Daisy: Direct to (streaming) fans, but not marketed to them.

Two weeks ago Beats Electronics, the company led by Jimmy Iovine and Dr. Dre., announced they were starting their own music streaming service called Daisy that they will launch later this year. In a related move, Beats also made an undisclosed investment in Topspin, the online business that provides back-end digital services for musicians and labels to facilitate the direct to fan model. You can read the full article here from The LA Times.

This business play was recently the theme of serious discussion on this past week's Hypebot's Upward Spiral podcast (by the way if you are a serious musician, or serious about the music industry, you probably should be listening to this podcast). After listening to the show and reading up on the venture. Only one thought comes to mind.

You can seriously tell that the business side of the music industry is run by musicians, and that isn't necessarily a good thing.

 Let me shed some light on this statement.

One of the biggest problems with most bands, is they don't give a damn about the fan, the person who pays for tickets, music, and merch; who, ultimately, puts food on the table for the artist. If they are a cover band, they normally choose songs they want to play, not what the fan wants to hear, and then they complain that nobody is showing up at their gigs. If the band is an all original unit, it is even worse. Most of the time, these groups refuse to play covers and try to force-feed their fans their own (mostly shitty) material. Then, they too, wonder why nobody shows up at their shows.

Now, before I get a million emails from bands telling me they don't do that, I must say this isn't an absolute truth, but I will guarantee it is well north of 80% of the acts out there.

And now we have Beats, run by a musician, moving into the streaming world. And they put another musician, Trent Reznor, in charge as Chief Creative Officer of the new initiative, whatever that means. No offense to Trent, he is one talented guy, and the founder of the CwF=RtB (connect with fans = reason to buy) model, but will this business venture work out with a musician in charge?

I can already see the problem with Daisy. The whole premise behind Daisy, is that it will give fans the chance to buy merchandise, tickets, and downloads direct from the artist, while they stream their favorite tunes. This doesn't appear to be a need set-fort by fans (consumer led marketing), but rather bands and labels (business to business marketing).

So here we go again. We are going to give the world another streaming service with no value proposition for the fans, but for the artists. So what is going to happen? Chances are Joe Blow the music fan won't give a shit, but Jimmy and His Big Dream Band will try, forcing Joe to change from Spotify to Daisy so he will buy concert tickets, merchandise, and music. They will send Joe emails, Twitter feeds, FaceBook Statuses, anything short of aerial cloud writing, hoping to get Joe to switch over from Spotify or Pandora, listen to their music, and hopefully impulse buy tickets.

Does this really appeal to the fan? The person who is the end consumer of the music industry?

My prediction is Daisy will show up with a big splash. It will appeal to bands and record labels, but not to fans. The service will survive with probably the same amount of users as MOG, which is around 500,000, and that will be it. Fans of music will stick to Spotify, Pandora, and iHeart and those ventures will see increased revenue.

That isn't to say the direct to streaming fan model isn't a great idea. It is so great that eventually Spotify, Pandora, and all the other streaming services will adopt Daisy's model. This will kill Beat's new business units value proposition, but will be awesome for musicians and labels. So at least some good will come of this. And for that I say thanks to Iovine, Dre, and Reznor.

Spotify -VS- Mog

I have been using MOG for a little over a year, and really liked the service. I paid the $10 per month premium fee that allowed me to download as much music as my iPhone could hold and then play it back whenever I wanted, even without an Internet connection. From a financial standpoint, it just made more sense for me to drop $10 per month and get access to hundreds of albums as opposed to buying a single album at $10 or single tracks at $1.99 from iTunes. It's just a better way to explore new music.

Then I noticed that I was the only one on MOG. Many of my fellow employees and friends are on Spotify and had no idea that there was another streaming service out there similar to the market leader. So being a music industry professional I decided to switch over to Spotify and analyze the differences between the two. And here is what I've got so far.

The Similarities:

Both MOG and Spotify have the same amount of music, or fairly close. This is because many artists, labels, and managers use online aggregators to get their music to the market. So, if an album is on MOG, chances are it's on Spotify and vice versa.

They both have multiple tiered account options and are identical in price. In the MOG world you can pay $4.99 per month for unlimited music streaming from your computer and customized radio stations. For $9.99 per month you get all those options plus the ability to download music to your mobile devices to enjoy offline. And when you are on Spotify the options are the same and so are the monthly fees. From a business standpoint there are no competitive differentiations here.

Both services have radio features, customizable playlists, and Facebook integration.

The Differences (and they're not that huge):

MOG has a sexier user interface, especially on their mobile versions. They use less text and more icons to separate user options.

Spotify integrates your playlists across various platforms. As a MOG user, I always hated that my playlist on my computer didn't show up on my iPhone and my iPad. With Spotify, I was psyched to see my playlists update on all devices seamlessly.

MOG has a more customizable radio feature. With MOG you select the artist you want and then click on their "radio" button, from there you move a slider to select only that artist, similar artists, or varying mixes of both. This is much more fun than Spotify, who has you listen to songs and give them a thumbs up or down to customize the playlists.

This is what I have witnessed thus far.  I will continue to use Spotify for now and document the differences between the two services. Right now I am leaning towards Spotify. Even though MOG has a sexier user interface, sharing playlists between devices is huge for me.

2012: Physical Music Sales Aren't Dead, Country Rules, Adele is Still Queen, and UMG Dominates.

Well, it's that time of year again.

The time of year when most Americans are in the gym, at least for a month, because they all made the same New Year's resolution.

That time of year when you have your first heart attack because you haven't been in a gym for eleven months, or because you got that first credit card bill itemizing all of your holiday purchases and the interest you will be paying on them until next Christmas.

And it's that time of year when Nielsen Company & Billboard serve up their Music Industry Report, and we learn once again that physical sales are down, digital sales are up, and the music industry is still in turmoil.

Go ahead and read this year's report here.

Here is what this music business insider surmised after reading this year's report:

1. Physical albums are dying, but they aren't dead just yet.

Here's a big surprise physical album sales fell 12.8% in 2012 continuing the decline of tangible music transactions. But the funny part is that even though this category continues to decline at rapid numbers it still controls the market share. Physical sales were at 198 million units, and of that CD sales were at 193 million, while digital units were at 118 million.  So even though we all think physical music transactions are completely dead. They really aren't.


2. Country is king (or queen).

This isn't your granddaddy's country music anymore. Gone are twangy songs about loosing your dog, your trailer, or your wife. Today's country is closer to pop and classic rock with artists such as Jason Aldean and Taylor Swift boosting the entire genre to new sales heights.

Here's looking at Country's amazing numbers:

Total Album Sales: +4.2%
Digital Album Sales + 37.8%
Digital Track Sales + 12.8%
Taylor Swift: #2 for Top Selling Albums, Top Artists, Top Digital Albums, Top Physical Albums, #3 for Top Internet Albums, and #3 for Top Artist Airplay, and #1 for Top Streamed Artists.

3. Adele's success of 2011 was so massive it boiled over to 2012.

“Adele’s album, 21, is the first album ever to be the top seller of the year for two consecutive years."

Adele released 21 in 2011 and the album's success was so huge that it actually propelled it to top the 2012 sales charts. The new British mum took first place in Top Selling Artists, Albums, Digital Albums, Physical Albums, Internet Albums, and #2 in Top Artist Airplay.

4. The album continues to die.

In the digital world TEA stands for Track Equivalent Album. It takes ten tracks to make one full album. This helped push digital album sales up 14.10% for 2012, however when we factor in physical albums and true digital albums into the mix total album sales fell 4.4% for 2012.

5. Purchasing EMI payed off big for UMG.

With a controlling interest in EMI's assets UMG dominated the market share of the remaining major labels. They beat out their nearest competitor Sony Music Entertainment in all six categories between two and seven percent.

Give Ska Drummers Some Love

This week I am prepping to audition for a local band called Teflon Don. This will be a new musical experience for me because it is in a completely opposite musical direction than I am used to.  The group is a Ska band, more particularly a Third Wave Ska band.

Now, I am very meticulous when I approach a new project. I download the music and listen to it constantly. I practice nothing, but that genre while I prepare, and I do research into the style I am playing. In that research I usually seek out the best drummers of the genre and YouTube their videos and pick apart their recordings to see what makes them the leaders of their style of music.

When I was told Teflon Don was a Ska band I immediately thought of traditional Ska music, but this is far from the case in Third Wave Ska. Traditional Ska is played much slower with more "lift" in between hits. To see what I mean watch the current master Gil Sharone  in the video below.

Third Wave Ska is completely different. First, it is faster, much, much faster. In fact, in my opinion I see Third Wave Ska closer to traditional punk rock than its original Reggae roots. The traditional lift between hits is removed to facilitate the brisker tempos and with that any type of swung eighths are converted to straight eights.  Get that right hand ready for a workout on the hi-hat!

As I dove deeper into the genre I was disappointed to find that the drumming community doesn't give the masters of this style more props. When you break apart what is required of them it is down right amazing. First, the speed required would challenge any drummer out there. Next, their fills must be just as fast and just as tight thus requiring a superior level of technique.  From a musical standpoint these bands tend to "move around" in a song changing speeds, styles, and sometimes time signatures on the drop of a dime. This can be a huge challenge to any drummer who is used to just laying in the pocket even in a basic 120 bpm tune, never mind trying it at Third Wave Ska speed . And finally these drummers are playing with larger bands that include horn sections. That means they must be prepared to set-up and then match the brass hits at those blazing speeds.

Watch this video of Streetlight Manifesto's Chris Thatcher and you will see what I mean.

I will leave you with this video from Third Wave Ska's poster boys Reel Big Fish. This live cut of their hit mainstream tune "Sell Out" helps demonstrate the speed, tight hits, and changing tempos and styles the drummer must hit while performing in this genre.

So I encourage you to give these Third Wave Ska drummers some love, and if you need a good workout on the kit. Throw on some Streetlight Manifesto, Mad Caddies, or Reel Big Fish and be prepared to sweat!

Managers. Remember Why You Are Doing This.

Last weekend I headed down to Tampa to watch my friend perform an acoustic set with rock legend Marty Balin. For those of you who don't know, Marty is the real deal when it comes to the music industry.  He was one of the founders and lead singers of Jefferson Airplane, the psychedelic rock group that graced the original Woodstock stage in 1969 and was inducted into the Rock and Roll Hall of Fame in 1996.

Marty's performance last week in Tampa was much more intimate. Together with a small acoustic group he performed for an intimate crowd at the home of his lead guitarist for a Christmas party. My friend brought me along to watch him play hand percussion with the rock legend. On the way to the gig he asked me if I would run sound for the group.

Now, I have a degree in music business, and I have been on the road long enough to know my way around a soundboard. I possess "just enough" sound knowledge to know how to get the best possible mix for a band, as long as they are in a small room and there aren't too many wires or requests for "more of "me"" in the monitor. So I said yes, and for the entire evening I made sure Marty sounded as best as he possibly could.

I am not sharing this experience with you to tout my own sound engineer horn. I am sharing this with you to promote another point. A point about the evolution of the music business.

When Marty and Airplane were coming up in the early sixties there were no college trained music business majors, sound engineers, or even musicians to help them out. Bands during this era came together mostly through chance. When the Beatles needed a new drummer they didn't hold weeks of auditions. They just found the next closest guy with a kit and a decent voice. John Entwistle was asked to join Roger Daltrey when the future Who singer saw him walking down the street with a bass guitar hung over his shoulder.

And back in those days it was easier to find band mates than managers or sound engineers.  Michael Jeffery went from a fledgling club owner to the manager of The Animals and Jimi Hendrix. Peter Grant went from a small time actor to the manager of The Yardbirds and eventually Led Zeppelin. And Owsley Stanley went from LSD supplier to sound man for The Grateful Dead.

These happenstances played heavily into every realm of the early development of rock and roll from performance to management. For now let's take a look at the management side of the equation.

When I started my first company, my business partner and I were just 20 years old. We had no idea how to properly run a business. What we did know was that we needed to "make money" so we did everything we could to get more customers, more orders, and thus more cash in than we were spending.  Simply put, we were hungry.

These untrained managers shared those same traits. Many lacked formal business training and thus had to make up the difference with sheer determination and will. They probably didn't understand a balance sheet, or a profit and loss statement, but did know they needed to make more money than they spent for their artists. Like us they were hungry, and that hunger carried over to pushing their bands to play better, challenge the status quo, and perform as much as possible.

During the 80's large corporations started buying up record labels and replaced these "down and dirty" managers with stuffed suits concerned only with the bottom line. And with that the music business management style change drastically.  Artists soon found themselves being managed by people who didn't necessarily enjoy their music, or even listen to it.

So how did this change the music business?

When your manager is so concerned with business and not as much with your music he, or she, will encourage you to do everything, but play out live. As someone who holds a degree in music business management, I can tell you we spent far more time on licensing, contracts, and balance sheets than on developing a great show, theory, or performance.

Those earlier managers lacked this formal training so they had to make up the difference in an other avenue of their business model. Because they truly loved the music they were representing they pushed their artist to make more of it, either live or in the studio. The net result was the development of superior musicians and songwriters because they had played more shows and recorded more albums.

Last weekend I was reminded about that fact. Watching a true rock legend from that era surrounded by people who absolutely loved his music trying to help him out. His manager was there running a video camera, his girlfriend decorating, fellow band mates brought food, and an unknown fan ran sound for the evening.

If you are in the music business I encourage you to take a moment and remember why you got into this gig in the first place.  Hopefully it is for the love of the music. If that is the case than take a page from the history of rock and follow that down and dirty management style where managers wanted to see their bands play more and encouraged them to do it. You may be surprised by the end result.

Here are some Spotify links to some great Airplane!

Jefferson Airplane – White Rabbit
Jefferson Airplane – Somebody To Love
Jefferson Airplane – Leaving On A Jet Plane

Classic Rock is Here to Save the Day!...Again

During last evening's 121212 Concert for Sandy Relief classic rock and rollers once again proved why they will never be forgotten and that they can still help change the world.

The sponsors of last night show didn't ask Bruno Mars, Rihanna, or Ke$sha. There was no Lady Gaga,  Maroon 5, FUN, or Bieber. Instead they brought out the big guns, rock's royalty if you will, with The Rolling Stones, The Who, Eric Calpton, Bruce Springsteen and The E Street Band, Roger Waters, Billy Joel, and Sir Paul McCartney.

In fact there were only three artists unqualified for AARP last night. Chris Martin, Alicia Keys, and Kanye West, and only one of them wore a leather skirt.  Thanks for the endless jokes and future Saturday Night Live sketch Kanye.

So why bring in rockers of yesteryear?

How awkward was it to see a 68 year old Roger Daltrey jump around with his leathery chest hanging out during The Who's set?

The Twittersphere was on fire during Billy Joel's performance with countless tweets comparing him to Darh Vader and Walt from Breaking Bad.  One Tweet by comedian Jeffrey Ross had many in stitches by spoofing a Joel classic with his elderly age: "Billy Joel is gonna have a heart a tack ack ack ack."

And how about all the parents who had to explain to their technology driven children that Dave Grohl used to play drums for another band called Nirvana? And the guy with the lime green pants was the bass player.

So why do these sponsors choose rock and roll relics over younger shinier models? 

You can ague all you want, but when Sir Paul McCartney ripped into "Live and Let Die" you were probably either singing along or swaying in your seat.  And after watching Kanye run around screaming obscenities in a leather skirt you were blown away by Billy Joel's performance with real music, real harmonies, and a killer band.

I give huge props to today's artists. Many work hard, and they are facing a radically different industry and consumer base with interests that change by the Tweet. All of this has led to a different style of musician.  Today's artist must stand out in a huge sea of competition.  To do that they must promote how great they are every day via marketing, social media, and any other means necessary.  They must capture consumers with everything BUT music.  Is it any wonder that today's artists go through costume changes during a show and yesterday's just change their guitars?

The artists that made up last night's bill were brought up in a different musical era.  To stand out they needed to play their instruments better than the next guy.  That's why Eric Clapton could kill it with a power trio and nothing else at last night's show. These artists needed to create songs that stuck with you for years to come.  I think everybody was singing along with Billy Joel during his set. And finally these AARP rockers came up during a time when the youth believed they could change the world...and they actually did. That's why The Who is a statement and not a question.

Sponsors seek out these aging rockers for a number of reasons.  First, they know a bill with Eric Clapton, The Who, The Rolling Stones, Billy Joel, and Sir Paul McCartney will easily fill seats with virtually zero marketing effort. Second, they know the music will be good...real, real, good.  And finally they know that these acts have already helped change the world so they have experience when it comes to doing it once again.

Regardless, I encourage all of you to drop a few bucks to the Sandy relief effort.  These people need our help. You can still donate to the Sand Relief effort by visiting their website at http://www.121212concert.org. And soon you can purchase the show from iTunes with proceeds going to the cause. 

What will you do without your own music library?

For years I collected tapes, then CD's, and then digital downloads to build my own personal music collection. When I got hold of a third generation iPod back in 2003 I started to dump all of that music into my iTunes library. Today that library holds about 15,000 tracks.

But over the past year I, like most of you, have switched over from purchasing new music to streaming it through an online music provider. There are many of these services out there. Most notably Spotify, Pandora, and MOG. I choose the later, MOG, and pay about $10 per month so I can download as much music as I want to my fourth generation iPod Touch and iPhone.

Now, I have been pretty impressed with streaming over downloading.  It has allowed me to investigate new music, find new indie bands, and catch up on some old favorites, all without having to drop 99¢ per track or $10 per album. It just seems to make financial sense in these tough economic times.

But with every great idea comes some sort of risk.

I have been following music industry related news for a while now and have noticed two reoccurring themes that trouble me when it comes to my music collection. The first started in October of this year when financial analysts deemed Spotify's business model "unsustainable". You can read the article here.

"In almost a one-for-one scenario, every dollar Spotify is generating immediately exits the company due to licensing fees..."

The second reoccurring theme that is troubling is what is happening right now on Capitol Hill in regards to intellectual property. For months now Pandora has been leading a charge to get Congress to reduce the online royalty payments for artists. It seems investors for the online streaming service need the business to make more money, and they have deemed the best way to do that is by lobbying our Nation's leaders to reduce royalty payments do to the musicians' whose works they are exploiting for profit. Former TuneCore CEO Jeff Prince wrote a great article on this conundrum for Hyperbot. You can get to it here.  

So what do these two themes mean for us streamers?

The answer is simple. The two biggest leaders in the streaming market have been deemed unsustainable. Spotify is surviving through the assistance of venture capital and Pandora is trying to create a stronger business model by challenging the artists they rely on for product. Eventually the venture capitalists backing Spotfiy are going to want out, especially if their forecasts continue to demonstrate they may not get a return on their investment. Investors invest to make money, not for charity. And if Pandora continues to challenge the royalty payments of their artists, those artists are going to stop providing the second giant with product. And if you think musicians need Pandora, just ask Taylor Swift and her management team who proved streaming is a benefit, not a necessity.

This could lead to consumers without a decent streaming service. And for those of us who haven't purchased a CD in months that could lead to thousands of consumers with stale music collections. Imagine what would happen if Spotify and Pandora fell off the map. Sure other companies would take their place. That is the power of capitalism, but consumers would be scared, and chances are they would go back to downloading their favorite music through services such as Amazon and iTunes in record numbers. Maybe Apple and Amazon stock isn't a bad idea at this moment.

Now, I am not saying that streaming will fall off the map, and to be honest I am still streaming over downloading as I write this article, but imagine what would happen if these companies disappeared. How much would you have to charge to your iTunes account in the day after, the week after...the year after?