Life with a Sound Track

Imagine if your everyday life had a soundtrack. The places you visited from Paris to Hollywood, the same everyday route you took to school or work, the local park down the street or even the closest beach you jog in the morning had a specific soundtrack associated to that location.

Musicians and music lovers alike have had a form of doing this for years through playlist. A group of college students going on a road trip might construct a playlist, or a compilation album that would then become the sounds of a memory forever associating to that road trip. A sixteen year old girl going through a break-up might decide to create a playlist of heartbreaking pop hits.

Adding location awareness to music apps is fast becoming a major mobile trend, as is evident by a rash of new mobile music apps hitting app stores of late. Use of location technology is taking many forms. Many, if not most, are designed to let users tag a location with a song. The result can be a localized, crowdsourced playlist, add context to the discovery of a new song or even be used as a way to find concerts and live shows. Other apps flip it around a bit by letting users in the same area determine what the venue should play. Think about the data local businesses could collect.

For those Spotify Premium listeners, Spotfiy early this year created a new feature for their mobile device app that has tempo detection to the rhythm of your Stride. Here is how it works: Pick from a playlist, such as “Recommended For You,” “Pop Hits,” or “Electronic Moves,” and you’ll hear a woman’s voice say, “Start running to detect tempo.” Your stride shows up as pulses on the green circle until she says that she knows your stride. It takes a few seconds—about ten paces. Then you’ll get a track with matching beats per minute. Genius.

Imagine if these two amazing app features together in one. As a provider of music and sound catalogs such as Spotify, this would open up a whole new world of revenue for musicians. This would create jobs for composers, DJs, playlist makers from all over the world giving them the opportunity to compose and invent infinite sounds/compositions for streaming services. This could re-inspire the consumers value of music and appreciation for it; along with allowing non musicians to compose and create the film score of their own life using the catalog provided by the service.

The Owners of the Music Industry

To further my discussion of my previous article on the revenue artist make within streaming, I wanted to look at the whole picture. Where is most of the revenue going if in 2014 global recorded music totaled in the US at $6.9 billion?  To break down the consumption of music in the US by genre, although possibly in broad terms, according to a study released by Nielson Music, rock music was twice as popular in 2014 as pop musicaccounting for 29% of the industry’s music consumption across album, track purchases, and music streaming.

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Forbes magazine also provides us with the top three paid musicians of 2014:

With Dr. Dre’s (Aftermath Entertainment) most recent sale of Beats, the company he cofounded, to Apple for $3 billion, he is listed at number one going home with $620 million this year before taxes. Coming in far second is Beyoncé (Columbia & Sony Music) with $115 million as her most successful year yet.  And finally, The Eagles (Asylum) with their longevity in the industry at $100 million.

The Wall Street Journal is reporting that after securing $400 million in fresh funding, Spotify is now worth more than the entire US recorded music industry at $8.4 billion.

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Sony leads the record label trio at $4.9 billion but if we look at Live Nation it will not be long when it takes a step ahead of all three. With Live Nation’s monopoly in live music, being that most revenue is from cold hard ticket sales, it would not be surprising that Live Nation takes the lead within a year.

The Tyranny of Choice

Have you ever noticed the immense amount of music that technology allows us to listen to? There are so many choices that it would be impossible to listen to every track out there in one lifetime. This is what a fellow blogger likes to call “The Tyranny of Choice”.  In his blog, he points out simple facts – making relevant points regarding the future of music.

There is a noticeable imbalance in the music industry. There a numerous music services world wide. These music services are focusing on a small percentage of consumers as opposed to targeting a much larger market share. Streaming plays an important rule in the music industry and it has caused cd and download sales to decline. By targeting that small percentage of consumers, music streaming services are simply taking the downloading money and converting it into streaming money. This means the consumers are switching but not spending more. Larger target market is not necessarily being considered meaning there is just revenue transition rather than revenue growth in the music industry.

According to fellow blogger, there are three things to focus on that are predicted to shape the future of digital music – (1) Consumer Behaviour (2) Tech Companies Strategies (3) Income Distribution. Consumer behavior of the next music generation listeners and not the generation transitioning from downloads or cd’s will be the ones music services need to pay attention to. By understanding the next generation, the music services will be able to properly grow and evolve. Technology companies such as Apple, Amazon, and Google control digital music in one way or another. For this same reason, others such as labels and producers can focus specifically on the music while these companies strategize to focus on their own established goals which mostly involve product/service sales. It is a win-win. Finally, artists and songwriters have begun to pay more attention to income distribution. Although it may not happen overnight, the pressure to more evenly distribute this income is an important movement.

Music listeners may not be expected to spend money on downloads or cd’s in the future, however they are expected to listen to the numerous music choices available to them more than ever before. The Tyranny of choice will influence the way we all listen to music. This provides artists and labels with new opportunities though. Because of “the tyranny of choice” technology has created and will continue to create in the future, artists and labels must come together to create partnerships that will allow them to sell an experience – an unique music experience that they can both sell to the next generation listeners. To provide unique music experiences to listeners is what music has always been about so to focus on this same principle in the future despite how technology continues to change our lives is truly a beautiful thing.

To read the blog post and see charts that served as inspiration for this blog post, follow this link – http://musicindustryblog.wordpress.com/2014/09/29/digital-ascendency-the-future-music-forum-keynote/

Musical Nostalgia

I purchased my first CD at a very young age. Holding it in my hands and knowing it in was mine was pretty neat. Playing it over and over again until I knew all the lyrics to every song was an even better feeling. Those days seem to be over though. Technology has provided us all with convenient ways to listen to our music now. Every day it seems as though there is new evidence pointing to the fact that streaming is the evident future in the music industry. Now don’t get me wrong, I absolutely love the effortless convenience that is opening up my Spotify account… listening to my favorite artists as well as easily discovering new ones! Is streaming changing the way we relate to music though?

I am sure I am not alone in saying that there is a certain beauty in owning music from that band you have followed and loved for years. Then again, there is also the music quality you can hear in say a vinyl than you could never hear while streaming that contagious song you can’t get enough of. It is true that streaming exposes us all to unlimited amounts of music we would probably never had discovered or even had the ability to purchase (even if we wanted to). As music consumers… or simply music lovers… we are able to appreciate the technological advances that make life a little easier however, every now and then we are entitled to feel a little nostalgia about the good old days and questioning how streaming is changing our musical experiences.

Article link served as inspiration. Read “Why I Rushed Out To Buy An Apple Classic: Soon It’ll Be Too Late” as it will surely take you for a stroll down your own memory lane. – http://www.nme.com/blogs/nme-blogs/why-i-rushed-out-to-buy-an-apple-ipod-classic-soon-itll-be-too-late

Is Amazon working on a Music Streaming Service?

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Amazon really seems to hit the ground running lately. First came the conjunction with Amazon Prime, a new video-on-demand service and a few days ago Amazon has announced the FireTV then, the counterpart of Apple TV. And apparently that was not all.

After Amazon released Fire TV, a streaming device for TV only a few days ago, now a contract indicates that in the next few weeks Amazon will also introduce a music streaming service similar to Spotify. While Amazon Prime customers currently can already stream movies and TV series for free , such an offer for music is still lacking at the moment.

Just like Spotify, Amazon might also offer a free  service in the streaming like the Spotify limited version and a premium subscription, which presumably would be a part of the Prime Offer. A contract between Amazon and the music label states suggests a deadline for the signature on May 1, 2014, which is a timely launch of the streaming service. Especially after the price increase Amazon Prime (of 29 € to 49 €) a music streaming service is another great incentive for customers to complete the Prime subscription. Amazon would therefore also make their own hardware (the Fire TV) even more attractive.

But even this leaked contract is real it’s no guarantee that Amazon will ever actually launch a streaming service. 

The contract, which publishers are being asked to sign by May 1, states the following:

“…If you provide a signed copy of this Agreement to us or our data manager that includes any changes, additions, or deletions (handwritten or otherwise), no such changes, additions, or deletions will have any force or effect…”

Here’s the full contract.

Spotify is popular – But will it be profitable?

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To most music fans getting used to Spotify or similar services, it feels like music streaming services business is healthy and just starting to take off.  Within the music industry however, it is no secret that music streaming leader Spotify in its current form is an unsustainable business model, losing millions of dollars each year…

Reputable financial analyst PrivCo released an overview of Spotify’s financial situation showing roughly $37.5 million net loss in 2010, and a whopping $60 million net loss in 2011. The financial firm stated that the 2011 numbers were “alarming” and “unsustainable”.  Granted, the company is going through an extensive growth phase, expanding to new countries and hiring new employees, however this is shadowed by the fact that almost every new dollar of revenue is going directly towards paying music companies, largely, the three major industry recording giants holding the rights to most of the world’s popular music repertoire.  PrivCo CEO Sam Hamade expressed one of two things needs to happen to keep the company afloat – “Either the online music royalty payment model to artists and music companies needs to change, which is highly unlikely in the near term given that digital royalties are record companies only growing revenue stream, or Spotify needs to ASAP introduce a tiered subscription system, as opposed to its current flat monthly fee model, which is clearly a broken business model.”

It isn’t clear whether Spotify will introduce a tired subscription system yet, the company is currently betting on turning free users in to paid subscribers.  Entrepreneur and investor Sean Parker has predicted Spotify will take over iTunes in terms of revenue within two years, however this could be majorly derailed if the rumors around iTunes launching it’s own streaming service are true – An Apple streaming solution would be an undeniably hard competitor to beat in winning over the masses of consumers happy with their other Apple products.

 

References/Further Reading

http://www.digitalmusicnews.com/permalink/2012/121005alarming

http://thenextweb.com/insider/2012/10/05/the-royalty-squeeze-spotify-booked-a-59m-net-loss-in-2011-on-244m-in-revenue/

http://www.billboard.biz/bbbiz/industry/digital-and-mobile/business-matters-can-spotify-catch-itunes-1006493952.story

http://www.nme.com/news/miscellaneous/65990

Microsoft announces Xbox Music

Microsoft is the latest name to be added to the list of companies competing in the digital music arena – The company announced their new Xbox Music service earlier this week, featuring the usual perks digital music companies are offering, with a few twists:

– The free streaming service claims it is one of the largest digital music catalogs on the planet, going so far to boast that you can “listen for over 80 years and never hear the same song twice.” This may be of huge interests to current users of Pandora, sick of the same songs played over and over again on certain stations.
– Cloud connected, so users can sync their Xbox Music Pass collection and playlists across your tablet, PC, phone, and Xbox 360 (currently, you can sync iTunes to the cloud, but iTunes is not also a streaming service),

Xbox Music will ship free bundled on every new Windows 8 PC. The basic paid Xbox Music Pass service will cost $9.99/month (similar to most other streaming services) and $99.99/year. Xbox Music will replace Microsoft’s previous failed attempt at the digital music sector, its Zune music service. Speaking of Zune, I find it hard for consumers to become interested in trying Microsoft’s new service because of negative associations with Zune. I find it likely that only consumers that purchase a new Microsoft computer may ever try the service, and only consumers that already have Xboxs may actually use the paid service. Also, I find the video very unsettling in terms of brand image and target market. The video feels very bland, uninspiring, and on top of this all, the unoriginal logo for the service makes an overall unenticing package – At least for me, personally (a Mac user, nonetheless).

What do you think, does Xbox Music have a chance at the digital music market?

Digital Music Arena – Part 1: Rdio’s Artist Program

During the first few times I posted here I wasn’t quite sure what my theme was going to be for the semester.  I’ve decided to track and provide commentary on what’s going on in the digital music arena, particularly streaming services, applications and websites contending to win over the 21st century attention-deficit music fans who have a million of ways to choose from to access music.  I think this is an important issue to follow because new developments in this arena are happening every day as consumers appear to be shifting more and more away from physical music formats, opting for digital ones.

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This first entry is about the streaming service Rdio.com, and their innovative strategy to lure paying customers to their service.

Rdio recently announced the release of their Artist Program, which incites artists to lure new subscribers on to the service by offering artists $10 for every new subscriber.  As Brian Bishop of The Verge remarks, “By paying artists to take advantage of its service, Rdio extends a hand to acts looking for additional revenue streams, and then every link and tweet an artist pushes serves as an advertisement for Rdio itself. It also lays the groundwork for Rdio to become a true social engagement platform in its own right.”

It is too early to tell whether or not the program will be successful in the long run – This will depend on whether or not artists participate in the program and if the practice becomes popular with other artists over time.  Well known artists such as Snoop Dogg, excuse me, Snoop Lion, Scissor Sisters and Chromeo are already participating in the program, however since these artists have a large fan base, it makes sense they would use the program).  It is unclear whether the program is economically viable for the majority of artists without millions of fans, but time will tell….  Any more developments on this program will be covered in future blog entries.

Currently, Rdio’s subscription plans are as follows:

Free plan: Free unlimited streams for 7 day trial

Web Plan 4.99€/month: Unlimited web streaming

Unlimited plan 9.99€/month: Unlimited web + mobile streaming

List of countries Rdio is currently available: https://www.rdio.com/availability/