Music Business Journal

by Ben Scudder

Services like Rhapsody charge a monthly subscription fee to grant users, with browsers or mobile apps, access to an extensive music catalogue. The content is stored on a server somewhere other than the user’s hard drive (i.e. “the cloud”). There is no need to safe-keep a personal music collection or move it around devices.  MOG is an example of a pioneering cloud-based service, and we wanted to know more. Anu Kirk, is the Lead Product Manager of Mobile Content.

MBJ:  What is MOG doing to acquire licenses/content?  Where do you feel MOG has the most potential for growth in terms of its catalogue?

Anu Kirk:  MOG uses a company called MediaNet as the provider for our catalogue.  We also have our own in-house licensing team of people with some legal background, some label background, and we proactively reach out to specific labels that we want to make sure that we have on board. This process is based on feedback from our users, who request such content, but also on our knowledge of the industry and our desire to bring in, so to speak, cool labels.  We reach out and ask these labels if they’d like to be part of MOG.  We have contracts, or terms that we offer them, we send out an agreement, and hope that they sign.

MBJ:  Do you find that MOG has been reaching out to smaller indie labels lately, or is MOG still focused on trying to make deals with larger independent or major record labels?

AK:  Well, I feel that ‘indie label’ is sort of a vague term.  Fifteen years ago, an indie label would have been something like Amphetamine Reptile, or something like SST [Records].  But today, an indie label can literally be a guy that’s made a couple of records on his computer.  I definitely think there’s a difference between that and a company that has been around for a couple of years with a sizable catalogue and sales of physical product.  And sometimes, if it’s a label that people have heard of in spite of the tiny genre it serves, we go after it. But many smaller labels that are genre specific, or even just digital, come to us directly because they’ve heard about the service and they want to make sure their music is placed. Many are happy to go through an aggregator like IODA, CD Baby, Tunecore, or a service like that.  One of the interesting things about being a record label today is that it is  not all that different from what running a label was like back in the days of physical media.  Think about what you’re trying to do at a label: you’re trying to sell your product.  In the old days, you would be on the phone with distributors trying to make sure that your record was at Tower Records,  the Virgin Megastore, Sam Goody, and the warehouse. Now you make sure that you’re on MOG, iTunes, Rhapsody, and Rdio.  The label has some interest in getting their stuff to us as well. Continue Reading full interview…

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Music Business Journal

Happy Reading, The MBJ team

by Micah Deterville

In November 2010, Damon Albarn, the musician behind the hit animated UK band the Gorillaz, announced that the follow up to their successful release “Plastic Beach” would be recorded on an iPad.  In his press release to NME magazine, Albarn said that he “fell in love with the iPad as soon as [he] got it…so [he] made a completely different kind of record.”

The Gorillaz strategic use of Apple’s product is certainly a novel one.  However, their publicized enthusiasm over the iPad is surprising, since the Gorillaz have an extensive partnership with Microsoft to help launch Internet Explorer 9.

The 15-track album “The Fall” was released on Christmas as a present to the Gorillaz fans, and it was available as a free download on their website.  The Gorillaz previous album releases came at about once every four years, so fans were shocked to receive a new album only one year after “Plastic Beach.”  At the time, Albarn was touring extensively, so he wanted to release “The Fall” during his tour to prove the album was recorded solely with the iPad. He used twenty different applications to craft the album, including SpeakIt!, Mugician, Amplitude and Moog Filatron.

Continue reading about Gorillaz in Our Midst…

by Jamie Anderson

With the music industry in a frenzy to coax users back to a paid-based model for media, cloud based subscription services and mobile devices seem to be the way of the future. In the UK, Spotify has seen growing success with its cloud-based music service, allowing users to pay a low monthly fee that enables them to download and stream music to their computer from a vast library of music. In the United States, Rhapsody has emerged as the largest cloud-based music service available. Similar to Spotify, Rhapsody allows users to stream music from their online libraries, as well as download a certain amount of gigabytes to their mobile devices. The arrival of 2011 brought the Consumer Electronics Show (CES) held in Las Vegas, along with new models of cloud-based technology.

The most exciting new service introduced at CES this year is called “Unifi”, and is produced and controlled by the RealNetworks family. RealNetwork is noteworthy for their media players, which are mostly PC-compatible. Their free media player can be downloaded to PCs, and they can play any musical content available in the library in a customized, easy to use interface. Unifi hopes to bring together people’s need for media on the go, including music, photos and videos. Unifi, which was warded the “Best of CES” prize for software and apps by CNET.com and Engadget.com, will merge all the media from a consumer’s computer and mobile devices into one online database. This database will automatically organize and filter one’s pictures, music and videos, and allow easy access to said data from anywhere with an Internet connection. This means consumers can not only access their iTunes libraries from anywhere, but also have one place to store all their photos and videos, which they will easily be able to send directly to Facebook, YouTube, Twitter, Flickr and Tumblr.

CONTINUE READING…

By Sahil Mehrotra

China’s music industry is immense and has enormous potential. It has over six hundred million users of mobile phone and counts nearly five hundred million web surfers. Its Internet market is the largest in the world. Yet digital distribution is largely unmonitored, and in general the market is so unregulated that illegal downloading of music is rampant.

In spite of its vast usage, China does not rank among the top five digital markets. By share of value, the US (39%), Japan (19%), UK (16%), France (12%), and Germany (9%) far exceed China, which is aggregated into a Rest Of World category that represents half of one-tenth of all digital music sales. The International Federation of the Phonographic Industry (IFPI) estimates that nearly 99% of all music downloaded in China is done so without proper clearance.

In an attempt to take advantage of a later correction in the sales of digital music, Google Music Search was launched in March 2008. Released exclusively in China, this new service is a platform that offers free, unlimited music downloads from most major labels. Google seems to be saying, “let’s join the pirates”—and so gain a foothold in a market that is likely going to be ebullient as time goes on. Ironically, since Google’s service is only available in China, music consumers around the world have been highly vocal about bringing the same service to their respective countries.

Google Music Search and Baidu

In fact, Google’s Music Search was launched to directly compete with the number one local search engine, Baidu. Baidu grants millions of users access to illegal downloads. Instead, Google Music Search also allows users to download unlimited free content, but it is completely legal. Google’s music catalog is limited, however, with only 1.1 million songs. Since Baidu has been in operation for longer, it can offer hundreds of millions of songs to download, which is much more enticing to music consumers. Furthermore, Baidu’s search engine gives users multiple download links of the same song, as well as different file format options (wav, mp3, aiff). Baidu’s advantages have made the site hugely successful in maintaining its large Chinese user base and trumping Google Music Search.

Continue Reading on the Music Business Journal’s Website…

by Evan kramer

Imagine Joe Smith as the head of a small chain of radio stations somewhere in the US’s mid-west region. Despite the downsizing of his staff, dwindling ad revenue, and the growing uniformity of the station’s playlists, Joe could at least end the year on a positive note. He survived running a small terrestrial broadcast operation, which in and of itself, was quite an accomplishment. Later in the day, however, a stern record industry lawyer of the Recording Industry Association of America walks into his office and tells him that he would like to collect a first-time-ever royalty on the use of his playlists. The amount asked, Joe estimates, is about one-tenth of his existing revenues—and he barely broke even! Joe becomes depressed. While the lawyer meticulously walks him through the legality of the request, Joe’s can only think about being solvent. In fact, Joe’s plight may not be unlike that of a thousand other small broadcasters who, on February 4th 2009, learnt that a revision of the Performance Rights Act was being proposed to Congress and the new law asked for such royalties.

History of the Performance Rights Act

When it comes to musical works, there are two classes of expression that are governed by copyright law. The first, the rights to a composition, refers to the actual musical work (lyrics and melody; the second, the sound recording right, addresses the use of master recordings (the recorded product). Composition rights are typically held by the original composer or the work’s publisher, while sound recording rights are generally controlled by the performing artist or the record label that distributes the recording. Since the dawn of the terrestrial radio industry, broadcasters have paid royalties to composers and publishers for the use of their copyrighted compositions. In the US, these royalties have been collected and distributed to composers and publishers through three performance rights organizations: Broadcast Music Inc. (BMI); the American Society of Composers, Authors, and Publishers (ASCAP); and the Society for European Stage Authors and Composers (SESAC)—a misnomer that dates back to the 1930s.

Continue reading on the pressure that mounts on terrestrial radio

by Luiz Augusto Buff

More than ten years have passed since the debut of Napster shook the record industry. The file-sharing software gave music listeners access to an immense diversity of music for free, causing a shift in industry power from record labels to consumers. The popularity of MP3 files increased even more with the success of the iPod. Even before Napster, recorded music sales were dropping year after year, due to discounts that labels were given to wholesale prices globally. Those numbers dropped even further when the demand shifted to the free content available on the Net. After the panic, artists and the music industry started to understand the opportunities that the Internet was offering, and started to migrate to new models of marketing and distribution through the online world. Still, adaptations are a necessity in the legal system to guarantee the functioning of the creative process. The fight against piracy continues but hopefully a new business model that takes advantage of the “feels like free” system will drive people to a legal form of consumption that not only will attend the demand for lower prices, but will help elevate the value of music back to a sustainable level.

Apple

In 2003, with the intention to provide legal content for their successful iPod, Apple developed the iTunes Store. The iPod had become the worldwide standard media player but the lack of legal content was the main issue that the company had to face. After forming agreements with all the major record labels, the digital retailer store was a booming success and is now responsible for more than 70% of the digital sales and the biggest retailer store in the overall music market, accounting for 25% of the market share, accordingly to IFPI (International Federation of the Phonographic Industry).

Before the online-based sales of music products, in order to get access to one specific song the listener had to buy an entire album. That meant that to buy one song, one had to pay for the ten (or more) other songs that came with it. One of the major changes that happened with the iTunes Store was the commercialization of single tracks- making it cheaper for listeners to buy their favorite songs. The number of units sold increased significantly but the sales performance of the recorded music products dropped radically.

CONTINUE READING on the State of the Music Industry

By Amy Mantis

With the advent of online marketing, social media platforms, music streaming services, and music piracy, it has become increasingly difficult to track the consumption of music. Falling record sales in conjunction with the explosion of new media delivery has made the task of monitoring an artist’s progress far more complicated than it used to be. For the past decade, BigChampagne has quietly operated behind the scenes, tracking how consumers find, acquire, and listen to music on the Internet. Throughout, the company has taken some big steps towards redefining the way the music industry measures success.

The Back Story

Founded in 2000 by Zachary Allison, Eric Garland, and Adam Toll, BigChampagne’s first venture was tracking what songs people were downloading at Napster and the various other file-sharing programs that followed.[1]

Garland and Allison hired coders to build software capable of tracking and archiving the contents of shared folders and up to fifty million daily search queries with the intent of selling the service to major record labels.[2] Amidst the copyright infringement lawsuits that labels filed in conjunction with the RIAA, the companies resisted the idea at first—figuring the courts were about to solve the problem. But as other P2P networks began surfacing, it became evident that file sharing was there to stay. NPD Group research estimates that 31 million Americans shared music from a P2P service in September 2002.[3]

BigChampagne got its first big break when the popular punk rock band the Offspring came forward in support of file sharing networks. According to Garland, “[Offspring] knew this was more an opportunity than a threat.”[4] He and his team immediately began tracking and reporting the band’s progress on P2P websites. Through the band’s management, Garland contacted Offspring’s attorney, Peter Peterno, whose roster included a number of other well established acts like, Destiny’s Child and Will Smith. Seeing the potential in Garland’s new service, Peterno promptly signed his other acts to be tracked as well, thus opening the floodgates for BigChampagne.[5]

Continue Reading on BigChampagne’s Ultimate Chart.

By Luiz Augusto Buff

With the development of digital music in the mid-1990s, the act of sampling became very popular and is now a fundamental element for musical styles like rap and hip-hop. The use of samples to construct new songs is considered a derivative work and usually a license is required. Copyright owners have already successfully sued hip-hop artists that tried to use samples without these licenses.

Another sample-based derivative work is the mash-up; a type of composition that blends two or more pre-recorded sounds creating an entirely new musical composition. While mash-ups are also considered a derivative work, artists like Gregg Gillis—known as DJ Girl Talk—are trying to push the boundaries of the strictures of the law by trying to include these musical collages under the fair use concept.

Girl Talk’s latest album, All Day, was released as a free download on November 15th and has more than 350 samples of different sound recordings in approximately seventy minutes of runtime. Obtaining all of the necessary licenses for each sound recording used would have been very costly and extremely time consuming. Gillis, having planned to release the album for free, decided to move forward without licensing a single track—not even the three-minute use of Black Sabbath’s “War Pigs”—claiming that his creations fit the guidelines of fair use. However, to determine congruency with the fair use doctrine, it is necessary to understand the origins and basis of the fair use concept….

Read more about mash-ups and fair use in Berklee’s Music Business Journal.