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Wednesday
Jan132010

More evidence that the major labels have you by the nuts and bolts...

For your benefit and mine, I keep track of just about every stat this industry produces (and then some) within MTT Stats (I am always a bit behind.  Feel free to contribute). 

One of the more interesting items I came across lately was the graph below (produced by Bridge Ratings).

From Bridge Ratings: “While a solid 40% of Pandora’s consumers rate the service “Excellent”, a large component of Pandora’s users find the music flow or unfamiliar music quotient to be less comfortable compared to their experience listening to terrestrial radio streams.”

In a nutshell (no pun intended), this research reminds us that even if someone could find (for consumers) all the best (not rubbish) new independent music, those exposing new music to consumers must utilize established major label content to create a satisfactory listening experience (for most people).

There are two ways (that I know of) around this:

  1. Music services embrace tools like Playdar (http://www.playdar.org/) which will (someday hopefully) enable consumers to easily mix the music they (and friends) already own into streams that contain a reasonable dose of unknown music.
  2. Have the Federal government declare any song that has already obtained mass-market acceptance as part of a public utility; all rates and fees are regulated and shortened to easily enable competing songs to enter the marketplace.

I am always one for less government instead of more, but those that control the established songs seem to have an unfair competitive advantage over everyone else? 

You wouldn’t hear me complaining if unknowns / independents were given free access to a limited amount of streams (of established music) per year (and the streams could be pooled); this doesn’t seem much different than resolving radio payola complaints. (No, I don’t think this is similar to the music-like-water thing.)

Hey U2, how about offering every independent 500 free on-demand streams per year instead of crying for more regulation.  Think of it as charity…

Reader Comments (12)

It would seem that "push" oriented marketing still remains the gorilla in the room. While many music listeners are indeed becoming more independent with how they get their music, huge chunks of the market essentially want to be told what to listen to. Furthermore, the "independence" of the new music listener often conflates the independence and options of HOW people listen to music (Ipods, Satellite Radio, Pandora, Mp3 Blogs) with the notion that they must, therefore, be listening to more diverse independent artists. This is only true some of the time.

Artists and labels will, for the forseable future, need to make a concerted case for why people should listen to them in their marketing. They cannot expect to simply strive to make their music "as available" as everyone elses and wait for these third-party music delivery services to filter their audience towards them. That is certainly a valuable tool now, and an essential part of any music strategy. But I would be hesitant to say that filters and "pull" marketing are the new big cheese.

January 13 | Unregistered CommenterJustin

Justin,

This is off subject, but can you give me a few examples of how artists and labels could make a concerted case for why people should listen to them in their marketing. Beyond the play button, which is easier/faster to click than to read a sentence, I don't know what anyone could say that would really matter? I guess it's not a matter of saying something, as it is in executing what I typically call an "elaborate plan" to help fans fall in like with you?

January 13 | Unregistered CommenterBruce Warila

As I observe my non-musician, everyday people friends their music habits, it seems that "good enough" music fed to them through major outlets is fine. Something to listen to while driving, or in the background to set a mood.

Many are age 40 and older, and music is just not as huge a deal to them as it was in their 20s.

January 13 | Unregistered CommenterGlenn Galen

And yet everyone claims terrestrial radio sucks.

Terrestrial radio doesn't play much new music at all. As an overall music market, it is continuing to shrink. It is also designed to appeal to the lowest common denominator and listened to in 15-minute chunks.

Bruce, I'm also puzzled by the conclusions you draw.

a) Why is "major label music" important for music discovery based on the Pandora data?
b) Pandora overwhelmingly features "major label" music from established artists, so why is this a potential issue for them?
c) The DMCA allows any non-interactive streaming to use whatever music they like. Pandora has deals with all the major labels to play their content as well.

?

January 13 | Unregistered CommenterJinsai

@ Jansai,

The only conclusion I am drawing (and it was not from the data / study) is that the music that most humans are familiar with is controlled by the major labels (I think that's a safe bet), and without this music, it's hard to push an over-supply of unfamiliar music.

I don't understand where you are coming from with the other questions. I did not infer or confuse (anywhere) the other things you are asking about? Or did I?

January 13 | Unregistered CommenterBruce Warila

@ Jansai (again),

I think I understand your question after reading your comment a few times:

On some level, it's an issue for every music service on earth. The latest site to run into this is Grooveshark. If a site doesn't reach scale and revenue targets it's done for. You can't run a music service (add supported for example) without major label content, and you have a bitch of a time trying to run one with it. It would be far easier to work around it (see solution 1 above)..

January 13 | Unregistered CommenterBruce Warila

Grooveshark has been operating in unlicensed (illegal) fashion for a long time. As someone who has created several digital music services, I'm keenly aware of the issues. I'd also note that regardless of music, it's difficult for these sites to exist as businesses.

To point #1, the problem is as soon as you start sharing your personal music collection, it isn't "personal" anymore. You're acting as a distributor/copier of someone else's intellectual property, no matter how you deliver it. And you're back to dealing with the major labels.

Your point #2 is effectively compulsory licensing (at statutory rates) for sound recordings - something which I believe is an inevitability in the industry, but which the current stakeholders will fight to the death to prevent. It's a controversial idea, to put it mildly, albeit one which has done reasonably well for the owners of composition copyrights.

January 13 | Unregistered CommenterJinsai

Point One - Not really. The sharing (mixing is the word i used) I had in mind was the kind you do when ten friends get together at a party, as in sharing (alternating) streams in a social setting.

Point Two - Right. I like the crude and social idea of allocating some free spins to independents (i.e.: the payola analogy).

The point of the post was simply to say that you need major label content to make it work, and that there's ways (perhaps) to get around paying the backbreaking fees.

Cheers.

January 13 | Unregistered CommenterBruce Warila

"Have the Federal government declare any song that has already obtained mass-market acceptance as part of a public utility; all rates and fees are regulated and shortened to easily enable competing songs to enter the marketplace."

I've seen a lot of stupid ideas, but this is the GONZO of stupidity. It destroys all incentive to excel. If, as an indie artist, you are going use all of the new tools available to you to succeed - and work your ass off to do so - why should your reward be a kick in the balls?

January 14 | Unregistered CommenterTonsoTunez

@Tonso - There's a difference between an advocated idea and telling people about the possibilities that exist (like it or not).

Also, I guess you missed the point about needing established songs to get to the point where you could be "kicked in the balls" to begin with. As I stated above, I am not advocating anything, but I find it kind of "gonzo" that you can't connect the dots here. It''s challenging at best to obtain spins unless major label content is mixed in. Where's your incentive if the entities that control the how, when, where, and at what cost (for familiar, established songs) are the same entities that have controlled the recorded music business for fifty years? Monopolies crush incentives (period).

Just to be completely clear. I am NOT for the government option. I was just pointing it out as an option. I will let the marketplace and technology solve the challenge described here.

Also, I think its shortsighted for any artist (not implying you are) like Bono to be asking for government intervention without considering that the hand that feeds you can also be attached to the mouth that bites you (see Option One above).

Thanks for your thoughtful, constructive comment.

January 14 | Unregistered CommenterBruce Warila

I believe Jinsai's right; what's needed is a compulsory license fee structure that pays artists for plays in a similar way that the writer is paid-a performance royalty. But it'd have to be somewhere far south of today's mechanicals to be sustainable. It needn't be so much less as to bankrupt artists and labels, and certainly not so much as to bankrupt internet radio stations, but it must be accurate and fair. The technology, the bandwidth, the data storage are all in place; it's possible to know, absolutely, how many times a given file is streamed and all streams must pay the same-so that everybody gets paid exactly what their music is worth. The same goes for writers as for artists; there's no longer any excuse for sampling a few terrestrial radio stations to determine performance royalties based on a largely imaginary number of spins.In other words, playlists are what radio is made of, and we have the necessary tech to count plays without even paying a person to do it; why not use this to ensure that every artist is treated equally by the marketplace?

January 14 | Unregistered CommenterMojo Bone

I understand the point your trying to make and I agree. People want to hear stablished acts that they like when they go to Pandora not people they haven't heard of, and to run an all independent internet radio station full of artist no one has ever heard would be very difficult. However there is a few things that I would like to point out. Mass Media is STILL and WILL be for sometime the driving force behind tru Mass appeal and reaching a large amount of people, and despite what a lot of people are saying about the new record "business" if you can call it that, and direct to fan marketing, which does work very well, Its that while its effective it is also has flaws its time consuming and with so much content out your competing with millions of artist for the same dollar. TV and Radio are STILL VERY RELEVANT, and because of that the trick is to use Mass Media outlets to your advantage for free. How can you do that you ask? I don't know other than trying to get a publicity campain and hiring a great P.R. firm with the contacts necessary to make that happen, which would cost you top dollar and still won't guarantee you'll make money. You can buy exposure I suppose but exposure now days is here today and gone tomorrow and without long term exposure of your music to a lot of people there won't be big results. You will find that trying to monetize exposure often times is like trying to grab smoke its there you just cant put your hands around it. Im not saying its not possible to make money from exposure but people have a sheep mentality they react to repetition, CONSTANT repetition thats why radio still works. And thats pretty much the format pandora uses to on their playlists.

January 17 | Unregistered CommenterChris

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