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Music biz - how do we turn the tide - Q1
Old 15th November 2007
  #1
Lives for gear
 
Saudade's Avatar
 

Thread Starter
Music biz - how do we turn the tide - Q1

1. How possible/soon is it that recorded music can only be monetized through either advertising/co-branding or a "painless" add-on subscription fee billed via ISPs? Will there be a day when the act of paying to buy music will be a fond memory to us? Can music sharing, to which most account the reluctance to pay for music, be "reigned in" to be positive players in the music industry?

Thanks Guests!
Old 15th November 2007
  #2
Founder CD Baby
 
Derek Sivers's Avatar
 

Smile yes to everything

Quote:
Originally Posted by Saudade View Post
How possible/soon is it that recorded music can only be monetized through either advertising/co-branding or a "painless" add-on subscription fee billed via ISPs? Will there be a day when the act of paying to buy music will be a fond memory to us? Can music sharing, to which most account the reluctance to pay for music, be "reigned in" to be positive players in the music industry?
More and more, we're in a world of customization.

Think of a TV show like Lost.
Want to watch it every Thursday night at 8pm for free? OK.
Want to buy a device that will record it Thursday night so you can watch it for free later? OK.
Want to watch it streaming on the network's official website, with ads? OK?
Want to rent the DVD? OK.
Want to buy the DVD? OK.
Want to buy the download from iTunes? OK.

Wherever there are enough people who want something, and a preference for how they want it, we'll find a way to give it to them in a way that seems fair to both.

Will music be monetized through advertising or co-branding? Sure!
Will music be monetized through an add-on billed via ISP? Sure!
Will people still be able to buy music? Of course!
etc.

It's not either-or. It's "yes!" to all.

Old 16th November 2007
  #3
Peter Wells, SVP Operations, Customer Advocate - Tunecore
 
PeterTuneCore's Avatar
 

I wonder if this is a question the future will render moot.

That is, the future is bringing MORE choice, not narrowing models down to a single, overarching philosophy. We've had that: there was a time not long ago that the ONLY way music got out there was on hard media (CDs, records, tapes) and broadcast (radio), and that was it! I can't imagine any SINGLE model bmaking everyone happy, and where there is unhappiness there will be competing models and, thus, more options.

Thus even the billing method (ISPs) might never become universal, if for no other reason that direct sales could reduce prices, and thus set up competing methods. Do you want to pay $1.99 for your song on your monthly DSL bill, or $0.99 for the same track purchased through PayPal direct from iTunes? The market will sort this out, and not to a single answer, but a multiplicity.

--Peter
peter@tunecore.com
Old 18th November 2007
  #4
Lives for gear
 
Gregg Sartiano's Avatar
 

Quote:
Originally Posted by Derek Sivers View Post
More and more, we're in a
world of customization.

Think of a TV show like Lost.
Want to watch it every Thursday night at 8pm for free?
OK.
Want to buy a device that will record it Thursday
night so you can watch it for free later? OK.
Want to watch it streaming on the network's official
website, with ads? OK?
Want to rent the DVD? OK.
Want to buy the DVD? OK.
Want to buy the download from iTunes? OK.

Wherever there are enough people who want something,
and a preference for how they want it, we'll find a
way to give it to them in a way that seems fair to
both.
Applying this idea to a cottage-industry artist is
like telling the small restaurant owner "hey, you need
a drive-thru window...people want OPTIONS!"
Quote:
Will music be monetized through advertising or
co-branding? Sure!
Will music be monetized through an add-on billed via
ISP? Sure!
Will people still be able to buy music? Of course!
etc.

It's not either-or. It's "yes!" to all.

It's possible (easy) to monetize an A-list star's music,
videos, YouTube/self-made vids, blog, etc. with every
kind of possible ad. Name artists & "super-producers"
have already struck deals with YouTube, for instance.
But these deals have an "ad hoc" feel and certainly don't
apply to the industry at large or point to any specific trend.
If anything, they delineate the contrast between the
"haves" and "have nots."

--

It's not as if the artist or label with the small-to-medium
following has nothing to offer YouTube or MySpace. Some
of these folks promote the heck out of their sites -- sometimes
getting "views" in excess of ONE MILLION or more! And
the ad revenue goes STRAIGHT to Silicon Valley.

Music HAS been monetized to YouTube and MySpace
through advertising! THEY'RE JUST NOT CUTTING US
IN!!!

--

Look at the media delivery choices
recently -- the purveyors are not exactly lining up at
ASCAP & BMI's doorstep to negotiate rates!

Meanwhile, video game programmers and computer
software providers are holding on to their propietary
rights and anti-piracy solutions as if their lives
depended on it.

Because their >LIVELIHOODS< most certainly do.

Halo 3 -- what was it...$170 million IN 24 HOURS!
In dollar figures, that's like going platinum...TEN TIMES!
If it was effectively downloadable or copyable on a
P2P/worldwide scale, would they have had half those
sales?

What if there was an iPod/iTunes-style setup for
console games?

Hypothetically, what if outside engineers invented
a popular, relatively cheap device that stored somebody's
video game and computer software library from the
original discs -- and the library just HAPPENED to not
be copyright protected in any effective way. Do you
think that software creators would have
something to say about it?

What if THEY lost between a third and a half of their industry's
income while the outsiders' business skyrocketed because of said device?

--

The ease of putting anything you DAMN WELL PLEASE into
an iPod has made a LOT of stockholders A LOT OF
MONEY...BUT NOT the folks who created the sounds in
the first place!!!

Inflation-adjusted RIAA figures show a $6-7 billion
drop in total yearly sales since '99/'00 (I cited
figures for this in a previous post). iPod sales are
currently clocking in at approx. $9 billion per year.
Coincidence?!? If YOU were a teenager, would you want
the iPod or a CD player and a $200 Sam Goody gift
certificate? Are you KIDDING me?

--

Quote:
Originally Posted by PeterTuneCore
I can't imagine any SINGLE model
bmaking everyone happy, and where there is unhappiness
there will be competing models and, thus, more
options.
No, but a streamlined system could
provide direct payment to artists and producers and
provide consumers with music-on-demand...not EVERYONE
would be happy, but literally 90+% of the consumers
could potentially be -- and there's the potential for a
well-justified windfall for music creators, producers, and
distributors.

We're talking about delivering DIGITAL SOUND. In a
world of digital video and broadband, this is SMALL
POTATOES. And people can choose their playback
systems -- they just need the ones and zeroes!

Streaming-on-demand (for a monthly additional fee) to
bluetooth-enabled mobile phones (configured to communicate
with car radios & home entertainment systems), for
instance, could solve security problems while bringing
unparalleled convenience and creating a "money pool"
to be divided up -- (hey artists: PROMOTE YOUR MUSIC,
GET PAID!!!)...ASCAP and BMI are already set up to
distribute money based on performance rights! AND
THIS IS JUST ONE POSSIBLE SCENARIO!

I'm sorry, you guys...I just think that Silicon Valley
is unjustly taking advantage of us in what should be a
huge, growing market -- and we're just DEBATING ON HOW
TO GET A HOLD OF THE SCRAPS THEY'RE LEAVING US.

You can bet if a drug formula (intellectual property)
was commandeered and reproduced illegally
on-the-cheap, putting a pharmaceutical company's
business in jeopardy, Congress would have something to
say about it, and legal means would be used UNTIL
JUSTICE WAS RESTORED.

Sorry to sound like a broken record, sorry to use way
too many "caps" in this message. Derek, I just think
there are two separate debates that need to happen
here. Having been in the same room with you, I have
seen you inspire the homespun music-creators in the
audience. I am not one of those people. "Cottage
industry" does not describe what I do, nor what I seek
to do. I am a career pro in a metropolis whose very
name is synonymous with the ENTERTAINMENT industry
(which is very different from the "sell-your-own-record"
industry...hey, I'm a Fugazi fan, too, it's just not what I do).

Broadway, film, and broadcast TV are very different industries.
Indie and mass-market music are as well. I think that the
two get "lumped together" for purposes of debate FAR too often.

--

I think the "old" label system was in a position to
morph with the times with independent outlets growing
simultaneously -- this is in contrast to most people
instinctively seeing a zero-sum game with regards to
the music industry. Many among us take to celebrating
the loss of the "old guard," seeing that loss as a harbinger
of "indie rebirth." I disagree.

--

It's as if Silicon Valley sank our boat, and the
ship's cook is saying "wow, I'm the commander of my
very own lifeboat!"

We got screwed. Do I expect it to change?
Not until artists and producers come together under a
banner (Musicians' Union? ASCAP/BMI?) and fight for a
positive change. Not until the leaders of these
organizations go to the mobile phone companies and
portable-music-player makers and say "the only way
you're getting the next round of A-list albums is if
you PLAY BALL...and PROTECT OUR ASSETS SO WE CAN ALL
MAKE MONEY." What if the ONLY way you could get the
next hot album by [big pop artist] was by getting a
$10 a month add-on subscription on your wireless
phone, but if you bought that, you would also get a
widely inclusive catalog of streaming music-on-demand?

This change has got to be top-down, not grass-roots.
If it's grass-roots, we're just gonna get screwed
until everyone assumes that live performances SHOULD
be the only way for us to get paid.

No, I don't expect it to change, but "hope springs eternal."
Old 21st November 2007
  #5
Gear Maniac
 

I wish i could agree with the above poster, I really, really do. But the fact is, we did get screwed, but people are being human and now adjusting to the new (reduced profits) the market is changing and in this globalised world, an american union doesn't mean **** till you've got the whole market (read world) on it. But I really wish I could believe you man.
Old 21st November 2007
  #6
Lives for gear
 
Saudade's Avatar
 

Thread Starter
Gregg, wow that was a very passionate discourse

Somehow I wish our guests put more of their guts and less of their brains when replying to our answers heh No offense meant in anyway, just that I think giving safe, predictable, one size fits all and politically correct answers won't win over many musicians here.

At least for me, you must sound like you want to change the future even though you know you can't (and you don't claim that you can) heh

I want my music to be in the hands of people who are passionate and idealistic about music. To me people who are not idealistic are boring
Old 21st November 2007
  #7
Lives for gear
 
joaquin's Avatar
 

Thanks Gregg for the excellent and enlighten post!
Old 27th November 2007
  #8
Lives for gear
 

Quote:
Originally Posted by Derek Sivers View Post

Wherever there are enough people who want something, and a preference for how they want it, we'll find a way to give it to them in a way that seems fair to both.

I agree that the market is in control, and that that's a good thing, but without floating prices I don't see how the market will tell producers what they really want.

The things you listed are primarily add-ons--all of which are great (and all of which the market can reward through higher demand and higher prices--bringing more of them into existence)--but I think what most people want is more and better content itself, not just more and better ways to consume the same content. They want more Lost episodes--which they can't get unless they can communicate precisely how much the show itself is worth to them.

Right now all they can communicate is how much being able to watch it at a different time or in a different format is worth. They can't even communicate how much they may enjoy outtakes or "making of" stuff because all the DVDs are fixed price as well and that stuff is thrown in as freebees--to get people who have already seen the episodes to buy.

Most content has a naturally fixed audience--meaning that after that audience is captured at the lowest possible level (ie the TV is on) the incentive to do anything additional falls off rapidly.

Fixed prices reward only quantity, not quality.

Producers could be missing out on enormous profits and audiences could be missing out on huge increases in the quantity and quality of their favorite content (the retailers are mostly already dead--except online--though they could certainly come back if there were some money in selling the stuff again)--we'll never know until the market is allowed to value each episode--or at least each program--directly. This goes for music, films, tv, books--all mass media content.

What is vital information to the producers in every other industry--ie how much each of their consumers values their product--is missing in all content. Therefore we miss out on an enormous percentage of produce that wouldn't appeal to the largest audience. Including a lot that would appeal greatly and profitably to small and mid-sized audiences.

There's little downside to this--all that could happen is that more content would be created, sold and consumed. Everything that was already at the right price point would likely stay as it is and most mass mass-market content would likely stay inexpensive just like mass market food and clothing.

Music studios and labels are in the same position as movie and television studios on this one--there's no way they can profitably focus on quality--the only profits to be gained are by catering to the lowest common denominator--the 18-34 demographic usually.

Once TV and movies go fully digital (and half the population has a 50" plasma) we may see movie studios selling off cameras and broadcast equipment like music studios are now selling off boards--they'll have to compete with everyone on YouTube and every illegal download just like music studios do now.

The only way around this in my opinion is floating, market-based prices. I don't believe it's a stop-gap but an incredible opportunity to increase the quality and quantity and importance of our culture many times over. And--by the same token--increase the number of folks who get to participate enjoyably in its creation.

Market-based pricing allows small artists to thrive alongside the big guys as long as they are moving their crowds in a way or to a degree that the big guys can't.
Old 27th November 2007
  #9
soulstudios
Guest
Quote:
Originally Posted by Gregg Sartiano View Post
It's as if Silicon Valley sank our boat, and the
ship's cook is saying "wow, I'm the commander of my
very own lifeboat!"
Nice quote, regardless of the context.
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