Digital Music Trends – Episode 58

This week on the show the third installment of my series on piracy and anti-piracy that started in Episode 53 with Ben Rush, the CEO of Audiolock.net and continued in Episode 54 with Alex Jacob, Communications Manager at the International federation of the Phonographic industry. Guests on the show are two representatives of the BPI which stands for the British Phonographic Industry. Helen Saunders is the Head of Internet Investigations at the Anti-Piracy Unit of the BPI and Adam Liversage is the PR and Communications director for the organization. In the interview we tackle the latest piracy figures, cloud services, the Digital Economy Act and physical versus digital piracy.

Also this week in the news: Songkick announced a new partnership with Youtube, Pure radio launched a cloud-based music service, Spotify’s SVP of strategic partnerships Paul Brown is leaving the company, Arcade Fire got a digital push from the Amazon MP3 store to reach the top spot in the US charts and RjDj launched the new Moovz mode that will appeal to hip-hop fans.

But as usual let’s start with this week’s interview!

AL = Andrea Leonelli

HS = Helen Saunders

ADL = Adam Liversage

AL: I’m really happy to welcome to the show Helen Saunders and Adam Liversage: she’s the head of Internet Investigations at the BPI and he’s communications director at the BPI. It’s great to have you on the show. We’re going to talk a little bit about piracy and about the state of the UK music industry. But first of all would you like to introduce yourselves and explain what your role at the BPI is?

HS: My role as the head of Internet Investigations is to look after the Internet part of the anti-piracy unit. Our function is to crawl to find unlicensed music that is available for download or indeed anyone who is file-sharing.

ADL: I’m director of communications so a large part of what I do is convincing the media, the public and politicians at large that action is needed against file-sharing and other forms of piracy and at the same time to promote the growing range of excellent legal music services that are out there in the UK.

AL: So let’s start with the figures. Many talk about piracy but they don’t have figures in mind. What is, according to your figures, the size of music piracy in the UK?

ADL: There’s a number of metrics that we use. We know, because there have been several studies and surveys around this, that around 7 million people in the UK are file-sharing on a reasonably regular basis. This menas that approximately about 18 to 20% of the population is file-sharing and it’s a problem which is losing the industry about 200 million pounds every year.

AL: So what are the main tasks of the BPI’s anti-piracy unit, are there many divisions to it and how is it organized?

HS: Well, basically we have a team here based in London, that looks after the Internet side of things, but we also have  a number of investigators based around the UK who take on more the physical side looking at car boot sales, markets, shops, but they also take on the online cases that we generate from the London office and work closely with law enforcement in order to help us take those cases forward.

AL: I’m really interested in the technology and the methodology involved in tracking down piracy online. Have you developed your own technology in order to detect file-sharing or do you rely on third party companies, and if so what kind of third party companies do you use?

HS: Well we use a range of techniques in order to uncover piracy online. The technology is so complex that we can’t use one technique for everything. So we do use third party vendors but we also do our own scans both across the web and on P2P networks.

AL: This week Carphone Warehouse has introduced a new cloud service for music that has been endorsed by yourselves as well as by PRS for Music. So what do you think about cloud services as a possible source of secondary revenues for the industry?

ADL: I think that when they are correctly licensed they are something that we would encourage. At the same time it’s important to point out what this service is and what it’s not. It replicates songs that you may have on your computer and transforms them into a legal stream which either goes to your computer or to a mobile device, and in a small number of cases it will upload songs which you have on your computer into a locker. You have to bear in mind that the industry is keen to see a wide variety of services develop and we’ve gone quite some way in taking leaps of faith with various services just to see how the market develops and to encourage consumer into the legal market. You will inevitably see more cloud services launch in the future which are entirely legal and licensed.

AL: The interesting thing about cloud services is that there’s still a debate on-going. For example there’s a service called MP3Tunes that has been operating for about five years now out of the States. They maintain that if the user uploads his own music onto their locked service and only that user can access the music then they should not have to pay licensing fees for that. Do you consider this sort of service legitimate in the UK or does it not comply with your requirements?

ADL: Not all services are alike. There are some record labels that don’t believe that the way in which Mp3Tunes operates should be licensed. The service that Spotify and Music anywhere provide is different. It creates a playlist based on what is on your computer but then moves everything into an entirely legal and licensed world where consumers are paying to have that service and where the artist is receiving payment for it.

AL: We’re talking about Spotify, Music Anywhere and We7 here in the UK, services that have or are developing a fairly widespread audience, so the UK is in a better position than other countries in that respect, but piracy is still very much present, so what are the ways the BPI think are feasible to  try and convert the people that are still pirating to the huge amount of services that are out there and available in this country.

ADL: Well there are a few things that we are doing. I think that the main thing as an industry is to try and make as many services available as possible. We have over 70 digital music stores in this country, that’s more than any other country in the world and the revenue they generate is twice as much a country like France or Germany so we are the most progressive country in the world when in comes to this. That’s a reflection in many ways of the fact that we are the biggest consumers of music pro-capita in the world. Almost anybody in this country buys at least two music products per year so making these services available is important. The other aspect of it is ensuring that people know about them and also explaining that they have moved on considerably in the past few years. It’s no longer the case that there are one or two dominant services and nothing else, there’s a massive range of choice. Record companies have digitized all the catalogue you could ever want, there’s something like 11 million songs that are available to be licensed. We’ve tackled issues like DRM which put consumers off the services so we’ve made it easier and better for people and now there’s a price competition as well – there isn’t ade -facto 79 or 99p per track price point, you can get tracks for 29p and in some cases you can enjoy services for free if you are willing to listen to adverts. So having the services is one things, educating people on how these services have changed is another, but also it’s unfortunate that these services still have to compete with the free, illegal services. That’s why we lobbied hard for the introduction of the Digital Economy Act which introduces a form of graduated response which we hope will encourage people to move to legal services.

AL: Talking about the Digital Economy Act – since we’re there – what do you think about its implementation considering that quite a few of the measures still need to be tweaked and finalized? Do you think that because many of the measures have yet to be finalized it might get altered or watered down in the coming months?

ADL: One thing is sure: the Government is completely committed to the Digital Economy Act. All rights-holder groups in Britain are committed to it and we only have a couple of exception in Britain’s ISPs who are resenting these measures. The rest of Britain’s ISP community has taken a sensible view and realized that something needs to be done about copyright infringement on the Internet. There’s consultations going on about how it’s going to be paid for and how it’s going to work – there is every indication from those consultations that everyone is taking it seriously and what we will have is a workable graduated response with a meaningful deterrent at the end of it and that will we expect move millions of people from illegal services to legal services in this country.

AL: The relationship of the BPI with ISPs – like for the IFPI – has been full of ups and downs over the years. But a few of them are now introducing legal services like SkySongs. Do relationships with ISPs from the BPI’s part vary considerably between different companies or are they presenting a more united front and being more collaborative with you guys?

ADL: It varies, there are a number of things which come into play here. Some ISPs are owned and operated by companies which are also content providers. So if you look at a company like Skype, their holding company produces movies and owns sports rights so they can see both sides of the argument. At the same time lots of the ISPs are trying to sell services to their customers but are competing with the free illegal services so it’s in their interest to do something about it. I’m convinced that the ISPs that oppose the measures are doing so purely because they are convinced that it’s a cheaper and more effective measure to try and avoid accepting their responsibilities under the act. Most People in this country feel that something should be done about file-sharing when they are asked about it, it’s only a minority of people who do it and their days are numbered.

AL : How does it technically work from the moment you detect that there has been an alleged illegal exchange of copyrighted files to actually identifying the person that has been allegedly responsible for this exchange?

HS: We would scan a Peer to Peer network and effectively download from the user a title that is actually one of our member’s titles. from that point we basically have the evidence and we have their IP address. We don’t know anything else about that user, that’s purely something for the ISP to resolve back to one of their subscribers. In the framework of the act it talks about the concept of CIR, so we would log a “Copyright Infringement Report” with an ISP and then under the act it would be their duty to send a note on to their subscriber once they’ve matched the IP address that we’ve given them to someone that was using that service at that time, so that’s essentially how it works.

AL: One of the uses of this technology and the fact that you can ask ISPs for the identity of people who have been sharing tracks once you have the evidence that this has happened has been is that in the last few weeks  Ministry of Sound  started a controversial campaign by sending letters from a law firms from people that have allegedly shared their music asking for compensation, basically saying give us 300-400 pounds and we’ll get over it and won’t take legal action. Many legal experts maintain that these charges would be almost impossible to enforce in a court of law and some people think that it’s counter-productive – a bit like the campaign by the RIAA is the US where it started suing the fans which turned out to be not such a great idea. So what do you think about it? Do you think that there’s still a reason to unilaterally ask people who have file-shared for X amount of money or do you think that the approach should be more gradual like in the Digital Economy Act?

PB: Well, I’m going to be very precise in my answer as I have been every time I’m asked about this. As things currently stand it is our preferred way of tackling the file-sharing problem through the measures that are outlined in the Digital Economy Act. Graduated response means that people have an opportunity to curtail and amend their behavior before there are serious consequences and we think that as things stand is the right way forwards.

AL: So let’s talk about piracy as a whole, not just Internet piracy but commercial piracy as well. When people think about physical piracy they tend to think more about eastern European countries, about China, but it’s actually a big problem in the UK as well. So what is the volume of physical piracy, is it something you are still concerned about and is it as damaging as digital piracy?

HS: I think there has been a shift over the years from commercial piracy to online piracy and that’s just the same as any other business or crime for that matter. In terms of commercial piracy, yes, it’s still a concern. I mentioned earlier things like markets and car boot sales, that where we see the biggest part of our problem. You mentioned China, yes we have bits coming in from overseas that have been pirated there but because it’s so cheap and easy to burn your own disc effectively they can be burnt to order at markets and car boots sales and effectively sold for a fraction of the real retail price. We’ve seen an increase in the sale of DVDs for example that carry 40 to 50 MP3 Albums each and that’s an interesting point because the new piracy is both physical and digital in that most of the music is obtained via file sharing networks, forums or cyber-lockers in the first place and then sold on. Pre-loaded hard drives are also a trend. It’s certainly not something that will go away – some people will still prefer to obtain their unlicensed music via those sorts of methods if they are not downloading online.

AL: And Internationally you work quite closely with the IFPI as well, so how do these two massive entities collaborate in trying to tackle the piracy problem?

HS: In terms of online the IFPI looks after the International problem. They are the co-ordinating body to make sure that the BPI and their equivalents around the world are doing what they can in their own countries. They also look after big international releases whilst we focus primarily on UK record labels and UK releases. We talk very closely about how we co-ordinate ourselves online and in the physical world if we identify pirated discs that are pressed overseas we work with them to identify the origin of those discs and make use of – for example – the IFPI’s forsenic facilities in order to trace those discs. So we do work and collaborate very closely and try to cover all bases.

AL: Talking about the future: the Digital Economy Act will probably start being implemented next year and even though many countries have talked about three strike laws and implementations there aren’t actually any figures as to how many people these new measures would actually stop. Do you have any projections, any numbers that you hope to achieve via the Digital Economy Act in the next couple of years?

PB: There is in fact a target of reducing copyright infringement by 70% within three years. There is not absolute clarity as to when that three years clock started ticking, but let’s assume that it started ticking about a year ago so the objective is to try to reduce it by 70 % by the end of 2012.

AL: And do you think this is feasible given that none of the measures of the Digital Economy Act have been implemented yet or do you think you may need a little more time to get there?

ADL: We have always said that legal services and education will help. We have strongly argued that effective deterrent measures which can be communicated as part of the notifications – including things like temporary account suspension and throttling – are required in order to meet those targets and we remain convinced that that’s the case.

And now this week’s news round-up:

– Songkick launches a partnership with YouTube

Billboard Business this week reported that Songkick – a London based start-up focused on gathering concert information –  has inked a deal with YouTube and Vevo. The company will provide up-to-date location-based services that will advertise concerts in the vicinity of the user, creating a compelling new way for people to find out about acts playing nearby. This is already being deployed for Lady Gaga and JustBieber videos, where the Tour banners lead you straight to a Songkick page. Songkick is fast becoming the place to find out about gigs happening in your area, since it aggregates information provided by over one hundred ticket sites around the world as well as the information added by its own users. The company has already inked many deals with the likes of the Hype Machine,Nokia, the BBC and others and its user base is growing every day.  I featured Songkick in Episode 10 of the show so if you want to delve in the Digital Music Trends vaults then go and listen to my interview with Ian Hogarth. From my part I’m always happy to report good news on London-based start-ups.

– Pure launches a cloud-based service with Shazam and 7Digital

Paidcontent amongst others reported this week that DAB radio manufacturer Pure has launched a new service called FlowSongs that allows people to buy music directly from the radio. This new service is the result of a partnership between the manufacturer,Shazam – the music recognition company – and digital a-la-carte retailer 7Digital. Users will be able to track down a song they liked via Shazam on the radio and then buy it with just a couple of clicks on the radio’s own screen. The song will then be available to stream from 7Digital’s server or users will be able to download from a normal browser browser as a DRM-free mp3 to use on any device.  Users will only have to pay a £2,99 yearly fee to use the Shazam service. This seems like a rather nifty solution – you can find out more on Pure.com – and from the looks of it it will work with all ofPure’s DAB radios that connect to the web.

– Spotify: Paul Brown SVP of Strategic Partnerships leaves the company

http://eu.techcrunch.com/2010/08/16/spotify-svp-paul-brown-leaves-for-new-startup/

Spotify this week lost its SVP of strategic partnerships Paul Brown. Brown told Music Week that an opportunity presented itself that he had to take and he will be working for a start-up outside the music industry.Spotify will therefore need to start looking for a new person to fill that all-important role. As TechCrunch points out the company still needs to do a lot of work in terms of partnerships – especially on the mobile carrier front – and Brown’s departure could on one side delay those partnerships and on the other allow someone else to start the negotiations with a clean slate and get things moving more quickly.

– Arcade Fire get a digital push from Amazon’s digital music store to reach the top of the album charts in the US

A couple of real interesting stories surrounding the release of Arcade Fire’s album “The Suburbs”. First of All it looks like Amazon MP3’s decision to sell the album at a loss for $3,99 really helped it reach the top spot in the US charts. Amazon still has to pay labels the wholesale price of about $7  when it decides to sell new albums for $3.99 so it was losing about three dollars per album. At the same time – whilst many blogs and publications point to the Amazon’s promotion as something that really propelled the album to the top spot – the co-founder of Arcade Fire’s label Merge Records – LauraBallance – said that Amazon’s promotions devalue the music.  This is an interesting take on the promotion that allowed Merge Records to have its first-ever number one album…

– RjDj updates its app and launches Moovz
http://moovz.rjdj.me/

And finally I wanted to point out to a major update announced by RjDj to its application – they have introduced a new feature called Moovz that makes the music groove to your moves! At the moment it’s aimed in particular at hip-hop fans as it’s a great new free-styling tool and since it’s a new category for the scenes it has its own specific user interface.

Well, that’s all for this week, I really hope you enjoyed the show. Next week on Digital Music Trends a feature on the Music Industry Conference Future Music Forum, taking place on the 29th and 30th of September in Barcelona. Please write in with any feedback, the email is digitalmusictrends@gmail.com and you can also follow me on twitter, the handle is digimusictrends. On www.digitalmusictrends.com you’ll find all you need to know about the show including links to the iTunes store and to the RSS feeds. Digital Music Trends is distributed via iTunes, Podbean, Soundcloud, The Music Void and Mixcloud.

Have a great week and ’till next time! This has been Andrea Leonelli for Digital Music Trends.

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: I’m starting 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 center 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.

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 from 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.

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 musicallycloudmodels.evantbrite.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.