I’ve been covering the digital music business for MediaShift for more than 18 months, and in that time I’ve chronicled new services and examined key trends and news. Below is a look at 10 things that I’ve come to believe are true about the modern music business.
1. The “DIY Revolution” has Been Relatively Ineffective
Although going it on your own was all the rage in 2009, reality has shown that the majority of artists still need a team around them to reach any substantial level of awareness, sales, and revenue. However, this team doesn’t necessarily need to resemble the traditional record label department structure. For many artists, surrounding themselves with a few tech-savvy friends and some seed money can generate the momentum necessary to fuel a moderate indie career. To reach far and wide enough to live off of one’s art, the task list is simply too long to tackle alone. In reality, DIY can work just fine if you modernize the traditional definition of the term.
2. Tech Can Replace/Enhance Some Functions
Technology has removed many barriers and allowed almost anyone to play the game. It has also removed the need for some of the team members that have always been needed. Recording, mixing and mastering music can be done faster and cheaper than ever before. Distributing the output digitally is near instant and inexpensive. Anyone can create digital tools that collect email addresses, stream music, sell tickets, and engage with fans. Just remember that with technology, “build it and they will come” is pure fantasy.
- There are 1.73 billion Internet users worldwide as of September 2009.
- There are 1.4 billion e-mail users worldwide, and on average we collectively send 247 billion e-mails per day. Unfortunately 200 billion of those are spam e-mails.
- As of December 2009, there are 234 million websites.
- Facebook (Facebook) gets 260 billion pageviews per month, which equals 6 million page views per minute and 37.4 trillion pageviews in a year.
I basically sum up the current state of the debate, the players, and what it will take for mass adoption. A quick and hopefully informative read to catch you up on where things are at in the streaming/subscription world.
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I just published a new post over at the PBS Mediashift Blog titled “The Year in Digital Music and Predictions for 2010″
Focuses on recent and upcoming topics such as acquisitions, direct-to-consumer, ISP tax, Spotify, analytics, and more. Would love to get input from all of you as to what you think are the key digital music moments of 2009 and what’s next.
I had been awaiting MOG’s new All Access service for a while – the idea of a socially-charged subscription service with six million songs for $5 a month is pretty exciting.
After using it for a day (I bought the six month subscription, bringing it down to just over $4 a month) I am really digging it. There are albums from all the majors and a great selection of indies; I’ve found most of what I was looking for so far.
The playlists offer a radio feature, which allows for solid music discovery. The feature most people are talking about seems to be the artist slider, which provides the ability to decide how much variety you get in your playlists. If you have it all the way to the left (Artist Only) it will automatically add songs from the artist’s catalog to your list. The further to the right you go (Similar Artists) the more variety it adds. This offers serious customization of the music discovery feature and to what extent your playlist is randomized. Or you can simply turn radio off and it functions as a straight-ahead playlist.
So as I am thumping R. Kelly’s new album (after listening to the Dead Kennedys “greatest hits” I couldn’t bring myself to buy) I am definitely feeling good about this service. But as a digital marketing professional, I’ve personally felt good about a number of streaming services that haven’t ever lived up to their expectations. Streaming has always been plagued by the inability to provide “everything everywhere” service like downloadable content (mostly) offers. But as an industry, we’re getting there.
The key to survival here is keeping the price low, adding a mobile service (coming in the next few months), and continuing to offer innovative user experiences.
Over the past month, I received a significant amount of feedback on my recent MediaShift article, What Will Record Labels Look Like in the Future?. People from all areas of the music industry reached out and shared their feelings on future business models, and strategies for moving forward.
Regardless of their background, practically every person I spoke with agreed on a core set of truths about the future of record labels (and the industry as a whole). The consensus is that…
Please hop on over to the PBS Mediashift Blog and read my new post, “What Will Record Labels Look Like in the Future?”
A choice excerpt:
This addresses the core problem. Labels’ traditional revenue streams are drying up and no business can flourish without sustainable income. A remapping of revenue sources is inevitable and has already been put into practice by many labels via so-called “360 deals.” Pulling from tour revenues seems to be a logical progression, especially since the new paradigm for many labels is that records exist to promote the tour, rather than the opposite which was true for decades.
To this point, Scott Perry adds, “The bank is broken, and until investing in an artist’s career is proven to be a profitable endeavor, it will be difficult for any artist to find a benefactor to fund the labor necessary to push an artist beyond their sphere of friends and into a larger network.”
Long tail distribution can be found in many things on the internet, it is especially useful in understanding the economics of abundance. However using it to understand fans can be incredibly useful.
The Pareto Principle states that you will earn “80% of your sales from 20% of your clients”. This fits into the long tail distribution of fans, as it allows you to identify the core audience you should focus on.