Digital Music Direct to the customer

Digital Music Direct to the Customer

Mark Cuban is a smart guy.   He dashed off a couple of ideas here that make a lot of sense.  I completely agree with him that the big copyright holders (labels and publishers) can act as “networks” and bring their music to market.  It is interesting that none of them are thinking this way at the moment, and the old way of thinking is guiding the day.  Namely, why do they need aggregators like Apple’s iTunes to replace the failing Tower Records of the past?  Why can’t the labels go direct to the customer with their product.

I have often said that when Napster 1.0 first emerged, the labels realized that they actually had customers.  And those weren’t Wall Mart and Target, but people like you and me.  And instead of embracing these consumers, communicating with them, drawing ‘em into the fold, marketing to them - they decided to sue the people.  The legal people overran the marketing folks, and the chance for creating a direct to consumer business slipped through their lawyers hands.

It has taken a while to grasp the totality of all this, but perhaps someday soon, a large music content company will decide to get into the business of marketing to consumers, and creating an infrastructure to support and make it happen in the digital age.  Can’t wait to see that happen.

 

Digital music rules

Digital Music Rules of the Road for Artists

Here is an useful list for success in the immediate future:

-    Utilize MySpace and otherwebsites to its full potential and don’t be afraid to “give your musicaway for free”. If one million people listen to your songs online,don’t see it as you just lost 1 million dollars in potential sales. Seeit as you just got radioplay in 100 markets.

-    You have tolearn new ways of viral marketing, including widgets and blog searchengines and don’t be afraid to experiment with putting your music innew places and contexts.

-    Look at what the most progressive record labels are doing with their artists, like Canadian Nettwerk and Barenaked Ladies and try to copy it.

-  If you play a live gig, make sure people know about it. It may seemlike a no-brainer, but it isn’t always. I don’t know how many goodshows I have missed just because I didn’t know about it. Do all you canto get in Flavorpill and other online publications. Send emails toeveryone you know and make sure everyone that shows up signs your emaillist.

-    Press vinyl copies. This might be the last thing youthink about doing, but DJs love vinyl and so do music lovers. Press afew copies and distribute them to your favorite DJs, clubs and critics.

-  Don’t sign a record deal. This may seem like a weird suggestion, butstay indie as long as possible. You want to make sure the odds are inyour favor when you finally sign with a big label or it can be ablessing in disguise.

More here from Digital Media Wire

 

PayPlay.fm: DRM-Free 4 Life

The folks at PayPlay.fm dropped me a line discussing their huge indie catalog of DRM-free music. While you won’t find any Sting or Beatles hidden in their back pages, you can enjoy 32 Below and Elika.

Clearly these boys aren’t going to take down the ITMS, eMusic, or even the selection at Goodwill (there’s always a something by the Stones or Devo in the record bin for the intrepid hunter), but it’s interesting to see a small company make a go of it in the wild and woolly world of media sales. MP3s, at 88 cents per, cost more because the codec is more costly, but WMA music is a mere 77 cents. Take that, 99 cent music that you actually want to listen to!

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Tags: drm, mp3, music

 

Free, Legal, On Demand Streaming Music? LaLa is Going to Give it a Shot

LaLa is making a very big bet on its business - it will offer users something they’ve never had (legally) before: free, legal, on demand streaming music.

LaLa already runs a cd swapping service and recently started to let users listen to live concerts on the site.

Now they are going to let users listen to on demand music on the site in addition to its other services. There are a number of paid services that do this already, and a handful of flat out illegal ones as well.

This is an extremely expensive business - unlike services like Pandora that have to pay only a fraction of a cent when they play a song (and it still hurts them), on demand streaming rates are more like $0.01 per song. That works out to an average of $0.17/user/hour, and there is no way to cover those costs with advertising alone.

It’s also much more difficult to work through the legal mess to offer this kind of service. Unlike Internet radio, which is covered by the DMCA and which has rates set by regulation, there are no laws to cover on demand streaming. LaLa must negotiate directly with the big labels. The one-cent per song I mentioned above is an estimate by an industry insider of what Yahoo and others pay. Labels can charge more or less than this, and they also like to get a minimum fee per listener/month of around $6. Unless LaLa puts listening restrictions in place, heavy users will go way beyond that. Our understanding is that the labels will also only negotiate one year deals, and if they see any profit on the table at the end of the term they will grab for more.

So how will LaLa cover its costs? The company says they are going to sell CDs to users. Like a song? Click a button and get it sent to you. They say that if they can get each user to buy one CD per month on average they will break even. That may be true, but the average music buyer in the U.S. buys two CDs per year. So LaLa will have to get heavy music buyers to the site to move that average up.

The company has been working on this for some time and is reportedly still in negotiations with labels to get the rights to music. Last year they took over an Internet radio station and began selling CDs to listeners based on songs they like. Hopefully they have enough data to prove their model out.

LaLa raised $9 million in capital from Bain and Ignition Partners.

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U.K. Music Label Creates a Vinyl-MP3 Hybrid

While the copyright fight rages between big record companies and their customers, some smaller, independent labels are moving in with innovation instead of litigation.

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Tags: copyright, mp3 , vinyl, label

 

Tech Politics Podcast: Copyright, copied wrong, battle goes on

Tech Politics Podcast: Copyright, copied wrong, battle goes on

There’s much ado about copyright, whether in Congress, among the movie and recording industries or with the Electronic Frontier Foundation.

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I-Tunes video downloads have no future

iTunes Video Downloads Have No Future, Free Online Streaming FTW

Don’t get too used to download videos from iTunes, friends, because new data suggests both content providers and consumers are poised to gravitate toward free, advertisement-based streaming video in the near future. Paid video downloads are set to peak this year, raking in an estimated $279 million, according to Forrester Research. The same report calls iTunes’ video download service a “temporary flash,” suggesting that ABC’s model of streaming shows online for free is where the market is heading. Part of the reason is the aversion people have to paying for video that they can’t easily watch on their TV. Apple TV is supposed to fix that, but I don’t know that it’s taken off as well as Apple might have hoped.

Bottom line: “Free is going to win,” probably because it keeps soap companies happy more so than that it being optimal for you.

iTunes-like video services have no future: study [Reuters]

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