Will the music industry ever extract real value from digital?

When Steve Jobs announced the launch of iTunes back in 2004 and queued up the slide for the song price – 79 pence – there were audible gasps among the audience. People were that little bit amazed. They were impressed that Jobs had pulled off the deal to sell individual songs - at a reasonable price. It worked too, with iTunes notching up over a billion songs for each year of operation since.

But the six billion songs sold on iTunes are part of a slowing curve – the overall digital business growing by just 25% in 2008 – to $3.8 billion, 20% of the global music business. With the business generating nearly $5 billion less in 2008 than five years before in 2004, before iTunes launched and digital kicked in, the ‘holy grail’ whereby new digital revenues more than made up for lost revenues from CD sales, never arrived. If digital sales grow by more than one fifth in 2009 we’ll be lucky and it still won’t be enough.

Nearly six years on from Apple’s genuinely sensational announcement, that same service dominates the digital space, to the satisfaction of no one, much. Earlier this month Apple’s iTunes related announcement – the iTunes LP, in contrast to six years ago, distinctly underwhelmed. Just a few titles in stock, and looking distinctively expensive.

There’s nothing wrong with the attempt to add value to digital albums by adding extra content – iTunes LP, CMX etc. Other than it’s too little too late. I was all for it back in the day, but the world has since moved on. The market is polarising with high-end CD box sets still in healthy demand but digital pretty much becoming established as the way to get your music for cheap.

The digital market hasn’t developed in a logical order – and has therefore struggled to add value year-on-year – like pushing a boulder up an increasingly steep hill. Had digital albums been launched with extra content originally, or quickly after the iTunes launch, it might have worked. It might have convinced consumers that they are losing packaging, but gaining content.

But while iTunes had DRM strangling its value and held its prices at a constant, CD prices fell by one third over five years. CDs albums are now routinely cheaper than digital – that’s counterintuitive to every music fan interested in ownership.

Meanwhile, digital song value has headed south, first with subscription packages, then with free to stream ad funded services. It’s a journey that has led at least, to a challenge to iTunes’ unhealthy market dominance, but at a potentially heavy price to the industry as a whole.

I love Spotify as much as the next music fan, but its struggle to extract value is in danger of becoming a spectacle. To consumers it’s a miracle, to the industry it’s a problem to be solved. The strategy looks right – drive a developing ad-products business as much as possible, while trying to upscale users to a pay model for a better experience. It has to be the test case and I would strongly argue, deserves all the help it can get from its music partners.

We need to begin to realise though, Spotify’s potential. It has the potential to generate revenues equivalent to a large niche, while at the same time eating further into CD revenues. This is the future music market – fragmentation into a number of niches.

iTunes (i.e. the a-la-carte song market) carved a niche, delivering 10-15% of revenues to the business. Subscription services carved another, smaller nice at under 5% revenues. E-music’s hybrid model carved another niche –delivering 10-15% of revenues for its indie label partners. Ad-funded streaming will be similar. All-you-can-eat services through ISP providers similar again. With each niche there is some natural cannibalisation – gradually creating another niche – the CD market.

This is not an unhealthy long-term picture – provided each of these niches can be sustained – serviced through good partnership and the positioning of the right content and payment models. Forrester’s latest angle in content windowing provides one example of how to do this. It’s something all smart labels know is a good way forward – account managing these relationships and managing the channel conflict that is bound to arise on an almost constant basis, using shared insights and data.

What’s more – this multi-channel, multi-audience niche scenario obliterates the random thoughts of the ‘free economists’ – increasingly supercilious, unconstructive and pretty dumb. There’s value in these niches – little patches of gold in them there hills.

There is value here provided each new wave of services is not met with the expectation that it will be the next big thing – making redundant what’s gone before. Instead it’s a landscape that needs to be cultivated, managed, serviced, through shared vision, insight and data. The answer is yes, but it’s more a ‘yes we can and we will’.

Today's question: Why didn't In Rainbows open the music industry floodgates?

Back in 2007, Radiohead exited its record deal with EMI and promptly self-released their new album In Rainbows as a ‘pay what you want’ download. This I know did not escape your attention.

The genius of the strategy was multi-layered. The move generated such a huge wave of PR that the record hardly needed a marketing budget. And ironically, the band themselves avoided the need to do the usual round of publicity appearances and interviews – an established system the band loathed. It made them look forward thinking and brave.

Best of all, the release of In Rainbows demonstrated Radiohead’s complete understanding of today’s music market, efficiently skewering both ends of the polarised demand for music: digital - the get it now, get it cheap (or free) no frills option; while the high-end £40 box-set satisfied the insatiable appetite for quality stuff that still exists amongst die-hard fans and music collectors.

I know you’ve reflected on all of that as well. But how about this – why didn’t Radiohead’s phenomenally successful strategy with In Rainbows catch on with other established bands?
How come the vast majority of major releases by established artists are non-innovative, conventional, publicity-machine driven affairs involving the usual parade of press, radio and TV mainstream slots, maybe with the odd free download, social networking or viral video strategy thrown-in for appearance’s sake.

For example, the world's biggest band U2. U2 hardly needs a leg-up, but the band still blitzed the BBC - the mainstream of mainstream - when it launched their last record. Although the band did exclusive streaming deals prior to release (Spotify in the UK) it was still a conventional release. Ironically, that record sold disappointingly. Maybe a more innovative, devil may care approach might have stoked up more interest? Who knows.

It might look obvious what the explanation is. That U2 and so many other major bands with a global footprint – Coldplay, Kings of Leon etc. – are on major labels, so the release method has to be by numbers. When the machine cranks up, who will try & stop it?

But there’s no reason why the label and the band couldn’t come up with something genuinely different. Coldplay is on EMI, but the ‘Viva campaign’ was impressive at least – and brave too when you consider the revolutionary costume styling – risqué even! But it was still conventional, big budget stuff.

The tipping point then – whereby bands can explore valid go-to-market strategies beyond the press, radio, TV and tour treadmill – is yet to arrive. I guess two things need to happen to tip the current record marketing establishment:

1. More established bands do an ‘In Rainbows’ (either without, or with, their labels). Coldplay for one seems to be chomping at the bit for the chance to do something that can put them in that kind of light. Next time perhaps.
   
2. A platform emerges that somehow democratises promotion – giving many more artists – especially new ones – fairer access to (the equivalent of) mainstream promo slots. Any one of Slice The Pie, Reverb Nation et al. Are attempting to do just that. The problem is that many don’t get beyond early adopter niches, or reach young but ultimately low-purchase audiences.

One small but significant step – announced last week – was the CBS and Last.fm initiative that facilitates Last.fm to programme a number of CBS’s HD radio slots in large US cities. That could lead to some genuinely interesting eclectic daytime radio in the US. This deal was obviously enabled by CBS’s outright ownership of Last.fm but that shouldn’t be a necessity. With Spotify, We7, Yahoo, AOL, Myspace and others (Twitter if we must), we surely have now mass market platforms to rival the old guard media.

Surprising then, how many established artists are not taking these platforms seriously. Is it a lack of belief, a lack of interest? Or is it that the old media platforms are better connected to music buying audiences rather than simply music listening or music-social audiences?

What we really need is more collaborative initiatives between new & old media - that focus on new artists not those we know already. These initiatives need to be new aggregator brands for music – doing what Top Of The Pops or MTV Unplugged did back in the halcyon days.

Why aren’t there more music brands like this today? That’s another question.

Why doesn't the music industry have answers to the big questions?

It will not have escaped your attention that for the past two weeks the UK music industry has been ‘debating’ (in public, via the press) the Government’s latest proposal to clamp down on file-sharers by forcing ISP’s to issue temporary suspension notices to persistent file-sharers.

Lord Mandelson announced the move, got mixed reviews but industry-wide support from BPI, PPL and HMV, underlined his position vaguely in The Times, but then the FAC (together with BASCA & MPG) – waded in with various comments amounting to ‘serious reservations’. The main thrust of their argument being summed up by Dave Rowntree as “taking a sledgehammer to crack a nut”. UK Music (how many music-based associations are there?) has stepped in to try & broker common ground.

It’s good to see artists voice their opinions in the debate, with Lily Allen blogging and writing an op-ed in The Times against the FAC, followed by Matt Bellamy from Muse chipping in with the ‘solution’ of the compulsory collective licensing of music for digital platforms.

Having read a bunch of press about all this I have at least one observation and it’s this:

What’s happened to the facts?

Where’s the established evidence – empirical & researched – that clearly benchmarks the position that file-sharing has damaged the music industry in terms of sales, artist development, investment in new artists & creativity, and jobs? In the various articles I haven’t seen a single figure, specific or contextual. The work just hasn’t been done. Or if it has, it hasn’t been well communicated.

No wonder it’s proving difficult to get unified agreement. Some members of the FAC have wheeled out the old adage that ‘file-sharers are also music buyers’ – an established fact, sure, until the issue of causality is considered, until the changing nature of that relationship is explored.

Now it’s easier said than done, I know. I’ve had enough experience, in music and other industries, to know that when you do work to try & know something (as opposed to a quick & dirty bit of lazy desk research to try & back-up a PR position) you open up a can of worms. People will argue over costs, methodology, timing, objectivity & god knows that else. You must be ready for that debate – and the facts, the evidence, the methodology, is what makes you ready.

It’s not a luxury. It’s necessary to try & research – from multiple sources if you have to – some kind of impact analysis that can form the basis of debate, policy and decisions. The music industry doesn’t have a great track record in this area however, due to the sheer complexity of the industry value chain, but also due to the lack of will and resources when it comes to factual, evidence-based understanding.

There shouldn’t be any room for debate left about the impact of file-sharing on the music business. But the press, academics and sizeable elements of the artist community and music consumers, remain unconvinced or at best sceptical.

It’s partly a symptom of legacy. Home taping didn’t kill music – that particular relationship was badly communicated and poorly understood and still leaves a bad taste. But the music industry has never had a good handle on other major relationships, like radio airplay and record sales (i.e. overall record sales not just for those artists on heavy rotation). Like singles and albums (it’s never been concluded whether singles promoted or cannibalised album sales). More recently, we seem to have no real analysis of the substitution effects of music streaming services (to be fair, it’s a little too early to say, but I know what my hypothesis would be).

As the current ISP & file-sharing enforcement debate moves on (hopefully soon) in the direction of alternative solutions, we will again be revisiting the idea of the collective license and whether that is a viable solution for the music industry.

I’m a sceptic of this solution – directly because of the analytical work I’ve done in this area – on a couple of separate occasions working with different parts of the industry. But that was over two years ago and things have moved on since then, what with ad-funded streaming, ISP mooted solutions and a dangerous slowdown in digital music growth.

Soon might be the time to look at collective licenses again. But once again, who is now developing the methodologies and gathering the objective facts and evidence to understand the impact for artists, music providers, ISPs, consumers and the Government?

It needs work – a budget, a methodology and a consultation process. Maybe the Government could facilitate the music and ISP industries to collaborate on doing that?

This blog asks a major question of the industry each day this week. Tomorrow's big question - Why didn't In Rainbows open the music industry floodgates?

Major Music Labels: Great Power, Great Responsibility

At the start of the summer, Billboard magazine published an opinion piece by me on Marvel Entertainment - that company's remarkable turnaround and the potential lessons for major record labels. You may have seen that in recent days, Disney has also seen the value in Marvel, acquiring the company for $4 billion.

This being a music blog, I won't go into the why's & wherefore's of Disney-Marvel, but it's one to watch as to whether Disney will get its return, without compromising Marvel's brand too much. Anyhow, with kind courtesy of Billboard, my op-ed is published here in full for anyone who missed it. For similar food for thought, you might also want to re-visit my very first blog post on HBO - Music Lessons from a Content Powerhouse. For the true believers then...

With Great Power Comes Great Responsibility

Music is being consumed by more people in more ways than ever before—we just have to figure out how to monetize it.

How many people have said that now? More people in more places than ever before, basically. Yet all is not well with the way the music industry is adapting to the new paradigm. Digital delivery may be changing the game for consumers and artists, but the bit in the middle—the industry—hasn’t yet figured out where the real money is going to come from. Meanwhile core product sales are in structural decline. What’s an industry to do?

Well, back in the late 1990s, another great entertainment business was dying on its back—comic book publishing—and specifically a great American cultural icon, Marvel Comics. In 1997, Marvel Entertainment escaped bankruptcy by a thread thinner than one of Spiderman’s. The company had failed to diversify its publishing business and flooded the market with comic book lines, effectively commoditizing its core business and leaving the company with a stock value of under $1. Yet today, Marvel is transformed with a stock value of $32 and a market capitalization of $2.5 billion. It is currently piling on the growth, riding roughshod over the global recession.

In order to rebuild, Marvel was forced to transform itself from a products business to a licensing business. With its “superstar” characters bringing in consistently lower yields, it needed to find a way to make money from its entire catalog of characters—not just the big names.

Three strategies began to turn Marvel’s fortunes around:

1. Licensing. After the success of Sam Raimi’s “Spider-Man,” Marvel had hot IP once again. Other studios took a renewed interest in its characters and there was a rush to license other major characters from the portfolio.
   
2. Product development. Nothing impacts on the culture like blockbuster movies, enabling Marvel’s characters to become hugely popular toys, video games, clothing and party accessories.
   
3. Character development. With a library of over 4,000 characters, Marvel went to work on strategies for commercializing the mid-tail brands, including Daredevil, Elektra, X-Men and Ghost Rider.

By 2003 Marvel was rejuvenated, with steadily increasing revenues and profits. One key insight that helped drive this new phase of growth was the Marvel brand itself. Marvel had created a universe where characters not only had their own compelling stories, but where those stories were carefully and complexly interwoven with other characters. That universe is what drew many fans (including me) to Marvel comic books in the first place and still does, to its increasing stable of movies and related products. Now, the Marvel Universe concept is integrated throughout the company’s strategy.

The potential is there for record companies to use their labels in a similar way. Not easy, but it could be essential to long-term success. Island’s 50th Anniversary celebrations couldn’t be achieved without focusing on its identity. Nonesuch has created a wonderfully eclectic but somehow cohesive community of artists—and loyal fans. Indie labels might argue their identity is their lifeblood, even if not directly recognized by every music consumer. The music business needs to organize communities of music lovers and buyers, not just social networks with music tacked on.

Marvel’s turnaround isn’t complete. The company made nice profits from licensing (which involves no capital outlay) but could only take a small cut of overall box office. To really scale revenues it moved directly into distribution—risky for a company so focused on content creation—forming Marvel Studios to produce “Iron Man” and “The Incredible Hulk,” a move that paid off handsomely.

Most music majors now have in-house production companies but not the strategic purpose and budgets to be equivalent to the commitment made by Marvel. But music companies should be making documentary films and session content for their artists—highly attractive to sponsors and licensable to all the digital networks increasingly desperate for quality content. [iTunes LP, announced yesterday, is a step in the right direction for example].

Direct-to-consumer is a key part of Marvel’s digital strategy—in 2007 it launched Digital Comics Unlimited—a subscription-based service with thousands of comic books available in digital format. Like another successful subscription provider in TV, HBO, Marvel realized that to offer a compelling subscription service didn’t mean having to make everything available—few subscribers want that. But they will subscribe to a service if that service contains something they do want that’s exclusive to them as subscribers.

From a successful licensing model, Marvel evolved its strategy into bigger plays: harnessing brand power, building on insight, diversifying its product and making major moves into distribution. Subsequently Marvel Entertainment now controls its destiny, when all looked hopelessly out of control a mere decade ago.

Thoughts from a beach: Michelle, Mandy, reading not listening and Radiohead. Not in that order.

I’m just back from ‘annual vacation’. As an independent, that basically means the summer off. Since you can’t get a rise out of clients or colleagues in the music business during any day in August, the only thing for it is to down tools and enjoy it.

Some quality time on my favourite beach in Cornwall helped (weather: acceptable). For most music nuts, extended beach time equates with long iPod listening sessions but alas, not for me. The need for vigilance in policing the whereabouts of three small children means I have to be satisfied with the sounds of the beach. Which is okay, because I love the sounds of the beach.

Reading not listening

However, my music consumption never stops. Rather than listening I found myself reading music. The usual sources came into play: The Guardian’s Film & Music on Fridays (beach reading doesn’t come much better), the latest Word, Uncut and Mojo (best of the three – the Word’s interview with Robert Wyatt – whataguy). I did head out on August’s middle Sunday to buy The Observer Music Monthly, but sadly, there was no sign of it. Worrying.

However, more unusually, I took along issue number one of Loops, the new ‘journal’ of music writing from indie label Domino and Faber & Faber – arty, even a little pretentious perhaps, but diverting enough for more cerebral, abstract moments. Similar was the music special edition of The Believer, which came with the best covermount compilation CD I’ve heard yet, plus an interesting (but not fascinating) interview with Thom Yorke.

Thom’s one of the few artists I’ll always make the time read (along with Nick Cave, Mark Linkous and the Gallaghers (the latter purely for laughs)). His most interesting insight on music from this piece was the new emphasis on ‘natural selection’. Something I’ve blogged about recently is too much music and the inefficiency of current distribution systems in getting the right music to consumers. On the artist side, with so much ‘competition’ and noise – and hype – one thing that will be on your side is just how good you really are – the natural selection point.

It’s a view many artists hold now and I think is a healthy one for both artists and businesses alike these days. Quality of content and innovation in the way you release it, will prevail.
Also, his recommended music site Boomkat http://boomkat.com/ is well worth a look. It’s another new content brand featuring a filtered approach to independent music along with many of the others I have featured on this blog including Think Indie, Mondomix, Lost Tunes, Daytrotter et al.

Finally, his (rather secretive) comments about the new Radiohead project whetted the appetite nicely – though it looks like Radiohead will be releasing a series of singles or ep’s rather than an album. I hope they don’t disappoint. Seeing the footage from Reading reminded me of just how great Radiohead is. They are the only current band I can think of that can captivate and mesmerize a large audience live in the same way the old greats can (which seems at odds with the booming live industry). We need more of them and more from them.

Talking of greats, I also read a shed load of reviews for The Arctic Monkeys new album (it’s out, but I’m currently restraining myself) and The Fabs. Decidedly mixed reviews, which is interesting, but the bands current ‘career position’ fascinates me and I’m looking forward to hearing it for that as well as the music itself. Oh - and catching up with their Reading headline slot too.

Post-holiday with The Beatles

More pertinent to me is finally hearing what I’ve been reading about a lot recently – The Beatles re-releases. With reviews ranging from those insisting on the catalogue and especially certain songs such as Michelle, being ‘transformed’ (read Mojo’s review for example) to more sanguine analysis (The Independent today), playback has to be one of those rapidly disappearing ‘appointments to listen’ where you put the CD on and actually play it back from start-to-finish and listen to it, not just hear it.

I’m also interested of course, in the commercial impact of the re-issues. A few years back, EMI had pinned great hopes on the release of the ‘Love’ album, only to be disappointed by consumers’ reaction to it. I don’t have any such fears for the remasters. Not only will sales be a massive boon to EMI and Apple Corps, but will probably even have a suturing effect on the entire CD business in Q4 and Q1 2010. I wouldn’t be surprised by sales in the order of tens of millions across all the titles.

What’s more, this is hardly the end of the commercial story for The Beatles recordings. The decision not to release the catalogue digitally starts to make sense in the context of the new remasters releases on CD. Digital will come, but I wouldn’t discount vinyl either – surely with the rise in high-end vinyl box sets a-la In Rainbows, The Beatles catalogue would reap lucrative results. A Beatles vintage turntable anyone?

(bizarre but true aside: I find reading anything about The Beatles painful after an experience a few years ago related to a children’s birthday party in my neighbourhood, a rotten hangover and Sir Paul McCartney – yes the real life Macca, not an impersonator. It was all too much).

Fly Mandy, Fly

Finally, I found myself catching a whole bunch of music related business articles, thanks to Lord Mandelson. 'Mandy' has instigated a new push within UK Government to help enforce against file-sharing, upping the pressure on UK ISP’s to monitor file-sharing and step-in if necessary. He even wrote a comment piece in The Times clarifying his motives. It’s all a bit vague of course and given the lack of progress along these lines in other markets (and not a dickie bird about such an approach in the US) we’ll have to see if the UK Government’s strategy gets anywhere beyond rhetoric.

One thing struck me though is that if Mandelson’s title includes innovation – which it does – where is the emphasis on innovation with this approach? Yes, a crackdown on P2P (which I wholly support) creates breathing space for the industry to offer innovative approaches. But the complexities within the music industry and its inflexible structure means that’s precisely where it needs the help – in brokering truly innovative solutions between all parties. Come on Mandy get to that.

Amongst all this exhausting reading I did manage to squeeze in the briefest musical interludes, with some help from the iPod’s random function. In amongst it all some highly connected listening involving Alice in Chains, Peter Gabriel and some vintage Aha. My resulting vaguely beach-related playlist:

Merz, Silver Moon Ladders
Queen, In Only Seven Days
Neil Young, On The Beach
Peter Gabriel, Sky Blue
Alice in Chains, Nutshell
Sparklehorse, Please Don’t Take My Sunshine Away
Wilco, Sky Blue Sky
Turin Brakes, Fishing For A Dream
XTC, You And The Clouds Will Still Be Beautiful
Aha, Memorial Beach
Blondie, Follow Me

The new way to listen #2: Too much music, so little time

A very good friend of mine is a very heavy CD buyer. His guilty pleasure is small but frequent (almost weekly) Amazon splurges – batches of three or four CDs, including lots of new releases. Just last week, to my surprise, his batch included albums by La Roux and Little Boots, two dangerously over-hyped UK female pop acts – not my friend’s usual fare at all.

I had to ask, why? But I do know the answer. Three years ago that’s how I used to discover new music – buying CDs on Amazon & Play.com. For us, the CD generation, it’s easy to see the attraction. At around eight-nine quid a pop, the average price is 30% below when we began buying CDs in the 80s. And with many new releases attracting good reviews, it seems like good value. As for CDs vs. downloads it seems like a no-brainer – CD wins for sound quality, last-ability, tactile comfort etc.

But this kind of consumer behaviour is anachronistic these days. For one thing, these frequently bought CDs are unlikely to be played much – nothing like to a level of frequency reaching a good return on investment. My friend admitted to both the above mentioned albums being “alright, not earth shattering”. I’m guessing he’ll never play either disc anything like enough to become nicely familiar with, or to discover any hidden depths within, the music.

I’m placing no judgement whatsoever on those two artists or their debut records. I am placing judgement though, on the times, and on how we as consumers, are best place to navigate them to enjoy our music to the full.

As engaged, interested and active music buyers, we’ll simply never ever keep up with the supply on offer. Let me bore you with the statistics. There are more records released commercially now than ever – nearly 34,000 separate albums in 2008 (BPI data) – steadily increasing every year from just over 19,000 titles released back in 2000. In the US, over 100,000 album titles were released in 2008 (Neilsen SoundScan), a large increase on any previous year, thanks to digital-only releases.

And that’s assuming that, like me, you are essentially uninterested in wading through the oceans of records released by unsigned or DIY bands via Myspace, brands and blogs. If you are interested in those then double or treble your already overwhelming choice.

However, more critically than volume is the issue of the music’s qualities. The heavy buying CD generation has invested much time & money buying up their collection of classics – those albums they return to time & again. Those albums we played in full, in a darkened room in our youth. Those records that helped us through the formative years, the early big choices in life, etc. etc. Often these were bought on CD some time after we first loved them on vinyl or on tape.

However good modern music gets, it’s so hard for new artists to compete in that space – to compete with nostalgia. And with so much new music derivative of what’s gone before, new artists are sometimes no more than an interesting twist on what’s past – the stuff we really loved and still love. Witness the recent revival of synth-based pop – never done better than the eighties. And even if the Tings Tings, Yeah Yeah Yeahs, LadyHawke, and swathe of more recent acts like Florence & The Machine can compete creatively with the eighties, can they compete emotionally with how that music caught on and connected at the time - how it joined people together en masse.

No wonder there is room even in today’s jam-packed music market for eighties revival bands – playing live and even making new records (for the record, Aha, Duran Duran and Simple Minds never actually went away). Those bands were lucky enough to come of age at a time when growing a fan base was easier. And for their fans, it’s easier nowadays to gravitate towards those artists you know, the one you invested in back in the day. It’s comforting that they’re still around.

For young music fans and for older but active music discoverers, the only way to navigate the modern level of choice is to prioritise. And this is where music consumption becomes personal – when we apply our own priorities to it. I’m thinking beyond prioritising the tools you use to discover music, though. Yes, we all will choose our favourite filters and content brands. Some of us will use Spotify to stream (for as long as we are blessed with it!), some will like to play around with Pandora or Last.fm until they perhaps get bored with those.

Less and less of us will buy a slew of CDs each week though, as these other tools present far cheaper, less risky and more convenient access points. But the new filters won’t help that much in terms of enjoyment. They’ll help filter through the dilemma of discovery – like Oysters. They’ll insure us against the hype and against the great swindle of the CD age – album filler. But they will not help us really enjoy our music listening.

To get return on investment from music, you need to invest - mostly time, but sometimes money helps, since when you buy something, you naturally give it at least some time to bed down. With current filters, you don’t need to make a financial commitment to hear most new music. But when I'm streaming the latest new release - just to gut it - it perhaps doesn't feel quite as it should, experience wise.

Would you rather listen to your favourite song 100 times or 100 songs once?

With the oversupply of music, the currency of music isn’t so much the format – CDs, downloads, streams, plays etc. – but time – how much time we have to listen and what we choose to listen to in that precious time. Since this is personal to every consumer, I’ll share with you here my own conclusions about music consumption, and my own set of priorities from now on.

The days of frequent flutters on Amazon & Play.com are done – just don’t make sense. It’s not so much a question of price, or quality - there is not enough time to give those records the proper listening they required to really enjoy them. It just results in a greater pile of albums that you never really get to know. Subsequently, very few new titles get added to your classic albums collection, most just drop into landfill.

From now on my music enjoyment is prioritised, not by payment method, or by format, but by the type of music it is. Until further notice, the following basic ‘system’ applies to my listening hours, in priority order:

1. The back catalogues of my recently discovered favourites. These include Spoon, Death Cab for Cutie and I am Kloot. For these, I know I’ll get great return on investment, so I’ll be buying these catalogues on CD. It will be an infrequent Amazon splurge. I won’t preview these on Spotify if I can help it, as I don’t need any reason to doubt the ability of these records to grow on me over time and with repeated listening.
   
2. Play all the classics at least once a year. No financial outlay required, just time. I’m of an age where if I don’t make this decision now, I’ll literally run out of time to enjoy Autoamerican by Blondie, Achtung Baby by U2, Seven by James, Stories From The Sea by PJ Harvey and the 100+ other titles I consider my own personal classics. They need to played once a year and that is going to take maybe 80 hours of listening time. That leaves no more room for Amazon splurges.


3. Listen to more music that’s ‘different’. Oh the wonders of specialist music labels like Nonesuch, ECM and Real World – labels I am undertaking right here & now to give more of my precious time to, whatever it is they might bring my way. Nonesuch just introduced me to Bill Frisell. ECM has fallen victim, temporarily, to my change in priorities, but will come ‘round as things settle down. Real World has blessed me with the music of Spiro – which has rightly received the heavy-rotation treatment in recent weeks at the expense of everything else. It might even be a modern classic. I want to give more time to alternative genres for so many reasons, not least I want my three daughters to grow up hearing music from all over the world, not be confined to western pop. Label brands come into their own in times like these and there will be case studies featured on this blog in future on the labels I think work on this level. I guess this will be a combination of streaming & buying, and for these labels I will maintain a direct relationship - on the mailing list, basically.


4. Give the old masters more time. It’s getting tight now, timewise. I don’t really know the catalogues of Dylan, Leonard Cohen or Springsteen, beyond the obvious handful of songs. I suspect their stuff is worth some investment though. It has to be – everybody in the world says so. I have in my current collection best-of’s by all of these - that'll be where I start. There are so many classics to discover, that anything I've seen live or in a different context will get immediate priority. So Crosby Stills & Nash for example, I’m suddenly interested in after their superlative display at Glastonbury. I have just invested in some Peter Gabriel catalogue after seeing him at WOMAD. and I'm listening to Ry Cooder after seeing him at The Lyceum last month. Another late great discovery for me personally. These classic artists are shouting loud and clear ‘We Can No Longer Be Ignored’.


5. New stuff when the hype has settled. And so here we are. New music has been re-prioritised out of sheer necessity. It’s not that I won’t listen to new music, I always will. I’m the guy so many people rely on for recommendations after all. But I’ll struggle to recommend anything brand spanking new from now on, because for me it needs to earn its place in my ears. I’m tempted to buy new records all the time, but I’ll happily wait until the hype has settled and time has done its work. I don’t see much point in investing in artists that won’t last, since I enjoy going on a journey with the artists I like, seeing how their work progresses, evolves or changes direction. It’s the pleasure and privilege of being a Radiohead fan, for example, even if that can also frustrate from time to time. And here is where Spotify comes into its own – I can take my time and work my way through new release without spending a fortune. Whether or not this is good business for the industry I doubt, but it works for me.

For me, music discovery has always been a search for the next addition to the classics – the next record that has the power to literally become part of my life, part of me. With 40 years of listening behind me and hopefully at least 40 more to go, it’s time to apply a strategy to ensure I get to discover, hear and enjoy as much music as possible that has the potential to become a personal classic. The ephemeral stuff can pass me by, I just don't have the time. If it’s too good to miss, something or someone will alert me to it, I hope.

I’m always vaguely excited about forthcoming music and for the next few months, that would be The Arctic Monkeys, Portico Quartet, Laura Veirs and my new favourite band I Am Kloot. There's nothing better than discovering artists late, when you can catch up on back catalogue at leisure, as with reading all the novels of a great author you just found out about. I love that serendipity and hope that will always be part of my music discovery. More to come on that next...

The State of independents #1

In eight years working in the music business I never attended an AIM meeting, until this week’s 10th Anniversary AGM. I have to say I rather took to it. There was an informal and certainly collective, feel to the proceedings. And a celebratory feel too but in a modest, nicely understated way. Nothing seemed too staged or rehearsed.

Hearing Alison Wenham reflect back on the ten years since AIMs inception and give her ten wishes for the new era, it wasn’t difficult to get a sense of just how much AIM has managed to achieve, against the odds I suppose, when the job in hand is basically herding cats. And what cats. Alley cats that’s for sure. As Chris Blackwell says in his forward to the AIM Anniversary brochure “The indies will always be the lifeblood, usually started by misfits who are passionate about music and the excitement of youth culture”.

Having worked on a project lately that has required partnership with a number of indie labels I can see the spot they’re in and it’s a very sticky one. If we assume a future scenario of gradual continued devaluation of recorded music (can you see any other?) then the only means to long-term survival for record labels is diversification into other revenue streams and rights ownership. In which case, only the Majors (& not all of them!) have the muscle to wrestle their way through, surely? If you run an indie label, record sales are your lifeblood – not gigs, T-shirts etc. And that means that soon enough, you’ll be relying on the true misfits of society – record buyers – to keep you going.

But surely, someone somewhere will come up with a more effective platform for indie music than those currently on the market. There are so few around, most notably e-music – the world’s number 2 music service by value. The others – Bleep.com, Beatport – are small – smaller than the sum of their parts basically.

The indie scene in the USA is a little more dynamic, but mainly due to the proliferation and popularity of music blogs – Stereogum, Aquarium Drunkard, Brooklyn Vegan et al. including my own favourites Daytrotter.com and Ear Farm. But blogs are also less than the sum of their parts. Blog aggregators like Hype Machine and Elbo.ws do a good but perfunctory job of corralling blog content, but these hardly make compelling music store experiences. The indies could do with a branded platform (digital and physical) to help them do exactly what these others fail to do – punch above weight, not below.

There cannot be a more marked indicator of indies punching below their collective weight than a glance at the annual best-seller lists. The IFPI publishes the top fifty best-selling albums worldwide each year. Over the past two years (i.e. out of 100 slots) indie label albums have featured just four times, with all of those from one label in one fanatical marketplace – Japan (Indie label Avex is basically a Major in Japan).

Small Labels, Big Ideas

At the AIM meet, board members sponsored individuals to shout out their big idea for AIM and the indie sector going forward. This was both intriguing and engaging, and the ideas were pretty good too – many of them pragmatic – like an industry database of media contacts to assist indies with their low-cost marketing efforts (a tie-in with The Guardian Media Guide perhaps?).

My favourite big idea was ‘Death to the CD promo’ – an industry wide switch to promo streaming. This is one of those no brainers for the modern age – creating a greener and more secure network for digital distribution of all promo tracks to media and brands. Not only that, but the flow of information from this network could be so much more effective than now, i.e. phoning around in vain to see if anyone in the media received or has listened to, your tracks. Not only that, with services like SoundCloud on the market, this could be achieved within a year. I’m sure it would be supported by the Majors but would be a nice one for AIM to lead. However, the idea was voted number 2, runner up.

Number 1 was this: ‘Lobby the BBC to encourage them to play a wider range of independent music on Radio 1 and Radio 2’. Now it’s easy to see why this got the most votes even in the absence of knowing what the other eight big ideas were (they’ll be on the AIM web pages by now if you’re interested). I’ve no doubt that if I switch on the radio right now (lunchtime basically) I’ll get one of Take That, Pixie Lott or if a commercial UK radio channel, inexplicably, ‘Halo’ by Texas. Either those, or (Still) Chasing Cars by Snow Patrol (aren’t they really an indie band though?).

I’ve mentioned a few times on this blog in the past how radio has a lot to answer for, in the UK and even more so in the US. Radio is still the number one music discovery platform according to surveys (though I’m convinced the surveys are wrong and that radio’s position as tastemaker is secondary to its role as background music for people who can’t be bothered to like music that much). And because of the huge audiences radio reaches it remains priority 1 for record promotion.

However, the strategic dilemma for indies is whether AIM should bother lobbying the BBC about the R1 and 2 playlists or whether it is better off working with alternative promotional platforms to get a greater presence for indies on those. To my mind it’s the latter, because I can’t see a huge audience of indie music buyers regularly tuning in to R1 and 2 during daytime, but I can see them streaming more alternative radio shows via digital channels or reading about new music in Clash, or streaming new music on Spotify.

And so to the other great dilemma of the day for indies – to license or not to license (or perhaps more how & when to license and at what price) – new digital services like Spotify. This was also a big idea: to ‘persuade digital service providers that independent music is essential for any complete, compelling and successful music service’. This idea didn’t get such a big vote on the day, but probably only because AIMs members felt this is already very much in hand – which it is, through licensing body Merlin and through digital distributors like The Orchard, IODA and Vital.

However, speaking with my strategist hat on, I’m not sure if the indies collectively aren’t missing a trick with digital licensing. Fighting your corner on deal terms is one thing, but AIM should consider if it’s worth licensing to digital streaming services at all. I’m not advocating that the indies don’t license, I’m saying that it would be a valid strategic decision not to, on the basis of unquantifiable net value (i.e. after substitution effects and relative assessment of deal terms compared with Majors).

It would be an even more valid strategy if the indies could create an alternative platform to the current crop of streaming services. On the day, several members emphasized the exclusivity and ‘quality’ of indie music and I can’t help but think that there are better ways to leverage this than licensing to a slew of services as second fiddle to Majors catalogues. They could opt to support e-music more proactively, giving it another push, though it seems that with e-music now actively courting Majors, the opportunity is lost. Or the indies could look at creating a platform of their own – perhaps working with more innovative technologies like Songbird or similar.

Perhaps the biggest obstacle to an alternative platform strategy for indies is the music itself. Yes it is exclusive and of quality, and comes from a place of passion first, above commercial priorities. But that’s true of plenty of the repertoire on Major labels too. One out of 2 of my own favourite ‘indie’ bands are in fact released on major labels. While there is still a gap in the market for an indie music platform, consumers simply don’t divide music between Major and indie labels in that way.

So finally, to my big idea (with the benefit of a review of the ten presented on the day of course) as follows:

Launch a new branded platform for independent music (not exclusively indie label music, but it could begin there) that focuses on emphasizing the passion behind the music – the exclusivity, the quality etc. - everything that isn’t just availability, basically.

A boutique brand for indie music is what springs to mind. By necessity it would have a digital presence (downloads, streaming, radio and a licensing platform for blogs), but also very much a physical one as well – after all the brick & mortar space is somewhat less competitive these days. This could be through a small network of new stores or through a network arrangement of indie shops.

It’s contrarian, sure, but that’s the essence of indie culture, isn’t it?

The AIM meeting was the culmination of a week of events celebrating the tenth birthday and ‘Independents Day’ – when we are all meant to flock to our local indie music retailer to buy CDs & support the biz. I didn’t get around to shopping for indie music from an indie store on Independents Day, sadly. In the end I was too busy and not near an indie record shop – and in truth I would not know where to find one. Besides I suspect they wouldn’t be stocking my current wish-list of music. If I could have though, I would have!

My current indie music wish-list is the entire back catalogues of Spoon, Dinosaur Junior, Death Cab and Laura Veirs (only two of which are on Major labels).

Newsflash for latecomers: Glenn Peoples from Billboard (and formerly Coolfer of course) has alerted me to exactly what I refer to above - a new indie platform - in the US, called Thinkindie, here...http://digital.thinkindie.com/...which is interesting innit?
Nice use of the black sheep mascot too. One to keep an eye on.