Digital Music Trends – Episode 55

This week on the show an exclusive feature on the company Music2Text that only officially launched last week. The interview with Denver Thomas – the CEO of the company – is pretty extensive so for this week I’m going to forgo with the usual in-depth news coverage and I’ll just go for a ultra-quick scan of the most compelling headlines instead, with links to the relevant articles on the show-notes.

If you’re at all interested in mobile distribution this feature is one you can’t miss: we discuss mobile distribution, the need to streamline user experience in mobile, business models and tools to communicate with the fans and ways to monetize that relationship. You can also click here to download a PDF of the interview.

You can actually try out the service – if you’re in the UK text EAGLE to 60444 and you’ll receive a link to the Eagle Rock Entertainment campaign, bear in mind that this number works in the UK only so if you’re somewhere else in the worlds and still want to have a look at the mobile site type http://m2txt.com/eagle in your mobile browser.

Press play below to stream Episode 55!
 

Music2Text is carving a new path in mobile music distribution.

Music2Text is a mobile music distribution company that only officially launched last week but has already gathered an extensive list of clients amongst high profile labels and artists. Denver Thomas – the CEO of the company – has been working on this project for years now and in this interview he shares some of his thoughts regarding the challenges of mobile distribution, the need to streamline user experience in mobile, business models and tools to communicate with the fans and ways to monetize that relationship.

AL: So What is Music2Text?

DT: Music2Text is mobile distribution. Just the concept of “Mobile Distribution” to the industry is confusing: we’ve taken something very complicated and simplified it. We give record labels the ability to upload their content into a web interface with a three step wizard driven process and the end result is a mobile store that is as easy to use as iTunes and that they can then directly push on to their fans.

 

If a label wants to get their content on a mobile music store like Vodafone they need to go through an aggregator but by the time the content gets there they have lost up to 60% of the revenue.

 

With our mobile music store they upload the content directly onto our platform – that is cleared on all UK networks and works on all phones –  and keep 100% net of all of their sales. We also go one stage further and enter the world of direct-to-fan: we have integrated data capture features into the mobile store so that it automatically creates a database of fans that the labels can use to post-market via SMS.

AL: In the mobile space, carriers in the UK have tried to develop their own mobile platform in one way or another but they have not been a roaring success by any means: why do you think it’s so hard to provide a mobile store with a great user experience?

DT: The problem lies with the mobile networks themselves, they are entering an area of broadcast where they are the gatekeepers of the mobile web but there’s a lack of government regulation in this space. These networks are holding back the music industry, the film industry and other e-commerce industries within the mobile web. They have cut deals with the major labels that suits their corporate interests and not the music industries or consumers.

 

The problem is that everyone is forced to follow this major label fixed policy where all the content ends up with portals hosted by the mobile networks who are in league with one another and where tracks that cost 59p to download from a computer are priced £1,50 on mobile. The frustration is that technology in mobile is advancing very rapidly and trying to monetize content so aggressively in this economy is not sustainable.

 

Consumers don’t want to pay £1,49 for a mobile track when they can go online and steal it on P2P networks, so the major labels are shooting themselves in the foot. The bottom line is that labels care about money first – how can they survive. It boils down to money, access, distribution, control of the distribution and royalty chain and control of the data capture. These are all aspects that Music2Text aims to streamline since we’ve asked the industry from the start what they needed.

AL: And let’s talk about Music2Text’s two business models: on one side how do you make money and on the other how does the band make money?

DT: As an artist I’ve been through that side of things and I’m now working on the business side of things so I understand what the artist needs from a label perspective. On the business side of things – as a company – our challenge was to build a system where we could abstain from the revenue chain. If you want to upload a single track, podcast a ring-tone or a video we will charge the label £3, and that applies even if you sell a million singles.

 

But we make our money through data capture, we capture the mobile number of the people who sent a text and host it on a page that is in the Direct2Fan part of the service. We then charge 4p per message when the label wants to get in touch with the fans directly via SMS. There are fixed costs of 3p to send that message so we’re only making 1p per text. We are just a delivery system and we’re gambling on the fact that there’s a long tail market out there of labels that want this service.

 

The system also automatically associates a keyword to a number – for example fans can text SONG to 60444, they then get an SMS back with a mobile link and by opening up that link the content automatically downloads. Labels are free to set their own prices on these downloads and through this process they know exactly how much we’re making. If they want to renew that keyword after 30 days that costs £25, if they want to upload an album that costs £20, and after that whether you sell hundreds of thousands or ten well fair play, the important thing is the data capture and the post-market opportunities are in place for them to be able to monetize the content and create new revenue streams.

AL: And from a band perspective, how do the figures break down in terms in terms of how much a label actually receives from what they charge for each download?

DT: For example, if the label sets the price of £1, the mobile networks take in England an average of 25% of the money, there’s nothing we can do about that. Their view is: you’re using our network, we want a piece of your ass. Then you have PRS fees and that’s 8%. Then there’s a Merchant ID charge of 6%, that’s where the reverse bill money comes in from the mobile networks from one Merchant ID account to our Merchant ID account and banks charge money for this cash to be moved so we have to pass on the charges to the rights-holders.

 

In our view though this charge should be closer to 3% so we’re looking to review it but at the moment we’re under contract and we can’t alter those contracts until January 1st 2011. We’re very transparent about our revenue streams. We’ll also have an additional revenue stream from mid-September since we’re going to be the first independent mobile operator that has been granted direct chart reporting.

 

It has taken us years to get here, this is not a project that has been dreamt up overnight by individuals who don’t understand the wants and needs of the industry both behind the scenes from a B2B perspective and also on the flip-side of that of how music is being accessed and distributed from the label to the consumer across all media channels – they are all changing but they are converging quickly towards mobile.

We also give labels training in how to market mobile music- we don’t allow them to sign with us and say “we’ll figure it out ourselves”. We always want to give them at least 15 minutes to explain how they can use the service to make money.

As a company if you truly want long term partnership with the labels you also have to hop into bed with them and explain to them how you are supplying solutions.

 

We’ve had interest from Stevie Wonder, Ingrooves, Universal (who have accepted us to be on their retail panel thus exposing our technology and company to close to 4,000 labels worldwide) and Playground Music who are the biggest distribution players in Finland, Denmark and Sweden. We also have Imogen Heap on board and we’ve done a recent mobile campaigned for Bashy – there are hundreds of labels looking to work with us.

AL: Can your system integrate with the distribution systems of other labels and become part of their digital supply chain? I’m thinking especially about larger deals that could involve hundreds of artists/releases.

DT: Absolutely. A great example is Playground Music, they are a physical distributor but they are also aggregators and a record label. They handle the interests of the Beggars group and Domino in that part of Europe. They met us at AIM’s Music Connected for which we were headline sponsors, it wasn’t even on my radar but they asked us whether we could take our technology to another four European countries so we have been discussing that.

 

Another company called  in Japan wanted to talk about how to develop our technology there with them as they think it would work well there. This surprised us since our immediate focus has always been to get it right in the UK first. We are members of the BPI, AIM, FAC and we’ve been working with the Music Manager’s forum.

 

We’re not just interested in making money, we really want mobile to work. That’s why we encourage labels to take half an hour to listen to us and look at our site and the material on there. This way – so far – we have not lost a client. As a company we have spent close to a million just to get to this stage before we actually launched and I think the care that went into the development is why we are getting these super-star deals from the start and these massive integrations. There’s a lot more that I’d like to talk about but at the moment I can’t as I’m under NDAs.

AL: Just yesterday Amazon announced that they made one billion dollars this quarter just from people buying goods on mobile devices, which is a really incredible figure. Is this something that encourages you as a company?

DT: Sure, but we’re talking about America where mobile commerce is far more advanced in psychology – the way that Americans take to that medium is different. In Europe it’s still a fledgling industry. there’s a massive mobile penetration here and so there is a gold-rush push by amateurs to try and conquer that market but like with any gold-rush there will be some successes and some casualties.

 

Smart companies have already been developing this three, four, five years ago and we’re one of them. We’re able to offer advice that is historic and common sense with a no-bullshit attitude: in this business you can either deliver or you can’t.

AL: And in terms of the payment systems you were talking about the charges of the mobile operators and that’s a really interesting point: is that absolutely the only way you can get payment for these tracks or do you think that there are going to be technologies developing in the next few years that will allow you to bypass the operator and use something like – for example – Facebook credits
?

DT: There are several issues that prevent companies to step into this space right now. Say for example that Facebook was to step into the music industry and act as a label or as an aggregator delivering content – on paper it looks like an attractive proposition but at Facebook they are well aware of the intellectual complexities of the music industry, meaning that if 99% of labels want chart reporting you either understand that industry very very well or you don’t.

 

Facebook understands social media very well and that’s why they are huge but if they want to step into the music industry they are going to step into a pile of shit unless they know what they are doing.

 

It’s not easy – for the consumer the process of buying a single is very easy but for us business heads there could be ten to fifteen people intellectually attached to that recording and that’s how the music industry functions. Other industries don’t understand how this functions and that’s why they are not getting involved.

 

How often have you seen a social network link to itunes that’s their get out of jail card but they appear to offer some form of music offering that only adds another layer of confusion to an already confused industry.

AL: One of the things that strikes me about Music2Text is that it’s really a platform: it can be used in so many ways by the record labels or by the artists. It can be a marketing tool with free downloads, it can be a vehicle to sell singles or albums or even a way to sell live recordings, anything can happen on the platform. Do you actually suggest to the labels or to the artists what mobile marketing is or do you let them explore how they can exploit your service to their advantage?

DT: We tell the labels: you can explore if you like, but go and read our mobile marketing pages. Once they do they are blown away and we then we are happy to offer them a half an hour or an hour of bespoke consultancy on mobile marketing. If they absorb that information they can integrate it into their artist’s PR, monetize the music and create a new revenue stream.

 

So far no one has said no. For example, most labels think: I’ll get a text code, my band will be playing to 6,000 people so all the singer will have to do is stop before the encore is say “Hey, text Jim to 60444″. You’d think it was that simple but there’s actually science behind it and we’ve been around 5 years quietly for a reason. To monetize text Jim to 60444 properly you have to really commit to the right mobile strategy.

 

The band, especially if not already popular, should start handing out flyers right from the sound-check, talk to the engineer and get them to put the band’s logo and the text code on the venue’s screens if available, find half a dozen girls before the gig and ask them to help you giving out flyers. The new music industry is about the artist interacting – and it does not matter if you’re Mariah Carey or an unsigned band , the principle is the same. If you don’t work at your career offline and also interact with your fans across social, mobile, digital and in all the new ways in which kids want to access music you will falter.

 

Look at Christina Aguilera’s tour, she had to cancel it. Do you know why? Because she wasn’t prepared to lower herself to the reality of how the public wanted to be personal with her. She can’t just be a diva anymore she has to communicate with the public in the way that Taylor Swift does superbly for example.

The same is happening with radio and BBC Radio 6 is a testament of that. People are starting to want to listen to DJs who really have something to offer, and Radio 6 is reaching out to people who are sick of this mainstream bullshit.

 

We don’t know what’s out there that is going to be the next golden age of cultural revolution but it will happen on the mobile web, not on the online web because it would have happened already and it hasn’t.

 

The reason why it will happen on the mobile web is simple: people are on the move with their mobile phones 24 hours per day and they don’t switch them off, that is the new media. I don’t care what industry you’re in, whether it’s a pharmaceutical company, a media company, a film company, a music company: if you don’t have some sort of mobile strategy in place now see what the future brings you in the short term. You’re going to have a huge problem by 2011/2012.

AL: You’ve been researching into the company for years now: are you still prepared to find surprises in the way labels will use this service or do you think there’s a way to predict how the public is going to react?

DT: For me you need to take that prediction back a bit to where the labels are. For the music industry to evolve and change you have to change the industry itself. Forget the four major labels, the independent sector is now more than open to look at different options and they are exploring.

 

Kerry Harvey Piper from Red Grape Records said: I don’t want to pay x amount of money to deliver and SMS message. Six months ago we were charging 6p per message and she said: that’s too much money: I want to pay 4p or less.

 

I am confident that music2text will scale into the long tail we decided to go there. We did some due diligence, found as SMS aggregator that was willing to provide the service for 3p and we said we were happy to keep just 1p. Kerry also gave us an idea asking us whether we could develop a technology down the road where there could be a third party sponsor for the text message that will pay for that text.

 

For example if I have a deal with Ford or McDonalds I could include the message:  sponsored by x and y with a link to an offer. That could be a mobile analytical tool working in the background of our system where for example if McDonalds were to give away a free burger with the offer and the person turned up and bought fries and a milkshake with that, the label could get a revenue share for the extra purchase. I’m thinking outside the box but someone has to and it may as well be us.

 

In that situation we would be earning from the label revenue chain & we’d be happy to only charge around 15% to manage the process so for the label it’s win-win. They are sending the content out to fans, this down the road can be monetized by a third party and they can potentially earn additional revenue from that campaign for conversion. So our system is set up to do those things because we’re listening to our clients.

 

 

All the public cares about is that you grab their attention in 2 seconds, otherwise forget it!  Our mobile music store is very easy to navigate we’ve asked 8 year olds, 25 year olds, 55 year olds and everyone understood what this is and how to use it. If you can’t deliver the content to mobile in 2 clicks you should not be in this business, don’t bother.

AL: So I was browsing the demo version of the mobile service the other day and there’s a link there that can be used by the fans to get in touch with the band directly. So how does that work and are there any costs involved in the service? 

DT: Reply2Band is very simple, in the mobile music store there’s a link that says Reply2Band, From that link the fans can send free messages to the band right from the mobile product page.

 

These messages go to the artist’s Direct2Fan page and we charge 4p for the bands to send messages back to the fans, but they can also monetize that message up to £1.50 for a single track or up to £5 or even £10 for an album.

 

To us it was a no-brainer but it took a year and a half to develop the technology. It’s really simple to use, our system is all about data capture so that the labels can have their cash registers directly connected to the consumers.

 

It’s a great viral tour as well – the artist Bashy was pulling in from the latest tour with Chipmunk about 600 to 700 fans on each date and he now has 7,000 fans out of a 9 date tour. Now he can send any content: a track, album, video podcast as well as free content to the 7,000 fans or advertise his next tour. 

AL: Finally, the company has only just started in terms of being launched officially. On the one side you’re going to be looking at having as many artists and labels on the service as possible and on the other side you must have a road-map as to how you’d like to develop the service in the next six months. Is there anything you’d like to share with us in terms of where you’re planning to take the service from here? 

DT: We’re planning some sort of official launch at Midem 2011, in the interim we already have a strategy in place to go into 14 countries by January. We’re a very secretive company and believe in PR only when it’s needed. When you’re developing something you either hype it and monetize it along the way or you do it the organic way, you develop it slowly, you build brand loyalty and your partners evolve with you because they feel you are part of their system – we are not part of their revenue chain so there’s a lot of communication/trust with the labels there.

In that sense we act more like a media-marketing company. Using the service is very easy for the labels and for the fans and all we do in the middle is advise and manage those digital processes for them. It’s ambitious and we’ve had many investment opportunities – a Canadian company recently offered us 15 million dollars so there’s a lot of investment interest out there.

This is mainly thanks to a company in London called Lansdowne Capital. One of the senior owners of this company is called Orla Dargan, an investment banker that has been guiding our fortunes quietly for the past two years.  We’re in very good hands in the city and as far as we’re concerned this isn’t about money, we want to make sure we have the right kind of funding to build a strong brand that the industry from an independent perspective can depend on.

We feel that we’ve developed a very well thought-through product and service that the industry needs and it has been developed by both artists and business leaders.

AL: Music2Text is something that in the UK scene especially but I’m sure in the International scene as well is very much needed as no-one else is creating this sort of technology.


DT: Well in the US we’re actually members of A2IM and that is our next market – we have been developing our opportunities there for the past 2 & half years quietly. 
I’m passionate about the industry – I love music –  I just want to see the real music that’s out there come to the fray – and it will. 

Interview conducted by Andrea Leonelli www.digitalmusictrends.com episode 55

Subject: Denver Thomas Ceo/Founder music2text

And now as promised a super-quick overview of this week’s news!

Italian Major label representative FIMI this week announced that for the first time in 11 years sales of music in Italy grew by 7.7% in value, with digital music increasing by 15% over the same period last year and CD sales growing from 45 to 50 million euros.

http://www.rockol.it/news-145297/Italia,-crescono-le-vendite-di-Cd–non-succedeva-da-11-anni-
(in Italian)
http://www.billboard.biz/bbbiz/content_display/industry/e3i3639278d2189e4ef9c31b5e41f5125f9

Music streaming service MOG has finally launched its mobile application for both iPhone and Android, giving its users a three day trial after which they need to subscribe for a fee of 9.99$ per month. The functionality is very similar to that of Spotify’s mobile app with the option of caching songs into the mobile phone to listen to them on the go. The videos show a very slick and usable app, one that should have Spotify pretty worried just about now – if MOG started to build a real customer base in the US those would all be customers taken away to a potential US version of Spotify.

http://techcrunch.com/2010/07/20/mog-iphone-android/
http://www.musicweek.com/story.asp?sectioncode=1&storycode=1041912&c=1

HMV – the only high street music chain left in the UK today launched a revamped version of its digital store called HMV Digital – the store allows users to download tracks very quickly and easily and to play them on any device. There are some launch offers at the moment with some cheap tracks and albums on the site so if you are in the UK and fancy a digital bargain go and try out this new service.

http://news.sky.com/skynews/Home/Business/HMV-Music-Download-Service-HMVDigital-Offers-Top-40-Singles-For-40p-In-Battle-With-iTunes/Article/201007415670809?

At the new music seminar, Pandora announced that they now have 60 million listeners, up from 40 million in December 09. If if they keep up this growth rate they could be reaching 100 million users in the first half of 2011.

http://techcrunch.com/2010/07/21/pandora-stats/

Musician Amanda Palmer has managed to sell 15,000 dollars worth of music and merchandise in just three minutes through the start-up Bandcamp. The platform, that acts like a distributor, allows the artists to sell physical and digital music through their artist pages. The service, that bears some similarities with the established Topspin, h only launched quite recently and naturally this exploit by Amanda Palmer was a great way to kick-start the company. Amanda Palmer launched her new EP – consisting of Radiohead covers played with a ukulele – in a variety of different physical and digital formats, from the simple download to super-elaborate physical packages. Pretty much all physical packages are now sold out on the site.

http://www.billboard.biz/bbbiz/content_display/industry/e3ic0d7c3a6d02f0164bcfeb5c76180e2e7

Well, that’s all for this week, I really hope you enjoyed the show! Don’t forget to email me or @me with feedback or ideas – the email is digitalmusictrends@gmail.com and the twitter handle is digimusictrends. Also don’t forget to visit the website for links to the feeds, itunes store and the vaults of Digital Music Trends featuring over forty interviews with digital music experts.
Have a great week and ’till next time!

Digital Music Trends – Episode 55

This week on the show an exclusive feature on the company Music2Text that only officially launched last week. The interview with Denver Thomas – the CEO of the company – is pretty extensive so for this week I’m going to forgo with the usual in-depth news coverage and I’ll just go for a ultra-quick scan of the most compelling headlines instead, with links to the relevant articles on the show-notes. If you’re at all interested in mobile distribution this feature is one you can’t miss: we discuss mobile distribution, the need to streamline user experience in mobile, business models and tools to communicate with the fans and monetize that relationship.
You can actually try out the service – if you’re in the UK text EAGLE to 60444 and you’ll receive a link to the Eagle Rock Entertainment campaign, bear in mind that this number works in the UK only so if you’re somewhere else in the worlds and still want to have a look at the mobile site type http://m2txt.com/eagle in your mobile browser.
And now as promised a super-quick overview of this week’s news!

Italian Major label representative FIMI this week announced that for the first time in 11 years sales of music in Italy grew by 7.7% in value, with digital music increasing by 15% over the same period last year and CD sales growing from 45 to 50 million euros.

Music streaming service MOG has finally launched its mobile application for both iPhone and Android, giving its users a three day trial after which they need to subscribe for a fee of 9.99$ per month. The functionality is very similar to that of Spotify’s mobile app with the option of caching songs into the mobile phone to listen to them on the go. The videos show a very slick and usable app, one that should have Spotify pretty worried just about now – if MOG started to build a real customer base in the US those would all be customers taken away to a potential US version of Spotify.

HMV – the only high street music chain left in the UK today launched a revamped version of its digital store called HMV Digital – the store allows users to download tracks very quickly and easily and to play them on any device. There are some launch offers at the moment with some cheap tracks and albums on the site so if you are in the UK and fancy a digital bargain go and try out this new service.

At the new music seminar, Pandora announced that they now have 60 million listeners, up from 40 million in December 09. If if they keep up this growth rate they could be reaching 100 million users in the first half of 2011.

Musician Amanda Palmer has managed to sell 15,000 dollars worth of music and merchandise in just three minutes through the start-up Bandcamp. The platform, that acts like a distributor, allows the artists to sell physical and digital music through their artist pages. The service, that bears some similarities with the established Topspin, h only launched quite recently and naturally this exploit by Amanda Palmer was a great way to kick-start the company. Amanda Palmer launched her new EP – consisting of Radiohead covers played with a ukulele – in a variety of different physical and digital formats, from the simple download to super-elaborate physical packages. Pretty much all physical packages are now sold out on the site.

Well, that’s all for this week, I really hope you enjoyed the show! Don’t forget to email me or @me with feedback or ideas – the email is digitalmusictrends@gmail.com and the twitter handle is digimusictrends. Also don’t forget to visit the website for links to the feeds, itunes store and the vaults of Digital Music Trends featuring over forty interviews with digital music experts.

Have a great week and ’till next time!


Digital Music Trends – Episode 54

This week on the show the second installment of my series on piracy and anti-piracy which is an interview with Alex Jacob, Communications manager at the International Federation of the Phonographic industry – better known as the IFPI. Also last Wednesday I attended a debate organized by Music Ally on Cloud music services with some very interesting guests so I’ll talk a little bit about that. And finally in the news for this week PRS for music released a controversial paper that calls for ISPs to be charged for the piracy that happens on their networks. Also in the news a heated back and forth between Tom Silverman and Tunecore’s CEO Jeff Price, Spotify keeps growing and maintains it will launch in the US by 2010, UK music retailer HMV is set to re-launch its digital store soon, We7 integrates a news element to its on-demand offering and becomes a real competitor for traditional radio and finally Ministry of Sound decides to sue its fans like it’s 2005.?

  

FPI feature
Alex Jacob
www.ifpi.com

Music Ally Cloud Music Models event

http://musically.com/blog/2010/07/14/liveblog-music-ally-cloud-models-debate/

Now last Wednesday I attended Music Ally’s event on Cloud Models for the music industry. The debate turned out to be quite informative in that the panelists were all coming from very different viewpoints. There was Michael Robertson of MP3.com fame who has now launched a music locker service called MP3tunes.com, Rob Lewis – the head of Omnifone, Pete Downtown from Imagination Technologies, Chris Cass from Gracenote , Bobby Rosenbloum from the law firm Greenber Traurig and Will Page from PRS for Music. Cloud models are clearly a hot subject now as demonstrated by the packed room – and with NPD recently reporting that between seven and eight million iTunes users in the US would be willing to pay a monthly fee of $10 to access a cloud service people are starting to realize that subscription could bring big bucks back into the music industry coffers. There were a few main points to take away from the panel
1) cloud music service is a very generic concept that includes a whole host of subcategories from simple backup systems to online radio, to on-demand streaming services and music lockers
2) service interoperability is key to the success of any cloud service, with the number of devices that are connected to the Internet either via 3g or wi-fi set to grow exponentially over the next few years access is fundamental
3) according to Michael Robertson this is the dawn of a new phase in the consumption of music and it brings a host of new business opportunities or the music industry – the industry by now should have learnt from its previous missteps and be willing to embrace these new models
4) there is an open legal debate as to whether music lockers need a license or not, especially if the user uploads his own music and that content is password protected.
5) cloud services may be able to appeal to that large segment of the population that at the moment does not buy any digital music thus expanding the market
6) licensing is a major hurdle in getting any legal service off the ground, there is a real need to streamline licenses and to clear up the data on who owns what rights.
This is a super-short summary of the main points that took away from the panel,but I do suggest that if you have time you go and read Music Ally’s liveblog of the event, the link is in the shownotes!

- PRS for Music controversial paper on the role of ISPs in compensating rightsholders for the exchange of unlicensed content
http://news.sky.com/skynews/Home/Business/Talktalk-Rejects-The-Music-Piracy-Proposal-Suggested-By-PRS-for-Music-As-Futile/Article/201007215664998?
http://newsblog.thecmuwebsite.com/post/PRS-man-proposes-piracy-monitoring-and-net-firm-levy.aspx
http://www.ft.com/cms/s/0/2876e320-8ec0-11df-8a67-00144feab49a.html
http://www.techeye.net/internet/prs-for-music-wants-piracy-levy-on-isps
http://www.musicweek.com/story.asp?sectioncode=1&storycode=1041844&c=1
http://www.zeropaid.com/news/89927/uk-isp-slams-proposal-for-piracy-%E2%80%9Ccap-and-trade%E2%80%9D-levy/
http://www.telegraph.co.uk/technology/news/7887348/We7-takes-on-traditional-radio.html

A controversial paper by Will Page – Chief Economist at the collection society PRS for music and David Touve – assistant professor of Strategy and Entrepreneurship at the Washington And Lee University has spurred further debate this week on the role of ISPs in controlling and ultimately compensating the rights-owners for the exchanges of unlicensed materials happening on their networks. The paper, entitled “Moving Digital Britain Forward, without leaving Creative Britain Behind” is based around the idea that ISPs are the next generation broadcasters – in the sense that they are operators of networks that connect supply with demand in a market for media. The problem is that open high speed networks differ from traditional cable and satellite networks since much of the entertainment carried by the ISPs is not currently remunerated. The assumption is that through the Digital Economy Act that has been passed as law in the UK the transit of unlicensed content over the Internet will be monitored and measured and this measurement allows for a precise quantification of the value of unlicensed media, a value that enables this media to be priced and traded. The paper identifies a company that has developed technology to monitor filesharing activities – called Detica and its technology called Detica C-View. This allows rights holders to measure and price and the problem of piracy and consider the aggregate effect of new licensed services, business models and events. Basically it allows to know exactly who is filesharing what on which network and to monitor whether the introduction of new legal services or the use of warning letters in the case of the three strikes implementation has an impact in the volume of unlicensed file sharing. The idea is that if changes in the scale of unlicensed media can be measured then they can put a value on this spillover to bridge the gap between licensed and unlicensed. The paper goes on to outline the legal basis to justify a transfer of value form the ISPs to rights holders – i won’t go into details on that one but you can find the link to the paper in the shownotes – and finally it puts forward two compensation based possibilities, that it specifies can only be considered by accepting that a form of market failure has occurred and therefore some form of regulation is required. First is the dynamic compensation model where operators would face a fee for the transmission of unlicensed media on their networks and that fee would be reduced in line with reductions in the unlicensed media transmitted, and second a positive spillover approach that converts infringing media to non-infringing by a way of a legal agreement. Basically in this second option network operators would pay a fee for a blanket license, which would also vary depending on the volumes of licensed and unlicensed material that goes through their pipes.
Well you can imagine that ISPs were the first to come forward against the paper with Talk Talk being the most vocal for now, the company stated to Sky News that
“It would require monitoring of traffic and this has huge implications in respect of directives on privacy and data retention. and also “It’s profoundly unfair – it is like making a bus company responsible for shoplifters who use their buses to get to the shops. Finally Talk Talk reiterated that”It is futile since people will switch to undetectable methods e.g. encrypted services, streaming.” So a pretty direct response here.
The Financial Times reported that a spokesperson for the Department for Business, Innovation and Skills said: “I understand this would require fresh legislation, which we don’t have any plans for at this time.” So I don’t think this will be integrated in a hurry in the Digital Economy Act since this law is controversial enough as it stands.
From my point of view there is a fundamental problem first in talking about pirated material as a lost revenue – there is no consensus on how much more the industry would sell if piracy wasn’t there, in other words how can you calculate whether the person that downloaded the latest Eminem album illegally would have bought it? Second there’s a clear privacy problem, as the idea of a private company lice Detica snooping around in every single packet exchanged over the net in the UK really gives me the creeps. And third, although the ISP metaphor of the bus driver is getting a little tired by now, ISPs are hardly responsible for the filesharing that is done by its users. I also take some issue with the idea that legal users will not benefit from the increased speed of the networks. If i want to rent a movie on iTunes I’d much rather have it in 5 minutes rather than a half hour and with HD content probably becoming the norm in the next two years we will need that extra bandwidth to push out better quality content. Sure, the user that just downloads a few MP3s will not feel much difference between a 2mb and a 100 megabyte download speed, but a time will come where the music industry will offer the material without any compression, and since that way an album could easily be 700 megabytes or so then a higher broadband speed would be a marked advantage.

- Tunecore VS Tony Silverman
http://www.wired.com/epicenter/2010/07/tom-silverman-proposes-radically-transparent-music-business/all/1
http://www.techdirt.com/articles/20100715/00310210223.shtml
http://www.techdirt.com/articles/20100713/00121510187.shtml

And there was another controversy this week as the founder of Tommy Boy records, Tom Silverman, released a pretty incandescent interview on Wired. The interview starts out with Silverman talking about a new business model in which the labels would become partners with the artists – a way to stop the advances culture once and for all and to make the payments systems more transparent. The controversial part comes a little later when he talks about DIY artists. First he states that fewer artists who are doing it themselves are breaking through than ever before, then he goes on to slam Tunecore users be calling releases that sell less that 100 copies as Noise and “an aberration”. He calls Tunecore users hobbyists who clutter iTunes with crap and make it harder for good artists to break through. This was obviously a pretty direct attack on Tunecore and so Jeff Price, the CEO of the company was quick to come up with a sarcastic rebuttle. First of all he argues that the presence of a release on a digital store does not compromise the finding of another release, and so an independent release is not blacking anyone from finding the lastest Lady Gaga track. Second, he points out that he disagrees with the concept of one person deciding for the rest of us what has and what hasn’t got value. Third Price goes on to point out how odd it is that Silverman is actually at the head of the New Music Seminar, an event aimed at providing young artists with the information needed to promoted their music and get it out there, he basically dismissed about 80% of the people who attend – and pay for – his series of seminars. Finally price concludes by pointing out that Tunecore artists have generated over70 million dollars in gross music sales and that with more people that ever consuming, streaming, stealing and listening to music it does not look like a wider offer is hurting overall music consumption at ll. The controversy was immediately picked up by Techdirt writer Mike Masnick who went on to report on both the initial interview and on Jeff Prices’ rebuttal. I completely agree with Mike when he says that there was a part of Silverman’s interview that actually contained some pretty interesting ideas about new business models, so if you want to have a look yourself follow the link in the shownotes to the interview, Jeff Prices’ rebuttal and Techdirt’s articles.

- Spotify’s growth and US launch plans
http://www.telegraph.co.uk/technology/news/7889670/Spotify-growing-healthily-and-on-track-for-US-launch.html

The Telegraph this week reported some juicy news on the Spotify front. Daniel Ek confirmed that the service now has over 500,000 subscribers in Europe and is one of the biggest music subscription services worldwide. Spotify has struggled to obtain the necessary licenses to launch its service in the USA but Ek was confident that the launch would happen by the end of this year. He also admitted that the service is not perfect yet and that in order to become the best service possible it needs to grow – he said that at the moment it’s not important to see the ratio of how many paying versus free users they have but it’s important to gain momentum and increase the number of people using it. This is a very interesting statement – the company has been pushing subscriptions hard as everyone agrees that the free version alone could not sustain the service. At the same time the implementation of its new social features has allowed Spotify to reach huge amount of new users and could make people feel like the £5 or £10 per month are worth it – especially if Spotify was to introduce some other important features related to the social space that would only be available to paying users.

- HMV to re-launch its digital store
http://www.billboard.biz/bbbiz/content_display/industry/e3i9342877e23cfa0f950bd4b3a5164edee

And Billboard Business reported on the imminent re-launch of HMV’s Digital Music Store, after it was taken down earlier this year. HMV’s head of Music Melanie Armstrong revealed at its suppliers conference that the company is very close to launching HMV digital. The new download store has been created in partnership with 7Digital, the digital retailer of which HMV acquired a 50% share in September 2009. The store has been touted as being completely DRM free, in start contrast to HMV’s previous offering and of being compatible with iTunes and Windows Media from the get-go, which makes me think that the offering will consist of very straightforward MP3s. Hmv is pretty much the only music retailer left on the high street in the UK and many people also use its website to order music, DVDs and games. The success of the digital store will depend on how well HMV manages to push the digital option in its high street stores, website and at its live venues. It is increasingly hard nowadays to get consumers to sign up to yet another service but an intelligent promotional giveaway or something along those lines may be a good way to draw customers to the store. Low prices do not appear to be quite as important, Amazon has been selling selected Singles and Albums at a loss from the start of the service as a promotional tool but the user base of Amazon Mp3 is still extremely low compared to that of iTunes.

- We7 integrates news in its music on-demand offering
http://www.guardian.co.uk/media/2010/jul/13/gmg-radio-we7
http://www.telegraph.co.uk/technology/news/7887348/We7-takes-on-traditional-radio.html
http://www.techradar.com/news/internet/we7-adds-breaking-news-to-on-demand-listening-702697

The Guardian, Telegraph and Techradar reported on We7’s latest addition to the service. We7 in fact has struck a deal with the Guardian Media group division to host their content within the platform. The deal will allow users to intersperse the playlists they created with regular bulletins that willkeep them up to date with the latest news. This marks the first step towards the creation of a truly on-demand radio where you are in control of the music but are still able to keep up to date with what’s happening in the outside world. I expect this to be the first of a series of deals with content providers to create a completely personalized radio experience and I wonder whether it would make sense for them to integrate spoken word podcasts into the service as well – wink wink – to provide the listeners with a more exciting experience. Music podcasts in addition could actually shift between the pre-recorded part and a direct stream from wE7 so that they could still use full length music without paying the extra license as the music would have been licensed within the service anyway. It may be an off-the-wall idea, but I think that would be pretty cool!

- Ministry of Sound is the latest label to decide to sue P2P downloaders, bad call?
http://www.guardian.co.uk/money/2010/jul/17/file-sharers-legal-action-music-downloads
http://www.zeropaid.com/news/89957/ministry-of-sound-legally-threatens-2000-alleged-file-sharers/

Ministry of Sound is the latest company turning to a law firm, in this case Soho firm Gallant Macmillan, in order to obtain compensation from users who are suspected of sharing its music. The company recently sent over 2,000 letters asking the recipients for between £300 to over £1000 for sharing particular pieces of music. These letters have become a more and more adopted practice despite even the British Phonographic Industry reiterating that legal action should be reserved to repeating offenders only and should not be used as first and only approach. Clearly the aim is to scare off people enough to get them to pay – to date none of these cases have actually gone to court in the UK.Legal experts deem that it would be very hard to actually win these cases in court because the copyright owners would have to provide irrefutable proof that that particular person was responsible for the filesharing.
I take exception in particular to the fact that many of the companies sending the letters have no intention of taking the cases to a court possibly because that would be far too expensive and it would be a tricky decision. What I AM sure about is that people who received these letter probably won’t be buying Ministry of Sound tracks ever again even if they absolutely loved the music.

Well that’s all for this week, i really hope you enjoyed the show, next week an exclusive feature on the company Music2Text a new player in mobile distribution so don’t miss it. You can email any feedback to digitalmusictrends@gmail.com and you can follow me on twitter, the handle is digimusictrends,
Have a great week and ’till next time!

Digital Music Trends – Episode 54

This week on the show the second installment of my series on piracy and anti-piracy which is an interview with Alex Jacob, Communications manager at the International Federation of the Phonographic industry – better known as the IFPI. Also last Wednesday I attended a debate organized by Music Ally on Cloud music services with some very interesting guests so I’ll talk a little bit about that. An finally in the news for this week PRS for music released a controversial paper that calls for the ISPs to be charged for the piracy that happens on their networks. Also in the news a heated back and forth between Tony Silverman and Tunecore’s CEO Jeff Price, Spotify keeps growing and maintains it will launch in the US by 2010, UK music retailer HMV is set to re-launch its digital store soon,  We7 integrated a news element in its on-demand offering to become a real rival of traditional radio and finally Ministry of Sound decides to sue its customers like it’s 2005.

IFPI feature

Alex Jacob
Now last Wednesday I attended Music Ally’s event on Cloud Models for the music industry. The debate turned out to be quite informative in that the panelists were all coming from very different viewpoints. There was Michael Robertson of MP3.com fame who has now launched a music locker service called MP3tunes.com, Rob Lewis – the head of Omnifone, Pete Downtown from Imagination Technologies, Chris Cass from Gracenote , Bobby Rosenbloum from the law firm Greenber Traurig and Will Page from PRS for Music. Cloud models are clearly a hot subject now as demonstrated by the packed room – and with NPD recently reporting that between seven and eight million iTunes users in the US would be willing to pay a monthly fee of $10 to access a cloud service people are starting to realize that subscription could bring big bucks back into the music industry coffers. There were a few main points to take away from the panel
1) cloud music service is a very generic concept that includes a whole host of subcategories from simple backup systems to online radio, to on-demand streaming services and music lockers
2) service interoperability is key to the success of any cloud service, with the number of devices that are connected to the Internet either via 3g or wi-fi set to grow exponentially over the next few years access is fundamental
3) according to Michael Robertson this is the dawn of a new phase in the consumption of music and it brings a host of new business opportunities or the music industry – the industry by now should have learnt from its previous missteps and be willing to embrace these new models
4) there is an open legal debate as to whether music lockers need a license or not, especially if the user uploads his own music and that content is password protected.
5) cloud services may be able to appeal to that large segment of the population that at the moment does not buy any digital music thus expanding the market
6) licensing is a major hurdle in getting any legal service off the ground, there is a real need to streamline licenses and to clear up the data on who owns what rights.
This is a super-short summary of the main points that took away from the panel,  but I do suggest that if you have time you go and read Music Ally’s liveblog of the event, the link is in the shownotes!

- PRS for Music controversial report on an ISP charge http://news.sky.com/skynews/Home/Business/Talktalk-Rejects-The-Music-Piracy-Proposal-Suggested-By-PRS-for-Music-As-Futile/Article/201007215664998? http://newsblog.thecmuwebsite.com/post/PRS-man-proposes-piracy-monitoring-and-net-firm-levy.aspx http://www.ft.com/cms/s/0/2876e320-8ec0-11df-8a67-00144feab49a.html

http://www.techeye.net/internet/prs-for-music-wants-piracy-levy-on-isps

A controversial paper by Will Page – Chief Economist at the collection society PRS for music and David Touve – assistant professor of Strategy and Entrepreneurship at the Washington And Lee University has spurred further debate this week on the role of ISPs in controlling and ultimately compensating the rights-owners for the exchanges of unlicensed materials happening on their networks. The paper, entitled “Moving Digital Britain Forward, without leaving Creative Britain Behind” is based around the idea that ISPs are the next generation broadcasters – in the sense that they are operators of networks that connect supply with demand in a market for media. The problem is that open high speed networks differ from traditional cable and satellite networks since much of the entertainment carried by the ISPs is not currently remunerated. The assumption is that through the Digital Economy Act that has been passed as law in the UK the transit of unlicensed content over the Internet will be monitored and measured and this measurement allows for a precise quantification of the value of unlicensed media, a value that enables this media to be priced and traded. The paper identifies a company that has developed technology to monitor filesharing activities – called Detica and its technology called Detica C-View. This allows rights holders to measure and price and the problem of piracy and consider the aggregate effect of new licensed services, business models and events. Basically it allows to know exactly who is filesharing what on which network and to monitor whether the introduction of new legal services or the use of warning letters in the case of the three strikes implementation has an impact in the volume of unlicensed file sharing. The idea is that if changes in the scale of unlicensed media can be measured then they can put a value on this spillover to bridge the gap between licensed and unlicensed. The paper goes on to outline the legal basis to justify a transfer of value form the ISPs to rights holders – i won’t go into details on that one but you can find the link to the paper in the shownotes – and finally it puts forward two compensation based possibilities, that it specifies can only be considered by accepting that a form of market failure has occurred and therefore some form of regulation is required. First is the dynamic compensation model where operators would face a fee for the transmission of unlicensed media on their networks and that fee would be reduced in line with reductions in the unlicensed media transmitted, and second a positive spillover approach that converts infringing media to non-infringing by a way of a legal agreement. Basically in this second option network operators would pay a fee for a blanket license, which would also vary depending on the volumes of licensed and unlicensed material that goes through their pipes.

Well you can imagine that ISPs were the first to come forward against the paper with Talk Talk being the most vocal for now, the company stated to Sky News that

“It would require monitoring of traffic and this has huge implications in respect of directives on privacy and data retention. and also “It’s profoundly unfair – it is like making a bus company responsible for shoplifters who use their buses to get to the shops. Finally Talk Talk reiterated that  ”It is futile since people will switch to undetectable methods e.g. encrypted services, streaming.” So a pretty direct response here.

The Financial Times reported that a spokesperson for the Department for Business, Innovation and Skills said: “I understand this would require fresh legislation, which we don’t have any plans for at this time.” So I don’t think this will be integrated in a hurry in the Digital Economy Act since this law is controversial enough as it stands.
From my point of view there is a fundamental problem first in talking about pirated material as a lost revenue – there is no consensus on how much more the industry would sell if piracy wasn’t there, in other words how can you calculate whether the person that downloaded the latest Eminem album illegally would have bought it? Second there’s a clear privacy problem, as the idea of a private company lice Detica snooping around in every single packet exchanged over the net in the UK really gives me the creeps. And third, although the ISP metaphor of the bus driver is getting a little tired by now, ISPs are hardly responsible for the filesharing that is done by its users. I also take some issue with the idea that legal users will not benefit from the increased speed of the networks. If i want to rent a movie on iTunes I’d much rather have it in 5 minutes rather than a half hour and with HD content probably becoming the norm in the next two years we will need that extra bandwidth to push out better quality content. Sure, the user that just downloads a few MP3s will not feel much difference between a 2mb and a 100 megabyte download speed, but a time will come where the music industry will offer the material without any compression, and since that way an album could easily be 700 megabytes or so then a higher broadband speed would be a marked advantage.
- Tunecore VS Tony Silverman
And there was another controversy this week as the founder of Tommy Boy records, Tom Silverman, released a pretty incandescent interview on Wired. The interview starts out with Silverman talking about a new business model in which the labels would become partners with the artists – a way to stop the advances culture once and for all and to make the payments systems more transparent. The controversial part comes a little later when he talks about DIY artists. First he states that fewer artists who are doing it themselves are breaking through than ever before, then he goes on to slam Tunecore users be calling releases that sell less that 100 copies as Noise and “an aberration”. He calls Tunecore users hobbyists who clutter iTunes with crap and make it harder for good artists to break through. This was obviously a pretty direct attack on Tunecore and so Jeff Price, the CEO of the company was quick to come up with a sarcastic rebuttle. First of all he argues that the presence of a release on a digital store does not compromise the finding of another release, and so an independent release is not blacking anyone from finding the lastest Lady Gaga track. Second, he points out that he disagrees with the concept o one person deciding for the rest of us what has and what hasn’t got value. Third Price goes on to point out how odd it is that Silverman is actually at the head of the New Music Seminar, an event aimed at providing young artists with the information needed to promoted their music and get it out there, he basically dismissed about 80% of the people who attend – and pay for – his series of seminars. Finally price concludes by pointing out that Tunecore artists have generated over70 million dollars in gross music sales and that with more people that ever consuming, streaming, stealing and listening to music it does not look like a wider offer is hurting overall music consumption at ll. The controversy was immediately picked up by Techdirt writer Mike Masnick who went on to report on both the initial interview and on Jeff Prices’ rebuttal. I completely agree with Mike when he says that there was a part of Silverman’s interview that actually contained some pretty interesting ideas about new business models, so if you want to have a look yourself follow the link in the shownotes to the interview, Jeff Prices’ rebuttal and Techdirt’s articles.

- Spotify’s growth and US launch plans http://www.telegraph.co.uk/technology/news/7889670/Spotify-growing-healthily-and-on-track-for-US-launch.html

The Telegraph this week reported some juicy news on the Spotify front. Daniel Ek confirmed that the service now has over 500,000 subscribers in Europe and is one of the biggest music subscription services worldwide. Spotify has struggled to obtain the necessary licenses to launch its service in the USA but Ek was confident that the launch would happen by the end of this year. He also admitted that the service is not perfect yet and that in order to become the best service possible it needs to grow – he said that at the moment it’s not important to see the ratio of how many paying versus free users they have but it’s important to gain momentum and increase the number of people using it. This is a very interesting statement – the company has been pushing subscriptions hard as everyone agrees that the free version alone could not sustain the service. At the same time the implementation of its new social features has allowed Spotify to reach huge amount of new users and could make people feel like the £5 or £10 per month are worth it – especially if Spotify was to introduce some other important features related to the social space that would only be available to paying users.
- HMV to re-launch its digital store

http://www.billboard.biz/bbbiz/content_display/industry/e3i9342877e23cfa0f950bd4b3a5164edee

And Billboard Business reported on the imminent re-launch of HMV’s Digital Music Store, after it was taken down earlier this year. HMV’s head of Music Melanie Armstrong revealed at its suppliers conference that the company is very close to launching HMV digital. The new download store has been created in partnership with 7Digital, the digital retailer of which HMV acquired a 50% share in September 2009. The store has been touted as being completely DRM free, in start contrast to HMV’s previous offering and of being compatible with iTunes and Windows Media from the get-go, which makes me think that the offering will consist of very straightforward MP3s. Hmv is pretty much the only music retailer left on the high street in the UK and many people also use its website to order music, DVDs and games. The success of the digital store will depend on how well HMV manages to push the digital option in its high street stores, website and at its live venues. It is increasingly hard nowadays to get consumers to sign up to yet another service but an intelligent promotional giveaway or something along those lines may be a good way to draw customers to the store. Low prices do not appear to be quite as important, Amazon has been selling selected Singles and Albums at a loss from the start of the service as a promotional tool but the user base of Amazon Mp3 is still extremely low compared to that of iTunes.

- We7 integrates news in its music on-demand offering http://www.guardian.co.uk/media/2010/jul/13/gmg-radio-we7

The Guardian, Telegraph and Techradar reported on We7’s latest addition to the service. We7 in fact has struck a deal with the Guardian Media group division to host their content within the platform. The deal will allow users to intersperse the playlists they created with regular bulletins that will  keep them up to date with the latest news. This marks the first step towards the creation of a truly on-demand radio where you are in control of the music but are still able to keep up to date with what’s happening in the outside world. I expect this to be the first of a series of deals with content providers to create a completely personalized radio experience and I wonder whether it would make sense for them to integrate spoken word podcasts into the service as well – wink wink – to provide the listeners with a more exciting experience. Music podcasts in addition could actually shift between the pre-recorded part and a direct stream from wE7 so that they could still use full length music without paying the extra license as the music would have been licensed within the service anyway. It may be an off-the-wall idea, but I think that would be pretty cool!  

- Ministry of Sound is the latest label to decide to sue P2P downloaders, bad call?
http://www.zeropaid.com/news/89957/ministry-of-sound-legally-threatens-2000-alleged-file-sharers/

Ministry of Sound is the latest company turning to a law firm, in this case Soho firm Gallant Macmillan, in order to obtain compensation from users who are suspected of sharing its music. The company recently sent over 2,000 letters asking the recipients for between £300 to over £1000 for sharing particular pieces of music. These letters have become a more and more adopted practice despite even the British Phonographic Industry reiterating that legal action should be reserved to repeating offenders only and should not be used as first and only approach. Clearly the aim is to scare off people enough to get them to pay – to date none of these cases have actually gone to court in the UK.  Legal experts deem that it would be very hard to actually win these cases in court because the copyright owners would have to provide irrefutable proof that that particular person was responsible for the filesharing.

I take exception in particular to the fact that many of the companies sending the letters have no intention of taking the cases to a court possibly because that would be far too expensive and it would be a tricky decision. What I AM sure about is that people who received these letter probably won’t be buying Ministry of Sound tracks ever again even if they absolutely loved the music.

Well that’s all for this week, i really hope you enjoyed the show, next week an exclusive feature on the company Music2Text a new player in mobile distribution so don’t miss it. You can email any feedback to digitalmusictrends@gmail.com and you can follow me on twitter, the handle is digimusictrends,

Have a great week and ’till next time!

Digital Music Trends – Episode 53

This week on the show is the first of a series of features on piracy and anti-piracy that are aimed at creating a conversation around a subject that is certainly still very much at the centre of the debate and still very controversial. I am hoping that interviewing private companies working in this domain as well as music industry organizations like the IFPI will help shed some light on the phenomenon.

First guest for this series of features is Ben Rush, the CEO of Audiolock.net. AudioLock is an online service that offers protection for digital and physical promos as well as digital download stores by automatically tracking illegal downloads through a proprietary watermarking system. Its low access cost makes prevention accessible even to individual producers and small labels.  

This week has been pretty quiet on the news front probably due to the usual summer slowdown but I’m going to cover the new Forrester research on music and the cloud and the UK ISPs legal challenge to the digital economy act.

Episode 53 by digitalmusictrends


But as usual let’s start with this week’s interview and first feature of this summer’s piracy debate.

And thanks again to Ben for taking part in the show – I really am impressed with Audiolock’s technology but also by the way in which they are trying to change the mindset of the public in a less confrontational way. Oh and as promised in the interview Here’s a short sample of a  mastered audio file which was watermarked > then downloaded as a 128K mp3 > then turned to an 80Kbps ogg file > then to real media > then to an 80Kbps mp3. And from this they still were able to pull the watermark which is pretty impressive. http://digitalmusictrends.squarespace.com/storage/AudioLock_Sample.mp3

And now for the news:

Forrester research piece on cloud computing:
http://www.musicweek.com/story.asp?sectioncode=1&storycode=1041809&c=1
http://www.billboard.biz/bbbiz/content_display/industry/e3i76b408899045994d81aab55a93246e9f

Music Week and Billboard business reported this week on a new study published by Forrester Research entitled “360-Degree Music Experiences: Use The Cloud To Target Device Use Orbits”. This work, written by researcher Mark Mulligan, explores user’s needs when it comes to cloud access to content and has revealed some pretty surprising statistics that shed some doubts on the idea of multiple access points as the consumer’s ultimate dream. In fact the research showed that the vast majority of users do not listen to music from more than one device and those who do are a very small niche.
Interestingly Mulligan notes that he believes the Tablet will really help in advancing the consumption of music streaming on mobile devices as it constitutes a bridge between a phone and PC, but this is interesting as many have touted the iPad as a large brick when they listen to Pandora because of its current inability to multitask. the research is entirely based on the US market and shows that whilst the PC is still the most popular device to listen to digital music from, the mobile phone is becoming increasingly popular for a younger audience that prefers to load it with MP3 rather than using a streaming app. The research was conducted at the end of 2009 when some of the newest streaming apps like MSpot and Moog had not yet launched in the US but it clearly shows that there isn’t a huge appetite for on-demand streaming services. I wonder what kind of results the same research would have produced in the UK, where streaming services like Spotify and We7 really have millions of users. Also something to bear in mind is that streaming music requires a solid data plan and those in the US are pretty expensive and pretty much impossible for most teenagers, which is another reason why they prefer to load their phones with MP3s.

ISPs legal challange to UK anti-piracy laws
http://www.billboard.biz/bbbiz/content_display/industry/e3ic639ed027f3e13c9b0845efbeb934218
http://news.bbc.co.uk/1/hi/technology/10542400.stm

The BBC this week reported on the new challenge facing the Digital Economy Act in the UK. After running the risk of being repealed by the new government since liberal democrat Nick Clegg was fiercely opposed to its implementation the Digital Economy act is now being challenged by UK ISPs BT and TalkTalk who want the High Court to clarify the legality of the act before it is implemented. Large ISPs have a number of reasons to be against the new act. first of all it only targets ISPs with more than 400,000 customers, which they say puts them in a situation of competitive disadvantage and makes it likely for people to switch service just to avoid detection. Second they maintain that some parts of the bill may not be in compliance with EU regulation, and given the number of iterations that the Hadopi had to go through to be compliant in France I would not be surprised by that. The Digital Economy Act was rushed through Parliament just before it was dissolved by the Queen prior to the general election and this has prompted many to say that there had not been enough time to iron out the creases in the law. As i had mentioned at the time when the Act was passed this was a shame as a great deal of research had gone into the process and much of it was not even considered because of time restraints. It will be interesting to see how the High Court rules in this case.

Well that’s all for this week – I really hope you enjoyed the show. Next week the series on piracy and anti-piracy continues with a feature on the IFPI so stay tuned for that. I will also be attending Music Ally’s debate on Music and the Cloud on Wednesday so there willl be a report on that. If you are in London and would like to attend the event make sure you visit musically.com.
You can find links to the iTunes and RSS feeds on www.digitalmusictrends.com and the podcast is also featured on The Music Void at www.themusicvoid.com.

Please don’t hesitate to email me with any suggestion or feedback, the email is digtialmusictrends@gmail.com Finally you can follow me on twitter, the handle is digimusictrends

Have a great week and ‘till next time.?