creative deconstruction

Music Technology Recap – November 2009 Edition

Posted on 02. Dec, 2009 by refe in NEWS, TECHNOLOGY

Music Tech November 2009

This is a guest post by Gabriel Nijmeh, a business analyst and music technology enthusiast.

Another month whips by since Refe first asked me to write the October music tech recap and I’ve really started feeling deja vu. You probably are feeling the same way but doesn’t it seem like we keep discussing the same issues and topics endlessly and yet feel like we are no further ahead? Here’s someone who wrote: “it feels like we need to graduate from the discussion into the “doing” of what we know to be true” which captures the sentiment. And I came another blog post I think nails what ails the music industry (and any industry facing mass disruption) was written by Steve Lawson who articulately describes the difference between transformative vs incremental change.

We will make serious strides forward when more people throughout the industry begin to accept and embrace transformativeand sustainable change. But of course, change is so much easier for those who have little or no interest in preserving existing models, so understandably given the tangled web of the industry, patience is critical and change will be excruciatingly slow. Many tend to see things as black or white. You take a position, become emotionally attached &  entrenched. With all that being said, I came across this line in a post: “unless you understand both sides of the subject you understand neither” which is good to keep in mind when reading about and trying to make sense of everything that is happening in the business.
 
Where did the money go?

It was a quiet month on the funding/investment side.  The biggest news being MySpace scooping up Imeem for chump change. Looks like MySpace is becoming the digital music consolidator grabbing “failed” music start-ups. Given the talent and assets MySpace has acquiredwith the purchase of iLike and Imeem, will MySpaceMusic, enabled by the music search deal with Google and backed by the labels (indie music aggregator Merlin now brought into the fold) become a relevant, long-term player in the digital music destination or are they themselves destined for a flame out but on larger scale?

In other funding news:

Spotify, Spotify and more Spotify

All eyes are on Spotify and their US launch, which according to recent reports has been delayed until 2010 because the labels believe an ad-supported model isn’t sustainable. The more important discussion is when or even if music streaming subscription services will find that right balance that satisfies labels, artists and music consumers. Hopefully one day, blog posts like: How Major Labels Try To Overwhelm Startups are truly a thing of the past. Many influential people are starting to believe that subscriptions can save us and I would agree to a certain extent that given a compelling and innovative service, there is a chance but don’t think this model only will “save us”. Realistically, music is too expensive to be free, too free to be expensive. What the average music consumer will be paying for is less for the music and more for the convenience of anytime, anywhere access, mobile streaming and management (tagging/backup/storage) of a near endless music catalog.

Robin Kent, former Universal McCann CEO and then CEO of Spiralfrog offers his perspectives and experiences on the economics of ad-supported media by answering the question posed by Music Ally: Can Music Be Free?

And then there is speculation that MySpace Music is considering moving to a paid model. Is the service compelling enough in its current state to even consider charging for it? Are the days of free, legal music services slowly coming to an end?

Opinions, Insights and Analysis

On Middle Men — Joe Hewitt, made this very good observation: “The Internet has been incredibly empowering to creators, and just as destructive to middle men. In the 20th century, every musician needed a record label to get his or her music heard. Every author needed a publishing house to be read. Every journalist needed a newspaper. Anyone who wanted to send a message needed the post office. In the Internet age, the tail no longer wags the dog, and those middle men have become a luxury, not a necessity.”

Anti-file sharing legislation gets go ahead — There is this false sense of security and delusion that legislation is going to eliminate file sharing. Is this issue really being dealt with? File sharing will go underground and it will be much harder to detect. More importantly, laws and legislation don’t address the real business question which is how best to serve music fans with innovative products and services. It is just a knee jerk reaction. What if by all measurements file sharing is curbed but sales/revenues continue to drift lower and lower. What will be the next excuse?

Resnikoff’s Parting Shot: The Verizon Problem– Resnikoffas always has some valuable insights: “Then again, who cares about this game anyway? The bigger discussion is whether control-oriented approaches are worth it, or just a misguided drain on precious resources. Instead of chasing three-strikes, why not develop three new revenue streams and better ways to compete with free? Why not skip the fruitless battles, the attempts to force consumers back into the 90s? Why not build 2015 before it arrives? And remember, all of those lawyers, lobbyists, and media-shapers, they all drain finite reserves of money and time”.

The Radiohead ‘In Rainbows’ Experiment: Did It Work?– Radiohead and NIN keep coming up as case studies for the “free” download experiment. It’s one tactic that needs to be understood as part of an overall marketing/sales strategy and within a band’s position in the marketplace. I think the problem is in searching for a one size fits all cookie cutter solution and being left disappointed when it doesn’t produce the same results.  Ideas, innovations and solutions will need to be dynamic and custom to each artist.So, the question is did Radiohead succeed in creating a new system for producing and distributing music?

 Why does Mandelson favour the Analogue Economy over the Digital?– Cory Doctorow:  “Mandelson argues that Britain’s Digital Economy will be based on the contra-factual premise of a steady decrease in computer speed, drive capacity, technical competence, network versatility and network ubiquity. Of course, the real digital economy is in those British companies that figure out how to thrive whether or not copying occurs – companies that use networks to reduce their costs, reach larger customer bases, and provide services whose demand and profitability grow with network use, companies such as Last.fm or Moo.com.”

Copyright Time Bomb Set to Disrupt Music, Publishing Industries — This is going to be very, very interesting and lucrative for some artists: “The late ’70s, when punk exploded and disco imploded, were tumultuous years for the music industry. A time bomb embedded in legislation from that era, the U.S. Copyright Act of 1976, could bring another round of tumult to the business, due to provisions that allow authors or their heirs to terminate copyright grants — or at the very least renegotiate much sweeter deals by threatening to do so.”

Also, here are a few blog posts that I’ve grouped together that questions the role of the record label, file-sharing and music blogs and the impact on artists:
 

• Roundtable Discussion: The Role Of The Record Label
• Behind the music: Can we ever measure the impact of downloading?
• Do music artists fare better in a world with illegal file-sharing?
• Quantifying how blog posts affect music sales

 
Music Services and Mobile Apps

The Rocketsurgeon Blog is a great site that tracks the latest in new music and entertainment web services.

Looking ahead a few years, here’s a forecast of the top 10 mobile applications of 2012. Mobile music, which is already here, is on the list. Give it a couple of more years and mobile streaming will be mainstream.

Is Apple intentionally blocking DJ apps? Some music developers think so as a slew of DJ apps remain unapproved. Mind you, one of the apps mentioned, Touch DJ was approved and now available for sale. In the same blog post, there are calls for Apple to introduce more granular categorization of music apps.  This would be a welcome relief! 

Behind every song there’s always an emotion and Stereomoodis the emotional internet radio, providing music that best suits your mood and your activities. Pick a mood or feeling, and a playlistis generated for you. I’m quite impressed with this service.

Too bad it’s taken this long considering bands like Pearl Jam, Barenaked Ladies have been doing this for a few years but LiveNation and Apple have teamed up to sell live shows and videos on iTunes.

Are music labels bi-polar? We keep hearing that ad-supported music is not sustainable yet we see Universal stepping up to support Guvera which is set to launch another ad-supported music (last month it was Free All Music) download service. The problem is free is not sustainable, unless underwritten by somebody.

Vevo, the music industry’s attempt to create a Hulu-like site for its music videos, will formally launch Dec. 8. Universal and Sony are in on it while EMI and Warner are not (but could) participate.

WineDJ Helps Set the Mood by Pairing Wine with Music– Here’s an iPhone app powered by Grooveshark which Liberty School wines is using to promote their wines. Pick a wine and a mood, and a playlistis created for you. There are numerous opportunities to pair the right products with music that won’t turn-off consumers away. And as a side note, you can use this app for mobile streaming until the Grooveshark iPhone app is approved by Apple.

Soundcloud has released their iPhone app this month for music professionals who want to collaborate, promote & distribute their music. Amazing how in a few short years, passing around demo tapes and CDshave been replaced with online, wireless music distribution technology like Soundcloud

Grooveshark went under a site makeover that is winning rave reviews. As you will read in this interview, Sam Tarantino, the 22 year-old CEO is an example of a passionate music fan who isn’t going to ask for permission to shake things up in the music industry. I’m sure he’s ruffled a lot of feathers but innovators push the envelope and lead by making no apologies. 

16-yr old launches Vye music-sharing site. Another Napster? — Calling this new mash-up service another Napster is a bit over the top. The fact they provide direct download links to MP3s probably means this site won’t last very long once the labels release the hounds.
Given the fact that playlist sharing sites are a bit cheaper to run, could playlists be free music’s killer app? Interesting tidbit here is that advertisers like to reach people who listen to programmed music and 8tracks founder and CEO David Porter points out that, “the global radio sector ($38 billion) is 2X the size of the recorded music sector.”

And finally, if you happen to be in San Francisco, CA or want to make it out, the SF Music Tech Summit is set for Monday, December, 7 2009.

The Music Industry in 2010

Now that we are in the last days of 2009, love ‘em or hate ‘em, 2010 predictions and forecasts have probably started to cross your screens. Looking back at everything that has happened this year, let’s indulge in a little Creative Deconstruction prognostication fun. If you could build a new music industry business model what would it be? What new services would you offer? Which artists do you think will  break-out next year? Will Spotify ever launch in the US? We would love to hear what your music industry predictions, hopes or even dreams are for a better 2010! 

Gabriel Nijmeh

Gabriel Nijmeh is a software business analyst, passionate music lover and guitar player. He currently advises a couple of music startups, including Mediazoic, a real-time social DJ platform and co-founded the Toronto edition of OpenMusicMedia which brings people together to openly discuss the intersection of digital music, media and culture.

 

 

 

 

 

Related articles:

• Music and Tech Recap – April 2010 Edition
• Music and Tech Recap – March 2010 Edition

Tags: file sharing, music streaming, Spotify, vc funding