The end of EMI?

Terra Firma Writes Down 90% of Investment in EMI

Does this mean bankruptcy for EMI? Or, will it mean that Warner can finally purchase the beleaguered company? Time will tell.

Are the stars aligning?

How would you feel about a music service you pay for with Internet access? Through your ISP. What if the service providers owned the content? What IF the service providers owned the content? (redundant for effect)

Think about it.

Comcast Said to Be Close to Controlling NBC Universal

Google Music

For those out there wondering what the big fuss over Google Music is all about, we (hopefully) have some answers for you. You can read about Thursday's announcement here.

However, a more helpful read is Billboard.biz's analysis of the new deal and its likely affects on the industry. Billboard.biz is usually fairly conservative when it comes to opinion writing so this should give you a good perspective on how the industry is viewing the deal.

Enjoy.

Lefsetz on Spotify

Hello all,

Although I normally link to articles of interest, the Lefsetz piece
on Spotify hasn't been posted beyond email format so I can't link (at
least not yet). I decided it's too important to be left to my
forgetful memory (if it's not now, it might never be). So I have
included in the piece in full. Though I'm sure this is copyright
infringement, I'm gonna claim fair use. Plus, I don't think Bob would
mind, after all, he does it all the time.

Enjoy!

ab

------

The Spotify Guys
Bob Lefsetz

They're Swedish!

Martin Lorentzon couldn't stop saying how much he loves L.A. Because
in the winter in Stockholm, it gets light just before nine and dark
again around three, and that's just too little daylight, for too
little time. If only winter were a couple of months shorter, it
would be tolerable.

Then again, Sweden's got better cell service. You don't get the
dropouts we do in America. And the tech companies are more open.

Speaking of tech companies, Martin made a mint. After working for
Alta Vista in San Francisco back in the nineties, he started a
company in Sweden that...let's just say it counted data. I'm afraid
most people reading this wouldn't understand it if I explained it.
And there's your digital divide right there. People who like to win
on intimidation and those whose educations allow them a superior
vantage point, enable them to move mountains, change worlds, make
tons of money.

And Martin put his millions in with Daniel Ek's and they founded
Spotify. Which the labels were glad to extract an advance from, but
were surprised actually launched and was successful.

Are you following their latest products? Wherein you can download
3,000 odd tracks to your laptop or mobile device? It's just like
owning them. Of course, you get this privilege only if you sign up
for the premium service.

And they've got software for not only iPhone, but Android and soon
BlackBerry, they're the anti-Apple, they're not a closed system, they
want to play with everybody.

And they just might end up dominating. If the labels will realize
that streaming is inevitable and play ball.

Oh, they're playing ball so far. That breakdown that hit the Web re
Spotify's costs isn't accurate, they've got special deals with the
labels, but they don't go on forever, Spotify's got to prove its
mettle, it has got to generate profits.

A couple of days back, Martin Lorentzon e-mailed me, he was in town,
did I want to get together?

Normally, I say no. It's a one way street. You demonstrate your
wares hoping that I'll help you out. But Spotify is revolutionary.
I was intrigued. But I wasn't sure of the agenda.

So I showed up at the Mondrian today to find a well-dressed man of
forty, voluble, polite and excited. Not a passive manipulator, but
someone intent on ingratiating himself.

And after catching up, hearing a bit of history, Martin's iPhone
rang. I could see it in big block letters. It was Daniel Ek. He
was coming down.

Wow.

Where to begin?

Spotify employs P2P software, that's why it's so damn good. It takes
2-5 seconds to ramp up each and every song, which has reduced bit
rate during that window, but usually that's a relatively dead window
and the listener isn't paying close attention anyway. Yes, there are
tricks. Only seventy five percent of the song is downloaded, an
algorithm provides the remaining twenty five percent. This is how
they all do it, it's de rigueur. And the files don't only come from
Spotify's servers, bits and pieces come from other users with the
software installed on their computers. Net effect? It feels like
you own the track. Usability is equal to iTunes. You can fast
forward, rewind, there's no lag time.

But that's on your desktop. What about your mobile?

Well, that's a bit different. You see then Spotify depends on the
network. Which is why they've limited sign-ups in the nations
they've already launched in. They want the streaming experience to
be perfect on your mobile device, after all, you're depending on it,
their servers and their wallets cannot be strained.

But if you want to pay, you can get Spotify instantly.

And in order to use the mobile app, you've got to pay.

And when you do pay, you can download the aforementioned 3,000 tracks
to your hard drive too, which truly is like owning them. Of course,
if you stop paying, you don't own them. But if you start paying
again, they return magically.

Daniel was focused on the rental issue. Needing to make purchase
available too. I think that's bullshit. You can't listen to the hoi
polloi. In America we rented movies on videotape, bought them on DVD
and are now renting them again via Netflix and Redbox. Who says
America is anti-rental? It's all about the user experience. And the
Spotify user experience is so good, that you don't need to own once
you've got it.

But what about Apple?

Martin and Daniel wonder too. Why exactly did Apple approve their
app? They gave it a 50/50 shot. But Cupertino said yes. Was it
because Apple was worried about the backlash or Apple just doesn't
care that much about music. Better to take thirty percent of apps
than the small margin in music. Then again, since the Spotify app
is free, there's no gross to skim from. Then again, you can't stream
music in the background on an iPhone. If you go to write an e-mail,
you lose Spotify. Whereas you can listen to your iTunes library
while you surf on your iPhone. All of which begs the question, will
Apple compete? Will Apple suddenly roll out a streaming service?
The guys at Spotify DON'T KNOW!

But someone will. Streaming is going to rule. It's just a matter of
when.

So when do we get Spotify in the U.S?

At the end of this year or the beginning of next.

Oh, I get it. These guys are in way over their heads. They can't
get it together. They promise, but don't deliver.

Absolutely wrong. They could launch tomorrow, they just don't have
all the rights. You see a certain company doesn't believe in free.
So, they won't let Spotify launch with the European model. But,
without the free element, is Spotify doomed to fail?

Believe me, Spotify wants people to pay. They want to integrate so
many desirable elements into the paid model that you'll want to pay.
Being able to see what stars are spinning, what your friends are
listening to. Yes, merging social networking elements with music,
something absent from iTunes. But you can only convince people to
pay if they get to try the service out. And so far, other than a
handful of the connected, no one in America has Spotify, few even
know what it is!

Daniel felt this was a problem. He had to convince the community,
the artists and executives. I laughed. This is like MTV. Once you
see it, once it launches here, word will spread like fire, people
WILL WANT THEIR SPOTIFY!

Daniel feels he could have 50 million users almost instantly. But
it's too soon. He doesn't want to risk messing with usability and
doesn't want to burn through the company's cash that fast. Yes, it
costs to stream, not only server power, but licensing fees. Also, he
wants to tweak the service. They showed me some unreleased elements,
but they've got tons more. They want to build it so you will come.

What a radical change from those in the music industry, and from
those in tech a decade ago.

Ten years ago, the techies were arrogant. They wanted to rip off the
music industry's wares. The Spotify guys are different. They want
everybody to make money. But they want the time and support to make
it happen. Honestly, they're not exactly sure of the business model,
they're figuring it out. They want most people to pay, they want
different tiers, but the customer is king, you've got to serve the
customer. Which the music business has not done in eons.

These are not charlatans. These are not guys in it for the fame.

They are in it for the money. But shouldn't the music industry love
them for this, feeling the same way?

They're smart. They know tech. They don't intimidate physically,
they make their moves via their intelligence, which flummoxes the
music industry. An industry that likes to bully and rip partners off.

But is that paradigm truly sustainable? In an era where the customer
is savvy enough to steal whatever he wants? If you think free
availability of music can be eradicated, you don't know dick about
computers. The only answer is a better mousetrap. Spotify is the
first step.

Most people bore me. It's all about them. They want to tell me how
great they are, why I should endorse what they're selling. But I was
positively riveted for two hours. I felt like I was at ground zero
of the music industry. Right there at the source. Better than
meeting Bob Dylan, who doesn't talk much anyway. Better than hanging
with the rock stars of yore who feel they're entitled, never mind the
underschooled and inexperienced nitwits of today. As for dealing
with the label people, other rights holders, it reminds me of the
sixties, there's a huge generation gap. My eyes roll back in my
head, I just can't waste the time. But today, in the lobby of the
Mondrian Hotel, I was excited. These guys want to deliver more music
to more people and get them to pay for it! And the service is so
good, it is worth paying for.

So I don't want to hear one naysayer. You can still sell tracks at
iTunes as a hedge, you can even sell CDs. But streaming is the
answer and these guys are the cutting edge. They wanted the
conversation to be off the record, but I insisted it couldn't be,
word has to GET OUT!

P.S. Let me make this perfectly clear. If you've got the premium
service, you're not reliant upon a wireless connection to listen to
music. You can download a little over 3,000 tracks to your mobile
permanently (as long as you continue to pay, of course). So if
you're in a dead zone, or camping in Timbuktu, you can listen to your
music - as long as you can keep the battery of your mobile charged!
(No, your music doesn't disappear if you run out of juice, the songs
remain, but without power, you've got to bang on rocks, you've got to
make your own music!)

P.P.S. Please read Chris Anderson's "Free". The guy's been beaten up
so heavily regarding the Long Tail that his new book has been
ignored. But check it out. Primarily because it explains the
concept of "freemium" upon which Spotify is based. I'll reference
the Wikipedia article here: http://en.wikipedia.org/wiki/Freemium
But Anderson does a much better job of explaining it. Giving
numerous examples. As for being afraid of the future, free's been
around for eons, Anderson makes this clear. Stop being afraid of
losing what you've got and start figuring out how you can make it in
the future by reaching so many more people!

--
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--
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--
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Viacom's Smoking Gun in the YouTube Lawsuit

C-Net is reporting that Viacom has uncovered emails that evidence YouTube's knowledge of infringing material on the site and that it chose to ignore the infringing content. May be a smoking gun, read on...

Did Viamcom find smoking gun in YouTube case?

Is Amie Street Changing their Business Model?

Amie Street To Offer Sony Catalog

amiestreet.com, known for its pricing in tiers triggered by sales numbers, has licensed the Sony Catalog, to be sold at $.69, $.99, $1.29. So much for gimmicks.

No matter where I go I'll never be able to hide from Sweet Good Alabama.

Law and methodology

OK, well since I made the promise to start updating the blog my life has suddenly gotten rather dull. Mostly just researching law firms. Why this has to be done an entire year before you actually work there is beyond me. But hey, law firms and the law profession, and, well, I guess the law in general is prone to methodologies and being entrenched in its ways, which is OK I guess.

Kind of like the way people get admitted to law school. For those that don't know, here are the steps you must take: 1) take the LSAT, which is a standardized test given by the Law School Admission Council 4 (I think) times a year. You must pay LSAC to take the test. You must also register with LSAC and do all your applications through LSAC. Each application costs somewhere around $25-$60, this cost is mainly to discourage people from applying. After all, if it didn't cost anything wouldn't everyone just apply everywhere? Not exactly, but it illustrates the point. Law schools are ranked by US News and World Report. The higher the ranking, the more prestigious the law school. Not to mention the fact that the rankings are computed according to some arbitrary measure, which no one knows much about. So these law schools hang in the balance of the ranking. Did your school move up? Hopefully. But this ranking also measures the value of your degree even if what the school is currently ranked is lower or higher than it was when you attended. You are admitted to law school based on some combination of your GPA and LSAT score. The higher the better. Not to mention these scores factor into schools' rankings. But I digress.

I realize this post wasn't the most enthralling, but, hey, I told you life had gotten a bit dull.

On the agenda. Block parties, the beach, hopefully some music, NYC, more law school, and deep sea fishing. Until then...

Streaming

In my quest to avoid working, I've decided to keep my promise and update the blog. Today I've decided to share a few thoughts on streaming vs. downloading. First, streaming is better. Come on, it is. Have you tried it? Not only am I considering canceling my Sirius radio b/c the signal is terrible, I am actually thinking about trying Rhapsody.

At first I had a bad feeling about streaming. It just didn't sit well. I tried Last.fm and it sucked, I haven't tried Pandora because I have lost all faith in other people, and when you live in rural TN a solid signal broadband signal is no guarantee. But now, I've got a signal.

My new favorite website is archive.org for its streaming feature, now I can listen to entire shows from the entire archive with no cost to my hard drive. Open the playlist in iTunes and I don't have to go back to get the stream again, it's always there. I know I'm behind the times b/c I don't have an external to store everything on but, hey, I call it efficiency. Ha.

Well that's all for now, maybe more thoughts will come. Until then...

An Update!!

Ok folks, I know this blog has been neglected, but I am recommitting myself to make it the number 1 source for your wasted time. Really, shouldn't you be doing something else?

Anyway, getting music going here in NY. Also looking for a job (paid only please) and preparing myself for a year on the Cardozo Law Review whew hew!! I was in the city yesterday meeting with my peeps from Spindle. Oh yeah, I'm also reading the longest book I have ever attempted: Atlas Shrugged by Ayn Rand. A question for those out there that have read it, does Ms. Rand ever change the theme of the book? I'm on page 600 and each page is the same as the previous one: rewards should be based on ability, not on need. I get it.

Oh well, today's post was more of a rant than anything worthwhile. But I guess I can't expect much, life is sometimes uneventful. Hopefully the next post will more interesting. Until then...

Webcasting Royalty Rates Agreed Upon

Looks like this thing has finally been worked out. Bravo to cooperation!

"Web radio, music industry reach agreement on royalties"

P2P Study - Should it be licensed?

P2P Study: Music Crackdown is bad for Business

Flat Speakers?

A few scientists at the University of Warwick have a developed a new "flat speaker" technology. Interesting.

"New flat flexible speakers might even help you catch planes & trains"

Thanks to Mayo for the link.

Fleecing Fans

And it continues...

"PNC Bank Arts Center charges all music fans a parking fee of $6, even if you don't have a car"

Scalping III

http://forum.nin.com/bb/read.php?9,548515 

Well here it is. Straight from one guy within this industry that deals with these issues on a day-to-day basis yet continues to remain fan friendly. Trent Reznor.  The funny thing is, I respect Trent Reznor so much for his continuous honesty and innovativeness that I will support him. AND I DON'T EVEN LIKE HIS MUSIC!!! But personal taste aside, here is his take on the current secondary ticketing market debacle. After speaking with an attorney earlier today, take these words as fact. Many acts do this, not some, probably most. So, where is your act? Are they taking advantage? If not, they better be taking measures to TAKE CARE OF THE FUCKING FANS!!!

As I'm sure you can tell, I feel very passionately about this subject because it cuts deeply into a vein that I have always harped on...you must respect the fan b/c they pay your bills and they can choose to unpay your bills. This is a simple formula. Take care of your fans, make good music, stay connected, and you will prosper. Choosing to do otherwise, taking money over credibility, damages you long-term viability. 

It seems to me this whole problem is a simple case of short term gain, long term loss. Typical music industry behavior. My question then becomes...when are we going to take things over? Teach acts to respect their fans? Teach fans to respect music as much as their favorite acts respect them? When are we finally going to realize that there WILL ALWAYS BE A MUSIC INDUSTRY BECAUSE PEOPLE LOVE MUSIC!!! No matter what form this industry will take, it will exist. So...do you have what it takes to work in it? How much do you value good will? Example: I recently spent two hours in front of my laptop trying to get Phish tickets to a show that is 15 minutes away from my house (Jones Beach, NY - fantastic location, I know), only to end my search frustrated and hating the ticketing system (mostly due to the total incompetency of the Live Nation ticketing system). 

But what is missing, is the connection. The reason why. I was pulling my hair out over not being able to get tickets, I had to have tickets (I still don't if you have extras) because this was a band that I had to see.  At this point you have to understand, I have spent almost $1000 on Phish this  year (mostly to the benefit of stubhub.com), which is depressing seeing that I could have gotten the exact same value for $300. 

The point of all this is to illustrate the problem. The secondary market is hurting the live music industry, the one segment that will always continue to survive because there is no digital substitute. So will you sit back and let the act "maximize" its revenue stream? Will YOU express an opinion motivated by a 15% take? Or, will you choose to respect your fans, respect technology, and ride the wave. 

Remember, long term relevancy is the key to long term sustainability. So, choose wisely. 

Adam Beasley

New York, NY

Scalping II

The plot gets thicker. After the last post on scalping and how tickets show up on the secondary market, a la Bob Lefsetz, this article was published in the Wall Street Journal. Very interesting indeed. I am not normally one that favors government regulation of the entertainment industry but this sounds like a very serious problem. After all, wouldn't we all rather pay face value?

Scalping

Check out this new Bob Lefsetz article on scalping. I raises questions about the manner in which tickets are showing up on the secondary market and who is putting them there. Very interesting in light of the LN/Ticketmater merger.

Ticketmaster/Live Nation Merger

"Live Nation, Ticketmaster May Merge" - Wall Street Journal

Ticketmaster/Live Nation Merger

I just got word that the Wall Street Journal is reporting:

"Ticketmaster and Live Nation are close to a merger, in a deal that
would consolidate two of the most powerful forces in the music
industry under one roof."

Performance Right in Sound Recordings

"Performance Rights Act To Be Reintroduced"

Three Strikes in the UK & Legitimized P2P

Three Strikes appears to be dead in the UK:

"Music Pirates will not be Disconnected from the Internet"

-

In other news, an attempt by Virgin to create a legitimized P2P service has been abandoned. For commentary on the situation and the future of legitimized P2P services see this blog by Resnikoff.

Apple

I'm sure most of you are wondering why there wasn't a post on Apple's announcement that it was lowering/raising/maintaining its pricing structure and formally dropping all DRM from its offerings. Well, the short answer is....does it really matter? Though this organization has traditionally maintained the stance that music, in the current digital climate, is too expensive. And I for one am of the opinion that prices should be dropped DRASTICALLY (lets say $3-5 per album) but the recent Apple announcement does little to adopt these views, mainly because there was no per album announcement and while they did drop prices they also raised them. Raising prices, even of the "hits", is an idiotic idea that will only have the effect of punishing people that legitimately pay for downloads. The only positive that can even be fathomed from this announcement is that now back catalog collections will be cheaper but let's think this through....who are the normal consumers of back catalog?? Older people. What demographic truly cares and will likely be swayed by lowered prices? Younger people. What do younger people buy? The "hits." What prices are getting raised again??? I'm sure you see where this is going. So are the major labels moronic? Yes. Is this a reverse solution? Yes.

Enough of that however because I don't want to appear cynical. Many today are mourning the potential loss of Steve Jobs' expertise at Apple, which you can read about here. Now I have never been much for the rumor mill and feel personal privacy should be respected but it is hard to imagine a more iconic figure in the realm of digital music innovation. He has been a force to be reckoned with. However, I do not subscribe to the opinion that if he leaves Apple for good this will a huge deal. I'm sure he is not the only innovator at Apple and hey, maybe talented innovators might actually start other companies, fostering competition, moving technology forward.

In other news, a friend of mine has just hung her shingle in the Middle Tennessee area. She started a production company and is looking for clients and employing a do-it-yourself mentality. Her promo materials won't attach for some reason so if interested I ask that you email her directly at queenp227@yahoo.com and she can send you the materials. Also, if anyone out there would like to be promoted in the same manner, just send DMCS what you have. My only disclaimer is that we are here to promote companies, not bands or shows. There are many other forums for that. 

So that's that. Happy belated New Year! Wealth, prosperity, and INNOVATION to all. Until next time...

Adam Beasley