerned (the labels, of course, do fine). But here's an interesting point that's worth bearing in mind more generally:

Moving on, the data claims that to make minimum wage, an artist would need 4.6M plays on a streaming service like Spotify. While that might be technically true, it's a pretty meaningless calculation. It does not take into account the promotional value of streaming -- and unlike selling 143 CDs, getting 4.6M plays of a digital track would certainly lead to significant revenue elsewhere. Surely an artist would be able to translate that much attention into successful live shows or their own CwF+RtB offering. After all, we've seen time and time again that focusing on something as narrow as money earned per track sold (or streamed play) is a limited way to view a musician's earning potential.

Follow me @glynmoody on Twitter or identi.ca.

Making Money by Giving Stuff Away

Open source software is obviously extremely interesting to companies from a utilitarian viewpoint: it means they can reduce costs and – more significantly – decrease their dependence on single suppliers. But there's another reason why businesses should be following the evolution of this field: it offers important lessons about how the economics of a certain class of products is changing.

On Open Enterprise blog.

How to Make Money from Music

Someone's managed:

it was recently revealed that rock gods Aerosmith have made more money off of their crummy co-branded version of Guitar Hero (I say crummy because reviews of the game have been lackluster) then they have on any album that the band has released to date. The revelation recently came from Activision chief executive Bobby Kotick and it unscores a number of really interesting points. First off, Guitar Hero: Aerosmith is nothing more than a "greatest hits" montage for the band, with a bunch of indy band songs sprinkled in for variety. Putting out the game cost Aerosmith nothing more than their signature, agreeing to allow Activision to use their music. Secondly, it proves the consumer is still interested in paying for music. They just don't want to buy CDs or single tracks anymore. They want interactivity, add-ons, special content and video games. According Microsoft gaming chief Robbie Bach, more than 60 million tracks were downloaded for Rockband, Guitar Hero and Lips over Xbox Live in 2008.

The second point is crucial: you've just got to offer stuff in the form that punters want. Is that so hard to understand for the music business?

More Analyst Cluelessness

Yesterday in "the other place" I was berating Gartner for its inability to understand the reality of open source, and now here's someone else from that strange world of "research" that simply doesn't understand the basics - in this case, digital music:

Music cannot just be 'for free' anymore than cars or houses can 'just be for free'. If people aren't paid, they don't make the product.

Sigh. Once more, then, children - and do pay attention at the back: music is digital, cars and houses are analogue. You can make copies of digital music for effectively zero cost (it exists, but it's too small to measure); you cannot easily make copies of cars or houses, and certainly not for vanishingly small cost.

As for the second part, ever heard of something called free software? Variously estimated as worth tens of billions of pounds, most of it is created by people who aren't paid. And even if they are, that's not a necessary pre-condition for its creation, simply a reflection of the health of the business ecosystem that has grown up around it. If there weren't people who got paid, free software would stil exist - as it did originally.

Similarly for Wikipedia: nobody gets paid, but look at the results. In just a few years it has succeeded in creating an unmatched respository of human knowledge, to the point where it is pretty widely regarded as the first place to look stuff up, despite its undeniable imperfections.

As with Gartner, this seems to be a case of analysts simply telling their clients what they want to hear, rather than what they need to know. Hence my general contempt for the breed, with a few honourable exceptions - RedMonk and the 451 Group spring to mind - that both know what they are talking about, and tell it as it is.

Confirmed! Sony is Barking

Sony BMG Music Entertainment on Jan. 15 becomes the last major record company to sell downloads without copy restrictions

which would be great, were it not for that this tiny sting in the tail:

— but only to buyers who first visit a retail store.

Now, why do I get the strange feeling that Sony doesn't fully understand this tubey Internet thingamy-bob?

Willy Nilly, Ageing Rocker Gets With It

Sir Cliff Richard, Tony's bosom pal, was one of the leading, er, lights in the effort to extend the sound copyright to a mere 95 years, instead of the current 50. Happily, that failed, but it's nonetheless surprising to see the music of the said musical knight being used for a nice bit of innovative thinking from EMI, one of the few music companies that seems to get it:

Benefiting from one of the first new digital directions from the new owners of EMI, from today, his latest album Love, The Album, goes for sale via online pre-order at £7.99 - with the price dropping the more fans make the purchase. The collection has a floor minimum of £3.99 and, no matter when a customer pre-ordered, they'll only pay the lowest final price.

Net Radio: Death or Dishonour?

Well, look at this. After all the high drama about the imminent death of Net radio because of the exorbitant licensing rates being demanded, we have an interesting twist:

SoundExchange announced yesterday new terms of a proposal to address the concerns regarding the minimum fees for webcasting set by the Copyright Royalty Judges (CRJs).

Under the new proposal, to be implemented by remand to the CRJs, SoundExchange has offered to cap the $500 per channel minimum fee at $50,000 per year for webcasters who agree to provide more detailed reporting of the music that they play and work to stop users from engaging in “streamripping” – turning Internet radio performances into a digital music library.

In other words, we won't kill you provided you enslave yourself and your listeners through DRM'd music. (Via Ars Technica.)

BuyaBand, SellaBand

At last - someone is trying a new business model for digital music:

For the first time fans and Artists can be in business together. Therefore each Artist issues 5,000 so called Parts. Parts cost $10 (plus transaction costs) each. Together Believers have to raise $50,000 to get their Artist of choice in the studio. At any point before your Artist has reached the Goal of $50,000, you can withdraw your Parts and pick a different Artist. You can even get your money back. It's your music. It's your choice.

Once your Artist has raised $50,000 SellaBand will assign an experienced A&R-person to this project. Together with a top Producer, your Artist will record a CD in a state-of-the-art Studio. During the process you will get an exclusive sneak preview of this exciting process.

...

The music on the CD will be given away as free downloads on our download portal. All advertising revenues generated on SellaBand will be shared equally between you, the other Believers, the Artist and SellaBand. The amount of money you and the band will get paid depends on the advertising revenues and the market-share your band gains on our download portal.

In some ways this is like vanity publishing: people pay to be published. The differences are that fans pay for publication - micro-patronage - published items are given away (because content has zero marginal cost), and money is made from advertising (the Web 2.0 way). I can see this working, provided the main company Sellaband isn't taking such a big cut from the ad revenue that it is perceived as a free rider on the work and money of others.

At least it's founders seem to have the right background, as well as an interesting idea. Here's hoping. (Via OpenBusiness.)