Monday, 23 February 2009

Possibly the only post about file-sharing

I don’t usually feel compelled to post about file-sharing or P2P. Not that I don’t think it’s a serious issue, of course it is. It’s just that I personally haven’t worked closely in that area for a while and that actually feels good. The whole business of file-sharing is a largely negative vibe. When working on legal music strategies & product development, the choice until now has been to work around file-sharing, or just live with it. Since I lived and breathed piracy in my years at a music trade body, it’s been good to get away from it. But a few recent developments have brought the subject back to the forefront of my mind:

1. The Pirate Bay trial.
2. Legal ad-funded streaming.
3. ISPs & music.
4. Digital Britain (the interim report).

I’m not tracking the Pirate Bay trial in great detail, but safe to say the outcome of it will be critical for music, technology and creative business in general. What struck me about the trial hasn’t been the outlandish statements and stance made by the Pirate Bay (are these guys really attempting to position themselves as crusaders against copyright to the wider benefit of creators, consumers and society? How can they be allowed to gain traction with that?).

No, what struck me was the statement by Bjorn Ulvaeus, from ABBA, on the Swedish website Newsmill. He slammed The Pirate Bay for giving users "the ''freedom'' to be lazy and mean" (these are the things trade bodies find it awkward to say for obvious reasons). Bjorn concluded: "Is it really so damn difficult to pay your way?"

I liked the economy and authenticity of this latter statement. Because in the end, the higher-ground arguments used by file-sharers and their facilitators – brought to a head by the TPB trial, have never held up, to my mind. Sure, you might not ‘agree’ with the way an industry is commercially and legally structured but does that give you a divine right to undermine it just because technology means you can?

If you think yes, then at least expect someone to try & stop you. If the current generation of tech-savvy freedom fighters want to be remembered for attempting to bring down the copyright industries rather than being anti-war, pro-environment, or existentially fulfilled then that’s up to them. I expect things will turn out unsuccessfully for them in the end.

The best excuse for file-sharing – the most genuine I suppose – is the sampling argument – which brings me nicely on to point 2 above. It’s quite right that technology is allowed to disrupt the structure of a business every now & then (just not in the manner of 1, above).

It was never really right for us consumers to have to take the risk on an album based on familiarity with one song, or even devoted loyalty to the artist. I’ve wondered what my personal tally is of getting an album purchase right or wrong, from a utility point of view. No idea, probably more wrong than right. But it was always a sinking feeling when you had invested in a piece of music only to concede to yourself on playback that you actually didn’t like it at all – that YOU made the mistake in buying it.

At last, we don’t have to worry about these things. We can now use the ad-funded streaming services and the music social networks to play anything we want as frequently as we want, before deciding if we like it enough to own it. It’s liberating. Indeed we can decide not to own very much music if we prefer to spend time streaming it or ‘socialising’ with it. As a music fan there’s no downside to this, other than maybe trading off some of the ‘deeper’ benefits of really committing, as a listener, to a piece or music or an album – something a lot of consumers really don’t mind about (and some – though not you, reader of course - might not even know what I’m talking about here!).

The development of legal ad-funded music services and music social networking, impacts directly on the need for file-sharing services. File-sharers agree with me on this. Over 60% of file-sharers also use legal & free music services, with over half of them now believing this reduces their need to illegally file-share. These stats come from the 2008 UK study by Entertainment Media Research and Wiggin.

As these services grow, music consumption shifts from the current dominant pattern of ownership, to one of access & discovery. This makes perfect sense given the changes in music supply and distribution. The only critical issues for music producers is that music streaming and social networking are allowed to thrive in a way that makes sense for the business economically. The latter point is hugely complex of course. Spotify has the momentum, but does it have the commercial model? I hope so, because to build momentum in the way Spotify has is a great achievement.

The subject of commercial models brings me to point 3 in my opening paragraph – the ISPs. Spotify might argue that it now has enough momentum to go it alone as a consumer brand. It would have been one hugely, insightfully smart ISP though, that might have approached Spotify a year ago with a partnership or acquisition in mind. For the ISP’s have what the innovative, insight-based start ups do not: a customer base (with a billing relationship); brand equity; financial muscle, etc. etc.

With the trade bodies shifting anti-piracy strategy away from consumers to their ISP gatekeepers (somewhat successfully) it only seems fair for the industry to offer a contra – namely to assist ISPs to develop valid alternatives to pirate services.

No one is saying it will be easy. ISPs of course have a set of issues all of their own that are comparable to the woes of music suppliers. And a whole stack of searching questions for those suppliers: why big advances for non-exclusive licenses? What can you tell us about your customers? Will they pay for (digital) music at any price? Will the Government help? (And those questions are before the really big ones like ‘What music service will we offer?’).

With B2B platform services now developing in the space (7 Digital and Omnifone are marketing music provision services to ISPs and Virgin Media was/is in discussions with Playlouder), there are vehicles emerging for ISPs to enter the music market in more effective, dynamic ways than they did at the turn of the century. Yes, music is an expensive licensing proposition – and an even bigger marketing commitment. But what the ISPs need to keep in mind from the get-go is the actual size of the market opportunity in music. Music piracy may not need any additional PR, but legal music sure does.

It may be that file-sharers account for 95% of music downloads as the IFPI says in its recent (and ever superb a resource) Digital Music Report. Not an unreasonable estimate as it goes, perhaps, but misleadingly scary. File-sharers binge on songs and don’t listen to half of what they download.

The EMR/Wiggin survey mentioned earlier reports that 2 in 5 ‘online music consumers’ have used a file-sharing service – ever. So from a consumer viewpoint, digital music is a 60% legal market. Break this down by demographic: for the over 24’s, online music consumers are three-quarters legal. This is the ISP’s core market – mom & pop, basically – the folks who pay for access. Even among the under 24’s, half don’t file share. And this is ‘ever’ – regular, habitual use of file-sharing networks is lower – more like one in five online users across Europe overall according to historical tracking by Jupiter (now Forrester).

If those stats were describing a disease, then sure, we would have an epidemic on our hands. But as a social trend, file-sharing isn’t quite as main-stream as its presence in the media can sometimes suggest (at least not among the ISP core paying audience). With cooperation between ISPs, the industry and yes probably, Government, it’s also containable.

I didn’t think the Government (I’m on point 4 now) should get involved before, but now I do, because of The Pirate Bay. If these jokers want to escalate the debate to a sociological level, the Swedish Government has no choice but to get involved anyhow (besides, one could hardly argue that music piracy hasn’t devastated the legal business in Sweden). In the USA, the debate is almost as fanatical and the impact on the market almost as detrimental, so it will be interesting to see if the new administration gets more directly involved in internet regulation.

Meanwhile in the UK we have continued Government support of our splendid Creative Britain. With the mainstreaming of the creative industries key to the UK’s economic future, it seems logical that UK Government wants to do all it can to ‘smooth the path’ for commercial deals to take place between music (and crucially, all creative industry) providers and ISPs.

Specifically (if you can call it that) with Digital Britain Action 11, the UK Government wants to establish a Rights Agency to help facilitate a ‘‘win/win/win’ for rights holders, intermediaries and consumers’. It’s typically vague but at least well-timed. Now is the time for Governments to facilitate a step-up in counter-piracy at the same time as maintaining a focus on incentives to innovate, helping to direct producers and ISPs to solutions that they may naturally, initially resist.

But solutions are quite close already, so it’s even more critical for Government not to confuse or slow down current progress with non-specific strategies.

Tuesday, 10 February 2009

Artist Path to Market (Post #2): Avoid the Hype Machine go for the Slow Burn to Success

Ah the one hit wonder. It’s a music industry staple isn’t it? Great one-off hits have lit up the charts for as long as the charts have existed, cultivating a love-hate relationship with the public. Everyone should have a personal favourite. Mine is ‘I Am The Beat’ by The Look, which sadly, reveals mostly nothing much but my age.

It charted in the UK at number 6 in 1980 and had nice shades of The Jam and XTC. And wonder of wonders, a quick Google entry, and it is right there on YouTube. An amazing 39,152 (and steadily rising!) views, reassures me that I am not alone. It’s had 4,426 plays on (slowly rising) and was re-released as a download in May 2006. The miracle of the internet - it has opened up a world of discovery and fun for nostalgia fans at least.

Of course, no serious artist wants to be a one hit wonder, quite the opposite. Even if artists don’t seek fame, fortune, adoration & idolation, which many don’t, they might quite like a sustainable career. But with the traditional ‘Route 1’ to market – i.e. signing a label deal – undergoing something of a re-appraisal, are there genuine alternative new routes to a sustainable career for artists?

Currently on the blog aggregator site Hype Machine, you will find a (very popular and very useful) composite list of the Top 50 Songs, Albums and Artists, aptly named ‘Music BlogZeitgiest’. Those not predisposed to tracking this kind of thing semi-obsessively, will recognise less than half of the albums and bands that feature. But that’s because many of those albums are debuts (I guessed about half of the 50 ‘zeitgiested’ albums were) by young, up & coming bands, very much in the ascendant. That’s because blogs are at the cutting edge of music taste and opinion, generally in a good, genuine and passionate way, if sometimes a bit nerdy with it.

Part of that nerdiness is the competitive nature of blogs and of music discovery in the current, online-led, media landscape. Bloggers, as with DJs, like to feel it’s they who have disseminated to the masses, news of the next big thing. Pitchfork pretty much started it all off, at least in the indie space, and is still seen as that genre’s tastemaker supreme.

But this addiction is rubbing off on the mainstream media as well. These days, to accompany the usual slew of annual round-up best-of lists in the music magazines, broadsheets and radio shows, come the beginning of year predictions of the next big thing. These two perennials, the end-of-year best of lists and the ‘this years’ next big thing lists, combine to kick off the industry Hype Machine that lasts all year long.

But the key question for artists is this: do you really want to be among the crop of artists that are fed into The Machine? UK 6 Music DJ Steve Lamacq BBC - 6 music - Steve Lamacq asks the same question on his blog recently. The exposure is great, but the potential for over-exposure and worse, backlash, seems a very real risk. Analysis of both albums made and sales from each album reveals ever- shortening life-cycles for modern day pop artists.

Looking back to one year ago – the collective ‘buzz’ being generated around any number of new bands that included The Horrors, Clap Your Hands Say Yeah, Palladium – was almost claustrophobic. I’m not singling out those bands for any reason, just examples. This year, in the UK business, it seems to be a crop of female singer songwriters – but a different crop of female singer songwriters to last year. And every now & again, the Hype Machine spins way out of control and literally creates a monster. We all remember The Darkness.

I haven’t so far, been a big subscriber to the Long Tail theory, but maybe it will emerge after all, by default. The long tail is currently being well stocked with an ever-increasing volume of short career span artists, who were ‘this year’s big thing’ at the time but never got past album two in the end.

But is there a solution? A path to longevity, other than obscurity? After all the life-cycle trend runs pretty deep. It isn’t just a result of the hype machine. Label deal terms are shorter, with five album deals rare these days, replaced largely by the ‘two album firm’. Other contributing factors are the sheer volume and choice of new music and the resulting impact on fan loyalty to any one artist. Improvements in production means that debut albums sound better than they ever did, setting high standards from the off and establishing a high sales watermark the artist can only dream of matching second time around. An interesting, though partly tongue-in-cheek post on the Guardian Music Blog’s School of Rock series, has some tips on longevity (see bibliography below).

If anything, a good manager or label will do the upmost to resist the hype machine for the artists they represent, in favour of longer term development and eventual world domination. Hat’s off to Virgin for the more subtle approach taken last year with Laura Marling, for example, despite the temptation to go hyper. And see the previous post on this blog about the intricately managed ascendance of the very excellent Elbow. At the end of the day, the age-old principle holds true – artist development is what matters most.

Assuming an artist has made a special record/set of songs, I think two approaches are required:
  1. Careful, subtle navigation through the hype machine – avoid irritating over-exposure too early on, and prevent any unnecessary backlash.
  2. Ensuring a handful of alternative approaches are somewhere in the marketing plan, to avoid over-reliance on the conventional route.

I see no particular distinction in the above, between digital and physical, or mainstream marketing. It isn’t about the channels. It’s about following the various routes to the audience you want to reach. The audience, channels, brands and content created all need to be woven into an integrated, long term plan – not a throw it all at the wall promo frenzy lasting one month before album release and one month after. I’m not saying don’t promote, but promote to the audience you want to reach. Use the brands and platforms your audience engages with the most.

In discussing this whole longevity vs. hype thing recently someone asked me an interesting question though: If artist life-cycles are reducing so much and the industry machine working ever-faster, how can it be that so many veterans – more than ever it seems - still show a very fruitful presence on the current scene? It’s not such an oxymoron as you might think. In fact it makes perfect sense. Every trend has a counter-trend – an antidote.

I’m convinced more than ever that modern commercial music is two markets: new music and the classic catalogue, with the latter creating ample space for comebacks, both on the recording and touring front.

But, in this polarised world, riddle me this: how many artists can you name that are doing well, creatively and commercially, on their 4th or 5th album? How many Coldplays, Pearl Jams, Radioheads or Wilcos do we now have? It’s strikingly few and that’s a shame, since we, the fans lose out following artists from album-to-album. Or perhaps it’s just the beginning of a change we need to accept.

It used to be that the relationship between frontline, new music and the catalogue, was symbiotic, whereby the best discoveries in new music would replenish catalogue, helping record labels to recoup their substantially risky investments in perpetuity (not quite, with copyright ownership limited to some 50 years of course).

But I’m convinced this relationship is broken and that this pipeline is no longer open. The last album through the gates from new to classic was OK Computer, discuss?

There are no easy answers other than a more careful, strategic approach to artist & content development, including the need to take long periods out of the game, to both renew the creative process and avoid over-exposure. My prediction for who will be big in 2009? I wouldn't care to say as I don’t think it does anyone any great favours.

But back to The Darkness. Justin Hawkins has of course, made a comeback recently with his new band Hot Leg. Not to be taken wholly seriously perhaps, but Hawkins inadvertently makes a good point. One path to creative longevity may well be to bounce back again and again under various new projects. Luke Steele previously of The Sleepy Jackson has done same with his new project Empire Of The Sun. What was previously known as ‘The Side Project’ might be the key to keeping it fresh and sustaining a musical career.

Brief bibliography for this piece:
‘Hype Machine’, Bill Wasik, Oxford American
‘Hype Springs Eternal’, Alan McGee, on the Guardian Music Blog
‘The Thinking Man’s Take On: The Hype Machine, Chris Barth, Pretty Much Amazing
‘The Rihanna Challenge’, Kyle Bylin, Hypebot
‘What’s the Secret to Creative Longevity’, Will Byers, Guardian Music Blog