Music, Business and Capital

Seth Godin has blogged his "the live music talk," and it's must read stuff for those who follow or have a particular interest in the continuing deterioration of the recorded music business. He talks about the music business as it used to be: radio promotion, limited competition, physical albums (vs. digital distribution), top 40 stardom and star power, magazines that were focused entirely on promoting new artists, songs, albums. And he talks about what has changed. Basically, everything.

Yesterday I tossed out a tweet in Twitterland to ask whether the major record labels had become their own worst enemies. Actually, I don't think there's any doubt about it. Steve Jobs is their nemesis. Or so they suppose. But their problems are not nearly so simple as that.

When the engine of growth for your industry, the enthusiasm of the 13-24 year-olds for the latest music, no longer contributes to your bottom line, you have a serious problem. It's even worse for those in the 18-24 year-old age group. I spoke on Saturday to the owner of an independent record store in Boulder, Colorado. He has operated that store for many, many years. When I suggested that 18-24 year-olds aren't paying for recorded music any more, I expected at least a little push back. Instead, he vigorously affirmed my suggestion. "Tom," he said, "we saw signs of trouble years ago, but it became absolutely obvious that over the past two years what you say is true. Eighteen to twenty four year-olds aren't buying recorded music."

So here are my questions:

(1) does that matter?
(2) if it does matter, can anything be done about it?
(3) and if something can be done, can it be done in time to make any real difference?

My answers to these questions will be developed in subsequent posts to this blog.

Meanwhile, Trent Reznor of NIN fame has taken his cue from Radiohead and raised the bar a bit. In addition to offering some of the latest mp3 content for free, he has assembled multiple packages at various price points - offering content at $5, $10 and even $300. How is it going?



Trent seems pretty pleased so far!

Music, Business and Capital

Stardoll

My friend, Daniel Ek, the CEO of Spotfy, is also the co-founder and CTO of Stardoll. The New York Times Magazine has a good piece today, "Dress-Up for Dollars," by Rob Walker (who does the Consumed column) about Stardoll and the remarkable drivers that brands have become among teens, in this case teen girls.

What I'm really looking forward to is the New York Times' coverage of Spotify (based in Europe and currently in closed beta).

Can't Buy Me Love?

All this time, I thought Seeqpod was just about searching for mp3s. Turns out the company has several initiatives underway that combine it's search capabilities with particular areas of focus, including finance, video, shopping, etc.


I thought I'd give the buyable search and discovery a try. They recommended I search the Beatles, but, nah! I thought I'd search for the one thing the Beatles told us that money can't buy. That's right. I searched for "love."


Some of you are going to think I'm searching for love in all the wrong places. But, as it turns out, my search did manage to turn up a whole lotta love. (I know. Terrible. Absolutely terrible.)

But I have to say, the results are not too shabby.

Andreesen's on a Roll

I don't know if you've been reading Marc Andreesen's blog.

If you haven't, you should. There are a handful of folks who write things that just nail what's going on in the world at a particular point in time. Chris Anderson, author of The Long Tail and Editor in Chief of Wired Magazine does that. My friend Brad Feld does it from time-to-time and so does Fred Wilson. But Marc Andreesen is taking things to another level entirely. Check it out.

Chris Anderson - "Free" Not Equal to "No Value"

When I saw Deborah Solomon's New York Times interview of Sheryl Crow, I had the same reaction as Chris Anderson's referenced below.

Whether it's pop stars or Wall Street analysts, the biggest misconception of free is that no cost = no value.

For instance, this today from Silicon Alley Insider:

Whether it's software, patents, movies, or music, as a planet, we have decided that things that exist only in the form of atoms, or are not offered as a service, have no value.

Or this, from Sheryl Crow in last weekend's New York Times magazine (from which this photo was taken):

I’m sad that people feel like music should be free, that the work that we do is not valued.

Don’t you feel valued enough? It’s more about consciousness. When music comes free by way of friends burning CDs, there’s not that understanding of the work that goes into the making of an album.

Spot the error? It's that the only way to measure value is with money. Of course the Web is built mostly on two nonmonetary economies, attention (traffic) and reputation (links), both of which benefit hugely from free content and services. And it's a pretty simple matter to convert from either of those two currencies into cash, as a glance at Google balance sheet makes clear.

In a recent post, we listed dozens of business model built on free. All of them are based on the notion that free stuff does have value and the way we measure that is in the time people spend with them. Do I actually need to remind Wall Street analysts that time is money?

[The Long Tail]

Forwarded or Posted by Tom Higley

Yahoo to Move Yahoo Music Unlimited to Real's Rhapsody

There's more than a little irony in the story below from today's Digital Music News. It looks as though Yahoo's Music Unlimited offering is going to move to Rhapsody.


Of course, the bigger story in the news these days is Microsoft's $44.6B bid for Yahoo. What would this mean, long term, for Yahoo Music Unlimited? Hard to say, but what are the odds that Microsoft would continue to use RealNetworks' Rhapsody music offering? Pretty slim, I'd say. It's far more likely that Redmond would see Yahoo Music as an adjunct to its own struggling music offerings and perhaps pull together some combination of Yahoo Music Unlimited that works with the Zune player. After all, Microsoft has already reportedly given the major labels (or at least Universal) a piece of the Zune sales price. (Though it's not like a percentage of Zune sales is going to go very far in helping the recorded music industry reverse the 10% decline in annual revenues it experienced in 2007.)

Unlimited Has Its Limits; Yahoo Taps Rhapsody on Subscription

Yahoo Music is now outsourcing its subscription-based offerings to both RealNetworks and Viacom-owned MTV, according to information disclosed Sunday. As part of the deal, subscription application Rhapsody - now a joint venture between RealNetworks and MTV - will become the exclusive provider of on-demand music services for Yahoo. The move replaces Yahoo Music Unlimited, a service that experienced tepid uptake despite aggressive pricing. Yahoo Music subscribers will migrate their accounts mid-year, according to the companies.

For RealNetworks and MTV, the move introduces Rhapsody to an immense audience, and a larger potential subscriber pool. "Soon, tens of millions of Yahoo users will be able to access their favorite music through Rhapsody – wherever they go, whenever they want it," said RealNetworks chairman and chief executive Rob Glaser. Rhapsody will also handle various non-subscription transactions, including a-la-carte downloads.

The news comes alongside a music-related acquisition by Yahoo. The mega-portal revealed that it has now purchased the privately-held FoxyTunes, a player plug-in that quickly finds lyrics, videos, bios, and other song- and artist-related information. FoxyTunes offers compatibility with 30 desktop and web-based players.

Permalink: http://www.digitalmusicnews.com/stories/020108unlimited