Friday, December 21, 2007

Strategy and Trends in Music



Okay, so I am new to owning an iPod, well actually an iPhone and I am fascinated by all the nuances of digital media. Where to get it, DRM freedoms, and reuse capabilities. Because my iPhone is great for playing music, listening to lectures, watching dumb TV shows and the like. I like it because I can't stand main stream everything. In fact I haven't subscribed to cable in 10 years. Though I do consider myself relatively up to date on music and media, just selectively so. So whats the point of this blog entry? Quite simply, its whats happening to one's ability to find, access and consume the music they like and its effect on the music industry. Clearly strategies are changing on part of both music labels, artists, and retailers.

Apple's got iTunes, Sony/BMG have Connect, Amazon's thrown in their hat (which is different from their new eBook store for their new Kindle product (which i think is brilliant). Then there is Rhapsody/Real Player stores, music.yahoo.com, Walmart.com, Napster, V-Cast, 360 Audio, Windowsmedia and the list goes on an on. And that's just the legitimate stuff. And each retailer tries to lock you in with requiring you to load their download management software (read tracking mechanism).

So will consumers only flock to the easiest place to get what they want when they want it, or will retailers follow the Apple/Amazon model and rope them in with software, or mobile kiosks in their hands (cell phones), pockets (wi-fi enabled mp3 players) and briefcases (ltd web-enabled e-books). That future has yet to be written. Apples (iPhone and iTunes) strategy has been a mix of openness and proprietary approaches. Meaning, that you can buy music (limitations on DRM free), and their iPhone can't load/play all types digital media. And Amazon's Kindle, while a visionary approach to book selling, it has a very limited approach to web access and now PDF reading capability. Clearly that's because they want it to be a book, and not a web app. That will work for a limited audience, but not everybody.

I think Google will eventually weigh in on this (with their considerable mass). They will emphasize their openness of applications and access. They already have a music listing service - you can see it when you search for any music artist (it is not holistic). They have a book search tool as well. They have a purchasing service with Google Checkout. So you put the pieces together.

Now back to the music I mean subject at hand. All this has and will continue to have a profound effect on what music actually gets made, and produced. Democrotazation in music is good only when you can actually find and then buy what you like. I'd love to find some "house" dance music mixed back and forth for legitimate download. So if anyone knows where I could do that, please forward the link.

A very good article on Wired sites David Byrne (musical genius in my humble opinion) on whats going on, and what both artists and labels will be doing in the future. Its not bleak, but worth reading. Here is a salient except from it as he discusses the standard label contract with artists:

Next is what I'll call the standard distribution deal. This is more or less what I lived with for many years as a member of the Talking Heads. The record company bankrolls the recording and handles the manufacturing, distribution, press, and promotion. The artist gets a royalty percentage after all those other costs are repaid. The label, in this scenario, owns the copyright to the recording. Forever.

There's another catch with this kind of arrangement: The typical pop star often lives in debt to their record company and a host of other entities, and if they hit a dry spell they can go broke. Michael Jackson, MC Hammer, TLC — the danger of debt and overextension is an old story.

Obviously, the cost of these services, along with the record company's overhead, accounts for a big part of CD prices. You, the buyer, are paying for all those trucks, those CD plants, those warehouses, and all that plastic. Theoretically, as many of these costs go away, they should no longer be charged to the consumer — or the artist. Sure, many of the services traditionally provided by record labels under the standard deal are now being farmed out. Press and publicity, digital marketing, graphic design — all are often handled by smaller, independent firms. But he who pays the piper calls the tune. If the record company pays the subcontractors, then the record company ultimately decides who or what has priority. If they "don't hear a single," they can tell you your record isn't coming out.

So what happens when online sales eliminate many of these expenses? Look at iTunes: $10 for a "CD" download reflects the cost savings of digital distribution, which seems fair — at first. It's certainly better for consumers. But after Apple takes its 30 percent, the royalty percentage is applied and the artist — surprise! — is no better off.

Not coincidentally, the issues here are similar to those in the recent Hollywood writers' strike.

Will recording artists band together and go on strike?
The rest of the article includes conversations with Brian Eno and other music foward (and backard) thinkers.

http://www.wired.com/entertainment/music/magazine/16-01/ff_byrne?currentPage=all