As part of Apple’s efforts to improve on the shortcomings of its popular iPhone, the company has approached some of the major music labels to try to expand the variety of ringtones and other musical features available on the device, several label executives said last week. The negotiations are very active right now and a final deal has not been set, said the executives, who requested anonymity so as not to disrupt the ongoing talks.
Also under discussion is whether Apple can sell songs from its iTunes store directly to iPhones over the cell-phone broadband network. With the next generation of phone expected to use much faster 3G technology, this is technically feasible. Here too, music labels argue that they should be paid more for an over-the-air download than a standard track bought over the internet, where the wholesale price is about 70 cents.
Pennywise, Poundwise: MySpace Free Experiment Pays Off
But others, including Pennywise, are also pushing gratis concepts and helping to define best practices in the process. In March, Digital Music News reported that the band attracted 500,000 takers on a free album giveaway driven by MySpace Records. That figure eventually notched to 640,000, according to MySpace, though 400,000 actually completed the process to secure the MP3s. "On top of the 400,000 downloads, we've scanned over 20,000 albums in the US and another, roughly 25,000 overseas," MySpace Records executive J. Scavo told Digital Music News on Friday. The giveaway officially ended in April.
Now, the band is seeing some meaningful results, boosted by the MySpace project. That includes a well-charting single, and according to Scavo, significant jumps in concert tickets, tour guarantees, and merchandise sales. After playing sold-out dates in Japan and Australia, the group is now hosting shows in the United States through mid-June. And the band is being factored into the Vans Warped Tour this summer. "If you ask them, their career has been revitalized far beyond their expectations," Scavo said.
Backstage Seeks To Distribute Free Music For The Long Tail
That’s the premise of an attempt by Grant Blakeman and the Backstage project, a startup that seeks to present bands with an easy way to grow their listener bases through the distribution of free music and video downloads. Built squarely upon the concept that the release of music albums and singles need not directly cost the prospective fan - or even the existing follower - anything other than his or her attention, consideration, and basic personal information like name, area of residence, and email address, Backstage presents bands with the option to create pages through which to promote recordings, DRM-free, with audio fidelity reaching as high as 320kbps, for a small fee: $12, $24, or $36, depending on desired download limit. (150, 500, or 2000 downloads, respective to the price plan, with file size limits of 50MB, 75MB, and 100MB. Per-download overages are $0.02-0.03.
Music promotion via Backstage can work one of two ways. People can first pay a visit to the site, where they can download albums, and subsquently be listed to receive tour announcements and other relevant updates about artists through email. Or, if a event is planned, artists can purchase cards ($50-$210, depending on quantity) to distribute to attendees, who in turn can venture to Backstage to grab downloads of songs they may or may not have heard at the live performance.
Rock's New Economy: Making Money When CDs Don't Sell
For Austin rockers Spoon, 2007 was a breakthrough year — but not because they sold a lot of records. Ga Ga Ga Ga Ga, their album on the indie label Merge, garnered more radio play than any disc in their 15-year history and earned them an appearance on Saturday Night Live. So far the disc has moved just over 250,000 copies, according to Nielsen SoundScan — about half of what Spoon's manager, Ben Dickey, believes it would have sold even five years ago. "But as far as the band is concerned, the record is a hit," says Dickey.
The reason? CD sales are no longer the yardstick the band uses. While hip-hop and pop artists ranging from Jay-Z to Britney Spears have long used recordings to sell every- thing from perfume to liquor, rockers are only just starting to think of album sales as a component — rather than the sum of — the commercial equation. Spoon have been actively licensing their music for use in films, television shows and a Jaguar commercial, making money, gaining exposure and moving up from clubs to 3,000-seat venues.
Music 1.0 Score Card
Record Label Market Share 2007 -
- Universal 28.8% (up from 25.7 in 2006)
- Sony BMG 20.1%
- Warner 14.4%
- EMI 10.9%.
The value of physical and digital recorded music sales fell 8.3% in 2007 to $18.9 billion. Of that, digital sales rose to $2.9 billion from $2.1 billion in 2006, equivalent to slightly less than 15% of total sales.
Subscriptions Picking Up Steam
Typical music subscription services have yet to move out of niche status and have pretty much performed below everyone's expectations. Other types of subscriptions, on the other hand, are proving to be an increasing popular purchase option. eMusic is the most popular and most obvious of the download subscriptions, and Audio Lunchbox has a similar product offering, but a number of artists and labels are finding new ways to capitalize on consumers' desire for music in bulk. Earlier this month, Magnatune launched download memberships that give buyers access to its entire catalog. A streaming membership costs $9 per month and an all-you-can download membership costs $18 per month (there are three-month and annual options). For the download plan, files are offered in WAV and MP3 formats. Magnatune founder John Buckman wrote about the download plans at his blog and said daily revenue increased 150% before the subscriptions were even announced. In another post, he showed the results of a survey in which 45% of respondents said they would be interested in signing up for a CD club.
Speaker company Bowers & Wilkins has just launched a music club that once a month gives subscribers exclusive album downloads in lossless files. Each album will be recorded at Real World Studios in Bath, England, with which Bowers & Wilkins has a partnership. Membership costs $39.95 for three months or $59.95 for six months. Equal Vision Records is offering a 2008 Release Subscription. For $60 (plus shipping for the first shipment) the buyer gets a CD of every Equal Vision title released in 2008 (expected to be from seven to ten titles) and an Equal Vision t-shirt.
Negotiations Leak: Could Variable iTunes Pricing Be on the Table?
Steve Jobs wants to extend Apple's lead in online music sales to the mobile market, and the 3G iPhone expected next month positions them to make the iTunes store available everywhere you have signal. Jobs also wants in on the ringtone and ringback tones business -- thoroughly impulse buys which become feasible on the iPhone only if purchasing can be done outside of a hot spot. Trouble is, he needs some new deals from the record labels to make this happen. The record labels have some demands of their own -- chief among them variable pricing. As music licensing negotiations between Apple and the labels continue, the labels hope to trade mobile delivery for variable pricing, according to a New York Times' record label executive source.
TouchTunes pushes Usher with iTunes pre-order
TouchTunes is giving away iTunes material as part of a multi-pronged promotional strategy, according to an announcement. Visitors to bars and other public places can now queue Usher's "Love in This Club Part II," from one of TouchTunes' digital jukeboxes; by agreeing to submit an e-mail address, they can pre-order Usher's new album on iTunes with three bonus tracks, and meanwhile download the single, plus the original "Love in This Club" music video. The album otherwise goes on sale May 27th.
Gabriel launches music download service for purists
The subscription-based music club will offer users one new, exclusive album per month, delivered in a "lossless" music format that provides CD-quality sound, one of the best recording formats currently available. The service promises to offer subscribers an eclectic mix of music from established acts as well as up-and-coming artists. It's aimed at music aficionados and audiophiles who value high-quality recordings, but who aren't currently catered for by online music services. Most download sites sell songs that have been digitally compressed to reduce the size of the file and make it quicker to download, but this process also diminishes the audio quality of the recording. Lossless tracks, by contrast, are optimised for fast downloads without compromising sound quality.
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