Tipping Points

Apple Approves Spotify iPhone App Ahead Of U.S. Launch (AAPL)

Congrats to Daniel Ek for his calm perseverance in getting Spotify to this position.  Competes with iTunes with the slickest and most advanced streaming music service I've ever used.  And where did he get his catalog?  Check out the YouTube demo.

Apple Approves Spotify iPhone App Ahead Of U.S. Launch (AAPL).

Live Nation:Ticketmaster - A Clear Conflict of Interest

The Media Equation - Big Music vs. Fans and Artists - NYTimes.com.

If the prospect of a single company mounting a Guns n’ Madonna tour worries you, it also concerns some in the business. Via e-mail, Tom Morello, the guitarist in Rage Against the Machine, told me that a Ticketmaster-Live Nation merger could have huge consequences. “Fewer and fewer gatekeepers mean fewer choices and higher prices for fans,” he wrote. “One huge monolith means no choice at all. Fans and artists must develop some organized counterweight quickly or resign themselves to their fate.”

Organized music patronage begins to sprout.

Fan-Funded Space Starts to Grow, Slicethepie Rumbles.

MySpace Platform To Launch Next Week

Techcrunch: MySpace Platform To Launch Next Week. 

The new developer platform, like Facebook Platform which was announced in May, will essentially be a set of APIs and a new markup language that will allow third party developers to create applications that run within MySpace. Developers will be able to include Flash applets, iFrame elements and Javascript snippets in their applications, and access most of the core MySpace resources (profile information, friend list, activity history, etc.). Applications will need to be hosted on MySpace servers.

And in a big change in strategy for MySpace, developers will be able to serve their own advertising within their applications, and keep 100% of the revenue (Facebook also allows this).

What Price a Download? - WSJ.com

$10 apparently makes me the median Radiohead fan.  CDs typically retail for $16, cost $6.30.  Without EMI in the middle, Radiohead will sell the album for $10, cost $3.40 in physical form and far less in digital.  Link: What Price a Download? - WSJ.com.

Radiohead gets music pricing right

What's music worth?  Radiohead apparently believes that it's anything a fan is willing to pay - or not pay.  They're right.  Fans recognize implicitly that the value of a single digital song file is something more than the marginal cost to make it - i.e. zero.  We live in a world where anyone with a Powerbook, Garageband, some high-quality microphones and a quiet room can create CD-quality music - for the cost of their time.  Distribution via email is at the same cost - free.  It's no surprise that fans of P2P generally see their activities as un-legal, maybe not legal by the definition of the law, but non illegal either according to their sense of the value of what they're taking. 

Where's the economic value if the traditional music asset has no value?  After all, an artist has got to eat. 

I believe that the value is in the emotional connection between the band and each fan.  Online marketing means that each fan is a market of one.  Value can be derived from that relationship, through the voluntary support of the artist by the fans, the willingness to pay more than zero for music, buying tickets to performances, buying merchandise licensed and/or endorsed by the artist.  Just ask the Rolling Stones what's more valuable, their music or the proceeds from their reunion concerts.  The Grateful Dead must have been laughing all the way to the bank; they were living the digital model in an analog era.

The valuable asset is no longer the music file but the email address that represents the passionate relationship of the artist to the fan.  It's the means by which the artist can capture and then maintain a stream of economic value that can give even a small artist the ability to maintain a workaday living through music.  Radiohead obviously recognizes this.  Check out their registration to purchase music.  The information requested will not only allow them to maintain these relationships, but also to understand the demographics of their most passionate fans.  As any savvy marketer knows, that's invaluable.  But it's a simple lesson music folks still ignore.  When's the last time you went to a concert and the venue or band asked for your email address?

The one throwback to the pre-digital age that does mystify me is Radiohead's adherence to the full-album model.  I had a eureka moment last week when a well-known VC revealed his theory that one of the causes of the demise of music was the CD - more than twice the music as compared to a vinyl LP.  The relative brevity of the LP, he argues, forced the artist and producer to make hard choices about song inclusion, leading to a more carefully considered and higher quality album.  More is not necessarily better.  When Radiohead releases my download to me, I'll let you know. 

By the way, I'm paying US$10.00 for the digital download.  How about you?

Link: Radiohead - Album - Cost - New York Times.

Yahoo slims down music.

Link: Heard on the Street - WSJ.com.

[Yahoo] slims down some of its activities. Its Yahoo Music service, which has about 250 to 300 staff, is among those expected to be trimmed and its fee-based subscription music offering overhauled or shuttered. Overall, the company plans to move staff around and freeze some positions, though significant layoffs aren't expected, people familiar with the matter say.

Roadrunner/Haystack/Mediariver Widget

Music 2.0 - Whack-A-Mole: Warner hammers imeem

This is the third of my series of posts about my views on the current state of the music industry. 

Whack-A-Mole.  There's a huge gap between the supply-obsessed Music Oligarchs and the demand-obsessed Super Disrupters. Like an infant’s Whack-A-Mole Toy, the Super Disrupters pop up, the Music Oligarchs hammer them down, only to find them popping up in greater and greater numbers. This is counter-productive.

Last week, I predicted that the most popular sites would be subject to lawsuits.  Warner Music Group's lawsuit against imeem.com is only one of an inevitable series of actions. 

"Imeem itself directly engages in much of the infringing conduct by duplicating, adapting, distributing and performing Plaintiff's works through imeem's own servers"

It will be interesting to see if Warner's allegation that the distribution is occurring through imeem's servers will stick.  Does imeem actually host illegal files on its computers?  Or is creating a cached copy of each playlist on its servers in order to provide better user experience?

P2P is old school.  The new generation of music Super Disrupters are obsessively focused on creating user experience that the Music Oligarchs are not delivering.  Since the Music Oligarchs have not made it possible  for these Super Disrupters to license their catalogs, the Super Disrupters have made the insight that music in the cloud can serve as a virtual library.  Why license music if you can simply to link to content hosted on other sites and not deal with the issues of provenance?  It certainly doesn't address the issues raised by the Grokster case, but there is an argument to be made that the music Super Disrupters do not have full liability for any illegal source files not hosted by them.

P2P Aggregators like Hype Machine, Critical Metrics, Seeqpod, and Project Playlist may well be next in line to be whacked, but wholesale annihilation of these companies would represent a lost opportunity for the Music Oligarchs.  There is an accommodation to be reached that can benefit both sides.   

Another prediction: the Music Oligarchs and the P2P Aggregators will eventually find a middle ground.  Data aggregation will be the key. 

Haystack.com is the featured channel on Brightcove

I was surprised when Haystack.com co-founder Abby Schneiderman emailed me this morning to report that Haystack.com is the featured video channel on Brightcove.com.  Brightcove writes, " See performances and interviews by emerging artists from We Are Scientists, Calla and the Living End to Echo and the Bunnymen and Neil Young conducted exclusively for the new music social network, Haystack.com." Check it out.