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DJ Hero Game Sales Hit 1.2 Million » Synthtopia
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via DJ Hero Game Sales Hit 1.2 Million » Synthtopia.
When DJ Hero was introduced, many considered it a flop because it wasn’t an immediate runaway hit like Guitar Hero.
It turns out, though, that DJ Hero is a hit – it just took a while for the app’s sales to find their groove.
Activision’s Dan Amrich writes:
DJ Hero was dubbed a flop on its release too, but what it needed was time for its audience to find it, a price break, and positive word from both friends and reviews to circulate. October and November were soft, but after the holiday, DJ Hero had hit about 800,000 units; today it’s 1.2 million units and counting, all of which come with a turntable controller. That’s not a flop; that’s the long tail at work. So to suggest a game is a failure because it didn’t sell hundreds of thousands of units in its first 168 hours is pretty ridiculous.
That’s good news for fans of the DJ game – because Activision is already working on DJ Hero 2.
The Tao Of Steve (Courtesy of Bob Lefsetz)
LimeWire Begs Music Industry for Second Chance
The company behind the file sharing software LimeWire is considering aggressively filtering out pirated content and is hoping to strike a deal with the music industry in which it would be permitted to live on as a for-pay music download service, a company executive said Monday.
“The biggest challenge right now is changing the behavior of a generation of internet users to get them to pay for music,” said Zeeshan Zaidi, LimeWire’s 35-year-old chief operating officer, in an interview two weeks after suffering a crushing defeat in a copyright lawsuit that threatens to leave the company insolvent.
On May 11, a federal judge ruled that LimeWire’s users commit a “substantial amount of copyright infringement” (.pdf) and that parent company Lime Group “has not taken meaningful steps to mitigate infringement.”
The ruling sets the stage for a potentially massive damage award against the company that could leave it insolvent. Attorneys for Lime Group and the Recording Industry Association of America are expected to return to court next month to haggle over the company’s fate.
Zaidi said in a telephone interview that the company wants to convert its 50 million monthly users into paying music customers, and become a player in the paid music-distribution business. For now, the bulk of LimeWire’s traffic consists of unauthorized copyright material — some 93 percent, according to RIAA estimates.
“One way to address what the court is talking about, short of shutting down the network, which I think is overreaching and drastic, is to filter the network of these files in question,” Zaidi said. “This is a way for us to move forward in the case.”
Zaidi’s plan could put LimeWire on roughly the same course followed by Napster after its 2002 courtroom defeat to the RIAA. Roxio purchased the Napster brand and domain name at a bankruptcy auction and attached it to a legitimate music download service, which exists today as an also-ran in a field dominated by Apple’s iTunes.
Similarly, Swedish entrepreneur Hans Pandeya had dreams of legitimizing the The Pirate Bay, the world’s leading BitTorrent search engine. His plan was to strike licensing deals with content providers and sell movies, music, games and software on the notorious site, but he never managed to pull off the acquisition of The Pirate Bay’s domain name.
To be sure, moving from the pirate model to the pay-to-play model has many built-in assumptions.
Foremost, converting copyright scofflaws into paying customers is a tough sell. And for LimeWire, it may prove to be a futile endeavor to get the major record labels — which just defeated LimeWire in court — to cut licensing deals.
“Suffice it to say, we’re talking to all of the major players in the industry to try to get the licenses we need to get this service off the ground,” Zaidi said.
Cara Duckworth, a spokeswoman for the RIAA, which represents Sony BMG, Universal Music, EMI and Warner Music, said “we intend to pursue damages.”
Mitch Bainwol, the RIAA’s chairman, said two weeks ago that, “Unlike other P2P services that negotiated licenses, imposed filters or otherwise chose to discontinue their illegal conduct following the Supreme Court’s decision in the Grokster case, LimeWire instead thumbed its nose at the law and creators.”
For now, LimeWire has about 5 million songs on its online retail store, none of them from the RIAA’s Big Four, Zaidi said. He declined to provide sales figures.
In its LimeWire lawsuit, the RIAA is seeking up to $150,000 per copyright violation, though the final damages have not been determined. It was the first case targeting a file sharing software maker following the 2005 Grokster decision, in which the U.S. Supreme Court cleared the way for lawsuits targeting companies that induced or encouraged file sharing piracy.
Zaidi said the recording industry should take the opportunity to partner with LimeWire, “to put the most amount of money into the pockets of artists and those who own their copyrights.”
The music industry, he said, “is in the driver’s seat. What happens next depends on what they choose to do.”
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Google Launches Multi-Front Assault To Grab Its Share Of Music Marketplace
A series on announcements this week at Google’s I/O developer conference could signal another seismic shift in how music is discovered, purchased and enjoyed.
Google’s most direct foray into music comes via the announcement that it had purchased Simplify Media two months ago, and will incorporating its technology in a new version of Android that enables users to stream music directly from their home PCs. That’s a very different approach than MP3Tunes, Spotify or Apple’s soon to be defunct Lala and others who have focused on storing music in the cloud.
Just as importantly Google announced that a new upgrade for Android will enable over the air downloads and auto-synch to all Android powered devices. No word yet, it Google is opening its own music store or just opening it’s system to Amazon and others. Either way, its direct challenge to iTunes.
Two other Google announcements also have strong implications for the music industry.
An expanded Google Chrome App store plans to do for web apps what Apple’s App Store has done for mobile apps. Developers will be able to sell apps for all web platforms and that could includes album and artist specific music apps that deliver bonus content or offer an ongoing conduit between the artist and fan. (More:Google Chrome Web App Store Offers New Opportunity To Monetize Music)
Google TV was also announced. The service and device bridges the gap between online video and the home TV set. For the music industry, that means the possibility of niche TV channels serving specific communities of fans much as blogs and internet radio does. (More: Google Wags TV’s Long Tail. Can FargoTripHop.TV Be Far Behind?)
Editorial : Can Hip-Hop’s New Generation “Master The Moment”
Editorial : Can Hip-Hop’s New Generation “Master The Moment”
Master The Moment.
Years ago, I wrote a personal editorial on AllHipHop.com, because I felt like the culture itself has finally learned to “master the moment.” This write up referred to the period affectionately known as the second Golden Era. I’m not certain if that the “Master The Moment” phrase had ever been used before, but I felt it was appropriate for the crop of ambitious, determined and business savvy artists that were successfully melding branding with marketing with commerce with art.
It all seemed to go hand in hand, like the Boy’s Club logo.
Strategically, this created stars, in front of the camera and behind. Most notably – but not limited to – is the team over at Def Jam Records, who repeatedly knocked it out of the park with Survival of the Illest, Month of the Man (Red & Meth) and other initiatives. Not to be forgotten were folks like Steve Rifkind and Loud Records, Jay-Z, Dame and Roc, and other collectives like the Duck Down crew, who remain a powerful brand. During that time, the artists and their team’s timing was impeccable. Biggie and Puff Daddy (P. Diddy) were supremely tactical in their approach to the game, something that often goes unnoticed these days. DMX was right on time when he broke out of the shiny suit era with “Get At Me Dog.” All systems were a-go, from the streets to the board room.
In present day, the “machine” and all of its various cogs seem out of synch. And I’m hoping that the new generation of Rap stars know the value of mastering the moment like their predecessors. But, I’ll admit I am not certain.
There is hope, if they take heed.
Nicki Minaj recently scrapped her touring plans with pop princess Rihanna in order to work on her album, which is now slated for a September release. “Barbz I’m sorry 2 say I will not be going out on RiRi’s tour. I’ve decided 2 use that time 4 the completion of my album. Hope u understand,” Nicki tweeted, of her album that I’d like to see manifest before the September 2010 scheduled release date. Well, if Nicki’s reasoning it true, she is probably preparing herself to win the war of longevity as opposed to winning battles for fast cash.
Speaking of cash, I believe quick money is the reason why a bunch of newer acts fail to master the moment. Rappers and other artists as well have the ability to pay their bills in ways unimagined before thanks to the internet. The loved and loathed one known as Waka Flocka is living proof of this. While many abhor this product of Atlanta, he’s tours getting about $15 – $17 thousand per show. Sometimes he does two shows a night, one for adults and one for teens. He’s admitted his reluctance to drop an album, because it could serve as a buzz kill if its not well received.
Then there is Drake, who is closely related to Nicki Minaj and Lil Wayne’s Young Money. Drake seemed to be set in the year 2009, as he had several smash hit records like “Best I Ever Had” and “Successful.” Furthermore, he’s already won numerous awards and has been nominated for a Grammy. This success has continued into 2010, where he’s graced VIBE’s recent cover and will cover XXL’s issue with the aforementioned Nicki Minaj. So, with Sprite commercials, Drake is still a bankable artist. In many ways, I do wish So Far Gone was turned into an album so all the accolades surrounding it could represent his “moment.”
Hip-Hop will continue to need stars on every level, including the underground. Take Jay Electronica for instance. He’s been resolute in creating a feverish demand, especially with his song “Exhibit C.” But, in a recent interview, he admitted that he wasn’t prepared for the demand.
I saw this video on 2dopeboyz.com, where the comments were particularly interesting and pointed to Jay Electronica’s ability to master this moment. Here is a random sampling.
“I’m not even asking for Act II, an album, or a mixtape….just put out a new song dude.”
“Everytime I see Jay Electronica’s name I think it’s a new song but nope, more interviews haha…”
“ok so i didnt wanna be one of the people always complaining, because i usually dont freak out when stuff is pushed back and whatever but seriously where the f**k is act 2?”
I really “need” Electronica to hit the masses with a video and then an album, but his fans mostly just want a new song. “Exhibit C” not only excited Hip-Hop’s core, but it rejuvenated those that have abandoned rap. A friend of mine hit me like, “Have you heard of this dude Jayo Electronica?” That’s no typo – JAYO. He had never so much as heard of Jay until that song. Yet, the follow up has been sluggish to say the least and I’m hoping the Jay’s moment isn’t escaping him.
But, Jay Electronica and others are in the driver’s seat of their careers and move at their own pace, and perhaps the pace of their base. Furthermore, they have the ability to generate revenue through touring and singles without a label. Why rush an album when you get $15, 000 per show like Waka Flocka or in Nicki’s case $30,000 to host parties during the NBA’s All-Star weekend?
I admittedly think of the classic album as the basis from which hometown heroes can transcend into timeless legends by way of their art. Every legend has at least one classic album, but that is a fleeting notion with the way CDs sales are down and rappers are dropping stray tracks daily. Nevertheless, timing is everything. Take Joe Budden for example. I still consider Mood Muzik 2 his classic album, even though it was a highly revered mixtape. It came out at a time when people thought it was over for the “streets draft pick.” Lil Wayne made it practice to flood the streets and the internet with song after song, mixtape after mixtape until the demand was unparalleled. Both artists made the moment their master, not the other way around.
So, where does that leave us.
It leaves us back to the basics with a modern twist.
Jay-Z is an excellent example. While Jay is revered as a solo artist, he’s never ever been truly solo. He and his team (whichever team that has been through the years) have always been a master at capturing moments in time. Just look at last year alone. He did the September 11 benefit, which coincided with his scheduled album release for Blueprint 3, which happened to coincide with the September 11, 2001 release of The (original) Blueprint. He released a quintessential pop ode to New York City (“Empire State of Mind”) when New York rap is still climbing back into prominence. If you look back, you can chart when Jay’ and his team (I emphatically stress team) were on the same accord and the results. Lastly, Jay has known when to change gears, when to collaborate with who and when to leave the past in the past. Sure, there have been missteps, but the moves have been overwhelmingly positive time and time again.
I can’t say the same for many of my favorite artist, who often look like they were an astronaut floating in space with no jet pack. Confused and directionless.
The moments in time became their master and they fell off, even though they were skillful artists.
With that, I charge this new generation of creatives (and some older ones) to keep pushing forward as aggressively as possible, but know when to pump the brakes, push the pedal to the metal and definitely know what kind of “vehicle” you are in. Employ your resources wisely in a way that allows you to maximize the impact of your talents. Generally, the moment is bestowed upon you and other times created by you. Whichever is the case, you better be ready and I hope you are, because the time is now.
History (Courtesy of Bob Lefsetz)
“The week before the health care vote, The Times reported that births to Asian, black and Hispanic women accounted for 48 percent of all births in America in the 12 months ending in July 2008. By 2012, the next presidential election year, non-Hispanic white births will be in the minority. The Tea Party movement is virtually all white. The Republicans haven’t had a single African-American in the Senate or the House since 2003 and have had only three in total since 1935. Their anxieties about a rapidly changing America are well-grounded.”
Frank Rich
http://www.nytimes.com/2010/03/28/opinion/28rich.html?ref=opinion
“A Quinnipiac University poll released on Wednesday took a look at the Tea Party members and found them to be just as anachronistic to the direction of the country’s demographics as the Republican Party. For instance, they were disproportionately white, evangelical Christian and ‘less educated … than the average Joe and Jane Six-Pack.’ This at a time when the country is becoming more diverse (some demographers believe that 2010 could be the first year that most children born in the country will be nonwhite), less doctrinally dogmatic, and college enrollment is through the roof. The Tea Party, my friends, is not the future.”
Charles M. Blow
http://www.nytimes.com/2010/03/27/opinion/27blow.html
Does it remind you of the music business?
In other words, are the major labels the Tea Party? Wanting things to return to a past that is so far distant that not only is it never coming back, many people aren’t even aware of it?
CDs?
History.
Files rule. E-mail me all you want about how you love the silver discs, but you’re in the minority, you’re a Luddite (and don’t cite sales statistics, illegal acquisition of files online dwarfs ALL sales.)
Albums?
Gone. Yes, you can reminisce, wax rhapsodic about the concept discs of yore, but you’re never going to get people to pay a lot to get an hour’s worth of unheard music again.
Terrestrial radio. People hate ads. They’re a tune-out. The concept that people will willingly sit through minutes of unwanted sales spiels is gone. Lobby against the DVR while you’re at it. And the iPod. Oops, rights holders tried that, didn’t work.
We’ve got a generation that believes music should be plentiful, and cheap. And no matter how much you want to deny it, their ranks are growing every day and baby boomers inured to the old world are dying. Or, to quote Bob Dylan, “He not busy being born is busy dying.”
Doesn’t matter what Doug Morris says. Nor Lucian Grainge. Nor…does Mitch Bainwol still run the RIAA?
As for Bono and his manager protesting that people must pay for music… Compare the number of people who go to the U2 show to the number who listen to music… Even Sarah Palin has fans. And Susan Boyle sold a hell of a lot more albums.
In other words, if you’re lobbying to drag us back into the last century, you’re fighting a losing battle. Doesn’t matter if you believe you’re right, if you think file-traders are thieves, your minions are dwindling. Hell, elected officials would rather take the money of Silicon Valley and the electronics manufacturers than that of the content creators…hell, they’ve got more of it!
Don’t get emotional. It serves no purpose. Don’t lament your job is evaporating. Figure out how you can function in the new world.
There will always be people who shepherd talent to the market.
How will they be remunerated and how much?
Interesting questions.
The old days of the label getting the lion’s share of the money are dead. Forget 360, that’s a tiny minority, how many people even have a major label deal? 360 is with the manager. Who may take fifteen or twenty percent, but no more. Talent is in control. How do you get a share of talent’s upside?
Major labels have historical rights that are worth something, but they might as well shut down new music development. Or restructure it with a lot less cash involved. Because it’s a losing proposition. There’s less revenue coming in and acts are doing it for themselves.
As for exhibition… The concept of keeping the listener prisoner is gone. You’ve got to entice people, prove your worth, there can be no bait and switch, you’ve got to be a partner with consumers. How long has it been since the industry’s done that? Not only the labels, but the touring outfits. You can’t get a good ticket and you never know what the final price is until you’re just about to check out.
But the touring business thinks the gravy train will last forever. Not noticing that fewer people paying more money for fewer shows is not a paradigm for ongoing success.
Then again, how many superstars do we have left? How many acts that can truly live like rock stars? You’ve got to be a musician today. There may never be a rich and famous contract. Only drugs and groupies and the high of playing live music on stage.
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Visit the archive: http://lefsetz.com/wordpress/
Marketing with Data
The full presentation in its slide form is below. It reads better in full-screen and even more so if you download it in Powerpoint or PDF.
The point I highlight in the presentation is to approach your first direct to fan campaign as more of an investment in data gathering to understand your fanbase and less of a silver bullet for overnight marketing and distribution success. With each subsequent campaign you’ll gain more intelligence on the unique dynamic you have with your fans. This will lead you to formulate more compelling offers for your fans and drive higher conversion rates over time as you become savvier in your segmentation and target marketing.
At Topspin we approach our data gathering efforts from a funnel perspective where we baseline and improve each of the following variables in a direct marketing campaign:
The original vision for our Topspin product is based on this approach. The idea is to get your artist into as many eyes and ears on the web as possible and get prospective fans to play or share your media. This level of engagement converts those impressions into permission marketing relationships, which ultimately translates into recurring revenue from your fans.
As you think holistically about the funnel, conduct your direct to fan marketing campaign systematically through a series of scientific experiments to increase each of the variables above in every subsequent campaign:
- State your hypotheses or goals
- Craft your offers to meet those goals
- Collect data
- Measure your performance
- Optimize your campaign
- Repeat successes, iterate improvements, and constantly experiment
This process should be circular in that you’re frequently re-starting the cycle for constant hypothesizing, measuring, and optimizing based on your previous campaign data.
The goals you set will depend on whether you’re prioritizing on fan acquisition for emerging artists or monetization for established acts. It’s helpful to define these goals from the beginning in a clear, quantifiable way so you have something to benchmark against.
When crafting offers marketers should consider their artist as a brand with many products to serve a variety of customers. These range from new prospective fans who want to hear the music for free before pulling out their credit cards to hardcore fans who place a premium on collectibles from their favorite artist. The best practice we’ve realized is to authentically connect with your fans and give them a range of tiered offers that will generate more revenue and margin for the artist than just selling the same product that’s available in all other channels.
Here’s some interesting purchase data that show how fans consume offers from Topspin artists and how it breaks down in revenue:
It’s clear that including physical goods in your offers will increase your overall revenue. Our average revenue per transaction at Topspin is over $20, and it’s $50 for some branded artists who follow best practices. This is significantly higher than other digital channels where fans are buying a track or two at a time. Here’s more Topspin data to reinforce the point of higher priced goods driving more revenue for artists:
As you can see, slightly more than half of the transactions at Topspin are under $10, but they only account for 17% of the revenue. In fact, offers priced $25 and over, which include physical items represent the majority of revenue. The hope is that you take these data insights and plot your own demand curve to serve your spectrum of fans.
Once you’ve crafted offers to meet your goals, you need to collect data, and there’s no better tool available than Google Analytics. It’s free, simple to use, a universal standard, and offers third party integration. Our Topspin purchase flow has integrated with Google Analytics so you can see those transactions as ecommerce metrics reported in your artist’s Google Analytics account.
Google Analytics lets you identify sources of traffic to your website and offer page. More importantly you can assess how this traffic converts to new emails and active paying fans. Here’s a Topspin Knowledge Base article on tracking website conversion by source traffic. Google’s Analytics is a powerful platform for measuring the effectiveness of all your online marketing activity. We recommend using Google’s URL Builder to create unique order page URLs for more granular tracking in your campaign. Here’s a more comprehensive and detailed Topspin Knowledge Base article on Tracking Sales and Conversion by Marketing Activity. You can use your own stats on traffic and conversion to project demand for your direct to fan campaigns. If you do not have a handle on your own traffic or conversion rates, here are Topspin averages across across a variety of channels for you to jump start your own projections:
According to the above data, email has the best conversion followed by direct traffic, and search. Given the lower rates of conversion across third party sites, it’s important to drive your fans directly to your offer page at every opportunity. In order to demonstrate this point, we depicted the difference in conversion of an artist broadcasting their video on YouTube vs. their own direct to fan video player on Topspin where they control the redirect which goes straight to the fan offer page:
Both video players performed equally well on click-throughs at a 10% rate, but since the YouTube player redirected fans to the YouTube video page, there was a 100x difference in purchasing conversion since fans had to click one more time on the YouTube video page to get to the artist’s offer page. By using your own video player and directing fans straight to the offer page, you can be assured of higher purchasing rates. Of course, you should definitely have your videos on YouTube as it’s a destination site for music discovery, but when it comes to your own website or social networks, you should broadcast and encourage sharing on your own players since they lead fans directly to the destination of your choice, specifically your offer page.
After the data is collected, you’re in a position to measure performance across channels. The goal is to identify the major drivers of conversion and prioritize on those channels that show the most promise in acquiring active paying fans. You can compare your performance against Topspin’s revenue distribution across all our artists and fans:
It’s no surprise that email is the highest driver of revenue at Topspin followed by direct traffic and Google search. What’s enlightening is that MySpace is still holding strong as a source of revenue compared to the much publicized growth of Facebook and Twitter. It will be interesting to revisit this analysis in a few months to see if Facebook and Twitter increase in share over time.
As soon as you get a sense of your campaign performance, it’s time to optimize. Focus on SEO since it’s imperative that your artist name and offer page are at the top of the search results given the volume of traffic and revenue generated by the search engines. You want interested fans coming immediately to you without being diverted to a third party site. A great web resource for SEO tips and best practices is the SEOmoz Blog. Another good resource is Rank Checker, which tells you where your artist site or offer page ranks in search results for different key words.
Now to touch upon one of the most exciting data topics for me personally: understanding the metrics for the new music business. We’re just scratching the surface in figuring out how to measure success for marketing artists online, and here are a few one-off stats from some of our campaigns. Topspin’s goal is to establish norms around these metrics to let you assess your own performance around indicators like these.
The first is the Play to Purchase ratio. When David Byrne and Brian Eno released Everything that Happens Will Happen Today, they released a streaming player with full-length streams, which was embedded far and wide. This proved extremely effective in that 1 in 5 plays led to a purchase in the first few weeks of the campaign. I would consider this highly successful, and since their average transaction prices was over $15 , that means each play was worth about $3.
A metric from the Fanfarlo campaign that signaled strong performance was their ability to acquire fans at a rate of 49 fans per 1000 impressions of their widgets. This included both new email opt-ins and purchasers. We found this number to be extremely high compared to our paid advertising tests, where we purchased inventory across music services to acquire email addresses at less than 1 per 1000 impressions (0.7 per 1000 to be exact). Fanfarlo’s widget impressions from Topspin may have been lower in volume, but they were FREE and 70x more effective in acquiring emails and paying fans.
“Dispersion” is the artist’s ability to get picked up and embedded in other websites. David Byrne and Brian Eno’s streaming widget was embedded in about 160 blog sites, and Fanfarlo’s streaming and email for media widgets were embedded in more than 248 sites. Once again, great metrics for widgets that ultimately directed fans back to their artist order pages.
Another mind-blowing Fanfarlo data point was their Shares to Sales ratio at 1.1. It means that for every one person who shared, more than one person purchased. This most likely had to do with the exceptional quality of their music, their fanbase of tastemakers who influenced their own audiences to buy, and their offer price of $1 for their campaign during a 3 week promo. The data has shown that Fanfarlo’s campaign worked wonderfully and is a great case study on viral promotions for an emerging artist.
These are just a few of the interesting metrics we’re getting our heads around at Topspin. We’re at the beginning phase of the direct to fan era, and as I said in my talk, I feel that we’re all in this together in figuring out what works and what doesn’t. I’m hoping the data in this presentation will help you generate more insights, which can ultimately be shared back with the community at large. Feel free to join us in the Topspin Green Room to share your ideas or ask questions.
Rent vs. Own: The Streaming Music Debate Continues
Original Post by Jason Feinberg on MediaShift, February 5, 2010
The exponential growth of Internet bandwidth combined with the ability to significantly compress digital audio has impacted the music industry in numerous ways, for better and worse. Just as file trading created a massive network of pirated music, the ability to stream audio in real-time has allowed for a number of innovative content distribution and promotion methods.
Digital music streaming services have been around for over a decade. Companies such as Rhapsody, Napster, MOG, and We7 have experimented with various business models and user experiences, with mixed results. The traditional streaming model was based on an all-you-can consume subscription offering, occasionally supplemented with a very limited amount of downloads. Adoption has rarely met expectations, and long-term sustainable profit has been elusive for most companies.
Now, a new wave of streaming services such as Spotify are emerging. Can they succeed where others have failed?
Changing Consumer Behavior
The lack of adoption of music steaming services has been attributed to a number of factors. First, a culture of ownership based on decades of purchasing physical media has locked many fans into a set way of thinking about music consumption. There are millions of music fans that correlate paying to owning, not just listening.
Then there is the illegal downloads issue. Convincing someone to pay to listen is difficult when they can freely own all the digital files they can find. Recent IFPI numbers estimate that 95 percent of all digital downloads are still illegal.
In addition to having to change consumer habits, logistics have also been an obstacle to user adoption of streaming services. For the majority of the past decade, most services were only available via a computer, thus limiting the number of settings and situations in which a subscriber could use the service. Most streaming platforms have now begun releasing iPhone and Blackberry apps, which adds portability into the equation. Until recently, devices were not able to capitalize on the functionality that these services offer, but thanks to 3G and WiFi networks, the bandwidth finally exists to take streaming music almost anywhere.
Subscriptions are not the only business model being used to monetize streaming. A number of ad-supported platforms have come and gone, such as imeem, which was purchased by MySpace late 2009. Imeem and similar sites (including MySpace itself) attempted to use the traditional media advertising model: Provide content for free, but surround it with marketing messages. Typically, this took the form of banners, sponsored promotions, and in-stream audio advertising. This model has also proved difficult to sustain long-term, due to the fact that royalties and bandwidth costs often exceed advertising revenue.
The New Wave of Streaming Services
Currently leading the charge in ad-supported streaming is Spotify. It has combined peer-to-peer streaming technology with in-stream audio advertising. Advertisements also appear on the user interface, raising the likelihood of user engagement. For users who wish to use the streaming service without advertising, and to have the option for higher quality audio, Spotify offers subscriptions in various configurations.
Due to licensing issues, Spotify is only available in a handful of European countries. Founder Daniel Ek previously expressed a desire to open in the U.S. by the end of 2009, but did not succeed. As discussed in a recent article on paidContent.org, the barrier to expansion seems to be licensing concerns, one of which is that U.S.-based labels are no longer satisfied with ad-supported free services and are only looking at subscription models. The most recent numbers show Spotify has 250,000 paying subscribers, compared to a free user base of six million.
The Path to Profitability
Content is key to the success of a streaming site, but adoption is still the ultimate issue. If consumers are focused on owning content, be it physical or digital, paid or illegal, streaming services will continue to have a major uphill battle.
Bob Lefsetz
In a recent Bob Lefsetz article, he addressed this issue, providing a detailed look at the obstacles standing in the way of mass consumer adoption. He also looked at how other industries have used bundling and focused marketing efforts to influence consumer viewpoints on renting content versus owning. Lefsetz states in his opening sentence that, “The recorded music business must switch to subscription, it’s its [sic] only hope of economic survival.”
His rationale for this belief is that iTunes and other a la carte purchase options are a losing battle regarding long-term revenue. Selling music track-by-track may be better than illegal downloads — but it’s still a poor economic model. By removing value from the album format (and losing its higher price point), the music industry has allowed customers to spend very little money. This means the business requires a much higher number of transactions to be profitable.
Lefsetz argues that by requiring users to pay one amount for massive amounts of music — essentially bundling content the way the cable companies do — the music industry is able to charge a much larger amount of people a higher amount of money. In exchange, these customers get all the music they can consume, across any device they want to use. Instead of paying $10 for storing 10 tracks, they can pay the same amount and have access to millions of tracks.
The continually dropping cost of bandwidth and massive connectivity available has set the stage for a profitable model in subscription-based services. The biggest challenge is to now convince consumers this is the best method for experiencing music. This job falls to the streaming companies and to the labels and artists that license the music. It also requires that the technology continue to offer more and more choice and convenience. In addition, a massive number of free users must be shown the value of converting to paying for listening, through higher quality audio and an ad-free experience.
As with almost everything in the music industry, the optimal streaming business model is still being figured out, but the emerging success of companies such as Spotify is showing a growing level of consumer adoption.
The Top 5 things to happen to Electronic Music in 2009
Top 5 things to happen to Electronic Music in 2009 from: Prime Loops 2009 has been a big year for electronic and computer music. Have a think back and remember all the things that have changed in your workflow since the year began – all the plug-ins, the new services and even brand new pieces of must-have software. But what have been the biggest things this year to hit the electronic music scene? Let’s take a look at the Top 5 things to happen to Electronic Music in 2009…
5. DJ Hero 
Whatever your opinion of DJ Hero, there is no denying that, much like Guitar Hero before it, it will open its music scene of choice to a massive new audience. The combination of Pop, Dance and Hip Hop music has thoroughly brought Electronic music to the gaming masses, solidifying a sense of interest in production and, perhaps more importantly, performance of the genre in a whole new generation. This could have massive repercussions on the electronic music scene – a huge influx of people buying DJ gear as they realise their calling in life requires a mixer and some headphones perhaps? Or a slew of punters rushing to find tutorials on producing music, so that they can be on the sequel? We’ll have to wait and see!
4. Spotify
Spotify technically launched in October 2008, but in 2009 it went online for free registration rather than invite-only. This resulted in people being able to get a scarily large library of music for absolutely nothing. This is a huge thing for all music producers – being able to get their music out with a new and exciting platform… or looking out for the newest way to get exploited by a large company. Either way it’s something big.
3. Accurate Pitch Bending 
Going into the more technical side of things now, Pitch bending has quite thoroughly evolved. Gone are the days of chipmunk-style vocals; technological advances this year have allowed us to pitch up several octaves whilst still retaining the natural sound on the vocals, preserving the punch of the percussion or the grit of the guitars. Scooter will be crying into their pitch-bending plug-in.
2. Flexible Time Stretching 
Not only has pitch bending undergone a revolution, time stretching has followed suit, with DAWs now allowing sounds to be stretched beyond recognition… without them actually being beyond recognition. Software such as Ableton Live has made it an industry standard that audio can now be manipulated just as easily as MIDI, without tempo being an issue any more. Hell, some DAWs allow you to not even record to a click track and then can automatically put you in time! Maybe talent would be a thing of the past if it were not for the need to stay in tune…
1. Melodyne DNA
…Or did I speak too soon? Melodyne deserve the top spot thoroughly – they have created software that can analyse an entire song, show you all the notes within it, then allow you to manipulate those notes. Think of the uses for synth-creation and sample manipulation – being able to grab and change that harmonic overtone in a synth sound without having to spend years EQ-ing a patch to perfection. This also has massive repercussions elsewhere – remixing will be changed forever; chordal instruments can be pitch (and time) corrected as easily as vocals now, and robots will take over the world. Okay, perhaps that’s a slight overstatement, but with so many seemingly sci-fi technological advances happening in such a short space of time, it’s easy to lose track of what’s real and what’s not. If 2009 has shown us anything, there are certainly some changes coming to the music world in the future; that’s for sure.