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A Savior for the Music Industry - But They Must Act Fast

Posted almost 2 years ago
With sales down about 10-15% a year, we're fast watching the erosion of the music industry as we know it. In five or so years, the CD business will be gone. Right now, I believe, the U.S. market is doing about $9 billion a year in CD sales. Poof!The reality as I see it is that online music is indeed killing CD sales. When Napster first came out, there was a lot of talk about how it encouraged CD sales. That doesn't seem to be the case anymore. I know I'm way more selective about purchasing CDs today thanks to online access, and often, I get free music almost by accident, just by stumbling my way through friends, MOG, CD-Rs, skreemR, and (well, a buck, but still) occasional single track iTunes purchases. Essentially: I can't escape music that's not on a purchased CD. The labels may be hurting, but music consumption is at an all-time high! The average person is listening to about 100 songs per month via their iTunes media player. Multiply that by about 100 million people who listen to music on their computers in America. We're talking about a lot of consumption. The sad fact is that the industry is monetizing a very, very small piece of the total consumption market. It's apparent: online streaming music needs to be free. And it needs to be free everywhere. On MOG. On Google. On Yahoo! You name it. In this imminent free-music movement, where's the money for the music industry? Revenue share in the advertising. Right now, when sites like Rhapsody give 25 free songs per month away, they're paying the music industry about a penny per track per stream. At that rate, one cannot just give it all away and sell ads against it to make a profit. A site like MOG or Rhapsody would have to serve an ad banner with every listen of every track and sell the ad in excess of a penny per user per view to make a profit. You can't sell ads for that much today.Here's what the labels need to do: drop that penny per track per stream rate to about 10% of what it is today (that's right - 1/10 of a penny per stream). When that happens, the labels are meeting the market and giving away music becomes lucrative; everybody and their brother starts doing it. The labels turn all of online music consumption into a revenue stream - every site with all-you-can-eat, on-demand music. Thousands of sites innovate and create new value around how to discover and consume music. By my estimate, that's a $250 million per year market for online ad spending alone.Next, ensure that every streaming track links to the opportunity to download the track in mp3 (with Amazon or whomever) and the labels have created the ultimate promotional machine for mp3 purchasing (for the next 10 years, people will still need to download for their portables and their car). Then slap on a tempting upsell: offer users an ad-free, higher-bitrate subscription service for a reasonable fee (say $5 per month). Suddenly the labels have a shot at staying alive.I don't see the labels really having a choice in the matter. This is their meal ticket, their way towards sustainability. When it comes to copyright, people just don't feel like trading is cheating. Ever see a sign at the public library that warns about photocopying copy-protected material? Yeah, funny, me too.(By the way, the labels need to find some talent, too. That goes without saying. Did anyone watch the Crappys- I mean... Grammys?)
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Comments (55)

  1. 1234chainsaw
    1234chainsaw says I worry that this solution won't work for indie labels. In very many cases, indies just have too few bands or artists in their roster to attract a broad enough customer base for monthly subscriptions. So I fear anyway. As for major labels, I can't really bring myself to care.
    Permalink posted 02/19/2008
  2. NeilNathan
    NeilNathan says alicia keys should not stand up she made john mayer look like a vintage blues god which is hard to do feist is always classy though so david, how you gonna get this manifesto into the hands of those dinosaurs that make these kinds of decisions?
    Permalink posted 02/19/2008
  3. Bartleby
    Bartleby says A very interesting point of view echoing other experts' stances gleaned on the I-web. MOG is a good implementation of your theory. I wonder you had it laid out as clearly as this when you started out...
    Permalink posted 02/19/2008
  4. david hyman
    david hyman says barteby, the bet was always that the backend and music itself would be commoditized. the only differentiator in this scenario will be the front end. mog is solely focused on the front end. discovery and ease the process of consumption. now, the only thing we're lacking is the free music. let's get going!!!!!!!
    Permalink posted 02/19/2008
  5. Paul Busch
    Paul Busch says The Record Industry is going to change. Our desire for music is not going to change and we have a generation of people who expect it for free....the record industry waited too long. Like the dinosaurs. How will the artists get by? Here is an very interesting read written by former Talking Head Chief David Byrne. Check it out: http://www.wired.com/entertainment/music/magazine/16-01/ff_byrne?currentPage=all Long live rock, I need it every night, Long live rock, come on and join the line, Long live rock, be it dead or alive. Paul
    Permalink posted 02/19/2008
  6. david hyman
    david hyman says i'm actually a believer. the transition is brutal because it's clearly not the same business they had. at least in the short term. who knows how it evolves over time. i think the marriage of brands and music is natural. ad rates will go up over time and it could be a great business. bigger than the one they've got today.
    Permalink posted 02/19/2008
  7. david hyman
    david hyman says i loved that article paul. he doesn't take the fatalistic immature position that the majors are evolving and not going away. there's more choice for artists now though which is super cool.
    Permalink posted 02/19/2008
  8. ammagiq
    ammagiq says The recording industry has put so much time and energy into fighting online music that I hope they can reverse course and finally see the forest for the trees. This outline all makes good sense to me. And you're right, they do need to act fast--but will they?
    Permalink posted 02/19/2008
  9. starstuff
    starstuff says I'm not as optimistic. I think we may have already killed the industry, and all that's left is salvage operations. $5 a month and $0.001/song in exchange for the whole recorded music industry? Why, because we're a bunch of looters and we'll steal it anyway? Think about how much you used to spend on CDs and ask if that even comes close. One can bemoan the quality of the talent, or one can champion making music a commodity, but surely not both. Do you want music for free, or do you want it to be good? Would anyone even notice? Here's a thought experiment: what if any song recorded after March 1, 2008 was suddenly subject to this new system (that is, essentially given away for nearly free), where older songs still enjoyed traditional copyright protection? How good would the new music be? Funny how the justification for stealing music has morphed from "Napster actually encourages CD sales" to "it's everywhere...I can't escape music that's not on a purchased CD". Follow that trend, and this proposal, and eventually it won't matter, because music won't be art anymore, it will be just a soundtrack to sell something else by. But don't take it from me. Here's someone who's been around the block: Gene Simmons: 'The Internet Killed Music' Kiss star Gene Simmons has blamed internet downloads for destroying the music industry - insisting there will never be any more legendary bands like The Beatles. The 58-year-old rocker is convinced illegal downloading has forced record labels to conform to a new way of working that will eventually put them all out of business. Simmons, who is known for his entrepreneurial skills, insists there is now less opportunity for talented new bands to find recognition because the internet is swamped with wannabes. He says, "The very same people that love the music the most have slit its throat and they're surprised it's dying.'How come my new band can't get a shot?' 'Because you killed it, bitch.' "Every day college kids who probably love music more than anybody are the same people slashing the record industry's throat by file sharing and downloading. It's the saddest thing for new bands. Doesn't affect me or Kiss. We can continue to play stadiums and do very well, and we release DVDs. But there isn't a chance for a new band to become the next Beatles or Kiss because there isn't the infrastructure to do it."
    Permalink posted 02/19/2008
  10. david hyman
    david hyman says the cd created inflated value. those days are over. but they need to move over now before the cd business is wiped out completely. ad supported music + downloads + subscription upsell + diversify into tours, merch, etc. they need to act fast before they lose the revenue they've got coming in.
    Permalink posted 02/19/2008
  11. starstuff
    starstuff says We're still a bunch of looters.
    Permalink posted 02/19/2008
  12. Paul Busch
    Paul Busch says The Internet Killed Music....????? No....it killed the distribution and management of product as we know it today. People and cultures will continue to play music, bands will continue to form and play music and create. Just because the star making machinery is not in place does not mean the death of music.....music will always be with us in whatever form and whatever form of delivery. Artists will have to determine what they need to do to survive.....in a new world.
    Permalink posted 02/19/2008
  13. david hyman
    david hyman says agree paul.
    Permalink posted 02/19/2008
  14. david hyman
    david hyman says i don't think star-making machinery goes away. labels still play role of marketing and a&r.
    Permalink posted 02/19/2008
  15. starstuff
    starstuff says sure, the headline was "the internet killed music", but what was meant by that was "But there isn't a chance for a new band to become the next Beatles or Kiss because there isn't the infrastructure to do it." That infrastructure, the distribution and management of product, and the star-making machinery, would be replaced with commodification of the art in David's proposal (which, sadly, I think will probably come to pass -- I'm not arguing that, I'm just unhappy about it). Artists will do something to survive.. like sell insurance and make crappier and crappier music on the side.
    Permalink posted 02/19/2008
  16. RSchaut
    RSchaut says Somebody should probably sit down with Gene Simmons, and explain that whatever it was that imparted "star quality" on Kiss, it sure as hell wasn't the music. There is a distinction to be made between music as art and music as a product. I have absolutely no idea how to imbue the music consuming public with the necessary discernment required to tell the difference, but I will not shed a single tear if the commoditization of recorded music means there will be fewer superstars like Brittany Spears and Celine Dion. As for how artists can make money in a world where recorded music has been commoditized, well, gosh, perhaps they can, like, perform once in a while? Not a bad way to hone one's craft. For far too long, the recording industry has been making money hand over fist, and, for the vast majority of artists, they have been doing so at the expense of those artists. Yes, a few artists (and, in many cases, the term applies very loosely) have become incredibly wealthy. For every very wealthy star, there are thousands of incredible musicians we've never heard of. Commoditizing recorded music levels the playing field, because it reduces the incentive for recording companies to invest money into promoting music that they think will bring them a high rate of return. I see that as being bad for people who make music as a product, and good for people who make music as art.
    Permalink posted 02/19/2008
  17. consumerx
    consumerx says Great Post and a discussion that has loads of implications. I'm not sold that illegal downloading is the major cause of falling cd sales. I'd say it plays a role, but to some extent falling cd sales could be related to the immense number of other media types and activities available to people now. When I was younger, there were some video games, but they weren't that compelling. I guess there were some cellphones, but kids definitely didn't have them and nobody was texting. There wasn't an internet available to the average joe and there surely weren't any social networking sites or the like. Now there are many other things competing for the attention or mindshare of people who 10, 15, 20 years ago probably would have been entirely or at least more focused on music. Touring and merch doesn't really represent a solution for songwriters, unless they are also performers. Nor does it help artists that can't or won't tour. Licensing streams for ridiculously small amounts of money presents two challenges currently. One is the micro-accounting, either by the sites that serve them up or by labels to their artists. Another is that should subscription services take off and we move to a celestial jukebox, wherein nothing is owned but everything is rented, sort of, via subscription, then one leg of your revenue stool for labels, downloads, disappears, and the labels find themselves with minuscule per stream revenue amounts. Change is needed, but there is a right way and I am not certain that because some labels have been slow to adapt it justifies wholesale purloining of any and all label content by end users or the creation of a fair bit of value for certain sites and services with no fair attempts to compensate the rights holders.
    Permalink posted 02/19/2008
  18. soundgirl
    soundgirl says the emasculated music infrastructure that remains is a victim of it's own inefficiencies. the looting was done by it's own insiders. the industry's best opportunities to adapt to a profitable internet model have long passed it by as arrogant corporate titans sat on their hands in denial. David's model makes sense and could salvage what's left of the industry. at least for awhile. artists will continue to make the art and although the process and channels of distribution are currently experiencing great changes things will eventually work out. supply always finds a way to meet demand.
    Permalink posted 02/19/2008
  19. starstuff
    starstuff says Good point RSchaut. Cheers me up a bit. Everybody go pay to hear live music this weekend, ok? But shouldn't songwriters and artists be paid for their recorded work as well? Or do they have to perform it again to make a buck? While we're at it, how does mog get paid? And how, if at all, do the songwriters and artists of the content on mog get paid for its use here? If I upload a favorite song to mog, is there any mechanism for the artist and songwriter to get paid, or does mog make it's money off of my love of someone's art without compensation to the artist? Just askin'.
    Permalink posted 02/19/2008
  20. RGM
    RGM says As I've asked in the past where is ASCAP and other music publishing companies in this whole thing? They are the one's whole go to bussinesses and collect royalties based on a song list. Sorry to MOG and other online sites that allow free downloads, but I've always thought this is one way how artist and record companies can make money. It should be easier to keep tabs of playlist's with todays technology, unlike in the past where it was more based on guess work. I also agree that sales for a CD (a piece of plastic) are, and have been overinflated for a while, and I will add you do get more for your money on a DVD. I have to also agree somewhat with starstuff that "We're still a bunch of looters" it is what it is. That being as it has been seen by the whole industry, that music is the product. This includes many artist. That is why you have Metallica and I have also heard Jimmy Page, sueing people for dowloading music for free in the past.
    Permalink posted 02/19/2008
  21. Lady Miss Ian
    Lady Miss Ian says "The Internet Killed Music....? No....it killed the distribution and management of product as we know it today." Spot on, Paul. Having been a victim of the effects of declining CDs, I've had personal experience on how the digital realm has killed the distribution and management of product. But, I've taken a philosophical point of view on the situation and like to look at it in comparison to the early days of television and radio. Both were new ways to "deliver" entertainment. Movie studios thought TV would kill film. Nope. It went through some hard years (and years), but evolved. Did radio diminish revenues of theatres or concert halls because nobody had to leave their house to seek out entertainment? Sure, but it didn't kill live entertainment, and radio evolved as well. It's such a larval time for digital music, which makes it difficult to say "yes, this is the definitive answer for getting everyone paid." What's important is to just start throwing methods at the wall until something sticks. And even if something does catch and it still makes people feel shaky, we shouldn't worry to much. Odds are it's not the final and penultimate form that that method is going to look like. If the 1/10th penny actually pays the artists, the marketers, the digital distributor, and the label (whether the artist is on or uses one or not), will be the test. Why not try? The trouble with music as a business is that it's an art. The trouble with music as an art is that it's a business. [Don't know who to credit that quote to, but it says a deep truth.]
    Permalink posted 02/19/2008
  22. redmiller1
    redmiller1 says Can't say I agree with your economic arguments, David. I play in a band that's not on a major label. We're definitely a regional act, we play a fair number of large shows, get some regional radio play, and while we like to think our fan base is growing. But the truth of the matter is our musical bread and butter is the weekend bar gigs. Now we have 2 CDs out on our own label. We're pretty parsimonious with our recording costs, but excluding CD manufacturing costs, it still costs us almost $5000 to properly record and master 12 songs (50 minutes.) And don't tell me about the dropping costs to record with computers. We're hip to all the latest technology. You still need good mics, a good room, and someone that really knows what their doing with the technology. As an artist, and a technologist, I understand the work that goes into making a decent musical product. Now as far as income, we run our stuff through CD Baby for the convenience, and because they provide a heck of a service for artists such as ourselves. I'm OK with Apple and CD Baby taking a cut as a distributor, and I'm OK with only getting 64 cents of every iTunes download. I'm also OK with getting 9/10ths of a cent for a stream on Rhapsody. It's minimal, but to suggest it should be less does not strike me as a fair shake for the artist.
    Permalink posted 02/19/2008
  23. RSchaut
    RSchaut says But shouldn't songwriters and artists be paid for their recorded work as well? Or do they have to perform it again to make a buck? Songwriters already benefit from performance royalties. For the artists who do perform, recorded music becomes advertising. Wouldn't that be sweet? Produce an album to promote your tour rather than doing a tour to promote your album. For the artists who don't, or can't, perform, well, I'm not sure the word "artist" applies.
    Permalink posted 02/19/2008
  24. david hyman
    david hyman says RGM, no one is saying free downloads. ad revenue is collected from labels and indie aggregators like ioda, the orhcard and distributed accordingly. (like they do with download sales - whether artists are getting compensated correctly is another seperate issue that needs to be worked out and watched CAREFULLY.
    Permalink posted 02/19/2008
  25. david hyman
    david hyman says redmiler1, how much do you think you are making from rhapsody at a penny per stream? i'm talking a smaller piece of the pie from a much much much bigger pie. i'm talking every site on the planet putting it out there.
    Permalink posted 02/19/2008
  26. soundgirl
    soundgirl says right on RsChaut! the tools available to discover new and interesting music have never been better than they are right now. the labels were good at promoting their favorites (those artists they perceived as having the highest rate of return on investment) for the mainstream but that system was never beneficial for all the great not-so-mainstream artists many of us cherish. music blogs (like MOG and many others), myspace, etc. HAVE leveled the playing field. this is an exciting time for artists with talent and work ethic who take advantage of the many DIY channels available for promoting themselves and their work. It's also a great time for fans who reject label spoon feeding and take the initiative to surf the information streams available online in search of exceptional music.
    Permalink posted 02/19/2008
  27. RGM
    RGM says redmiller1: 64 cents of every iTunes download thats pretty good! I'm sure the record companies want some of that action. They gotten a bigger cut in the past. I know CBS owns Last FM, and that worries me from an indie artist view point. Lady Miss Ian: I also agree with paul, "The Internet Killed Music....? No....it killed the distribution and management of product as we know it today." As far as the statement, "The trouble with music as a business is that it's an art." The trouble with music as an art is that it's a business." It is ,and has been for a while, ever since it was seen that getting it to the masses means big bucks. Like Rob Halford once sang, "out there's there a fortune waitng to be had, you think I'll let it go your mad you got anotherthing coming."
    Permalink posted 02/19/2008
  28. RSchaut
    RSchaut says Here's a video of New York University's David Purcell. The bio from the site where I found this reads: "David Purcell teaches and advises in the Music Business program at New York University's Steinhardt School of Education. He specializes in the economics and legal underpinnings of the music industry."
    Permalink posted 02/19/2008
  29. Iren
    Iren says I would point you towards the wired magazine music issue from 9/2007 where Terry McBride the CEO of Nettwerk Music Group.. has what I really think is the only way for labels to survive (read the whole thing at http://www.wired.com/wired/archive/14.09/nettwerk.html).. really when it comes to the majors I can't really bring myself to care, as they did this to themselves with their greed and bean counting....
    Permalink posted 02/19/2008
  30. david hyman
    david hyman says iren, if it wasn't for the back catalog of the world's library music that is in their hands, i would feel less empathy too. that being said, there are many people at those labels that care a bunch. they got jobs there and work there cause their music junkies, like us.
    Permalink posted 02/19/2008
  31. RGM
    RGM says So what your saying David is that ad revenue collected from labels and indie aggregators like ioda, have somewhat replaced the job of collecting fee's like publishing companies use too?
    Permalink posted 02/19/2008
  32. Iren
    Iren says David, I see your point, however a fire sale on those back catalogs, maybe bought and managed by people who worked at the labels and have been stopped from doing reissues or working with those catalogs might be a good thing. Those back catalogs are assets and the are not going to far... and honestly we are already starting to see the copyrights of a lot of music from the start of the rock era expire in europe allowing for reissues of a lot of stuff that the majors have kept locked away..... I think this is simply a case of a bloated over extended business needing to die to be reborn. I wish that we could go back and see the music industry change over from sheet music to recordings and see if these same issues were discussed then.
    Permalink posted 02/19/2008
  33. Michael Goldberg
    Michael Goldberg says I worry too about indie labels. Since at least the early '80s most of the really good music has been released by indies. Even in the mid-to-late '70s, bands such as R.E.M., Patti Smith, Devo, the B-52's ad many others had indie releases. Their survival is very important, and they need made money and their bands been to make money if we are going to continue to enjoy all the great artists that are discovered by indies. Think what the music world would be without Feist, Broken Social Scene, The Decemberists, Big Star, Death Cab for Cutie, The Replacements, Elvis Costello, Graham Parker, Modest Mouse, American Music Club, Sun Kil Moon, Red House Painters, Spoon, Pavement, Sonic Youth, Nirvana, Soundgarden, Sleater-Kinney, Deerhoof and I could list 100s more.
    Permalink posted 02/19/2008
  34. vannatta
    vannatta says The ad supported distribution model isn't any different than what we had before, radio ads supported the performance royalties paid by radio to the artists, in the same way that selling beer at the local gin joint paid everyone in the art food chain as well (well, those that paid their BMI or ASCAP fees anyway contributed...) - except with one important exception on the new model - now the playing field is leveled for the source - without whom, there would be nothing to sell around it, (unless it was all talk radio) and of course, that doesn't go over well in a nightclub/bar setting, and there would be nothing for beer companies to sponsor on the road - to boot... With good technology - all combined together - collaborative filtering, combined with machine listening, and yes - even editorializing/blogging here on MOG and elsewhere - and other technology too numerous to mention) the artist can receive more and more direct money by cutting out the middle man. Very exciting times! If the labels (indie or major) still serve a purpose to artists in that new world then they will need to prove it beyond the easy barrier to entry of said technology. Or the easier barrier to entry of creating forums around music... (and yes, the technology needs to be combined in unique ways, extended, and perfected) and then you can have something like a penny (or why not 2-5 cents?) paid directly to the artists on a subscription basis - directly from their own servers ultimately - (or a new business that provides it...) Whether music is streamed or not... you're renting it ... for 5.00 (not a bad price to remove the ads and a model not seen enough on the Internet in general - but proven as a model) then yes, at 100 plays a month - there is money to be made for everyone - after all that's only a dollar a month for 100 plays - but artists have to start getting their fair share for recorded material(!) - if there's 5.00 a month in that model, then the musicians/writers should see at least 2.50 of that, and the real entrepreneurs in music (and yes, most musicians are the very embodiment of the definition of entrepreneurs) can easily get all 5.00 of that money as well - without paying the middle man. The Internet has done nothing more than eliminate the middle man - and it will do it more and more effectively, in a very short period of time. You could even be fair and say, if you have reached 20 plays on a particular song, then you own it ... we already got our 1.00 or whatever it would have been to download the track... No matter what happens, I welcome all the changes that are coming - and I think that ultimately it will be good for everyone, and if musicians play their cards right (or new businesses play it for them) then the musicians will ultimately win out in the end - and IMHO it is about f*ckin' time that happened...
    Permalink posted 02/19/2008
  35. david hyman
    david hyman says regarding your statement that "You could even be fair and say, if you have reached 20 plays on a particular song, then you own it ... we already got our 1.00 or whatever it would have been to download the track...", that's a very interesting idea. never heard of, or thought of that.
    Permalink posted 02/19/2008
  36. contrabandwidth
    contrabandwidth says I don't feel one more subscription (i.e. bill) would be the solution for most of us, at least with broadband/high speed connections to the internet being way over priced in America for what they deliver (and with more and more filters and interference put in place everyday by At&T and Comcast to slow or stop huge file transfers) it just wouldn't be worth it. Those of us music junkies who are on a fixed budget, a high speed connection is one of our few luxuries that allow us to access and discover that music fix we need. I only have a broadband package, not a bundle cable/tv/phone, which many people are sold on. In my area your talking close to $150 for all of that. I pay near $60 just for broadband, and that is tough some months. Online may be changing the face of the music industry, but if we don't have more people pushing Net Neutrality and competition between ISP's, than the monopolies will put the final nail in the online distribution model, making a new bloated and bureaucratic model of business for the music industry where the distributors like BMG and Sony are just replaced by Comcast and AT&T. Music will still continue to be over priced because of these new middle men. I don't see how this will be a soluble business model if we have the new biz model of paying more money for access to higher trafficked sites.
    Permalink posted 02/20/2008
  37. redmiller1
    redmiller1 says David asked "how much do you think you are making from rhapsody at a penny per stream?" I know exactly how much money I'm making from Rhapsody. I get statements from CDBaby that tell me which songs are streamed, how many times they're streamed, and how much money I've earned from Rhapsody per song. I've been very pleased with CDBaby's service. While there are plenty of horror stories about rat-bastard record companies, CDBaby appears to be following a good business model. I recommend them to other artists. Speaking of other artists, my friends in the Boat Drunks were recently released from Hot Tomato Records and are no longer having their music distributed by Redeye. They've now moved to CDBaby, too. http://www.boatdrunks.com/
    Permalink posted 02/20/2008
  38. Me and the Horse I Rode In On
    Me and the Horse I Rode In On says I just read your post. Haven't had time to read all the comments.................sorry if this has been said earlier. Right now I just think that too much music is for sale. I know lots of people have made huge amounts of money making music and some has made a fine living. I think a lot of those people must realise that music is a hobby or part of a career. I'm not sure that labels will survive............but hey. Do we need to keep labels alive? The music will always be there. The real artists are in this game because of the love of music. They don't make a lot of money in the first place. Let's cut away all the crap and let the artists and consumers communicate directly. This business has gotten too big and too much noise has been created. It's time to lose the major hits and artists kept alive because of heavy marketing and tabloids. Make some room for the real artists and enable them to let their music be heard, find their audience and spread their music. More on this later.....................................
    Permalink posted 02/20/2008
  39. david hyman
    david hyman says redmiller, i understand you know the exact amount. what i meant was, "are you really making much?" if the rate was less, you'd be getting a lot more money because people would be listening on thousands of sites, free to consumer. here's the math: 500 plays per month from rhapsody pays a total of $5 from rhapsody through cdbaby 50,000 plays per month from free to consumer services provided by mog, google, myspace and countless others at 1/10 of a penny pays you $50 through cdbaby.
    Permalink posted 02/20/2008
  40. pete
    pete says Word!
    Permalink posted 02/20/2008
  41. Me and the Horse I Rode In On
    Me and the Horse I Rode In On says I'm not too sure this will have an effect in regards to the artists. MOG, Google, Yahoo, LastFM etc etc etc will benefit because this idea enables them to stream a lot of music at a very low cost. I like this idea and will help make streaming music everywhere legal but I think we still need to look elsewhere for a solution that will truly benefit the artists.
    Permalink posted 02/20/2008
  42. david hyman
    david hyman says nice post cody b. yeah. 320kbps. i'd pay for sure.
    Permalink posted 02/20/2008
  43. Cody B
    Cody B says I lost my job from the same company Lady Miss Ian did, and just about anyone who was in the record industry had moaned for years that we weren't doing enough to make the transition to an online model. Now the horse they rode in on has left the barn.. During the time I was in the music business,I never downloaded a song for pay or free. Now that I'm not in the music business I do just about as I please and plenty of it, although I still buy CD's..probably more than ever. Streaming to me is just OK..It is definitely not the way I find out about music and so far it is not the way I want to listen,because even the biggest services don't have everything. Since MOG started dealing with rhapsody,I'd say 75% or more of the songs I've posted were not available from the R. I totally agree that streams should be free..Just a short time ago major labels were practically giving away singles (the cassingle era) and that should be the way they proceede now. I agree about a sound quality upsell..even in blog land the 320 upload is revered. The industry hasn't said boo about sound quality when it was part of the reason CD's blew up in the first place. The most amazing thing to me about Blogs and music communities is how much content folks create for free. Here at MOG folks are churning out reams of excellent content about music. If folks are sharing music that is less than full quality and not making any dough from it what is the problem? But what if Bloggers did get paid? and also had to pay an ASCAP/BMI type fee for use like a bar does? It seems like there's an army of distributors out here..
    Permalink posted 02/20/2008
  44. David Shantz
    David Shantz says It seems the inevitable equation is a larger audience with less spending from each. Perhaps a realistic goal for the music industry is $3 - 5 per person per year. It's going to cramp someone's style -even if the market could be defined as a Billion listeners. There's a news flash: Facebook valued at being worth more than the music industry... Truly, there is something out of balance. Another perspective: As a data point, I buy more CDs than ever. Mostly used, then RIP to a huge storage device. The reason is sound quality. The web is far too unreliable and the sound quality is weak. With data storage at below $500 for a Terrabyte perhaps there is a subscription model where most all of the music a subscriber might like is included on a wireless storage device? Like Tivo, without the cable in the back.
    Permalink posted 02/20/2008
  45. Me and the Horse I Rode In On
    Me and the Horse I Rode In On says David: Create the MOG-fest. A two-day festival promoting the "most popular MOG bands" + "the discovered on MOG - bands". A way to get these artists more attention and a little dough on the side. Crew: MOG volunteers Full-video broadcast on MOG for those of us living too far away. Take it from here!!!!!!!!!!!!!!!!!!!
    Permalink posted 02/20/2008
  46. david hyman
    david hyman says me-horse-on, we've been planning it. it's called the moggie awards ("the moggies") - we have a live event that is video broadcasted online. get some artists to play, bring in sponsor, etc. we've got new ad sales machine who can bring in advertisers to sponsor and pay for the thing.
    Permalink posted 02/20/2008
  47. kaluss
    kaluss says i went into ''long island sound'' a local cd/record store today...just to buy a cd. any cd. i felt bad for them.
    Permalink posted 02/22/2008
  48. ebuzzmiller
    ebuzzmiller says Dave, agree with 99% of what you're saying, but it isn't just the labels that are keeping the rates high. What about the music publishers, and the performing rights societies, all of whom want the rates to INCREASE, not go down........this is a challenge that doesn't get covered enough.
    Permalink posted 02/25/2008
  49. kristiana
    kristiana says Oh, and where would this Mogathon happen possibly? California, right? Dang. Or are there other contenders? It would be great if it were in one of those cities that has always been about the music, just to make it that more meaningful, don't ya think...New Orleans? Nashville? Chicago? Heck, I'd get my butt to one of those fine cities, ya wanna believe it. http://mog.com/kristiana/blog_post/139387
    Permalink posted 02/25/2008
  50. kristiana
    kristiana says What a great read, thanks Dave. What Henry said. While it would be nice to make a living from one's music, that is not why the great ones do it in the first place. They make music because they HAVE to. The Arcade Fire was a little indie band from Montreal. After putting out ONE record Bowie is singing your praises? Then Springsteen gets in on the love. Whether you like them or not, they have something going for them. They took a chance, struggled, but kept going on. Because they had to. They're playing from the heart. I dunno...why am I rambling about this? When talk becomes all about money and who is getting paid...I just find it obnoxious. Constant touring would be a hard life, not everyone can do it. It would be quite something to take on in order to make a living at it. A blessing and a burden. But why are we making music in the first place? To make a connection, to meet new people, to share a vision, a message. Hopefully.
    Permalink posted 02/25/2008
  51. fastnbulbous
    fastnbulbous says Lady Miss Ian is onto something regarding comparisons with radio, film and tv. Musicians tried to boycott recording when they felt jukeboxes and radio were taking away their live gigs, which was their sole income. The film industry was alarmed in the '50s when television threatened to steal their audience and turn them into a bunch of, ahem, freeloaders. Then VHS tapes and VCRs were supposedly going to kill the film industry. And home taping. Around and around it goes. I think David's model is reasonable, except for one problem. When I was a partner in a media company, I did research on convergence, and saw a big bottleneck in terms of infrastructure. A fair amount of fiber optic cables were laid out between cities for corporate use, but no one was willing to build the roads that lead to the superhighways from residential areas, leaving us well behind Europe for universal access to fast broadband. I'm not totally up to date on what has been done in recent years, but I think that's one reason why we still have the problem with a small number of companies demanding pretty high prices on connections that aren't all that fast. I'm webmaster for the central office for a large national nonprofit, and we do not allow people to stream music or video -- we just don't have the bandwidth for 200+ people to do that. People who want to listen to music at work bring it on their players or flash drives. So I don't think anything's going to change overnight. It was nearly a decade ago that Napster first made a splash, yet albums are still released on CD. Sales may be down, but as long as there is money to be made with the format, it will remain available. I know I'll continue to buy them until at least three things happen: 1) A better codec than MP3 is adapted by nearly all devices. I'm rooting for FLAC, as I'm not comfortable with Apple having control over that; 2) all music can be purchased in uncompressed and lossless audio for reasonable (considering the money saved on manufacturing materials, discs, cases, booklets, distribution, etc.) prices, like $5 an album; 3) more reliable RAID style storage gets cheaper.
    Permalink posted 02/25/2008
  52. jonsmirl
    jonsmirl says Why specify only ads supported? There are other models that work. Instead let's get the music industry out of retail and license cellphones, web sites, etc as wholesale and let them do what they want with the music. The monetizable point in music is when it is being browsed and selected, not when it is being played (radio is dead). Adapt a model that maximizes this behavior. Selling a track, forcing the consumer to archive it against loss, and then rebuy it for different DRM schemes does not maximize browsing on revenue generating sites. It does the opposite, it drives the consumer to the P2P networks. Alter the model to maximize the monetizable browsing. If downloads are free and of high quality people will visit these licensed sites to browse and chose their music. Since it is free to download nothing will stop them from deleting and redownloading again as their environment requires. This would happen all of the time as MP3 players are bought and replaced. Get a new disk/computer - download the music again. It won't be worth the trouble to copy from one machine to another. The sites on the Internet will remember your collection and help your rebuild it (this is a monetizable browsing activity). The collective redownload churn in a free download environment produces billions of page views. Since downloading is free P2P evaporates. The RIAA even has something to do, it can chase the commercial entities that aren't licensing - much more respectable than chasing grandmothers and children.
    Permalink posted 02/25/2008
  53. Cody B
    Cody B says Make the Bloggers distributors model explained by someone who thought about it for more than 10 minutes http://www.eff.org/wp/better-way-forward-voluntary-collective-licensing-music-file-sharing
    Permalink posted 02/25/2008
  54. david hyman
    david hyman says jonsmirl, i agree. someone should be able to buy a nokia phone where the cost of the phone has the free music built into the BOM (build of materials) cost. no doubt, this is a viable model that could/should operate in parallel.
    Permalink posted 02/25/2008
  55. starstuff
    starstuff says OK, I know the discussion has moved past this by now, but you all might find this interesting anyway. Here's a link to a video of Gene Simmons saying similar stuff as I posted before on Dave Navarro's show. http://www.maniatv.com/shows/spread-entertainment/videos/dave-navarro-spread-entertainment-gene-simmons-record-industry-has-changed-ep-15-082307 I like the good ideas that are getting generated here and in lots of places, but I still think file sharing and copying music for free has set back the industry and the artistry quite a bit, and those of us that have participated in that are all partly responsible. Like I said before -- everybody go out and hear live music this weekend!
    Permalink posted 03/01/2008

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