Music streaming and the music industry

Reading this debate in the Observer earlier, prompted by Thom Yorke and Nigel Godrich’s decision to remove (some of) their music from Spotify, has got me thinking about the state of the music industry and its business model. Note the word “state” and not “death”.

Streamtape

The crux of the current argument is that the revenues Spotify and other streaming services provide to artists is not comparable to the previous model. Yorke and Godrich argue this is fine for back catalogue tracks, but not for contemporary music for new artists, who are struggling to support themselves. (I’ll continue to refer to artists during this post, though it might be more accurate at times to refer to record labels)

From reading these articles and others like it over the past few years, a few things strike me:

  • The previous business model worked on a combination of broadcast royalties and individual purchases. Online streaming is usually positioned as a replacement for ownership, but really it is a combination of both, potentially depriving artists of both revenue streams
  • The past is the past, and we cannot go back to the old model. If all labels withdrew support for online streaming, there would still be YouTube, Tumblr, BitTorrent and other means of distribution
  • Mass (commercial) media has been derided as an advertising business, with content provided in exchange for being exposed to marketing messages. With media and content disintermediated, the symbiotic relationship is being cut and new revenue models are needed
  • When radio is compared to streaming; it can be shown that streaming pays more per listener. However, the reduced scale/greater efficiency (depending on your perspective) of streaming means net revenues per artist are generally lower
  • Technology has made it easier for people to both create and distribute music. With finite space in broadcast media, the long tail has become very long in the online sphere. Meaning that the proportion of artists that can thrive on their revenues is getting smaller
  • The idea of a well-remunerated artist is relatively recent. Prior to the introduction of mass distribution in the early 20th century and commercialisation in the 1950s/60s, artists generally had to rely on live performances or patronage to survive. Mozart was one of many artists to famously die penniless. Could this be something that we return to? (A sidenote that I won’t delve into is that this could be another area that the post-war “golden generation” with their big houses and final salary pensions once again trumps against other generations)
  • What is fair reward for an artist? Creative endeavours are difficult to judge in economic terms. A trader might argue he or she is worth a percentage of revenue generated. That could be true for artists, but that would indicate revenue generation is the primary goal for producing music rather than artistic expression.
  • Some people view the music itself as the “loss leader”. The product that drives awareness of an artist, that can be subsequently exploited through other channels
  • However, more revenue opportunities exist nowadays. Modern music is arguably as much about the image or lifestyle as it is the sound, and so we get artists diversifying into clothes, headphones and other accessories. Admittedly, this works better for some genres (pop, hip-hop) than others (folk, for instance).
  • Despite the recent dip in the number of festivals, live music and ticket sales are often pointed to as the primary revenue driver. But unlike online distribution, live events are finite and so revenue can only be increased by playing at venues of a larger capacity (which is finite) or raising revenues to the point of marginal utility (which would ultimately segment your live audience as either the most affluent or the most fanatical)
  • The more concerts (or media appearances) made, the less time available to write or create new songs. Could this make manufactured pop music the most viable music model? Analoguous to the marketing industry, tasks are split between the creatives (songwriters) who come up with the ideas, and production staff (performers) who execute them. Could this be the future, where songwriters and performers are salaried, with bonuses depending on how well things perform?

No-one yet seems to have the answers, if indeed answers are needed. The music industry is being disrupted, and whatever the future may look like, we have to accept that it won’t be the same as it was in the past.

sk

Disclaimers: I work at an organisation that operates radio stations, but I work in a separate division. I currently pay for a Spotify Premium account, and haven’t bought a CD or digital download for myself for several years

Image credit: http://www.flickr.com/photos/runeone/4168247363

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Should pitching be a classical recital or a jazz improv?

I’ll avoid the layer of lingering suspense from the subject title by saying that it is a false dichotomy. Both can be suitable in different circumstances, though I lean more towards the latter.

Over the past few months I’ve been involved in quite a few pitches – sitting on both sides of the table.

The obvious thing that all pitches need is preparation. Lots of it. But there seems to be two broad approaches (note the emphasis: The rest of the post contains exaggeration).

1. The orchestral recital

This treats the outcome as fixed. Overt preparation goes into perfecting a repeatable performance.

This can be fine if you know exactly what your audience wants, and your audience knows exactly what it is getting. But is can also be a bit obvious. Perfectly pleasant, but not inspiring. It is not necessarily one-note but it is one performance.

In a business sense, it could be a face-to-face pitch follows a written proposal. But unlike a concert, the ticket isn’t bought and the relationship isn’t cemented – thus the dangerous assumption that you know exactly what your prospective client wants could back-fire if there is a miscommunication along the way.

2. The Jazz improv

The opposite end of the false spectrum is improv riffing. Here the preparation is more covert. All the pieces and mechanics are meticulously prepared, but there is no set way to put them together.

This enables a flexible performance to adjust and adapt to the mood of the room. But it still requires a fulcrum or groove to maintain structure and avoid obfuscating the issue.

This approach is more applicable to business development meetings. There may not be a set agenda, so the seller has to adapt to the need of the prospective client. The challenge is to make the covert preparation overt where applicable, through the introduction of easily digestible and memorable products or concepts.

The combination

Clearly, the optimal solution will be a combination of the two approaches – the relative weight depending on the specific circumstances. Across these, there are a few key things to remember.

  1. Prepare. And do lots of it.
  2. Create a skeleton structure that can be expanded or contracted to fill available space. There may not be a need to talk at someone for 30 minutes, but empty space should be filled
  3. Don’t plan to communicate everything that is prepared – always leave things behind that can be brought to the fore if the conversation moves that way
  4. If you can’t answer, at least respond – there is always the possibility of an intentionally tricky question. Acknowledge it but deftly segue into a related area that can more comfortably be answered.
  5. Prepare multiple scenarios – don’t plan for a single performance, plan for a residency

sk

Image credit: http://www.flickr.com/photos/joelwashing/3108694945/

Content and Interpretation

Content and interpretation are the two primary components of a presentation or performance.

The best performances incorporate both. The mediocre contains one but not both. The worst have neither.

Content also requires context.

Interpretation also requires passion.

Both require relevance.

Both need to create a connection.

Both are subjective.

At this moment of reflection, I would grade a selection of the artists I witnessed at the two All Tomorrow’s Parties festivals as the following:

ATP vs FansATP Breeders

To give a few specific examples:

  • When David Yow ripped off his shirt and jumped into the crowd as the first bars of the first song were hit, you knew you The Jesus Lizard were back, and back properly
  • Holy Fuck were my act of the two weekends. Their most recent album is fantastic, and 1.30am on the Saturday night was the perfect slot for them
  • Playing in a well lit Pavilion with Burger King and family amusements on show took away some of the atmosphere, but the quality of Beirut and Deerhunter’s material shone through
  • Andrew WK only has one song, and that song isn’t particulary good. But he is passionate, earnest and really makes the effort to create that party environment
  • !!! are one of my favourite bands and have some great tracks. They blew me away at Glastonbury in 2005, but this performance fell flat in comparison
  • I only saw the first half of Tricky’s set, and hear it got better. But the 30 minutes contained all ambient material that I really wasn’t in the mood for
  • Madlib closed the second weekend, but only produced a couple of pedestrian raps and complained about people not buying his records
  • I may be being hard on some acts. But for acts like Grouper, who play but don’t perform, sets can be quite dull

Ensuring the quality of both content and interpretation is obviously not just restricted to the music stage – it is something to consider next time you are “performing” on any stage, whether a boardroom, conference or park.

I’m going to my third festival of the month this coming weekend (well, at least some of it). After that, I plan to catch up on my reading and writing

sk

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Links – 17th January 2009

Aside from links, this blog probably won’t be updated for a week or so. I’m trying to stick to my quality over quantity aim, and my schedule is pretty full at the moment.

Marketing

Paul Isakson posits that weird and wonderful advertising works because of the prompt that our brain receives, irrespective of what the actual message is

Advertising has been about persuading people to purchase things they don’t need. So, with overconsumption being scaled back, Brian Morrissey wonders how the industry will react

Demanding a read/write city – why interactions such as graffiti should be encouraged (Anti-Advertising Agency)

The best and worst logo redesigns of 2008 (Brand New)

Fred Wilson predicts that display advertising will become so cheap that it will outperform search. I somewhat disagree – prices may fall, and effectiveness may improve but publishers can justify premiums due to the surrounding content and context. Network display is more likely to be filtered out. However, the piece is worth reading

Technology

The Feltron 2008 Annual Report – Nicholas Felton has collated a huge amount of data about his life, and published it.Are the benefits of this self-analysis worth the expended effort? I’m not convinced but the report is fascinating, and his interest has led to the development of daytum

CJR has a fascinating two part interview with Clay Shirky

Russell Davies has some excellent ideas in his new schtick

Graeme Wood’s post on the future of television and TV advertising dovetails nicely with my post on targeted TV ads

Business

Umair Haque has a brilliant guide to 21st century economics – he argues that we have to reinvent the global economy

The mistakes that are made in the hiring of NFL coaches (via Ben)

Music

Do the BBC’s Sound of 2009 and other such polls encourage a narrow and homogenised outlook on upcoming music? (Sweeping the Nation)

Interesting look at the remuneration (or lack of) with perceived promotions e.g. I didn’t know that US radio didn’t pay royalties as it claims it is free marketing

Websites

Stack – a great idea for magazine subscriptions – a pick and mix from leading independent titles

I Wear Your Shirt – another social media get-sort-of-rich quick scheme. Pay (fee rises at $1 per transaction) for a guy to wear your t-shirt and promote it online

For the time-pressed, particular recommendation goes to Clay, Russell, Umair and Graeme

sk

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ATP – always in beta

The Nightmare Before Christmas, co-curated by Melvins and Mike Patton was fantastic. Musically, it was the best of the 7 All Tomorrow’s Parties weekenders I’ve been to. There are few places where you could find a bill diverse enough to incorporate Mastodon, Squarepusher, Rahzel, Os Mutantes, James Blood Ulmer, Junior Brown and Monotonix (pictured below)

See my Flickr for some more photos from the weekend

Aside from the music, I came away hugely impressed by the organisation. Past events have come in for criticism, but by and large these have been addressed.

  • The venue was a bit small and tatty – so they moved to a larger one
  • This venue initially restricted alcohol to the room it was bought in – a “zone” of free movement and consumption was introduced
  • Some acts attracted big queues – a new stage was created in the pavilion with a larger capacity, and second performances were introduced
  • This venue wasn’t optimised for a good sound – the stage was dismantled and the overall event capacity was reduced
  • Security had been accused of being heavy handed – virtually all the security I saw were pleasant and approachable (they even let a chalet gig go on until 5am before shutting it down)

Now if only they could improve the road links to Minehead…

This is the idea of business as a service. This harks back to Russell Davies’ post on the lines getting blurry. Organisations should accept their mistakes but work with their stakeholders to continually evolve and improve.

This isn’t a new concept. Back when Japanification was en vogue, kaizen – continuous improvement – was the big buzzword. As epitomised by companies such as Toyota, a stream of small changes was the key to incremental performance gains. Success would be borne out by evolution and not revolution.

I believe that this notion is so crucial because it empowers all of us – whether chief executive, event organiser or researcher. ATP have shown what can be achieved with humility and dialogue. We should all keep the following question in mind.

How can we improve today?

sk

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Live Nation’s monopoly

The advantage of having a monopoly, or near monopoly, means that you can pretty much do what you like without fear of revolt. If a customer wants the service, they have nowhere else to go.

Take Live Nation for instance…

  • They have been accused of using their dominance to artificially inflate ticket prices
  • The 360 deals mean that they will concentrate their efforts on a few commercially successful acts at the expense of diversity and the long tail, squeezing every last bit of revenue to recoup as much of the outlandish fees paid out
  • They can offer ridiculous “No readmission” policies without providing food or a smoking area. I am a non-smoker, but “pro-choice”. I didn’t realise Live Nation were into health planning.
  • And to top it all, they can introduce priority tickets. The amount you like a band or willingness to queue/wait for a ticket no longer matters – it is all about the phone you have (On the plus side, this may mean that they will no longer be serving Carling)

Is there a concerted boycotting effort going on? Or, like me, are people sucking in their distaste in order to see some of their favourite bands.

sk

Photo credit: http://flickr.com/photos/larimdame/

Eco-clubbing at Bar Surya

discoballClub4Climate recently announced the launch of (according to their press release) Britain’s first eco-nightclub. It is located at Bar Surya in Kings Cross, with the press launch occurring next week on the 10th July.

Among their initiatives include the use of poly-carbon cups, charitable donations, low-voltage lighting and a recyclable water system. However, the most eye-catching element of the scheme is the energy generating dancefloor. The Daily Mail have a diagram of how it will work here.

Due to the costs involved in getting this system up and running, this is more than a mere marketing stunt (though as the Mail story alludes to, you wonder how eco-friendly printing 200,000 Boris Johnson leaflets is). In spite of this, the club will need more than its eco-outlook to survive. I’m tentatively in favour of the idea, but there are several elements of this particular scheme that make me sceptical

  • The initiative will get people in the door once. But the primary choice of clubbing venue revolves around where you will have the most fun. The website doesn’t contain any details on the styles of music or the DJs involved.
  • People don’t want to be preached at on a night out. Making people sign a pledge (no. 8) before they are allowed to enter will turn people off
  • Free entrance to those that travel via public transport, walk or cycle can go one of two ways. Firstly, unless they are targeting the upper reaches of society, the vast majority of clubbers will travel via tube or bus to get there (taxis are for the journey home only) and so few people may pay. However, how do you prove you have walked in? And getting a receipt for Oyster card journeys can be a hassle
  • Sadly, the credit crunch means that people will start thinking about the now rather than the future. Will this disrupt eco-projects?

So as far as the PR goes, the venture is a hit. But i think the details may need to be adjusted for it to take off.

If the owners are looking for another PR move, perhaps they could stock some Booty Sweat – the fictional drink in the new Ben Stiller film that Paramount are licencing as a real product during the marketing campaign.

sk

EDIT: I’ve just noticed that Club4Climate have used the Cheeky Girls in a previous PR stunt. Looks like they won’t be going for that more affluent level of clubber