Interview by Globe and Mail with Rdio, the streaming service that made a successful effort to set up in Canada.
UK-based digital distributor STHoldings Ltd. has pulled 234 member labels from Spotify, Rdio, Simfy, and Napster. The act was motivated by continued complaints from these member labels, specifically related to payouts, though it appears that a recent study was the final straw.
“STHoldings can confirm that we have taken the decision to remove all STHoldings distributed content from the following music services: Spotify, Simfy, Rdio & Napster.
“Despite these services offering promotion to many millions of music listeners we have concerns that these services cannibalise the revenues of more traditional digital services. These concerns are confirmed in our own accounts and a recent study by NPD Group and NARM.
“As a distributor we have to do what is best for our labels. The majority of which do not want their music on such services because of the poor revenues and the detrimental affect on sales. Add to that, the feeling that their music loses its specialness by its exploitation as a low value/free commodity.
“All the labels we represent have been given the choice to have their music to Spotify, Simfy, Rdio & Napster. As of today (16.11.11) from the 238 labels we distribute, 4 have expressed that they would like to be on these services.”
The group also shared some depressingly-low payout figures to bolster its case.
During the third quarter – the first full quarter STHoldings supplied content to Spotify and others:
Gartner Research is forecasting a fourfold increase in subscription music revenue over the next four years, with sales of physical music media, including CDs and LPs dropping from $15 billion this year to $10 billion in 2015.
By contrast, aggregate sales of online music will climb from $6.33 billion to $6.8 billion next year and to $7.7 billion in 2015.
Music downloads will still be the format of choice, with revenue growing from $3.63 billion this year to $3.85 billion in 2012 and $4.05 billion in 2015, Gartner said.
Connectivity is key – the rise of connected devices is contributing to an increase in the number subscription services like Spotify, allowing users to access millions of licensed songs and either cache them locally or stream them over a wireless network. Subscription service revenue is expected to ramp from $532.1 million this year to $2.22 billion in 2015, according to Gartner.
Given the consumer demand to access media “anywhere, any place, any time”, wireless carriers and ISPs could certainly accelerate the return to paid music by offering cloud storage in addition to high bandwidth for streaming.
Those following Bjork have been introduced to an interactive multi-media experience biophilia which is a customized app for iPad/iPhone.
Now comes eVinyl, an LA-based oufit focused on building a new format for music. Consider it a mashup of an ebook and a CD – like the old vinyl experience, album art, liner notes, and music are combined, plus video and sharing.
eVinyls are built in the EPUB3 format, enabling cross-format compatibility across Kindles, Nooks, and iPads. eVinyl’s goal is to create a more structured and universal format for albums in media players.
Plus, artists would also be able to make changes and instantly add content into their customized eVinyl releases.
Here’s a preview link
Digital Music News has put together a “Thirty Years in 30 Seconds” GIF that shows the changes in both format and music sales. A bit jumpy, but the pie gets smaller and smaller….
On Tuesday, Stingray (mobile arm of Montreal’s Galaxie music subscription service for cable) launches a subscription-based streaming music service for mobile phones. Customers can access its 45 audio-only TV channels through an app on Apple’s iPhone, iPad and iPod Touch, plus all Android-based mobile devices. Listeners can skip songs and download tracks they like using the iTunes store.
Zynga, the social games developer, has pop star Lady Gaga music downloads connected to its games.
GagaVille, a farm within the FarmVille game, will have unicorns and sheep on motorcycles (who knew?).
The album “Born This Way” is released May 23, but Farmville players will have exclusive access to songs starting May 17
Everything is blurring into one big media mass.
In a long expected announcement to bring music storage to the cloud, Google has launched a streaming music service.
Named “Music Beta by Google,” the service acts as a sort of “digital locker,” allowing users to store their music in the cloud rather than on personal hard drives or mobile devices.
Once you’ve uploaded your music library to a remote server, you can stream your music to your Android phone or web-connected PC. With an Internet connection, you can access your music wherever you go. Currently it’s free while in beta mode, with a max of 20,000 songs.
Like every music innovation, the labels are resisting Google’s service as they are with Amazon and are not ready to offer licensing terms.
Given that the words “download” and “streaming” are not defined in copyright law, the labels are positioning streaming as having a radio station, and downloading as almost synonymous with piracy.
What the labels are saying is: regardless of whether you have already paid for your music, you have only paid for one copy. If you want to listen to the music you paid for on different devices (or share a favorite track, God forbid) you gotta pay again.
I get the idea (encourage it, actually) that digital content is like a utility, like water or electricity – pay a small monthly fee, and let the technology sort out how to divvy up the pie amongst all the content creators.
Labels would prefer that everything is streamed (supports utility model) but we aren’t there yet, which is why they hate digital lockers – a lot of people will upload pirated content and stream that content to their devices.
Still, it feels like another step in the demise of the historic music label model.
Orpheus Media Research recently released a customer survey indicating that music lovers still rely on traditonal radio and friends for music discovery. The data sample is 500 people, with 40 percent having more than 1,000 songs in their personal music library. There is no indication of age groups or geography or genre:
Radio as a discovery source:
Friends as a discovery source:
On-line recommendation tools:
Still, out of the 87 percent of respondents who actively search out new music on their own, almost a quarter find it difficult to discover new, unheard-of music that they like.
Doing the math, it means that less than 10% of the survey group found new music they liked using on-line recommendation tools.
I can relate to that – I started a Pandora search with Annie Lennox (female voice with synths) and ended up with Celine Dion(!)
With nearly 40 million views on YouTube and the song on iTunes, is Rebecca Black making money on her mom’s $2,000 investment for a video that was produced over a weekend?
The terms of the deal between Black and the production company Ark Music are not known, but one can make some assumptions on what has been received by Black and Ark collectively:
YouTube: figure $1 per thousand views = $40,000 with 40% to the content owner (Black + Ark) = $16,000.
iTunes: yes, there were sales, estimated at 40-50 thousand downloads = $45,000 across different online stores. Typically the artist will get 70% of sales, but to get the song onto iTunes and others requires a distribution service catering to indies who may take 10% – so $45,000 times 60% = $27,000.
Total income: $43,000 return on a $2,000 investment
The challenge here is the reason for her success – her video is a bad musical joke gone viral. It’s hard to believe there’s an artist career that can make money long term.
Most likely this is her 3:48 of digital fame.
Ark Music certainly did ok in self-promotion with their name in production credits….
The New York Times, in an attempt to monetize all its platforms (both hard copy and digital) is rolling out a paid subscription model and is using Canada as a testing ground. Non-subscribers will be allowed to read up to twenty articles per month free before being prompted to start paying.
This March, Canadian Music Week celebrates 29 years as one of North America’s premier all-media events with conferences, award shows, a trade exposition, film festival, and Canada’s biggest new music festival – Canadian Music Fest.
http://canadianmusicfest.com/
Sony Corp will be offering millions of songs through a digital jukebox connected to popular devices like TV sets and games consoles i.e. home-based listening vs. mobile.
Music Unlimited Powered By Qriocity launched in the U.S.A on Thursday, offering six million songs on demand through the cloud-based network that 60 million Sony PlayStation gamers use to play online video games.
Qriocity competes with Apple iTunes Music Store, but unlike iTunes Qriocity offers a monthly subscription music streaming service rather than songs for downloading.
With from all the major labels including Sony Music Entertainment, Universal Music, Warner Music Group and EMI Group, Qriocity launched in the UK in December, and is now available in Japan, France, Germany, Italy, Spain and Canada.
For $3.99 a month, Qriocity subscribers get a radio-like service which lets them select the music genre or artist – similar to a premium offering by Pandora Inc, the Internet radio service company which filed for a $100-million public offering last week. For $9.99 a month, users can choose any song they want to listen to.
The service joins an increasingly crowded market with offerings from digital music start-ups like Rhapsody, Rdio and MOG. While competing music services have been adding mobile features, Qriocity’s focus is living rooms as Sony attempts to build on its core strength in consumer electronic devices like Bravia TV sets, Blu-ray Disc players and PlayStation 3 game consoles i.e Sony is interested in selling more of their hardware.
