If you talk about the Music Industry, one word you will hear for sure -and a lot- is Crisis. In its most positive connotation, a crisis is a turning point that triggers some radical changes. So with a crisis come opportunities.

That seems to be the gist of the speech Mike Masnick, editor of TechDirt, gave at the at the Leadership Music Digital Summit.

In front of an audience, featuring RIAA top execs and the 4 big labels, Masnick, who is a long time advocate of the “Free Music” theory, talks about the latest and greatest from Trent Reznor, the front man of NineInchNails ,who has been experimenting with disruptive models where record labels and copyright are not needed anymore.

“Connect with your fans – give them reasons to buy” is the motto of the Masnick’s keynote. Connections can be shaped in different forms: you can offer your music for free  and upsell concert tickets and merchandise, or you can ask your fans to finance your new album. Some of your fans – or to say it with Kevin Kelly- your  1,000 true fans -  will end up wanting more than a mere MP3. As the Italian saying goes: appetite comes with eating.

But this presentation- unlike the MidemNet one that focused solely on the Trent Reznor visionary experiments- lists other success stories from around the music industry.

-Fans as investors: In mid-January 2008, Jill Sobule launched a website, jillsnextrecord.com, which sought to raise $75,000 through fan donations in order to produce, manufacture, distribute and promote an upcoming studio album. In exchange for their donations, Sobule offered an assortment of gifts with values commensurate with the donation: from the free download of the album when it’s released ($10) to the opportunity to attend a recording session and sing on the record ($10,000). 53 days after the public launch of the site, Sobule reached her target! The  album is now live and distributed through Sobule’s own label, Pinko Records. Jill who had a hit in 1995, had been dropped by two labels in between and two others went out of business…

-Engage with humor: Josh Freese who has played drums for Reznor’s Nine Inch Nails in the past, released his latest new album with a rather hilarious take on the tiers. As Ian Rogers from TopSpin revealed, Josh’s $250 tier has sold out in less than 48 hours (there were a total of 25 available)!

-Free Music and Cheaper-Smart Ticketing: For Corey Smith Free Music built the base and tours built the revenues. In 2007, he grossed $1.7 million, in 2008 $4.2 million. Users can buy the tracks on iTunes. When Corey experimented with taking the free tracks down from his site, iTunes sales went down! Corey also innovated the approach to concerts by selling $5 tickets!  Tickets are cheaper on the on sale date and users can bring a friend…a potential new fan.

-Tours go to fans, not the opposite: ”Thing a Week” is the name that former programmer Jonathan Coulton gave to a creative experiment. In this project, Coulton undertook to record 52 musical pieces in the course of a year, one each week. All songs were released under the Creative Commons license.  In an interview with This Week in Tech, Coulton stated that he made more money in 2007 than he did in his last year of working as a programmer, 40% of it from digital downloads and 40% from merchandise and performances.  Coulton has been one of the first ones to use services like Eventful to guarantee a large enough crowd at a certain location and showing up for a “strategic” concert in a place where he’s guaranteed to make some money out of it.

-Video concerts, Souvenirs & BitTorrent: Swedish musician Moto Boy went around to various videos sites, found all the videos fans had posted of his concerts, picked the best ones, and put them all together to create a “virtual concert” for fans (both new and old) to enjoy.  Also, while distributing his music for free through BitTorren, Moto Boy created a little mechanical music box that plays one of Moto Boy’s songs. You can place it on any surface and wind it and it plays the song. The music box is a cool souvenir that Moto Boy’s true fans are more than willing to pay for.

So while the crisis is unfolding so are the new opportunities. To quote William Gibson, the future is definitely HERE….and it’s getting distributed!

Leadership Music Digital Summit 2009 – Mike Masnick keynote address, 3/25/09 from Leadership Music Digital Summit on Vimeo.

BREAKING NEWS

The Pirate Bay Verdict: guilty

-Wired: Why File Sharing Will save Hollywood, Music.

A good read on the importance of sites like The Pirate Bay “The complete DNA of social media was right there, from the very start of P2P”: buddy lists, user uploads, filtering content by user, viral marketing, ad-supported content and the potential of mining valuable data. “Even as the content industry celebrates another false victory over file sharing, the world is moving on, to cloud-based, on-demand streaming services — some licensed — where you can hear music and watch videos faster and in a more social way than you can with bit torrent. And as content holders look to monetize those networks, P2P networks provide the only useful template, because they share so many characteristics with today’s social-media networks”

-Cnet: Copyright holders cheer Pirate Bay verdict

Top industry executives voice their hope that the verdict will finally discourage illegal downloaders

-Mike Masnick at TechDirt: Pirate Bay loses a lawsuit; Entertainment Industry loses an opportunity

What comes out of this story according to Masnick, a long-time advocate of the necessity for the music industry to innovate. A good summary of Masnick’s view is his MidemNet presentation.

His take on the verdict moves along those lines: the battle was lost in a court by file-sharing fans, but the war will be lost by the entertainment industry if it doesn’t innovate and find new business models soon.  And by Pirate Bay fans, Masnick points out, you have to account for not only consumers but also content creators as “Paulo Coehlo, who found that “pirating” his own book helped him tremendously, and who recently spoke out about what a useful tool The Pirate Bay has been.”

-Billboard: Hundreds Protests Pirate bay Conviction

TRENDS

-Hypebot on Online Radio: Edison Infinite Dial Study Shows Growth And Potential Of Online Media Online radio and video viewership grows, only 21% buy music online.

-TechCrunch on Kindle2: 300,000 Kindle 2s Sold To Date

-TechCrunch on Facebook vs MySpace ComScore Data: Closing The Gap: Facebook Only 9 Million Visitors Away From Passing MySpace In U.S. Facebook is booming in Europe too.  According to comScore, unique visits in February more than quadrupled to 100 million, on a year-over-year comparison.  On a global scale, unique visitors jumped 175 percent to 275 million.

GOING UP, DOWN AND UNDER

Going UP

The Music Meta-Data Industry (Muze and Macrovision)- DigitalMusicNews: How Macrovision Changed Music Metadata Overnight…

Some big financing rounds emerged this week.  Goom Radio attracted $16 million, and SoundCloud lured $3.3 million.

GoomRadio – a new interactive radio service centered around  “social DJs streams” and with already a discrete success in France – gets a fairly bad review on TechCrunch where it is dubbed as a new Pandora for the mainstream: Goom Gets $16 Million To Litter Web Radio With Beyonce And DJs

German-based SoundCloud shows some potential with its filesharing services aimed at empowering musicians- but competition (both the professional and free one) is fierce. VentureBeat has the details: SoundCloud raises $3.3 million for audiophile file-sharing

Going UP and DOWN

Itunes Variable Pricing Effect- Billboard:iTunes Price Change: Sales Down, Revenue Up In Week 1 Tracks that now sell for $1.29, up from $0.99, sold 12.5 percent fewer units than during the previous week, while tracks whose prices were unchanged sold 10 percent more than the week before. (Overall track sales were up 3 percent during the week). Billboard also looked at how the sales of iTunes’s top 100 songs (about half of which now sell for $1.29) were impacted by the price hikes. While unit sales dropped about 1%, revenues were up over the prior week, according to iTunes, though exact figures weren’t provided by Apple.

WORKING ON IT

MOG Revamped Service – Hypebot-MOG Music Network Gets A Makeover. Wannabe the Huffington Post” Of Music

MySpace Music is on roll planning to release new features, recover from theFacebook storm and possibly generate some revenues.

–TechCrunch gathers rumors about Warner regrets for a poorly negotiated JV deal- An Embarrassed Warner Music Regrets MySpace Music Deal

–AP raises its praise to MySpace Music CEO, music executive Holt, but it might be too little too late- MySpace hopes to turn free songs into needed cash

QTrax come-back gets a harsh review from ArsTechnica: Hands-on: Free but inconvenient music doesn’t work for Qtrax “Ars gave it a runthrough and found that the P2P-based music service sounds much better on paper than it does in real life.”

UNDER

DigitalMusicNews reports that Passalong Networks Shutting Down; Top Execs Departing

MOBILE

Nokia Comes with music: going up?? Moconews: Nokia’s 5800 Combined With Comes With Music A “Big Hit” 20% of the downloads are over-the-air.

NineInchNails Iphone App is LIVE

Popular industrial band Nine Inch Nails has released a free application for the iPhone, allowing fans to interact with one another and receive streaming content, accessing content and remixes by fans, chatting with nearby fans,etc.

Ars Technica review: NIN’s iPhone app brings you Closer to the band

Chris Borgan insighful post: What Nine Inch Nails Knows About Tribes

Wired excellent video:

MediaPost on the AT&T and Iphone extended exclusive deal: Report: AT&T In Talks To Extend iPhone Deal

PCWorld on Verizon CEO plans for a 4G IPhone: Verizon CEO Says 4G IPhone Could Be on Verizon

MocoNews on new Iphone UI features that would be based on the user activity: Apple Patents Reveal Plan To Adjust IPhone UI Based On User Activity

AlleyInsider on an upcoming (maybe) Hulu Iphone app: Hulu iPhone App Coming Soon, ‘Badass’

MUSIC & SOCIAL MEDIA

Good reads for the week on Discovering Music Through Social media:

-Mashable on HOW TO: Use Social Media for Sharing Music

-Gizmondo: Discovering Music in 2009: The New Tools

New Services

New Chart Scans Web For Top Talk On Tracks We Are Hunted: tracks the most-favored music on P2P and social networks, Twitter, web forums and blogs. It then presents the 99 hottest tracks (according to its calculations) through an intuitive Brady Bunch-style interface. Wired: Sneak Preview: A Fantastic New Way to Find Hot Music

Hypebot shortly reviews WikiCharts “Somewhat like the just launched We Are Hunted, The Wiki Chart tracks data from a bunch of different sources of music (blogs, Billboard, YouTube, iTunes, radio, imeem, last fm lots more) and come up with a weekly top 40 of the most buzzed about tracks”

Marketing through social media

The most viral video ever: Susan Boyle. Mashable: Susan Boyle: The Biggest YouTube Sensation Ever?

Tapulous joins forces with iLike to promote the Coldplay-branded Tap Tap app -DigitalMusicNews iLike, Tapulous Marketing Alliance Begins…

Twitter as a Music Platform: Mike Skinner releases its new songs via Twitter. NME: He’s writing a song a day this week, and giving them all away for free

A lot has been happening in the TwitterSphere this week. Some snapshots here:

-Twitter’s U.S. users nearly double in March

-Oprah, Ashton Kutcher mark Twitter ‘turning point’

MUST READ

TuneCore CEO Jeff Price discusses music marketing and the state of the music industry

Music fans pitch in to design covers, back CDs, map tour