The MUSIC and New Digital Media REPORTThe fees paid by Yahoo Inc. and RealNetworks Inc. for licences to play music on the Internet should be recalculated, a U.S. appeals court ruled Tuesday in the first case over music usage involving so-called new media.
At Netflix, the picture is darkening
“Netflix (NFLX-Q152.78-1.83-1.18%), with a series of deals to stream movies and television shows over the Internet, seems poised to make a technological transition that its floundering competitor Blockbuster Inc. failed to do.”
“And that is where the growth is: Standard & Poor’s credit analyst Jayne Ross believes the broadband home-video market is expected to increase by more than 50 per cent annually over the next several years, even as the overall movie rental business will be flat to slightly up.”
Bob Lefsetz argues that in order to create competition for Apple’s iTunes, music providers must initially allow their content to be provided to a start up such as Spotify for free.
Apple has too strong a “default” hold, and this will only be strengthened by its new Ping service and whatever streaming service they announce in the future.
http://lefsetz.com/wordpress/index.php/archives/2010/09/02/applestreamingsubscription/
Streaming services such as Spotify who are trying to determine where they can make the most money from their service are seeing a higher demand for “multi-platform” access, which includes smartphones, for which they can charge a paid “premium” rate, as opposed to the free access “freemium” rate.
“Take multi-platform access, such as how Spotify makes users who want mobile access via their smartphone apps pay. Kumaran said users paying for multi-platform access use the service on average three times more than as those who don’t.”
@Web 2.0 Expo: Web Community Discusses Freemium Model
http://www.billboard.biz/bbbiz/content_display/industry/e3ia9f1b586d315106411f76cc7380b4e67
The profits from streaming services are small, even for big name artists.
Lady Gaga got a million plays on Spotify and earned $167
http://www.hypebot.com/hypebot/2009/11/report-spotify-paid-lady-gaga-167-for-1m-plays.html
Glenn Peoples writes in Bilboard Magazine that access based models (ie subscription) may someday be the dominant way that music is disseminated, but a healthy functioning model is no where in sight, and so the best way for an artist to make money still is to find creative ways to sell copies of your music.”
Analysis: CD and Downloads Are Toast? Not If You Want To Make Money Today
http://www.billboard.biz/bbbiz/content_display/industry/e3i8ca14b8f869f03f0f9ef2b4c26f7fe11
The Cynical Musician reports that
“To generate revenue equal to the $1,160 per month (slightly over the U.S. Federal poverty line), an independent artist needs: 1,813 downloads per month at iTunes; 3,392 downloads per month at eMusic; 127,473 streams per month at Rhapsody; or 7,733,333 plays per month at Last.fm. Paradoxically, it says, CD sales are “still our best bet” for generating revenue.”
http://thecynicalmusician.com/2010/01/the-paradise-that-should-have-been/
Is Spotify, or other streaming services, playing fair?
Spotify payments are truly tiny… the tracks I sell through agreement with CD Baby to Spotify generate on average $0.015 per track sold… yup, a penny and a half. (Selling a track for download will produce around $0.60). So, I have to hope that a whole lot of people playlist my music.
Maybe that will happen, and then millions will listen to my kazoo-band rendition of Musorgsky’s Pictures at an Exhibition, and with my thousands that I earn…
Are the payments fair? How can we know? How about some simple math: if we pay $10.00/mth for a streaming service, and listen to, say, 30 songs a day ( about 2 CDs worth), 30 days a month, at $0.15 per song, the streaming service is paying out $13.50 to artists. Spotify, or whoever, has to hope that many subscribers do not listen to this much music to make up for those who do, and that they can make money through other means.
http://www.billboard.biz/bbbiz/content_display/industry/e3i15f690d9bb7df95678ac49b5ac756ac4
http://www.guardian.co.uk/music/2010/apr/13/spotify-songwriters
Rhapsody is a popular US download and streaming service. As reported in Billboard, it was recently spun off from its parent RealNetworks (owner of the popular Real Player), and it immediately became publicly obvious that the service is not yet profitable.
Rhapsody has now recently lowered its premium service from $15 to $10 per month, which allows the listener access to over 9 million tunes, and can be accessed on a variety of smartphone platforms. It will soon enable songs to be streamed “off-line”, by allowing you to download subscribed music to your device.
All this for $100 a year, or the price of 7 CDs. But not in Canada.
Here in Canada, we still do not have access to this streaming service, or any other except for CBC Radio 3 (which deals directly with the artist, no labels: but you can’t access the on-demand library of Canadian bands and your playlists, etc with a smartphone yet).
Rhapsody is unable to negotiate an agreement with Canadian labels. It was able to lower the subscription price in the US, because they were able to renegotiate the terms with the labels in the US, who apparently are interested in providing access to their artists at a price that will enable the service to become profitable, and grow.
With the coming tsunami of bandwidthbearing down on North America , and explosion of sales of smartphones, this is increasingly imminent and likely.
But, that tsunami of bandwidth will continue to geo-bypass Canada… and that is more than just sad: it’s pathetic.
More Digital Blues, Rhapsody Edition
April 06, 2010 – Digital and Mobile
http://www.billboard.biz/bbbiz/content_display/industry/e3i48b556a1527d0b6549f37714a72cbb01
These services are not available in Canada, due to geo-blocking. Only users within a certain geographical area can access content. The service provider can exclude access based on a user’s IP address. Until content providers in Canada negotiate with the service providers, access to their services will remain blocked. (Globe and Mail, Oct 20-09)
www.theglobeandmail.com/news/technology/the-legal-music-fades-out-for-canadians/article1330240/
“legitimate download sites shun Canada in part because of licensing problems. That hurts Canadians, and most people don’t even know it’s happening.” (Globe and Mail, Oct 20-09)
www.theglobeandmail.com/news/technology/the-legal-music-fades-out-for-canadians/article1330240/
Whether or not Canadians are able to view the same content that Americans or the rest of the world can “boils down to domestic licensing and copyright ownership, a crux of technological revolution that has slowed the speed with which many Canadians adopt new devices, whether it’s the iPod or streaming television over the Internet.” (CP, April 6-10)
http://www.ctv.ca/generic/generated/static/business/article1525133.html
In Sweden, “streaming services such as Spotify accounted for 46% of download sales, up from 17% in 2008. While a number of factors could be behind the rise in music sales, it seems more than a coincidence that sales increased in the same year that both penalties and a better legal alternative were given to Swedish music fans.” (Billboard Magazine, Jan 20-10).
http://www.billboard.biz/bbbiz/content_display/industry/e3i9a5528fef77b82114fac6905271b2a13
The MUSIC and New Digital Media REPORT 