Opinion and analysis of the day's music business news.
-- The story of Playlist.com is far more interesting than the actual music service. CNET’s Greg Sandoval wrote a good article about the company’s recent Chapter 11 bankruptcy filing and its precarious financial position: $2.2 million in assets and a debt to the four major record companies of $25 million.
Sandoval writes that the usual suspects (the majors) will be blamed but points out the company chose its fate. You see, Playlist.com deserves the blame for its downfall. It pursued a business model with great risk and little potential revenue. It should have been clear to the company that major labels would not show great support for an ad-supported music service that did not first acquire licenses from the content owners. Many companies had been burned before.
An ad-supported service lacks the customer captivity that gives a company security. In 2008, he writes, Playlist.com had 45 million registered users, 20 million uniques per month, a former Facebook executive for a CEO and venture backing. But lawsuits and an inability to retain customers led to its downfall. In the end, it would have been cheaper to license music first and build an audience later, although labels were partially paid with promissory notes that could be completely worthless.
Years down the road, it will be fun to reassess labels’ handling of sites like Playlist.com and ad-supported services. It may have been wise to discourage ad-supported models and play-first-pay-later tactics. In the end, licensing to paid services that build value through features and innovation may prove to have been the best strategy. With the emergence of Pandora and YouTube as the standard of free services, the loss of Playlist.com does not appear to matter much. But only time will tell. (CNET)
-- In a letter to the editor of the Globe and Mail, musician Randy Bachman reacts to comments by John Mellencamp on the impact of digital piracy.
"Digital piracy is responsible for the 50 per cent reduction of Canada's music recording market. Even so, cultural industries - production, marketing, and retail - represent 3.8 per cent of Canada's GDP. Cultural industries employ 633,200 Canadians - more than the forest products industry. The entertainment industry's ability to remain healthy and continue to deliver content to consumers in innovative ways is dependent upon a copyright framework that both discourages massive online piracy and encourages legitimate commerce. That's why Bill C-32, the Copyright Modernization Act, needs to be taken seriously as a starting point for moving Canada's copyright protections into the digital - and Internet - age." (Globe and Mail, via Music Tech Policy)
-- At its new Ticketology blog, Ticketmaster CEO Nathan Hubbard outlined three new initiatives. One is the blog, which was launched with this post. Another is the new way of showing prices during the search process. As explained in yesterday’s Business Matters column, Ticketmaster is now disclosing both the face value and the ticketing fees (itemized amounts as well as the total). So, now potential buyers can see fees earlier in the search process. Some Ticketmaster clients will move to all-in pricing. It’s a very helpful change that should please customers. “This user experience mirrors what you see across the web from leaders in their field – Amazon, Apple, Expedia, Zappos and more,” writes Hubbard. “It’s not complicated, it’s just the right thing to do.”
Another new feature is a refund policy, mentioned in the company’s July presentation and officially unveiled yesterday. The refund policy grants a three-day window from the time of purchase to return the ticket, up to one week prior to the event. One asterisk: the offer is good for venues operated by Live Nation. A thought: Allowing customers to return tickets could prevent some tickets from appearing on the secondary market, thus bringing more of consumer spending to Ticketmaster, Live Nation (the promoter) and the artist.
The arrival of these new initiatives marks the beginning of a more customer-friendly Ticketmaster. Just the fact that Ticketmaster started a blog reveals a new mindset and more openness to communicating with the public. The company has the market power to set industry standards, and everybody will be better off in the long run if more fan-friendly features become standard. (Ticketology)
-- At the Technology Policy Institute’s Aspen Forum on Monday, RIAA president Cary Sherman said U.S. copyright law “isn’t working” for content creators.
“The DMCA isn't working for content people at all. You cannot monitor all the infringements on the Internet. It's simply not possible. We don't have the ability to search all the places infringing content appears, such as cyberlockers like RapidShare.”
So how to solve this problem? In the Q&A, Sherman suggested legislation could create agreements between content owners and intermediaries (ISPs, search engines, etc.). He added the RIAA is working on discussions with intermediaries and would prefer private negotiations to Congressional mandate.
A lawyer from YouTube disagreed about the efficacy of copyright law and said the DMCA is working “exactly the way Congress intended it to.” YouTube’s recent legal victory over Viacom was based on its adherence to “safe harbor” provisions in the DMCA. (CNET, Mashable)
-- Weezer's upcoming album, "Hurley" (Epitaph), was originally funded by surf-skate company Hurley International, according to guitarist Brian Bell. (Hurley is owned by Nike.) From a video interview at the Mile High Music Festival: "The inspiration came from a surf company called Hurley that was funding the record at the beginning of the recording process. We actually did some sort of advertisement - I don't even know how they're tied in so much, although we got some clothes and we did a photo shoot (in which) we're wearing these clothes. And I think we're selling these clothes in malls. So how that's tied in I don't know. I think it's this whole, like, tying in different media then using Hurley, the character from 'Lost,' which I've never seen in my life, as our mascot for this record is almost post-modernistic maybe? I hope people don't look at it as too jokey, because it certainly comes across that way without reading into it a little deeper."
Bell's explanation differs from the band's previous explanation of the origination of the title and album art for the album. In an interview with Spinner, Weezer's Rivers Cuomo said the band first chose a name for the album and then decided on a picture of actor Jorge Garcia, whose character in "Lost" was named Hurley. The interview did not give any more depth about Hurley International's involvement with the album beyond "the beginning of the recording process." (New Rock Star Philosophy, Spinner)
-- Pandora has added genre options that allow users to forgo naming an artist, title or composer and select a broad or specific type of music. Categories range from standards like hip hop, rock and jazz to more focused genres. For example, blues has seven sub-geners, electronic has 11, R&B has nine and country has eight. The addition of genre stations is a good move that creates a "lean back" experience that is even easier than the previous method of generating a playlist. Genre stations can be found at the bottom of the page next to concert listings. (Press release)
Opinion and analysis of the day's music business news.