Where is music technology headed in 2010

Another year has passed and we can only hope – and more importantly work – towards making the new year and new decade in the music business less tumultuous and one where the the disruptive forces of change are embraced for the sake of the artists and fans. Because it’s about the music, isn’t?

Now more than ever we need to keep the focus on two important groups: artists and fans.  It’s about creative innovation, not exploitation. We still have a way to go but signs are pointing up as more people focus their energy on solutions-based thinking and building.

Before we look too far ahead to 2010 and usual set of predictions, let’s take some time to reflect on what transpired not just in 2009 but over the past ten years. Has anything been learned? Are we headed in the right direction? Will we be spinning the same wheels bare?

Did anyone imagine that in just a few short years the industry would face such swift, radical change leaving some still spinning?  Disruption for one group is innovation and opportunity for another and the battle will continue to rage between these two camps.

A review of 2009 on back…

CMU has put together their review for 2009 covering the media and the internet, the music business and artists and the music.

The A to Z of digital music startups in 2009 is an impressive list of digital music startups.

11 Interesting Moments For The Music Industry In 2009- Twitter, Social Media, Music Games, drop in concert attendance.

Bruce Houghton: 3 Trends, 13 Companies & 1 Wild Card To Watch In 2009 and How Did I Do With My 2009 Predictions?

The decade in music: Sales slide, pirates, digital rise – “Nothing defines pop’s past decade as much as the Internet and its evolving powers to alter the way music is created, marketed, shared and consumed. And, some would say, devalued and plundered.”

All the Rules of the Music Business Have Been Remade – From creation, distribution, consumption, it is utterly amazing how technology has flipped the business on it’s head and blown the gates right off.

What has the digital decade meant for music? – “The way in which we consume music has been revolutionised, but rumours of the death of major labels have been greatly exaggerated.”

2010 Music Predictions, Wishes and Guesses

Here’s a recap of some predictions written about for 2010. It’s a fun, year-end exercise and it might be a better idea for those making them to review them monthly, or at least quarterly. And better yet turning these predictions into actionable goals.

All the predictions in the world won’t matter unless the music fan is looked at like a valuable consumer and not some menacing threat.

Bruce Houghton has one prediction for 2010 and honestly, it’s less a prediction but good old common business sense: Those that serve the fan will thrive. Those that do not will whither.

Here are a few that are worth bookmarking and revisiting over the next couple of months:

• Five Music Predictions for 2010 (and Five Reasons Why 2009 was a Flop)
• 8 Key Trends for the Next 5 Years
• Bob Lefsetz’s Predictions
• The Year in Digital Music and Predictions for 2010
• Bobby Owsinski’s 7 Music Business Predictions For 2010
• 2010: 5 Music Business Predictions (And A Football One)
• 10 music-tech trends that will shape the next decade

And as for my thoughts for 2010 and beyond?

Service Agnostic Playlists:
I believe that in 2010 we will start seeing more service agnostic, portable and shareable playlists. You just enter the name of a band or song, and a new service like Playdar (hooked in with the XSPF format) will help you find the song either on your local drive or any music service(s) you might subscribe to. Playlistnow.fm, Stereomood.com and Playlist are examples of the shift from MP3s to playlists, and as an end user you aren’t as concerned about where the music is located.

Music in the Cloud Goes Mainstream:
Sure, anyone with the time and inclination can use Simplify Media, Subsonic, Tunesbag, MP3Tunes to create their own streaming music service but only the biggest, most meticulous music geeks are doing so. 2010 we will see, directly or indirectly, Apple, Google, Amazon making moves towards cloud based music service offerings.

Apple and Others Finally Get Social Music:
For most of us, music has always been a social activity and we are already enjoying the social nature of music online using sites like Twitter, Blip.FM and other third-party, independent services. Apple, Google and other big players will finally start taking it seriously and will build social networking functionality into their core service offerings.

Music Tech Investments
Duncan Freeman of Band Metrics has just posted his list of music tech investments and M&As for 2009. There was certainly quite a bit of activity and will we see more investment activity in 2010? GigaOM recently posted a piece: After Weak Exits In Digital Music, VCs Start Smaller offering some additional perspective. Investors may be stepping back a bit but are not stepping away completely from investing in the digital music sector. Investment returns in music streaming services haven’t been as hoped for but there are other (not as sexy as Spotify) digital music opportunities that don’t face the same, out of the gate, licensing hurdles. With $154 billion of venture money still sitting on the sidelines, that money will have to be invested somewhere, right?
December funding news:

• App Store Champ Smule Raises Another $8 Million
• Podcasting company Lexy raises $458k in debt financing
• ZumoDrive Raises $1.5 Million For Cloud-Based Mobile Music, Media Access

Music Services and Mobile Apps

New iPhone apps like Flypt (music remixer), PRS Jam App (for guitarists), Muppets Animal Drummer (music rhythm game), Beaterator (music mixer) being released are becoming much more interactive. Instead of just being passive listeners, music lovers can now try their hand at being creators, producers and remixers.

Soundtrkr is another interesting app I played around with this month. It’s a geo-tagging music app that lets you connect with other music fans in your area. It’s like Foursquare for music. It will probably be just a matter of time before Pandora or LastFM add this functionality which I think would be brilliant move. Myxer launches MobileStage, a mobile marketing platform for artists and brands/advertisers.

Nowplaying.FM – With so much music/bands being discussed on Twitter, there isn’t always a link provided to the music. With Nowplaying.fm, they are a music search-and-play service in the style of GrooveShark which searches various services and finds the song you want to hear. As I already noted, this is where Playdar can really shine as a music content resolver.

PlaylistnowFM – Similar to Stereomood, you can listen to preselected playlists based on mood/what you are doing. Clean interface (combines elements of Blip.FM and Twitter) and a decent selection of tunes.

Playdar – I’m going to keep an eye on this one in 2010. It’s a bit of “geeky” but very promising tool. Some smart developers will create amazing apps/services that will make it even easier for the music fan’s to discover and listen to music. For early adopters getting their heads around it and Playdar powered services like Playgrub and Playlick, the focus will be building playlists and less on where the music is located. I really hope to see Playdar underpin a lot of future music services which ties well into my thoughts about service agnostic playlists. Read this write-up for a really good description of how Playdar works.

Amazon Adds Audio and Video Streaming to CloudFront – This announcement slipped through quietly. For no additional cost, Amazon will let developers/companies stream delivery of audio and video content. Keep an eye out for new and upcoming service launches now that this type of technology is easily accessible and affordable.

Best of 2009: 10 iPhone/iPod Touch Music/Sound Apps – Suzanne Lainson has recently posted a very thorough article detailing the potential iPhone music revolution where many free and/or cheap tools are allowing music fans with little or no musical talent to create music. It may not be all that good but at the very least, fans will garner a better appreciation of the time and effort that goes into the creative process.

Opinions, Insights and Analysis

In 2009, the hot talk was about Spotify (will they or won’t they launch in the US?) and in 2010 music in the cloud will be on everyone’s lips. There is still a way to go before we see commercial offerings and mainstream adoption but a lot of the hurdles are being knocked down including: technological, costs and cultural.

Music in the Cloud: Heavenly or Pipe Dream? – There are enough open-source tools and software that lets you share and stream music from your computer anyway, so streaming music from your “personal cloud” is already here. It’s just that many people can’t be bothered with setting up, maintaining and backing up their libraries. Once Apple flips the switch, it’s game on. See next article.

How Apple’s New Music Strategy Reflects a Paradigm Shift – This is a great piece with two key points: 1) the transition toward streaming rather than owning is slow, but real. and 2) Apple is still betting on owning music in a new way, rather than subscribing to it.

In the legal download world, someone has to pay for the music, so will 2010 be the year that “brandvertising” finally proves that ad-supported music downloads work? Free for All and Guevara are going to try hard to prove so. And with so much activity on the mobile front, it will be interesting to see if 2010 “will be the year mobile begins to realize its potential for marketers.”

Here is a great article that describes the The Problem With Free. It is summed up best: “When you pay for something, you appreciate it more than when you get it for free.”

APIs Can Set You Free — “Music — or any kind of information, for that matter — no longer emanates from a centralized source. Instead, it reaches listeners’ ears through a plethora of tweets, blogs, widgets, apps, social nets, search services, recommendation engines and the personal messages from the artists themselves.”

Formula That Can ID Music Industry Payola Developed — “A University at Buffalo researcher has invented a statistical method that can detect payola-like corruption in the music industry, a system that gives law enforcement an inexpensive statistical guide to identify potential music corruption and to better target more traditional and much more costly hands-on evidence-gathering.”

4 Ways One Big Database Would Help Music Fans, Industry — Great idea but very challenging to implement and maintain. We already have MusicBrainz and FreeDB plus other proprietary music industry databases. Trying to reconciliation and bridge commercial and open source interests won’t be easy. And I hate saying it but it will be impossible to reach any consensus or standards to satisfy all parties.

What was once thought will be a music business saviour, music video games sales peaked in 2009 and sales forecasts missed . Are consumers bored? Will 2010 be any better?

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And that caps another year in the business! Where do you think we are headed in 2010? What do you hope to see happen? What are you working on that you feel will make a long-term difference?

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.

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.

 

 

 

 

 

French streaming service Deezer launched a Premium Subscription last week.

There isn’t usually much to talk about when a product is perfect. People may rave for a while, but there’s little to discuss aside from the accusations of a few inevitable dissenters. A product or service that is truly newsworthy, however, is one that is almost perfect – but not quite. An excellent product that offers a solution to a real problem, but that has one or two inescapable flaws of its own can provide months of heated discussion and analysis.

Online music streaming is exactly that kind of product. It’s almost paradoxical, in many ways: on the one hand, people want on-demand music. Who’s going to argue with convenient access to (almost) the entire world catalogue of music? Yet, many people still have a nagging desire for ownership. Ownership may be “for pussies” as Lefsetz so eloquently pronounced in a recent post, but I’m willing to admit that I enjoy downloading a track on iTunes and adding it to my collection. Yes, I understand that my “collection” is really just a store of digital code, but this isn’t about the intellect – it’s about the feeling.

Also, streaming finally offers a system of music delivery that is faster and more convenient than most forms of file sharing. “Why are you going to steal,” asks Lefsetz, “if all of a sudden you can check it out quickly on a streaming service?” A couple of recent surveys seem to support this. According to the New York Times a survey by the NPD Group here in the US found that “teenagers aged 13 to 17 illegally downloaded 6 percent fewer tracks in 2008 than in 2007, while more than half said they were now listening to legal online radio services like Pandora.” Not exactly earth-shattering evidence, but it’s a start.

On the other hand, if these music streaming services aren’t profitable or sustainable, does any of that really matter?

That’s the big question. How do streaming services hope to make any money? Spotify, Grooveshark, Imeem and others are burning through large amounts of cash as they continue struggling to find a way to climb out of the red. The recording industry has set royalty rates for on-demand streaming as high as 1 cent per song. That may not seem like much, but consider that by some estimates Spotify is currently streaming over 1 billion tracks per month. Add in the cost of bandwidth and hosting and the cost of streaming quickly becomes astronomical. (This is obviously an oversimplification of the equation. For a more detailed look at the numbers behind streaming click here or here.)

Freemium has been the model of choice, but so far converting free users to paid subscribers has proven difficult. Spotify has reportedly been able to convert about 4% of its users to paid subscribers, or 116,000 in total. That’s a big improvement over the 34,000 subscribers in May. But these numbers still point to the challenges that face platforms relying on freemium to drive revenue.

With any freemium model the product’s core functionality is already available to users for free. The challenge lies in developing the right incentives to make upgrading worthwhile. Spotify appears to be finding success in their mobile offering. Premium subscribers are able to sync their account with their iPhone or Android device. Mobile access is increasingly important to consumers, and judging by the doubling of subscribers noted above it has been enough to seal the deal for many.

In further evidence of the power of the mobile device in music streaming, the company behind the French streaming service Deezer surveyed its users and found that 80% wanted mobile access. Until this point, Deezer was 100% free. Last week the company introduced Deezer Premium, which directly responds to the results of this survey and offers mobile access for a monthly fee.

But what happens when a platform comes along and offers free mobile access? It’s only a matter of time as the streaming space is becoming increasingly crowded with new entries such as MOG. The feature that converts users becomes a commodity next month and it’s back to the drawing board.

Freemium is not the only option. The strongest alternative may be mobile bundling. In this scenario the cost of the streaming service is partially or completely subsidized by the cell phone carrier, and built into the cost of the plan. In this feels-like-free model cell phone users are still paying some of the cost for a subscription, but they don’t feel it because in many cases it doesn’t even show up as a line item in their monthly bill.

While this model may solve one problem, it does so by creating a few problems of its own – which is par for the course in music streaming. Most bundled services operate with some level of exclusivity toward their partner carrier. This type of arrangement could solve a platforms revenue problem as it relates to mobile users, it could also dramatically hinder a platform’s adoption on the desktop.

Can a streaming service afford to alienate a large portion of desktop users? Mobile devices continue to carve out a bigger and bigger presence in consumers’ lives, but the desktop is still the digital hub. I would argue that market dominance still depends on it, although I’m not sure what good dominance does it you have to sacrifice profitability to get there.

One thing is clear: without a free version to get users hooked any new streaming service is dead on arrival. I agree with Lefsetz who writes, “You can’t get people to pay first, that’s twentieth century thinking.  You give them a taste now, and then get them to pay.” He goes on, “We live in an attention economy.  It’s almost impossible to get people to spend time with [your service.]  Make it easy for them!  Convince them!  Then get them to spend money.”

The bottom line is that music streaming services need to find a way to get more people to pay. No one wants to see streaming disappear, but there aren’t too many who are willing to donate cash each month if they don’t feel they’re getting additional value. Without the support of the industry or the government, Spotify, Deezer and the rest are left to survive the old fashioned way – by convincing consumers to buy.

And these services don’t have the industry’s support. Many in the business still cling to the download as the only acceptable transaction. This is not lost on Daniel Ek. “The big question is, are we not just fighting piracy, but also taking away the industry’s most lucrative customers, the ones that were buying 30 or 40 CDs a year?” Ek recently asked the New York Times. “If so, the music industry is in worse shape than it was before.” Perhaps that’s the biggest paradox of them all.

Still, music streaming is not the end of the story. Spotify, Deezer and their competitors have accomplished something that is likely to have massive ramifications on the music industry – they’ve given us a taste of true on-demand music consumption, and I don’t think we’ll ever be satisfied going back.

Time for our recap of what went on in the music industry this week. Make sure to check out anything you might have missed and leave your comments. Of course our coverage of music news is by no means exhaustive, so if you know something we don’t submit a story.

Most Popular:

• Imogen Heap shows us that DIY pays off – and takes a lot of work – Taking an objective look at what some are calling the ‘new music business model.’
• What the music industry and the credit crisis have in common – Greed is greed.

This Week:

• What makes a great live performance? – Guest post by Andrew McMillen.
• New Music Releases: August 18th 2009 – New music by Temper Trap, Cave Singers, and Choir of Young Believers.
• What will it take to unite artist, industry and fan? – An editorial on the future of the music business.
• Imogen Heap update, plus full streaming of new album – Check out free streaming of Imogen’s new album Ellipse.

Other News:

• MySpace buys iLike for $20 million
• iTunes captures 25% of all music sales, 69% of downloads

Music Video Picks:

No new videos this week. Check out the archives.

This Week in Music History:

1963 - Stevie Wonder became the first artist ever to score a US No.1 album and single in the same week. Wonder was at No.1 on the album chart with ‘Little Stevie Wonder / The 12 Year Old Genius’ and had the No.1 single ‘Fingertips part 2′. This was also the first ever live recording to make No.1. (This Day in Music.com)

The founders of music streaming service Last.fm announced this morning that they will be leaving the company they helped create. “This is the latest stage in a long journey for us founders, which began in a living room in East London in 2002, and took us to the headquarters of one of the biggest media companies in the world.” The media company they are referring to is of course CBS, which acquired Last.fm about two years ago for $280 million. The announcement, which was posted this morning on the company’s blog, didn’t indicate why the team has chosen to leave, saying simply that, “After two years running Last.fm within CBS we feel the time is right to begin the process of handing over the reins.”

It is possible that it was CBS who informed  them it was time to leave – when a start-up is gobbled up by a larger entity, the founding leaders usually do not stick around for very long. Look at the recent ouster of MySpace co-creator and CEO Chris DeWolfe. The team may also have something new up their sleeve, although if they do nothing has leaked yet. Either way, they are leaving on something of a high note. According to founder Felix Miller, “Last.fm’s users have more than doubled in the last 12 months – we are now at an all-time high of 37.3M monthly unique visitors.” Yet, as Mashable notes in their coverage of the announcement, Last.fm has been under a lot of scrutiny lately related to their recent waffling over whether or not to charge international users, and accusations that they handed user data over to the RIAA.

It will be interested to see what will become of Last.fm now that CBS has full control. The presence of the original founders seemed to maintain a sense of independent thought and creativity – something that can be much more difficult for a behemoth like CBS. Yet that authenticity is valuable and a service like Last.fm wouldn’t be the same without it. That’s something CBS should definitely be thinking about right now – with the online streaming radio wars heating up recently this would not be a good time to toy with the trust of their users.

It used to be the record label’s jobs to tell us who to listen to. A&R would scour the earth looking talent, groom them, coach them and surround them with people who could get them where they wanted to go. If the label caught the scout’s vision they would sign the act and fund a record or two.  There was a process. It wasn’t perfect, but a process nonetheless. Label’s stopped doing this years ago. Maybe it was MTV that started the decline of artist and repertoire. Label’s saw the money that could be made off a pretty face and their priorities began to change. Before you knew it Britney Spears was at the top of the charts. Once the majors began to consolidate and were gobbled up by companies run by executives who hadn’t played a record since the Carpenters, the role of Taste-maker belonged to fewer and fewer entities who cared less and less about the art of music.

As listeners began realizing that they were being fed a diet of insubstantial junk, it was the beginning of the end for the industry. You can blame Napster all you want, but what made Napster so appealing was that it exposed fans to music they had never had access to when the major labels were running the show. It was like one massive, world-wide mix tape that anyone with a broadband connection could tap into. Independent bands started to realize that people in places they had never even toured were not only listening to their music, but were sharing it with their friends.

Now new tracks are pouring onto the Internet like auto workers into a state unemployment office. Except there’s no line, and nobody working behind the counter. Armed with a free copy of Garageband and the vague hope that someone, somewhere might listen, scores of nameless musicians are doing their best to take advantage of the new digital frontier.  It’s largely the same situation for listeners. A music fan who logs onto MySpace looking for fresh tracks could spend endless hours scrolling through band profiles, probably finding more misses than hits. It might take weeks before they uncover something that really gets inside them.

The major labels dropped the ball. The world needs taste-makers. People want help discovering new music. When the labels couldn’t be trusted, at least the world always had independent record stores. The fact that music lovers were willing to weather the elitist condescension of record store employees is proof of this – people want someone to tell them what they should like! Of course, record stores were a casualty of the digital revolution, too. An unintended and unfortunate casualty, but I’m not sure any amount of wistful nostalgia can bring them back now (though there are many who still try - and God bless them.)

This is why services like Last.fm make such big deal about their ‘recommendation engines.’ They’ve created a system built on crowd-sourcing and meta-tags in order to fill the taste-maker void. It works ok – I have found a few artists through Last.fm that I’ve now added to my regular rotation. But crowds are stupid. The individual members of a crowd might by intelligent and capable, but put them together – stupid. Read Malcom Gladwell’s Blink if you don’t believe me, he’ll convince you. 75% of the songs that end up on my Last.fm station are either mediocre or downright terrible.

I know there is more good music out there - but where is it? We need people and services to step up and tell us where to find the good stuff so that we don’t have to waste so much time on the filler. Technology can help but real people need to be involved, too. Pandora has a good start, using over 50 actual humans to analyze a host of criteria when making recommendations. Mufin is brand new, and looks like it may be the most comprehensive recommendation engine to date. But even these options don’t feel human, so they don’t carry much weight. People don’t want recommendation engines, they want to hear someone they trust raving about an artist they love. Maybe it will be bloggers, maybe indie labels will step up to the plate, or maybe someone will create an engine that really does the trick. Either way, in our post record industry world, the sooner the new taste-makers emerge the sooner the real talent will have a chance to rise more quickly to the top. That’s good for everybody – except maybe the filler.

Imogen Heap

I have talked ad-nauseum about the opportunities that social media provides artists to get the word out and connect with their listeners. Sometimes I feel like I am beating a dead horse – surely everybody get’s it by now, right? But the more I talk with new artists and record labels the more I realize that everyone really doesn’t get it yet. They either don’t believe that something like Twitter can actually advance their career, or they just don’t know how to use it properly to get the results they want.

I follow a lot of different artists and musicians on Twitter, and I love to see some of the innovative things they are doing to engage with their fans. Recently rap/reggae artist Matisyahu offered to send out the address of his rehearsal hall to the first few followers to send him a message. Everybody had so much fun that he did it again for the next couple of rehearsals. Singer/songwriter Imogen Heap posted a link to a live web-stream where fans could eavesdrop on her as she played piano just for fun. The four ‘heapstreams’ that she has hosted have garnered thousands of hits and a lot of positive comments and tweets from grateful fans. The majority of the comments expressed how much they appreciated being allowed a window into the artists private creative process. The videos also reveal that Imogen Heap really knows how to play her instrument, something that is valuable in itself.

These ideas are perfect examples of how social media can be used creatively to add value and depth to the artist-fan relationship. As technology increases and artists have more time to play around with new tools and new ideas we are sure to see many more innovations in the future. Bands should be paying attention! If you learn from the people who are out in front innovating you have the opportunity to get your name out there in ways not possible five years ago.

Business Week ran an article recently that talks about the “problem” of online music streaming services. The article claims that while online streaming was initially intended to promote music, and therefore promote the purchasing of music, it has actually had the opposite effect. The author describes a 23 year old man who has gone from spending over $100/mo. on music purchases to only $10/mo. because he figures he can simply stream whatever music he wants to hear at any given time.

Despite the account of the single consumer they interviewed, I disagree that online music streaming has really caused the sale of recorded music to decline. The fact is that online streaming does promote music. The listener is exposed to music that they may never have encountered otherwise. When a listener hears something she likes, she will look for more music by that artist and may end up a loyal fan down the road. Does that guarantee that she will someday purchase the music that she has enjoyed via the music streaming services? Of course not, but she is much more likely to do so than if she had never heard the artist in the first place

This perspective also seems to ignore the fact that conventional radio has been doing the same thing for decades. (Of course, Billy Corgan has decided he doesn’t like that either – but that is another post entirely!) Listeners do not pay the radio stations that they tune into, and the stations - particularly online stations – pay big royalties on the music they play. It is understood that the artists benefit from the free publicity, and the radio stations make their money from advertising dollars that exist because so many people are able to listen for free. The listeners obviously get to enjoy music in their homes, cars or wherever else they happen to have a radio. It works the same way online. Granted, there are at this point fewer listeners, and the ad dollars haven’t caught up with conventional radio, but the free publicity piece remains unchanged. If both services ‘stream’ music into the home, why is one generally accepted as promoting the sale of music, and the other as discouraging it?

The answer is that this entire discussion is irrelevant. Free online music streaming is not discouraging it’s listeners to purchase music any more than conventional radio. In fact, it is almost certainly helping music sales, especially for lesser-known artists. The real issue is that the old Industry models are broken in far more serious places. Consumers have decided what they want – free music that they can listen to whenever and wherever they want – and the established Industry doesn’t like it. The argument against online streaming is just another straw man that the Music Industry has erected in an attempt to reclaim some of it’s former control.