Digital Audio Insider

Thursday Odds and Ends/Blog Update

2009-10-29T14:06:00.003-05:00

A couple of follow-up items from some recent posts: Mojo Nixon's free Amazon MP3 giveaway moved some units -- more than 1 million downloads. Idolator also noted the lack of actual numbers in Amazon's press release touting pre-orders of the Susan Boyle CD, and provided a breakdown of first-week sales for other releases that had heavy pre-orders from Amazon customers.

Barnes & Noble's new Nook might mean less room for music in B&N stores:

There's lots of space devoted to music that will be replaced with nook areas.

Finally, my apologies for the infrequent posting as of late. I've been busy with recording and mixing tasks -- we're expanding the three-song free Christmas EP we released in 2006 to a full-length holiday album. We're mastering the album on November 10th, so blogging activity will probably be light until then. Unlike our three previous albums, we'll be using TuneCore for digital distribution instead of CD Baby -- look for some posts next month about the relative strengths of each service!

tags: digital music Mojo Nixon Susan Boyle The Layaways

Wednesday Odds and Ends

2009-10-21T11:02:00.004-05:00

Amazon sent out a press release today, touting Susan Boyle's upcoming album as its largest-ever CD pre-order, but it didn't reveal the actual number of orders.

NME magazine is using Last.fm data to create artist pages for smaller acts, something I discovered when a web search turned up an NME page for my band.

How the Shazam song-identifying software works.

And Sunday's NY Times magazine has a long piece on Pandora and its process for catagorizing songs. One interesting fact: the current catalog is approximately 700,000 songs. That's small relative to the number of tracks available in iTunes or Spotify, but it no doubt dwarfs the number of tracks in any traditional radio station's rotation.

Maybe I just need to use it more (and perhaps listen to something beyond indie rock), but I've never been wild about the tracks that show in up Pandora stations I create. And I don't think it has anything to do with the size of the catalog. I completely understand what Pandora is trying to do with the Genome project, but I question the prioritization of the song attributes used to serve up songs. When I click "Why was this song selected," it seems like I always see things like "major key tonality" or "electric rock instrumentation", both of which seem less important than the way the vocalist sings, or -- for many listeners -- lyrical style/content. According the article, vocal style and lyrics are categorized (here's a Wikipedia list of Music Genome attributes), but the only explicit reference to vocals I ever see when using Pandora is "a subtle use of vocal harmony."

tags: digital music Shazam Last.fm NME Pandora

Big Fish, Small Pond

2009-10-15T10:48:00.005-05:00

It's tough to make sales evaluations based on chart rankings alone, without the underlying sales data. But I can't help thinking that an act like the Feelies gets a huge benefit from being a big fish in a relatively smaller pond -- the eMusic catalog. Because the eMusic catalog is smaller than the iTunes catalog, and lacks content from three of the four major label groups, when a critically acclaimed indie act releases new or reissued material, it garners a lot of attention from eMusic's indie-loving subscriber base. And the use-it-or-lose it component of the eMusic subscription model encourages customers to download something now, rather than later.

In this example, the band's recently reissued 1980 debut, Crazy Rhythms, has been one of eMusic's top 10 or 15 albums for the past month, and The Good Earth, from 1986, also makes the top 30. Yet neither album appears in top 100 in the iTunes store or Amazon MP3. (Crazy Rhythms is currently the 923rd best seller in the Amazon MP3 catalog.)

My guess is that the Feelies are moving far more units via eMusic than they're selling in the iTunes store or Amazon MP3. So even with eMusic's smaller per-track payout rate (30 - 35 cents vs. 70 cents for iTunes and Amazon MP3), the band might well earn most of its digital download income for the reissues from eMusic.

tags: digital music the Feelies eMusic iTunes Amazon MP3

Track of the Day: David Fletcher's "Hometown"

2009-10-09T15:24:00.002-05:00

This is a music economics blog, not a music blog, but if you'll forgive the detour, I wanted to make a quick plug for David Fletcher. I suppose I'm not unbiased, as my good friend Christopher Cassels plays bass in Fletcher's band, but a song from his "Lunchbox Cowboy" release has been getting lots of play on my iPod over the past few months. While the rest of the album has more of a singer-songwriter vibe, "Hometown," which sounds like a rootsier version of Earlimart, is by far my favorite track:

If you don't see the embedded Lala.com widget above, you can hear the track on Facebook. The CD is available from CD Baby, with downloads at the usual digital retailers. And if you're in the San Francisco bay area, you can catch the band performing tomorrow night at the San-Rock-Fael show in San Rafeal.

tags: digital music David Fletcher

When Free Works

2009-10-09T14:32:00.003-05:00

Free music is getting a bad rap as of late by some industry analysts (see Mark Mulligan's recent post), but -- in certain circumstances -- I still think it can work. I agree with the skeptics -- having all artists give away digital downloads of all their music isn't a long-term solution for the industry. However, it's important to distinguish between what works for the entire industry and what works for an individual artist.

Here's a recent example that I think is going to succeed, in the sense that free music is going to increase both the attention the artist receives, and his long-term income: Mojo Nixon, of "Elvis Is Everywhere" and "Don Henley Must Die" fame (and currently a DJ at Sirius XM), is giving away his entire catalog via Amazon MP3.

It works because:

1. It's a limited-time offering -- it's not free forever, just the next few weeks.

2. Mojo Nixon is already relatively well known, but I'm guessing he's not selling a ton of music these days. So he's receiving some attention for it, while there's limited downside in that he's probably not giving up much by forgoing his sales for a few weeks. (Though you could also argue that he's giving up some future sales as well.)

3. The free music isn't coming directly from the artist -- you download it from an actual digital store. I doubt the free music gambit would work as well for Nixon if the files were coming from his own website. There's already too much artist (and MySpace) hosted content for listeners to digest. Having the free music come from an established store makes it relatively unique. It also enhances the perceived value of the tracks -- you see them listed as "free" among other downloads that cost anywhere from 89 cents to $1.29.

What does Nixon expect to gain from it? From an an e-mail interview with Hypebot:

i bet in the long run this will be a greater financal pleasure than the status quo

Of course, what works for Mojo Nixon isn't going to work for every artist. Lesser-known acts would probably have a hard time getting Amazon to sponsor such a giveaway. (According to a comment to the Hypebot story, Nixon's agent/manager is an Amazon employee.) And there's also a value to being a trendsetter. I doubt the attention Radiohead garnered for its "In Rainbows" experiment will be equaled by the next big-name act who tries it.

Going forward, it will be harder for labels and artists to gain attention with free music promotions. But for the next couple of years, it seems like individual acts will still benefit from strategic giveaways. Look for a follow-up post next week on the results of my own band's giveaway of our last album.

tags: digital music free music Amazon MP3 Mojo Nixon

Lala.com Gets Cheap With Pitchfork

2009-10-06T15:10:00.001-05:00

Pitchfork has a nice tie-in with Lala.com for its Top Albums of the 2000s list: The mp3 versions of many of the list-toppers are on sale at Lala.com, some for just $1.99. And Radiohead's "Kid A," Pitchfork's top album of the decade, is just a buck!

tags: digital music Pitchfork Lala.com

Tuesday Odds and Ends

2009-09-29T11:58:00.002-05:00

Slate's Farhad Manjoo on the hypocrisy of Apple's stance on iTunes for non-Apple devices.

The WSJ on Warner Music's new agreement with YouTube.

And an economist wonders why rap albums are so long, relative to other genres.

tags: digital music iTunes Apple Warner Music Group YouTube

eMusic's Per-Song Payout for Q2 2009

2009-09-25T13:17:00.002-05:00

The eMusic payout for the second quarter of 2009 is significant one, as it's the last payout for subscriber downloads that mostly occurred before two major changes to subscription music service: the addition of older Sony material to the catalog and the restructuring of subscription plans that reduced the number of downloads allotted each month.

Our second quarter 2009 eMusic sales just showed up in our CD Baby account and we received 33.4 cents (before CD Baby's 9% commission) per download, almost exactly the same as the 33.5 cent payout for the previous quarter.

Because eMusic pays labels a percentage of subscriber revenue, there is no set per-download payout. Instead, the payout can vary based on the overall download activity of subscribers. Digital breakage, which occurs when subscribers don't use all of their allotted downloads, results in a larger payout, when calculated on a per-download basis.

In theory, the restructuring of the subscription plans should increase the per-download payout, as subscribers now receive fewer downloads, paying more on a per-track basis. However, after the introduction of the Sony material and re-working of the subscription plans, I wondered if there would be much change. Historically, the average breakage rate at eMusic has been quite high. Based on the subscription prices and the payouts I've received for my own music, I'm guessing it has been in the 40% to 50% range. But if the availability of the Sony material -- coupled with the fact that subscribers have fewer downloads to use each month or quarter -- results in significantly less breakage, it might mean little or no increase in the payout rate to labels.

I'll report back as soon as I see our eMusic payouts for the third quarter of the year!

related: Sony and eMusic: Why the Per-Track Label Payout Might Not Change, eMusic's Per-Song Payout for Q1 2009

tags: digital music eMusic digital breakage

Sounds Like the Billboard Hot 100

2009-09-21T14:17:00.002-05:00

If you're old enough, you might remember "sound alike" albums. They were cover versions of popular releases, cut with studio musicians and sold below the cost of the original artist version. (Cut-out copies of "Sounds Like the Bee Gees" still populated the sale rack at local discount store when I was kid.)

A few years ago, I noticed some modern sound-alike albums in the eMusic catalog. In most cases, these releases were copies of artists that weren't available from eMusic. While it seemed far-fetched that this R.E.M. collection was a suitable substitute for the real thing, it sort of made sense within the context of the eMusic catalog. If you searched for a specific artist and couldn't find them in eMusic, maybe you'd be willing to spend a few expiring downloads on the sound-alike tracks.

Marc Cohen, of the Ad-Supported Music Central blog, recently announced a new online music store that will update the concept -- 33centmp3s.com:

The store will offer covers of all the popular tracks at any given time. The catalog will be small at first focusing on the Billboard Hot 100. The store will carry sound-alike and interpretive covers.

Sure most people who want to buy a track will want it by the original artist. I understand that and those people can buy it for a buck or so at iTunes or amazonmp3.com or dozens of other stores. Some people will just want to pay less for the music they like and some people will enjoy exploring different covers of music they like -- that is the market I am aiming for.

I think he might have more success with latter audience than the former -- if music consumers aren't willing to pay 89 or 99 cents for an iTunes or Amazon MP3 download, they always have the option of obtaining the song for no cost online. The audience for pure "sound alike" tracks seems limited to those music fans not willing to pay for the original track, but unwilling or unable to obtain the readily available free content from P2P and files sharing sites. On the other hand, when it comes to music discovery, people seem more willing to listen to covers of well-known songs than original material. Derek Sivers (the founder of CD Baby) and others have often advised unknown acts to include a cover song on an album of otherwise original material to increase the likelihood of it being discovered in the iTunes store. The downside here is that the tracks won't be listed in the iTunes store, you'll need to visit the 33centmp3s.com to find them.

Still, it's a novel concept for a download store and it'll be interesting to see what happens when it launches in November. The basic math, as explained here, is that 33centmp3s.com will handle the payment of the statutory mechanical royalty for each download (9.7 cents) to the song publisher and split the remaining money with the artist who recorded the cover version.

related: The Return of the Sound Alike Album, More Sound Alike, Even More Sound Alike Albums

tags: digital music sound alike albums eMusic 33centmp3s.com

Friday Odds and Ends

2009-09-11T12:21:00.003-05:00

Digital sales now account for half of the revenue for Chicago's Bloodshot Records. From Greg Kot's interview with label founders Rob Miller and Nan Warshaw:

We're making half our money digitally, but that doesn't replace all the lost sales from physical goods, dovetailing perfectly with the worldwide economic collapse in November. That's usually our busiest time, shipping goods to accounts for the holidays. But sales didn't just slow down, they stopped.

Bandcamp is ditching 128k mp3 files. From an e-mail sent earlier in the week to Bandcamp artists:

In an effort to further streamline our user interface, pave the way for some new features, and solidify our reputation as the go-to spot for high-quality music, we're dropping support for 128k downloads in about a week. After this change we will only support "best quality" (320k mp3 and more) downloads.

While this change won't allow the option of giving away a 128k file and charging for the higher quality versions (Bandcamp also supports ACC, Ogg Vorbis, Flac, and Apple Lossless files), the e-mail noted:

...if you have a track or album set up as both a free, normal quality download, and a paid, best quality download (an approach that sounded great in theory but wasn't particularly effective in practice): It will switch to being available as a paid, best quality download only. If you still want to make payment for that track or album optional, we recommend you switch it to a name-your-price download with a zero minimum.

And one quick thought on the lack of a Beatles announcement at Wednesday's Apple event: I would've seemed far more prescient if I actually posted this earlier in the week, but I wasn't surprised. The Beatles/EMI have always done a good job of timing releases for the holiday shopping season. Unless they made all of the Beatles content "album only," adding the material to the iTunes catalog probably would have diminished sales of the new remastered CDs, as purchasers cherry picked their favorite tracks. My guess is that an iTunes announcement will come in early 2010, after a gazillion of the new CDs are purchased as Christmas gifts.

tags: digital music Bloodshot Records Bandcamp iTunes the Beatles

Sony and eMusic: What I Missed

2009-09-08T09:39:00.003-05:00

In last week's post about the popularity of Sony material in the eMusic catalog, I observed that virtually no individual Sony albums were topping the download charts. While I raised the possibility that subscribers were downloading a ton of Sony tracks from across the catalog (such that individual albums didn't rise to the top of the charts), in my focus on the album download charts, I completely missed the fact that eMusic charts can be ranked by label. An anonymous comment to the post clued me in!

As of this morning, here are the top-download albums for the past month at eMusic -- Sony-distributed labels occupy the top five spots and three more Sony-affiliated labels are in the top 15:

1. Columbia
2. Columbia/Legacy
3. Epic
4. RCA Records Label
5. Epic/Legacy
6. Matador
7. SST Records/The Orchard
8. Merge Records
9. XL/Beggars Group
10. 4AD/Beggars Group
11. Sony Classical
12. Naxos
13. Arista
14. Jive
15. French Kiss Records/The Orchard

So despite some of the vocal "I don't download Sony" protests that you'll see on the eMusic message boards, the current subscriber base is clearly embracing the Sony catalog, if not specific albums. (I definitely viewed the changes as a mixed blessing -- I was unhappy to have my download allotment cut. But my eMusic choices over the past two months include Sony releases by the Zombies, the Clash, Cheap Trick, the Psychedelic Furs, the Church, and -- please don't laugh -- A Flock Of Seagulls.)

Attracting new subscribers as a result of the addition of the Sony catalog is another question, but we'll have to wait for an announcement from eMusic for any news there.

related: Post-Sony Chart Watching at eMusic, Chart Watching at eMusic, Album Pricing at eMusic, More Thoughts on the Changes at eMusic, Sony and eMusic: Why the Per-Track Label Payout Might Not Change

tags: digital music eMusic Sony Music

Radiohead Doubles the Quality

2009-09-03T11:39:00.004-05:00

No, that's not my opinion of the band's latest song. When Radiohead conducted its "name your own price" experiment for the direct download of the "In Rainbows" album, there was some grumbling about bit rate of the mp3 files -- just 160k. But the band's new track "These Are My Twisted Words," which they're giving away here as a free mp3, is encoded at 320k.

Update: Radiohead's Jonny Greenwood discusses mp3 audio quality in this interview from yesterday with Sasha Frera-Jones. Thanks to Aaron for the tip!

related: Radiohead Says 160k Is Good Enough

tags: digital music Radiohead free music mp3 quality

Post-Sony Chart Watching at eMusic

2009-09-02T14:35:00.002-05:00

Back in July -- approximately two weeks after the addition of Sony back-catalog material to the eMusic catalog -- I observed that with exception of Michael Jackson, the major-label content wasn't rocketing up the eMusic charts. At that point, however, because of the rolling refresh periods for eMusic subscribers, some of them might not have had a chance to download any of the Sony material.

As of yesterday, it's been nine weeks since the introduction of the Sony material, meaning that all monthly subscribers have the opportunity to use at least two months of their downloads on the Sony catalog. But the current top-download charts remain as smaller-label (and indie rock) focused as ever. The only Sony release showing up in the "top 15" charts for the day, past week, and past month is this Kenny Chesney collection.

The top download charts at eMusic have always been dominated by recent releases, so perhaps it's not surprising that older Sony material isn't being snatched up. And, as I noted in the previous post, absent something like the death of MJ, it's unlikely that everyone will gravitate toward the same Sony releases. That is, if individual subscribers are downloading a wide range of Sony material, specific releases aren't likely to rise the top of the charts. So it's possible that a ton of Sony material has been downloaded, but the downloads have been spread across the catalog.

Yet when offered certain classic indie releases for the first time, eMusic subscribers will push them to the top of the download charts, something they've failed to do with non-Michael Jackson Sony material. Husker Du's SST catalog was added on 8/24/09 and currently accounts for 4 of the top 15 spots in the weekly download chart. While the Husker Du releases are offered as "album-only" downloads, the fact that some of them are relative bargains -- it will cost you just 12 downloads for the 23-track Zen Arcade -- no doubt adds to their appeal. Still, the contrast with the Sony catalog is striking.

Of course, the reason eMusic added the Sony material to its catalog was to increase its appeal to future subscribers, not the current subscriber base that was content with the all-indie lineup. So the real question is, will potential subscribers be lured by a Sony catalog that costs -- as a result of the new subscription plans and the "12-download album pricing" for many releases -- $5.00 to $6.00 an album? That's a healthy discount from the $9.99 default iTunes album price, but I'm not sure if it's enough to entice fans of older Sony material to start an ongoing subscription.

related: Chart Watching at eMusic, Album Pricing at eMusic, More Thoughts on the Changes at eMusic, Sony and eMusic: Why the Per-Track Label Payout Might Not Change

tags: digital music eMusic Sony Music iTunes

Last.fm Royalties for Q2 2009

2009-08-07T16:16:00.005-05:00

Statements for the second quarter for Last.fm's Artist Royalty Program become available last week. Once again, here's what my band received for the various streaming and radio options for our songs on Last.fm:

Free on demand: 0.5 cents per stream

Premium radio: no meaningful figure

Free radio: .05143 cents per play

Subscription radio: .05882 cents per play

The free on demand rate was unchanged from last quarter, while the free radio rate showed a very slight increase from last quarter's rate of .04995 cents per play.

One change from previous quarters is the introduction of the Subscription Radio category to replace the Premium Radio category, coinciding with the recent change in the Last.fm business model, which restricted free radio streams to listeners in the U.S., U.K., and Germany.

From a Last.fm forum post:

During Q2, the 'Premium Radio' tier was replaced by 'Subscription Radio,' to coincide with the introduction of a subscription for radio streams outside the US, UK and Germany. Whereas previously Premium Radio was classified as streams for all services that can be accessed by subscribers only (for example, Loved Tracks Radio), the new Subscriber Radio is classified as any radio stream listened to by a subscriber.

Due to the change being made mid-quarter, both tiers will appear on the Q2 2009 report, to be replaced by Subscription Radio only in future reports.

Please see below for an explanation of the terms you see in your royalty reports:

Free On-Demand: these are plays of a single track, directly from the site (using the Play button) in the US, UK and Germany, where the rights holder is participating in the ARP. They appear the same as a Full Length Preview for the user, however they earn royalties whereas Full Length Previews do not. All labels participating in the ARP will have their tracks set to Free On-Demand automatically, and can change this by opting out of collecting royalties directly from Last.fm.

Premium Radio: up until Q2 2009, this meant any subscriber-only radio streams, that were not available to non-subscribers. During Q2 2009, this was replaced by Subscription Radio.

Subscription Radio: replacing the Premium Radio tier, these are radio streams listened to by a subscriber to the site (regardless of their availability to non-subscribers).

Radio: these are radio streams listened to by non-subscribers, which means within the US, UK and Germany. The need for subscription to listen to radio streams in the rest of the world occurred during Q2 2009 - before this, the 'Radio' tier was global.

The change in the business model appears to have affected our already-modest total number of radio plays, which dropped more than 50% from the first quarter of 2009 to the second quarter. Some of that drop, however, was probably due to the fact that we were still getting some Last.fm radio play of our Christmas EP in early 2009. Money-wise, our Last.fm royalties are so small that it's a non-issue for us, but the shutting out of non-subscriber radio listeners outside of the three regions could conceivably have a meaningful impact on the royalties of some more-popular artists.

related: Last.fm Royalties for Q1 2009, Last.fm Royalties for Q4 2008, Last.fm vs. SoundExchange

tags: digital music Last.fm streaming radio royalties

Twitter Optimism

2009-08-03T11:13:00.002-05:00

Ahmir '?uestlove' Thompson of the Roots in the Wall Street Journal. He has high hopes for converting Twitter followers into purchasers:

I'm hoping to get a million before the album comes out. I'd like to hope that half that number could actually be persuaded to buy the record.

tags: digital music Twitter ?uestlove Thompson

Set Them Free -- Some Thoughts On Free: The Future of a Radical Price

2009-07-31T14:57:00.005-05:00

You can't write something titled Free: The Future of a Radical Price and not give it away, at least in some form. The new book from Wired's Chris Anderson -- author of The Long Tail -- is available, in various formats, free of charge. You can read a free Google books version for another week or so and there are also free ebook and audio book versions. (In keeping with the idea that "time is money," you actually have to pay for the abridged version of the audio book, which will save you three hours of listening time!)

I opted for the unabridged version -- here's my take: Despite the "radical" portion of its title, most of the book isn't that radical. Anderson provides the history, with many examples, of businesses that have thrived with free content, ranging from the free Jello cookbooks used to sell the actual product to the birth of ad-supported radio to today's free online services -- Google, etc.

Anderson's case for free digital goods boils down to this: Once you move from atoms (physical goods) to bits (digital files), the marginal cost of each copy approaches zero. In this situation, whether or not the manufacturer or producer of the product likes it, the option for free is unavoidable and you're simply fighting gravity if you try to stop it. Moreover, today's digital savvy consumers (particularly those under 30) have an instinctive understanding of this idea of zero marginal cost, they simply don't regard file sharing or digital copies as theft. Rather than resisting it, content producers should embrace free, and make their money on other goods and services, some of which will be promoted by free goods. In the case of Free the book, for example, while there's no charge to read the digital version or listen to the audio book, you'll pay big bucks to hire Anderson to come speak to your organization or business. The "freemium" model, where a small percentage of consumers pay for an enhanced version of the free version, such as when online gamers who play the free version are subsidized by a small percentage who pay for the premium version, also gets a lot of attention.

As with the Long Tail, which also started as a Wired article, the original magazine article might have been enough -- the basic premise is easily explained, the book format essentially allows for more background and examples in support of Anderson's initial idea. Still, it's an interesting read/listen, with lots of background on economics and consumer psychology, even if you're not completely sold on the idea. (The main criticism in Malcolm Gladwell's review of the book is that Anderson glosses over the fact that even if per-unit marginal costs approach zero, they can still add up if you're dealing with millions of units. His example is the hundreds millions that Google spends on bandwidth fees for YouTube videos. Plus there are other costs associated with the creation of products beyond the pre-unit manufacturing costs.)

Anderson also addresses -- and better articulates -- some of the same issues that I've been grappling with in this blog for the past several years, such as the attention economy and the fact that content isn't scarce any more, but time the available to consume it is becoming more precious every day. Sometimes, however, in his enthusiasm for free, Anderson gets a bit carried away, as when he includes restaurants which offer free condiments and malls with free parking as examples of business models that are "built on free."

As for Anderson's take on free music, I would've loved some additional analysis. In his defense, the book isn't called Free: How The Music Industry Can Thrive By Giving It Away, but I thought his treatment of recorded music in the age of free was a little breezy. He provides the usual anecdotal examples -- Radiohead deciding to "give away" its In Rainbows album (not technically true, as it was a name-your-own-price experiment), Prince giving away a CD in a Sunday newspaper, etc. -- to paint an optimistic picture of how musicians can harness the power of free music while making money from live shows, premium versions of the recorded music, and merchandise. While RCRD LBL and Pandora receive brief mentions, he didn't address Spotify, Last.fm, or other ad-supported ways for music fans to stream or download tracks.

I'm not anti free music (my band the Layaways is giving away the mp3 version of our latest album), but there are some major issues relating to free music that I wish Anderson had addressed:

1. The attention economy: As Anderson notes in the book's coda section, "The first to Free gets attention, and there are always ways to turn that into money." The Radiohead experiment worked in part because Radiohead was the first superstar act to try it. But what happens if/when dozens of major acts do the same?

2. Another major theme of the book is abundance vs. scarcity -- when something becomes abundant, an adjacent scarcity emerges, and that's where there's money to be made. (If the software is free, for example, charge for supporting that software.), Anderson's main thought on music is that the promotional value of free music files can help acts earn a living from live performances.

Yet there are only so many live shows most fans can attend each year. If recorded music is destined to be free, then musicians are left to compete for something that is ultimate more scarce than the dollars of music fans, the amount of time they can devote to seeing live music. Granted, consumers are willing to pay much more for a concert ticket than a CD, so you don't need to sell as many tickets as you do CDs or digital albums to make the same amount of money.

One other thought here is that, due to online distribution, it's possible for a small act to literally have listeners around the world. Yet there's no practical way for that act to perform for all of those listeners and make money from ticket sales.

3. Touring income dries up as soon as the artist is unable or unwilling to tour. As Anderson notes with his example of manufactured Chinese pop stars who make all their money from touring and corporate-sponsored appearances, the singers complain about losing their voices from all the live performances. Also, if recorded music becomes free, there's no possibility of the retired musicians (or their heirs) earning money from their back catalogs.

4. Finally, and this a much larger issue, but it's important to distinguish between the overall music industry and musicians when evaluating the merits of free music. I'm not bashing the major labels, but I think it's fair to say that the traditional "recoupable advance and recording and promotional costs" model has -- historically -- done a poor job of transferring money from consumers who purchase recorded music to those who create the music. A relatively small number of artists earn big bucks in recording royalties, while many musicians who sell tens or hundreds of thousands of units never recoup and hence never see royalty checks. (In fairness to the labels, they lose money on most of their releases...)

If the old major-label is the only model, free music becomes much more attractive for artists, as many of them earn relatively little from the sales of recorded music. But in today's world of online distribution, it's possible for self-released artists to receive a large portion of the purchase price of every unit of music sold -- 70 cents from a 99-cent iTunes download, for example. Even though the sales of recorded music are plummeting, it's possible to earn more money on fewer sales.

These shortcomings aside, the book is definitely worth a read or listen. And -- please forgive the pun -- you can't beat the price.

tags: digital music Free, the book Chris Anderson free music

The Drought

2009-07-30T16:20:00.002-05:00

Sorry for the lack of recent posts. Please check back tomorrow for a long review of Chris Anderson's Free: The Future of a Radical Price.

tags: digital music free

Chart Watching at eMusic

2009-07-16T14:02:00.004-05:00

A little more than two weeks after the introduction of Sony material to the eMusic catalog, I'm somewhat surprised by the top download charts: Except for Michael Jackson (no explanation needed), the "top 15" charts for the day, past week, and past month all look fairly similar to the pre-Sony charts. That is, they're dominated by recent indie rock releases -- acts Spoon, Dinosaur Jr., etc.

However, based on the charts alone, I wouldn't necessarily say that eMusic subscribers aren't embracing the Sony catalog. There's a lot of new material, and absent something like the death of MJ, it's unlikely that everyone will gravitate toward the same Sony releases. If subscribers are downloading a wide range of Sony material, individual releases aren't likely to rise the top of the charts.

Another contributing factor is the eMusic -- perhaps in deference to the subscribers angered by recent changes in subscription plans that coincided with the addition of the Sony material -- has so far taken a fairly low-key promotional approach with the Sony catalog. Aside from some of the "Six Degrees of" features, well-known Sony releases aren't plastered across the home page or the main pages of the site.

Looking beyond the top 15, Bruce Springsteen and the Clash are, as of this afternoon, the first of the Sony additions to appear regularly on the eMusic charts.

related: Album Pricing at eMusic, More Thoughts on the Changes at eMusic, Sony and eMusic: Why the Per-Track Label Payout Might Not Change

tags: digital music eMusic Sony Music

Fast Turnaround for Pandora Submissions

2009-07-13T10:47:00.003-05:00

The turnaround time for Pandora's new artist submission process is excellent -- less than two weeks: I uploaded two tracks from the latest Layaways album for review on June 26th and had a response on July 8th.

Unfortunately, it wasn't the one I was hoping for, as we received the "thanks, but no thanks" rejection e-mail. I was slightly surprised -- it's not that I think that highly of my own music, but our previous album is already in the Pandora catalog.

So either Pandora has become more selective or my band's music has gotten worse, or some combination of the two!

No sour grapes here -- you can't expect everyone (or one particular Pandora reviewer) to like everything. But if you're curious, here are the two tracks that didn't make the cut:

The Layaways -- All Around the World
The Layaways -- On Any Given Saturday

tags: digital music Pandora The Layaways

CD Baby Changes Commission for Direct-Sold Downloads

2009-07-09T09:44:00.003-05:00

This weekend, CD Baby will flip the switch for its redesigned retail website. The changes will include:

-- single song downloads
-- artist pages, in addition to the current album pages
-- a music uploader -- artists don't need to mail in a physical disc for download-only titles
-- download cards

As noted in an earlier post, the introduction of single-song downloads was clearly going to necessitate a change in CD Baby's commission for direct-sold downloads. The new commission on direct digital sales will be 25%, while the old rate (9%) is retained for sales via iTunes, eMusic, Amazon MP3, etc.

From an e-mail sent yesterday to CD Baby artists:

In order to launch the much-anticipated single-song downloads (see below), we had to make a change to our fee structure. This adjustment will only affect download sales purchased from our own cdbaby.com retail website (it won't affect digital content we distribute). Beginning July 11th, CD Baby's cut on all download sales purchased directly from cdbaby.com will be 25% (with a minimum of 29¢). This change is actually vital to our continued success as a company, and here's why...

The credit card fee we pay to our bank whenever a customer makes a purchase on cdbaby.com ranges from 27¢ (for a single) to over 50¢ (for an album or CD sale) per transaction. Clearly, at our old rate of 9% of 99¢, we'd actually be losing money on every single download transaction. That’s not a good business model. We've been praying daily that the banks would choose the philanthropic path and waive all their credit card processing fees, but alas, reality persists. And that's why the new retail fee structure is necessary.

For all your other digital distribution income (iTunes, Rhapsody, eMusic, etc.) we're still paying you 91%...

tags: digital music CD Baby digital downloads

Amazon MP3 Sings the Blues

2009-07-06T17:09:00.002-05:00

I'm all for broad mindedness when it comes to defining musical genres, but check out the bestselling "blues" songs at Amazon MP3. Some of my favorites in the current top 25:

4. "Get the Party Started" -- Pink
12. "Wind Beneath My Wings" -- Bette Midler
13. "Brandy (You're A Fine Girl)" -- Looking Glass
14. "Forever Young" -- Rod Stewart
21. "One of Us" -- Joan Osborne

There's obviously something screwy with the chart programming or with Amazon's genre classifications. I'm pretty sure that Pink song has been near the top of the chart for several months now.

tags: digital music Amazon MP3 AMZN

Album Pricing at eMusic

2009-07-02T13:00:00.005-05:00

The new "album price" at eMusic, introduced in conjunction with the addition of portions of the Sony catalog and price increases for subscribers, has produced some interesting results.

It's a mixed bag for subscribers. In some cases, album pricing yields some incredible deals on a per-track basis. This eMusic message board thread highlights some of these relative bargains.

The downside is that the 12-track album price is used for a fair number of Sony albums with fewer than 12 tracks. In some cases, such as Aerosmith's 1970s releases, they're available only as full-album downloads, while in others, select tracks (usually the most popular ones) aren't available a la carte.

The Bruce Springsteen classic, Born to Run, is one of the best examples I found. You can download seven of the album's eight tracks individually, but if you want the title track, you'll have spend 12 downloads to get the entire album. So recent subscribers, who will soon be paying 50 cents a download, will spend $6 dollars on the album. That's not a horrible deal, but it's closing in on the $7.92 price at Amazon MP3 and iTunes. However, if you want to bother with the hassle of assembling the album from different sources, you could purchase the title track from Amazon for $1.29 and then complete the album by downloading the remaining seven tracks from eMusic, for a total price of $4.79. The track is only 99 cents at iTunes, so it's only $4.49 if you don't mind mixing digital file formats.

The Michael Jackson catalog will no doubt be topping the eMusic charts over the next few weeks, but most of the late singer's hit singles are "album only." The version of Thriller available at eMusic don't include bonus tracks, but with the extended versions of Off the Wall and Bad, the additional tracks reduce the per-song price.

And if you're looking to pick of the best-known tracks from some Sony artists on the cheap, eMusic isn't the place to go: tracks such as "Cum On Feel the Noize" by Quiet Riot and "What I Like About You" by the Romantics are album-only. If you only want the hits, you'll be better off with Amazon MP3 or iTunes.

My biggest disappointment? Lou Reed's Metal Machine Music, a four track release, is only available for the 12-download album price!

tags: digital music eMusic album pricing

Customer Reactions to Amazon's On Demand CDs

2009-06-29T15:38:00.004-05:00

When writing my previous post, I was wondering how Amazon.com would describe its "on demand" CDs -- and what the customer reaction would be. Not surprisingly, a few customers aren't fans of it. One review of the new Cheap Trick album, which is an Amazon exclusive for the next month (I believe a standard CD version will be available in July):

This is musically the best Cheap Trick album in years...and years! Some of these tunes (like "Sick Man of Europe") are up there with the best songs they have ever recorded. However, DO NOT order this CD from Amazon. I unfortunately did and failed to read the fine print... This is a CDR. The packaging is a REALLY cheap trick... super thin crappy paper that is printed and put together horribly. The booklet and tray card aren't even trimmed correctly. The disc face art is okay, but it's a CDR, not an actual replicated disc. I can't believe they are trying to pass this off as a major release at a normal CD price. I want my money back! Will this ever see a proper release on CD????

I have to think this review might not be so harsh if the price of the "on demand" CD were a littler closer to that of the Amazon MP3 version of the album. To me, a CD-R is definitely superior to digital files -- you're getting something in terms of liner notes and you're free to encode the songs in your desired file format and bit rate.

But until on demand discs become more prevalent, my guess is that some customers who are willing to pay up for the physical disc are going to perceive the premium for the CD-R version as too much. (Even though manufacturing costs make identical pricing for the mp3 and CD-R versions impossible...)

Amazon does note that it's a CD-R in the editorial description, though this information is "below the fold" and well after the product description that says "Audio CD."

This product is manufactured on demand using CD-R recordable media. Amazon.com's standard return policy will apply.

tags: digital music Amazon.com AMZN on demand CDs Cheap Trick

Pandora Raises the Bar?

2009-06-18T13:11:00.005-05:00

A couple years ago, I was on the "Disintermediation 2.0: How Technologies Are Flipping the Music Business On Its Head" panel at the Future of Music Coalition's Policy Summit. In response to audience member's question about the need for indie musicians to manufacture CDs, I said that it was still necessary for promotional purposes -- that college radio stations weren't going to download your mp3s and probably didn't want a CD-R with your name written in magic marker. Pandora founder Tim Westergren, who also on the panel, was very quick to say that Pandora would be happy to add that homemade CD-R to its library.

Not anymore, however. Pandora recently revamped its music submission process and will only accept material that's already available for sale on Amazon.com as a CD, not mp3:

We're very excited to announce a brand-new process to submit your music (or your band's music) to Pandora.

You'll need:
* a CD of your music
* a unique UPC code for that CD
* your CD to be available through Amazon (must be a physical CD, not just MP3s for download)
* the legal rights to your music
* MP3 files for two of the songs from your CD
* a free Pandora account, based on a valid email address, which can be associated with your music

The Pandora FAQ page links to Amazon's Advantage program, which requires shrinkwrapped, manufactured CDs, not CD-Rs. Pandora earns a referral fee when listeners click through to buy music from Amazon, though Amazon pays referral fees for both mp3 sales and CDs. So protecting the referral earnings probably isn't the reason for requirement -- it seems likely that it's simply a hurdle that's been set for potential Pandora artists.

I can't say I blame Pandora for the move -- given the amount of self-released music out there, requiring Amazon-available CDs is one easy way to cull potential submissions to its library. If Pandora, however, is willing to accept the "on demand" CD-Rs that comes from Amazon's on-demand CreateSpace program, then it's still a relatively low hurdle to clear.

Update: I've been reviewing that Amazon Advantage guidelines and can't find the reference to manufactured audio CDs vs. CD-Rs. The current requirements for CDs are a UPC, a bar code, and shrink wrap. Previously, a "no CD-R" rule was definitely in place. So I'm wondering if Amazon dropped the requirement after the launch of the CreateSpace program.

tags: digital music Pandora Amazon.com

Thursday Odds and Ends

2009-06-11T12:50:00.003-05:00

Via Marginal Revolution, a new working paper from Harvard Business School -- It Is Okay for Artists to Make Money...No, Really, It's Okay:

How can this be? How can the best jazz artists in the world earn so little? Might this be the work of coercive commercial powers?

Possibly, at least to some extent, in the case of musicians. Big companies do have a lock on distribution. Or anyway, they have had (things are getting a lot more interesting, distributionwise, in the age of the Internet and iTunes). But the real the problem here, we suggest, is not with the operation of commerce but with its failure to operate, or with its failure to operate with adequate sophistication. Something has gone wrong with the market for jazz musicians when such musicians this good get paid this badly. Richard E. Caves, economist and author of Creative Industries: Contracts Between Art and Commerce, argues that artists get paid poorly because they will do their work anyway. An inner drive makes artists grateful for the opportunity to work, so you can get by without paying them much.

This year's Bandwidth Conference is scheduled for August 27th and 28th. The featured speakers are Jeff Price of TuneCore and Livia Tortella of Atlantic Records.

Some FAQs from eMusic about the new subscription plans and "album pricing." No details yet on how many albums will eligible for the 12-download price.

And Paid Content speculates on possible reasons for the exit of Last.fm's founders.

tags: digital music eMusic Last.fm