Did you know there’s a special six-week window of opportunity that comes once a year - every year? The sad thing is, most musicians aren’t aware of it or don’t give it much thought.
Will you be different? Will you be ready this year?
FACT: About 20 percent of all annual music sales take place in the last six weeks of the year – during the holiday season! And the demand is there consistently every year. Internet-based holiday sales, in particular, continue to grow … and there are more opportunities all the time to tap into these online consumer dollars.
Many independent artists profit simply because they put a little time and energy into creating annual holiday campaigns that gain momentum year after year.
THE PROBLEM: Most artists never tap into this holiday revenue potential.
Why? Thanksgiving, Christmas and Hanukkah come only once a year, and they are short-lived events. It’s easy to justify not putting much effort into them. Therefore, most musicians ignore this holiday music income stream.
That’s a BIG MISTAKE!
ACTION STEP: Now is the time to create a plan to share your music, do good in the world, and profit from the unique way you can help people celebrate during the holiday season.
Do what the smart bands and artists do: Think ahead and create a plan now that will serve you and your fans during the coming holiday season.
Source: Hypebot (by Bob Baker)
On the heels of Google wading into the music streaming waters with its Google Play Music All Access service, with a $10 fee for all-you-can-eat streamed tracks, the indie music agency Merlin has today published results of a recent survey of its 20,000-label member group, plus an analysis of 6.5 billion music streams over the last year, which spell out where the money is coming from today. Streaming services are making increasing headway as a revenue driver for musicians, but digital downloads — specifically Apple’s iTunes — are still ruling the roost.
Worldwide, iTunes has held on to its spot as the single-biggest source of revenues for Merlin’s independent label members, both across key markets like the U.S. and UK, as well across Europe and globally. Interestingly, Spotify is securely in second position, underscoring just how popular both Spotify and streaming services have become — second has been a place held by Amazon for some time prior to this. Amazon’s MP3 download service subsequently slipped down to third place across the board, while Deezer and eMusic are split regionally in terms of their influence and in grabbing fourth place.
We’re reaching out to Merlin to see if we can get a specific percentage breakdown here. Typically iTunes has been estimated to hold around 60% of the digital music market by revenues; NPD put its share at 63% in April 2013. (Update: A Merlin spokesperson says those breakdowns are not being disclosed.)
“The new generation of digital services has created a new dynamic of consumer freedom, limitless choice and myriad paths to discovery,” Charles Caldas, the chief executive of Merlin, said today in a speech at the Great Escape conference in Brighton. “Our numbers illustrate that this dynamic is bringing incremental value to the market, and the demand from music fans for the music being released by our independent members is higher than ever before.” However, in what might be a swipe not just at big labels but big players like Google jumping deeper into the market, he also cautioned against companies that might be trying to apply legacy music royalty concepts to digital.
“The ecosystem is fragile: power is more concentrated than ever, and we are seeing an attempted land grab by the largest companies for digital market share as they try to recreate the old-market advantages they are clearly losing in the digital space,” he noted. Merlin, despite its tens of thousands of indie label partners, only makes up about 10% of the world’s music market, so it has a place continuing to rage against the machine.
It will be interesting to see whether Spotify’s (and streaming’s) rise are eating into that 60% marketshare for iTunes. But the research from Merlin suggests that if this is the case it’s not a watershed moment quite yet: both formats appear to still be growing, even if streaming is growing more.
Some 92% of respondents in the survey said that streaming and subscription revenues (based on streaming) grew in 2012 compared to a year ago. One-third said the rise was as much as 100%.
The rise in downloads was less pronounced: around 66% said a-la-carte download sales grew alongside that streaming rise. Only 8.4% said the rise in download revenues increased by 100%.
In terms of what the growth in streaming means for actual businesses, the takeaway is still marginal.
Merlin’s members say that they expect royalties of $65 million or more for 2013 from streaming services, but if you just do the math and divide that among 20,000 members, that works out to only $3,250 per label. Considering that Merlin claims that its members’ share of streaming services is typically 12-20% higher than those of other major labels — included in Merlin’s counts are acts like The National, Grizzly Bear and Bon Iver, as well as labels like Domino and Beggars Group — it sounds like streaming, despite all the advances and popularity, remains for now just an opening act, and not the main event.
Full results of the report can be seen here.
Source: TechCrunch (by Ingrid Lunden)
Psy’s ‘Gangnam Style’ might have catapulted the South Korean music market into the global consciousness but to industry observers like myself it has long been a market of particular interest. Being the first major music market to pass the 50% digital mark – in 2006 – South Korea has been held up both as a digital trailblazer and as a canary in the mine for the global music industry. Strong growth over recent years hinted at a brighter international future, but just as ‘Gangnam Style’ was propelling South Korean music to unprecedented global heights the South Korea music market went back into decline.
The South Korean music market is one of contradictions and idiosyncrasies, but crucially it also holds many lessons that the global music market would do well to pay heed to.
Bucking Global Trends
According to the IFPI’s invaluable Recording Industry in Numbers, South Korean recorded music revenues declined by 5% in 2012, breaking a run of four years of successive growth. But unlike the global market, it wasn’t the CD that was to blame for the fall but digital. Physical revenue grew by 19%, the third successive year of growth, while digital actually declined by 25%, dragging the entire market down with it. The mirror opposite of the global music market where 7% digital growth wasn’t enough to prevent a 5% physical decline drag down total revenues by 1%.
2012 wasn’t the first year that South Korea stood out from the pack though, indeed the last 13 years have been vastly different from the global market (see figure):
In 2011, a proposed class action lawsuit was launched against Universal Music Group over digital income. The litigation from Rob Zombie and Rick James on behalf of themselves and others under the UMG umbrella seeks substantial damages from the record label’s decision to treat income from downloads off of venues like Apple’s iTunes as “sales” instead of “licenses.”
Just how much money is at stake is an open question.
The lawyers representing the plaintiffs want UMG to turn over download revenue and volume data tied to particular artists so they are able to come up with a calculation of damages and order the information in an effort to gain class certification.
But UMG is telling a judge that’s not reasonable, and if it happens, the privacy of artists will suffer.
The current litigation, in many ways, is a follow-up from a path-breaking 2010 ruling by the Ninth Circuit Court of Appeals over a dispute pitting Eminem’s production team of Mark and Jeff Bass against Eminem’s record label, Aftermath (a subsidiary of UMG). At the 9th Circuit, the judges ruled that a lower court had erred by not deeming the label’s agreements with third-parties download providers as licenses instead of sales.
The attorneys for other UMG artists want to repeat the success, which would entitle these artists to collect about 50 percent of collected digital revenue instead of about 15 percent.
But this case is somewhat more complicated given the potential number of artists who have contracts with UMG. Not every artist has precisely the same contract. Not all artists enjoy the same level of success. Commonality is one of the factors that a judge will consider when deciding whether or not to certify a class action.
The plaintiffs’ lawyers think that having access to data will help them sort through the issues in preparation for certification. And they’re not willing to settle for data that leans on anonymity such as “Artist #437 had 1000 downloads and $785 in download revenue in 2005.”
The plaintiffs are willing to designate the information potentially handed over as “Attorneys’ Eyes Only,” but UMG is objecting with a noteworthy argument on “third-party privacy interests.”
UMG says that “the issue’ here is that the plaintiffs’ attorneys — “all 50 or so of them” — do work in the music industry. UMG lawyers stated in a court filing on Friday, “Under plaintiffs’ proposal, plaintiffs’ attorneys and music-industry professionals could review the private financial information of thousands of recording artists with whom they may have adverse relationships, and who have not indicated any desire to be part of any class or to be represented by these attorneys or professionals.”
In the case involving Eminem’s music referenced above, UMG asserts that “when plaintiffs earlier sought private download data for just a single artist, Eminem… he strenuously objected, and was prepared to intervene until Plaintiffs agreed not to seek such data at all.”
UMG also believes that the “true, disguised purpose in seeking the artist names is to help evaluate their case for settlement purposes.”
Nonsense, responds the other side.
According to the court documents, the plaintiffs tell the judge, “It is ironic that UMGR continues to press for more information about how Plaintiffs will calculate their damages, but seeks here to deprive Plaintiffs of important data Plaintiffs can use both for internal analysis of class certification theories, and to illustrate for the Court available methods for calculating damages for any class or subclass. Plaintiffs should not be handicapped in these tasks.”
Source: Billboard (by Eriq Gardner)
The following infographic from Mobile Roadie takes a look at the Mobile Music Industry as of 2012. It was inspired by multiple sources, including Mobile Roadie’s client data, Compuware.com and Flurry Analytics. Believe it or not, ringtones currently represent the biggest proportion of global mobile music revenues. However, in 2013 it’s estimated that full track downloads via mobile will overtake this.
Source: Mobile Roadie (by Terri Kim)
Here’s where the war on piracy gets really complicated. Because for all the ‘just embrace it’ advice from the tech community, it seems that shutting down massive piracy hubs actually improves digital sales. You need an attractive carrot…
…and a giant stick as well. It was true for song downloads following the shutdown of Limewire, and now, there are statistics backing the Megaupload shutdown, as well. ”The shutdown of Megaupload caused a statistically significant increase in digital sales,” Carnegie Mellon professor of information technology and market Michael Smith recently told an audience last week at the Digital Book World Conference in New York.
According to details from MediaBistro, Smith analyzed and compared countries with varying degrees of Megaupload penetration (low, medium, high). And after crunching the numbers he determined the following result:
"It does suggest that when you look at competing with free, using anti-piracy measures to make piracy less attractive does work," Smith said. Perhaps the more important questions are how long the effect lasts, and whether it was worth the effort. Limewire took years and millions of dollars to shut down (and let’s not even get into the costs of the Megaupload takedown).
And sometimes, shutting down one massive piracy hub merely creates a void for another to fill. In the case of Megaupload, Kim Dotcom is now filling that void himself.
Source: Digital Music News
MILESTONE: ONErpm’s Facebook Store Converts to Timeline
It’s finally ready! Artists and labels can now sell their catalog with all the more space Timeline provides. There will be some design/functionality updates soon, but the product is ready for commercial use. Enjoy.
Interested in your own app? It’s free to use. Sign up on ONErpm.
Does Digital Still Trump Physical?
At this point in the history of the music industry, we’re led to believe that all sales will eventually will be sold digital via MP3 or WAV files, however, TopSpin reported that it made 75% of its sales via physical versus digital with a volume of 50-50.
Granted, TopSpin doesn’t do business with a bunch of digital stores like Spotify, which can easily fudge these numbers but it’s an important kernel of news because it means two things: all digital stores should carry physical inventory and people still value physical, whether that’s a vinyl LP or an accessory.
ONErpm plans on making this adjustment soon.
And then there were three.
The bidding war for EMI — the record label behind Katy Perry, Lady Antebellum, and Coldplay — is over. A consortium headed by Sony (SNE) agreed to pay $2.1 billion for EMI’s publishing business earlier this month, while Vivendi’s Universal Music was the last suitor standing with its $1.9 billion bid for the label itself.
Breaking EMI in two was inevitable, but the meaty morsel here is that EMI’s publishing arm sold for more than the label itself. In other words, EMI’s past is more valuable than its present and future.
Need a Tissue?
There aren’t too many people mourning the passing of the major labels. The labels and their thin artist rosters monopolize the already limited playlists of commercial radio. Then there’s the negative publicity stirred up when the label-backed RIAA went after unemployed moms downloading tracks. Music piracy is a problem that needs to be addressed, but the labels didn’t do themselves any favor by making it personal.
Even the fact that Universal will now control nearly 40% of the market — leaving Sony at 30%, Warner Music Group at 19%, and a smattering of indies battling for the rest — is unlikely to raise eyebrows with antitrust regulators. Prerecorded music has been a fading industry for years, and herding struggling labels together will only make it that much easier to identify the remains.
The Gradual Fadeout
CD sales peaked in 2000 when the labels sold 942 million units, raking in $13.2 billion in sales. It’s been pretty much downhill the rest of the way.
Digital sales were supposed to save the day, but the label-backed MusicNet and pressplay initiatives were too restrictive. It didn’t make sense that music lovers had to jump through more hoops to pay for music than the pirated options available on peer-to-peer file-sharing networks.
Apple (AAPL) finally got it right with the iTunes Music Store, which launched in 2003. Labels didn’t like the $0.99 price point for singles. Artists didn’t like the pricing either, since it found consumers cherry-picking the songs they actually liked instead of paying $9.99 for complete albums. However, Apple’s storefront was far better for the industry than the piracy alternative.
Legal downloads should have been the industry’s salvation. Record companies — what were then five major labels and countless independents — would benefit from the benefits of digital distribution. Labels wouldn’t have to worry about pressing and packaging discs. There were no shipping or return hassles. Apple did all of the work, and labels got to keep roughly two-thirds of the sales. Unfortunately, it didn’t play out that way. The growth in digital music — which by 2008 found Apple replacing Wal-Mart (WMT) as the country’s largest music retailer — wasn’t enough to offset the serious slide in CD sales.
Internet Killed the Radio Star
What went wrong? The labels will point back to Napster, LimeWire, Kazaa, and other disruptive peer-to-peer networks that swayed countless Web-savvy users to download and share pirated tracks. They’re right, but there’s a bigger picture that the major labels are missing.
The Internet made it easier to swap virtual mix tapes, but it also armed garage bands with the tools to get noticed. The playing field was leveled as artists set up MySpace music pages and uploaded tracks to the original MP3.com website.
Where would Justin Bieber or Susan Boyle be without YouTube? How many bands are scoring national attention through Facebook fan pages?
For better or regrettably worse, everyone’s demo tape is now a click away.
Who says you need a major label for digital distribution? Getting your music on iTunes, Spotify, or any of the popular e-music stores and streaming sites will cost most artists less than a video game.
In terms of getting noticed, setting up pages on YouTube, MySpace, and Facebook are no-brainers, but music-dedicated sites including Bandcamp and SoundCloud are also there for promoting your digital presence.
The opportunities keep coming. Google (GOOG) introduced the Google Music Artist Hub last Wednesday, giving artists a free way to get their music available on what are now 200 million activated Android devices.
Last Round for the Music Moguls
The record companies aren’t worthless, even in this scorched climate. Even if CDs go away, there are still promotional, radio, and touring benefits that are easier to secure under a major label. The problem for the prerecorded music industry is that the gap between the signed and unsigned has narrowed.
Even proven bands are finding it more lucrative to leave their labels and strike out on their own. As home recording equipment gets better and cheaper, record companies are no longer necessary to bankroll the once costly recording sessions.
Labels used to love signing artists with established followings, but now those same artists are wondering why they should be tied down to long-term deals when they have the digital distribution tools at their disposal to reach their growing audiences.
There’s a new world out there, and its soundtrack is being scored by unsigned artists that you don’t know — yet.