snapshot 3/17/08

Indie labels take e-commerce into their own hands
With their digital download sites, a growing number of indie rock labels have begun to answer the prayers of fans who would love to hear long-out-of-print singles on their iPods or other mobile devices. Merge Records became the latest to join the field with the recent launch of its online emporium, which, according to label president Mac McCaughan, features "high-quality MP3s and full FLAC (free lossless audio codec) files of recent, older and out-of-print titles, including all the early Merge singles, as well as the Superchunk 'Clambakes' series." The store will also eventually host exclusive tracks, remixes and video content, in addition to the label's catalog.

Such sites can also help foster a new ethic of digital-song ownership. After a song is purchased at Seattle label Sub Pop's download store, launched in fall 2007, "you can log on to your account page and download it as many times as you want," director of technology and digital development Dean Hudson said. "We are also able to do things like automatically upgrade songs without any cost to the buyer once the song becomes available at a higher bit rate. And of course, all the songs are (digital-rights-management)-free."


More bands embrace the option of giving away music
The two latest bands to offer their new albums online for free are advancing divergent versions of the business model Radiohead introduced in fall 200 Where Nine Inch Nails' approach, like Radiohead's before it, draws fans in with free music and then offers additional music for purchase in more extravagant configurations, the Charlatans UK release doesn't seem connected to any such game plan.


California looks to tax iTunes, other downloads
Mirroring efforts by a number of other states, including New York, legislators in California hope to apply sales taxes to iTunes and other digital downloads, according to the Orange County Register. The tax would result in the price of a 99-cent song going up to $1.07 or more for California purchasers, while more expensive downloads would also increase by roughly 8 cents on the dollar. Digital downloads from Apple and other companies would all be subject to the tax requirement. However, the report notes that the legality of California’s proposed “iTax” has come into question, as Assemblyman Charles Calderon of Whittier is attempting to use an unconventional and likely illegal voting strategy to get it passed, circumventing the state’s requirement that two-thirds of the legislature approve of any new tax. Consequently, should Calderon’s bill be voted into law, it will likely face immediate enforcement and other legal challenges.


LimeWire DRM-free music store launches
The U.S.-only store currently has a catalog of 500,000 tracks, with thousands more to be added “daily”. All music is offered as MP3s encoded at 256 kbps and priced a la carte at 99c per track. Additionally, LimeWire is offering pre-paid plans similar to eMusic, ranging from $9.99 per-month for 25 downloads (40c per track) to $19.99 per-month for 75 downloads (27c per track).

Despite being at least six months in the making, the LimeWire music store is a purely Web-based affair and doesn’t yet tie into the LimeWire P2P client. On that note, LimeWire says that in the future it “will be releasing a version of our file-sharing software optimized for integration with the Music Store.” That way, LimeWire can begin to leverage its, albeit shady, brand recognition amongst music down-loaders in an attempt - like Napster before it - to develop a legitimate business in the onlooking eyes of the music industry.


Retailers clash with Pepsi over free music downloads
Pepsi is at odds with some of its biggest US retail customers over a national marketing campaign offering free digital music downloads from online retailer Amazon.

But the partnership has antagonised rival bricks-and-mortar retailers. Amazon's media and electronics business competes directly with Wal-Mart and Target, the two largest mass retailers, while its rapidly growing grocery business competes with major supermarkets. "You have to ask yourself why Pepsi would team up with a company that doesn't sell its products, and risk antagonising all the people that do sell its products," said a source at one retailer.

In an apparent response to retailers' concerns, Amazon's name has been banished from the front of Pepsi bottles carrying the promotion - rendering it invisible in supermarket aisles to passing shoppers. Similarly, Amazon's logo is on the back of cardboard multi-pack cartons of cans that are stacked on the shelves of mass discounters and supermarkets, next to the product's bar code and nutritional information.


Songkick Attempts To Rank Band Popularity
Songkick, a concert listings website, has introduced a new online application that attempts to rank a band’s popularity online. The site measures band popularity by gauging activity levels on MySpace, blogs and Amazon sales rankings.

The results are heavily swayed towards currently touring rock bands, but it’s entertaining to pit your favorite bands against each other. Unfortunately, the technology is somewhat clunky. In the battle of the bands chart above, The Chemical Bros. received a Zero in overall rank, which tells you something is amiss — but the concept is provocative.


Indie labels bypass iTunes, give digital sales a shot
So why are some indie labels ditching the cheap and easy distribution channels and doing their own digital distribution? "Money" and "shelf space" (or the digital equivalent of shelf space) are the answers. The money angle is simple enough: the label slaps up a store, offers its music for sale directly to fans, and splits all the profits with the artists. Steve Jobs doesn't get his pound of flesh.

Nor are the labels at the mercy of stores like iTunes, which choose which artists to promote. The blessing of a major retailer can be a good thing, as it is for artists like Feist who are lucky enough to appear in an Apple television ad, but it generally means that small acts won't be prominently featured on the iTunes Store. Unless buyers already know about these bands, they're unlikely to discover them through browsing. Building your own store solves this problem and allows labels to feature the bands they want, when they want.

But in the digital, long-tail era, such stores can succeed by targeting a niche fan base with exclusives, rarities, and out-of-print material. They can also cater to online buyers concerned about audio fidelity by offering lossless versions of tunes, something that the major stores don't even make available.


Music on the Web awaits non-techies
The shift to the Web hasn't caught on with people who, like Ms. Berry, feel that they don't have the time or the technical know-how to track new music online. But in fact, to reach casual fans, several Internet sites have developed easy, typically free ways for music lovers to cut through the clutter: music search engines, music-streaming sites and music-based social networks. Some musical artists are using these sites to connect with their fans on a more personal level, too.


Does This Latte Have a Funny Mainstream Taste to You?
In 2005, Starbucks looked like it was going to do for undiscovered music what it had done for the nonfat latte. The company decided to stock “Careless Love,” a CD of sophisticated pop-jazz songs by Madeleine Peyroux, who had attracted only a modest following in this country, plying her craft in small bars. Ms. Peyroux soon found herself at No. 81 on the Billboard chart, and has become a mainstay of jazz.

Starbucks was betting that its eclectic taste played to the upscale atmosphere of its coffee shops, where it enticed customers to pay $4 for their daily caffeine fix. And record companies saw Starbucks at the vanguard of a new class of unconventional sales outlets that could keep the CD alive in an age of digital downloads.

But the ardor for Starbucks has gone the way of yesterday morning’s grounds. Critics in the music industry say the company squandered its cachet by mismanaging the effort to broaden its music mix. The choices that reflect its early taste for the offbeat — like an album from Lizz Wright, a torchy pop singer — are now squeezed in with offerings not unlike those at Wal-Mart, including the latest releases from Alicia Keys and James Blunt. The shift has not been lost on some customers.