April 30, 2008
There are some folks, Andrew Keen comes to mind, who are easy to dismiss not because of the sensational and contrarian nature of their ideas but because of the lack of thought and discussion that surrounds them. Contrast this with Kevin Kelly who wrote 1,000 True Fans back in March and ignited the the echo chamber we lovingly call the Blogosphere with his suggestion that with a 1,000 true fans supporting them an artist could live exclusively from their craft.
The idea is not without its detractors, Jaron Lanier of Digital Moaism fame (summerized back in ’06), being the most prominent. However, unlike Andrew Keen who goes into Fox News styled apoplectic fits (more) when there is disagreement, Kevin Kelly has opened his blog to highlight the arguments against his meme. In posts last week and again today, Kelly has highlighted variations of and arguments against his meme. While remaining steadfastly committed to the idea of a 1,000 (or perhaps 5,000) true fans, Kelly is has taken up the challenge of proving his ideas right. He is on a quest to find 3 artist that make a “predictable income sufficient to raise a child.” If he cant, then the 1,000 true fans meme will be declared officially dead and Jaron Lanier, Andrew Keen and the terrorist will have won.
April 29, 2008
Last week the RIAA was cheering the destruction of million CD and DVD taken from flea market vendors and church swap meets across the country. This week it put out the numbers of CD’s shipped from its client record labels to music stores and they arent good. The ailing music industry shipped 17.5% fewer CD’s to record stores in ’07 than it did in ’06. Of course, much of what was shipped to the stores is still sitting in discount bins so the actual sales decline is surely much worse. Across all physical formats, CD singles (up 50%), Cassettes (down 41%), LP’s (up 36%) etc… shipments were down 16.9% Y/Y.
Despite this news, record labels still seem intent are keen on destroying any company, site or individual foolish enough to build a service that makes online music discovery and playback simple and painless. The four major labels, though nine of their subsidiary companies, have filed suit against Project Playlist, a site that aggregates music from around the web into one simple interface. According to the label’s, Playlist.com enables “massive copyright infringement” by pointing to files on other websites (ie blogs, artist pages, fan pages etc…). Despite common sense and the generally accepted business maxim that your customer can not be your enemy, the luddites at the major labels seem to relish finding novel ways to destroy shareholder value and drive customers away.
I’m not the sharpest tack in the marble box but if I wwas an exec in a failing $10 billion industry that had shrunk by more then $2 billion in the last year with shipments down 19%, the last thing I’d do is sue a company that lets my customers discover and buy my product. Call me crazy.
March 19, 2008
The once haughty recorded music industry has finally collapsed under the weight of its own greed and inefficiency. We can officially call the industry dead, not when the companies are shuttered (because a number of them will survive), but when their main business model is radically different. According to an article in todays Financial Times the music industry is edging ever closer to signing a deal with Apple Computers which may do just that.
The article discusses a deal the two sides are trying to hammer out to shift the labels economics from collecting money based on the number of songs/CD’s that are sold to collecting money based on the number of iPod’s or iPhone’s thats are sold. Its a complex deal that the article emphasizes may not get done, however for the labels to even consider it highlights how very desperate they’ve become. This deal would certainly spell the end of the traditional record labels as their status as added value intermediaries (ie important middlemen) fades even further. Also read a related article which is a bit of a counter-point to the first article albeit with little new information.
March 14, 2008
Earlier this week the IFPI, a global music lobbing organization best known for being less effective and more costly then the RIAA, dropped its membership dues in order to keep label partners from jumping ship. The organization charges ungodly sums of money to the labels to get marginal democracies to seize peoples CD burners. Variety has the full story here.
March 7, 2008
The recorded music industry has become the global icon of how to destroy customer goodwill and torpedo an industry, in the digital age. Their mis-steps go from the tragically self-defeating (suing fans, grandma and apple pie) to the spectacularly ineffective (seeding corrupt files on P2P networks, malware and DRM). The US recorded music industry isnt in decline, its dead, there is nothing left to do but harvest the usable organs.
The surest sign that the recorded music industry has gone the way of chimney sweeps and buggy builders, is a couple of recent articles from blog A-listers Seth Goodin and Kevin Kelly. These are not folks from the lunatic fringe screaming in the wind, like myself, these guys are mainstream pundits well respected by the conference booking set. Even they no longer question but are promoting solutions to come after. The lessons and insights they offer could be as instructive to magazine publishers and indie flim makers as they should be to musicians.
Kevin Kelly’s article, 1,000 True Fans is a must read for any artist hoping to make money in the digital age. In it he argues that an artist can make a decent living ($100,000k/yr) concentrating most of their efforts on cultivating a fan base of just 1,000 “true fans”. He defines a true fan as “someone who will purchase anything and everything you produce”, ie your mother. The model is actually very well reasoned and hearkens back to the patronage model that Pholks have been debating for years. The application of a CLV to a music fan that appeals to me on some fundamentally geeky level but attempting to a hard dollar value on fans is frought with issues. While this is agreat article with lots of interesting areas for exploration and strategy building its to be taken with a dose of salt.
Marketing god Seth Godin, one of the coolest looking bald guys since Cypher, released the text of a speech he delivered on the music business. His Live Music Talk is another long read, but well worth it (pdf here). He basically argues that fan engagement, he calls it “tribe management”, is the future of the music business. Get permission, get personal and get pervasive is the point he is driving home. Of course he says it much better then that but you get the point. Seth, we’re that close, reimages the music industry through a consumer marketing framework, using Natalie Merchant to make it concrete. While this article doesnt offfer anything really new it does make seem to crystallize and simplify many older arguments.
February 19, 2008
A couple of years ago a kid from Norway, named Jon Lech Johansen, broke the encryption put on DVD’s to stop people from coping them onto their computers. A year or so later he did the same thing to the iTunes music store and made it possible for folks to share their music purchases. He was pretty unpopular with the big media companies but geek-boys the world over loved him, so he went legit and started a venture backed company. However, going legit isnt what it used to be. His latest application, let’s you share your music and other media with friends and family no matter what device they might be using. The new application called doubleTwist allows you to convert all your iTunes purchases to plain old mp3’s for you can shares them across devices. and it help you manage that process. The application is still in beta (early beta if the number of crashes I’ve had is any indicator) so you might want to check out the PDF press release here , the blog reaction here or the early articles here and here.
Thanks to the erudite scholar and gentleman, david touve for the tip.