Opinion and analysis of the day's music news.
Surprising Internet Radio Stat of the Day
-- In the mad race for an on-demand music service that can pay the bills, We7 has offered some numbers that may cause people to re-think the importance of Internet radio. As Billboard reported, UK music streaming site We7 launched an upgraded Internet radio service this week. The site first offered a more basic Internet radio service at the beginning of the year.
According to a post at Music Ally, by September the basic Internet radio service was already accounting for 55% of tracks experienced through the site. In October, according to We7, 63% of all visitors and 83% of regular visitors used the Internet radio function. All users have the option of listening to the music of their choice on-demand.
So, over half the tracks streamed at We7 are now coming from a non-interactive, lean-back service (Internet radio) rather than the interactive, lean-forward service (on-demand). Clearly the site’s users are happy to sit back and let We7 choose the songs that will be played. It goes to show that people don’t always want to put in the effort that goes into browsing releases and creating playlists. Further, it calls into the question the main value proposition of an unlimited music service: depth of catalog. Maybe there is value in offering over 10 million songs. Judging from this example, however, many consumers don’t want to put in the effort of digging through that much music.
The trend is good from We7’s financial point of view. Non-interactive streams cost far less than interactive ones. For a service that subsists mostly on advertisements, a wise tactic is to push as much listening as possible to the kind that will result in a lower royalty bill. (Billboard.biz)
Amazon.com Alters Revenue Plan
-- Starting December 1, select magazines and newspaper publishers can now get 70% of revenue from sales at Amazon.com’s Kindle Store – the same rate labels receive for digital downloads. There are a few requirements to qualify for that rate, such as the need for the Kindle version to more than 95% match the print edition. Amazon.com deducts from gross revenue a delivery rate of $0.15 per MB. Blog publishers will continue to get 30% of gross revenue. (Press release)
Merch Sales Insight
-- Hypebot surveyed its readers for some insight into their merchandise sales. About 42% said sales are about the same as before the recession with the rest being split between higher and lower sales. Over 56% said the average total purchase is $15 to $25, 33% with less than $15 and about 10% over $25. Perhaps most important is just 34% said merchandise sales help are helping with their careers. (Hypebot)
Merch Alert: Expect T-shirt Prices To Rise
-- Related: In the most recent issue of the print magazine I examine how soaring cotton prices are impacting T-shirt costs. It’s a topic that has been brewing in the business media but has received either scant or no attention in music. So, I spoke with Zazzle (which is deeply involved with music), Wolfgang’s Vault and Bands on a Budget. The short version: so far suppliers are doing a good job absorbing price increases, but consumers should expect to see higher prices by early 2011. That means artists will have to weigh price increases to their fans or less profit per sale. They can also look into cheaper styles of T-shirts or cotton-synthetic blends, although the latter is likely to increase in price as well. (Billboard.biz, subscription required)
Apple Bought Wi-Gear?
-- Apple is rumored to have purchased Wi-Gear, a manufacturer of Bluetooth headphones. The deal was said to have happened two months ago. Now the website of San Francisco-based Wi-Gear says the company “has ceased operations and is no longer in business.” The LinkedIn page of Wi-Gear a co-founder shows his is currently an iOS Bluetooth engineer at Apple. (9 to 5 Mac)
Closer Look: OK Go's Partnership With Samsung
-- OK Go have released their latest video that’s part of a partnership with electronics giant Samsung. The video for “Last Leaf” was filmed using Samsung’s NX100 camera. It can be viewed at OK Go’s website as well as www.cre8yourworld, a site set up by Samsung. The video shows a series of animations sketched into pieces of toast – it’s pretty cool. This is a very interesting partnership. Consider the traffic Samsung is getting. The band’s latest video, “White Knuckles,” got 1 million views in its first 24 hours, according to the press release. There’s an obvious connection between the band’s creative output and the product – Samsung’s cameras are used in the making of the videos. And you can’t overlook the fact that the band being sponsored is operating in a new realm of the music business, one that depends less on sales of recorded music and more on alternative ways of turning creativity into revenue. When music is an experience instead of a product, this kind of brand-artist sponsorship not only makes sense, it’s vital. (Press release)
Opinion and analysis of the day's music news.