Why Mainstream Can Kill
Last week Starbucks announced that it was leaving the music business. Sales have been shockingly low: one journalist calculated that they add up to about two CDs per store, per day. Why did this fail so spectacularly? Paul Resnikoff argues that the Paul McCartney-and-Alicia Keyes combination was too mainstream to be interesting to consumers. Starbucks was more effective when they highlighted talented but unknown artists. He compares that model to music in the video game industry, which prides itself on being cutting edge. Digital Music News, April 24thread more
The New Economics of Music
Economist Umair Haque explains why the music industry is so vulnerable to piracy and how to fix it. He argues that consumers download music because buying an album comes with a great element of risk because the record label provides no guarantee of quality. In most industries the cost of a product is an indication of quality, but the music industry has near-uniform costs. Umair suggests new pricing models to reduce this element of risk. Bubble Generation, February 15, 2008read more
Insiders talk free music at MidemNet
Music industry and technology insiders met in Cannes to discuss the future of free music at the annual MidemNet forum. Many of the participants said “they believe that subscription-based or advertiser-based business models are the answer.”
Author: Ray Bennett
Source: The Hollywood Reporter, January 27th read more
The newish blog TalentFilter is reporting that Clear Channel is once again after artists’ royalties. This time it’s in connection with a contest that L.A. station KYSR (Star 98.7) is sponsoring for bands. The contest promises the winner a spot on the station’s Star Lounge CD, a Star Lounge Concert at the Guitar Center Studio, and $10,000.
It’s only in the legalese of the contest rules that the real "prize" is revealed — it appears artists must waive their royalties to participate and allow Clear Channel to use their music in nearly any form. Here’s an excerpt of the language: read more
Doyle Bill Would Encourage New Low-Power FM Stations U.S. Rep. Mike Doyle introduced a bill on June 21 that could prompt hundreds of new low-power FM radio stations to sprout up around the country, including the Pittsburgh region. The bill would relax a restraint that prevents new stations from securing spots close to existing full-power commercial stations on the radio dial. by Jerome L. Sherman, Pittsburgh Post-Gazetteread more
Major Webcasters to face billions in new fees? The CEOs of the four leading internet radio broadcasters, RealNetworks, Yahoo, Pandora, and Live365, say the new annual $500/channel administrative fee would force their companies alone to pay $1 billion per year to SoundExchange without including actual royalty payments. by Anne Broache, CNET, June 7, 2007read more
Congressman Mike Doyle, D-Penn., caused a bit of a stir at the “Music, Technology and, IP Policy Day” event last week with his keynote speech. People were particularly interested in his comments on low power radio and the possibility of a program funding pop artists for their work. Here’s some excerpts from the speech:
Thank you. It‘s a pleasure to be here with you today.
I want to tell you a little story about a Congressman who gave a speech about mashups and mixtapes.
I never thought when I gave that speech in a House committee hearing a month or so ago that anyone would pick up on it, but a lot of folks did folks who care a lot about issues like the future of music, radio, and the Internet. read more
Kurt Hanson over at Radio and Internet Newsletter offers an excellent (and expansive) rundown on the history of copyright law leading up to the recent decision by the Copyright Royalty Board to set higher royalty rates for webcasting. The history is to long to quote, but Hanson rightly diagnoses (with one major caveat) the problem with the ruling:
"And thus we end up with a situation in we’re in right now, in which a trio of judges granted the copyright owners a royalty rate from Internet radio that is effectively, I believe, more than 100% of the total industry’s revenues!… read more