ContentSphere - Music & Media in an Online Culture

I started this article two days ago (which isn’t quite correct because I started writing it about a week ago), though I have yet to come to the main part - the lessons themselves. Hope you enjoy, have your read.
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If talking to independent musicians about the benefits of distributing content for free you most certainly will come across four arguments in monolithic defense.


Please note: I won’t discuss copyright issues in here. But no matter if you give away your song for free to billions of people or if you sell a licence to one company - your copyright in your song remains unaffected. Please keep that in mind.

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I promised to, so I’m delivering. One thing to start with: This whole GEMA (Germany’s collections society) apparatus of rules, conditions and rates really is complex. If I get anything wrong - be it either to GEMA’s advantage or disadvantage - please tell me and I’m going update my article. Email me or simply post a reply below. I gladly will stand corrected.

I don’t know what it looks like with ASCAP et al. - I can’t imagine it to be worse than here.

First off, everybody being a member of GEMA who wants to address any of his problems with GEMA in court runs into an essential problem. Legally, it’s a registered society. That implies at least one important aspect: Any action by GEMA is based upon its members’ voice which means you - as its member - authorise GEMA’s actions.

But let’s take a closer look.

Continue reading "GEMA Round 2: Tie Your Artists Down by Membership " »

At this year's Midem, Mike Masnick from Techdirt gave a presentation focussed on how Trent Reznor/NIN is doing music business. It is worthwhile watching the video. Masnick's accompanying article can be found here. You will find additional comments there.

Unsurprisingly, there are some issues mentioned which might be familiar if you read my previous articles on here. Discussing the "Ralph Lauren Model" I pointed out how important the added value to a generic content is. Masnick again summarises the five most important facts:

• Motivate consumers by involving them.


• Add real value to generic content.


• Create hype to promote the product in the long run.


• Implement a pricing strategy that makes use of long tail strategy.


• Most importantly: There's a wide variety of strategies to choose from. Be creative.

In case you are reading this within your email feed, the video might be missing. Do yourself a favour and visit my blog to watch it.

At SIIA Industry Summit 2009, Pearson CEO Marjorie Scardino described the framework for Financial Times' digital and pricing strategy. Financial Times is published by Pearson.

Sardino, referring to print content, stressed the difference between generic content such as news and the value Financial Times provides by quality analysis. Apart from the brand value, it is in particular the supplier generated extra content which defines the product's market value.

But where is Ralph Lauren?

The newspaper's price has been increased which led to an increase in number of readers too. Now this is what Scardino calls „The Ralph Lauren Effect", in marketing more commonly known as snob effect.

Certain target audiences have a need to "feel" quality and identity of a product by price. Customers expect exclusiveness and social prestige in buying. You might compare it to car enthusiasts buying a Porsche's sound, or like the fact a vacuum cleaner has to be noisy to be efficient. It is about feeling the product and consumer’s identification with it. Lower the price or reduce the noise – sales figures will go down.

This phenomenon works well with exclusive goods. The price indicates the quality of product.

Print vs. music media

So can digital distribution in print media be compared to music in terms of pricing and product structure? Is it possible to transfer the Ralph Lauren model?

Let us start with one premise: The basic situation to be analysed here differs in print and media. Scardino refers to standing the competition within several print outlets. The core issue in music business is not based on rivalry. It is about 1) Upon which sources do I generate revenue? and 2) Is there a way to beat piracy?

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On MidemNet Blog, Peter Jenner shares his "Thoughts on the deal between DSPs, Content Industries, and Government for Next Generation Access". Actually, his thoughts might have their origin in a news flash from last year.

Sorting it out...

The story's beginning has to be set in March 2008 when Warner Music Group hired business veteran Jim Griffin to develop a new business model to build upon. In early December, the result hit the public. Selected universities were approached to prove if the business model would work: Students would pay a small fee, and in return they were allowed to access and download all music available via internet for free - legally. According to Eliot Van Buskirk on wired.com all major record labels apart from Universal agreed to be involved.

However, in a real world environment (outside the campus) the intention is to establish a (nonprofit) company to collect the fee in cooperation with the ISPs. With Warner's and Griffin's business model, this company ('Choruss') apparently turns out be registered by Griffin's OneHouse Digital.

Cure to everything?

Another well-known media strategist, Gerd Leonhard, announced on MidemNet Blog that at Midem 2009 he was about to show "[..] why we urgently need a new blanket license for Internet music (on-demand streaming, and downloading) that is similar to what we already have for radio & broadcasting (i.e. a collective or a compulsory license that is made available to anyone), why all the efforts of controlling music content online have failed to generate relevant future revenue streams for the creators (rather than just the lawyers), and what the alternatives will be."

Peter Jenner hails this idea as the one solution which fits the situation.

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Three weeks ago, Andrew Dubber once again tackled the question of "Why give music away for free?" on his blog. He earned more than 140 comments. That is a lot. It stirred up the a lively argument between the contributors on more than just one level. Take your time - it is an excellent read.

Here is the comment I added. I left it unedited which means there are a few referers to other people's comments. Hope you don't mind. If you like, add your two cents by adding a comment right here (or over there).

Nothing is predictable

So what remains to be a constant in music business? There’s the product, which includes performance & composition. It’s the artists, or more generally speaking, the creative bunch (whomever that will include on the technical side). On the other side of the story we’ve got the consumer. Then there’s kind of a middleware - let’s call it the platform of distribution, no matter how many third party companies are involved (if any). There are rules and a technological as well as a economical framework to deal with the product. This includes licensing & copyright law. Anybody involved intends to get their share of money. Expect for the consumer, who’s trying to pay as less as possible. IF he’s doing so.

So everything remains more or less? No, for heaven’s sake - again I’m with Andrew. If anything’s predictable, it’s a multi-dimensional complexity which arises of any constant being altered by a multitude of parameters: technology, globalization, ubiquity, The Long Tail, individual production etc.

Upside down

What’s changing in music (or media) business? Basically, anybody’s role will change - that’s quite easy to see. It’s not only the labels. And it will not change somewhere in the future, it’s already in the making. Be open minded and keep up a good amount of analytical awareness. Your tasks have changed.

Complexity arises from multiple forms of the product’s carrier (media, format, resolution, options). More complexity arises from options in the choice of distribution channels (online, offline, label, portal, aggregator, selling by yourself). Even more complexity arises when it comes to choose whether to add added value (ltd editions etc - see Tom Robinson and Julian). If that’s not enough, you can define the pricing model and strategy as an artist yourself (depends on way of distribution of course).

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