It’s all about the music – musings on the business of music in the digital era

Posted in Indulgence, Music Industry, Rants on May 7th, 2010 by Alex

You gotta do it all yourself these days

It’s all about the music, isn’t it? No-one needs to make money to make music, but it certainly helps. Modern music begs to be created by and channeled through increasingly advanced technology, to be heard on multifarious shores. Music is global, dispersed and, increasingly, non-commoditised. Some money is necessary to facilitate this, but there’s less and less of the filthy stuff around. In 2009 global music related revenues slumped 7%, continuing a decline that began in the early naughties when the digital revolution took hold.

But it’s not as simple a picture of piracy induced decline as the record industry would like us to believe. What’s most important to understand is that digital theft is only partly to blame for these financial woes. Due to the ease on distribution of the new digital formats, and the ability to buy single tracks off of albums without buying the whole thing, sales have migrated away from lucrative CD sales (which supports a massive production and distribution infrastructure) to considerably less lucrative digital forms starving both the recording and distribution industries of cash. The way people consume music has changed forever, but the music industry was slow to catch on.

There has also taken place a devaluing of the music. Because of the ease of distribution of digital media, and no tangible way of stemming the free exchange of digital music files, a key economic law has been violated: the law of scarcity. Put simply, a ‘commodity’ that is desirable but abundant or freely available has a low (or non-existent) intrinsic value. Musicians and the industry alike would probably balk at this, but it’s an immutable law of economics that everyone’s going to have to get used to.

That said, the digital market is thriving in almost every territory, and the music based revenues in Australia, Brazil, South Korea, Sweden and the UK grew last year because of this. But it still remains harder than ever to make money out of music, and as a result record labels (key for providing funding for bands to produce and market their wares) are less able to take on new acts. This is leading to an anti-diversification of the music that’s being marketed to the masses and a preference for pushing legacy acts. This trend is likely partly responsible for the fact that digital sales, volumes of streamed tracks and even those of pirated tracks are all trending towards the popular end of the market. The ease and low cost of production and distribution of music mean that there are more acts than ever competing for listener attention. These three facts, among many others, mean that it’s tougher than ever for a marginal/unsigned/independent artist to get heard, let alone make money.

As a result bands are having to become marketing/promotion machines on top of all the other diversifying tasks they are having to take on in the absence of labels. Some see this as bad thing, others see it as bands being forced into taking control of their own destiny – this may come with much more work, and countless pitfalls and gotchas, but for those successful the immediate rewards are much higher. Unfortunately, only bands with a lot of nouse, real dedication and a lot of luck are likely to make this a reality, which leads us back to the labels – the market needs for them to start taking risks again, and quickly.

Instead, the big players have been trying to litigate and legislate their way out of their deepening hole. The former has yielded little success and cost a lot of money, the latter has had some success with legislation passed in both France and UK. The UK’s Digital Economy Act is controversial to say the least (it gives media companies the power to request that repeat offenders have their internet cut off) and was rushed through in a potentially unconstitutional fashion. This legislation is unlikely to work, not least because it won’t grow any teeth for at least 2 years, by which point Plan B will (God willing) have taken hold.

What’s Plan B? Well it’s already happening around you and the record industry is only mildly less worried about it than they were when this pesky digital revolution thingy started happening in the first place: streaming.

Industry backed Spotify currently dominates the European streaming market and is already becoming ubiquitous. The last software update saw them integrating with Facebook and including listener’s own MP3 library in playlists – a move which should give iTunes pause for concern. However, Spotify isn’t making anyone much money at the moment, least of all the artists, and there’s a palpable sense of “when will they shut it down” in the air. Until that is rival little cousin We7, whose revenue and royalty payout model yields better results, posted profits last quarter apparently proving that an advertising based streaming service can be profitable. The market is really hotting up, and with Apple recently squashing streaming service Lala, rumours are rife that they are preparing an iTunes based streaming service in an attempt to muscle in on the party.

These streaming services will need to become truly mobile before they are a viable alternative to MP3’s (Spotify already are for paid subscribers) and even with We7 turning a profit, it’s unlikely that they’ll be really embraced by the industry unless they can turn over a bit more cash, most likely via mandating paid subscription. One way or another, streaming would seem to represent the future of digital media, and once firmly established should render filesharing redundant.

This being the case, the situation we’re currently in, where making money out of selling music directly is nigh on impossible, will remain so for the foreseeable future and probably forever. That’s not to say that one can’t make money out of music. Live music is a big growth area at the moment, with many record labels looking to monetise their acts this way. However, this is driving ticket and bar prices up which could have the effect of squashing this market too.

An interesting side effect of digital streaming is that it’s actually widening the music listening audience. 60% of people never buy music, however, services like Spotify are engaging these people into actively consuming music and converting them into potential revenue targets – they may not want to buy music, but they may well pay to see it, or simply swallow some advertising for the privilege. Understanding, expanding and exploiting this ‘new’ audience will be key to the evolution of the music industry.

So where does all this leave the music industry? Well there’s a bunch of people that don’t make music who probably will have to find careers in different industries, but the people who do make the music are likely to carry on doing so, regardless of the economic welfare of the music industry. The economic battle will be fought by suits who will utter the word ‘licensing’ a lot while worrying about the logistics of an increasingly complex royalty system. The music is thriving, even if it’s not as good at generating dosh as it was before, and thanks largely to the advent of digital distribution, there’s a larger audience than ever before. The music exists without the industry, and that’s what matters.

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Defending the Faith?

Posted in Petulance, Rants on October 13th, 2009 by Alex
Apparently there are trace elements of metal in bottled water...

Apparently there are trace elements of metal in bottled water...

Still the filesharing battles wages on, despite the fact that there is no war. Dom Lawson’s entertaining article on this subject apparently fell foul of Metal Hammer’s editorial scythe. We can only assume that they didn’t want to fall on the wrong side of this prickly debate. And who can blame them, why risk pissing off your superiors over a war that’s apparently being waged elsewhere?

I do wonder though, how many folks out there who are earnestly ‘trying’ before conveniently ‘forgetting’ to buy. Is this costing the music industry money? Maybe. However, that’s largely beside the point. The issue here is that music is no longer a commodity that can be contained and rationed. The commodities are the physical items that accompany the music – the CD, the cover, the box – these are tangible goods that should be exchanged for money.

It’s because music is freely available that this situation exists. I’m sorry to restate the obvious, but it’s worth thinking about this. Water is ‘freely’ available in the UK. We pay for that by way of taxes (rates). The only time you pay at the point of receipt of water is when you buy the bottled stuff, and then what you’re actually paying for is the container and the convenience (plus the mark-up of whatever establishment you purchase it from). The future model of music will resemble this, and take a look at Spotify to see this in action. The music industry already knows this and the majors all own a stake in Spotify. The problem with this is the margins are much lower with models like this, and until the majors can shuffle their operating models to account for this and pacify the investors, they’re going to carry on chasing rainbows with lawyers and politicians.

By the way, the words on this page are not a commodity either. By the time this piece makes it onto the blog it will have eaten at least an hour and a half of my time. This blog probably eats more of my time per month than your average unsigned band does of the band members’ time. Should you wish to take these and consume them in any way you see fit then please feel free to do so. If you want me to save them onto a CD and send them across to you I’ll charge you for the CDR, postage, packaging, and round that up for my efforts. If more people start to read this blog, maybe I’ll put some advertising on it and try and cover the cost of the server and maybe I’ll even get a bit extra. If you want to take any of my articles and make money out of them (god knows how you would do this) by posting them on your own, commercial, website, then you will have to pay me. If you do not I may take legal action. Will I try and charge you for simply reading this article/blog despite that is takes time, effort and money to run? Hell no! Readers are more important to me than profit, and without them I stand no chance of making any anyway. The printed media industries learned this years ago. These days, some newspapers are moving to models that they no longer charge even for the physical product, and make money from the extra advertising revenue gleaned from the larger distribution.

I don’t know why I’m telling this to you lot – you already know this. I also don’t know why I bitch about the fact that this debate is still happening, I actually quite enjoy it.

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The Good, the Bad and the Ugly – Part 1

Posted in Indulgence, News, Tracks on August 20th, 2009 by Alex

The Good

Devin Townsend nonchalantly Tweets:

@dvntownsend counting down…late nights, great progress…suddenly very happy about record 2. Released around Nov 20.

and unleashes more verbose psychobabble on the world:

Musically, ‘Addicted’ is along the lines of the big, wall-of-sound hard rock/heavy metal of Ocean Machine and (The Devin Townsend Project’s) ‘Accelerated Evolution’ — even Physicist at points. It is a very direct and ‘to-the-point’ album with an emphasis on groove and the chorus.

Exciting stuff, seriously. If it’s 1/10th as good as Terria or Accelerated Evolution, it’ll be amazing. Perhaps more tantalizing however is:

On other notes: I have been rehearsing with a new band, and we will start touring in early 2010, representing all the back catalogue of solo material, from ‘Ki’, ‘Addicted’, Physicist, Ziltoid, Terria, Ocean Machine, The Devin Townsend Band, Infinity etc… I have some big plans for this and rehearsals are sounding amazing. The touring entity will be called ‘Devin Townsend’ and is essentially a way for me to get out there and interact again and showcase 15 years of music that never really got its fair shake. We look forward to seeing you out there!

Yeah! You better be doing that in the UK Mr. Townsend!

Next – A new track released off of Megadeth’s anticipated new album:

Do I hear some leanings back to Countdown to Extinction days? Speed metal loveliness indeed!

Every Time I Die released another new track off of the forthcoming New Junk Aesthetic on their Myspace. This is a delightfully pleasant recording, but does anyone else notice a hint of a softer, more commercial sound seeping through? Could this be the beginning of a slippery slope for the southern hardcore mavericks?

This week I discovered that not all Metalcore sucks, with the introduction to my music vocabulary of Burnt by the Sun. Like a darker version of Hatebreed, they keep the breakdowns to a minimum and deliver top notch aggressive metal. I may even put on some big sunglasses and a fake beard (to wear over my real beard) and venture out surreptitiously to but a copy.

Other stuff keeping me happy:

  • No Made Sense with their brutal progressive hardcore and stupid sounding album title
  • Photonic, which has lead me to dust off various albums by Fugazi, Pavement and Guided by Voices
  • Oceansize. Apparently they have an EP out soon.
  • Earth. Slowly I’m getting my head around this most frustrating of bands. Albums Pentastar and Hex are simply beautiful but also infuriating.
  • Revocation. Everyone is carping on about them like infatuated teenagers thanks to Cosmo Lee’s article suggesting that they may be the next great metal band. That’s probably going a bit far at this early stage, but they are pretty good. The guitar solo on Dismantle the Dictator is to die for. No doubt Metal Hammer will be forcing them down our throat for the next 3 years.

The Bad

Desparately naive wannabe journo’s laying into indisputably legendary bands like Black Sabbath. Why on earth would you write such an ill-informed bucket of badger shit is totally beyond me.

Music streaming site Spotify is part owned by the evil overlords of the music industry in an attempt to keep the site afloat in the face of pitiful advertising revenues and in lieu of paying out royalties to the record labels. If this isn’t depressing enough, it sounds like the artists aren’t getting any royalties either and are unlikely to see any dividends when some cash burdened corporate is stupid enough to buy this service which is as likely to see profit as I am likely to turn green and transform into a million dollar bill.

…and the Ugly

This dude bustin’ some classy moves. I have been known to do this after a couple of beverages, which is when it gets truly ugly.

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