The music biz's digital flops - a short history

Why is this never brought up?

All the ideas have been ways that the recording industry thinks that we, their customers, should accept their product.

But they have NO IDEA.

Remember when the early recordings of Elvis was about to come out of copyright? "This will KILL the music industry! Continue Copyright 4 EVAR" was the shortlist version of the industry of what this meant. The end of music being produced.

Well, when the copyright passed out on the recordings, I never heard so much Elvis on the radio. So what happened? People still bought CD's. Hell, two Elvis compilations (including the tracks OUT OF COPYRIGHT!!!) were brought out in the UK and guess what? PEOPLE BOUGHT IT.

Huh? So the End Of Copyright didn't kill the money from music?

But you never hear that being brought up as a counter to the continuing expansion of copyright powers, do you.

Why? Because the execs Have No Clue.

Re: Advertising between tracks/ad-financed music

We already have that. It's called "Radio."

Problem with music..

..is that you listen to it. You don't watch it, so advertisement cash is lower. Also most people listen to music as a background service not as something they're preoccupied with. How can advertisement be put into something you don't really pay attention to?

Only way forward is to open "eat-as-much-as-you-like" shops and get cash from there. Choice is obvious: to have 0 or (let's say) 20%. Illegal free P2P or affordable legal shop? Most people will pay just for a convenience - you don't get poor quality or fakes in legal shops.

Another thing is that longer they wait - better P2P becomes. And easier. And more entrenched in hearts and minds, especially of young generation. I grew up in Central Europe where piracy even now is rampant. Getting everything for free is a nature for many people there, just because we got used to it. Heck, we had radio transmissions with games for Atari, Spectrum and Commodore back in the days!

Pandora and their problems

Reading pandora.com offers a different take on why they closed down the UK access to the service - http://blog.pandora.com/faq/#79. And note that, should they have had major problems generating revenue, that would likely have been the case globally, not locally (if they had problems getting listeners and thus ad-income in the UK they could have tried for a better market presence. Instead they shut down).

Also, if memory serves me right, Pandora didn't so much have problems generating revenue as they did have with generating revenue to match the crazy costs that were put upon them by the body that decides the cost of playing music on the internet or by satellite - have a read at http://blog.pandora.com/pandora/archives/2007/03/riaas_new_royal.html

@Mark

WTF???

Do you actually understand what copyright means? The fact that the early Elvis recordings ended their copyright period meant that world+dog was then free to copy / recompile / play publicly the recordings without paying anything.

Now it would have been surprising if there *hadn't* been a shed-load of compilations and massive radio play of 'em. But there was, so it was business as usual in an industry that's always prepared to take a free lunch when one's on offer. More fool the idiots who bought the compilations in question as they were paying for something legally available for free.

The only difference was that the money went not to the estate of Elvis, nor to the record companies that had previously owned the recordings, but to those who leapt on the bandwagon to make a quick buck or two.

However, had there been no copyright at all in the first place, Elvis would never have made any money out of his recordings, that honour would have gone to anyone with a record pressing plant and a few hours to spare. He'd have made a bit from live performances, but the heavy grease is in the records and selling the tunes as ad jingles and such. Those expensive suits would never have happened and Graceland would not exist. The world would probably be a poorer place for it - I'm not an Elvis fan, but even I can see the popularity of the whole "package" must have something in it.

This doesn't change anything. Find a better analogy.

Qtrax may not be the best example...

After all it's ad supported downloads, at least pandora/last.fm/imeem are streaming only and have a possible revenue stream from upselling users to paid for downloads from itunes/amazon/napster.

But pretty much someone at pandora/last.fm/imeem is going to have to figure out how to do deep analysis of user patterns and correlate music taste with non-music product purchases. I know it's possible, and these sites are probably going to be better at it than Google since they really are close to the music data, although they might have trouble getting the other half of the equation. All those sites should just hire some people who really understand statistics and good music (a rare person going by the music tastes of the few statisticians I've met in my time.) and throw data at them until they figure out what music sells which products.

sod the execs

Execs really have no clue. One of the reasons I'm a militant torrenter/p2p is because I have been waiting for, count in, 10 years for the music industry to catch up, and they have either purposely or stupidly ignored or mucked up any straightforward system.

If I could simply choose an album I like (as minimum 192kb/s mp3) , pay a fiver for it, and use it how I wish, they would have easily had £100 off me for the last 10 years. When given a choice of a) Type in album name, download album, play, or b) Drive to a shop, eventually purchase my CD, bring it home and rip it, bin the original CD, then play, I chose a).

They've squandered the market. Screw them. When a) is a proper option I'll play ball. But it's taken 10 years and we're still only 3/4 the way there.

(Good article)

Who Cares

Not me. Their greed and stupidity got me looking for other sources of entertainment.

There is now some very high quality music available under CC license. I download this, and for the stuff I like I make a contribution on the artists website (if there's a button for it)

Why Do The Music Companies Hate Me?

Music has been an important part of my life for a long time. I learned a couple of instruments as a lad and when I hit adolescence, I started playing professionally. I did live performance and studio work for 30 years as a second career. I have large collections of vinyl and CD's and I've ripped them all to digital for my convenience - 29,000 tracks at last count. I have paid good money for every track on my hard drives and I wouldn't have it any other way.

The short version of this story is that I've been a good customer to the music business for a long time and they've rewarded that loyalty by treating me like I'm a thief. At every opportunity, they've failed to recognise the distinction between their good customers and the thieves while they employ one further restrictive ploy to "protect" their music and monetise it to the detriment of their loyal customers.

Is it any wonder why they flail about trying scheme after scheme, each a larger failure than the last? They don't seem to know their customers well at all - they've made the simple act of buying and enjoying music into an expensive nuisance.

Sell me an unencumbered product at a fair price and I might continue to support you. Failure to do so will result in your demise and no one will cry on your passing.

Re-invent the wheel

1) Broadcast personalities

2) Broadcast personalities who tell people which music is good.

3) Broadcast personalities who tell people which music is good and to what they should be listening.

4) Broadcast personalities who tell people which music is good and to what they should be listening and who play "for-pay" commercials between the music they play.

5) Companies who sell the music that the broadcast personalities play and tell their audience to buy.

6) Contests.

7) Promotions.

8) Concerts.

9) Payola.

10) Performers who will come on the broadcasts of the personalities and talk about themselves, their lives, their new releases, their new concerts, and even take questions from the listening audience.

11) Which presupposes a live audience and a live broadcast.

12) No pre-recorded junk.

Now there are no personalities. Everything is pre-recorded in Akron by disenfranchised tech-school dropouts. There is no music. There are no promotions. There are no concerts. Performers only appear when their publicist (or prosecutor) suggest it. It's all junk.

No wonder nobody wants to pay for it. Who in their right mind would think it had any value?

The Phoenix Rover landed on Mars. NASA says they're looking for life. I think they're looking for the Next Big Thing. I think they'll find it and I've got five VCs all lined up to fund it....

Bigger issues

One of the things I found hardest, when I was growing up, listening to niche music, heavy metal, all I had was my mates word of mouth and a couple of monthly magazines, so my view on my music was a little blinkered. I simply couldn't afford to take too many risks and buy something new, I didn't have the money to waste on a duff product, so I would make careful choices, but would still every so often simply try something out, why I now have boxes of vynyl and cassettes in the loft I will never listen to again! A lot of dirt to sift out a few gold nuggets.

Some 20 years later I have a massive amount of information at my fingertips. I can do a Google search and find bucket loads of reviews on sub-sub-genres in my favourite music, try out a few free samples and make very, very selective choices. I am not easily swayed by ad's and I am not taking chances anymore, hence I am wasting a lot less money on taking financial risks.

There's my argument, while I accept that "music theft" does happen in heaps, lots of us are now very careful how we invest in music and video, we spend less and we ensure we get our moneys worth. That my dear record company execs is your answer, it's not that we are all ripping your music-slaves off, we are simply a lot smarter now than ever before. The only market that you are still taping into is that 7-10 year old girlie, boy-band, Brittney and the 35+ Saturday-Supermarket bargain compilation shopper, buying yet another Love/Soft Rock collection, market.

I don't buy MP3s from online music stores, I buy CDs because I still want "own" what I paid for some 25 years or more, down the line, not "rent" 300 quids worth of music, then watch the store go down the pan in 3 years time, taking my DRM'ed music with it. When I buy, I spend time searching for cheap stores, who will fight for my attention over £1 reduction to get my business these days, much like everything I buy online. I read up on what I want, then being the rate whore I am, I will search out the cheapest deal I can find.

(Paris, well...my description of myself in the last paragraph!)

Cake is not a dual-use food stuff

On Monday 26th May 2008 a new phrase was added to my lexicon.

Cake is not a dual-use food stuff ranks up there along with "Bucket of Sunshine" to describe Hiroshima.

Gief Moar Brillyness!!!

Full circle?

So we're back to the new equivalent of radio stations... complete with ads. If I recall correctly, radio stations survive, and indeed profit, from selling advertising space between tracks.

And now the equivalent, completely customisable streaming music, is so much more tempting to people's ears - I don't blame the industry from trying to monetise this the only way it knows how, through advertising.

They'd better be quick, while there's still people who aren't sufficiently tech-savvy to know better. And while people's moral perception is still against listening to music for free (although to be fair they might be too late on this one).

To be quite honest though, the industry claiming that technology will kill music is very shortsighted. The radio didn't kill concerts, the TV didn't kill radio, the internet didn't kill newspapers, home taping didn't kill music, video didn't kill the radio star. Media formats change; public requirements change; technology changes, and commercial interests will all change to fit.

So what's the answer Paul?

The article is interesting as far as it goes... hopefully there will be a part two that has some answers. It's easy to poke holes, but harder to come up with solutions.

Why Paris? She's all about poking holes.

Its over

The cat has been out of the bag now for many years. If you dont have "that" album then someone else will. All music released up to this point IS now freely available, whether it's FTP, HTTP or simply people swapping drives. It might be illegal but it's rife.

If all the major P2P services closed overnight, there would still be a million private sites hosting music and already many thousands of people with hard drives bursting with pirate material. The internet isn't required for that to spread, a simple USB flash drive or iPod will do.

The major problem faced by the record labels now is that they have created a climate where the single song is king. There is a twofold effect here:

1) Musicians aiming only to make successful unit-shifting songs and miss the trick of becoming artists, capable of deep and complex albums. A single song is unlikely to get played too many times by a listener and hence the band will not create a sense of identity or instill any loyalty in the listener. Hence, consumer interest dwindles.

2) Single sales (eg: from iTunes) generate far less revenue than physical album sales. An mp3 has no tangible physical reward for the consumer(cant be waved in the faces of friends, or lovingly rediscovered in a cd case). Less value attachment to product = profit level declines.

Up to this point in time, record companies may as well kiss goodbye to revenue generation on previous releases (for aforementioned reasons). Current and future music is really going to have to drive sales. Their big struggle is going to be how to generate interest in new artists with no fan base, very small repertoires and diminished consumer interest and value attachment to their product.

I enjoyed your article. Thanks.

Evil steve because he killed the album. The great big rotter.

I've mentioned this before

Can't be arsed retyping it properly with the extra thoughts added in, so here it is in it's cut and paste glory with notes added, marked as 'edits':

"There's definitely a model that can be exploited in here with regards to ultra-low cost 'teasers' in MP3 format [edit - maybe an all-you-can-eat low bitrate streaming/suggestion service, a la Pandora?], and then paying a one off fee [say, min £3] for a FLAC version [edit - with artwork and shiz - NIN style] or going out and getting a hard copy.

And if they only include the 'full' versions [FLAC/high bitrate MP3/hard copy] in the charts, then all the schoolkids paying £1/album of 128kbps Pete Waterman/X-factor toss might not control the top 10 all the time - and that would put a completely irrelevant, but fun, smile back on my face."

Just reflecting upon my comment from the other month, with the edits, I do wonder if anyone has done something like this yet with uncompressed [important - I'm not paying full whack for substandard copies] DRM free files, and whether it got anywhere?

Listen to a tune on a £5/month Pandora-style subscription, and get full quality FLAC downloads of the tunes you like as a top-up service - maybe linking to an iTunes equiv with a back-cat 'o FLAC?

Or am I just mad?

I may be a dreamer...

...but I'm not the only one ;-)

Steven R

P2P vs Whatever the RIAA/MPAA comes out with

Since the industries and their methods are so closely related, I'll deal with them together.

RIAA/MPAA (and their members) are too busy trying to control the markets, the media and the consumer.

They limit the available content: Each site has tracks limited to whichever corp sponsors them.

They limit the quality of the tracks: How often do you see downloadable FLACs?

They limit the usability of the end product: DRM + Rootkits. Not to mention non-playability on various different platforms (Linux).

They narrow the end user/customers choice in where to access media.

They price differently depending on your location

They stagger release dates between regions.

They deliberately cripple the formats to enforce these draconian measures.

They limit the back-catalogues that are available.

They (at least WRT Digital products) aren't providing a physical product/stores/sales-persons, and yet they charge the same for it - even though it is usually of a sub-standard to the physical original!

They constantly shift the Copyright term in their favour by wheeling out Peter Pan and Great Ormand Street Hospital (Think of the Children!!!) or Sir Cliff Richard.

It's like being told you can only buy a car with a third-rate 2-stroke diesel engine (but still pay Mercedes prices) and that you can only fill the tank from approved petrol stations that are owned by the same manufacturer!

...

P2P (Bit Torrent etc) Don't have any of the above limitations/restrictions/problems/nonsense involved.

So why should anyone want to play by rules of the RIAA/MPAA?

@TeeCee

But the compilations were of recordings that had no copyright. According to the pigopolists and paytards, WE DO NOT PAY for music unless forced to by copyright law.

So how come they were *selling* LOTS of copies of this uncopyrighted work???

Because the loss of copyright, unlike the pigopolist doom-and-gloom mongering talk to get copyright on those elvis songs extended, DOES NOT stop people buying music.

Sweet Zombie Elvis!!!

"The only difference was that the money went not to the estate of Elvis, nor to the record companies that had previously owned the recordings, but to those who leapt on the bandwagon to make a quick buck or two."

He's dead. He isn't interested in money any more. If he'd worried about his inheritors being destitute, he could, like I do, invest in a pension. If he'd pissed the money up the wall instead, why should I care if his descendants get the dosh either?

All you can eat services.

Napster has relaunched, again - as one such service. I was an original 'member' of Napster back when it was evil, but I thought I'd give the new one a go as it promised no DRM etc. I used their webpage to check on the availability of my favourite obscure artist. Yup, lots of tracks available, it said, join up and we'll tell you all the details.

I went for the 'Light' version, i.e. no credit card details on start up and 79p per track. Sounds good, right?

Downloaded the software and set it up - what a feckin' mess the whole thing is.

Ran it - didn't work. Told me I needed to enable cookies - did so but no joy. Penny dropped, I needed to use Internet Explorer. Which I don't have...

OK, take 2. Put Napster onto laptop, which has IE on it. Start it up. Geez, so this is what life is like without AdBlocker / FlashBlocker. Ugly, ugly, ugly! Anyways, typed in the name of my fave obscure artist.

The few results came back quite quickly, but were seemingly random and not one album included, even the ones considered 'hits'. Now I know that this is an extreme test, given the artist isn't a big name, but the hype did lead me to believe that I would get some joy out of the search.

There is no incentive to me, as a middle aged bloke, to subscribe to a service which doesn't cover the edges of music or the 'back pages' if you will. I would spend good money to own CD copies of music I like, which isn't the new boyband / X Factor winner / 1 hit wonder, but mostly old and out of print.

Ironically, I can get lots of the stuff via music 'blogs' etc., who can provide copies for free, but then again they do have a sense of music outside of an industry or money making machine. Hell, if Metallica, the bete noir of the original Napster, can get on the bandwagon providing MP3 and FLAC versions of shows...

re: @Mark and Elvis

No, the recording is still 50 years in the UK. Sir Cliff "living twonk" Richard tried to use his contacts with fellow god-botherer Tony Blair to get this extended to 95 years (the same as the copyright in the UK and more than the US's version, so they can "harmonise" to 125 years in the US...) but this didn't work.

Some of Cliff's earliest recordings are coming out of copyright as well as some early beatles, rolling stones and other well ancient works.

And the example is, as far as I can tell, exactly right. Despite there being no copyright, people paid over good money to buy the music in a convenient format, rather than buy one copy and put it on P2P for people to find, copy and rip to CD.

Copyright wasn't NECESSARY in that case. So how necessary is copyright for longer than, say 5 years? Anyone who wanted it will have bought it by then and anyone willing to wait 5 years to get it "free" wasn't really interested in paying for it in the first place.

50 years? Well, unless it's advertised, nobody knows it's available.

An idea for all programmers

If/when copyright is extended, demand greater salary. After all, you don't own the copyright but that copyright has now gotten more valuable to your company who DOES own it.

And you deserve some of that value, else you are being ripped off.

Those piratical companies, stealing your work!!!

Loss of control

What is worrying the record execs is loss of control, read http://news.bbc.co.uk/1/hi/entertainment/6260995.stm this must scare the living daylights out of them, shock horror a charting record with no cut for the middle men. Bands can now go direct to the public and make more money even with people copying their downloaded tracks, just by cutting out the middle men. The record industry is going the way of buggy whip salesmen.

Pedant

erm, surely "fridge" comes from "refrigerator", no?

Paris, cos she is also too cool for school.

@ Maty

"More than once(hrrumph!) a friend, had ended up getting a pirate version of a disk he already owns (sorry, has a license to use) because Vista + DRM makes the legal version unusable."

I'm using Vista and have ripped every CD I own to a NAS box, I can create playlists to burn onto CD or my Generic MP3 player so whats the DRM issue?

I also don't buy new CD's, I wait a couple of months after the release, buy a used copy off Amazon, rip it onto the NAS box and put the disk back on Amazon the next day, sometimes made more than I paid for it too......