The Future of Music: Moses Supposes

WILL MOBILE RADIO REVIVE THE RADIO STAR?

Written by Moses Avalon on July 26th, 2010

Data Plans will Likely Put a Damper on Clear Channel Dreams of Mobil Domination.

Moses Avalon

If video killed the radio star will smart phones revive him?

Announcements from Clear Channel this week force artists and their teams to seriously evaluate the position that mobile content will play in their ability to expand a fan base.

Clear Channel celebrated with a press release, indicating that they had almost completely sold out their advertising lots for mobile radio commercial spots, ending a long dry spell for radio advertising sales.

The significance for this is the fact that these sales are based on the perception that mobile radio is where tomorrow’s radio listener will be pointing ears for music consumption. Evan Harrison, a Clear Channel president charged with the duties of creating a unique on-line music experience was quoted as saying, “Mobile is a strategic necessity for us.”

Record labels and publishers have been salivating over this development because mobile radio offers something that terrestrial radio never could– instant sales. In mobile radio there is a “buy button” ever present. When a listener hears something he likes, he can download it. Boom! – instant sale and instant buyer data. It is a dream come true for music sellers.

And a nice dream it is, but is it a sound one? Can mobile radio revive music sales and the radio star?

YES, MOBILE WILL SAVE THE DAY

Here’s what’s going through the minds of Clear Channel’s digital execs, Pandora and other mobile music services that mimic the old style radio format (which on artist and songwriter royalty statements is called, “non-Interactive streaming.”):

According to Forrester Research, a market research firm, the amount of time consumers listen to mobile radio is rising staggeringly. The firm claims the average user tuned in to Clear Channel’s iheartradio App for 137 minutes a week in July. This is up from 120 minutes at the end of 2009. Conversely, the amount of time consumers spend listening to traditional radio has decreased four hours a week from its 2005 benchmark of 10 hours.

“There’s a tremendous amount of interest” says David Goodman, president of CBS Interactive Music Group, which powers radio apps for AOL, Yahoo!, and Last.fm.

It seems obvious from all this optimism that artists should begin doing DJ booth tours for mobile radio stations. (Except, there are no DJs in mobile radio. Computers make the playlist based on users’ listening habits. And there are no “stations” because it’s all done on a massive server.)

So… mobile good, right? Not so fast.

NO, MOBILE DON’T MEAN NUTTIN’

Mobile is just another sales avenue, but nothing special. At least not yet.

The problem with all this hyperactive hype that research firms are famous for is that it often doesn’t take into consideration how much new things cost the consumer. These conclusions regarding mobile are no exception.

The big problem with the theory of more listener hours = more interest is that these stats were gathered over 2008-2009 when people had unlimited data plans. That perk ended last month (June 2010) when AT&T announced the end to such indulgences. Customers are now charged for all data they consume.

This sets a barrier to how high the number of hours the average listener can tune into mobile radio. Most people who use smart phones for data uploads and have a plan of $15 a month. This allows them about 250 megabytes, or roughly 2 hours of streamed audio content. This will not be satisfactory to those users who also need to save some data for useless things like email, downloads, Apps, movies and of course, porn.

Even those with deluxe plans of $50 will not be listening more than a few hours a month. The likelihood is that they don’t have that big data plan because they really, really love streamed music. They have it for uploading large files they create for work to FTP servers.

But terrestrial radio is still FREE.

So, raise your hands, who will pay $15-$25 a month just to listen to Clear Channel or Spotify when they can hear the same playlist for free in your car? I’ll save you some market research fees fellas: no one.

For mobile radio to recapture the glory days of regular radio, AT&T and Verizon will have to sell a truck-load more smart phones and will have to give away unlimited data plans for quite some time. Or they could put mobile radio in cars and bundle the data plans so the consumer doesn’t feel the pinch.

Could it happen? Maybe. So far, Clear Channel has not announced plans for anything like this and the trend seems to be going in the opposite way — in the near future we’ll be paying more for large data plans, not less. So, I’m not holding my breath that this will restore music sales or the radio star to the days of wine and roses.

Your thoughts and suggestions for Clear Channel?

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Tags: Clear Channel, mobile radio, Moses Avalon, mosesavalon, Music Business, music business downfall, music revenue, radio ad sales, radio revenue. radio adds sales, radio sales, record companies, record sales

PUBLISHERS TO WRITERS: WE WANT YOUR RECORDING RIGHTS AS WELL

Written by Moses Avalon on July 19th, 2010

At AIMP Luncheon Execs Reveal the New Model of Music Publishing

Moses Avalon

At the House of Blues this past Thursday the Association of Independent Music Publishers (AIMP) held its monthly luncheon. These are always nice places to catch up with colleagues, but this time it was rather unique due to revelations made by the music publishing Execs and their demands on those seeking publishing deals with them– we want your recording rights as well.

The panel, hosted by veteran music barrister, Henry Root, consisted of executives mostly from major publishers. Each opined as to what they will be looking for when signing candidates in what each claimed are “transition times,” for the music industry.

The panel consisted of business affairs executives, David Lessoff (New West Records), Alan Melina (President New Heights Ent.), Robert Allen, (Universal) and Greg Sowders (Warner Publishing)

When responding to Root’s question of how 360 Deals, often described as “land grabs” by industry insiders, play a role in a publisher’s decision to sign or not to sign, each panelist gave more or less the same answer using carefully chosen words, which was basically this: If you plan on signing with us, make sure you come with all your rights intact.

Meaning that if you have a previous recording contract on a label and now you have the interest of a major publisher–maybe because one of your recordings has gained some traction–you might have to go back and get out of your record deal.

What the F–k? Did I wake up after taking the red pill r’somthing?

For publishers it used to be, don’t call us unless you’re signed to a major. Now it seems to be the opposite. Since when is a publisher concerned about a songwriter’s recording commitment? Answer: since they started up streaming development deals to major record labels.

Melina: “If the artist already has a [label] deal we basically say you have to re-negotiate so you can give us the 360 rights so we can up stream them to [our sister] major.”

The panel seems in agreement on the point that publishers today are interested in the whole package, even if it’s for rights they themselves do not plan to exploit; just like 360 deals on record labels, who take an interest in an artist’s acting roles, live shows and other things peripheral to the sound recording revenue. Majors traditionally broker those rights to third parties for exploitation. Publishers are now entering that game, parsing off recording rights to labels with which they are “comfortable” doing business. Presumably this will often mean their sister labels. For example a publishing deal on Warner Chapel will likely only yield a record deal on Warner Music.

What if the artist wants to stay indie while licensing their publishing rights for needed cash. One panelist commented that this might not be possible in the new paradigm, “If you are signed to label that we don’t like, you are f–ed.”

And the same works in reverse: If you already signed to a publisher it might impede your sign-ability to a major label recording contract.

Lessoff: “If an artist already has his publishing tied up and then there is only those shiny disks to bring in revenue the deal is not as good for us.”

In the old days, before offering an advance publishers wanted a writer/artist to not only have a record deal, but a guaranteed release with a pressing of at least 100,000 units. This was the signature of a known entity. Now, however, they see a prior deal as an impediment because they are expected to up stream their development act with all rights in place. And they can not do that if an artist still owes an album to the bedroom label who took a chance on them.

Once the publishing world would light up over a Carol King or Bob Dylan. These configurations of artists came with large amounts of rights to parse. But now, even that seems too limiting. To get an advance in “transition times,” according to the panel, you need to be something like Prince: artist, writer and producer.

Saunders: “A home run for us is signing a writer who is a producer and has direct access to [other] artist[s]. The self contained singer/songwriter is still possible but difficult.”

UPSIDE /DOWN SIDE

On the down side, this trend, if carried through to its logical conclusion, would mean that artists looking to enter the major label system– excuse me– the major label/publishing system, will now find themselves more laterally integrated than they may wish to be; If your publishing is on UMG then so must your record deal be on a UMG distributed label, etc, etc.

This limits the artist’s strategic choices and consolidates the power that one company has over the artist’s destiny. True, there is an advantage to having one group handle everything for you, if they are really good at exploiting everything. But what if you’re happy with the job that Bedroom Records is doing for you; promoting you discreetly and in a way that keeps your street cred, but want a high level publisher or Copyright Admin company, like Bug Music, to be a bull dog about getting that ASCAP and sync money? Once you had that option. But it seems the trend is working towards taking that away. Now, if you want that high tower publisher you may to jump to a high tower label, and their weighty 360 Deals.

On the up side, well there really isn’t an upside, unless you look at it like this– now an artist or their manager don’t have to shop the work twice. You get two lousy deals for the effort of one.

What do you think of all this? Comment here.

Mo out

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Tags: 360 deals, 360 record deals, AIMP, Alan Melina, Association of Independent Music Publishers, Bug Music, David Lessoff, Greg Sowders, Henry Root, House of Blues, Moses Avalon, mosesavalon, music publishers, music publishing, music sales, Music scams, publishing deals, record deals, Recording Industry, Robert Allen

ISRAELITE DISCOVERS “NEW” TECH CONSPIRACY

Written by Moses Avalon on June 27th, 2010

NMPA Sees the Truth Years After the Rest of Us.

Moses Avalon

During the National Music Publishers’ Association (NMPA) annual meeting on June 16, CEO David Israelite stated in his key note address that he has identified the “new” enemy of the music biz– Computer and Communications Industry. But didn’t everyone already know that?

Even though it’s nice to finally see someone in an executive position declare with authority what has, up till now, been delegated as something of a conspiracy theory, this pronouncement is kind of like Columbus “discovering” America. I wrote about the tech industry’s hidden agendas in an article called “The DRM Manifesto,” in 2007.

David Israelite: Prophet of Hindsight

(If only Mr. Israelite had been a subscriber to my blog, which I believe he is, now that I think about it).

Okay, so now that the NMPA has seen the light, what will they do about it?

The NMPA has filed their suit against LimeWire and they’ll win. But after the RIAA, whose victory last month entitles them to collect something south of $1,000,000,000; I’m not sure there is going to be anything left in LimeWire’s purse for the songwriters.

I like David. I first met him at a NARAS function years back. He’s a good egg, but his attitude personifies the reason that the $85Billion tech world was able to so easily battle against the $15 Billion music industry; a sort of corporate narcissism that says, “nothing ever happens till it happens to us.”

Taking advantage of our malignant myopia about strategic changes in the music landscape, ISPs used the oldest trick in the book– divide and conquer. And divide us they did, quite well. Of course, they had a great head start and a lot of help — from us.

OUR CIVIL WAR

Labels and publishers have been for years squabbling over how to divide up money earned from new, Internet-based revenue streams. Publishers argue that the underlying composition deserves an equal split of the booty because without the unique combination of lyrics and chords, labels would have no fodder to create hit records. Labels, conversely feel that it is they who make the substantial investment in developing and promoting the song, therefore, they want the lion’s share.

To use a metaphor, publishers own the beach front property, but the label builds the billions dollar resort and markets it to the public. While the resort has to continuously promote and maintain the beach to keep money rolling in, the landowner just collects cash as their land goes up in value. Should new revenue created by the resort be split equally with the landowner? It depends on what side of the economics you’re on.

Labels have fought publishers vying for equal shares of licensing fees, proposing that the US adopt the standard in most foreign countries– a 90/10 split in favor of labels. Publishers scream, “labels are greedy” (another “new” discovery) and won’t give an inch. This is why it took almost seven years to establish new Statutory Rates for ringtones, streaming, internet radio, etc.

Tech lawyers even turned our in-fighting into a sound legal defense, saying that they would love to pay the music biz for licenses, but, since the publishers and labels couldn’t come to an agreement, they didn’t know how much to pay and to whom. This clever argument has cost our industry millions.

The argument has been the single largest detriment to our industry. Far worse than piracy; it weakened our ability to fight as a unified force against the tech giants promoting theft, and making music the free toy at the bottom of their cereal box.

BYGONES

But all this is prologue. The very funny thing about Israelite’s pronouncement of the new enemy, is that the war is now winding down. The enemy will soon be our partner.

ISPs are making three strikes and graduated response deals with content holders and cooperating with European and Canadian agencies while they raid P2P hubs, write new anti-piracy laws and arrest infringers. Have ISPs grown a heart? No. ISPs are trying to position themselves as an alternative to Cable TV. Now they need to provide legally obtainable content. So, in the eyes of the ISPs, music has been promoted from the free toy at the bottom of the box, to the nuts and raisins in the cereal.

The tide, while it still has a long way to go, has turned and I believe it will not be more than a few years until we are back to business as usual. Sure, there’s still Google to tame with their recent (temporary) victory over Viacom and their book digitizing efforts, but all this is likely going to resolve in the coming years. ISPs are trying to curry favor to fend off the Fed’s internet regulatory attempts.

Where does this leave Mr. Israelite and his discovery of the “new” enemy? I don’t know. To me he looks a bit like General Patton proclaiming that the Germans are the enemy on D-Day. It’s kinda surreal, actually. Sorry David, don’t flame me, I love ya and support ya, but, my response is that you should actually read the posts of mine that you subscribe to. You could have been in front of the RIAA instead of waiting in line behind them at the LimeWire payout window. If ya did that maybe the NMPA–who has let the RIAA take a public brow beating for years–wouldn’t look like the last kid at the dance without a date.

Or maybe it’s time for a new trade organization. One that combines the agendas of both the NMPA and the RIAA and can fight for all components of music as one force, instead of just the recording side or the publishing side.

In spite of my comments above, I support the NMPA. Israelite’s speech is worth a good read. His “top 10″ list (reprinted below) is an excellent decoder for those following the ISP/content war. He clearly and articulately outlines the challenges of past years and the truth about what ails us, even if it’s a truth that many labels and artists already learned the hard way.

Mo out.

The David Israelite Top Ten List

Regardless of what a website or person claims, you know an entity is secretly, or unconsciously anti-music business, anti-artist and anti-composer, if they fit any of the agendas below.

No. 10: They support changing the law to reduce damages for copyright infringement.

No. 9: They support the elimination of statutory damages for secondary copyright infringement.

No. 8: They favor rolling back copyright extension; in some cases, radically.

No. 7: They favor the elimination of the songwriter and publisher rights for server, cache and buffer copies.

No. 6: They oppose efforts to obtain the identities of individuals engaged in massive copyright infringement.

No. 5: They support extreme versions of orphan works legislation.

No. 4: They have filed legal briefs supporting anti-copyright positions of Grokster, Napster, LimeWire, Cablevision, Google, YouTube and Verizon.

No. 3: They oppose graduated-response protection for copyright owners.

No. 2: They oppose treaties that support copyright enforcement like the Anti-Counterfeiting Trade Agreement.

No. 1: They actually argue that illegal peer-to-peer file-sharing traffic helps the economy and doesn’t hurt songwriters.

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Tags: David Israelite, David Israelite CEO, David Israelite NMPA, dying record business, Internet Radio, LimeWire, Moses Avalon, Moses Supposes, mosesavalon, mosesavalon.com, muisc business, muisc sales, music sales slumps, National Music Publishers Association, NMPA, record business sales slumps, record music sales, RIAA, Statutory Rates for ringtones, streaming

The Future of Music: Moses Supposes

...The Music Biz: inside info, outside the box

WILL MOBILE RADIO REVIVE THE RADIO STAR?

PUBLISHERS TO WRITERS: WE WANT YOUR RECORDING RIGHTS AS WELL

ISRAELITE DISCOVERS “NEW” TECH CONSPIRACY