Business Matters: Who Pays for Antipiracy Enforcement?
Business Matters: Who Pays for Antipiracy Enforcement?

Maybe It's Time for App Developers to Start Selling T-Shirts
-- Piracy is no longer a problem for legacy entertainment companies like record labels and film studios. Mobile app developers now must deal with their pirated games being available on the Web.

On Friday TechCrunch wrote about the experiences of app developer GAMEized, who found that downloads of pirated copies of its FingerKicks app had eaten into sales. In a blog post titled "The Huge Success of an App Store Failure," GAMEized described how it amassed over 17,000 players in just a few days but collected less than $800. The company blames Apple's policies:

"Apple apparently has no functional counter-piracy safeguards in place on their Game Center - essentially permitting users to play pirated software on their Game Center without any fear of reprisals or consequence."

Maybe the problem is that app developers should make money selling other products, as TechCrunch founder Michael Arrington has argued for music artists. "When the industry finally capitulates and realizes that they can no longer charge a meaningful amount of money for digital recorded music, a lot of good things can happen," he wrote in October 2007. Those good things include the exploitation of other revenue streams such as live music, merchandise and limited-edition physical product. In other words, give away your music and sell T-shirts.

What's good for artists and labels should be good for app developers. After all, mobile apps are just zeroes and ones, no different than digital music tracks. Since the marginal cost of distributing either a music file or a mobile app is zero (or close to it), developers simply cannot justify charging for their products. The price is being driven to zero. Piracy and lost profits are the fault only of app developers who stubbornly cling to a broken business model.

I'm being facetious, of course. Some labels and artists have exercised their rights to give away music, but the vast majority continue to charge for it. (Likewise, some apps are free and supported by advertising. It's the developer's choice.) In fact, the price of digital downloads has actually gone up since 2007, driven by more deluxe versions of digital albums and higher prices for popular tracks. Arrington didn't even anticipate the shift toward free, licensed music (he wrote only of digital downloads). The fact is we're in a golden age of free music - free, licensed music. Pandora just had a successful IPO, Spotify launched in the U.S. this week and YouTube and Vevo are incredibly popular platforms for experiencing music.

That "artists need to just tour and sell T-shirts" argument just never made much sense -- especially for music publishers and songwriters who don't sell T-shirts or make money from live concerts. The argument's weaknesses become even more evident when piracy is no longer a music industry issue. Once television and movie studios started being impacted by piracy, public sentiment changed. Once piracy reaches deep into world of app developers, we're likely to see an even greater shift in public sentiment. ( TechCrunch)

Gimme Indie Rock!
-- Now is a great time to be an indie label or independent artist. We hear that statement all the time. It's implied in the way direct-to-fan tools are marketed and perceived. It's implied when indie rights group Merlin tells us indies' U.S. market share is 57% better in digital formats than in physical formats.

And we've just heard it from Peter Jesperson, Twin/Tone co-founder and current head of A&R at New West Records, in an interview with City Pages' Gimme Noise blog.

"The limitations are mostly financial these days. Apart from that, I think the smart, sturdy indies can totally compete with the majors. At Twin/Tone, we were quite content to be a sort of "farm team" for the majors. Not so at New West. We have a remarkable staff and, for some artists, I think we can do a better job than the majors."

So why all the angst, DJ Shadow? In an interview with The Guardian, the American producer/DJ (real name Josh Davis) rails against today's commercial infrastructure and the inability of many of his musician friends to making a living through music.

"It used to be that there was a label there to be the monetary side of the business; now every artist has had to adopt the street-corner hustle. But it's not one-size-fits-all. I'm not comfortable doing that. Do I wanna sell records? Of course I do. Do I wanna be successful? Of course. But it gets tiring and wearying, feeling like you're always trying to figure out new ways to scam people, when really what you wanna do is just sell the music you make, or get it out there."

This is a discussion that is sure to pick up. Musicians want a living wage just like anybody else. They have been sold a story that the digital revolution would provide a means to sustain them and their families. But there's a growing chorus that says that's not the case. (Read the Guardian's May 2010 article on Imogen Heap on the financial difficulties of touring during a time of slumping record sales.) More on this later, I'm sure.

Moontoast Advises: Keep it Simple (as Toast?)
-- Marketers need to concentrate on only four drivers that influence the success of a social commerce campaign, according to the folks at Moontoast: audience (understand its size and nature), offer (understand what will interest people), placement (understand how people will experience the message) and "virality" (understand how it will be shared). "Keeping it simple lets you measure and improve towards social commerce excellence, which we all want. So let's keep it simple friends, focus on the drivers," writes CTO Marcus Whitney. If you aren't reading Moontoast's blog, you've been missing some good, practically advice on social commerce from people who really understand the space. ( Moontoast blog)

Copyright and 'Bloop'
-- If you're interested in an excellent discussion on copyright that digs into fair use, transformative works, derivative works and other themes, read "Kind of Bamboozled: Why 'Kind of Bloop' is Not Fair Use" at Copyhype. It examines the case of "Kind of Bloop," an album with Chiptune version covers of Miles Davis's classic album
"Kind of Blue." The case revolves around the album art, not the music, but the post still provides education and insight into legal matters that are of great importance in the music business. And, as usual, a good discussion has occurred in the comments - bonus points for reading through those. ( Copyhype)

Questions? Comments? Let us know: @billboardbiz

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