MIDEM(Net) Blog

Gerd Leonhard: The Future of Music and the TeleMedia Economy (slideshow)

Gerd Leonhard — Thu, 05 Nov 2009 17:19:35 +0100

I gave a speech at the 7th Telco2.0 executive brainstorm in London, today, and because there was a lot of stuff that I think has great relevance to the music industry, I have put together a special slide-show for my MidemNet blog readers, below. You can view a larger version of all images by clicking on the link, below. If you want to see the entire presentation please go to Slideshare to download the PDF.

I am sure this will be a big topic for MIDEM 2010, as well. Please comment, tweet etc!

Phil Hardy: A few words in defence of the majors

Phil Hardy — Thu, 05 Nov 2009 09:48:11 +0100

In 2008, the view calculated that the four major international record companies had a collective global market share of 77.3%. Downsizing that a little, say to 75%, on the basis that as a ratio the majors release fewer titles than the independents and you might expect when you turn to the review pages of the national press that around three quarter of the reviews would be of albums on the majors’ labels and a quarter on independent labels. You’d be very mistaken.

This weekend I tracked the reviews of non-classical albums in the Saturday edition of the Daily Telegraph, the Sunday Times and the Observer’s Music Monthly magazine. Here are the figures:

Majors Independents

Daily Telegraph 1 6

Sunday Times 2 7

Observer MM 18 11

Total 21 24

This means that of the 45 albums reviewed, in total only 47% were released by the majors, a figure that falls to 37% if one omits the 18 albums given two sentence reviews by the Observer’s Music Monthly magazine.

Moreover, if you leave out “event” releases – the Robbie Williams’ album, a four CD Frank Sinatra set, or the Norah Jones and Michael Jackson sets – the percentage falls even further.

The discrepancy between albums released and reviewed is partially understandable and yet at the same time puzzling. If you’re a young would-be gunslinger of a rock critic it’s highly unlikely you’ll be much interested in Barbra Streisand or Snow Patrol now – earlier they were cutting edge, or could be argued to be so, and so a reviewer could make his mark, pushing the band forward or stamping firmly on its hopes.

Always better to write about “the next big thing”, whether it is or not, than the fourth album by Starsailor. Similarly, outside the dedicated music press, national newspapers, seeking to develop and grow younger audiences, want “the new”, want to be the place where “the new” is regularly to be found. But about the “once new” -- a broad range, for example, Mary Chapin Carpenter, Steve Earle, Elvis Costello, Eels, Metallica, Iron Maiden, Lionel Ritchie, Diana Krall ….

Of course some of them (Carpenter and Earle, for example) have been dropped by the majors. Why? Well one reason is that they don’t attract the attention of reviewers, so their sales slip (and their contracts follow). Some, like Richard Thompson and Earle are happy in independent land. They like their freedom. But not everyone is that way constructed.

So two weeks ago Lyle Lovett, an artist who has had considerable critical success, released Natural Forces, his 13^th album – 11 studio outings, one live album and two compilations, all for various UMG labels -- to a resounding silence in the UK’s mainstream press.

Or think about re-issues. We all praise Ace and its brother re-issue labels, even those who wait for the latest Bear Family mega compilation and then slice it up into a series of out of copyright cheapies.

The majors are best known for mainstream re-issues. Some of these have been enormously successful, such UMG’s Dreamboats and Petticoats series in the UK, which has virtually created a new market for re-issues.

Releases, like these are not reviewed rather they are written about in the press in the manner of event releases by the likes of Robbie Williams in articles about silver surfers and shopping patterns in supermarkets.

But, what of the likes of Davy Graham? A hugely important guitarist, operating on the fringes of jazz and folk in the UK in the 1960s, Decca’s two CD anthology has received little publicity. Over the years, like UMG, EMI, SME and WMG have put out similar groundbreaking re-issues to a mixed reception in terms of publicity.

In general, the exceptions noted above – and it’s early days yet for Davy Graham -- the re-issues of the majors get (almost) reasonable press coverage, but how many Lyle Lovetts are there on the majors’ rosters and how many will there be next year?

The cost-cutting practices of the majors will inevitably mean less. But each act axed means sales of between 40,000 and 50,000 albums lost. Those lost sales add up. They might also add up for the national press, in terms of (new) readers who don’t read the dedicated music press but have a wider interest in music than Greatest Hits and Dreamboats .

How to reach them? Print a wider range of album reviews.

Denzyl Feigelson: The Fanfarlo Four Step

Denzyl Feigelson — Fri, 30 Oct 2009 13:45:43 +0100

Fanfarlo have a wonderful story. This hard-working band have been independently incubating (distributing their album "Reservoir" through AWAL into iTunes in March 2009) until their recent licensing with a major label. They created a creative campaign that attracted a solid and growing fanbase, and turned that experience into loyalty & sales.

Their campaign is quite talked about - The Fanfarlo Four Step - 1) Don't Suck, 2) Get Others to Introduce you to their Audience, 3) Make those Audiences an offer they can't Refuse and 4) Repeat. I remember coming in contact with the band in early 2007, looking for great emerging artists for the first iTunes Festival at the ICA. Their music was a regular on my iPod. Then I heard Bowie was a fan. I started getting emails from the band genuinely looking for opportunities. Their newsletters were regular, and interesting. The quality of their live performances and recordings always stood out. Then they assembled just a great group of experts to assist their growth - great management, their Topsin widgets were brilliant, they also enlisted Radar Maker, who create custom digital campaigns, thus allowing the sharing of the Fanfarlo experience into all social media quite effortlessly. Cleverly they knew they also needed to conquer the vast US market bringing in Sneak Attack Media and BigMouth PR, also one of my favourite ethically produced merchandise companies - Sandbag . I was also noticing ex industry pro's in the US championing their cause. The team a band creates around them in conjunction with a fan army, add great recordings and live excitement - a winning combination. For a limited time the band offered a full download of the album for $1, that offer also included 4 bonus tracks. Tickets to live shows were also offered at a reasonable price.

All this activity created a strong foundation for success - huge fanbase, sales in the US, huge digital impressions, sold-out shows, most blogged about on reputable sites culminating with a new home on a major. Its a great story, tons of hard work, more hard work!! and couldn't have happened to a nicer group of band, management and team members.

Hugo Amsellem: Why Spotify could not have been French

Hugo Amsellem — Wed, 21 Oct 2009 16:00:02 +0200

In this first guest post, French music industry blogger Hugo Amsellem explains why local music streaming service Deezer may have difficulties whilst Spotify should flourish: over-reliance on music streaming alone is not a sustainable model, he argues...

For those who missed the news, Deezer just raised a second €6 million round from private equity funds.

Formally known as BlogMusik, the service was forced to shut down due to a lack of licensing agreements. 2 years and many negotiations later, the company eventually came up with a legal and complete platform, ready to roll. By then, competitors did launched other innovative streaming services, and even if Deezer is perceived as a success with 10 millions users worldwide, it appears that the service lags behind its competitors. This "Deezer" example raises a problem that relates to a culture of entrepreneurship and innovation in France. How do French startups always end up as the second or third players in their market?

Same Draw

Back in 2007, if I remember correctly, France was the leading country in legal streaming. Then, during the following 2 years, no major innovations were made, apart from additions of back catalogue. How do you make profitable platforms without service innovation, and business model innovation? Well you don't, and you spend 2 years burning the cash you just rose because you have to keep the boat afloat and pay the interactive royalty rate in addition of the guaranteed minimums required by the major labels.No need to show proof that the free streaming of songs on the internet is not profitable, but if you still want to be sure, read this article. With unassumed growth, streaming services go straight to their doom and they know it.

No risk, no success!

So, if these startups need short-term cash to consider profits in medium and long term, why don't they raise funds? In France, large capital investments in insecure areas are very rare. French Investors do not believe in the profitability of a service whose business model is largely yet to be defined and who requires a lot of money to survive before reaching the break even. In the meantime, Spotify raises € 50 million, and innovates throughout the value chain of online streaming to reduce uncertainty and propose a many-headed business model to investors.

Born in the wrong time and wrong place?

This scenario could suggest that French tech startups often arrive on a virgin and small national market with a relatively low demand. For example, apart from the early adopters, uses of online music streaming were not real and were yet to be democratised. Companies like Deezer or MusicMe made the first part of the way, showed the way for others, but could not innovate long enough in order to make profits from gained and retained market shares. This seems to be a major obstacle to the emergence of a French Google or any French market leader startups.

Are - what we (and the French government) often define as "French entrepreneurship success stories"- becoming other failures? Will our reluctance to take risks result in following and uncompetitive firms? In this very case, it appears that un-innovative music streaming services will not survive, and that the only way out will be a takeover by a group of Telecom for whom music is a loss leader to sell subscriptions, and therefore for whom music does not necessarily need to generate direct revenues.So much for music diversity...

Ruth Mortimer: Tokio Hotel become space-age holograms to support traditional retailers

Ruth Mortimer — Tue, 20 Oct 2009 18:54:52 +0200

Ever been gutted at missing your favourite band live? You need worry no longer; music is going space age as German band Tokio Hotel becomes the first act to appear in hologram form in electronics retailers across Europe. Tokio Hotel's label Universal Music Group worked with agency Musion to create the band's first-ever "virtual tour", which transformed footage of Tokio Hotel performing live into three-dimensional holograms. This then allowed the band to perform "in person virtually" to local crowds in Media Markt stores around Europe over a three week period. The "performances" apparently drew up to 700 people at each store. Romain Delnaud, director of operations, commercial affairs, at Universal Music Group International, says that the initiative hoped to accomplish "our aim of supporting the traditional retail landscape which still continues to stand as a key player in breaking new acts on an international scale." You can see amateur video footage of an event in Holland from YouTube here:

It's an interesting idea that mixes the exclusivity of live gigs with the need to bring some more interactivity into traditional retail environments. But will it be successful and will we see more artists signing up for virtual touring?

Gerd Leonhard: Social Media & Music - a quick Overview (slideshow)

Gerd Leonhard — Sun, 18 Oct 2009 18:41:58 +0200

A picture is worth a 1000 words... hopefully you will enjoy these collected 'Social Media & Music' items. I will be doing a workshop at the MidemNet Academy on this -stay tuned! Gerd Leonhard

MIDEM 2009 conference video: Publishers, labels and societies working together

James Martin — Wed, 14 Oct 2009 10:29:50 +0200

As this panel illustrated, publishers, labels and collecting societies are coming together to unveil concrete initiatives of reinforced co-operation, like joint licensing of master and publishing rights, or improved operating efficiencies. This session explored how such initiatives can be developed and extended.

Speakers:
Jakob Hüttel, Head of International Legal Affairs, KODA (Denmark)
Andrew Jenkins, EVP, Universal Music Publishing Group (UK)
John Kennedy, Chairman & CEO, IFPI (UK)
Moderator: Jeremy Silver, MediaClarity

Ruth Mortimer: BSkyB sings about the launch of Sky Songs

Ruth Mortimer — Mon, 12 Oct 2009 16:23:01 +0200

Broadcasting giant Sky has announced it will be taking on Apple's iTunes digital music service with a new product called Sky Songs, out next week. The project has all four major labels on board - EMI, Sony Music Entertainment, Universal and Warner Music - along with a number of independents. It follows an announcement last week by Virgin Media that it too would launch a music service.

Unlike iTunes, where consumers can cherrypick the tracks they desire and pay for them individually (a micro-payments model), Sky Songs will use a subscription method, where people pay for access to a library of what claims to be more than four million songs. They can both download and stream tracks.

So will it succeed? Mike Darcey, Sky's chief operating officer, says that the new service "will reach out to consumers who want legitimate digital services offering choice, ease of use and great value. Offering legal access to digital music is a vital step in combating illegal downloading."

Yes, well, obviously anything rewarding artists for their work and cutting down on piracy is great. But music subscription services do not always prove popular with consumers as they tie people into contracts for set lengths. Consumers also worry about losing their library of music when they stop subscribing.

The real chance this service has of succeeding and really rivalling Apple where others have failed is in the sheer power of the Sky brand in promoting it and cross-marketing it with its other products. Spotify has already proved that music streaming online can garner consumer interest online and through mobiles and Sky can take the service onto its set-top boxes too.

Although competitors like Spotify and We7 are more established in this market, it appears that Sky and Virgin Media are keen to make a big noise by getting involved in music. Do you think they can succeed?

MIDEM 2009 conference video: Coke case study

James Martin — Mon, 12 Oct 2009 16:05:25 +0200

Coca-Cola has created a unique music initiative that ties into a global campaign (over 100 markets) in partnership with Atlantic Records/Warner Music Group and the entertainment marketing agency Brand Asset Group. Coke has brought together a select group of music's top artists and producers, across genres, to create and perform a new single while creating a unique business model. This session offered the possibility to learn from all stakeholders the steps of this very unique deal. Speakers:

Joe Belliotti, VP, Brand Asset Group (USA)
Jonathan Daniel, Manager of Fall Out Boy & Panic at the disco and Founder, Crush Management (USA)
Umut Özaydinli, Global Music Marketing Manager, Worldwide Sports & Entertainment Marketing, The Coca-Cola Company (USA)

MIDEM 2009 conference video: Live & Brands: Building win-win partnerships

James Martin — Mon, 12 Oct 2009 15:57:20 +0200

This panel explored how brands are moving beyond simply slapping their logos on stages, becoming true partners to an increasing number of events and artists.

Speakers:
Bojan Boskovic, General Manager, Exit Festival (Serbia)
Simon Lewis, President, Marketing Partnerships, International, Live Nation (UK)
Becky Morgan, COO, All The Worlds (UK)
Helle Müller Petersen, International Marketing Director, Tuborg (Denmark)
Elizabeth Schimel, Global Head of Music, Entertainment and Communities, Nokia (Finland)