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.

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 Last.fm (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

Music artists your route to market is as easy as A, B, C...(post#1)

“For all it may be a workable and pragmatic model, a teenager miming with a tennis racket in front of the mirror is hardly dreaming about running a small business with low overheads and low expectations”.
Alexis Petridis, The Guardian, from “This song was brought to you by...” April 2008.

It’s never been easy for pop musicians who are not yet popular. A few years back, a friend of mine delightedly, excitedly told me his mate’s band (UK indie hopeful’s Vega 4) had at last been signed by a label in the US - a major in fact, Capitol. What did I think about that? My response was inevitably, rather muted. “Do let him know when you congratulate him that his chances of a sustainable career in the music industry have just improved, to roughly 1%”.

Since I was The King of Music Industry Stats at the time, he couldn’t really argue. The percentage I quoted was the appropriate one – the chances of releasing a record and going to Gold sales, and therefore, being in with a shout of getting a second album with real momentum behind it. It didn’t happen for Vega 4, even though the band was unusually fortunate to get a second bite of the cherry when they signed in the UK with Columbia 18 months later. They sunk with barely a trace.

That was back in 2005/6. Fast forward just a few years, and the music industry landscape for a new band has become even more crowded, competitive and complex. With an increasing groundswell against the idea of signing with a label (at least in the traditional sense) - but a rapidly fragmenting media landscape making any other route look bewildering - what exactly is the best route to market for a new artists these days?

Two HUGE questions face you:

1. Just what do you do to get your music heard? and;
2. Just how long do you intend to last?

This was the subject of a very recent discussion I took part in for Radio 4’s Today Programme. In fact, the programme never got aired due to the valuable airtime being sucked up by UK retailers going down like nine pins in the recession. It’s a shame, because the debate was interesting. A young Welsh artist called Rod Thomas was involved. http://www.rodthomasmusic.com/. For Rod & artists like him these two questions might as well be written in huge letters on the side of a wall the size of El Capitan, they are so big.

But what exactly do you do to climb up & over the wall? And how do you make sure that when you reach the top, you don’t take two steps forward only to drop right off over the other side? It isn’t enough to do everything and hope for the best, yet in the ultra competitive landscape of new music, a lot of artists do exactly that.

The ‘strategy’ such as it is, follows a much worn path. With or without the help of a label, the approach usually follows all of the following (and, appreciated, probably much more):

- Set up various digital properties: Artist site, MySpace, Facebook, iLike profiles etc.
- PR your best songs & story to tastemakers in the music press, radio and TV
- Do lots of live shows and get mixes to DJs, clubs & bars

If you can get any traction at all you can start to build your own fan base through a digital ‘street team’ approach, collecting emails for mail outs and deploying various digital widgets to get these fans to spread your music a little further.

This is all very well, and to some extent if you didn’t do this, you wouldn’t be covering all the bases you need to, so go ahead - and good luck. If some traction is gained and a buzz starts to generate, it’s then time to seriously ponder Huge Question 2: what is your longer term plan? Are you focused on sustainability, longevity? Or do you just want to get a deal and take it step-by-step. If the answer is the latter and you are in a hurry to get signed and get on with it, that’s fine. You just have to be aware of being sucked into the Hype Machine (Post #2 of this series, coming soon).

If it is the former, there are deeper things to consider. There are options to be more strategic about your approach, what you do and when you do it. I can’t offer a cut out template solution, obviously. Since each and every artist is different, it would hardly be appropriate. Individuality & uniqueness – preferably with great quality and low on gimmickry – are critical, and in short supply.

What you can and must do, is recognise wider trends in music consumption and work with these – or if you are supremely confident – deliberately against them. But recognition and understanding of what’s going on with wider trends might just help give you a focus, edge and advantage. I’ve specifically noted three trends here – a kind of A, B, C rule that you may want to keep in mind in working up your strategies for winning, building & keeping your audience.

Rule A – Recognise that music discovery is shifting from recordings to live performance

Used to be you could do all sorts to ‘get the record out there’. Of course you still can, but with greater choice and ubiquity and fragmented channels for recordings, it’s a less effective method, because whether or not people get to hear it is less relevant than when they get to hear it and how they feel when they do. It is contextual discovery that’s important. And that’s were live performance can be so effective – because it has a greater impact on the listener.

Radio is background for most. Music streaming services are more active, sure, but users are either streaming back playlists, which makes the experience more like radio anyhow. And if they are actively looking for certain artists or checking recommendations, they may well be ‘snacking’, so artists, you can’t hope that your music will make a truly impactful impression in the way you intended when you lovingly, painstakingly wrote & recorded the track. When music is live, the listener is actively receptive to the music – they want to hear you play. They are ready to be moved & convinced by you & your music.

The catch is there’s no catch. You just have to play live a lot, in a lot of different places and to keep your audience – with a lot of variety. That’s why Jack Savoretti http://www.jacksavoretti.com/ toured Caffe Nero’s up & down the country. And make sure you have a way to make the listener tune into you again when you’ve finished performing. So think USB giveaways, flyers with download codes etc. And think quality. Make sure what you give away directly to your live audience are your very best tracks or recordings of your best live performances. And if you don’t consider yourself to be a ‘live act’, and you’re not Kate Bush, get out of the business!

Rule B – Understand that the internet is not an effective platform for discovery, when you’re on the supply side

This is just the flipside of A, very simply. The web is a very misleading platform sometimes, because it’s so eulogised. For all the talk of democratising content and liberating the long tail, digital platforms are essentially bigger icebergs, with narrower tips, than mainstream media platforms. Viral videos are statistically harder to achieve than hit records – and generate a lot less revenue. The long-tail has been largely debunked as far as music providers are concerned. See the recent work by Will Page and Andrew Bud.

The majority of people actually want to be advised what to like, so aggregators & filters are where you need to be. No wonder an iTunes or e-music feature can be worth so much – such real estate is valuable, as it will be on successful new digital aggregators such as ISPs, when they arrive. Although it’s hard to get onto these, in the same way it is to reach mainstream media gatekeepers, you can service them better with varied, regularly refreshed content and you should strive to build a relationship with music programmers and content editors purely through innovating with content. Beck is pretty inspiring when it comes to this sort of stuff.

Rule C – Make sure that your representatives get Rules A&B

A label might still be ‘Route 1’ to reaching an audience (discuss). But you do need to think about what audience you want to reach and for how long do you want to keep that audience. With labels working the Hype Machine ever faster out of sheer necessity, you may reach a wider audience more quickly, but with no guarantee of longevity – in fact a risk of flash-in-the-pan like transience that may prove hard to recover from in the longer term. This is complicated and deserves more detailed analysis.

Fan loyalty is hard to build and harder to hold on to. Actual research with consumers, as well as the market data, confirms that loyalty is on the wane. Yes, you can carefully manage e-mail lists and work hard on engagement tools like digital service profiles and blogs. You should definitely work on more episodic content releases – shorter EP’s, live sessions etc. and keep some exclusives for your own lists even though you are reaching smaller audiences than the big digital platforms (these are crammed full, remember).

From some recent presentations made elsewhere and from comments on this blog, there is a growing list of new artists who might be working their way slowly to a workable, pragmatic DIY model (Corey Smith, Ingrid Michaelson, Jill Sobule, Joe Purdy, Jonathan Coultan ). These have all been stated as examples of the new ‘middle class’ of artists who can make a viable living from making music. Whether or not they want to be classified in such a way I have no idea. That’s back to the opening quote and for every artist starting out these days, to seriously consider.

Recorded music 2009: What would Don Draper do?

As we enter the last odd year of the decade, it's a good time to reflect on where we've come since 2000. That was the year I entered the music business, the one that marked the beginning of the slow but sure decline of CD sales and the conundrum of digital distribution. Noffin’ to do wiv me guv. I've bought more records in the past eight years than any period in my life and I expect quite a few mid 30's to mid 40's music fans would say the same. We've taken advantage of the increasing choice, increasing channels and falling prices. Meanwhile the vast majority of people under that age band have probably gone the opposite way, taking advantage of free music (legal, illegal, ambiguous) and cherry picking downloads from albums while finding a multitude of other sins on which to spend their money. For other punters, music's general ubiquity has probably negatively affected sales rather than the other way around. Record promotion just isn't what it used to be.

And the institutions in the value chain really are, finally feeling it. Retailers, right in the front line, first took one for the team and now appear to be going down like nine pins. Physical distributors, well they're all but done for. More worryingly, many market-leading digital music services are folding or making cut backs and lay-offs. But what about the record labels? There were some small indie casualties in 2008 (Gut for example), but nothing of real significance. Meanwhile the majors appear to be soldiering on.

But all isn't well, clearly. Overall sales figures tell only part of the story - total global trade value is down approx 6% in 2008, with the value of retail music sales now rapidly approaching half of what it was in 2000. The more telling indicators though, are the sales of individual 'blockbuster' titles, which are getting hammered. Universal dominates the blockbuster charts, but even its big guns in the final quarter – Razorlight, Snow Patrol and the three K's: Keane; Killers and Kaisers – all took disappointing yields despite good reviews. Those titles combined have racked up 1.7m sales to date in the UK (OCC figures) – not bad but probably not much above half those forecasted by the marketing teams, who are now left with deep scratch marks about the head. With all the chart markers down, but the business of selling music still costly, artist P&L's must make grim reading for the accounts men. Who on earth can call themselves a genuinely profitable long-term music venture in these days?

With just about every panacea turned to and from, where exactly do we go from here? More to the point, where are the visionary leaders that will take recorded music in a new direction? Who are the pioneers cutting new paths for artists just setting out on their careers making music? If you should shout these questions into the chasm, it’s pretty echo-y, isn't it?

Well, it seems to me there's nothing else for it. We need to call in Don Draper.

Come on now, you aren't asking yourself 'who the hell is Don Draper', are you? I'll bet you're not, but just in case, I'll fill you in. Don Draper is the Creative Director and recently promoted Partner, in Sterling Cooper, a boutique firm of advertisers in New York. In the 1960s. In a TV show called Madmen. So yes, strictly speaking, Don Draper doesn't actually physically exist. But Draper is such a brilliantly drawn fictional character that it really shouldn't stop us giving him a bell – or at least pretending to. For if we step into the Draper mindset, admittedly, not easy, it might be revealing.

The Draper Method

Firstly a quick tutorial. Draper is nothing if not thorough. He doesn't just take briefs, read the 'research report' (god I love Madmen) and brainstorm. No no no. Don 'lives with' his clients problems. He mulls them, ponders them, sometimes obsesses over them. He becomes them for goodness sake. In the Draper method, Problem Definition is everything - the root of any solution. But then comes the hard bit – the solution itself. Draper is first & foremost, a creative genius. He'll look at charts and matrices drawn up by his junior colleagues, but only in order to reassuringly, dismiss them outright. He's inclusive though. Like all good leaders, Don will ask around. He'll consult colleagues yes, but more critically, he will tend to ask those uninvolved and detached from the problem. He’ll ask his wife as they climb into bed with their good books. He’ll consult his mistresses over a post coital cigarette (we forgive Don all sins and infidelities btw, as he is genius and this is the 60s remember). He’ll even quiz complete strangers. He’s not looking for the answer directly. He just needs to bounce off his interlocutors on his journey to the answer.
It all takes time this, but then something occurs and it's this: The Miracle Happens. It might strike like a lightning bolt in the middle of the night, or it might ping into Don's Brain in the middle of a conversation, or it might simply rise gently to the surface. This is why clients call Sterling Cooper and ask for Don, and not go to the major agencies for cookie cutter, safe solutions. Draper gets to the truth of it, the heart of the matter. He's not simply a contrarian, so you can't try and second guess him.

However, since he doesn't actually exist, this is precisely what we will attempt to do, because the recorded music business quite simply, needs a miracle.

Don's Analysis of the Problem

Draper would quickly recognise the fundamental nature of recorded music’s problem – the downward spiral of devaluation: digital technology, piracy and music ubiquity combining to eat away at the notion of music as a luxury, and subsequently falling prices and margins.

Let’s start with the music itself. That’s where Draper would begin. Would he see issues here? Almost certainly. There’s no shortage of high quality new music (just turn off the radio and read any music blog!). That isn’t the problem. But new music just doesn’t last as long as it used to, vastly reducing artist life cycles and increasing risks for producers out of hand. Don would look at any number of breakthrough acts who had a successful 2008: The Ting Tings, Sam Sparro, Friendly Fires, MGMT etc. and he would worry about where they might be two years from now. That is a problem.

Draper would probably see music as two markets: New Music and Classic Catalogue. The old greats from the latter are literally timeless. They will sell forever. They can be re-invented over & over, like Dylan, Young, McCartney have only very recently. There is no gain whatsoever in commoditising the Classic Catalogue. However, the pipeline from New to Classic is thinner and more unpredictable than ever. It’s almost closed. Even deserved modern classics don’t have a shelf life of more than a few years, if they even achieve breakthrough in the first place. This is because of music’s proliferation and because of reduced consumer loyalty to any particular artist or genre.

Next, Don would consider distribution. He would almost certainly challenge the notion that the future of music is entirely, digital. In ten years+, digital has added no monetary value to music sales that hasn’t been lost from core products, a situation that is unlikely to be reversed. No institution built around selling products for dollars can survive from selling those same products for cents. Don’t press down the accelerator on commoditisation, he would advise. However, Draper would not be fool enough to ignore file-sharing (much as his instinct would want to do so. After all this is a man who insists his firm should drop ungrateful clients!).

Finally, he would meditate music’s customers. More fundamentally than supply-side issues of music creation and distribution, Draper would see that it’s the people, the audiences that are changing the most. In fact, audience habits are fragmenting so fast around the discovery, listening and storage of music that most consumers – critically those of the highest value to the business – are becoming confused themselves about what to do with the products on offer, if they know anything about them.

Don's Solution (sort of)

These changes in both supply and demand mean that it has become impossible for incumbent institutions to cope alone. It’s clear why new entrants into the value chain are those which make all the impact, for good or bad. The business manual says that when an industry’s core product is being commoditised, industry players must build new added value products or services around the core and at the same time, milk the cash cows and diversify, ASAP.

Draper appreciates this landscape isn’t easy for music producers – artists or labels. Everyone is already trying to do this, with patchy, limited success. Hence we have a land grab going on between labels, live promoters and artist management. But clearly, each of those individually isn’t good at doing everything – so this is counterproductive. The core product in music is still a song and if you’re lucky, an album of songs. That won’t change. What needs to change is the quality and care with which these are presented and packaged – both in terms of promotion, marketing, consumer information and product packaging. And much better cooperation between the partners involved in delivery to consumers. It all needs a good dose of Draper-like class. We can do so much better than this, he might say.

In the end, Draper’s solution is both easy and very difficult at the same time. What he wants, as a music fan himself, he thinks the people also deserve. Where do you discover great music? Don would not dream of listening to music radio, during the day anyhow. He doesn’t have that much time to read about music, so he lacks what others lack – a decent, concise filter to what music he might like. Don’s a busy man and can’t spend hours playing around with a recommendation engine that’s hit and miss. He certainly isn’t up for anything like social networking (in his case because he would expose himself to strangers from his mysterious past, but that’s another story).

What do you decide to buy? These days, Don hesitates to buy a CD in a plastic jewel case that is by design both faulty and environmentally unsound. Nor would he download a music song file of such poor quality that he couldn’t conceive of why he would want to actually store it somewhere for long term use. Nor would he subscribe to a music service which has every song, because why on God’s earth would he want access to every song?

Can you see where Draper might come from with the solution? If we respond to the forces of devaluation with reduced prices and offers of ever greater volumes, we are contributing to the downward spiral and our own eventual demise.

The examples of successful initiatives going the other way (quality not quantity) are what Draper would point for potential bigger, wholesale solutions. In the physical space we’ve had Radiohead’s £40 In Rainbows box set (no discounts there!). In radio, Bob Dylan’s phenomenal Theme Time Radio Hour. In music TV, Later With Jools Holland and now Spectacle: Elvis Costello With...(have you seen this yet?). In film/soundtrack, Mamma Mia. In digital, there is little to challenge iTunes/iPod, but that can change.

Productions, content brands, franchises, apps – something that indentifies and builds high value audiences and takes them on a journey. Whether that journey starts with a digital search for an artist or the physical purchase of a CD, a radio show or music TV, there must always be a next step for the consumer, to something really worthwhile and of high quality.

Footnote #1. The subjects and views elucidated in this post are those of fictional character Don Draper, not your usual author.

Footnote #2. There is actually a tumblr site called What Would Don Draper Do? http://whatwoulddondraperdo.tumblr.com/ I did e-mail a week ago for the ‘real’ answer. No reply yet, but as I said, these things do take time.

Footnote #3. For UK viewers, Mad Men season 2 returns to BBC4 this year (doesn’t say quite when) but you can catch up with season 1 by spending £12 on Amazon, which is amazing.

Footnote #4. Happy New Year for 2009. January is a busy month but have no fear, The Brew blog intends to be back in early February with another thrilling essay.

Reflections on 2008 #2: The Music: Is it just me or are albums getting better?

They're out. Music lists. The 'Top 50' album & song lists are everywhere. And the more discerning, self-controlled list-makers are at least coming up with their top 10s. I must confess I do love this time of year as I'm a sucker for a good list. And so I have to do my own for this blog of course!

It's an opportunity to reflect on the year, have some fun and take a break from the seriousness of the previous posts on this blog. I know it can be heavy going at times, but that's what comes from studying and working in a business you love for eight years long. And of course this is an opportunity to thank you all for reading Juggernaut Brew and to wish you a very musical Christmas & New Year. Some thanks come in the form of these recommendations on music in 2008.

What I love most about music is passing recommendations on to others. However, it’s a tricky business, recommendation (ask Pandora, The Filter, Mufin et al.). What I really love to do is make my musical recommendations personal – aimed at the individual and their needs at any particular time. However, if you read this blog regularly I'm confident by now that we have a lot in common – a little community if you will. Please do try at least some of the music in these lists if you haven't already, as they come with my personal, passionate quality guarantee!

Albums – has the renaissance begun? It would seem so...

Now this is interesting. Judging by 2008, I sense that the album – never a perfect universal format – is undergoing a renaissance – improving itself under duress of the various digital forces impacting on it. I hope so, because I predicted this would happen, so I can claim a small forecast victory. However, it's statistically almost impossible to prove (Music PhD's might want to give this one a try).

Certainly, digital album sales are increasing more rapidly than digital songs, although that isn't really a strong indicator of the point I'm trying to make. Perhaps better, is the fact that, on total music subscriptions such as that operated by TDC in Denmark (Play) – where consumers have access to everything – it seems that album consumption is more common than single songs, with 85% of tracks downloaded as whole albums. It seems that despite the imperfections and exposure de-bundling, the album has a future, even if that is at ever reducing prices.

I love albums personally – they are still very much my musical currency of choice. Here is my ranked best 10, followed by the next best bunch, unranked. Finally, in a world where there is just too much music to listen to, I list a few as a kind of note to self, that I'm intrigued to check out, but haven't yet had the time.

1. Merz: Moi Et Mon Camion. I wonder without looking how many 2008 round-up lists have missed this gem. All artists are musical, but some are more musical than others. If you like your pop mellow and multi-faceted, do yourself a huge favour – don't let this one pass you by.


2. Mercury Rev: Snowflake Midnight. Music discovery is nothing if not serendipitous, but you have to be open to it and actively willing to set aside previous conceptions and dive in. I have know about them for years and never been convinced by what I've heard. Then I bought this on the strength of the reviews I read and was blown away. Ethereal and wonderful.


3. Bon Iver: For Emma, Forever Ago. No doubt this is high up on many a list and deservedly so. Very few artists can claim to have made something as original, coherent and consistently good as this. Be interesting to see where he can go from here.


4. Elbow: The Seldom Seen Kid. Anyone who read my post on Elbow knows how much I love this band. I actually prefer their last two albums to this but whatever, this is clearly pop music (and album making) of the highest standards. Proof of what can come of sticking at it and practising your art.


5. Death Cab For Cutie: Narrow Stairs. Since I love Americana and I love Wilco and Sparklehorse it only makes sense to take the closest thing to those I could find in 2008 and it's this. Unexpectedly great.


6. Eryka Badu: Amerykan Promise. I love ambitious, audacious albums and am a bit partial to a concept album. This is a breathtakingly ambitious, genre-busting album that absolutely stands for everything the album format is and should be: a statement from start to finish.


7. Ladyhawke: Ladyhawke. What a fabulous debut this is! For anyone who is, musically speaking, a child of the eighties, this is that rare thing – a brazenly unashamed nostalgia trip that works through sheer force of will. It's great for the gym as well. I put it just above the other great energetic debut of 2008 Santogold's Santogold!


8. Marcin Wasilewski Trio: January. I did think about an alternative best of list for non pop stuff, but then it's all music and uses up the same senses and time available to us. I no longer treat it differently and find that I can listen to this stuff more and more. This is a Polish piano trio on the iconic ECM label. It's lovely stuff, well worth letting your world come to a stop for. Jazz post warning: I feel the need to write a Jazz post in 2009.


9. Vampire Weekend: Vampire Weekend. As with Bon Iver, you will find this one high up on all the best of lists. For me, this album is testament to one of music's most unique qualities – it grows on you like nothing else. When I first heard this it didn't do much for me at all. I thought it sounded contrived. But the more I played it, the better and better it sounded and in the end totally won me over.


10. Paul Weller: 22 Dreams. Well well well(er). I never thought he had this in him. I have always found his post Jam stuff clichéd and a bit dull, but this is something special. Like the best music experiences, it sometimes helps to put your preconceptions to one side. 21 tracks long, it improves as it goes and by the end it doesn't feel like a bloated listen. A remarkable achievement.

The next bunch of albums I really liked in 2008, in no particular order: Aimee Mann - 'Smilers'; Amadou & Mariam - Welcome to Mali; The Black Keys - Attack & Release; Esbjorn Svensson Trio – Leucocyte; Bobo Stensson – Cantado; Ry Cooder – I Flathead; James – Hey Ma; Tindersticks – The Hungry Saw; White Denim - Workout Holiday; TV On The Radio – Dear Science; Santogold – L.E.S Artistes; Martina Topley-Bird – The Blue God; M83 – Saturdays = Youth; Emmy Lou Harris – All I Intended To Be; Midnight Juggernauts – Dystopia; Teddy Thompson – A Piece Of What You Need; Laura Marling – Alas, I Cannot Swim; Natacha Atlas – Ana Hina; ACDC – Black Ice.

The albums I'm curious about this year but didn't get to hear yet are: Kanye West, Fall Out Boy; Jun Miyake; British Sea Power; The Stills & probably many more I've let wander off the radar! Help me Spotify, We7!

The albums I'm looking forward to most in 2009: Arctic Monkeys; Laura Viers; The Hours.

Finally on albums, it was great to see the return of upscale, special product. It started with the Radiohead In Rainbows Box Set from last year, but this year I thought the Laura Marling ‘Songbox’ was fab, and the Lost Campesinos! packaging for We Are Beautiful, We Are Doomed looked good too.

It seems the best way to go is to stream or download what we want to sample for a while, but then to buy the special editions of what we really love enough to want to keep. That cuts down on all of the wasted plastic as well.

Songs – too many to choose from – solutions still required

How many new songs were released in 2008? A zillion perhaps? How on earth does one filter these? Playlists, compilations, recommendation engines, streaming services, editorial lists, or picks from albums. Combinations of all of the above, probably.

One interesting insight I heard recently was from Entertainment & Media Research – that people only love three songs a month (that many!). Personally, I am totally overwhelmed by song volume and so picks from albums is the only one I can work with. So here are my song picks from my favourite albums, in album order. This is my playlist for 2008. I'd do a Muxtape for you to download, except Muxtape got taken down (hence my last post).

1. Merz: Silver Moon Ladders. I picture nothing but the St. Ives coast at dawn when I hear this, and what could possibly be better than that.


2. Mercury Rev: People Are So Unpredictable. Maybe it's the line 'there's no bliss like home' – I mean, has this guy ever worked from home!


3. Bon Iver: Re: Stacks. Come on now, stop your life for four minutes, lie on the sofa, put this on. How to disappear completely.


4. Elbow: The Bones Of You. The single biggest inspiration behind this blog. 'Nuff said.


5. Death Cab For Cutie: Cath. Lovely tune, unsettling lyrics. Nothing quite like it since Pearl Jam's Daughter for a combination quite like this.


6. Eryka Badu: Master Teacher. Do you miss Stevie Wonder's best epic moments from the likes of Songs From The Key Of Life. No worries, try this.


7. Ladyhawke: Magic. It is. It really is! Is this the best opening track on an album in 2008? One for a radio feature.


8. Marcin Wasilewski: Diamonds And Pearls. When Jazz groups cover pop songs, the results are usually mixed at best. Prince by a Polish jazz piano trio? This nails it.


9. Vampire Weekend: Where do you stop with this. The album is nothing if not wholly consistent throughout, but the track I like best is probably Oxford Comma, just for the witty English references.


10. Paul Weller: Cold Moments. It sounds warm to me.

Other songs I loved: Teddy Thompson – Where To Go From Here; MGMT – Electric Feel; The Last Shadow Puppets – The Chamber; Santogold – Lights Out; Nick Cave & The Badseeds – Hold On To Yourself; Midnight Juggernauts – Road To Recovery; Adele – Hometown Glory; Aimee Mann – Stranger Into Starman; Amadou & Miriam – Sabali; Gutter Twins – The Stations; James – White Boy; Jaymay – Blue Skies; James Youill – No Surprises.

Gigs - Someone turn out the lights on the way out

I'll admit, I don't get out to as many as I once did and I can't handle festivals. But I do make every effort if I can see something special might happen – which was why I went to see Elbow three times! The Meltdown show at the Royal Festival Hall, with the 40 piece all male Voice Lab choir, was amazing – one of the top five shows I've seen in my lifetime and definitely the high point of the year. Will Elbow sell out Wembley Arena though? I don't know, because of the times we are in and because I think it’s a big step. I wish them the best of luck.

The low point was probably The Hours just a few weeks ago. Not because the band weren't good – they were very good – but because The Hours should be playing bigger and better venues than Proud Galleries Camden Lock. Maybe in 2009.

I also learned a lesson to follow ones instincts better when it comes to live shows. I regret I didn’t queue to see Bon Iver play in a tiny Brighton Venue of 200 people (doh!). But I’m glad I made the effort for Vampire Weekend later that same evening, in a venue of no more than 500 – they tore the roof off!

What can I say about the live business in 2008 that hasn't been said already? The year the bubble burst, the buffers got hit, the end of the road etc. As with albums, the 'format' of the live show is changing and will change further in 2009 – I think with the reduced quantity, we'll see a marked increase in quality. Lesser live bands will struggle to sell anything like the ticket numbers, at the prices, we have seen in the boom years.

My one sure prediction is that live, bands will need to work much harder. I thought it was interesting that Counting Crows played a series of shows in which the set list was entirely different each night. I think we'll see more of that. We'll also see more of like-minded artists get together for 'community tours'. I'd like to see James Yuill, Maps and Merz on the same bill for example.

Finally, will we see a reversing of the trend to give away free albums to promote the tour? Maybe, and I hope so. It has become increasingly commonplace for bands to give away their records in the name of building a following for their live shows. But with the bubble in demand for live bursting, it won't be so easy for artists to simply look to touring to make a living.

The Business - Solved. Next Year. Promise

I've deliberately focused on the music for this post rather than just the business. I think the music has been great and that has been the single biggest boon to the industry in 2008. The business is of course, the subject of all of the other posts on this blog and there are many more topics and angles stacked up for next year.

See you then. Merry Christmas. Happy New Year. Thanks for listening.

Reflections on 2008 #1: Music's Big Mistake: Muxtape – the best music store we never had?

What's the one thing that the digital music business needs most right now? The answer is a business model with natural friction. Stay with me...

In my view, Muxtape was the most powerful music business idea in 2008. It was also one of the most workable new concepts because it had, in its very essence as a playlist service, natural friction. The song downloads could be DRM-free because the number of tracks was limited each time (to a playlist of typically 12-20 songs) in a way meaningful - and palatable - to both industry suppliers and consumers.

Contrast this with more compromised service launches later in the year such as Datz or Nokia's Comes With Music. These appear to offer a total catalogue to consumers, but of course they don't really, due to various imposed restrictions. Datz lacks brand new releases and then presents single songs alphabetically. Nokia's CWM has the majority of song catalogue but is restricted by DRM to one mobile phone and one PC. Any attempt to communicate either the completeness or simplicity of these offers to consumers will immediately ring false – they’re neither complete nor simple. However, any attempt to explain the restrictions will either confuse potential users, or simply turn people off.

These are unnatural frictions, placed upon these services in order to protect the music labels from potential cannibalisation of existing formats. This is a perfectly legitimate concern of course. Only a ship of fools would capitulate to the file-sharing minority by opening up entire music catalogues digitally at commodity prices (like free!). However, just because these frictions are imposed on these services doesn't mean that music fans will understand or except them. The results end up mixed at best, with Nokia and Datz talking of ‘market testing’ and ‘learning’ from consumers’ response. In other words a win-win for precisely no one – not artists, labels, publishers, service providers or consumers. Just more examples of potentially good music services with their wings clipped by the constraints of the current business.

It could have been so different with Muxtape. The service embodied a universal need among all music fans – to compile and receive music as a thought/gift/experience. It captured the best of recommendation and discovery. Because of this, it was popular. When it was launched in early 2008, Muxtape attracted 8,685 registered users in the first 24 hours and 97,748 in the first month, with some 1.2 million unique visitors to the site (those stats from the current Muxtape url). It had real, organic, buzz.

Muxtape lent itself quite well to each of the current payment models – advertising, premium subs, a-la-carte – or any combination of these. Its early success was built on the strength of the idea itself. As founder Justin Ouellette puts it: “My goal with Muxtape's design was to translate some of the tactility [of cassette mixtapes] into the digital world, to build a context around the music that gave a little extra spark of life and made the holder anxious to listen”. Spot on, and his early customers got the sentiment loud and clear.

For a truly absorbing read, go to the current Muxtape site and read Justin's very articulate account of the experience he had in taking his innovation to market and the industry's (mainly the major labels) response. Fascinating but a little bit sad at the same time.

Why does this happen in the music industry time and again? A young upstart with a great idea creates an early phenomenon – followed by a complex, stifling attempt to grow it within the rules set by the business – followed by an exhausted, emotional shutdown.

My hope for 2009 is a genuine, un-compromised music service offering - one that meets real, if latent, consumer demand. Muxtape had that extra special bit of insight – something real music fans understood and wanted to engage with. Digital music services launched by big brand telcos, physical music retailers, handset manufacturers and ISP's have, so far, lacked exactly that insight (with the almost singular exception of iTunes).

Why do the big brand institutions continue to try to invent the next big music breakthrough? Why not instead, seek out the bright young things and buy them in or partner with them? Surely that’s a better alternative than trying to re-invent the wheel, when the chances of building a service based on real insight, or even that little bit of luck & serendipity, are narrow. I'm sure there will be other start-ups in 2009 that will show the same qualities that Muxtape did, despite the difficult economic times we are in. And maybe because of the times, one of the bigger players will be savvy enough to pick them up and run with them. If so they could reap the benefits and rewards, and industry kudos, of being the challengers and even successors to the mighty iTunes.

Transforming labels - six ways re-evaluated

I was in a meeting the other day at which somebody asked me for a copy of a report I had written over 18 months ago. It wrong footed me a bit - I have mixed feelings about sharing something I've done that long ago.

It was a brochure I wrote and self published, about six ways in which record companies could build new revenue streams during these challenging times. When I got back to my office I skimmed through it with dread. 18 months is a long time and thinking moves miles on in that time frame.

I felt a bit embarrassed reading it, but a tiny bit proud as well – just for giving it a go and getting it done. After all, this brochure helped win me a couple of projects. And there it was on Guy Hand's desk the day he hired me to help Terra Firma understand the record business. The opening line of the brochure was quoted in a widely read leader piece written by Robert Sandall for Prospect Magazine. And, people who read it liked it, so I guess it served its purpose at the time. But on re-reading, I wondered, especially given the dizzying pace of change in the music business, how much of what I'd written 18 months back was in any way still relevant in the here and now.

It seems timely to consider this after a few weeks in which we've had a number of interesting things said by the majors – three of them anyhow. First we saw EMI reveal its new strategy of three new operating divisions: New Music, Catalogue and Music Services, along with the soon to be launched D2C 'learning lab' on emi.com. Meanwhile, Warner claimed that all new artist signings would have some element of multi-rights – partial 360 degree deals. And Universal (currently literally wiping the floor with its major competitors) somewhat audaciously revealed operating results that included a growth in revenues of 4%.

Revenue growth in the record business? Is that still possible these days? Obviously the answer is yes, though the vast majority of this was driven from core album business, thanks to two out of four major artist releases now belonging to the Universal roster. Pure market power works, even in a steadily dwindling market.

But my brochure was about going beyond the traditional and diversifying the core record business into new – and more profitable – revenue streams. My six ways to drive new business were as follows:

1. New retailing.
2. Brand partnerships.
3. Personalisation & recommendation.
4. Commercialising communities and D2C initiatives.
5. Customer loyalty.
6. Product innovation & programming.

Aside from evaluating whether this really is a list of coherence rather than a brain dump, I'll take a very brief look at each one, benchmarked against the success of real efforts made by the labels – or new entrants of course - in each area.

New Retailing
The idea here was to take particular titles or repertoire outside the traditional physical retail space and look for new retail partners. The Spice Girls famously did this with Victoria's Secret for example. And Hot Topic, Nordstrom and Starbucks had all entered the CD retail business in the US, so it seemed like momentum was building and might transfer from the US to other markets.

But it's gone rather quiet. Starbucks has scaled back due partly to the tough economy, but also due to a now badly exposed lack of real commitment to music. One-off successes like The Spice Girls have proved harder for the labels to scale across the piece. Meanwhile no new dedicated entertainment retail brand has emerged (I've been approached twice in the past two years by new physical ventures, so there is interest, but no execution). In the UK have we seen Virgin's enthusiastic re-branding as Zavvi, but that's not new. Giving a school grade verdict on new physical retail for music then, over the last 18 months? Has to be a D, for disappointing.

Brand Partnerships
This has been a potential industry panacea for a while now. No question, brands have been a shot in the arm for music in several key ways. One-off licensing deals have secured vital bottom-line income for labels. Some artists (notably Groove Armada) have successfully gone outside the mainstream label system directly through brand partnerships. And the synch business itself has grown impressively, as has public performance of music in general.

The innovation and creativity around individual campaigns (ads, festival sponsorships, TV soundtracks) has been a genuinely great development for the music industry. Listen around you – wherever you go or whatever you see on TV or in film, the music has become intriguing and of consistently high quality. No more jingles and less library music and a lot more money being generated. However, labels have so far failed to truly scale this across the piece, with initiatives like Universal's BrandAmp and Warner's Brand Asset Group fairly quiet after fanfare launches two years or so ago. Labels have not become creative agencies for their artists. For the industry this has to be a B+, but for the music labels, a C+.

Personalisation & Recommendation
By this I meant prioritising licensing to technologies focused around this. Back in December 2005, Gartner Research and Harvard predicted that, by 2008 25% of online music purchases would be driven from recommendation technologies. That just hasn't happened. It's taken iTunes ages to come up with Genius. As ever with Apple, it’s doubtful they'll share data on the impact on sales directly from that feature. Meanwhile, despite a flurry of activity, no real breakthrough has occurred. Pandora has struggled (partly due to licensing prices but also due to the hit & miss nature of the way it works). Recently launched Mufin has attracted rotten user reviews.

Besides, where a service is actually built around recommendation itself, there is and always will be a monetisation problem. Consumers won't pay directly for recommendation. The other issue is the illogical nature of music recommendation and discovery. It can't really be efficiently coded can it? Real music fans are so far underwhelmed by recommendation technologies – either collaborative, music-genome based or otherwise.

Personalisation is another thing entirely. The BBC & Google have both understood the power of allowing users to very easily personalise their home page and web navigation experiences. But when you login to the iTunes Music Store, where exactly is your personalised home page? Spotify is better at this and allows you to personalise the user interface in nice, subtle ways.

So things are developing. But overall the technology, services and licensing in this area has not driven anything like the impact predicted by Garner & Harvard. Combined industry efforts hear get a C- could and should, do better.

Label, Artist D2C
It's funny, 18 months ago I wrote passionately about artists creating communities for themselves (via artist websites primarily) rather than letting others do it for them. I tipped Radiohead to be the first to succeed with the approach – an obvious choice that turned out as expected with the In Rainbows digital release. Right now there is a lot of talk about capturing the artist-to-fan relationship better, and understanding fans individual and collective needs better.

Even if a lot of the talk is hyperbole right now, there probably is something in this. However, no artist has been really successful to date except Radiohead and Trent Reznor (although the definition of ‘success’ might lead to a different conclusion). In my previous post on this subject, I tip Topspin Media to make the most impact for artists going direct to consumer. Anyone interested in why should check out Ian Roger's recent keynote at the Grammy music conference in the US. Ian posted his slides online – recommended reading.

As for label D2C – we have a couple of imminent releases – so I will reserve any judgement until then. But the timing is iffy. With a slew of new digital services recently launched but yet to bed down, and even more coming, I don't think this is great timing for launching a D2C service. The impact could get lost in the crowd. So as I write this, commercialising artist communities gets a C, with label D2C specifically a D, notwithstanding new launches next month.

Customer Loyalty
The point I make in the brochure is that many fans would spend more on their favourite artists if given the opportunity, conveniently. Pre-orders, special-edition versions and fan loyalty schemes could be used to extract more value from fans. This has been done successfully, though again Radiohead and Nine Inch Nails seem to have capitalised more than most on the idea. I have hopes that Amazon, with its deep retailing expertise and scale, can achieve a lot in this area for a wider array of artists. Also, I think subscription services – yet to really come of age – can drive the elusive ARPU that everybody talked about when these first arrived a few years back. I think this is an area with a lot of commercial promise, but I don't think a huge leap forward has been made in the past 18 months really. Grade C.

Product Innovation & Programming
For me this is the single biggest area of impact. With the core music formats – albums, songs and videos being gradually commoditised from the combined impact of file-sharing, unbundling and music ubiquity, classic management theory would suggest that what this industry needs most is a re-invented core product.

But what would that be exactly? Digital brings all kinds of possibilities, such as multi-media bundles and of course, the all-you-can-eat music subscription. I'm surprised that we haven't had more EP type formats in the digital space, though there have been a few examples. I like iTunes Complete My Album as it is a dynamic price model – the more you buy the better the value (though isn't an all-you-can subscription 'complete my catalogue' by default?).

I still believe that long-form video and greater innovation with audio-visual content using digital channels, can improve music as both a product and experience. What did I mean by programming from a label viewpoint? Firstly, every label - the majors especially - needs a production business (most majors do and in Sony’s case of course, SiCo is a major contributor to the bottom line).

Rather than simply making multi-media programmes around artists, new albums or even non-music ventures, this function needs to do much more for the labels strategically. In order to achieve maximum impact for artists, there is a need to make the right content, get it through the right channels and platforms, at the right time and using the right brands as sponsors – all to reach the right audience. This is new in music marketing and is a subtle, strategic discipline that can be offered as a true holistic service to artists. No longer can labels simply spread content around in the hope that some of it will stick and trigger off demand for an album. The game is changing. Look back to my very first post on this blog on HBO – Music lessons from a content powerhouse – for more thoughts on this subject.