Tuesday, 31 March 2009
I occasionally write about music on this blog, not just the business of music. If I were to write about music that interests you, what are you most likely to do? a) park it for later/never b) stream some of the songs I mention on Spotify c) buy the music from a digital music store. File-sharing isn’t an option I’ll include for now but obviously if you really wanted to, you could. If I really wanted to know the answer I could add a voting widget on the blog, but the question is actually kind of rhetorical.
But it is no less critical for that. With Spotify probably coming in somewhere close to 1.5 million unique users by now, ad-funded streaming seems to have momentum, so you might answer b) stream it. On the other hand, if you have been persuaded by any of the arguments & threads on this blog at all, you might well opt for c) buy it. I’ve posted several times on the limitations of streaming for music discovery and enjoyment, but also many times on the lack of inspiration to buy digital. But both are accepted options on the future of recorded music’s rather limited, menu. The technology evangelists will insist that transactions aren’t even on the menu at all – and they are quite wrong about that.
State of the Nation for Digital Music: Streaming vs. Transactions
First, streaming music. Consumers love streaming when it’s free. The first generation of subscription-based streaming services (led by Rhapsody) found a limited niche. Even the free ad-funded options later released by Rhapsody & Napster couldn’t take them into the mainstream. The second generation ad-funded streaming services really worked. Last.fm gained traction as a music social network & recommendation service then introduced full-track streaming. iMeem followed. Then Spotify took off and flew in the UK and Europe.
So far so good, except for the weaknesses in music streaming we are learning more about as things unfold: the business model. It’s tough, tough, tough. These services pay the labels advances and the publishers per stream, and now operate in a recession where ad-funding isn’t flowing into digital platforms like it did last year. This has had a lot of coverage in the past few weeks but was first exposed by on Michael Robertson’s blog over a year ago.
Consumers won’t pay in numbers for streaming or recommendation. They will tolerate some advertising if the trade-off seems reasonable. They have yet to really work out how streaming music for free impacts on their overall, long-term music consumption, but the chances are they will use streaming services to listen to a greater variety of music and take the risk out of music purchases. Since this means more time listening than shopping, that will inevitably mean less music purchases.
Now, since I posted last time on this subject of streaming outweighing transactions, Spotify has done an affiliate deal with & Digital whereby all the tracks on Spotify are one or maybe two clicks away from being purchased. Good stuff. So is the problem solved? Not really. Streaming on Spotify is quite passive, quite lean back. It is unlikely users will stream on Spotify to screen music prior to any kind of purchase and then go ahead with gusto to 7 digital to buy. It’s unlikely that stream-like-buy will establish itself as a major pattern of consumer behaviour. The instant buy button for music was always overrated.
Now to transactions. Why do we buy a piece of music? We’ve been conditioned to and that trend is ingrained and is still strong – if you are over 30 at least. For under 30s not so strong perhaps, but still very much present. But plenty of under 30s music fans prefer CD to digital, which seems weird but is logical. We’ll buy digital because it’s quicker than physical, usually – slightly more convenient and slightly cheaper. Now DRM is gone it’s less risky & confusing.
We mostly buy digital to add to a device, hence iTunes has the market sewn up, occupying 80% of a large niche. As opposed to streaming, all second generation market entrants have struggled like hell. Smaller brands have made no headway into iTunes market share and Amazon & Play have done okay with aggressive pricing but not shifted the needle for the market, really.
Interestingly, none of these digital stores have introduced the ability for customers to stream the songs in full before they buy. Unlike the streamers introducing click-to-buys, these established retailers know the game too well to expect full sampling to shift their sales up. It’s likely to go the other way, they know that.
On the other hand the innovation in the transaction market has been poor compared with streaming. iTunes isn’t sexy anymore it’s a 7-11. DRM got stripped, so what. Genius is okay but not game changing. Differential pricing isn’t the same as dynamic pricing and it looks like it will leverage some standard prices up as well as down. Amazon has gone aggressive with pricing, not impressing anyone, much.
But there have been, and still are, some interesting takes on selling music. Amie Street’s dynamic pricing model. E-music’s hybrid, great value music club-type subscription for indie content. Some higher-quality & lossless song-file services etc. – all niche. We’ve had music market-places such as Burnlounge and now we have the Peoplesmusicstore (I like this, more about it in a later post).
Finally, as I wrote a few posts ago, some services are, at last, focusing around particular audiences and repertoire rather than getting hung-up on payment models - Lost Tunes for example.
That’s the digital market covered (minus file-sharing and a few mobile services, granted) – in total worth roughly $3billion, under one fifth of music and not making up for lost CD sales. Growth is slowing down already at around 25% in 2008. In short we’re in a bit of a spot. But it is early days let’s use this brief history to see what might happen next.
Digital Music: What happens next?
What we have to realise is that the consumer adoption curve is law. The mass market simply does not go for things that aren’t convenient, simple and good value compared with the alternative. We have no right to believe that digital will grow significantly unless we see greater innovation and value arrive on the supply side. There might not be one big breakthrough to rival iTunes initial impact, but some clear ways to go as follows, with my view on the medium-term (say five year) potential:
The outlook isn’t too rosy. Is it really much more than personalised radio? With its simple functionality there isn’t room on the market for more than 2-3 key players and they’re already here, which becomes very challenging for new entrants like Myspace Music. Ad-funding on its own won’t sustain Spotify, but people love it, so a good chunk of users might be happy to pay around £2 per month to not have to live without it. Spotify might be able to earn £50m or so from direct subscriptions in addition to its ad-revenues. Medium-term potential: low
Despite the dominance of iTunes there is still some ground to be made through targeting services better to audiences (particularly new digital adopters in the more mature demographic segments). See previous posts around product development in this area. Through more compelling services and some innovation around targeting the market for transactions could easily double, though in the longer term it depends how much music is commoditised in other ways. Potential: medium
E-music was always a good idea, an innovative model. But it’s pricing is still way too aggressive for music producers and it is yet to convince the market that the ARPU model is an effective replacement for transactions. So it stays niche. But ISP’s (or even Spotify of Myspace) could offer a simple hybrid whereby 30 tracks per month are keep-able within a streaming subscription, maybe with some sharing capabilities. The pricing equation isn’t easy, but with a good value package and great presentation across multiple platforms this could shift the needle and could reach a hitherto indifferent digital consumer. Potential: high
These are still some way off. The cloud with everything available and consumers paying for access isn’t quite as inevitable as people think – it’s back to business models that actually work. Play Anywhere is an interesting B2B offer that bridges what we have now with some kind of future cloud-based mother jukebox but it’s too complex to be mass market. Potential: low
New technologies arrive weekly, but don’t seem to really get that much better. They come and go, with nothing making a mark more than Pandora or Last.fm has already. Even if someone perfected music recommendation it’s not something that consumers will pay for in itself and will not drive transactions for the same reason Spotify will struggle to – music purchases don’t work that way. Potential: low
On the brink for over a decade digitally, playlists have been a key music currency for as long as tapes existed. As with all things music though, what made mix tapes great – the time, thought and love it took to create them – has been commoditised by digital, with playlist services swamped with literally millions of crap compilations. Still, some services like Muxtape and Mixwit were built on traditional mix taping values and looked promising until licensing issues killed them off early. But now the labels are licensing project playlist, so the sector might yet deliver. Key to its potential are two factors: built-in natural friction on music use (keeping the industry comfortable and consumers tolerant) and the ability to offer great value since sales can be seen as incremental to all of the current product offers on the market, even commercial compilations. Potential: medium
Making it happen. Who decides?
I’m sure I’ve missed a few key developments above, but I hope to have demonstrated that there are plenty of elements that can still bring value to digital music and help the market grow significantly. However, most critical of all is how the various market players interact to bring these elements to consumers in coherent, sustainable ways. It’s the subject of the next post or one after so please keep a look out for it.
Monday, 23 March 2009
Being deliberately ruthless, I got to a tally of 49 songs that I became immediately interested in listening to. I virtually ignored the protest & politics section so it could’ve been higher. And like I said I was ruthless. My most popular category was heartbreak with 13 songs. That is irrelevant to but I thought I would share it with you anyway.
Now what’s missing from this story so far? Exactly right. Any intention on my behalf to buy the tracks.
Out of the 49 songs that caught my eye I already owned a copy of just over half of them, mostly strewn across my CD collection which spreads throughout lounge shelving (prime spot, my classics & recent bests), office shelving (current playlist, new releases, freebies) and boxed up in the shed (abandoned, just not forever). I had a handful of the 49 in my iTunes library, but since most were songs I hadn’t heard for ages - or at all - I’m unlikely to have them to hand.
With the sheer inconvenience associated with actually seeking out the 49 songs, the whole exercise was looking like a source of frustration - yet another small music project to put on hold.
But guess what? The people at the Guardian have, this time, been smart enough to link the series with a digital song platform, in this case Spotify. The Guardian’s (again, excellent) music blog has a simple hyperlink to Spotify under each song’s editorial. You can even copy & paste the HTML for a blog widget (I’ve installed one there on the right – my 13 irrelevant Heartbreak songs for you to check out).
Now, while this is fantastic and has indeed taken the inconvenience out of my little project perfectly, it also got me thinking about how the industry is making leaps & bounds forward so fast, that we might be missing a trick or two on route. Curiously, there is very little mention of the link anywhere on Spotify. Nor does The Guardian make it at all obvious in the published supplements. This seems to be either an unofficial arrangement, or a joint promotion done on the quiet (which kind of defeats the purpose doesn’t it?).
Two things occurred to me about this:
- Here was an excellent chance to promote both The Guardian and Spotify (and for labels, the songs!), but even more critically, encourage consumer interaction between old & new media platforms (among a key high-value, mature consumer demographic to boot).
- The link to Spotify made sense, but hang on a minute – Spotify is free – were there e-commerce, transactional opportunities missed here?
Both the above struck me as lost opportunities, with the latter a real issue in demonstrating how the digital music industry is currently positioned.
I’m still curious as to why it’s not made easier, in this digital day & age, for consumers to simply click-to-buy an album for which they have just read a glowing review. Last year I received some excellent music book gifts – Robert Dimmery’s ‘1001 Albums You Must Hear Before You Die’ and Garry Mulholland’s ‘This Is Uncool: The 500 Greatest Singles Since Punk and Disco’. On reading both I became eager to check out a shed-load of music. But again, with no linked incentive to buy digitally anywhere connected to the publications, I ended up making a less than pertinent mental note and buying one or two CDs on Amazon.
Of my 49 songs, let’s say I would buy 20 (I would!). Why didn’t the Guardian link up with iTunes or Amazon, or 7 Digital, to offer a simple menu of purchase options: 20 songs for £9.99 say? Or how about the whole 1,000 songs categorised by the seven sections for £99? Higher quality song files with a glossy collector’s booklet? Make that £149. Whatever, you get the idea. We are talking nicely incremental sales here, so incentivised pricing would work extremely well for both consumers and suppliers.
I know about the technical issues – metadata, bandwidth, dynamic pricing – all surmountable. Publishing is an issue of course – again surmountable. The logistical issues are well worth sorting out for a better digital future anyhow.
So why don’t we see more of this? More fundamentally, why does the industry now seem to be steamrolling forward inexorably toward ad-funded streaming models before we have explored more innovative transactional models?
It’s a key question. Rather than debate about whether all-you-can-eat streaming cannibalises existing sales, what about the opportunity cost of transactional opportunities not yet explored?
I have read in recent weeks at least a dozen articles about how Spotify’s momentum and the growth of ad-funded streaming services is tipping consumer behaviour into a new paradigm of access, not ownership. Tosh! Kind of – of course there is some truth in it, but the real picture of changing music consumption habits is far more varied.
Streaming music services represent snacking on music, the equivalent of browsing in one of those super-fancy-stationary stores where everything looks enticing and is mostly very affordable. But since you don’t need any of it, you pick up & flip a few things around in your hands and then walk away, empty handed. Or maybe you remember you actually did go into the store because you needed a new notebook.
Spotify is a form of music discovery and consumption, not a panacea. It is fun, convenient and superbly ripe for the kind of editorial tie-ins like the one with ‘1000 Songs’. It’s even better for background streaming while working on the laptop. But I for one am not ready to walk away from music ownership because of it.
I want to commit to certain records knowing that the pay-off comes from repeated listening in a range of environments, situations and emotional states. Streaming services are a way of filtering through the tide of new music and a way of snacking on new stuff, but that’s not how you discover what your primary collection of music for life sounds like. It’s unlikely I would have discovered Wilco or Sparklehorse or Merz on a streaming player. I certainly would not have warmed to the new Starsailor or Adela Diane records through that medium.
As that consumer who wants the deeper connection with music – who seeks out the next life-affirming records that can make the difference, I’m still here waiting for a reason to have a digital music collection, and for reasons & incentives to buy more music digitally. Until then, it’ll be Spotify, CDs and live shows. Not a paradigm shift for me.
Friday, 13 March 2009
It is sometimes vaguely topical, but not news, since music industry news is so widely available. If you don't already take them you must seek out Digital Music News, Five-Eight, Hypebot, Coolfer and MusicAlly for timely & savvy insights on digital music issues. And for all-round music perspective, Record of the Day of course.
On Juggernaut, I'm trying to write about the fundamental issues in music & the music business mainly from a consumer perspective – one so easily forgotten in the relentless tide of new technology and corporate shenanigans. If I occasionally veer off to more into discussing music more than business I make no apology for that, since in the end it’s all about the music after all. And writing about music itself can bring about the best, deepest insights.
Very briefly on the name, which a few more curious folks have asked me about. Well, it was, somewhat fleetingly, going to be a blog about music AND coffee, which is another life necessity and great passion of mine. However, I quickly realised I know nothing about coffee or the business of coffee, so that was that. The play on words is derived from 2008’s theme tune to my life, Elbow’s ‘Bones Of You’ (from the now miraculously popular and no less superb for it ‘Seldom Seen Kid’) in which the highly-stressed protagonist is "charging around with a juggernaut brow" (roughly 20 seconds in). Juggernaut brow/brew (coffee), geddit? Thanks for that.
In trying to take a lighter as well as more frequent touch this week, I managed to bemuse, daze & confuse a handful of regular readers. Have no fear The Brew will be back to business as usual from next time. I did however find another platform for a lighter touch – Twitter. I know, I know, I’m late to the party. To be honest I don’t think I’m long for it either, so get my Twitter updates (there on the right) while they last! Do the people at Twitter expect us to stick with this for life? No! We can’t create an existential vacuum this big for long, surely?
I wasn’t even curious about Twitter until reading Rob Fitzpatrick’s write up in The Word and coming across one comment on the therapeutic benefits of emptying your mind - getting your thoughts out of your head and into the cloud. Seemed a nice break from getting my head out of the clouds! Having tried Twitter I’m at least more qualified to comment on its application now, which for commercial brands I think is limited. The brand and record company feeds are boring. But it’s a fun way for smaller more specialist communities to bond and certainly a great way for bands to engage with fans. As to the commercial model – same as usual with new digital phenomena – to be confirmed.
Which brings me briefly back to yesterday’s post on the ongoing commercial challenges for digital music in which I neglected to register my concern and sadness over the closure of Fabchannel. The live music streaming site had been built up over nearly a decade and had a catalogue of over 900 separate performances. Firmly setting its stall out as free to users and ad-funded, ultimately Fabchannel could not make that formula work, despite a heroic effort.
The audio-visual digital space is an area in which I’ve done enough work to know just how hard it is. Fabchannel couldn’t squeeze enough blood from the stone even with the added value of exclusive, live content. For yet another gut wrenching account of how a digital music start-up eventually turned to dust, read Justin Knight’s ‘leaving letter’ on the current homepage. Ring any bells? Not too dissimilar from Justin Ouellette’s closing remarks on his closure of the original Muxtape which I posted on in December last year. What with the week's other fallout, I do hope Fabchannel doesn’t become symbolic of what’s happening in the music video space generally.
Ending on a better note, this week it struck me for the first time this year how 2009 is shaping up to be another good year musically (personally I thought 2008 literally, rocked). Wednesday’s post waxed lyrical on great music from unexpected sources, in this case Starsailor’s magnificent ‘All The Plans’. And with new albums up soon from Doves, The Hours, Laura Viers (anyone any news on this?) there’s clearly never a shortage of creative genius out there however they might all eventually get paid!
Thursday, 12 March 2009
Perhaps not though - what hasn’t been been debated, analysed, rumoured & forum’d with this one already this week? Besides, it’ll all blow over in a few days and the issue will be resolved –temporarily. And that is the issue – the lack of longer-term viable commercial deals between content producers and digital distribution platforms.
The PRS-You Tube squabble isn’t trivial, it strikes at the very heart of the music industry’s commercial model and means to future sustenance. The debate over the value of music videos on the web is a pre-cursor to the future debate of music itself on the web, what with Spotify’s momentum signalling the true arrival of ad-funded streaming services.
The difference between the two of course (music video and music itself), is that music video has never had much in the way of transparent market value, ever. The term ‘promo’ is such for a reason. The original deal between the labels and MTV was as good as barter – license the content for nothing and broadcast it as a promotional platform for the on-sale of a transactional good – CDs. One business model: going, going, eventually gone.
Meanwhile, the digital revenue model is a work in progress, to be confirmed. To put it into perspective, radio pays roughly 5% of its revenues to the music industry in licensing fees – an amount considered by many on the label-side nowadays, to be too small – 5% isn’t much of a cut after all. But it’s negotiated regularly in absolute terms, informed by the amount of revenues radio makes from advertising rather than tied to it (public radio - the BBC - also strikes its own deal with publishers and labels). It’s not a big share but it is solid, stable revenue flow to the music industry.
Commercial radio is a global market worth roughly $33billion (2007) and falling. Google’s revenues meanwhile for 2007 were $17 billion and rising ($22 billion). There isn’t much doubt about which sector is now leveraging ad-revenues more effectively. While You Tube of course, is only a part of Google, it’s a significant part.
The basic argument the recording industry is taking is that Google and You Tube can afford to pay more than it does currently for what is a critical element of content. Music video may have little transparent value, but it does have considerable collective intrinsic value. Meanwhile You Tube takes the argument that its own commercial model (not that of its rich parent) must be viable in itself. And with ad-revenues currently small, it can’t afford higher rates. Now you will know all this of course. I only iterate it here to make one point – both sides are right – which is why this is a genuinely hard one.
In the straightforward negotiation, the music industry is on trickier ground than You Tube. It’s hard to make any kind of ‘claw back’ argument – that you’re increasing your rates because the world is changing, than it is to stake a claim to nothing more than a valid slice of what the new world has to offer. You can hardly increase prices based on the size of your customer if you offer the same product to other customers. The music video market is a non-exclusive glut of services now including DailyMotion, MTV and smaller players Muzu, Joost etc. Even Music Brigade e-mailed me this week to let me know that its back. Guys, I didn't notice you'd gone!
On the other hand, You Tube’s mission doesn’t square with the world of content creation. You Tube doesn’t want to discriminate between a free-to-produce UGC video and a high-end glossy music video costing £10k per-minute to produce. Offering absolutely every piece of video ever made under the same free-to-all terms basically means the eventual, certain end of high-end glossy. That’s a shame because high-end glossy, professionally produced video is what a lot of people want, but have come to expect to get for free.
Basically, the goals & missions of You Tube and those of music & content producers do not square. The only solution, from an end-product point of view, has to be some form of service tier development. If you the user want your music video for free, fine, get it in its current, down & dirty form and don’t expect to get EVERYTHING. But if you want it higher quality, with extras, tier-up to something better. That something better has to paid for, be it subscription, transactional or sponsorship funded rather than ad-funded.
The producer-distributor partnership must share equitably across both or all tiers, not just one. The onus is on You Tube (and its content partners) to develop a commercial solution that maximises revenues enough to pay its way. Offering everything ever made by anybody or any company will not cut it. Platforms: innovate around your commercial model (Spotify seems to be working hard at this, watch that space). Meanwhile producers: innovate with your content and leverage some exclusivity.
The most puzzling thing to me about this spat is the timing. It comes just as You Tube has announced the development of its 'Vevo' service with Universal. That seems to me like exactly the right way to be going, in the direction of a solution that can work on a slightly more sophisticated level than what we have currently. It shows again how labels and publishers are as separated in the vision of music’s future as either is from You Tube.
Footnote: With these types of fundamental debates, it’s informing to see what music artists are saying. Beth Orton defended her ‘little’ royalty cheques on NME. Find me an artist that doesn’t like a royalty cheque. It’s a living!
Wednesday, 11 March 2009
Tuesday, 10 March 2009
Next, you need your experienced, reliable corporals – the ones who can really carry it for you if you let them. New albums from Starsailor (wipe that smirk off your face & grab a cup of coffee for tomorrow’s post) and Doves could potentially do better than any previous releases by those bands, if the campaigns are good and all the suns align with the planets. Both have great lead singles. Could this be the Doves year? It’s a question Guy Garvey posed on his Finest Hour radio show on 6 Music. All that would be required is for Doves to do ‘An Elbow’ – namely emerge from an underwhelmingly slow-burn career to be not only be more widely appreciated, but revered and then, actually popular. Note that this doesn’t just happen because the band has made a great record (see Juggernaut Brew post on Elbow for details). If only that was the world we're all living in!
But the slew of recent & forthcoming releases by new talent could certainly help the sales curve at EMI wake from its recent slumber (Coldplay aside). Empire Of The Sun and Lonely Dear have both been well received critically, especially the latter, with its easy on the ear sound-scapes and nicely lilting tunes. Julian Velard might struggle to differentiate himself from a crowded space of male troubadours, but the songs I’ve heard have real strength.
Bat For Lashes has no such problems standing out from the crowd. Every bit battier (it’s all in the name) than the very recent parade of solo female pop artists and with a point to prove in taking on the ever-more difficult second-album-syndrome, I’m especially looking forward to hearing this record. However, it maybe that Polly Scattergood is actually even battier. It’s too early to judge her success on this debut perhaps, but one to watch for the future.
Add to these the small media industries of Lily Allen and Pete(r) Doherty and it seems like quarter two 2009 is looking like the most active period of music marketing EMI has had for roughly two years – since their new owners took over, essentially.
Quite what impact Terra Firma has had on the schedule is hard to tell. Several albums mentioned above come delayed by the various corporate meanderings but perhaps that’s no bad thing. As a result, EMI is unusually, piling a lot of new product into what is usually a quiet quarter – which might well give some of these artists an edge - or at the very least, some breathing space to be heard. As an alternative to the fourth quarter pile-up in which many big releases effectively crowd each other out, it’ll be interesting to see if the timing of this combination of releases gives EMI a noticeable hike.
Sunday, 8 March 2009
So I will give U2's new album a listen, eventually, but we might well enter the second decade of the century before I get around to it. I haven't streamed it on Spotify. The single has washed over me once or twice, no big deal. I haven't read about it, apart from snippets in Observer Music Monthly and Alexi Petredis's review in The Guardian (and that's because I read both OMM and Film & Music cover to cover every time no matter what's in them).
Tuesday, 3 March 2009
I’m intensely curious as to why this hasn’t really happened. It’s been happening in the magazine sector, where digital has been a major driver for niche (let’s call them specialist) b2b and d2c titles since the turn of the century. Not all have survived, but the specialist magazine sector has been transformed.
I’ve always thought that a great digital music service would be a bit like the equivalent of a magazine, but with all of the interactive elements that magazines lack. Even the advertising could be appealing, since it is targeted to the user. I can easily find myself distracted browsing the ads in The Word or Uncut.
It’s what physical magazines do very well – target audience segments of like-minded consumers. In doing so, each and every magazine effectively creates its own sub-culture. Magazine editors understand this acutely and as a result, often know their readership intimately. And not a single cold call of market research is needed, it’s all just interpreted.
Why hasn’t this kind of market activity been mirrored in the digital music space? And, why haven’t established music editorial brands such as Mojo, Q or Kerrang! made brand-extension plays into the digital music space, in the same way they did in commercial radio, for example?
We know some answers of course. Market entry in digital isn’t easy. It’s a different business with different rules to the physical space. Until recently it was probably expensive to set up (before b-to-b platforms like 7 Digital became established). And most significantly, we had DRM – if anything could put off a potential market entrant it’s that dreaded acronym. And of course some big music names in the physical space did enter digital – and bungled it badly.
While editorial music brands have stayed clear of creating digital stores, few equivalent new niche services emerged in the space. Some have. Beatport (dance) and Bleep (indie) are good examples. There are a few classical music services. But that’s less than a handful out of hundreds of digital music service launches. The irony is that many of those launches converged around the same concepts: the widest music libraries possible; the latest big releases etc.
Most tellingly, so many digital music services have been busily targeting the under 28 demographic. In my eight years working the space I think I’ve come across less than half a dozen digital services squarely aimed at music fans over 30 (the ones with the money who buy music and are, increasingly, going digital). This reminded me of the basic mistake of commercial radio channels – all converging on the same mass audience with indistinctive offers.
I’m glad to observe that this finally looks like it is changing, with some new, targeted audience brands emerging in 2008. Whether they will thrive longer-term is all in the execution, but I think they have some major plus factors going for them:
- Ubiquity: with digital making everything available, the trusted filters and catalogue curators are more needed now than ever.
- Total music: as distinct from music ubiquity, if music through your ISP or phone handset does catch on, then expect these platforms (the good ones) to host targeted content brands within them to help the broad base of users with music discovery.
- Revenue: targeting to audiences means you can expect a higher proportion of engagement, but even more critically, transactions.
- The recession: as an advertiser or funder, show me an audience that’s relevant and connects passionately and deeply with the service – quality not quantity.
A couple of examples I like that want to mention in brief and another one I’m disappointed with
Lost Tunes [here]
Out of a mere 1059 titles available (as at now, but what does the volume matter?), Lost Tunes has no less than 453 exclusives. It has also created some high profile products which it has kept as exclusives, most notably Paul Weller’s BBC Sessions.
Lost Tunes teaches some interesting lessons for digital music. For starters, it was one of the first DRM-free, 320k MP3 stores – uncomplicated and compatible. The service concept is to “replicate the experience of being in a trusted record store” – nicely swimming against the tide of making everything available. Lost Tunes is editorially led – “a breathing music magazine” according to the team that created it. For this market, that’s a concept that will never be replaced by a recommendation engine. But Lost Tunes does rely on search. Indeed, its ‘smart search’ works really well – mainly because the associated metadata for the titles in the Lost Tunes catalogue has been entered by hand. It’s a clear signal that to deepen music discovery, mainstream digital services will need to work much harder on improving metadata.Though the total user base is small, it’s the level of engagement that really impresses, with 37% of customers repeat buyers. Developed on a ‘very modest’ budget but with enough success to wash its face commercially, the good news is that Universal is backing Lost Tunes to the next level of development. Its big challenges will be to attract catalogue from outside the Universal chambers and to take the store outside the UK, preferably with global rights clearances for the catalogue.
Calabash / Mondomix –[site here]
Calabash music first launched (in the UK and USA) early in 2006 and benefitted early on from some fairly vocal support from Elvis Costello, who declared the store his favourite digital music destination in an interview with the LA Times. The service’s strap-line was “easy access to hard-to-find-music” and although very clearly targeted to fans of ‘world music’, of course the service never associated itself with that much maligned genre, but declared its repertoire mix as “artists that move us”. Indeed, its catalogue is much wider with each of its main 12 genres (Afro to Sountracks), further split into sub-genres, giving over 100 categories.
In January this year the service was merged with French ‘world music’ free listings magazine Mondomix, with the new store subsequently launched globally in beta. It has a catalogue of 150,000 tracks, which might not sound like a lot. But again, that’s not the point. Services like Calabash/Mondomix are about connecting a select catalogue of music with a select audience – quality rather than quantity. The user base is currently small, although Mondomix did tell me that it has a very high conversion rate of turning site visitors into buyers.
Finally, there is an interesting take on social networking in which users can create not a personal (and self-centred) profile, but ‘projects’ – user generated channels which feature music from the service but enable the creator to wax lyrical about issues much wider than music.
How not to do it: ShockHound
Mmm. I did have great hopes for ShockHound at first. Launched in the USA by Hot Topic, the hugely successful merchandise brand targeted at Emo Kids, I would have thought they’d be onto something by launching a digital platform aimed at those very same Emo Kids. A high-value music consumer segment if ever there was one, a digital channel for the shoe-gazers of the modern age might have been a marketing masterstroke. But ShockHound has aimed way too wide. With Nickelback, Snow Patrol, Van Halen and Avril Levigne awkwardly juxtaposed in the ‘Top Artists’ tab (and Eminem, Beyonce & Lady GaGa among the Top Tracks). If the service doesn’t re-align its goals more closely with its core audience, the initiative is bound to fall over.