Questions For The Digital Music Business and The Rise of Band Blogs
Looking back at the SanFran MusicTech Summit earlier this week, a few notable moments stand out that reflect on the state of the digital music business and how a new crop of startups may shape its future.
Perhaps the greatest challenges to companies like MySpace Music and Facebook may not be from the big players, but startups that offer artists greater control over their work and pricing flexibility.
In one of the sessions, I asked a panel of digital music executives how they see business faring when revenue comes from advertising. Anthony Batt of Buzznet said he was too busy thinking about the fourth quarter. "I'm not an economist," Batt said. I pressed and asked what they were projecting for 2009. He said the market looks "uncertain." Josh Brooks, vice president of MySpace Music, said that as the economy worsens, people will spend less money on entertainment. They will spend more time at home. They will go online more often. Advertisers will want to reach those people where they are spending their time.
This is fair picture. Forecasts generally call for moderate growth in online advertising through 2009. eMarketer expects the market to increase 14.5 percent in 2009.
Even with this outlook, digital music companies face challenges above and beyond what lies ahead with the economy.
MySpace Music is definitely the big player, but criticism about the service ranges from a poor UI to how they treat indie labels. Add to that a potential competitor like Facebook and the issues intensify. Brooks took repeated questions about why they gave the major labels preferential treatment. Brooks said that MySpace Music will phase in new services to provide the indies more of a presence. That reality materialized today. Digital music distributor IODA has signed on to make its catalog available on MySpace Music.
But perhaps the greatest challenges to companies like MySpace Music and Facebook may not be from the big players, but startups that offer artists greater control over their work and pricing flexibility.
Rise of the Band Blogs?
Of the startups that presented at the conference. Bandcamp received some of the highest acclaim. BandCamp is a blog platform designed for musicians. The platform is similar to Blogger or Wordpress but with limited flexibility. The service is free. Sites are designed for search engine optimization. The site has a Flash player but everything around it is HTML. BandCamp includes an analytics platform that details page views, music sales and what tracks musicians played. The service integrates with Paypal. Tracks may be offered for free.
Artists determine the price for their music. The artist uploads their tracks as .AIF or .WAV files. BandCamp converts the file and then offers the artist a selection of different formats for their play list. Artists may choose to sell the music as an mp3, for instance, at a high or low bit rate, setting the price accordingly. There even appears to be the ability to do variable pricing, something the majors have wanted to do for quite some time. BandCamp takes no cut from the sale. Musicians host their own sites.
For BandCamp Founder Ethan Diamond, the service is about giving artists control. He likes to call themselves the "very nerdy" fifth Beatle who takes care of all the geeky stuff so the band may do what they do best.
In his presentation, Diamond sharply criticized the practices of companies that do not provide artists with complete ownership of their works. Diamond has said before that Imeem and MySpace Music both fit into this camp. The companies that engage in this practice he called "online sharecroppers."
Already The Dynamics Are Changing
Steve Jang, vice president of marketing and business development at imeem, sat on the panel with Brooks and Batt. He seemed pretty quiet compared to his colleagues.
He must have had a lot on his mind, listening to his counterparts talk about the business. As we reported this week, Imeem is up for sale. They've laid off 25 percent of their staff. Warner Bros, as you may recall, sued Imeem earlier this year. They later dropped the suit in exchange for an equity stake in the company.
And so, who will purchase Imeem? Is this a play for Facebook?
Oh, these times are a changin'. :-)
Comments
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It seems that the value chain of music industry is really getting disintermediated and that social network platforms are playing the key role. There are also Ning and TopSpin that will offer similar values to artists.(Look at the Hoffspace and 50Cent pages created by Ning)
What will happen when this new trend emerges as the mainstream way to distribute music online? What if indie musicians really exit MySpace to build better profile pages? Then we may need a hub(or an aggregator) for music & musicians profiles in different platforms. In this respect, Qbox.com is an interesting model to watch. Qbox's Qplayer works like a remote control for music in different networks such as MySpace, Bebo.
Posted by: Ian | October 25, 2008 3:11 AM
Very interesting posts. The practice called, "online sharecroppers" is just the latest attempt to corral the independent artist movement. Bandcamp is the direction most sites should be heading. More Good News for indie bands
Posted by: Duane Charles | October 25, 2008 4:02 PM
Interesting stuff - like most people here at RWW it's been obvious that basic RSS could do most of what bands (and indeed people) use MySpace or Facebook for.
I couldn't see anything in the FAQ about musicians hosting their own sites though - the implication is that currently they're hosted by bandcamp rather than being a Wordpress like platform.
Ian's point is valid - there's always going to be a roll for mediators and filters, but I can see this becoming what are currently review sites (drownedinsound, etc) once services like this start offering widgets (I couldn't see an obvious mention of player widgets) that can be embedded in those pages.
The downside there, of course, is that widgets are harder to monetize, but if bands shift to self-hosting then it becomes more about sales.
What would be really clever would be some kind of way of registering a site as 'official band site' with Google, Yahoo, etc, so that it always came top of search.
Ultimate goal is to get something like '1-click' in there (maybe go for the iTunes like model where they evidently hold back charging the purchases for a few hours so they can bundle them into one payment request).
Other downsides - no matter how untechnical, many bands will always opt for a pure hosted approach - they are yet to realise that having a page on MySpace is like signing a record contract without reading the small print.
I do wonder if there is a market for a simple iWeb like tool for creating sites in specific domains. It's hard to underestimate people's technical skills at times - I had to explain to my brother why having his band site entirely written in Flash was a bad idea (and that was why it didn't appear at all in Google. And yes, I know you can make Flash searchable, but the kind of person who decides to do everything in Flash is the kind of person who isn't going to know how / why).
Posted by: JulesLt | October 27, 2008 5:41 AM
This is a total AHA moment on all kinds of levels. I love how more and more companies are empowering small, no-name talented artists to get their stuff out there. It is important to note that Myspace has allowed for lots of No-namers to rise up into the big leagues (Colbie Callait, Play Radio Play etc.) This is exactly what we're looking to do with artists as well...give control. Good times.
www.sayvee.com
Posted by: Nico Boesten | October 27, 2008 3:08 PM
If you don’t know about Lala, you’re missing out. Pretty cool, from what could be my favorite new site, Lala.com.
http://snsays.com/1742/different-digital-music-approach/
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Barbara
http://www.ipodepot.info
Posted by: Barbara | November 10, 2008 10:31 PM