Music & Web
Poor old Spotify . Less than a week after Billboard magazine reported that the music-on-demand service had “rebooted” its negotiations with US labels, rival service Rdio has just opened its doors in both the US and Canada, proudly boasting deals with many of those same labels. So what gives? What does Rdio – another European startup boasting unlimited music, anywhere – have that Spotify doesn’t? Two words: faux humility.
Yesterday at the New Music Seminar in New York, the streaming music recommendation service Pandora announced that they now have 60 million listeners registered. This is up from 50 million in April , and 40 million in December . Before that, it took them all over 2009 to double in size from 20 million to 40 million. In other words, the service is now adding users faster than ever. And that shouldn’t come as a big surprise to anyone who has used the service. While it’s great on the desktop, it’s even better on mobile devices.
The basic recording contract upon which most of the popular music business has been based for the past 50 years is fundamentally broken. This is not the sentiment of one of the countless critics who throw stones at the music industry from afar, usually for vague philosophical reasons, but rather the pragmatic opinion of a true insider: Tom Silverman, founder of Tommy Boy Records, which sold millions of records by hip-hop artists including Club Nouveau, Coolio, De La Soul, Digital Underground, Everlast, House of Pain and Naughty By Nature.
[UK] Ad-supported music streaming service We7 and Spotify competitor has big plans to go mobile. That much was already known – an iPhone and Android app has been in the works for sometime. Earlier this month, however, CEO Steve Purdham surprised attendees at an event in Manchester by telling them that while the We7 iPhone app was ready, its release was purposely being held back.
How much is a music distribution company worth these days? The Orchard , one of the largest independent music distributors, is going private in a deal valuing the company at about $13 million. Its largest shareholder, private equity firm Dimensional Associates, is buying the 58 percent of shares it does not already own. Dimensional is paying $2.05 a share , which is more than a 20 percent premium over yesterday’s closing price. With 6.228 million shares outstanding, that values the business at $12.8 million—not a hell of a lot, considering that it is less than one quarter’s revenues.
C’est une information étonnante révélée par le dirigeant de Spotify, ce jukebox numérique qui fonctionne selon un modèle freemium (mi-gratuit, mi-payant). En marge de son discours au South by Southwest, un festival de musique se tenant chaque année à Austin au Texas (États-Unis), Daniel Ek a indiqué que sa plate-forme consommait « certains jours [...] plus de bande passante qu’un pays comme la Suède [pays dont est originaire le service, ndlr]« . Selon TechCrunch qui était présent à cette conférence, Daniel Ek a donné quelques précisions sur son choix d’utiliser un modèle P2P (peer-to-peer ou pair à pair) plutôt que de centraliser l’ensemble de son catalogue de musique dans un seul centre de données et de le diffuser en continu à partir de ce seul point comme le font d’autres services. Daniel Ek aurait répondu que si les fichiers étaient diffusés depuis un centre de données du Royaume-Uni, « ils [les utilisateurs de Spotify, ndlr] consommeraient toute la bande passante » .
While Spotify CEO Daniel Ek didn't say much about his company's timeline for launching in the U.S. during his SXSW keynote interview, it definitely looks like the popular streaming music services is putting all the pieces for a U.S. launch together. In an interview with Bloomberg earlier today, Spotify's senior vice president Paul Brown noted that the company is "buying server space in random parts of the states and there are licensing discussions too."
Shazam getting traction
richw alerts us to a fascinating essay from a member of the band Fucked Up (different, apparently, than the band we recently wrote about going by the name Holy Fuck ) explaining the economics of SXSW for bands . Actually, though, it's much more than that. It explains the economics of the music industry, with a single point underlined: as a band, you need to figure out how to get money , and stop waiting for others to just give it to you. The key point is made somewhere in the middle: You may have heard that the music industry is sort of falling apart. It isn't really a matter of there being less money in the pool - just that the money people have to spend on entertainment (which will always be somewhat of a constant) is just being diverted away from where it historically has gone (record labels and managers).
Mike Masnick has a post up on Techdirt with this great description of the changes afoot in the music industry (emphasis mine): You may have heard that the music industry is sort of falling apart. It isn’t really a matter of there being less money in the pool – just that the money people have to spend on entertainment (which will always be somewhat of a constant) is just being diverted away from where it historically has gone (record labels and managers). The music industry is by definition an operation invented to divert money spent on music away from actual musicians – the problems that the music industry is currently facing have specifically to do with the fact that the money that would usually flow directly to the bigger economic actors is now going somewhere else .
Recently, the UK government passed The Digital Economy Act which included many, perhaps draconian, measures to combat online music piracy (including withdrawing broadband access for persistent pirates). Much was proclaimed about how these new laws would protect musicians and artists revenue and livelihoods. But how much money do musicians really get paid in this new digital marketplace? This image is based on an excellent post at The Cynical Musician called The Paradise That Should Have Been about pitiful digital royalties.
I read with sadness this New York Times profile of Irving Azoff and Live Nation. As my friend Andy Weissman asked, “How divorced is this world from reality?” The article reminds us of the way the music industry worked for many decades: a world of power by those who manage artists and run record companies.
Pandora going public?
French media conglomerate Vivendi this morning reported financial results, posting a decline in full-year profit but beating estimates because the net loss was much narrower than expected. You can read more analysis of the media and entertainment giant’s performance elsewhere , but there was a particular passage in the press release regarding Vivendi’s music subsidiary, Universal Music Group , that caught my eye. UMG, the world’s largest music company with artists like U2, Amy Winehouse, Lady Gaga, Taylor Swift, Black Eyed Peas, Rihanna, Eminem, Lil Wayne under contract, as expected finds its revenue from physical product sales (CDs) in a seemingly unstoppable decline.
Back in the nineties, when CDs were selling strong, we called the major labels the Big Six. After the music business’s major transformation over the past decade, we’re down to the Big Three — officially speaking anyway. EMI, one of the so-called Big Four major record labels, no longer considers itself a “label” per se, but a “comprehensive rights management company” under the new leadership of Roger Faxon, formerly the head of its robust publishing division.