Will "Free Love" Shape Music’s Future?
Category: Music

Will "Free Love" Shape Music's Future?

Consumer expectations of "free" in exchange for their increasingly divided attention are beginning to shape many music marketing campaigns.

EMI's successful launch of Coldplay with a free track and free concerts is a recent example. Wired's Chris Anderson has also been writing about the rising power of free for more than a year and his forthcoming book may bring the concept into the mainstream.

But a new brief from TrendWatching.com focuses a particularly sharp lense on the reasons behind as well as the  potential power of "free" dubbing it "FREE LOVE".

• FREE LOVE: the ongoing rise of free, valuable stuff that's available to consumers online and offline. From AirAsia tickets to Wikipedia, and from diapers to music.
• FREE LOVE thrives on an all-out war for consumers' ever-scarcer attention and the resulting new business models and marketing techniques, but also benefits from...

...the ever-decreasing costs of producing physical goods, the post-scarcity dynamics of the online world (and the related avalanche of free content created by attention-hungry members of GENERATION C), the many C2C marketplaces enabling consumers to swap instead of spend, and an emerging recycling culture.

• Expect FREE LOVE to become an integral if not essential part of doing business.

What is fueling FREE LOVE? According to the brief:

• An all-out war for consumers attention (make that saturated consumers), including various handout and sampling techniques.
• The online world, with its amazing capacity to create, copy and distribute anything that's digital, with costs that are close to zero, forcing producers to come up with new business models/services, which are often purely ad-driven.
• The ever-decreasing cost of physical production makes it easier to offer more (nearly) free goods in the offline world too. In fact, many goods have actually become insanely cheap. Just one example: the price of televisions has fallen, on average, by 9 percent each year since 1998, according to U.S. Dept. of Labor data.
• The avalanche of free content created by attention-hungry members of GENERATION C.
• C2C marketplaces enabling consumers to swap instead of spend, making transactions cash-neutral.
• An emerging recycling cult

For years the music industry has fought "free", but from P2P to mp3 blogs to We7, FREE LOVE is everywhere. How the industry handles "free" will help shape its next chapter.

Nokia's "Comes With Music" and ISP licensing are attempts to make music feel free.  But serious hurdles like antiquated licensing rates and practices remain; and labels must deal with them or FREE LOVE will continue to be their nemesis rather than their friend.

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The Push For Pan-Licensing
Category: Music

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Mid-Year Sales Report
Category: Music

Mid-Year Sales Report

Music on mobile devices is expected to account for $7.3 billion of the global amount spent on recorded music by 2011, according to new data from eMarketer.

The report, titled "Recorded Music: Digital Falls Short," predicts that music sales as a whole will continue to decline, but online and mobile markets will grow rapidly.

As more and more multimedia-capable handsets are released, the mobile music market is expected to jump from $1.7 billion in 2007 to $3 billion by the end of the year. The figure is estimated to grow to $4.8 billion in 2009, $6.2 billion in 2010, and $7.3 billion in 2011.

As CD sales plummet, the music industry is expected to see a $5 billion decline in total music sales in the next three years, from $31.8 billion to $26.2 billion. Because of this, record labels will look to the mobile space for additional revenue.

On Tuesday, Nokia inked an agreement with Warner Music Group to make its library available on Nokia's Come With Music service and music store. According to a report from The Register, the record labels are receiving a very lucrative deal with these types of mobile ventures.

For this report, "mobile" includes master recording ring tones, full-track audio downloads, ringback tones, music video downloads, and streaming services. It did not include licensing revenue or polyphonic or monophonic ring tones in its estimates.

Online sales will increase as well, going from $1.9 billion in 2006 to $7.5 billion in 2011, the report said. In three years, online and mobile sales will account for the majority of music sales, with 56% of the total market.

Music companies need to integrate with online platforms to enhance the mobile music listener's experience, eMarketer said. In this vein, Verizon Wireless and Rhapsody announced Monday a partnership that allows wireless customers to download DRM-free MP3s directly to a mobile handset.

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When Will MySpace Music Appear?
Category: Music

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NARM Calls For Fixed Release Dates
Category: Music

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Rhapsody Starts DRM-Free Blitz
Category: Music

Rhapsody Starts DRM-Free Blitz

Rhapsody formally announced its MP3-based download store on Monday, an expected move.  That means better downloads and more flexibility, a message that is now being spread aggressively.  Rhapsody joint venture partners RealNetworks and MTV Networks are dishing $50 million into the DRM-free blitz, and the splashiness is already underway.

The attention-getting includes a massive album download offering, an enticement for would-be users.  The giveaways are being given to the first 100,000 to sign up for the Rhapsody MP3 Store, a process that involves registering an email address and credit card.

The gratis album comes in the form of a $10 credit, which must be used by Independence Day.  The action is happening at rhapsody.com/mp3.

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Where Have All The Good Managers Gone?
Category: Music

They dreamed of discovering a band, suffering for a few years and then scoring. By the time they collected deferred commissions, their share of record, publishing and merch advances and a percentage from a couple of tours, they'd made a nice score. Inevitably too, they'd felt the rush and would start all over again with another band.

Not any more; the silly advances are gone and so are the people that chased them.

In 2008, early stage management is about spending time on MySpace, supporting a D.I.Y. or understaffed indie record and helping an agent who represents enough developing acts to fill the Titanic book a tour. Then he advances, plays tour publicist and drives the van.  And for what? 15% of a record that's a hit because it sold 5K copies more than the last one that sold 20K?

As I've written previously, the new music business is creating a new musical middle class. Rather than a few flash in pan stars, we're seeing more smaller but longer careers. This is a good thing for music and for fans, but it's not necessarily attractive to the much needed next-gen. of aggressive young managers.

I know a few great ones, but sadly not nearly enough.

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Independents Day
Category: Music

Independents Day

As the July 4th holiday approaches, independent labels are rallying their cause.  The group has crafted a modified holiday, "Independents Day," designed to raise contributions and draw consumer attention towards independent labels.  The global campaign involves a number of label associations, including A2IM in the United States.  

A2IM is positioning a large compilation of independent artists between July 4-6, one that includes Ani DiFranco, Frank Black, Slipknot, Tokyo Police Club, and Atmosphere.  The album will be available on eMusic, Amazon MP3, Zune Marketplace, and A2IM.org, though iTunes fans will never see the collection. 

The reason is that the compilation is only being sold as a bundle.  Apple rarely allows album-only purchases, and according to those familiar with the discussions, quickly dismissed the possibility. Separately, A2IM confirmed that the compilation could not be broken into singles.

That represents a fairly inflexible demand, especially for a mostly flexible independent community.  On the digital side, independent labels and artists were the first to embrace MP3s, and most of the resistance towards singles-only sales has come from massive, major label artists. 

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How Much Is Napster Actually Worth?

How Much Is Napster Actually Worth?

Just how much is Napster actually worth?  According to a mutinous group of investors, Wall Street thinks the company is worthless, and that is a serious problem. 

The dissenting shareholder group, which first emerged last month, found that the street is valuing the company below its aggregated assets.  "At today's valuation [$1.50 per share], Napster has the dubious distinction of being worth more dead than alive," the group stated.  "We believe this discrepancy is a result of negative sentiment surrounding almost all music content businesses due to the unresolved effects of piracy, but also due to a lack of confidence in the way the company is governed."

The investors - Perry H. Rod, Thomas Sailors and Kavan P. Singh - have been rallying for management changes to reverse negative perceptions.  The trio highlighted a subscriber base of 760,000 and a "growing, globally scalable business model and multiple revenue streams," though continued quarterly losses and stagnant consumer demand were not mentioned.  "While considerable venture capital has flowed into digital music startups over the last five years, primarily into revenue-challenged experimental business models that have been largely disappointing, the market fails to discern and account for important differences that set Napster apart," the group stated.

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UK May Have Legal P2P By Year’s End
Category: Music

UK May Have Legal P2P By Year's End

The UK may have legal music via P2P licensed at the broadband ISP level by the end of the year, according to the Register. The British government apparently pushed for talks between ISP's and the music industry as a preferred solution to legislation. South Korea is close to a similar solution.

Its a radical shift and many hurdles remain to be overcome including wholesale agreement from fractured recording and publishing industries. But all sides seem to agree that something radical must be done to re-monetize music and no other plan seems to offer similar upside.

COMMENTARY: It could take much longer for a broad experiment to be hammered out - perhaps until the end of 2009 - but licensed P2P is coming and the UK will lead the way.  Watch for similar moves along with a so called "iPod tax" on devices that copy and share music to come to the US in the next 2-3 years as well.

And think about how legal P2P would force a shift in many business models. Music 3.0 is right around the corner.

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