There has been a lot of complaining in the media for the past few weeks regarding online privacy. A fantastic infographic was recently published which is helpful in visualizing how Facebook has changed their default privacy settings from its inception in 2005 to today.

I am a bit mystified when people complain about online privacy — do they not understand that the nature of the Internet is voyeuristic? On the flip side, do people who play-down the importance of online privacy not understand what technologists are able to learn from your ranting through social media?

Do you think that privacy is as big an issue as some media outlets have made it?

In January the U.S. Department of Justice approved the merger of Ticketmaster and Live Nation — creating the behemoth Live Nation Entertainment. LNE’s deal with the DoJ required that several divisions of each company would be broken-off to allow for competition. Here enters Apple.

The DoJ sanctioned Philip Anschutz’s AEG and Comcast as definitive competitors. Who knew Apple would join the race — and possibly be best poised to win?

Apple has filed a patent describing an incredibly detailed method of providing live event ticketing for live concerts, weddings, sporting events, and more — with the hope that they further cement iTunes role as the go-to for all entertainment related activity for consumers. Although Comcast has the most direct connection to the consumer via television, consumers are more familiar with computer-based purchasing than television-based purchasing. This only leads to speculation that it is within Apple’s reach to take a controlling stake in the live event ticketing business.

It isn’t just big businesses that Apple’s new venture will effect. Start-up companies like Mobile Roadie, Blue Haze, and Myxer were hedging a bet on dominating this market.

Be sure to give the merger details of Live Nation Entertainment and Apple’s patent filing a close read. Having a strong understanding of this marketplace shift will be key for decision-makers in the coming months as Apple begins to approach the record industry with their newly proposed financial models.

Who knows, maybe Apple will allow concert-goers to attend a single song of a concert for $0.99?

Do you think Apple will create a more equitable proposition to ticket buyers by eliminating Ticketmaster’s infamous model of service fees?

When working with a “top ten” MySpace artist several years ago, I was privy to the financial aspects of their earnings from MySpace Music. I was stunned by how little had been earned. Since then I have been one of the few technologists who evangelize that physical product is still king.

Now don’t get me wrong. Digital sales and direct-to-consumer marketing are the wave of the future — and in some genres the wave of the present. However, if you make decisions by the numbers (which you should) — you must acknowledge that digital sales will not pay for hotel rooms, van rentals, and fuel for 95% of most artists.

Information Is Beautiful has created a fantastic infographic which compares the sale of physical CD’s to revenue generated by Spotify, an ad-supported streaming music service currently only available in the United Kingdom. As promised, their work is beautiful! This information is something we should all keep in mind when doing due-diligence in reviewing potential technology vendors.

Wouldn’t it have been wonderful if you would have been quicker to embrace YouTube or Twitter? Instead of waiting to see what everyone else is doing, wouldn’t it be great if you could instantly parse good ideas from bad? In this article, I explain the key principles which early adopters use.

Marketing has changed at the hands of social media. Although it is easy to describe the tactical changes (e.g. artist-made videos and tweets), it is often difficult to identify the over-arching, strategic change. Without knowing how to identify the strategic principles that work every time you use them, it is easy to fall-back to old practices that do not work anymore.

The idea is really simple: Do not try and change the momentum of the fan. Find ways of using their momentum to drive them deeper into what you want them to pay attention to.

Practical example: Which of the two marketing promotions do you think would work better?

2. Coca-Cola purchases vending machines and scoreboards for schools in exchange for prominent placement of their logo.
3. Coca-Cola creates an extreme sports event in the parking lot of the local mall and markets the event at radio.

It isn’t that the second idea is not a good one. That exact example works well for some niche markets. The problem is that the second idea attempts to modify the natural behavior of the student — and will not produce results for the majority of students. The first strategy also presents itself daily, where the second idea is a one-time event.

Brands like Coca-Cola have mastered the ability of putting their logo in places that are important and highly-visible. We should do the same when marketing an artist online.

I call this concept Centralization vs. Syndication — centralization being the old-school ideology of forcing the fan to do something outside their norm, syndication is the new-school ideology of putting your brand in places where people already are looking.

The problem is not that you do not hear about the new, hot trends. The problem is that you hear about so many of them that you do not have time to figure out to which you should pay attention.

When you are being pitched a new technology idea, don’t clam-up — explore the ideas in more depth by asking six simple questions:

2. Am I attempting to change the behavior of the fan?
3. Does this technology tool limit the contents availability to a niche?
4. Will the fan be redirected away from the web site where they discovered my promotion in order to enjoy my content?
5. Will the fan be forced to download and install something?
6. Is this technology something that will be appealing only to my core fans?
7. Is the fan likely to encounter my content only once?

If the answer to any one of those questions is “yes” — you have a yellow light. You should always slow down for yellow lights. If your answer to two or more questions is “yes” — you have a red light. You know what to do at red lights.

Lastly, I highly recommend that you scan the headlines of TechCrunch and Mashable daily. These web sites have an incredible reputation for accurately predicting the success or demise of technology ideas. If you are pitched an idea that does not have a write-up on one of these two sites, you have a yellow light.

What new idea have you seen that you believe will be a big part of promoting artists on the Internet?

Scatter Tunes is software for desktop computers which allows music fans to have a more interactive experience with an album, called V-Albums. Scatter Tunes works directly with record labels and, in turn, the record label promotes the V-Albums as a premium offering to fans.

I’m a big proponent of finding ways of creating premium offerings for fans. As I have stated in the past, I believe music has become commoditized in the eyes of young consumers and the industry must take immediate action to foster ideas that create new value for music products. Although I appreciate the sentiment of what Scatter Tunes is attempting to accomplish, I think their concept is a big miss:

2. The Scatter Tunes desktop application does not have a comprehensive catalog of music. If you are a music fan who has downloaded Scatter Tunes and you want to purchase a song from an artist who does not have a deal with Scatter Tunes, you will need to use iTunes. Correction: I was totally incorrect on this statement — ScatterTunes has a full store with over 3 million products.
3. Music fans don’t want to download software to their computers. Not only is it inconvenient but many consumers still live with the mindset that anything you download from the Internet is loaded with viruses.
4. There is no option to embed the product on your website or social network profiles.
5. With the launch of Apple iPad this week, iTunes will certainly develop content which is just as good as the V-Album.
6. As far as I can tell, Scatter Tunes doesn’t share consumer data or provide the publisher a method of directly communicating with the music fan.
7. If you are going to force the fan to download a third-party product, that product should not recommend competing products.

Lastly, as a technologist, I find the use of “patent pending” on the Scatter Tunes website a bit ridiculous. There is nothing that they are doing that a dozen other companies haven’t failed at doing over the past decade.

What could Scatter Tunes do to turn things around?

2. Dispense of the requirement for a desktop-based application and move toward a widget-based technology that can be embedded on any website.
3. Share consumer data with publishers and make it easy for publishers to further engage music fans who have purchased their content.
4. Offer a superior financial proposition to iTunes or the other digital service providers.

In summary, Scatter Tunes is masterful at branding and creates some amazingly good-looking content. However, I do not believe Scatter Tunes’ proposition to the marketplace holds enough lasting value for it to become a sensible investment of time or resource. iTunes will catch-up and overtake the Scatter Tunes value proposition in short order.

What else do you think Scatter Tunes could do to improve their proposition to the marketplace?

I am often asked about the challenges technology poses to music. Hipsters expect me to embrace emancipation — expecting I don’t oppose P2P. Music executives expect me predict their demise — anticipating I don’t appreciate their accomplishments. My response surprises people.

As I see it, the responsibility of a record label is to leverage the relationships, reputation, and capital it has acquired through its past work to:

2. Create value for shareholders by discovering new talent and nurturing existing talent.
3. Manage the expectations of artists on the complexities of a successful career.
4. Provide creative guidance and an resources for the creative process to thrive.
5. Attract high-caliber collaborators.
6. Identify market opportunities, create awareness, and drive sales.

Notice that I didn’t detail anything specific (e.g. retail, distribution, marketing, or radio). I am framing responsibilities, not tactics.

I don’t believe our core responsibilities to the artist are any different today than they were two decades ago. We have all seen the troubling statistics and know that change is desperately needed in in our industry. If our core model doesn’t need adjusted, what does?

Record labels must acknowledge and change:

2. Treat record deals like a dot-com company would.
3. Fire people who can’t adapt.
4. Invest in initiatives only when results are quantifiable.
5. Create additional sales appeal on top of the music the artist delivers.
6. Understand that social media is a total deviation from the traditional music marketing model.
7. Piracy is not new.
8. Require more from artists.

Artists must acknowledge and accept:

2. Music is a bad investment — if it weren’t banks would be in the music business.
3. A proper 360° Deal is a good thing.
4. It takes perspective, experience, analysis, and money to create a successful business around your music — none of which you have.
5. The Internet isn’t a replacement for a record label. There are too many channels of distribution and promotion for you to manage and still do what you do best. However, you still need to do due-diligence on prospective record labels alliances.

I have no doubt there are other things which need to change, too; this is not an exhaustive list. But I believe I’ve covered some of the major issues. If music organizations and artists can adopt these principles we’ll be well on our way to a healthier music economy.

Question: What other tactical changes need to be made to music business for it to survive?

Although we are seeing a growth in paid-for digital music, 95% of all digital music is acquired illegally. Big industry players are scrambling to prevent recorded product from becoming too inexpensive. News flash: music is already commoditized. It is time to change strategies.

Why do I say that music is already commoditized? If you consider that the average song is sold for $0.99 — but for each purchased song about 100 more are downloaded illegally — the industry is really only capturing about a penny per song sold. We do not like to talk about that, do we?

Let’s take a look at our strategy for the past decade:

What hasn’t worked…

2. Digital Rights Management
3. Empowering artists to sue P2P networks (think Lars Ulrich)
4. Public service announcements on television
5. Filing lawsuits against fans
6. Appealing to Internet service providers to block P2P’S

What I think we should try…

2. Use the combination of devices (e.g. iPad) and media to create experiences that cannot be duplicated on P2P
3. Find a method of utilizing game mechanics to enrich the fan’s experience in a way which cannot be duplicated on P2P
4. Flood P2P networks with truncated audio files
5. In an act of civil disobedience, develop and release viruses into P2P networks which render P2P clients unusable
6. In an act of civil disobedience, use DDoS to slow down P2P networks to the point that they are no longer enjoyable to use
7. Cooperate with P2P’s and create a flat-fee license which P2P users can purchase allowing their file sharing to be legal

The last of the options I have listed is the only option which I consider to be practical. However, I am not above fighting fire with fire.

Do you believe that music business professionals have accepted piracy as an unresolvable issue?

I remember thinking that there was a culture clash waiting to happen when OK Go signed to EMI in 2001 — after their videos “went viral” on YouTube. When EMI recently began blocking content from YouTube’s embedded players, it became a matter of time before the relationship would end.

I frequently hear fellow music professionals blame piracy for the subpar state of the music economy. Although I agree with their premise, they treat piracy as though it is something new. Nothing could be further from the truth. Wouldn’t you agree that theft has always been a core issue?

1. I vividly remember visiting a discount department store as a child and wondering why the Beach Boys cassette my Dad was buying was tangled-up in an anti-theft device.
2. I recall buying blank cassette tapes to create mix tapes from my local incarnation of “the top 8 at 8″.
3. The invent of the double-deck boom box made it possible to make exact copies of cassette tapes.
4. Then there were those alarm systems installed at the front doors of music stores in the 90′s.
5. Before home Internet speeds became quick enough to upload MP3′s there was an uproar over computer-based CD burners/duplicators.

I think it would be in everyone’s best interest to understand and admit that there has always been a significant problem with theft in the sale of recorded product. It is okay to admit that a large portion of music fans have managed to suppress the natural, moral imperative to not steal. People knew it was wrong back then just like they know it is wrong today.

You must admit the irony: Music business, one of the primary purveyors of messaging about sex, violence, and drug culture is now complaining that it has been the victim of morally corrupt behavior.

We should also remember that our industry collectively decided to bail on the best form of DRM ever created — vinyl albums. Had we done proper due-diligence on the compact disc, we would have realized that duplication and digitization was right around the corner.

What other pre-Internet methods of protecting music from theft am I forgetting about?

The value of a record label is in its relationships. If People.com loves your big artist, they will pay attention to your new artist. The same for radio. However, a million fans on Facebook for your big artist does not do squat for your new artist. What can you do to game the system?

Unfortunately you cannot game the system. It is important that we begin to adjust our attitudes toward social media. Political connections do not work. It takes bodies and time to create a meaningful relationships between bands and fans. It does not start with street date and stop when sales drop-off. Investing in social media happens every day, all year, every year.

You must employ people (not outsourcing or using interns) who really care about the music they are representing and give them access to the artist and the tools to create media which get fans excited. These employees will be the ambassadors of your artists to the world. You wouldn’t hire a drifter to a personal assistant, right? In the same vein, treat the hiring of these employees seriously.

What is the best model you have observed for creating connections between bands and fans?