What can save Recorded Music? Is it the magic of Free? Fans funding their artists? 5-cents downloads? A new slate of start-ups is emerging with radically innovative solutions.

Fan-funding seems a fascinating alternative, but the scalability of the model raises serious concerns. Sellaband, Slicethepie, the just announced Pledge are just a few names in the category.

Dympol, a New England based start-up, is advocating a different and unique proposition. Get paid to pay is the tagline of the company: by working with sponsors that believe in the value of music, Dympol is able to offer discounts that help fans buy more for less, while helping recording artists and labels earn more.

Dympol’s personalized micro-sponsorship platform, powered byalgorithms that simultaneously and randomly allocate variable discounts to users, allows any brand or content owner to create a campaign on- the- fly and and start offering purchases discounted with instant cash-back rebates.

A few indie artists, labels and sponsors have already embraced the Dympol philosophy: Kendrick, Ruby Bullet, Starlight Beats, Cumbancha Records, Nancy Newlis and Skedwool. Launching through Dympol is extremely easy:content owners and brands can quickly chose what content to sponsor, the target audience and the budget.  Embeddable widgets help promote the campaign online, throughout blogs and social networks.

The official debut of Dympol is happening this week at the CMJ Music Marathon, the largest and longest-running music industry event of its kind. CMJ is using Dympol’s platform to sponsor up to 50% in cash-back rebates on tens of thousands of MP3s from the 1,300+ bands performing at the event this year.

Jay B. Ziskrout, Dympol’s CEO and a former punk rock drummer and international music industry veteran, told us that more brands and artists are slated to launch soon.  With brands hungry to create new ways to engage with perspective customers, music becomes the perfect connector. “Brands and content owners” says Jay “can create micro-campaigns, decide the timing, the demographics and the level of budget. They get to choose among a catalog of millions of DRM-free tracks. We’re also launching soon a number of prefab theme-based campaigns that marketers will be able to pick from”.

As with Adsense for search, Dympol is creating a sustainable and scalable ecosystem for the music industry, generating value for all the players involved: fans, content creators and marketers.And as with AdSense, costs are directly correlated with results.

I’m sure we’ll hear more about Dympol in the next few months.

Music and Innovation hardly get together and, when they do, the War of the Roses is a more likely scenario than Star Trek. Not always though.

Augmented Reality might be a peaceful exception. A new wave of music videos is indeed emerging, with the promise to enable new creative ways for artists to interact with their fans.

The first experiment carries the signature of an artist known for his love story with new media, John Mayer.  His new music video “Heartbreak Warfare,” from the upcoming Battle Studies album, makes use of augmented reality technologies and is now live on his website.  Fans with a webcam can experience the new video by downloading an AR icon from the site and lining it up with their webcam or opening it on a mobile phone. Once the computer acknowledges the marker, the video will start playing with the user inside the background!

Check Mayer’s proud interview with Wired for some backstage intelligence.

Next up is an Australian band, Lost Valentinos, who is using AR in a very different way. Each band member was shot while performing the song on its own, then matched with a marker. Now it’s totally up to their fans to compose their own videoclip.

Unlike the broadcast era, AR doesn’t require multi-million dollar budgets. The only challenge is to how creative and engaging you want to be.

Columbus – which America celebrates today – was a disruptor but he didn’t really know to what extent. He dared challenge the ocean for 36 days, and landed on what he thought was India. He lived with that belief. And changed history forever, for the better or the worse.

It was supposedly Amerigo Vespucci, who realized that it was a new land, and the German cartographer, Martin Waldseemüller, named it after him: America.

In the music industry, it was Napster, 10 years ago, the one to open the gate of the digital innovation to an industry plagued by payola, fake talent, and the monopoly of a few ultra-billionaires. By disseminating the digital culture inside the music business, Napster initiated a disruption that his creator was probably unaware of.

In the years after Napster, the very concept of music distribution, marketing, copyright, music ownership and consumption have profoundly changed. Daniel Ek, from Spotify, wants to be the Amerigo of that revolution and wants consumers and industry players to follow him. He is not an innovator as Shawn Fanning was, but he might end-up linking his name to the final acts of the digital music revolution.

From a consumer standpoint, Spotify for the first time has fully embraced the concept of music in the cloud vs ownership- which was a legacy of the physical world.  The pillars of the Spotify product and marketing strategy

• Streaming as the core of the music experience. Your music library is ubiquitous, as it has to, in the post-Walkman, post-Napster generation. Sharing, Collaborative Playlists, Scrobbling for finer recommendations are nifty features to make the experience social and the discovery personalized.
• Mobile as key enabler of the freemium membership, because that’s where scarcity springs, not online with the gazillions of BitTorrents.
• Free and Freemium as complementary models because music is not a one-way funnel of conversions. The targets tend to infinite: from the teenage  girl who was born wired to her cellphone to the music freak who listens to music non-stop downloading BitTorrents of anything digitized in the last 10 years.
• Impeccable quality: a p2p tech system that makes the streaming experience almost as good as in real-life, high quality sound, and a higher one for finer ears willing to shill 10 pounds/month along with other compelling perks as the mobile access.

The challenges: consumers are still in a limbo between the physical age where they were hard-wired to the concept of “owning” music as the ultimate music experience, and the digital age, where bits are defiant of any ownership, copyright, and ubiquitous.  The post-Columbus age is not one to happen overnight, the shift takes time. But Daniel Ek knows it.

From a business standpoint, it would be easy to assume that money will follow the value and believe in all the “feels like free” speeches. But the reality is somehow harder, record labels don’t want to admit to shrinking revenues, and pretend to ignore that streaming is a marketing channel.

Will Spotify succeed in its ambitious conquest of the new world under those terms? Some are warming up already to sing its death song, others elevate hymns of liberation from the Itunes monopoly.

Time will tell. What seems certain is that the biggest threat, given the level of sophistication and superiority of the service,won’t come from consumers.

Ancient civilizations believed that time was not linear but circular and postulated the theory of the Eternal Return.

Fast forward to the 21st century: the era of time as progress. Still, sometimes, it feels like ancient philosophers might have been up to something.

Take the history of the Music Industry in last 10 years and compare it against the “evolution” of the Book Industry in most recent months. You look at the facts and then tell me if I am the only one disoriented in time and space. The phenomenon of this displacement is what we today call deja’vu.

-1998 The first Mp3 players are borne.

-2001 The  iPod’s birth date.

-2001–2003 Competitors rush to produce better “gadgets”:Dell, Creative, Microsoft, Sony. (They will all fail).

-2003 a closed DRM’ed marketplace for downloading music comes out of Apple’s genius. The war is over.

In the 4 years that lapsed between the first portable Mp3 players and iTunes, the music industry went haywire. The only options users were left with, if they wanted to fill their players, were either the clumsy ripping of CDs or downloading music from Napster and the likes. Which also helped shape the perception that music “should” be free (which you can argue in favor or against, it doesn’t really matter, because it’s what it is).

Then iTunes came with its “reasonable” 99cents/single track marketplace and built a monopoly that still lasts after 5 years (and keeps growing with the latest stats showing Apple as the number 1 US music seller and a whopping 25% market share).

How about the Book Industry?

-2005-2008 the first ebook readers hit the market. But there’s a reason why ebooks only represent 1% or, when lucky, 2% of the book market. Those readers are 1) all but usable (chunky navigation, horrible fonts) and 2) there’s no easy way to fill your ereader with books and 3) ebooks aren’t that widespread.

-2008-2009 Amazon hits the jackpot with its whispernet technology. What that means is that the Kindle is not only a better device in terms of interface, but most importantly it is dead simple to buy a book and in 60 seconds read it on your device. Sounds familiar/itunish? And there’s more. The Kindle just like its godfather iPod, is locked with its own DRM.  And let’s not talk about publishers and their fear that the digital books will cannibalize their sales of the pricey hardcovers.  So God bless the new monopoly? Maybe not.

-August 2009:  The war ain’t over yet this time or so it appears at least reading the news this week. Where do our hopes go this time?

1- Google opened up its 1million ePub archive for free. ePub is the non-DRMed defacto standard for digital books, which all readers can read…well except the Kindle, unless you use some geeky trick.

2- This week Sony attack to Amazon started getting serious with the announcement of its upcoming Daily Reader Edition which will come with a wireless connection similar to the Kindle’s one (but through AT&T) and at a cheaper price. The new ereader might also be slick!!- with a much desired touchscreen interface.  On the other hand, Barnes&Noble, which has the advatange of a bookstore, has already a nice mobile app for the iPhone, iPod Touch, BlackBerry and is gearing up for the launch of a wireless ereader sometimes soon in the next few months.

Both Sony and Barnes&Noble are Google partners and have less DRM restrictions than Amazon. There is still some and a lack of interoperability – but you think you could convince publishers to give up on DRM? Another deja’vu?

———————————

-2010 or what’s next? Lessons learned from the Music Industry’s failure with the digital evolution

-One Store and One locked-in pricing policy doesn’t do the trick of convicing the market that they have to pay…

-Free as in digits helps shaping up a whole new industry of added-on services (think TrentReznor and followers, or Coelho). Read Chris Anderson’s Free for more inspiration.

-A new User Experience.

• What are those Kindle notes if not primitive and useless? Shouldn’t I be able to share them, post what I’m reading while I’m reading it, recommend it, borrow my ebooks, gift them?
• My Library in the Clouds. I want to buy books from multiple sources and store them in a place where I can access them anytime as my mood dictates and with whatever reader I might own at that point of time. I don’t want to be the slave of one reader and one store.
• Discovery: build something to beat Amazon recommendations as soon as possible. Make it flexible: sophisticated as the Slacker radio and mass-market as the Billboard charts. To everyone his own…

-A new Generation of e-Writers. With the advent of digital, Music saw an explosion of creativity. Never in history so much music had been produced. Be prepared for the new wannabes of the digital age: give them the tools, the marketing information they’ll need, create the filters to separate the wheat from the chaff. Think TopSpin, ReverbNation, and the likes, only for books.

-New Formats. Remixes, Multi-media, Augmented Reality…digital will usher new forms of creativity and  change the same “writing” concept …which has been stuck for …about 500 years, besides some sporadic innovation from Japan where already half of the books are mobile-originated. But are there the tools? Is someone working on it?

-The Dawn of the Empire. Don’t be US-centric. Innovation is spreading at the speed of digits. Think of Baidu for music in China. Be prepared for other languages and cultures to take over, legally or illegaly.

Will the future of ebooks be open, multi-cultural and social? Or will the deja’vu’ take over?

———–

Recommended Readings:

-How To Beat The Kindle By Farhad Manjoo

-Does the Book Industry Want To Get Napstered? By Farhad Manjoo

]]> http://snowcrashing.com/2009/08/29/the-book-industry-and-the-music-industry-a-dejavu/feed/ 1 http://snowcrashing.com/2009/07/01/rip-kings-story-tellers-and-pirates/ http://snowcrashing.com/2009/07/01/rip-kings-story-tellers-and-pirates/#comments Wed, 01 Jul 2009 04:23:25 +0000 Antonella Stellacci http://snowcrashing.com/?p=337

A tough week for the music industry. A quick Death Toll:

THE KING

With Michael, an era is gone. The ‘golden’ era of Super-Stars who can (could) move millions of hearts and dollars…

Appetite for Self-Destruction: The Spectacular Crash of the Record Industry in the Digital Age has an entire chapter dedicated to Thriller, the album that saved record labels from crashing, back in 1982, when sales were drying out in the post-disco age.

The dialogue that follows is between the then-chairman of  CBS Records (then morphed into the now Sony Music Entertainment) and Michael Jackson.

So Yetnikoff pressured his biggest star. With just months left in 1982, he gave Jackson and producer Quincy Jones a deadline: Finish a new album, and make it a blockbuster, by Christmas. They weren’t happy about having to rush, but they obeyed and finished the final Thriller mixes in a month. They turned them in to Epic Records, for release just before Thanksgiving…

“I told you I’d do it,” Jackson told Yetnikoff.“I told you I’d outdo Off the Wall.”

Yetnikoff responded: “You delivered. You delivered like a motherfucker.”

Jackson: “Please don’t use that word, Walter.”

Yetnikoff: “You delivered like an angel. Archangel Michael.”

Jackson: “That’s better. Now will you promote it?”

Yetnikoff:”Like a motherfucker”

It was the right album at the right time: All seven of its singles landed in the Top 10, the album lasted a ridiculous thirty-seven weeks at No. 1 on the Billboard charts, and it went on to sell more than 51 million copies—the best-selling album in the world until the Eagles’ Their Greatest Hits surpassed it (in the United States, anyway) in 2000. Thriller singlehandedly rescued CBS from its late ’70s doldrums—the company’s net income jumped 26 percent in 1983, to $187 million—pushing fans back into record stores and propping up the industry.

So be it. The King is dead…but to put things in  perspective, of what kingdom are we talking about?

Umair Haque chimes in the post-mourning debate about how rich Michael Jackson and his heirs (potentially) was:

If the world’s biggest pop star only made $25 million a year in total, something’s very, very wrong. Where’s the rest of the money? Why can’t a resource as scarce as the King of Pop capture more value?

After all, that’s not even mega-rich.

The world’s top hedge fund “managers” regularly pull in hundreds of millions. That’s an order of magnitude difference.

—————

THE STORY-TELLER

Another day, another magazine folding. After Blender, today’s the turn of Vibe, the urban glossy founded in 1992 by legendary producer Quincy Jones.

—————-

THE PIRATES

The Pirate Bay isn’t dead yet, but the boat is sinking. Today Variety reported that Swedish video game company Global Gaming Factory X agreed to pay about $7.7 million to buy TPB.
Can a reformed PirateBay survive?

Christopher R. Weingarten (@1000TimesYes) – Music Writer, RollingStone.com and Village Voice on Twitter and the End Of Music Criticism.

BREAKING NEWS

Music Labels Win $2 Million in Web Case [NYT]

Record Labels’ $1.9 Million Win in Thomas Retrial Constitutional?[EFF]

What’s next for Jammie Thomas-Rasset? [Ars]

BUZZ, COMPANIES & TRENDS – MUSIC

Music Charts Won’t Recognise Free Streams Yet [Moconews]

-The Economy of Digital Music- A Harvard Study

• Yet Another Study Shows That Weaker Copyright Benefits Everyone [TechDirt] Download the Full Study here
• Read also Harvard Study Finds Weaker Copyright Protection Has Benefited Society [MichaelGeist]
• Harvard Paper on P2P Flawed But Worth Reading [BillBoard]

Virgin Unlimited

• Virgin Media & Universal Launch Unlimited Download Service, But… [Hypebot]
• Analysis: Virgin Media’s unique unlimited music service [MusicAlly]

More Lawsuits and Old Victims

• Another Music Start-Up Sued: EMI Takes Grooveshark to Court [MediaMemo]
• The Seeqpod.com Sale: So, What Does $125,000 Buy, Anyway? [DigitalMusicNews]
• Italy Is The Latest Country To Realize IP Address Alone Does Not ID File Sharers [TechDirt]

R.I.P MySpace?

• MySpace Cuts U.S. Staff By Nearly 30 Percent [PaidContent]
• Yes, MySpace can be saved [CNNMoney]
• MySpace Music set for September UK launch [Telegraph]

Imeem and Warner

• Exclusive: Warner Music Group Gets Back Together–Very Cautiously–With Imeem [MediaMemo]

UK News

• Digital Britain: piracy-battling strategy revealed [MusicAlly]
• Spotify joins push to get music lovers to pay for content [NewMediaAge]

Artists

• Let’s Prove That Artists Don’t Need Major Labels To “Make It” [Hypebot]
• The New Black: Mos Def’s T-Shirt Experiment…[DigitalMusicNews]
• Kings of Leon Launch Record Label. [Glasswerk]

Radio

• Sirius unveils iPhone App: reviews not so good (updated) [Reuters]
• Enjoying ‘Jelli’ Radio? Now, Try ‘Jelly’ Radio...[DigitalMusicNews]

EMusic

Q and A: eMusic CEO Explains Controversial Price Increase, Sony Deal [Wired]

BUZZ, COMPANIES & TRENDS – MOBILE

DRM Never Die? Protections Will Remain on Comes With Music…[DigitalMusicNews]

Songbird releases iPhone Sync Workaround [RWW]

Less Well Known Artists Make Use Of Mobile Platforms To Interact With Fans [TechDirt]

Palm Pre struggling to drive downloads from App Catalogue [IntoMobile]

Debate heats up over Apple threat to disable iTunes sync with Palm Pre [ComputerWorld]

iPhone 3G S First Take [CNet]

BUZZ, COMPANIES & TRENDS – SOCIAL MEDIA

Analysis: Twitter Is Effective, But How Effective? [BillBoard]

What’s Ghetto? Pushing Digital Album Sales On Twitter (Video) [TechCrunch]

Music Critic Promises to Tweet 1,000 Record Reviews [Switched]

Your Online Music Marketing Report Card [Hypebot]

READS

The Passion Index - MusicMachinery

How Thomas-Rasset case would have played out, had we not been in the Parallel Universe – Ray Beckerman

How The Recording Industry Changes Its Own Story -TechDirt

Narm Presentations- Enjoy

NARM 2009 State Of The Industry: Michael Masnick from NARM on Vimeo.

NARM 2009 Keynote Interview With Ian Rogers from NARM on Vimeo.

Those stories aren’t “new”. But it is always good to remind us of where we still are….

1) The KINDLE is a DRM locked device (said with a lot of disappointment)

2) LALA’s Propietary Network DRM Threat

KINDLE RELATED STORIES

-Kindle owners find out about DRM’s ever-present threat

-Amazon Uses DRM To Turn Kindle Into A Very Expensive Paperweight

-Is the Kindle one massive DRM timebomb?

-7 Reasons Why TechCrunch’s New Tablet Can Crush The Kindle

-Over 160 O’Reilly Books Now in Kindle Store (without DRM), More on the Way

-Amazon Ups the Ante on Platform Lock-In

-Amazon Kindle and Sony Reader Locked Up: Why Your Books Are No Longer Yours

LALA RELATED STORIES

-Is Lala’s DRM a new way to lock up music?

-Lala Admits To Using Network DRM

Forget about home theatre surround sound, iPod docking stations and the new-wave all-in-one music systems. It’s time to get ready for the next revolution, the return of the vinyl record – the favorite physical format of indie music collectors and audiophiles.

December 2008’s issue of Rolling Stone revealed vinyl sales are up 60 per cent from 2007 in the United States alone. Nielsen SoundScan reported 15 percent year-over-year growth in 2007 and 89 percent in 2008, making the 1.9 million vinyl albums purchased last year the most since Nielsen SoundScan began tracking sales in 1991.

This year is shaping up to be even better, with 670,000 vinyl albums sold through mid-April. Add that those figures are often times conservative, as many independent retailers do not report their sales to SoundScan; and more than two-thirds of vinyl albums are sold at indie operations. Patrick Amory,  of indie label Matador Records, claims, “We can’t keep up with the demand.”

By contrast, CD sales have fallen  20 percent  for the past few year as we all know…

Vinyl is cool again!  But for who?

It is evident that the phenomenon is affecting not only or primarily the technophobic middle-aged consumers, but also younger generations who are developing a taste for records. Albums ranking in the top 10 for 2008 included Radiohead’s In Rainbows at number one, Fleet Foxes’ self-titled release, Guns N’ Roses’ Chinese Democracy and the B-52s’ Funplex! Amazon biggest sellers for vinyls have been so far alternative rock, followed by classic rock albums.

Amazon had introduced a vinyl-only store as of October of last year, and increased its selection to 150,000 titles across 20 genres. In April of this year, BestBuy announced that it is planning to devote eight square feet of merchandising space in all of its 1,020 stores solely to vinyl, after a test in 100 of its stores around the country proved successful.

A digital download or stream is a “disposable” experience. A vinyl is a ritual, it’s a “collector’s” ritual. It nurtures a sense of belonging, of deeper connection to the music world. It’s like a blessing, an entitlement: I have this record, I own it, it’s Mine,therefore I am a Music Person (more than if i didn’t or if you don’t).  And showing it to your selected music-friends is part of this experience.

Vinyls as Robert Benson writes in his insighful post:

-have better quality sound

-satisfy the need of collectors

-make music a ritual, a “true” experience for the music lover

-often times come with perks as free downloads of the digital format. Indeed, labels like Matador Records have begun including coupons in record packaging that can be used to download digital versions of the album’s songs. According to Matador the coupons have been a big hit.

In the words of Refe Tuma at Creative Deconstruction: Digital files are nearly worthless as a product. You can’t see them or touch them. They are infinitely reproduce-able and instantly available. If over abundance commoditized a physical product, inite-ness devalues a virtual product completely. Vinyl on the other hand can’t be easily reproduced, and is a much more sensory medium.

Again the lesson seems to be that given a real Reason To Buy, users- even the kids so often blamed for “stealing” music, will do so.

Last week, TRVSDJAM, the combined force of Travis Barker and DJ-AM, released their newest mixtape via Twitter, offering a free download of their newest mixtape in exchange for a tweet.

By tweeting “Download the new #trvsdjam mixtape ‘Fix Your Face Vol. 2 – Coachella 09′ in exchange for one tweet! http://twitter.trvsdjam.com/”, tweeters receive a free download via an application built by Culture Jam Labs.

As you can see in the pre-populated tweet, a special hashtag – #trvsdjam – is included in the twit, with the goal of making it a top trending topic on Twitter.

A brilliant and innovative use of Twitter as a Marketing Platform.

How did the campaign go?

Travis Barker and DJ AM have a combined 230k+ followers on Twitter.

By looking at TweetMeme it appears that so far 12,350 have retweeted the message. That translates into a 5% conversion rate.

The Twist chart shows the trends over the last few days. Clearly there was a peak as soon as the twit was broadcast, then the buzz quickly dried out.

So how do you measure the success of such a campaign?

-Buzz: the story definitely picked the interest of the music community and the social media one. The coverage includes big names as Hypebot,  MusicAlly, ProHipHop, TechCrunch, Mashable, and the list could go on…just try googling it.

-TwitterBuzz: the initial twit reached an audience of 230,000, the combined followers of Travis and DJ AM. It was re-twitted roughly 12,500 times. Assuming the average number of followers is still 70 as stated in a January poll,that translates into a reach of close to 900k users! Not trivial for an operation that probably costed the two musicians less than $5k (the development of the app).  According to Twitterholic, a Twitter tool that keeps tracks of your followers, both Travis and DJ AM kept growing their “followership” but at a rate that is pretty much in their average for the last few weeks. So this doesn’t seem to be a secondary byproduct of the initiative, but probably it wasn’t in the plans either.

-Conversions/Sales: as stated before, conversions could be measured against the total number of followers at a 5% rate or against the total reach, at a about 1.5%. How many of those downloaders were already followers? How many non-followers? How many were real fans? How many of those downloads will translate into new fans that attend live performance and buy the artist’s music? Will they be able to keep messaging to those users? Send them a follow-up?

These seem to be legitimate questions, and it’s up to each musician to gauge the success of his own initiative based on his goals.

Early Twitter conversations were tagged as life-casting and mind-casting, because early adopters were mainly geeks. But always more and more musicians are jumping on board, embracing the potential of Twitter as a marketing tool and new medium, what I would rather call a “FanCasting” because it is not really about sharing your personal life neither your knowledge. It is more about building and nurturing the Tribe of your True Fans, as brillinatly explained by Kevin Kelly and Seth Godin.

There are plenty of examples of musicians who use Twitter to connect with their fans and engage them, offer free music,  twitt a live show.  And many examples of companies supporting and educating artists in this new effort: TopSpin, ArtistsHouse and Plugola are just the first who come to mind.

To conclude heres An inspirational video from a few months back: Steve Lawson interviewed by Andrew Dubber

Steve Lawson from Andrew Dubber on Vimeo.