MIDEM(Net) Blog

Ted Cohen: The Pocket Recording Studio

How far off are we from carrying a recording studio and full set of instruments everywhere we go - in our pockets?

First, we were impressed with being able to take a digital album anywhere; now, we can carry all the music we’d ever care about on an iPod or any other music player (or all the music in the world if you’ve got a Rhapsody subscription and an internet connection). Now, it seems we’re starting to take the next step towards portability of everything music related with the proliferation of a ton of innovative mobile applications for iPhones and Android devices that give you everything you need – everywhere.

For $10, you can download FourTrack, which lets you record CD quality audio on your iPhone. Earlier this year, The 88 released a single using FourTrack that was of surprisingly good quality – and it’s only going to get better. Smule’s Ocarina app lets you turn the iPhone into a beautiful instrument simply by blowing into the phone. At San Fran Music Tech Summit in May, Ge Wang, the Co-Founder of Smule, gave an amazing demonstration of Ocarina that had to be seen to be believed. Smule also released “I Am T-Pain” last month, a portable Auto-Tune app which lets anyone record songs in a voice like T-Pain. It was purchased over 300,000 times (currently at $2.99) in the first three weeks, and it ranks as the #4 overall app – and #10 in gross revenue. Users have recorded millions of tracks with it.

And it’s not just recording. You can get half a million guitar chords with GuitarToolkit. Need the lyrics? Download the LyricFind app (free or paid) and get the lyrics to over a million tracks on your phone, all licensed and quality controlled.  Looking for different instruments? The top music apps are filled with options, such as PocketGuitar, Drum Kit, FingerPiano, and Pocket Trumpet. There are even three different didgeridoo apps for the iPhone!

As sound quality increases and apps become more and more advanced, how far off are we from creating an iPhone orchestra? Am I the only one that thinks it would be awesome to see John Williams conducting a stage full of people blowing into, shaking and tapping on their phones.

Digital technology has eliminated the barriers to distribution, it's now empowering the masses to fully express themselves, opening up new avenues for music creation.

 

Ted Cohen: A Delicate Balancing Act

Nobody is probably going to like everything I say here today, maybe anything!

I have been and remain totally conflicted as to how to deal with the mounting digital business crisis. The rights of the services, the rights of the copyright holders and the rights of the public seem to be in an escalating conflict. Each side claims the other is disingenuous, unreasonable andor greedy. There's seems to be a total disturbance in the Force, we can't just seem to strike a reasonable balance. We are witnessing a very real death spiral.

Since the late '90's, I have tried to believe in the free market solution to the launch of digital enterprises. New ventures would be able to sit down with the relevant rightsholders and stakeholders and strike a sustainable business arrangement, one that allows that entity to come to market with the promise of success. This is proving to be more and more difficult to believe in. 

Many legitimate offerings have not been able to secure terms that support longevity, let alone short-term survival. Even Spotify, the current industry darling, is beset with rumors of financial doom. "Do the math!" is the war cry. "The CPM's are not achievable", another oft-heard refrain. So if Spotify isn't the answer, what is?

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.    

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.”

Ted Cohen: The Spotify Effect

At every digital media event, anywhere that digital music is discussed, virtually everywhere that I’ve been in the last three months, the first question that seems to come up, “what do you think of Spotify?” It breaks out into two categories, those who use it and love it, and those who have only heard about it and just want to touch it.

In Ibiza last week, during panel that I was moderating, the Spotify love fest broke out early in the session, and this was a dance music conference!

The concept of the Celestial Jukebox has been discussed for the past dozen years, viewed by most as the holy grail of music; Spotify is not the first implementation of the dream. RealNetworks’ Rhapsody and Napster, now owned by Best Buy, were both early music service pioneers. iMeem, MySpace Music and others have been offering ad-supported music services for some time. To be frank, I have been a huge fan of Rhapsody since its inception. It completely changed my mind as to what was the future of the music business. I began to speak publicly about the advantages of subscription over a la carte models:

•    Flat fee access
•    No $0.99 barrier to music discovery
•    A lean-back/personal experience

Variable Pricing - What It Should Really Mean

Yesterday, I was quoted in the Los Angeles Times story on the impending iTunes pricing changes, it read like this:

Some music industry veterans are criticizing the 30% hike price, saying the timing is tone deaf because it comes in the midst of a recession and at a time when spending for online music appears to have reached a plateau.

"This will be a PR nightmare," predicted former EMI Music executive Ted Cohen, who is managing partner of digital media consulting firm TAG Strategic. "It is for the music industry what the AIG bonuses are for the insurance industry."  

It appears, based on calls and e-mails that I've received, that my position on this issue wasn't evident. While I wasn't misquoted, it did appear outside of the context in which it was intended. So, let me clarify where I stand.

I am a huge proponent of the variable pricing concept. I lobbied for this early on with iTunes when I was at EMI, with no success. I therefore applaud the recent efforts by the labels to bring it to market, it's long overdue.

What didn't come across in my comments is that I believe it's important that for variable pricing to succeed, it must achieve two clear goals:

• Offer tangible value to music fans
•  Maximize revenues for artists, labels, publishers and the services   

These are not mutually-exclusive objectives. 

As we continue to try to wean a whole generation off of 'free,' it's critical that we don't 'jump the shark' at this juncture. Moving to the ubiquitous availability of DRM-free tracks is just part of the solution. It's time to mature the a la carte digital music marketplace. Variable pricing can significantly contribute to this sorely-needed evolution. While Amazon has led the way by putting certain releases on sale for a fixed time period, the pricing of digital music has, for the most part, been flat. There have been few meaningful calls-to-action, this has to change.

We have an amazing opportunity to bring paying music customers back into the fold. This can be achieved by putting new artists on sale and creating customer value through creative digital bundles, such as mining back catalogue through well thought-out campaigns. 

At the same time, there is nothing wrong with putting a premium price on a new track from U2 or Jay Z. There just has to be a balance that demonstrates concern for the fan.

Based on what has been revealed so far, it appeared that there was far more focus by the major labels on pricing upward and less on increasing value to the customer. If this is not the case, I publicly apologize for prematurely ringing the alarm.  If, however, it proves to be true, we are squandering a golden moment.

I sincerely hope I was wrong.

 

Ted Cohen: The Next Chapter At EMI

I’m currently in Margaret River, a resort town 3 hours south of Perth, Australia. It’s a sleepy place, the Napa Valley of Western Australia, where broadband is considered to be 256k, not fast enough to keep up with the latest YouTube media star! I’m woken at 7am this morning by a reporter from the Wall Street Journal asking, “What are your thoughts on Douglas Merrill’s departure from EMI?”

To be honest, I hadn’t heard about it yet, the announcement came out on Monday afternoon, I’m 16 hours ahead here, so I think it hit the wire at 3am Tuesday morning, my time. So, I leap out of bed, fire up the the MacBook, and start digging around.

I haven’t learned much yet, nothing earth-shaking to report, but I am troubled by what’s happened, as I continue to believe that, while EMI & the other major labels will suffer further ‘lumps’ during this transitional period, they can ultimately survive, IF and only if they work smarter and become more nimble.

In May of 2000, I joined EMI to bolster their global digital business development efforts, recruited by Jay Samit, then SVP of New Media.

It's Time To Get On The Same Page

It's now just over a month since we were in the Debussy Auditorium at Midemnet 2009, and a lot has happened:

• Spotify and Catchmedia have become the media darlings, each showing that you can bring innovation to market without litigation and hand-wringing.
• That said, Seeqpod and Songbeat have been sued by both EMI and Warner Music Group.
• Spiral Frog teeters on collapse.
• Jim Griffin's Choruss initiative is beginning to get buy-in from the majors.
• Total Music and Ruckus have ceased operations, major label initiatives that failed to get traction.
• The Pirate Bay trial goes on in Stockholm, with no clear winner in sight.

It's clear that the chaos isn't over, we need to get down to business.

As many have stated over the past months, there is an audience out there for music, there are revenues for the taking. We need to stop posturing, litigating and talking over each other. We need to stop leaving money on the table and maximize the opportunities.

We need to creative sustainable partnerships & deliver services that address fan behavior. If we can't do that, we've truly lost.

Ted Cohen: It Was The Worst Of Times, It WasThe Best Of Times

This year's Midemnet marks our tenth anniversary, and what an amazing time we've been privileged to observe. The early pioneers: Napster, Liquid Audio, MP3.com, Rioport, Rhapsody, Soundbuzz, Musiwave, OD2, Melon, Puretracks, the next generation: Kazaa, Pandora, iTunes, and Limewire, and the newcomers: Amazon MP3, Omnifone, Nokia's Comes With Music and EchoNest. These innovative ventures have changed the face of music forever. However, as we look back at the past decade, it's clear that it hasn't been very kind to the traditional music industry. As physical formats continue their sales spiral downward, staffing and roster cuts are deep. It is painful to observe, as the labels now confront the need to rapidly evolve or become irrelevant.

It has, however, offered the independent music artist the greatest opportunity for success to date. The MP3 format, e-mail, websites, internet radio, music blogs, UGC, all these tools and more have made direct connection between artist and fan a reality. Distribution, once the Holy Grail, can be achieved instantaneously through services such as Tunecore. Marketing is key, so why not utilize the services of of ReverbNation or SonicBids?

Join us at Midemnet 2009 as we explore both the possibilities and realities of monetizing the artist-fan relationship. It's just the beginning of the revolution, arm yourself with invaluable knowledge.

Ted Cohen: School For Scandal

Two major events took place in the U.S. over the past weeks related to the ongoing battle between the RIAA and the college population of music consumers. On one hand, the music industry was emboldened by the passage of the first campus anti-piracy bill, signed into law by Tennessee Governor Phil Bredesen.

From Zeropaid, "Senate Bill 3974 requires that Tennessee public and private colleges and universities exercise appropriate means to ensure that computers connected to their campus network are not being abused for the purpose of illegally downloading and distributing copyrighted material through P2P and file-sharing programs." RIAA Chairman Mitch Bainwol applauded this development.

On the other hand, Duke University's Head of Student Affairs told the RIAA to back off, rejecting their pre-litigation notice procedure. From Digital Music News, "Duke University now wants proof of infringement before forwarding an RIAA notice, according to the Office of Student Affairs.  That replaces an earlier practice of simply passing pre-litigation notices through to students, without deeper examination......The move presents a speedbump for the major label trade group, though symbolically, it signals another episode of resistance by a major university.  It could also signal the beginning of greater levels of pushback, based on technical definitions of what actually constitutes infringement. "

The need by the music industry to try to put "the genie back in the bottle" continues, Sisyphus woud be proud!