MIDEM(Net) Blog

Free, public Music 2.0 / Future of Music Webinar tomorrow July 31st 2009 5pm CET

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Exclusive Music Marketing Forum white paper

At MIDEM 2009, 18 key players of both music (Sony BMG, EMI and Glassnote) and brands/advertising agencies (Coca Cola and Telefonica/02; Euro RSCG KLP, Havas Media et M&C Saatchi) met behind closed doors to discuss and explore best practices for music-brand collaborations. The MIDEM Music Marketing Forum's exclusive and insightful report is now online, here! Feel free to comment... And read on for a guest post from Forum moderator William Higham, futurist, and founder, Next Big Thing.

Free...Feels-Like-Free...Freemium...? What will YOU do?

By Gerd Leonhard, Author and MediaFuturist.

If you are in the music business, you may be wondering: going forward, what exactly is the value of 'content' (to use that rather ill-fitting Silicon Valley handle for creative goods), when and where? The debate on what kind of content should be /could be /must be / ought not to be free, or bundled, or subsidized by 3rd parties, or paid for with advertising, is raging on the web. And this is happening not just within the music business, but also within the news, print and publishing, books, films and TV industries.

Personally, I think pretty much the entire content business is quickly heading towards a total business-model reset.

Since I do a bit of reading as well as some assorted writing on this topic (which I recently tagged the '21st Century Content Ecology') I thought that I would share some of the best writings I have seen on those issues that surround the Free Content debate. So here they are:

Ted Cohen: Michael Jackson and the Media

For over 40 years, Michael Jackson dominated every medium in which his music was featured. From his early days in the Jackson 5, throughout his solo career and right up to his death, he was front and center across radio, television and, later, online.

As he came out of “retirement” and his record-setting fifty nights at AEG’s O2 Arena in London this Summer, all media began ramping up their coverage of the impending event. Television news and entertainment programs relentlessly covered the story, questioning his ability to go the distance, to reclaim his title as he King of Pop, to erase all the doubts, to break the single-venue box office record. It made for great ratings and became the new spectator sport. Radio increased rotation of his many hits, custom digital radio services such as Pandora and Slacker offered up Michael Jackson-influenced custom stations.

Upon his untimely death, all stops were pulled. It was all Michael, all the time. CNN, MTV, ABC, BBC and TMZ, Michael was bigger than ever! Not since Diana’s death had the world come together to grieve like this. There were global vigils, specials and in-depth analyses into how it happened. Radio play jumped almost 2000%. As reported by CultOfMac, Jackson sold a record 2.6 million digital downloads in just one week, according to preliminary sales numbers from Nielsen SoundScan. These sales make Jackson the first artist to sell more than one million digital songs in one week.

The week before his death, Jackson sold 48,000 songs, illustrating how big a jump this week’s numbers are. Jackson’s records are dominating the charts. Six of his albums are in the top 10 Top Digital Albums chart, a record, and 25 of his singles are in the top 75 Hot Digital Songs. But Michael was always the focus of attention since his career began. On radio, the Jackson 5 had 10 hit singles including “I Want You Back” and “ABC”. Michael released over 60 solo singles.

Over the years, broadcast Television was very good to Michael, and Michael was good for television ratings. The New York Daily News chose these 10 memorable Jackson TV appearances:  

1. Jackson 5 on "The Ed Sullivan Show" (1969): The Motown group appeared regularly on the variety show, but during a 1969 visit, Sullivan presented the Jackson 5 with their first single, "I Want You Back," which knocked B.J. Thomas’ "Raindrops Keep Falling on my Head" from the number one spot.

2. "The Jackson 5ive" (1971): The Saturday morning cartoon featured animated versions of the group, though the boys themselves weren’t involved with show.

3. "The Jacksons" (1976): Each 30-minute show included celebrity guests, singing, dancing and comedy sketches. It was the first TV series to feature an African American family.

4. "Motown 25: Yesterday, Today, Forever" (1983): During a performance of "Billie Jean," Jackson stopped the show with the debut of his now infamous moonwalk. The performance earned the pop-star an Emmy nomination.

5. Premiere of the "Thriller" music video (1983): At the time it was made, the $500,000 13-minute music video was the most expensive video ever. It won a Grammy for Best Video in 1985.

6. Super Bowl XXVII (1993): Jackson performed a medley of "Jam," "Billie Jean" and "Black or White," and was later joined by 3,500 local Los Angeles children singing "Heal the World."

7. Oprah Winfrey interview (1993): In his first interview since 1979, Jackson sat down with Oprah for a 90-minute live one-on-one, in which he denied bleaching his skin and revealed he suffered from vitiligo. ABC estimated that on that night, more than 55% of the televisions in use were tuned to the interview. ABC estimated 62.3 million people watched all or part of the sit-down.

8. "Primetime Live" interview with Diane Sawyer (1995): Appearing with wife Lisa Marie Presley, it was his first interview after first being accused of sexual abuse. The interview was watched by 60 million people.

9. 1994 MTV Video Music Awards: Jackson and then-wife Lisa Marie Presley walked onstage hand-in-hand before he proclaimed, "And just think, nobody thought this would last. Then they kissed.

10. "Living with Michael Jackson" (2003): The documentary, which was filmed over a period of 8 months and hosted by Martin Bashir, has been fingered as one of the contributing factors that led to his child molestation trial, because of certain revelations about his relationships with several children, whom he admitted slept in the bed with him. ABC paid reportedly paid upwards of $5 million to air the documentary.

While the historical truth is that MTV resisted playing Michael Jackson’s videos, once they were onboard, it was the perfect marriage. Billy Jean, Beat It, Thriller and Bad drove MTV’s ratings through the roof and represented the “golden years” for MTV.   All media have thrived through their association with Michael Jackson. It has been a win-win partnership from the beginning. With the current resurgence, it will continue on for the foreseeable future.    

MidemNet 2009 video: Conversation with David Eun, Google

In this exclusive session, David Eun, VP of content partnerships for Google, expertly tackled TAG Strategic's Ted Cohen's opening question - "why are you trying to screw the labels?" - and then went on to explain how the web giant is changing the way consumers access music while creating compelling new partnership opportunities globally. Not to be missed!

MIDEM 2009 conference video: Indies in the Digital Landscape

Collectively, indies represent one of the world's biggest catalogues. However, many digital platforms or services have launched in recent times without any content from indie labels. What are the opportunities to be taken advantage of by digital services and indie labels? What could be done to improve the climate between them? Speakers included: Kevin Arnold, IODA; Charles Caldas, Merlin; Scott Cohen, The Orchard; Scott Ambrose Reilly, Amazon; and Horst Weidenmüller, !K7. Moderator: Emmanuel Legrand, Editor, Impact Magazine.

MidemNet 2009 video: Serving artists, serving fans: What is the best organisation?

With value creation in the music business increasingly coming from the relationship between artists and fans, music companies are now restructuring to better serve this relationship. Confronting the vision of innovative entities with those of big music companies reinventing themselves to adapt to the new music environment, this panel explored the business structures, partnership models and networks that have the greatest benefits to offer both artists and their fans. Speakers included Bryan Calhoun, Soundexchange; Tim Clark, Manager of Robbie Williams, ie:music; Kenny Gates, PIAS ; and Martin Thörnkvist, Songs I wish I had written. Moderator: Billboard's Mark Sutherland.

The End of Control and the Future of Content (slideshow) - tell me what you think!

By Gerd Leonhard. Greetings MidemNet blog readers, and all past and who-knows, future Midem participants. I held this presentation, below at the Google HQ in San Francisco in March - shortly after MIDEM 2009. Many of my thoughts about the music industry found their way into this speech so I figured I should share this with you again. You can download the PDF via Slideshare (follow the link below), and you can watch the video here (note: Google had some tech issues when we recorded this so the quality of the lighting is not so good).

In any case, I would like know what your thoughts are on what I am presenting here so please comment below or ping me via Twitter (which is much preferred) or my new Futerati.com site.

Ted Cohen: Sustainability And The Future Of Webcasting

There have been some significant announcements made in the past few weeks on both sides of the Atlantic concerning the rates charged by labels and publishers for the use their music by webcasters/online radio stations. The future of citizen webcasting, tens of thousands of stations serving the tastes and needs of hundreds of millions of music fans around the world has recently gotten somewhat clearer.  For webcasters, the long, dark period of uncertainty is finally over, isn’t it? The problem might not be solved for a long time.

It’s been effectively argued for many years that the economics around webcasting don’t work. In traditional terrestrial broadcasting, scale means success. In webcasting, achieving huge numbers potentially leads to a webcaster’s demise. Simply put, it works like this: For every listener a terrestrial station acquires, its average operating costs per listener goes down incrementally. For every listener a webcasted station adds, the costs go up incrementally, this is not a sustainable model. When I was at EMI, I was asked to give a webcasting economics presentation to the management board. After a 30-minute overview of the numbers, a senior EMI exec remarked, “I don’t understand, how can they make any money?” And, therein lies the problem. Is the webcasting financial model fatally broken or does it just need a tune-up? I believe it can be fixed if everyone just plays a little nicer in the sandbox.

Six weeks ago, the UK announced new rates, the Guardian announcing, “Royalty collector PRS For Music has bowed to websites' pleas for smaller charges, more than halving its on-demand streaming music rate from £0.0022 to £0.00085 per track, effective July 1 and lasting for three years.”

StrategyEye Interview: Steve Purdham, We7

In this interview from our industry knowledge partner StrategyEye, Steve Purdham, CEO of We7, the Peter Gabriel-cofounded ad-supported free music service, talks about profitability, pirates and how to succeed in the treacherous online music sector. He also pulls no punches with much-hyped rival, Sweden's Spotify...


Why are ad-supported music services such as Imeem, Lala and SpiralFrog all suffering at the moment?
                              
It's a combination of things. In some situations it's just bad execution, but in other situations it's timing. If you look at SpiralFrog - that was a bad model and bad execution. The big debate in the music world was about how consumers didn't want digital rights management (DRM) music. The consumers just wanted the freedom to move music from their iPod to their PC. SpiralFrog was a download model with DRM that was only limited to a small number of labels, so it had all the ingredients of failure.

The one that surprised me was Imeem, because I think they executed very well. I think it just shows that the timing on that was wrong. The one who has been very strong, in the US in particular, is Pandora. They withdrew from markets when the economics were wrong, they focused upon the economics and they didn't get too carried away. They're expected to do about USD40m this year and break even.

Are any ad-funded models working at the moment?

No. Most of them are working off the back of venture capital. That includes We7. But can they work? The answer is yes. Given the right time, the right costing base, the right advertising infrastructure, it can actually work.

A lot of people look at this and say, the idea is flawed, because the amount of money that the music industry is expecting to get for the music is different to what the advertising inventory industry is prepared to pay for accessing the audience. But that is just a point in time based upon where those two industries happen to be and there are a lot of changes going.

                             
What is We7’s business model?

We7 is an online jukebox, which basically allows people to listen to as much music as they want for free. But in addition we've also integrated an MP3 download store so if you want to put it on your iPod then you can download and pay for MP3 files. So it gives people the choice of both environments.