First comes word that overall sales are down on iTunes since the implementation of variable pricing.
Then Warner Music Group’s CEO Edgar Bronfman Jr. says:
Although we priced down a far greater number of tracks that we priced up, early results show a net positive result on our digital (sales). Variable pricing will be even more positive for us as we shift more to digital.
While variable pricing made sense when hard, physically “scarce” albums were being sold, it is just plain folly to think the same rules can be applied to digital music.
The biggest reason for this is that digital copies of songs are simply not scarce. By raising prices on popular songs the labels simply make it more likely for fans to feel justified in sharing the music via P2P services rather than paying a jacked-up price for a digital file.
Clearly, there is a major disconnect between the dreams of the labels and the reality of the market. There is no way that the labels will convince consumers that even though they no longer have to manufacture or deliver the music that they still have the right to charge the same or more than they have in the past for the same content.
There is also a major disconnect between the labels and the musicians who are getting ever-more frustrated with seeing their music kept out of the hands of their fans at every turn, seeing their fans sued and prosecuted for basically expressing extreme fandom and, to top it off, getting a crappy percentage of the profits generated.
So, if the labels think something as anti-consumer and anti-musician as variable pricing will be the thing that saves your business, well, that will just expedite your demise.
The producers of a very cool documentary called “RIP! A Remix Manifesto” faced a common dillema in the film these days. Their investors wanted to make sure that their chances of recouping weren’t undermined by piracy and the films DVD and theatrical distributors had similar concerns.
In an interview in Wired.com the producer said something quite smart:
We knew the film would appear on file-sharing networks immediately and we knew the audience for the film wanted and expected it to be online. So knowing that, we wanted there to be a method for those who wanted to pay to do so.
So, instead of figuring out a way to limit the reach of the film or threatening to sue and prosecute potential fans and evangelists, they decided to put up a “pay-what-you-want” download of the film.
It makes so much more sense to embrace the current technology and the desire of fans to access content in a flexible manner than it does to try and handcuff your content and treat potential fans like potential criminals.
In yet another completely over-zealous attempt to stop those evil pirates from destroying the music industy, the US Attory General is not satisfied with the crazy $30,000 in fines Kevin Cogill is being made to pay for leaking a copy of Guns n Roses latest album onto the internet before its official release:
The prosecutor in the case is demanding prison time, even though the probation department recommended a sentence of probation. Why? The U.S. Attorney’s Office says probation won’t adequately protect the music industry: “The recommendation does not reflect — or discuss — the gravity of the offense and will do nothing to deter other would-be leakers in this rapidly expanding threat to the music industry,” the prosecutor argued in papers filed with the court.
Let’s put aside the fact that this is a losing (or lost) battle that the Feds are fighting on the behalf of RIAA. Instead, let’s consider how successful a similar approach against drug users and small-time dealers has been in curbing drug use.
The whole situation is infuriating. It makes no sense that the US government is wasting tax-payer dollars trying to “send a message” on behalf of a group, RIAA, that is currently being counter-sued for lovely things like intimidation and using false evidence. Not only that, but considering there probably isn’t an album out there that hasn’t found its way to a P2P site (often after being “leaked” by a member of the band or even of a label b/c it boosts sales) it seems unfair to prosecute Cogill in this way.
There is a compelling post by CNet’s Matt Asay exploring the various potential of future music business models.
So I think the “adoption tax” model is promising. The future is flat-rate: you subscribe, you forget about paying for individual transactions, you enjoy more music than you ever have before.
While I certainly see the appeal of this sort of approach I just canceled my cable TV service because the all-you-can-eat approach wasn’t worth the cost – and, of course, because of all of the alternative means to get that content.
Right now, the same is true for music. There are so many free ways (both legal and piratey) to acquire music right now that the idea of adding a new monthly music bill to my accounting seems like a stretch.
PaidContent has a bit of information about ManiaTV’s latest venture, an attempt to reinvent what it means to be a music label:
it’s jumping into the music business with a new show called Making the Music, which effectively seeks to take over the role long played by the music labels. The original series is focused on hip-hop producer Scoop Deville as he works on a new album—and maniaTV will get a cut of the revenues once the LP is released.
The idea is that Scoop et. al. will be able to use the social media aspects of show as a way to test-market and hone their final product. Of course, this only works if people tune in and get involved.
I am always interested in new takes on music production and promotion and this is certainly an intriguing idea. One does have to wonder, with LP sales decreasing pretty steadily, if getting a cut of the record sales is really worth all that much. Maybe they are cut into the other potential revenue streams such as licensing, touring and merchandising?
Lots of chatter this week about YouTube’s flipflop on placing pre-roll and post-roll ads on some (or all) of their videos. This is due, they say, to the fact that no other scheme has worked to allow them to cashify their massive market share and total eyeballs.
This could be an opportunity for some of the video-sharing sites competing to be the YouTube alternative to actually offer an alternative: ad-free viewing.
Then we would find out the following:
1. Will YouTube’s current viewers be bothered enough by the new ads to actively seek out alternatives.
2. Will the alternatives be able to offer the level of content and exposure provided via YouTube.
3. If a site succeeds in building a bigger market share by offering ad-free viewing how are they going to cashify.
I get excited anytime a big player makes a big move. We all get to sit in the stands and see how it goes, devising our own schemes based on what goes down.
Ok, that might be a bit of an exaggaration but one of the things that makes web video tough to cashify is figuring out just what to charge for. What does getting 1,000,000 “views” on YouTube really mean.
A recent dust-up with some Avril Levigne supporters creating autoplay embeds on her video “Girlfriend” so that it would beat out “The Evolution of Dance” to become the so-called most popular video on YouTube.
According to NTV, this might have caused a change in policy over at YouTube:
“…we have reason to believe the site has stopped counting views from videos set to play automatically on pages around the web. We first took notice of the issue when popular producers contacted us saying they’d seen a dramatic drop-off in the number of views they receive for new videos. It’s possible that YouTube has adjusted more than one aspect of its view count methods, and it’s also possible that the view count methods are just malfunctioning. But enough people are mentioning the autoplay issue that we think there’s a good chance that’s the issue.”
While it’s a good step for YouTube to take I don’t think it is going to make much of a difference in the overall scheme of things. There will still be plenty of people out there able to game the system and the actual value of a view will remain in the eye of the beholder.
According to ArsTech the guys have added indie label The Orchard and over 1 million new tunes. Says The Orchard:
“The partnership is a significant validation of the consumer-empowering business model AmieStreet.com is pioneering,” The Orchard says in its press release. “On AmieStreet.com, songs are priced based on their demand, and customers receive money for more downloads when they recommend their favorite songs. By allowing consumers to drive the price of music, a song’s price becomes a measure of its popularity, enabling people to discover new music with more ease and convenience.”
As brands and broadcasters continue to find ways to transmit both entertainment and an overwhelming desire to consume material goods and services to the viewing public, there is an ever-increasing presence of brand-intergration into original entertainment.
Not surprisingly, the web, where traditional advertising has never worked, is a laboratory for this sort of content. Next up to the testing grounds is courtesy of jolly ol’ England…
“In a first between social network and music company, “The Secret World of Sam King” revolves around a junior ’facilities’ employee at Universal Music who secretly founds his own start-up label in the post room. Producers will draw on real-life experiences along with cameo appearances from Universal artists to bring additional authenticity to the setting and story.”
What’s worth noting is the complete transparency of the integration between brand and story. Nobody is being tricked or deceived about where at least some of the money is coming from. Whether or not the actual show will be entertaining is a whole different kettle of fish.
So I read over on Mashable that YouTube is launching a “reporters” channel. According to YouTube’s very own blog (aw, they have a blog…not a vlog?)
“People around the world have been using YouTube to report on the events and issues affecting their lives, shedding light on stories that might otherwise not be told and offering new perspectives on events covered by the traditional media. Today, to highlight these journalists on YouTube, we’re announcing the launch of the Reporter channel type.”
So, with that in mind, I ask you, is this the future of news:
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May 7, 2009 7:06 am | 
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