8Sided Blog

the scene celebrates itself

How File-Sharing Affects Album Sales (c. 2008)

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Billboard:

In a study called “Purchase, Pirate, Publicize: The Effect of File Sharing on Album Sales,” Jonathan Lee of Queen’s University in Ontario monitored both the sales and pirated downloads of 2,251 albums… from 2008. (For some perspective, that’s the same year that Spotify arrived in the U.S.) Legitimate album sales data came from Nielsen SoundScan, while file sharing stats were pulled from a BitTorrent tracker. “From the results, I conclude that file sharing activity has a statistically significant but economically modest negative effect on legitimate music sales,” he writes.



He added, “But the results can also inform business and policy decisions in the market for music and for other media as well. Trade groups such as the Recording Industry Association of America (RIAA) and the International Federation of the Phonographic Industry (IFPI) spend considerable effort and resources to deter piracy and shut down file sharing networks like the one studied in this paper. If the effect of file sharing on sales is small, this expense may not be worth it. The results of this paper should help to inform such cost–benefit analysis by trade groups, law enforcement agencies, and policymakers.”



TorrentFreak:

One of the downsides is that the data itself is relatively old, from 2008, and the music industry has changed a lot since then. This means that the results may have been different today. Also, it’s worth noting that the download numbers come from a BitTorrent tracker that counts a relatively high share of music aficionados. They may also act differently than the general file-sharer.



Complete Music Update:

{According to the study,} while file-sharing activity had a negative impact on CD sales, the word-of-mouth marketing power of the file-sharing community actually aided legit download sales. Perhaps suggesting that file-sharers were quick to shun physical products as file-sharing became an option, but they nevertheless used the file-sharing networks – to an extent at least – as a try-before-you-buy platform.



Lee adds that the extent to which the marketing power of file-sharing offset lost CD sales varied according to the level of artists, with “bottom tier” acts losing out the most. Though, the researcher ponders that this might be because their music wasn’t as attractive to file-sharers who were trying before they buy, i.e. the music itself was the problem.



As for what all this tells us about today, the report focuses on data that pre-dates the big shift of digital consumption from downloads to streams, so mainly identifies trends occurring in a specific moment of time. Though, given the disparity in ‘is file-sharing good or bad for music?’ reports over the years, it’s good to see one that acknowledges both outcomes and tries to balance one off another.

David Bowie’s Music Industry Future Vision

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The Week:

{David} Bowie’s capacity for groundbreaking even extended into the arena of economics. In 1997, he pioneered the idea of using his future royalty payments as backing for financial securities that could be sold on the markets to investors. The so-called “Bowie bonds” themselves didn’t work out too well. But the idea of turning the streams of royalty payments from intellectual property rights into a financial security took off in film rights, comic strips, pharmaceuticals, restaurant franchises, and more. Such oddball securities now make up 21 percent of the U.S. market for asset-backed insurance.



But what’s even more interesting is why Bowie cooked up this idea. In 2002, in the heyday of Napster and the free file-sharing craze, Bowie told The New York Times he thought the entire business model of the music industry was collapsing. Fourteen years later, things did not pan out as dramatically as Bowie predicted — but he got the basic thrust right.



David Bowie in The New York Times, 2002:

”I don’t even know why I would want to be on a label in a few years, because I don’t think it’s going to work by labels and by distribution systems in the same way,” he said. ”The absolute transformation of everything that we ever thought about music will take place within 10 years, and nothing is going to be able to stop it. I see absolutely no point in pretending that it’s not going to happen. I’m fully confident that copyright, for instance, will no longer exist in 10 years, and authorship and intellectual property is in for such a bashing.”



”Music itself is going to become like running water or electricity,” he added. ”So it’s like, just take advantage of these last few years because none of this is ever going to happen again. You’d better be prepared for doing a lot of touring because that’s really the only unique situation that’s going to be left. It’s terribly exciting. But on the other hand it doesn’t matter if you think it’s exciting or not; it’s what’s going to happen.”

Streaming’s Elephant In The Room

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Music Business World:

If you missed it, video music streams – YouTube with a bit of Vevo, essentially – were bigger and grew faster than audio streaming services in 2015 {according to recent Nielson data}. That’s all audio streaming services combined – including AOL, Beats Music (RIP), Cricket, Google Play Music, Medianet, Rdio (RIP), Rhapsody, Slacker and Spotify.



In 2016, then, the music business’s quest to restrict YouTube’s dominance of ‘free’ music looks like a bigger challenge than ever before. “This is absolutely the legacy Lucian {Grainge} is determined to leave,” one ally of the UMG boss recently told MBW – referring to Grainge’s recently-inked new contract with Vivendi. “Getting ‘free’ under control and dealing with the YouTube problem is his No.1 business priority.”



Yet there might be one more ace up the sleeve of Grainge and his old mentor Doug Morris. Sony and UMG are both major shareholders in Vevo – a platform that’s part-rival, part-partner, part-moneymaker and part-irritant to YouTube.



As many have pointed out, if Vevo’s YouTube relationship fell apart, it would be a in a world of pain. Lots of people can’t even distinguish between the two brands. But what’s often overlooked is that the Vevo/YouTube balance is more reciprocal than many appreciate. According to ComScore, Vevo uploads bring in around 38% of YouTube’s monthly traffic. (Videos from Warner Music, which isn’t an investor in Vevo, independently attract another 20%.) Messing with Vevo means messing with a significant chunk of YouTube’s existing $9bn annual revenue.



With all this talk of Spotify and publishing lawsuits, YouTube’s dominance in the free arena remains the hulking elephant in the room. Personally, I’m much more eager to see them reined in than Spotify.

Total Music Streams Doubled In 2015

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Digital Music News:

Song downloads plunged another 12.5 percent last year, and a depressing 23.4 percent since 2013, according to preliminary US-based stats from Nielsen Music. Indeed, downloading is plunging downward, but streaming is absolutely soaring: according to the same dataset, the total number of streams doubled in just one year. As in, gained 100 percent, in 365 days.



Also from Digital Music News:

Accordingly, the music world will witness a more dramatic download plunge in 2016, with 12.5 percent shifting towards 18 percent, according to conservative DMN estimates. The decline will subsequently accelerate to 25 percent in 2017, with a 40 percent drop anticipated in 2019.



The reasons for this aren’t mysterious: last year, the number of music streams doubled to 317.2 billion streams in the US alone, thanks to explosive growth across Spotify, YouTube, and Apple Music, among others. That is directly assassinating paid downloads, with Apple accelerating the plunge by aggressively pushing consumers towards Apple Music streaming accounts.



The rest, as they say, will be history, with downloads occupying a niche space in music listening experience, alongside CDs and other marginalized formats.



The tone of these articles is a little gloomy, which is interesting from a site called Digital Music News. I see the download decline as inevitable by nature of the technology (just wait until the wireless / streaming CDJ is invented for the club DJs), and the rapid acceptance of streaming as a good outcome. Those numbers will get higher and higher as download numbers plummet. It changes the game, but I’m confident fleet-footed independent labels will adapt and succeed.

The Expectational Debt of 2015

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My one time music biz collaborator Dave Allen delivers his thoughts on 2015 via Medium:

In a serendipitous moment I happened to read Teju Cole’s article about the famed photographer Henri Cartier-Bresson, who in 1952 published a book wherein the English title became The Decisive Decision. The original French publication was titled Images a la Sauvette that roughly translates as Images taken on the sly, a much more accurate and nuanced title.



Perhaps we could agree that the internet allows musicians to make music on the sly? Musique á la Sauvette? Cole asserts “The photographer has to be there to begin with, tuned in, tuned up, active.” One might paraphrase that as the musician has to be there to begin with, tuned in and tuned up, active. Different tools are at hand for sure, yet the access to distribution of a musician’s work is now boundless. As for an example of ‘being there to begin with’ I give you Ryan Adams, who has his own studio along with a seemingly endless amount of material, and a work ethic of rather epic proportions. Adams is always on, always there. He sees recording as a never-ending process.



The rest of the piece is equally throughtful and illuminating, also touching on topics like television, income equality, and mindfulness in basketball. Dave’s opinions always make for an absorbing read with plenty to chew on.

Vinyl Sales May Be Rising, But Have You Seen Who’s Buying It?

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Bill Brewster for The Guardian:

The demographic of the average vinyl buyer is very clear. It’s a middle-aged man, possibly bearded (OK, definitely bearded); kids have probably left home, no longer on speaking terms with wife, spare bedroom has become a shrine to his teenage love: the Floyd (their album The Endless River was the best-selling vinyl LP in 2014). Essentially it’s me.



Vinyl will never again reach the 1970s and 80s heyday. Having reached a nadir in 2007, when vinyl album sales slumped to 205,292, last year they topped 1m. The predictions for 2015 suggest double that. It’s now the craft beer of music formats. But just as craft beer is not the answer to the alarming closure rate of public houses, neither will vinyl save the music industry. It will survive thanks to the network of enthusiastic collectors, indie record labels and DJs – but no thanks to any input from the major labels.



The problem the indies face is that they are being crowded out of the marketplace by the enthusiastic entry of companies like Universal Music Group who are said to have reissued 1,500 different titles on vinyl this year – most of which could be picked up in a charity store for pennies.

Empire Building: Vinyl Edition

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The Dallas Morning News:

[Josey Records managing partners Waric] Cameron and [Luke] Sardello say they approached [vinyl pressing plant owner Stan] Getz about buying A&R in July. They’d known him for years, having run dance-music labels of their own in the mid-1990s; like every local label, they had to get their records pressed at A&R, especially since the CD essentially killed the vinyl industry by the early 1990s and the nearest facility is now in faraway Salina, Kansas.

As recently as five years ago, buying a record-pressing facility might have been considered a dreadful investment unless you also had a time machine to go with it. Yet sales of records continue to climb: According to figures provided by the Recording Industry Association of America, more than 13 million LPs were sold in the U.S. alone in 2014. Numbers haven’t been that high since 1990.

“The business of vinyl is an old business model, and it’s the one that has survived everything,” Sardello says. “Vinyl has survived streaming, and not only has it survived, it’s thrived. It’s up 40 percent each year. So what else is there to detract from it? It’s never been easier to access music, and yet vinyl is as strong as it’s been for the last 25 years.”

At the same time, they will begin opening other Josey Records stores: Cameron says he wants to have six to 10 more outlets in the next two years in “major metropolitan areas,” including San Antonio.

“The thought was always vertical integration,” says Sardello, “We started thinking about bands. We started thinking about a label. We started thinking about a studio. We started thinking about more stores and how we can work with bands and labels and go from pressing your records to distributing our records to putting them in our stores to sending your band on a store tour.”

Kudos to these guys, who I’d met on and off back in my DJ’ing days. The lede buried in the main story, but that I highlight above, is the plan to eventually cover the manufacturing, distribution, and retail stages of releases under the company operation. This is the strategy major labels used to dominate in their heyday, so it’s interesting to see an independent upstart take on similar goals. Of course the elephant in the room is that today’s ‘physical product’ climate is much different (despite comparisons), and the majors themselves no longer follow this process – acquiring equity in streaming services, in hopes to somewhat replicate the traditional food chain, seems to be the current major label modus operandi. So it’s a gusty move to pin such high aspirations on a format with an unpredictable shelf-life … vinyl’s extended perseverance is an optimist’s hope. But, as I join in optimistically rooting for vinyl, I’m also rooting for Josey, and we certainly need more gutsy maneuvers like this in the independent music biz. Rock on.

How Well Does the Factory Model Explain Pop Music?

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The Nation:

From one musical vogue to another over the years, the notion of pop songs as industrial product has persisted, sometimes taken up by the music makers themselves as a source of pride. Berry Gordy, the founder of Motown Records in Detroit, the then-booming home of the auto industry in its postwar V-8 heyday, had put in time on the assembly line at a Ford plant in Dearborn, Michigan, and he modeled his whole vertically integrated musical operation on what he learned at the factory. As he recalled in his memoir, To Be Loved, “At the plant, cars started out as just a frame, pulled along on conveyor belts until they emerged at the end of the line—brand-spanking-new cars rolling off the line. I wanted the same concept for my company, only with artists and songs and records.”



Today, the pop music that’s most popular is produced and distributed by methods that, in many ways, appear to be more regimented and mechanized than the means by which any music had been made in the past. Producers generate instrumental tracks by sample-mining and synthesis, using software and keyboard plug-ins; teams of “topliners” add melodic hooks and lyric ideas onto the tracks; and the results are cut and pasted, Auto-Tuned and processed, then digitally tested with software that compares the sonic patterns of a new song with those of past hits. The world of this music is both familiar and unique, connected in elemental ways to the first popular music produced in America and, at the same time, utterly inconceivable in any era before the digital age.



[However,] a more accurate and illuminating way to understand today’s pop might be to think of it as post-­industrial, a phenomenon not of the machine era but of the information age. Music is made today by mining the vast digital repository of recordings of the past, or by emulating or referencing them through synthesis, and then manipulating them and mashing them up—with the human fallibility and genius that have always laced popular music and probably always will. Indeed, it is accessing and processing—the methods that digitalization facilitates—rather than gearing and stamping for uniformity and mass production that distinguish 21st-century pop. Like machine-age plants everywhere, the song factories have closed, and the work of the day is being done electronically.


John Seabrook’s book The Song Machine: Inside the Hit Factory is certainly inspiring some interesting think pieces on pop music. I’m also starting to suspect that one of my most mentioned labels – Factory Records – was probably the least suitable imprint to hold that name. Motown (based on Gordy’s quote above), Tin Pan Alley, or today’s assembly line song laboratories could have really run with the moniker.

EDM After The Drop

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I’m not one to complain about EDM – it’s sort of like complaining about the weather on Mars to me – and SFX’s troubles just give me a headache, so I usually avoid posting here about either. But this article on NPR regarding the intertwined futures of the two is a great read.

This section gave me a giggle, and seriously makes some sense:

Few acts today stand with one foot in SFX’s world and another in the underground, says Marea Stamper, who DJs and produces music as the Black Madonna and works as a creative director and talent buyer at Chicago club Smart Bar. “It’s like comparing Kiss to the Clash,” she observes. “They’re just not related.”



[Music journalist Philip] Sherburne agrees with Stamper’s comparison between SFX-scale acts and vintage pop-metal bands. “Just sonically, Avicii or mainstream EDM sounds to me like Van Halen’s ‘Jump,'” Sherburne says. “It’s the same synthesizers; it’s the same pleasure centers. You could say that Alesso is Bon Jovi. Bon Jovi took metal or hard rock and aimed it squarely at a very mainstream, middle-American public. That’s exactly the same thing: These artists have taken what was once a subculture and redesigned it along a pop format. I don’t know the economics of hair metal, but it seems to me pretty clear that [with EDM] we’re in the era of the Wingers and the Whitesnakes.”


Drew Daniel of Matmos and Soft Pink Truth is also perceptive and a bit nostalgic:

“There were always limits and doubts that I had about the utopian ambitions of the rave era, but there was still a feeling that raving could mean cutting ties to business as usual,” Daniel says. “It’s epitomized in that kind of hilarious gatefold drawing inside one of those early Prodigy LPs.”



The artwork for the 1994 album Music for the Jilted Generation shows a long-haired raver cutting a bridge that connects the toxic, heavily policed city to an idyllic meadow.



“That exemplifies this idea that radical forms of dance music could also lead to radical forms of creating community,” Daniel says. “There’s always been a spectrum, so I don’t want to say there used to be a good thing and now there’s a terrible thing — that’s overly simplified.”


Be sure to check out the full article.

Full Stack Music: 1 Trillion Streams, 200 Million Tickets

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TechCrunch:

Going back to 1999, the record company would use radio as a way to get fans to discover a new act, then monetize that investment, primarily via selling “on-demand” access in the form of CDs and, finally, drive additional discovery by subsidizing touring (known as “tour support;” a label would underwrite some of the cost of touring to help build an audience to whom to sell CDs). Touring represented a small percentage of artist income.



[Fast forward to 2015:] Over the next few years we will see [the] connection between streaming [i.e. “on-demand” access] and ticket sales become completely explicit. Streaming services will increasingly make it seamless for fans using their services to see when the artist has a local show; Songkick’s existing API partnerships with Deezer, SoundCloud, Spotify and YouTube are hints at what this could look like. It’s not impossible to imagine a time when you could possibly buy tickets directly from your favorite artist right inside your streaming service.



When that happens, artists will finally be able to see a connected picture of how their music is distributed and monetized. An act who gets 100 million streams will see that 10 million of those were monetized via paying subscribers, 90 million by ads and another 5 million fans via ticket purchases. The outcome will be a more seamless experience that results in casual music fans attending more concerts.



The key point across all of this is that the central, most valuable asset of streaming music services will be the listener data they generate. As we shift from offline radio to online streaming, artists will know how those 1 trillion tracks of music were streamed — which fan listened to them, where they were based, which concert tickets they purchased in the past — and be able to tailor personalized and richer experiences to their fans.


The TechCrunch article quoted above was published three days ago. Seems a bit prescient, as the same site revealed this breaking story earlier today:

[Pandora] just announced it will purchase Ticketfly, a Ticketmaster-type site, for $450m in cash and stock. Pandora says in a press release that Ticketfly’s service will allow Pandora listeners to better find live music events.



“This is a game-changer for Pandora – and much more importantly – a game-changer for music,” said Brian McAndrews, chief executive officer at Pandora, in a released statement today.



It’s likely that Pandora will use this extensive data set to attempt to sell tickets through Ticketfly to events it knows listeners will enjoy.