Business Matters: Subscriptions and Anti-Piracy Efforts: Helping the Record Industry Make Progress?
Business Matters: Subscriptions and Anti-Piracy Efforts: Helping the Record Industry Make Progress?

Subscriptions and Anti-Piracy Efforts: Helping the Record Industry Make Progress?
-- Subscription services have finally, pretty much arrived while anti-piracy efforts are showing positive results. The music industry needs to play both offense and defense. Either is a fair interpretation of the new "Digital Music Report 2012" released by the IFPI on Jan. 23.

After a decade of inflated expectations and dashed hopes, subscription services are finally showing serious traction. With the help of these services, global recorded music trade revenue rose 8 percent to $5.2 billion in 2011.

Like previous reports, "Digital Music Report 2012" offers quotes from a number of record executives to expound the possibilities of access models. Here's an example of the common refrain: "We think the presence of access services can expand the whole market," EMI Music executive VP of global business development Mark Piibe says.

In the past, the problem was that access services (another name for subscription services) needed more than a mere presence. The products weren't all that great and they had too few distribution channels. Access to a huge catalog of music isn't very valuable when the service is disappointing. Now the download model is fairly set in stone (online lockers are a different matter) and the access model is dynamic and exciting. Today's subscription services are better than their predecessors, and there are more partnerships -- mobile companies, ISPs, telcos -- through which to offer those better products.

The numbers of subscription services found in the IFPI's report are somewhere between good and impressive. Last year subscription services grew to 13.4 million subscribers from 8.2 million in 2010, according to the IFPI. That may sound high to some people, but it's a global number that incorporates services around the world.

Some of the individual numbers have not been widely reported. The report says Spotify has 2.5 million subscribers worldwide and "over 400,000" in the United States alone. (A Spotify rep tells me that "over 400,000" figure for the United States is rooted in a Forbes article on CEO Daniel Ek. The last figure Spotify gave for U.S. subscribers was 250,000 in November.) WiMP, a subscription service available in Norway and Sweden that's bundled with broadband and mobile plans, has "more than 350,000."

A few other figures in the report have been widely reported: Deezer has more than 1.5 million, Rhapsody has 1 million and Muve Music has more than 500,000. No figures were given for the other services that operate in the United States: Sony Music Unlimited, Rdio, Mog and Rara.

Then there's piracy. The IFP -- and other trade groups -- has talked about piracy consistently over the years. The line is usually something like, "Piracy is a threat to creative industries and must be deal with by legislation or market solutions." Many people outside the music industry don't think anti-piracy efforts will work, or they think governments should stay out of these matters. Now, the IFPI can point to some interesting data to help make its case.

Take France, for example. In France, a country with one of the tougher approaches to digital piracy in the entire world, track sales were up 23 percent and digital album sales rose 71 percent (compared to 24 percent globally), according to the report. The IFPI added that P2P usage in France dropped 26 percent since infringement notices started being sent in October 2010, according to an IFPI/Nielsen study (it does not specify if the Nielsen measured P2P traffic or received self-reported P2P usage estimates from consumers).

The IFPI report also mentioned a French study tracked iTunes France sales from July 2008 - well before the Hadopi law was passed - until six months after the start of infringement notices. The analysis found that iTunes sales experienced a "significant uplift" coinciding with the highest level of awareness about Hadopi. Further, the positive effect "maintained throughout the period studied." The upshot, according to the study, is that iTunes sales were 22.5 percent higher for tracks and 25 percent for digital albums than they would have been in the absence of Hadopi.

These cases don't amount to concrete evidence that anti-piracy efforts will both lower piracy and improve digital revenues. But these two examples, along with growth in subscription services, lend credence to the IFPI's long-standing argument that a combination of anti-piracy efforts and better digital music products makes for a good long-term strategy.

Gobbler Raises $1.75 Million In Funding
-- Media file management startup Gobbler has raised $1.75 million in new funding from a long list of investors. They include ff Venture Capital; Black Ocean Group; Mindjolt CTO Aber Whitcomb; Facebook VP Dan Rose; former Googler Jermey Wenokur; Science's Mike Jones; and LowerMyBills founder Matt Coffin. That brings its funding up to "just over $3 million," according to TechCrunch.

Gobbler is a digital asset management service that allows people to share large media files. It's not a file-sharing service as much as a collaboration tool, CEO Chris Kantrowitz explains to TechCrunch. "We are focused on a different type of media creator. The person who works from a home environment or mobile environment."

Creators can use Gobbler to back up audio files, organize their files and transfer multi-gigabyte files and folders. It supports a range of media creation software including mixing/recording (Cubase, Logic, Protools, Sony Acid and others) and mastering (Apple Waveburner, Steinberg Wavelab, IK Multitracks T-Racks).
(TechCrunch, via Hypebot)

Study: Tablet Ownership Nearly Doubles Over Holiday Season
-- A new Pew Internet study has found that tablet ownership nearly doubled from 10 percent of U.S. adults to 19 percent over the holiday period. Ownership was found to be fairly even across ethnicities but varies according to age, education and household income. Thirty-one percent of college graduates surveyed now own a tablet, compared to 15 percent of high school graduates. The younger the respondent, the more likely he or she was to own a tablet. The top age group was 30-49 (27 percent) followed by 18-29 (24 percent), 50-64 (15 percent) and 65-and-over (7 percent).
(Pew Internet)

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