MIDEM: PRS think music made Apple

Remember how music was before Apple came along with the iPod and iTunes, and started to create a workable digital download market?

If you're too young to recall, imagine a headless chicken desperately trying to pull its own legs off so that it could hit anyone trying to buy an egg off it.

Music isn't particularly grateful for Apple's part in sorting out the mess and creating a world where people will pay for something they could get for free. Not at all, actually, as PRS CEO Robert Ashcroft appears to be moaning that Apple treats music bad:

Apple has more cash in the bank than the record industry has ever made in annual revenue, according to Robert Ashcroft, CEO of PRS for music, speaking on a panel about innovation within the music industry at Midem. "I would like to say that the music industry contributed a little bit of that to Apple."

Well, up to a point - although nobody really buys some Universal stuff from Apple, or downloads a bunch of PRS-regulated files. If anyone involved in Music deserves a bit of thanks from Apple, it'd be the artists.

Although, I suppose, you could argue that the industry's failure to sort out its own digital offering over more-or-less the decade it had the field open to itself is something Apple should be grateful for.

MIDEM 2012: What does 'sharing' actually mean

Facebook trumpet round the MIDEM conference with a huge number:

The 2012 Midem Music Conference has brought new data to light about the Facebook Music experience which launched last Fall: over 5 billion songs have been shared via Facebook as a total count since they launched the Facebook Music thing last year at the f8 conference.

Five Billion is certainly a number with a lot of zeroes. But what does this "sharing" actually constitute?

Sharing used to mean making a song available - borrowing (or, if you were an executive stealing) an actual track.

This five billion might include some people clicking on links to hear a song, but mostly just means billions of little blips of data floating up the side of the screen, mostly ignored.

Spacelab is starry-eyed:

What's more, the Facebook music sharing data shows a wholly different group of songs than what you'll find on the Top 40.

Really? Wholly different?

"When we looked at the top 100 songs shared on Facebook, it was a lot of the same songs you would discover if you looked on a Billboard chart. Some artists aren't as famous globally but have local artists with pockets of fans. One example is Skrillex. [He's] not necessarily a top 10 artist, but two of [his] songs [were on our chart.] So that's one of the really powerful things about this. It's not just reinforcing the same songs everybody's listening to, but enabling artists to be discovered in ways that were never possible before at scale," said Facebook's VP of partnerships Dan Rose to Billboard editorial director Bill Werde in a keynote Q&A Monday.

So that's "wholly different" in the sense of "mostly identical, except for a few cases.

(And don't you love the idea that Skrillex is some sort of out-there act who you wouldn't come across without Facebook?)

It's clear Facebook haven't really thought through their pitch - if it's not about reinforcing the same songs everyone listens to, then what's the point of a top 100 listing?

As with most things it touches, Facebook don't offer anything particularly valuable or inventive, and rely just on scale.

Still, five billion has a lot of noughts in it.

MIDEM 2011: Imogen Heap and Damien Kulash

I'd recommend taking a few minutes out of your day to read Midemnet's liveblog of a session featuring Imogen Heap and OK Go's Damien Kulash.

Surely even the record companies have noticed that the people who have ideas about how music will reach audiences in the future, and in the now, are very seldom on the direct payrolls of record companies?

Midem 2011: Building a music platform with money that could be spent on tax

So, MIDEMNET is underway, the pre-MIDEM digital wing of the music industry's excuse to spend part of January in France, and amongst the interesting factlets sneaking out is that Vodafone's music service looks like it's doing a bit better than Nokia's soon-to-be-hit-with-a-car-jack OviMusic. MusicAlly reports:

More than 100,000 people in the UK have signed up to Vodafone’s paid music subscription service, according to Lee Epting, the operator’s content services director.

It's amazing what you can do if you don't pay your £6billion tax bill and get it knocked down to a smidge over £1bn, isn't it?

(I know Vodafone claim the £6bn figure is wrong, but until such time as they decide to tell us exactly how much they weaseled out of, it's the best figure we have to work with.)

It's an interesting headline figure, and sounds like a fairly strong start to the service - although it gives no indication of churn rate or how many of those sign ups include people taking advantage of the 'first month free' offer with the intention of jumping ship as soon as they can. Nor do we know how much of money that could otherwise have been spent by the state building hospitals has been lavished on attracting those 100,000 subscribers.

Vodafone have been sensible in building a store that you don't need to be a Vodafone customer to use, and selling files that are unlocked and can be shifted around from phone to computer to iPod.

They're also been cunning in setting their usual store prices unrealistically high, which makes the subscription service seem like more of a bargain. This isn't, by the way, an all-you-can-eat model like Nokia's, but something more akin to eMusic's "you give us a fixed sum a month, and you can download a fixed number of tracks a month". So, it seems, you've got a better chance of locking people into a service where they get something tangible - if you can call a digital music file tangible - than something where you have wide access but nothing is yours.

Let's not forget that this is a very limited success, though: Vodafone has over 18 million customers in the UK [Source: Vodafone half year results to 30/09/10]. Only managing to get 100,000 of those to sign up isn't that amazing a conversion rate.

Format madness: MusicDNA at MIDEM 2010

After a few years in which most of the rubbish new ideas for music formats have been physical, the people who bought you the MP3 are trying to fly the flag for a new format, MusicDNA.

As follow-ups go, Dagfinn Bach has come up with something a bit more Second Coming than Space Oddity:

Speaking at the Midem music conference, Mr Bach said: "We can deliver a file that is extremely searchable and can carry up to 32GB of extra information in the file itself.

"And it will be dynamically updatable so that every time the user is connected, his file will be updated."

But why does all that extra information have to be wedged into the file? If you've got a 32GB iPod, you're going to be a bit screwed if all you can fit on is a single tune. Couldn't you just put a bit of extra data into an ordinary mp3 which could suck down the extra data off the internet, instead of saving it all in the file? Isn't carting all that extra gubbins around heading away from the cloud, instead of towards it?

Given that increasing numbers of people have always-on connections to the end, what possible value could there be in forcing clunky, larger files onto people to carry extra data that could just as easily be looked up off the web anyway?

[T]he MusicDNA files are likely to be more expensive than current music downloads.

Oh. That'd be it, then. Wrap a load of old tut into the music, and whack up the price.

Not that it's about that, you understand:

Mr Brandenburg, director of the Fraunhofer Institute for Digital Media Technology in Germany, said: "I think it brings together a number of ideas that have been around for a long time.

"I remember 10 years ago, a lot of people were saying that we need to enrich the user experience, that legal access to music has to give the customers more than just music, and this is certainly one very nice way to do it."

Actually, what people have been saying for 10 years is that legal music must be cheap and convenient. I don't think anyone has ever said "I wish every day the lyrics insert would change every morning", have they?

MIDEM 2010: MTV plan future for music computer games

Highly recommended is PaidContent's interview with MTV’s games SVP Paul DeGooyer. He's firstly trying to put a brave face on the decline in sales of Rock Star type games - "not as sharp" as we might think, apparently; then he ponders where the future might lay:

“Songs and music games need to be a part of people’s self-expression. Developments in terms of console interfaces are going to make it, literally, more gestural to interact with music.”

Literally more gestural. My self-expression will literally be more gestural. Frankly, I can't wait for the future.

It turns out what he means is that you might not need a crappy plastic guitar shaped thing. In effect, he's picturing an air guitar which makes a noise.

MIDEM 2010: Spotify don't want to get too social

There's a couple of interesting points from Spotify CEO Daniel Ek in MIDEM yesterday. Music Ally has a great report.

First is a clear-eyed explanation about what Spotify is and isn't:

Ek also alluded to Spotify’s current investment in more social features for its service, but warned that this won’t represent a complete about-turn in the company’s strategy.

“We’re looking at that quite a lot, but we’re not Pandora or Last.fm,” said Ek. “I think they’re fantastic products, but what we’re trying to do… we’re really trying to drive you to create your library and to use Spotify as the cloud-based service where you have your music library.”

Although - actually - Spotify Playlists are probably one of the most successful social networking devices yet created by a music company.

Talking of which, they're hoping playlists might become more of a revenue generator:

He also promised that Spotify is looking at how to improve its integrated downloads offering, including allowing people to buy playlists rather than just individual songs.

A rebirth of the album as a form of paid-for mixtape? It still won't please the record companies - they still see an album as a way of making some money back on the duff tracks they've funded, and this won't do that. But it's still 'buying a collection of songs in one go', so it should cheer them up a little.

Playlists are also driving subscriptions, claims Ek:

He also claimed that it’s not just mobile apps driving Spotify’s customers to upgrade to the premium version:the playlists are important too. “More and more of our users are understanding and building their library in Spotify. Once they invest in that, the willingness to pay increases.”

Which carries a warning for the labels who are currently starting to mutter darkly that they don't see why they should be cutting Spotify goodwill - if people start to 'collect' in the cloud, and pay to do that, there's a real risk if the RIAA whip away the football. It's unlikely anyone would start to pay a new service to do the same thing quite so willingly if Spotify crashes financially and takes their investment and playlists with them. Even if the RIAA cartel doesn't totally care for Spotify, they need to build trust in cloud-located music collections.

MIDEM 2010: Labels unhappy with legal; want more money

It's MIDEM time again - when hundreds of music industry executives fly to expensive hotels in the South Of France to tell each other how poorly their industry is doing.

As is now traditional, the event has kicked off with MIDEM Net. PaidContent are there, reporting that labels are starting to get tired of legal services which pay them small, but regular sums:

Indeed, sitting next to Spotify’s [SVP Paul] Brown on stage in Cannes, Warner Music Group (NYSE: WMG) digital biz dev SVP Stephen Bryan, suggested advertising returns from free are not enough to satisfy labels…

“We believe that the ad-supported services are most important in terms of aggregating an audience that can then be converted in to a premium service,” Bryan said. “We want to do more as a music company to make the paid services as attractive as they possibly can be relative to free options."

Warners, it seems, is worried that a legal-but-free service that is convenient and usable offers no reason to pay for a subscription.

That might be true. Spotify, to be fair, kind-of wish more people would pay for subscriptions as well:

"The real aim for us is to grow a real strong subscription service as well,” Brown acknowledged, perhaps keen to meet the label’s concern. “That’s becoming more of what Spotify is about.”

Spotify currently claims a quarter of a million subscribers out of a user base of seven million, which seems like pretty good going - but not good enough for Universal:

Universal Music Group’s international digital SVP last week said Spotify needs to convert 10 to 12 percent to make enough money to pay the record labels: “That to me equates to a sustainable business model.”

Hang about a moment, though: Spotify pay based on their users - so it might not be handing over as much money as the labels would hope for (labels always hope for more and more; they are corporations, after all) but it's not up to a supplier to tell a retailer where their sustainable business point is.

The trouble is, if you take the free services out of the marketplace - or, if you break them to a point where it's unpleasant or pointless to use them - you might very well increase the percentage of paid users against free users, but only because the user base will shrink. The free audience will just go elsewhere - and that means nobody will get paid anything. They don't learn, do they?

Bookmarks: Some stuff to watch on the internet

The MIDEMNet blog has posted a number of sessions from this year's music industry electronics gathering, including a conversation with Radiohead manager Brian Message and why knowing your fan matters.

Sadly, there's no film of the heads of the four majors trying to prove their understanding of new technology by trying to set up a teasmade.

MIDEM 2009: Empty places

Yesterday I mentioned Gerd Leonhard's guesstimate that the attendance at MIDEM was down by anything up to 20%; Bruce Houghton over on Hypebot has the official figures:

In the end, the Cannes mega-conference appears to have dodged the bullet with figures released by organizer Reed Midem showing a 12% drop in attendance to 8000 from 9100 in 2008.

Hypebot suggests these are pretty good figures in the circumstances, and points out that all the key players were there. Although it makes you wonder who the one in ten who didn't show up were, then.

MIDEM 2009 off by as much as a fifth

Having spent much of the weekend being patronised by the likes of Feargal Sharkey, it's not surprising that Gerd Leonhard spent much of his time wandering round Cannes laughing at the ashes of a once-great business:

Here in Cannes, France, at the annual MIDEM music industry conference, we have once again debated and contemplated (and wined and dined and smoked) for the last 5 days. We have noticed some 15-20% less attendance, empty restaurants and much-less-than-usual action in the exhibition halls - the music industry as we knew it is OVER. And good riddance. The organizers tried hard (and did well!) but you have to wonder: what are you (the industry) waiting for? Is it not time to VOTE FOR SERIOUS CHANGE in the music industry, and make that switch to an open, collaborative and mutually fruitful ecosystem? Like... now?

If the music industry will no longer send its top level staff for some winter sun on a French jolly, they might well be asking themselves what's the point of going on?

MIDEM 2009: If you can remember the internet, you hadn't logged on

Donovan has told MIDEM that the internet is the new 1960s. He has attempted to explain what he might mean:

"The dream of the '60s, of me and John Lennon and the others, was: How do we speak to everybody on the planet at the same time?

"The first answer was via satellite, but that didn't connect to everyone. Then John would say, 'How about telepathy?'

"Then we forgot about it until now we realize that the Internet fulfills that dream of communicating with everyone. I'm not afraid of the Internet because it's that the dream we had. The Internet is the new '60s as far as I'm concerned."

The use of internet rather than telepathy makes it easier, but the RIAA have already employed a lobbyist to encourage Congress to shape laws covering intellectual property rights in case people start thinking the new Kid Rock single at each other.

MIDEM 2009: Man - the lifeboats?

The Isle Of Man government has introduced plans for a blanket music tax on broadband services. The BPI is - at least publicly - being all pleased:

"If ISPs take the position advocated in the Isle of Man, we’d be in an enormously better position," [The BPI's Geoff] Taylor responded.

The Register's Andrew Orlowski isn't quite so sure:

[M[any in both the tech business and the music business are wary of a government-imposed licence fee. A voluntary subscription scheme would provide an incentive for new services to be created - P2P service providers would compete for your custom. Such a voluntary P2P scheme is expected to be announced from a major UK ISP within a few weeks.

With a compulsory licence, ISPs would have no incentive to look after music sharers or differentiate themselves - everybody would be able to offer anything. And privately, labels are wary that collective agreements set a low floor price for music royalties.

Ah, but this is the Isle of Man we're talking about here, and it's more than likely that the music industry will see a small island in pretty much the same way the British military saw Gruinard: a place to test the most toxic stuff away from the major centres of population. If it all goes wrong, and results in the music industry losing more control, they've only lost a tiny market. If, on the other hand, it means the big four get a disproportionate chance to hoover down revenues from the licence, then that could be a prize worth the risk.

[Thanks to Mikey for the story]

MIDEM 2009: Placebo taken by Sam

After the digital stuff, MIDEM turns to the music, and amongst the early announcements is that Placebo are signing to PIAS for the next album. They could have had their pick of the majors - they say - but instead fell for PIAS small-scale, big-idea charms:

Placebo frontman Brian Molko said “We are delighted to be signing with [PIAS], one of the world’s most respected and successful independent music companies. We were very lucky to have so many great labels interested in signing us, it means a lot, especially after 12 years of releasing records!! But we now feel we have the right partner for Europe in these ever-changing times to continue this crazy adventure and to scale even dizzier heights with our new record".

Two exclamation marks and "scaling dizzy heights" in "ever-changing times" - let's hope that he's putting a bit more effort into the lyrics than he has into the press release.

Still, Meds was a splendid album, so let's hope a smaller, more loving environment might bring about something even better, so people stop going "what, really?" when you tell them you like Placebo.

MIDEM 2009: Google regrets

PaidContent's Robert Andrews reports back on the MIDEMNET session with Google's content partnerships VP David Eun. His poorly-disguised frustration with a music industry that thinks that the internet owes it probably means he should be kept away from Feargal Sharkey:

"Lots of people 'get it'. On the other hand, there's a culture (amongst music execs) where 'these are my interests, meet them, if you can meet them then maybe you can have access to our content'. There's really not a concern for the other person's business (ie. Google's) - (they say) 'if you can't figure out how to make it work, that's your problem'. If that becomes systemic, you decrease the number of partners you can have."

He also spoke a little about Warner's current exclusion from YouTube - and sounded like a man who, while not uncaring about one label's absence from his service, isn't all that desperate about it, either:

"I think it's unfortunate. The only way a partnership works is if it works for both parties ... You can't force someone to be a good partner - you can force them to follow contractual obligations, but you can't force them to be a good partner. The way you become good partners is to give them incentives to go beyond what the obligations are. We don't have that type of relationship with everyone or with Warner Music right now ... but we hope we can find a way of working so that both parties are happy working together."

Sure, it'd be nice to have those guys on board again, but perhaps they don't want to play, said YouTube from the top of its goldmine.

MIDEM 2009: Clash of the giants

Another meeting between Gerd Leonhard and Feargal Sharkey, reports Music Ally:

The most heated section saw consultant Gerd Leonhard accuse the music industry of desiring rules that are “just not reasonable”, provoking a stern rebuke from UK Music boss Feargal Sharkey.

“I don’t think that imposing one vision on all of humanity is the way to go,” he told Leonhard. “It’s slightly arrogant to come and tell two very successful industries that they don’t know what they’re doing.”

Sharkey is in charge of UK Music, who are pretty much dedicated to imposing a single vision on all of humanity wanting to use music in a digital environment; what angers him so much is that he must know, in his heart, that Leonhard is right in his diagnosis, even if you don't totally accept his solutions.

And "two very successful industries"? Well, it didn't take long for someone to point out the baselessness of that claim:

Pete Jenner, who was on the panel: “Two very successful industries? We’re talking about the record industry, which is in the fucking dumper!”

Indeed. Perhaps if you're actually at MIDEM, Sharkey isn't coming across like one of those stock thugs they have on Casualty every couple of weeks who hurls abuse at the paramedics trying to help him, but certainly from this distance he's making himself look like a petulant closed-mind. UK music needs better, even if UK Music, the organisation, probably deserves no better.

MIDEM 2009: Katy Perry takes Rihanna's prize by mistake

The traditional curtain-raiser to MIDEM (if you ignore MIDEMNET having already raised the curtains), the NRJ French music awards, managed a spot of Brits-level debacle last night, with Katy Perry waltzing off with two prizes, only one of which was intended for her. She somehow was given the award for best international song, despite the judges having voted for Rihanna's Disturbia instead. BBC News:

Perry did legitimately scoop the best international album prize

Well, she might have been the intended recipient, but as to if her claim to have made the best album in the world outside France in 2008 is "legitimate", that would be a different question altogether.

MIDEM 2009: MySpace waft out their music CEO

Music Ally continue to bring the freshest coverage of MIDEMNet, covering an appearance by Courtney Holt, who has arrived to run MySpace's music offering from Universal.

He talked a little about how MySpace will try to make money from online music, given that he sees free downloading as the "main competition". It's all about adding value:

The MySpace Secret Shows are one example, he says, where bands play smaller gigs for their fans. “Those types of programmes are really relevant, we’re going to expand into more of those,” he says.

Curiously, then, the main driver for marketing MySpace music - which offers the chance to put your music in front of the largest imaginable audience - is a series of teeny tiny gigs where you play music to the smallest possible audience. I'm not sure they've quite thought this one through.

Are they selling much?

Amazon is proving a good partner, although “we need to make the intent to buy and the purchase a little bit easier”, although MySpace is seeing “increasing intent to buy”.

What’s that? “People are clicking on buy links,” he says. “It’s gonna take some time, we know that’s challenging, but it’s also important to all of our partners.”

That, of course, is the sticking point: are MySpace making any money from this? Are the labels? And are the labels as prepared to wait as long as News International to see the massive MySpace audience start to turn into big piles of cash?

It turns out that MySpace has one strong card in persuading patience from its RIAA partners - not being Apple:

“The terms that we’re cutting with everybody are fair deals for us to be able to run this business. The labels do want to see other people survive as digital music offerings [than iTunes], they want to diversify their revenues.”

This, though, might prove a problem in the long run - if MySpace hope to replace Apple as the dominant music retailer on the web, the record labels would be just as unhappy as they are with the idea of Apple dominating.

MIDEM 2009: Comes With Music, but that's easily dealt with

The pre-Midem MidemNet digital music conference is underway down in the South Of France, where somehow these companies who have to fight for every cent have managed to send their executives and sub-executives to find out stuff they could get for free on the internet.

Musically has been liveblogging an interview with Dr Tero Ojanpera, the EVP of "entertainment and communities" with Nokia. He has, obviously, been talking mostly about Comes With Music, giving an interesting little nugget about the "fair use" limit, and how it's not just us who is curious to see exactly where that limit might lie:

“We are seeing some people downloading hundreds of tracks a month initially, but when the base expands this will be even more like a bell curve. There were some bloggers who went and downloaded a lot, but once they noticed Nokia was not doing anything, they gave up! We are not really seeing anybody who is abusing the service. It’s validating all the research that was done before - this is how people will use it - some will use a lot, some will use a little, and it will average out.”

You'll notice he doesn't say that Nokia believed that the exploratory downloaders failed to breach a limit of fair use, just that Nokia chose to not do anything. Sadly, nobody seems to have bothered asking Ojanpera why the company won't just come out and say what it considers to be fair use of its service, and why it childishly keeps the figure secret.

Why doesn't it trust its customers with the actual rules for a service that they're paying for? It just seems to be cussed secrecy for the sake of it.

Also interesting is that some people are buying Comes With Music handsets, and not bothering with the music:

“What we are seeing three months in in the UK is that the consumption pattern is like a bell curve. There are certain users that don’t activate, and then a really nice bell curve where we are seeing good downloads in the middle and…”

[Moderator Bill] Werde [of Billboard] interjects - why are some people not activating? Ojanpera says some simply missed the offer. Bizarre.

I'll agree with Music Ally's "bizarre" response - given that the marketing is garishly insistent about Comes With Music, the suggestion that people might not realise that their Comes With Music phone comes with music seems a little odd. Surely the other possibility - that you can offer people unlimited music for no extra money, and they can't even be arsed to explore the offering - is far more fascinating. And worrying, for the music industry. And psychologically fascinating.

And are people buying in to the service in large numbers?

So, the UK then. The price point of the 5310 has lowered, and reports suggest sales aren’t good. Why? “I don’t want to put you on the spot” says Werde. Why not?!

Anyway, Ojanpera’s response, pointing out that Nokia has been expanding the device base for CWM in the UK. “Our target is not any more about ‘this is a few specific devices’, but going forward we will have this in all price points, and make this a mass-market phenomenon.”

Surely, if you can have Comes With Music in the cheapo end of the market, that must mean the money that's flowing to the labels, and then on to the artists, must be piffling beyond belief?

And what about the simplicity of the offering?

Is the offer simple enough, asks Werde? “One thing is of course, this comes back to the marketing, and that needs to be fine-tuned all the time. The actual product is so simple - one year of music, unlimited downloads in your phone and your PC. That’s simple enough, and a great offer.”

Of course, the offering isn't simple at all, when you look at it - and get down to fine details of owning the tracks forever, but requiring a DRM key, which you can only change once past the subscribing period. It's not that this is a totally unfair rule from Nokia's point of view - if you run DRM servers, you're not going to want to commit to long periods of fiddling for people who aren't paying you any more - but it complicates the offering more than it should. Interesting, then, that Nokia don't seem all that bothered about trying to crawl out from under the DRM tarpaulin.

MIDEM 2008: Orange: DRM is hobbling our business

It's not just customers (or would-be customers) who get frustrated by DRM: it's a pain in the arse for retailers, too. At MIDEM, Orange music product development director Brenda O’Connell has told MocoNews that DRM has caused problems for the company's attempts to create downloads usable on PCs as well as mobiles:

“The DRM ecosystem on the mobile and on the PC is fundamentally different; getting them to talk together to create a seamless experience was a huge amount of work.”

And results have been “nothing to write home about”, she conceded: “It’s taken us two years to get this converged service to market, two years is far too long. We’re also very concerned about the fact that customers are really rejecting DRM. We want to launch not only a la carte services but subscription-based services, rental models. DRM is what’s holding us back at this point.”

Something to think about as you read music industry bosses raging at people who grab music where they can - after all this time, it's the industry's reluctance to trust people which is, reducing the legitimate options for downloads and ironically making theft more likely.

For all the talk about this MIDEM being a conference where the industry has embraced digital, when you listen to the people who are trying to work with the majors, it's clear they've not actually changed their position at all - just started realising they're going to have to. Ten years too late, and they're still dragging their feet.

Still, Orange retain some optimism:

Orange content services SVP Herve Payan: “If we don’t remove the DRM, we believe it will be slow growth. Ideally, we will have MP3. The majors are changing; we think in the next six months we will have it.”

But still another six months? And that's the optimistic view?

[Part of MIDEM 2008]