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

ONE BILLION DOWNLOADS FOR THE APPLE STORE

Apple’s numbers are worth noting, because the company reported 800 million downloads just a month ago, and hit half a billion back in January. iTunes, on the other hand, took two years to reach that number of songs downloaded. The all-time top 20 apps sees Facebook and Google Earth climbing past Pandora to become the top free apps, followed by Pandora, Tap Tap Range and Shazam. [VentureBeat]

TRENDS

SPOTIFY CEO INTERVIEWED BY THE GUARDIAN: MUSIC FANS WILL BUY MUSIC

“If you truly connect and empower your fan base, people will pay for music. Perhaps that revenue won’t come primarily from selling records, but ad-supported music services, subscription music, downloads, merchandise and live shows as well as CD sales are all going to make money for labels and artists,” the head of Spotify, Daniel Ek, told the Guardian. “I think the music industry as a whole can be in a better position than it has ever been,” said Ek. “There has been a massive shift from ownership to access but people will pay for music if packaged correctly and it offers them something special.”[The Guardian]

MONETIZING SOCIAL MEDIA – FORRESTER PREDICTION

Forrester research by Mark Mulligan (free summary; $750 for full PDF) predicts that even though social music may not generate much revenue now,  monetization’s effectiveness must — and will — improve. Social music destinations will continue to build highly engaged audiences and deepen the relationship between fans and their music. But the labels will have to come to a compromise and change the licensing structure for streaming music. [Epicenter]

GOING UP, DOWN AND UNDER

DRM IS DEAD!  ITUNES VARIABLE PRICING IS BORN

As announced in January, on Tuesday, Apple made good on its promise to remove DRM from every song in the iTunes store — a long-awaited move that the labels only allowed in return for Apple letting them price songs at three different points: 69 cents, 99 cents and $1.29. [Hypebot]

Only two days after, and Billboard reports that there was evidence the increases have hurt the sales rankings of songs given the higher $1.29 price.[BillBoard]

SPOTIFY API

It’s a good week for Spotify. Commercial terms were found with PRS [MusicAlly]

And on Tuesday libspotify, the company’s API, was launched to the public, which means that any developer (for approved devices) can build apps that access Spotify’s massive music catalog and use its P2P architecture, which streams Ogg Vorbis files between users like a streaming version of BitTorrent. [Epicenter]

VEVO IS COMING SOON

It’s now official: before the end of the year the new music video hub Vevo will see the light. Google/YouTube and UMG are working together at the new Join Venture and trying to get other labels on board. The big hope is to be able to better monetize music (videos).  Will they be able to get to $25-40 CPM? [Billboard]

YAHOO MUSIC IS BACK

On Tuesday, Yahoo Music launches its redesigned artist pages incorporating music content from third parties:downloads from iTunes, albums from Amazon, streams from Pandora, music videos from YouTube, and tickets from Ticketmaster.  Yahoo hopes this strategy will cut costs, while still providing music and videos for its 20-million-plus monthly visitors. [Epicenter]

LEGAL P2P COMEBACK? QTRAX (RE)-LAUNCH

The ad supported p2p finally “officially” launched last week with all four major labels on board. The subsidiary of Brilliant Technologies originally unveiled their service at the international music tradeshow Midem last year, but it quickly closed down after it turned out the company hadn’t finalized the major label agreements it said it had. Since then, Qtrax has signed licensing deals with all four major labels, and a number of independents.[Billboard]

SONGZA ACQUIRED BY AMIE STREET …SIX MONTHS AGO

TechCrunch was the first to discover that popular music store Amie Street has kept a deal it forged with Songza, a media streaming service, under wraps. The acquisition happened in October 2008 [TechCrunch]

WE7 AD-FREE SUBSCRIPTION AND REWARD SCHEME

We7 is funded by short adverts played at the beginning of each track alongside a paid-for download store. With the new rewards scheme, regular users collect points by spending time on We7 that they can exchange for ad-free days of music. The reward scheme will be followed in the summer by the launch of a paid-for subscription service for ad-free streamed music. This is likely to cost £9.99 for a month or 99p for a day. [MusicWeek]

GUNS N’ROSES AND ROCKBAND

“Chinese Democracy” will be released in its entirety into the Rock Band Music Store on April 14 and gamers will be able to download and play all 13 songs from the record, Harmonix and MTV Games announced Friday [Billboard]

SOCIAL MEDIA

TWITTER MUSIC POTENTIAL

Hip-hopper K’naan is revising his song “People Like Me” using fans’ tweets and the San Francisco sessions vets in Moonalice are planning a repeat performance of their real-time Twitter concert [UnderWire]

TWITTER PARTNERS AND GORILLAZ

No, Twitter Partners isn’t backed by Twitter, but Universal Pictures, Virgin Media and Gorillaz will use its services to launch on Twitter, soon. Supposedly virtual band Gorillaz is the first client to launch activity, promoting the documentary film Bananaz ahead of its theatrical release.[NewMediaAge]

FACEBOOK & PIRATEBAY

The Share on Facebook Pirate Bay feature didn’t last long. The Pirate Bay had recently made torrents more social by adding “Share on Facebook” buttons across its site. The social network  asked TPB to remove the buttons. After being ignored, Facebook is now blocking all links to The Pirate Bay and its torrents—legal and otherwise. [Ars]

MUST READ

Trent Reznor Interview with Wired [TheUnderwire]

MUST WATCH: TRENT REZNOR INTERVIEWED BY KEVIN ROSE