There is a growing number of artists who are taking their music promotion directly to their fans by offering streaming access to it online. Why not – it’s a great way to give people a sample – and if they like what they hear they might buy a song, share it online, or buy a ticket to a live performance.
Singer songwriter Ryan Adams‘ latest album Ashes and Fire went on sale this week. For the past few weeks, listeners could sample songs or listen to the entire album online at NPR Music, SoundCloud, or at the Ashes and Fire website.
Some might think he’s crazy, offering his entire album upfront for all to hear. How on earth will he sell albums? In fact, I think Adams and a growing number of artists understand that the formula for selling songs has changed, and restricting access to your songs isn’t the way to get folks to buy your music. Instead, offer a listen to everyone. In fact, offer them the chance to hear your whole album! If they like it, do you think they’ll be satisfied with returning to the website every time they want to hear it? Of course not – they’ll buy it, or the songs they like from it. And maybe they’ll come see a show as well.
Streaming is a very good thing for the music industry. So says a new study conducted on behalf of streaming services company Aspiro Music. Streaming music reduces illegal filesharing activity and increases overall listening to music.
The survey, conducted in Norway in June, shows that one of three Norwegians have now streamed music. A good 60% say they feel more up to date on music, 68% listen to more music and 72% say they often find music they didn’t know about prior to using a streaming service. Streaming increases both the total consumption of music, as well as broadening the range of music people listen to.
“We believe that efficient and payment-based streaming services will lead to better economy for artists, record labels and rights holders long term, and that it will turn around recent years descending revenue trend”, commented CEO of Aspiro Music Per Einar Dybvik.
Aspiro Music produces branded and white label streaming music services based on payment or subscription models to a variety of companies, including T-mobile.
Like a phoenix rising out of the ashes of recent news of music services like Imeem (sold for pennies), Spiralfrog (shutdown) and Spotify (US launch delayed), this week MOG, a music blogging platform, launched All Access, a new, ambitious on-demand service that is, well, pretty cool.
MOG All Access is right upfront about their business model – it costs 5 bucks a month – and they’re very direct about how great the service is too. The homepage says the music service is “Better than Rhapsody, Pandora and iTunes Combined.” Others agree – out of the box it’s getting some great reviews.
MOG All Access says it offers just about every album and song you can imagine – and indeed, I plugged in a bunch of stuff and they had most of it. Curiously, they don’t have Belle & Sebastian or Pousette Dart, a couple of offbeat names I plug in when I’m testing the depth of a service. (Spotify had both, Pandora and Google Music only had Belle & Sebastian). MOG did have Armin Van Buuren, I’m From Barcelona, Donna the Buffalo and other sort of obscure musicians.
The other thing that they have are deals with all four big record labels, as well as many others. In fact, their recent press release included enthusiastic quotes from the big four.
MOG All Access is the only online service that will let you plug in the name of an artist, like James Brown, the example on the video on their site, and then listen to all James Brown music. Other online services won’t give you more than 3 songs by an artist, thanks to performance copyright issues, but obviously, MOG obtained permission in their licensing deals to offer this.
While you’re listening to James Brown you can view all his songs and lyrics, save songs to your locker, build playlists and share them with friends, buy music, or just listen to his complete collection, James Brown Radio. While you’re listening to that, you can decide you want to discover or hear some similar sounding stuff and turn on the music discovery tool.
MOG All Access Founder David Hyman says that although they are offering an easy way for listeners to purchase music, they’re really betting that “consumption in the cloud is the future.” So you store your music in your locker, and listen on whatever connected device is handy – mobile, pc, whatever.
MOG’s got a great platform and it appears that the record companies have given the service not only their blessing but also a unique offering to listeners by enabling them to offer unlimited on-demand access to any music they want. At five bucks a month, they’ll have to get a lot of subscribers to make it work. As I have said about new services before: May they thrive…
News Corp owned MySpace will purchase independent online music service Imeem, in a deal which is reported to be $1million in cash. Imeem has been in financial trouble for a while, and has run through an estimated $30million in investor dollars.
Among the investors, all four major record labels, although earlier this year Warner Music wrote off its investment in the service. In 2007, Imeem became the first ad supported on-demand online music service to negotiate deals with all four major labels. Those deals included equity which made partners of the four major labels. MySpace also has partnership deals in place with the four major labels.
A few months ago MySpace acquired online music service iLike, with 50 million registered listeners, for a reported $20million. Comscore estimated that Imeem had 16 million unique visitors in September. It’s impossible to compare these two numbers except to say that it doesn’t sound like Imeem is a lot smaller than iLike to me.
MySpace now owns two of the five online music services that announced partnerships with Google’s new music platform. The way that works is that Google drives traffic to partner sites who play the music and pay the royalties.
Recently Spotify delayed their US launch due to problems negotiating a license for ad supported on demand streaming with the record companies. Plug that info into the fact that Imeem was about to get acquired by MySpace for so little, and it’s easy to understand why Spotify is meeting with some opposition. Seems like the record companies want to limit their exposure on the ad supported revenue model…
Music sales have been changed by the Internet. That’s perhaps the most obvious statement I’ve ever written on Audio4cast. Nonetheless, it’s interesting to look at how the Internet has impacted music sales, and a post on Nielsen’s blog recently did just that, discussing a recent article in Billboard magazine.
Individual tracks accounted for 57% of all digital music sold in 2008. More intriguing is the fact that the top 200 tracks accounted for 14.5% of sales in 2004 and rose to 15.8% in 2005, 17.1% in 2006 and 2007 and 17.2% in 2008. Through October 25, 2009, the top 200 tracks’ share stood at 18.7%.
Not exactly what you were thinking, right? We all think of the Internet as fostering diverse listening and independent artists. So why are sales concentrating more on the most popular songs, not less?
It turns out that popular tracks may be benefitting from a “herd effect due to the viral nature of the Internet. The awareness generated by that small number of songs could drown out less popular songs.” In other words, top 40 playlists are still driving music sales. In any week, one of out four songs sold belongs to that top 200.
On the other hand, Album sales are trending in the other direction. “The top 200 digital albums have accounted for a smaller share of total digital album sales since 2004.” “The top 200 digital albums have shown an opposite trend in market share, steadily dropping to 21.9% in 2008 from 28.7% in 2004.”
Listeners that purchase albums online are listening to fewer hit albums and more eclectic album offerings, while those that purchase single tracks are concentrating on the top 200 songs more and more. The numbers show that it’s not exactly the expansive and expanding marketplace many have imagined. While the Internet has become the place to find and listen to music by independent and unknown artists, the diverse offerings have yet to impact digital song sales, which remain concentrated on the hits.
Spotify, the European on-demand music streaming service that has taken Europe by storm, will apparently delay a US launch. For several weeks now there have been reports that the major labels were putting pressure on Spotify to abandon a free, ad-supported streaming model. The New York Times recently reported that major labels, already involved as backers with free ad-supported services like MySpace and Imeem, aren’t eager to license their catalogs to Spotify on that basis.
And they have a lot to say on the matter. “On-demand services have to negotiate private deals with the labels – there is no compulsory license, and the deals are not public.” according to David Oxenford a legal expert in streaming audio licensing.
But how much is the new Google music platform impacting this? Google Music is now driving listeners to Imeem and MySpace/iLike – the two services that are licensed by the record labels to stream on-demand. With that deal in place to support the two services that the record labels are already invested in, would they want to see Spotify come in and disrupt the market for on-demand services? Given some time, and the preference they’re getting from Google Music, Imeem and iLike (owned by MySpace) should be able to build their brands as destination sites for on-demand music.
Instead, the record companies would like to see Spotify offer their service on a premium basis, to those that subscribe. “We like Spotify as our partner in Europe, but we would like them to move more toward a paid subscription environment,” said Thomas Hesse, president of global digital business at Sony Music, as reported by the New York Times. Word is, Spotify is not happy about coming to the US with a paid-only model, hence they have delayed their launch.
Last week at the NAB Radio Show in Philadelphia, RAIN hosted a side channel of digital audio related programming in the form of three short panels and a few quick presentations. I spoke on a panel hosted by Dan Halyburton of RadioTime, along with Les Hollander of Pandora, and Matt Sunshine of Center for Sales Strategy. We talked about the business side of Internet radio, and considered the impact of mobile, measurement, and the future.
One of the “vignettes” at the Summit featured SoundExchange’s Jon Simson and Bryan Calhoun. The discussion by SoundExchange was interesting for a couple of reasons. After battling with streaming stations for years over performance copyright issues centered on rate, reporting, and compliance, they came to offer an olive branch, of sorts. Simson took the time to explain how hard they strive to find every last performer and send them every dollar they deserve of the fees online stations are streaming. He told a few anecdotes of finding old artists that made it personal and real, and that was a good thing. SoundExchange even sponsored the event, which was held in a private room at the Hard Rock Café next to the convention center.
The conversation took a brief, weird turn when Simson warned the crowd that now that rates are settled SoundExchange expects compliance and payments. He even called out one broadcast company for their failure to adhere to the rules, which I though was both antagonistic and counterproductive in terms of the goodwill they apparently intended to convey. Nonetheless, it was a unique moment in the history of Internet radio – the friendliest gesture I’ve seen from the record label side of things, and I’m glad I didn’t miss it.
More to come on the NAB Show and RAIN Summit East this week…
There’s enormous buzz about Spotify, the European streaming music platform that promises to launch before the end of the year here in the US. I wish I could say I’ve tried it, but can’t unless I fly over to Europe for the weekend. Spotify is a music service that allows listeners to browse and stream songs on demand from a library of 3.5 million songs. Listeners can also build playlists, and their interface is supposed to be very intuitive and fun to use.
According to CEO Daniel Ek, Spotify aims “to provide the world’s biggest catalogue of music that’s quick, simple and fun to use.” He says they’ll compete with Napster and Rhapsody here in the US (among others) but that only Spotify offers both an ad supported and subscription ways to enjoy the music.
Two main things about Spotify make it a good bet for success. On demand song streaming is appealing to music fans. Recent research has shown that as on demand streaming of songs increases, illegal song downloading goes down. Music fans are content to legally listen and share their music via an on demand streaming service rather than illegally download the music. Research also shows that fans would consider using an ad supported platform to get their music for free. Spotify’s platform gives music fans the chance to hear what they want when they want it, without paying for it. Legally.
Everything I’ve read mentions their nifty platform, which requires a download onto your computer. They do not yet have an iPhone app, and they have a Google Android app that has not been released.
Already valued at $242 million, Spotify will be under enormous pressure to generate both advertising revenues and premium subscriptions to appease both their VC investors as well as pay royalties to the labels. In an article in Techcrunch over the weekend, guest author Michael Robertson is skeptical that they can make it given current royalty rates.
I have to admit I’m curious – both to see the service and to see how well they can monetize it. It will be an interesting test of both the ad supported and premium subscription marketplaces. May they thrive…