Sundtempest

Reporting, analysis, and opinions on the latest trends and developments in the music industry.

Archive for the ‘Industry trends’ Category

Latest Digital Music Retailers Deliver Mixed Results

About a year ago, I wrote about digital music retailers Qtrax and Spiralfrog, two websites from an entire batch of (supposedly) next-generation music sites. At the time, they were in pretty bad shape, which seemed rather unsurprising given the glut of music delivery channels out there and continually sagging demand, among other things.

Fourteen months later, it looks like most new digital music websites, including Spiralfrog, are showing underwhelming profitability and an inability to capture market share. Once again, this is entirely expected. Qtrax is still getting those legal agreements, as it’s kind of hard to run an intellectual property-based store without them. Spiralfrog brings nothing new or interesting to the table and still relies on DRM. iMeem has lots of users but isn’t generating much revenue, probably because people can stream full songs on YouTube or a variety of other sites and last.fm does a better job with social music sharing.

On the other hand, newcomer Lala seems to be doing pretty well. The site was founded in June 2006 and was initially centered around CD trading. Lala members paid a small fee to exchange their physical music CDs with other users, and the website took care of the logistics. Recently, the site has mostly changed its model. The site now allows users to stream from a catalog of music, upload their own music to listen to for free from any web-enabled device, and purchase new songs at low prices. While any one of these features would probably be uncompetitive, the combination of them seems to be doing pretty well for Lala.

What music websites have you been visiting lately?

Labels size up Web 2.0 music services [cnet]

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Record Industry Wants More Money From Music Games

It’s hard to read about the video game industry without noticing the massive success of current-generation music games such as Guitar Hero and Rock Band. Even considering their recent decline in sales, the relatively small handful of games in this genre have produced overwhelming sales, appealing to a mass market of would-be musicians normally untapped by the game industry.

Not surprisingly, both the recording and music publishing industries have experienced a sort of halo effect from the success of music games. Songs that appear in popular music games typically receive massive sales boosts, sometimes on the order of 100-200%. This effect really can’t be understated - Aerosmith, who had an entire Guitar Hero game featuring their music, has reportedly earned more money from sales of said game than any of their actual albums.

On top of this effect, labels and music publishers are compensated for the use of their music in games. A master use license is required from a record label to synchronize or edit any music in an audiovisual production (like a video game) and a synchronization license is required from a music publisher as well. These licensing fees are essentially free money for labels and publishers. While the manufacture, distribution, and retail sale of physical CDs requires a huge amount of overhead (not to mention radio promotion, video production, touring, etc.), licensing deals do not require any additional work from the licensors.

However, it seems like these fees are just not high enough for some players in the music industry, like Warner Music Group, whose CEO Edgar Bronfman believes his record label and publishing company are not receiving enough money for the use of their catalog. If music game developers don’t acquiesce to his demands for more money in future titles, Bronfman says he won’t be willing to license for them.

Does any of this sound familiar to anyone? For a company that isn’t doing well now, Warner sure seems to be going out of its way to actually lose even more money.

Why the Music Industry Hates Guitar Hero [Wired]

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The Grammy Awards: Explained

As a paying member of The Recording Academy - the folks that created the Grammys - I’ve been at least somewhat following the awards for the last few years. I even voted in them for 2008, though that was mainly because I entered one of my own albums (Antigravity) into the “Best Dance Album” category (I think the band Justice won). You might not be aware of how this process actually works, so I thought I’d break it down here.

There are actually over one-hundred categories where an album, artist, or song can win an award. You’ve probably never heard about most of these, largely due to the fact that they are more obscure to the public at large and, if televised, would make the ceremony several days long. They include things like Best Spoken World Album for Children, Best Hawaiian Album (which fellow JPF member Daniel Ho has won four times now), Best Album Notes, and Best Surround Sound Album. Not exactly crowd-thrillers, but still important.

If you’re a member of the Academy, you can enter - not nominate! - any song or album in any of the myriad award categories, provided you submit the appropriate forms in the right time period. It’s not too hard to do, but again, this isn’t nomination. This just puts your entered album or song into the pool with all the others. Now, because only Academy members can do this, and being an Academy member costs money, there aren’t tens of thousands of entries. As I recall, the 2008 awards had, at most, around 950-1000 entries for categories like “Best Album” that virtually anyone could submit to. Some categories had only a few dozen entries, such as the aforementioned “Best Spoken World Album for Children”.

At some point, all Academy members are notified that the voting process for turning entries into nominations is beginning. This is where it gets interesting. You get a list of all the entries for all the categories, and simply select which ones YOU would like to nominate. The entries that get the most nomination votes become actual nominations, which you hear about on TV. After that process, everyone votes on the final nominations to determine the winners.

“Wait!”, you say. “How would anyone be able to listen to over 900 albums to make an informed vote?”

Of course, that’s the central issue with the Grammys. Contrary to popular belief, all the major labels don’t conspire to somehow rig them, nor do big bad corporations have a secret cabal deciding what music deserves awards. Nope, it’s just regular people, running the gamut from hobbyists to music pros. And none of them have any motivation to listen to that much music. Is the music actually available to Grammy voters, should they want to listen? Sure, but that doesn’t mitigate the central problem. Any rational person is going to look through the list, or maybe even just the first page, pick the albums he or she already knows and likes, and nominate those. There’s no reason not to.

It doesn’t have to be that way. Just Plain Folks runs an award ceremony every few years which gets literally hundreds of thousands of entries each year. It’s free to enter and you don’t need to pay any fees to get involved. Did I mention JPF is a volunteer-run organization which relies entirely on its sponsors to pay its operating expenses? How can it possibly execute such a massive undertaking and do it fairly?

Well, it’s not easy. Thousands of judges are involved, categorized into three groups: music fans, musicians or writers, and industry professionals. While anyone can be a judge, they have to be willing to put forth the time to listen to a TON of music. The sole criteria for voting is a question, “Does it move you?” No ratings, no scores, no reviews, just whether or not the music evokes some kind of response - be it grooving to a rhythm, tears from a ballad, memories of 80s rock concerts, or however else individual judges choose to define ‘move’.

Because one needs to make a large commitment to become a judge, and because there are so many judges spread across a wide spectrum, the multi-round screening and nomination process is about as fair as humanly possible. You don’t need to worry about your album being overlooked, because whoever is judging your category wants to hear more music and vote objectively. There’s no money involved on any level (no prizes either) so the system can’t be corrupted.

Though the JPF awards don’t happen every year, mainly due to the unbelievable collective investment of time and resources, they are the biggest and best music awards around. The Recording Academy could learn a thing or two.

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95% of All Music Downloads Are Illegal

The International Federation of the Phonographic Industry (IFPI) has recently released their 2009 Digital Music Report which has some surprising, and not-so-surprising, findings. On the not-so-surprising side, digital single sales have again grown massively, increasing 24% from 2007. The #1 digital single, Lil Wayne’s “Lollipop”, sold 9.1 million copies - his album “The Carter III” didn’t even break three million physical sales in the States.

Another shocker; 95% of all music downloads are unauthorized (read: illegal) with no payment to artists or producers. While this sounds about right, I have to wonder what their study methodology was. After all, free music released through licenses like Creative Commons, or fan works on sites like OCReMix, shouldn’t really count as ‘illegal’ even though there is no payment to artists or producers.

Among the surprising findings included in the study was that 72% of UK music consumers said they would stop downloading music illegally if they were asked to by their internet service provider. Really? That’s how we can cut down on 70% of music piracy, just ask people to stop pirating? Again, I’m curious to see how this question was phrased and who was being asked, since it seems unlikely to me that a simple, polite request is a more effective deterrent than threatening criminal or civil prosecution.

The full study is definitely worth a read, even if you just check out the summary. There are some great figures that have nothing to do with piracy, such as a breakdown of how many artists there are in any given genre on MySpace.

Most Online Music is Illegal, Study Says [PC World]

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Should Music Software Cost As Much As iPhone Apps?

A little earlier today I noticed a heated debate today on KVRAudio lamenting the typically high pricing of music-making apps and plugins. The original post wondered why developers don’t drastically lower their prices to be more in line with iPhone apps (which themselves are in line with the lower end of computer software programs.)

That’s an interesting question!

As a musician and producer who uses a lot of computer software to create music, pricing is of a regular concern to me - and probably many of you as well, as for the last ten years, music software has made it very easy to produce pro-grade recordings. Like with the price of high-end photo editing and 3D modeling software, there is virtually no upper limit on that of music production apps. Collections of highly realistic orchestral sounds, typically used by film, TV and video game composers of all kinds, often cost thousands of dollars. The most expensive to date, the complete collection of Vienna Symphonic Library sounds, almost hits the five digit mark (and takes up a good 800 gigs on your hard drive, to boot.)

On the other side of the spectrum, Apple bundles its fairly powerful Garageband software for free with all new Apple computers. If you’re a student or educator and you want to upgrade to the industrial-strength Logic software, which normally lists for a reasonable $500, you can pay as little as $150. There are a number of companies besides Apple offering equally cheap (if not cheaper) programs, and whole websites devoted to freeware apps and plugins that can be just as powerful as commercial products.

There are tens of millions of Americans who have home studios of some kind, from simple eight-tracks with guitars to sophisticated scoring platforms. Would the Apple approach perhaps boost sales and popularity of music products like virtual synthesizers and sequencers, improving the tools of composers and producers the world over? Post your thoughts!

Apparently, You Need T-Pain’s Permission to Use Auto-Tune

In a strange turn of events, popular hip-hop/R&B artist T-Pain is apparently claiming that he deserves royalties anytime another artist uses Auto-Tune in their music. Auto-Tune, a software audio processing effect that “snaps” melodic content such as vocals into perfect pitch, was released in 1997 by Antares Audio Technologies without any involvement from T-Pain. The effect was initially brought into the public consciousness via the 1998 pop hit “Believe” by Cher, which used it extensively in the main vocal melody.

So, considering he was not the first artist to use the effect (by a long shot) and had nothing to do with the design, development or testing of the product in any capacity, where does T-Pain come into all this? In a Chicago Sun Times article about copycat artists, Rap Star P. Diddy noted that, “You have to go to him to get permission, I actually gave him a half a point on my album for showing me certain tricks.”

In an article posted on MTV.com referencing the same arrangement, T-Pain said, “Diddy actually gave me royalties on this album just for using Auto-Tune. He signed the contract and everything. If I can do that with Diddy, somebody else better be signing something.”

Whether or not we’ll actually see T-Pain actively try to collect royalties from other popular artists using the Auto-Tune effect remains to be seen. In all likelihood, both he and P. Diddy were not being entirely serious when discussing the topic, and were merely reacting to the myriad of R&B artists extensively using Auto-Tune. On the other hand, maybe Kanye West should look out.

Audio copycats source of distress for T-Pain [Chicago Sun Times]
T-Pain Says It’s Time ‘For Everybody Else’ To Stop Using Auto-Tune [MTV.com]

Labels Seek to Oust YouTube With New Video Service

As an appropriate followup to last week’s YouTube-related post, the major record labels are now considering the creation of a competing website that would aim to dethrone YouTube as king of music videos. The new venue could be implemented in one of three proposed ways; one would be a new “premium” section within YouTube, strictly for music. The second would be a joint venture hosted within the streaming TV website Hulu (in and of itself a joint venture between the major TV networks.) The third, and perhaps riskiest, would involve the labels actually creating their own website independently from scratch.

While Google has created special arrangements for the major labels, paying them per-stream and shared ad revenue through YouTube, the labels claim that Google is not monetizing the service as well as it could be.

The track record of the majors during the internet revolution does not seem to forecast success for their new venture, should it go through. Their public image has suffered over the post-Napster years and their attempts to capitalize on the internet have been moderately successful at best, complete failures at worst. Google has not always hit home runs with all of their offerings, but the acquired YouTube is the de facto video site of choice - any music video service would have a massive uphill battle for conversions.

Labels Think They Can Build a Better Mousetrap [Wired]

The Future: Reselling MP3s! (Or not)

A new challenger has showed up to the crowded field of digital music retail, with a twist: you can not only buy DRM-free songs there, but sell your “used” ones as well. Bopaboo.com, which hasn’t publicly launched its services yet and will be entering a private beta soon, was founded by 28-year old Alex Meshkin. This should perhaps raise some red flags already due to the controversy surrounding his involvement with Bang! Racing, a former NASCAR team which folded after only one season of operation, leaving a host of angry employees and investors.

There is very little information available on how Bopaboo intends to actually make money. The website tour seems to suggest that it is a user-driven marketplace, with prices as low as 25 cents for a single download, and personal storefronts for individual users to upload their “used MP3s”. It is unclear how Bopaboo will differentiate between legitimately “used MP3s” that are no longer on the user’s hard drive, and songs that the user simply uploaded to make a quick buck from.

The icing on the cake? Mishkin has not even met with major label execs yet to discuss his new business model.

Questionable leadership, technologically nonsensical business model, intense competition, and unresolved legal issues. A recipe for success!

Reselling MP3s: The music industry’s new battleground? [CNET]

Is DRM dead? RIAA says “no”

At a recent industry panel during the Digital Hollywood Conference in Los Angeles, the head of the RIAA’s technology unit, David Hughes, definitively stated that DRM is still going strong and is poised for a comeback.

Hughes stated that of the “22 ways to sell music… 20 of them still require DRM. Any form of subscription service or limited play-per-view or advertising offer still requires DRM. So DRM is not dead.” He added that “I think there is going to be a shift… I think there will be a movement towards subscription services and they will eventually mean the return of DRM.”

Also at the panel was Fritz Attaway, executive vice president of the Motion Picture Association of America, who agreed with Hughes’ opinion: “We need DRM to show our customers the limits of the license they have entered into with us.”

This is a stark reality check concerning the views of the people who are generally representing two of the major entertainment industries in America. It is fairly clear at this point, as we have seen with the recent Microsoft DRM server issue, that while things are changing fast in the music industry, some major players are simply refusing to drop the idea of DRM, even if they’ve taken some small steps away from it.

But what was up with that statement by Fritz Attaway? That was one of the least subtle ways I’ve ever heard an entertainment industry executive say “we don’t trust the consumer.” Not exactly how you rally support to your side. A better argument, just throwing this out there, might be that piracy can hurt profits which leads to decreased investment into new releases, and thus piracy eventually hurts the consumer as well.

ps. Sorry for the decreased rate of posting. I’m working on a lot of projects, setting up a music software/sample business, duties at ocremix.org, and moving into a new apartment. If you’re interested in helping write for SoundTempest please shoot me an email!

OurStage lets music and video fans distribute $25,000+ monthly

OurStage, a relatively new website centered around user-submitted and ranked music and video content, is now offering over $25,000 per month in prizes as part of its ongoing contest system. The prizes range from cash and gift cards to one-on-one mentoring sessions with established artists and producers, performance opportunities, music gear, distribution deals, and more.

The website, which is funded by “enthusiasts and angel investors”, invites musicians and filmmakers to create a profile and upload their music and video content for free. However, where OurStage differs from MySpace and iLike is the aforementioned contest system. Visitors to the site can quickly “Judge” contest entries by listening to or viewing two randomly-selected entries in a pair, then picking which they prefer more, and by how much (or selecting that the entries are just as good.)

This system, according to the site staff, prevents “gaming” - where a popular artist can solicit hundreds or thousands of fans to all vote for a song and propel it to the top of the charts. OurStage’s judging, in comparison, is completely randomized; users cannot choose to vote on a specific song. The code behind the system is also designed to balance the amount of ratings and exposure each entry gets, so that all songs or videos have equal exposure.

As the end of each month draws near, the top contestants from each category (such as “Electronic”, “World”, “Rock”) are brought into the quarterfinals, followed by the semifinals, where a winner for each is established. Then, the finals commence, and two grand prize winners are chosen from the pool of category winners; one for video, and one for music. On the first day of the next month, the process begins again.

Though OurStage is fairly new, it has already established numerous partnerships, such as with the Just Plain Folks Music Organization, John Lennon Songwriting Contest, Virgin Mobile Festival in Canada, and others.

I hadn’t heard about OurStage until a few weeks ago, when Brian Austin Whitney (founder of Just Plain Folks) contacted me and asked me to do some research on it, along with twenty-nine other individuals. OurStage had approached JPF about the possibility of becoming community partners, but considering the amount of websites in existence that take advantage of musicians, many of us were initially cautious. However, none of us could dig up anything fishy or sketchy. It was a completely legit site that didn’t charge its users a dime.

Not long after I did my research, I uploaded two songs from my 2007 release Antigravity to the electronic category, and encouraged Jillians Goldin, my girlfriend and frequent collaborator, to put up one or two of her tracks as well. We both entered into the February contest, and while it isn’t over, I think we’ve had an interesting experience thus far.

Before I get into that, let me say that I’ve been a user of Garageband.com for over half a year. GB runs on a somewhat similar system; there’s an ongoing contest, you create a profile and upload your music, then people vote on your songs in a randomized system. Songs that rise to the top of the charts have more visibility, and there are prizes for people that move through multiple rounds of judging. As of now, I have songs from Antigravity at #1 in Trance, #2 in Techno, #11 in Techno, and #29 in Electronic, out of hundreds of entries.

The problem with Garageband’s system is that in order to get a song into the whole judging process, you (the artist) must obtain fifteen “review credits”. You can do this by paying a flat fee, or by reviewing fifteen song pairs and giving detailed ratings to each. Your reviews are then, in turn, evaluated by other users to make sure they are legitimate and accurate, which they should be as the system forces you to listen to at least 90 seconds of each songs. The process is exhausting and many reviews turn out fairly glib in the end. However, there is an incentive to write good reviews; high ranked reviewers can win prizes every month, be they artists or not.

OurStage takes a different approach that in many ways works better. You need only listen to 15 seconds of each song in a review pair, and you don’t have to write a text review or evaluate multiple numeric categories. You simply select which song you like better, and by how much. The fact that the artist does not need to pay money or do the equivalent of thirty reviews simply to have their song entered into the contest is another huge plus.

This brings me back to the experiences of Jill and myself. We’ve been watching our songs move through the charts since the beginning of the month, we’ve judged dozens of songs, and browsed through the site documentation. After all that, our shared view is that it’s a great idea for a site that is more evolutionary than revolutionary, building on the idea of free-entry contests judged in a highly democratic fashion. However, we do share three common criticisms…

1. There are not enough categories to properly sort all of the music actually uploaded. The electronic category has ambient and new age songs next to driving techno instrumentals and Madonna-style pop. While over-classification should be avoided, overly broad genre tags create unbalanced competition.

2. Users regularly upload music to the wrong category and there seems to be little reprimand for this. During my time judging the “World” category, over 50% of the songs I judged were completely misplaced, with absolutely no qualities that could possibly merit the “World” label. This wastes the time of the people judging and is irritating to artists competing against these mislabeled songs.

3. There is no actual incentive to judge besides the enjoyment one may get from doing so. Don’t get me wrong; it’s definitely fun to judge. However, I think there should be some sort of additional motivation, even if it’s just the chance at a prize. I believe this has created a serious lack of proper ratings in several categories. It seems like a song can jump 20 or 30 places in just a single vote, as a result.

My song “Warhead” went from 65 or so to 172 in the span of a few hours. Previously it was as high as 29. Songs should not fluctuate this much in such a short period, especially towards the end of a month. For fluctuations to be minimized, more ratings need to be gathered.

Considering OurStage is fairly new, I can understand that all the kinks have not been entirely worked out. I’ve seen staff posting on the Just Plain Folks forums and responding to user feedback, so they’re certainly willing to refine and improve the way they do things. OurStage is still relatively small compared to sites like Garageband or Soundclick, but I’m hopeful that its thoughtful design philosophy and enthusiastic staff will make it a popular hub for music and a great new way for artists to get exposure (and maybe a little money on the side.)