DMT 113 – Spotify, Spotify on the wall…

After last week’s raft of announcements from Spotify we spend the vast majority of the show making sense of where the company is heading. Featuring Steve Knopper (@knopps), Darren Hemmings (@mr_trick) and Eliot Van Buskirk (@listeningpost) as guest hosts we discuss Spotify’s latest numbers, the potential impact on users of the upcoming features, the impact on the industry and on artists of the service (including an in-depth tangent on Youtube) as well of couse as the significance of Metallica’s appearance alongside Sean Parker and Daniel Ek.

You can find all the show-notes here: http://bit.ly/dmt113notes

Hope you enjoy this week’s show,  have a great week-end and ’till next time!

The iPad 2: Hardware = Evolutionary / Use cases = Revolutionary.

The iPad 2 was finally unveiled yesterday and journalists as well as Apple fans are already criticizing the evolutionary nature of the upgrade, the lack of a 5 megapixel camera, lack of an SD card slot and – last but not least – of an entirely redesigned device. All this forgetting that the revolutionary part of this product release happened a year ago when the device was actually launched. Much like the iPhone there is little that can be done now in the way of dramatically altering an already great device but rather each release is going to improve it a little.

Personally I think that the importance of yesterday’s announcement on the iPad 2 lies in the fact that it got a strong validation as a content-creation device.  In its first iteration the iPad was deemed more as a content consumption device useful to access a variety of media including books, browsing the net, checking emails and so forth.  The iPad 2 – maybe thanks to its newfound processing power – branches out to allow serious multi-track recording and video editing.  More than that, Apple made it clear in a long video on the use-cases that iPad has found in the real world, including schools and hospitals, that it is pushing a revolution  in 2011 where the tablet will go from being perceived as an unnecessary luxury item to it becoming – shockingly – useful.  

I would like to concentrate on the introduction of the Garageband app, I’m sure video-editing experts will be picking iMovie apart elsewhere on the net.

There are already a number of applications that have taken advantage of the iPad’s recording capabilities but none to my knowledge as extensively as Garageband’s iPad app that was demonstrated yesterday and that is probably due to the hardware limitations previously imposed by the A4 processor and the 256megs of RAM (addition: it was later announced that the Garageband App will work on the original iPad) 

The app lets you record up to 8 tracks as overdubs – that is not an amazing offering but it is more than enough to lay down the barebones of a complete song. It’s possible to import the iPad project into Garageband’s desktop big brother for tweaking and that can itself be integrated into Logic Pro, giving you a huge amount of scalability.

The virtual instruments that were introduced with Garageband certainly look pretty sweet and include some great technical sparks like using the accelerometer on the device to gauge the pressure applied on the screen and control the velocity of the keyboard.

But aside from the virtual instrument the iPad already had – and I assume retains – the ability to plug in via the Camera connection Kit USB high quality Microphones as well as USB to MIDI cables and USB-to-guitar leads. These really magnify the potential of what can be achieved on such a thin and light device giving you the opportunity to not only mess around with some virtual sounds in a gimmicky fashion but to actually record real-world  instruments where the only limit is your own ability.

 Now, we don’t know whether Apple decided to support external USB mics and Midi input on Garageband ‘s app itself but if not there will surely be a slew of other developers bringing DAWs apps to the market that will improve on their offering.

The export options seem OK and they do allow you to recording something impromptu and to share it with your friends & fans if you have any. Now if Apple conceded that Soundcloud has created THE platform for the social sharing of audio and added a direct-to-Soundcloud export function straight from Garageband that would make me even happier.

Let’s not forget that this is the first iteration of the app and that undoubtedly there will be many improvements coming in due course. But right now I’m happy to see that the idea of the iPad as a content creation device will take hold in the mainstream. Apple sets the bar and showcases functionality with its own apps but developers always find a way to top it and offer even more which makes me think that 2011 will be a very exciting time indeed for musicians and content-creators in general who like to travel light.  

One final point – I wrote this piece based on Apple’s demo: in the real world the Garageband app could actually suck. 

DMT 63 – Ditto Music

Hello everyone and welcome to Digital Music Trends! I’m shocked and appalled to see that it’s four weeks since the last show and I’m very sorry but between holidays and work madness I have been totally snowed! But I promise to keep it up ’till the christmas break without interruptions, even though the shows may consist of just the interviews or just the news for a few weeks.

Well, to make up for my long absence this week I have a really cool interview with Lee Parsons, the CEO of the digital distribution service Ditto Music, we talked both about the company and about his views on the future of digital music distribution. So here’s the interview, I hope you enjoy it!
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Interview with Lee Parsons from Ditto Music

AL: Andrea Leonelli
LP: Lee Parsons

AL: I’m really happy to welcome to the show this week Lee Parsons from the Digital Distribution service Ditto music. First of all for this episode I would like to talk on one side about Ditto music and on the other about your recent travels to various digital music events. I would also like to explore your position on the future of music online and on the role of the musician as well as that of the distributor. I’d like to start with Ditto music, so tell me a little bit about your background and how you started out. 

LP: Me and my brother were both in a band and this is probably five or six years ago. We got management and publishing really early on and also got a deal quite early on and we ended up doing our first ever gig at the Sony building in London at a massive showcase, full of people and with our management there as well. I remember our management asking us how many gigs we had done up to then and we said that was the first. And it just went downhill from there really. It was probably the worse gig I’ve ever been to and unfortunately I was part of the gig so that wasn’t great. We just didn’t get it, we did gigs with Razorlight and a lot of other bands but we never claimed our PRS back as no-one had told us what the PRS was. We made so many classic mistakes going forward and by the time we’d learnt what we were supposed to be doing our career was over. But what happened was that we wanted to put our single out since after all the work we’d done we had a large fan-base waiting to buy the song. So we looked at how to set up a record label and that took us three to four months because you have to go through Company’s House for the company and then you have to register your CAT codes through the database. It was really complicated and we knew nothing about it at the time since we were musicians. Then in terms of distribution we went to our local shop and they said we couldn’t put it in a shop until we had a record label. We said we did have a record label but they said they couldn’t take us since we did not have enough content. So we decided to forget the shops and started looking into digital, this was about four years ago when it was still early days for digital. iTunes would not take our content as they said we didn’t have enough to warrant having an account with them. So we used a site called Whip It at the time (it has actually gone bankrupt now, they were friends of ours). So we put the track out through Whip It and it got to number 80 in the charts due to the fans we already had and that’s pretty much it, that was the end of our career. But what we did realize was that we had a system in place now so that any band could come to us and we could release their music within a day. We could put them out on our record label, put them on pre-release, we could get them SMS codes and release the music. We started getting more catalogue and deals in place with companies like iTunes, we now have deals with 400 to 500 services. In January 2007 we released the first ever unsigned artist into the Top 40, they are actually in the Guinness book of records as the first artist ever to get into the top 40 just on digital sales. So if you think back to three years ago the major labels still didn’t see this change, while we realized it cost us nothing to put a digital release out and we didn’t have to print the CDs. We were still working out of our bedroom at the time but we were in The Times, The Telegraph, BBC1 and we had another seven top 40s that year with unsigned bands. Since then it’s just grown and grown, we have about 15,000 artists with some massive names, we have two offices in the UK and we are about to launch an office in the US. What I do for the most part is travel around talking about the music industry and how we can help unsigned artist. Even though we are a business and one of our goals is to make money me and my brother come from a band background so the main objective for us is to open new doors for bands that weren’t there when we released our music. 

AL: And in terms of the technology that the company uses, who do you rely on to build your back-end infrastructure? 

LP: We have English staff and also an office in Romania – you know what it’s like with a technology company, you build something and then the next month you have to change it. You have to keep progressing at everything you do so that’s a really important part of our business.

AL: You have hundreds partners now. How do you start the process of building a new relationship with a partner and when do you know whether a partner is someone that can deliver in terms of sales or streams or when something is bound not to turn out?

LP: A lot of partnerships are relationships and I’m sure they are thinking the same thing looking at me, wondering how they can be sure that I can deliver good content and we can work with them. The longer you are around the larger the network you build. We are the only distributor to have a monthly We7 Presents slot so every month we get to put an artist on the front page of We7. That comes from the fact that three years ago I volunteered to go and talk on a panel at Manchester University and Steve Purdham, the founder of We7 was there. We kept bumping into each other in different panels and we just sat down and we tried to work out what we could do for unsigned bands. Instead of taking all unsigned content into We7 we decided it was better to find a way to promote just one band and give it a bit of a push, since as well as being promoted on the site they also get paid per stream, so when a band gets a We7 Presents slots they often also make a few thousand pounds out of it as well. Partnerships are based on your reputation, your networking skills and your honor as well. If people trust you then they will always do business with you. 

AL: How’s your relationship with Apple? I know you recently set up a 24 hours promise with iTunes and that caused a bit of a tiff with Tunecore. How did that come about and how did you manage to guarantee that? 

LP: A few of the distributors found out at the same time that Apple had upgraded their software as the same time as we did so that releases instead of taking four or five weeks to go live were going live really fast so we thought: we can literally get something on iTunes in a few minutes but there’s a chance that it won’t be in a few minutes so we decided to say 24 hours to make sure that it gets there. At the moment, working with iTunes, we know that their technology is the same as everyone else’s, it could change, so 99.9% of our content goes out within 24 hours but we still can’t really guarantee it because it’s not fair to iTunes or the artist. If you look at it though it’s still a massive advancement in technology and it really does make a lot of difference to people’s careers. If someone had told me back when I had the band that I could put a single on iTunes within a day I’d have bitten their hand off but unfortunately it took us six months. I really think the way this is progressing is going to help unsigned artists more than signed artists. Signed artists have got their promo all sorted but every now and again you’ll get an artist on X-Factor or Britain’s got Talent where they need to have the single out the next day and we can do that now, it’s amazing. 

AL: People talk about conversation all the time and they talk about how unsigned artists need to keep a conversation going with the fans. It seems like this is a great way for artists to monetize that relationship really quickly. If somebody decided to release a single each week that would be feasible now whilst before it would have required a lot of planning. 

LP: Exactly, because you never know when you’re going to get a spike in sales. Every new and again you’ll have an artist in the top ten of iTunes and you think: why is that? And then you find out that they got a synch deal with someone – which is something that we also help out with – it’s been played in a program in America and suddenly everyone has gone out to buy it. If they hadn’t been on iTunes that would have been totally missed so it’s an amazing leap forward in technology. 

AL: Recently you have taken part in a Music Metrics panel at the Leadership Music Digital Summit in Nashville. I wanted to ask you about that panel in terms of charts versus metrics. There you made a comment on the fact that people need to look at metrics to find out future trends rather than charts that report on what has already happened. What’s your stance on this issue? 

LP: There’s quite a lot to talk about here. I looked at metrics as they are really important, I did the panel with a guy called Eric Garland who runs a company called Big Champagne. They have a chart called the Ultimate Chart with which they cover social presence as well as torrent downloads. They then compile this data into a single chart. When they started they got a lot of criticism from the labels because this chart was very similar to the normal chart, but what did they expect? Obviously social trends equal the normal chart. We had a lot of top 40 singles and a lot of these artists went on to have a lot of success but a couple of them got into the top 40 and didn’t have the media presence to back it up. What I think this is saying to people now is: charts are important, but they are all based on your media presence. You really need to monitor not how many Facebook hits you’re getting but who’s coming to your Facebook, not how many tweets you write on Twitter but who’s re-tweeting them and who’s interested. If you go to Tesco everything is lined up for you to buy and they have a map of who you are and follow you around the store. Same with Facebook, the ads on Facebook are not randomly suggested to you they are down to your age, your location and your interests. There are now companies like HootSuite where you can monitor who is tweeting about you and what kind of person they are. In terms metrics there are three things that artists can do for free. First thing would be to implement a small survey for the visitors of their site. Most artists give away a free MP3. When you give away the free MP3 obviously you’d want to get their email address but also a few questions out, find out how they got onto your site, what other kinds of music they like, what they thought about your artwork… Don’t be too intrusive but try and find out a little bit of extra information about these people so that you can draw up a map of who’s actually listening to your music and work out how to sell to them. It may be that they don’t want to buy your music but you can find out what town they’re in for example. Another point is that if you sell someone else’s music through your website a lot of times that will sell better than your own music. This is because recommendation from someone else is a lot stronger than recommendation for your own material. So look at other people’s fan bases and affiliate because that’s what all businesses do. Business is all about affiliation and the music industry is no different. For free you can also use Google alerts, all you need to do is to sign up to Google Alerts to find out when people have mentioned your band and then follow that along. These are all free tools. There are also paid tools like HootSuite but these are really simple things that the bands need to try and implement as fast as possible. 

AL: I was on a panel recently where we were talking about the effects of social media and which social network artists should use. I am a big believer in the fact that a social network is only as good as the kind of people who are using it and as relevant as the music that the band is making. So MySpace will only work for some bands and Facebook will only work for other bands. What is your viewpoint on this also in terms of the artists that you have on Ditto: is there a social network that is now prevalent in helping artists? 

LP: I think at the moment there isn’t a main social network. MySpace used to be the main social network for artists. Now there are loads for example Soundcloud, Bandcamp and even Spotify is classed as a social network since people can send music to each other and recommend music. I would recommend a band to be on as many of these as they can. People always say: I haven’t made much money from Spotify. But if you take the revenue from Spotify and you add it with that from iTunes, Grooveshark, Bandcamp you can start to build a decent portfolio of income. It is an open-ended question as it comes down to what works best for you.

AL: Picking up on the point of subscription services do you think that they will amount to substantial revenues for artists at some point and which factors do you think might allow that to happen? At the moment even people who run these services admit that they don’t see themselves as becoming a major revenue source. 

LP: Unfortunately that’s going to stay as it is at the moment. The main difference between an unsigned artist and a signed artist is that the signed artist will have already come to a deal with Spotify through their label. What unsigned artists don’t get is that advance from the label. Obviously sites like Spotify and We7 will have to start paying that advance money back so that’s a big dent out of their profits. What I’d like to see happening is for the PRS to step forward and start paying out more money. I know that the PRS has a lot of income and has millions of pounds each year that are unclaimed and probably go back to the major labels – it would be great if they could work out a way to share that with the rest of the artists. I can’t see that happening anytime soon but we are constantly putting pressure on them to get them to come forward with that. 

AL: I wanted to talk about free versus paid, because naturally Ditto is a company that distributes music on services that are monetized in one way or another. Do you think free is an inevitability or do you think people will keep wanting to pay for music? 

LP: Hypebot quoted me as saying “Music is Free” and that’s the end of the argument. But what I really meant to say is that if I’m in a band and you want my music I know that you can go and get it for free. But that does not mean that you are going to get it for free. If you like me as a brand I know you will go and purchase it. Also artists now sell a number of other things on their sites like for example dinner with the band, private concerts etc. The last thing any of us wants to do is to go on another panel and talk about piracy, that argument is gone and completely stone dead. Forget that and work out how to create new revenue streams. I know that if you’re a fan of my band and we have music on iTunes you’ll buy it on iTunes if we developed a relationship. If someone downloads it for free instead then you as the artist need to make sure that the track that person download has the right information and maybe lyrics in the metadata and try and get that person to buy something else from you. 

AL: So basically what you mean is that “Music is Free” is a statement of fact, any half-successful band will have their tracks ending up on bittorrent. What the bands have to do is then work in order to get people to want to buy the music or whatever else they are selling. 

LP: Because people are good, as far as I can tell a high percentage of people will always buy music even though they can get it for free. Artists just need to develop a good relationship with their fans. I had this argument on a panel a few weeks ago. A guy was just fascinated by his music getting torrented thousands of times and everyone was saying that they would love for their music to get torrented thousands of times. Another guy in the room said that his band has the music free on the website but also does a vinyl, a limited edition CD, distributes on iTunes and said that they actually make quite a lot of money even if the fans could get the music for free. If you have your music on every single service you have lots of small pockets of money that build up. These bands are not moping around complaining about people pirating the music. 

AL: What do you think about the structure of the Music Industry? Will it drag on being as it is for quite a number of years from now both in terms of formats (digital or physical) and in terms of its structure or do you think that change will be quite sudden? 

LP: If you actually look at the rate at which the music industry has been changing over the past three years you’ll see that three years ago digital singles weren’t even chart eligible. Also if you look at how EMI has declined with people suddenly out of jobs I think that it’s going to happen sooner rather than later. What we definitely do know is that the old model is dead so we need to try and make something cool out of the new model. That’s why I love what I do for a living in my company helping loads of artists release music. This opportunity wouldn’t have been around four years ago but it is now and because I’m keeping ahead of the game and try to keep up with trends we always will be around and able to offer people new services.

AL: In terms of helping artists achieve what they are setting out to do: now there’s the artist and there’s you as the digital Distributor. Some independent artists though they don’t have enough time to deal with everything on the promotional side of things – in this case who do you think is the best person to help them. Is it a PR person or Management?

LP: its kind-of a never-ending question. If you get the right PR guy it’s the right PR guy, if you have the right manager it’s the right manager, but 9 out of 10 times it’s the wrong people and really the best thing they can do is to do it themselves. There are no shortcuts, we used to do a lot of PR for bands and we still do but not at a professional level because three years ago there were only a few unsigned artists releasing every week but now we do up to 500 releases per week and you can’t feasibly generate interest for all these people. When a label or anyone really looks at you as an artist they are going to go straight to your social media and check your presence. There’s no real shortcut around that since you can’t buy Facebook followers or twitter followers. If you can build up 100 real fans on Facebook that is more important than having 50,000 fans on MySpace. Once you have all that in place then start looking for the right PR person or maybe the right manager but there’s no shortcut to it.

AL: And finally I want to end with the hardest question: where do you see Ditto being in five years’ time?

LP: It’s an exciting question because who knows what’s going to happen. All I know at the moment is that I’m going to go off to the States in January and then I’ll be going to Australia to look at their market. The digital distribution for me is in place now, it’s a great service for artists but it’s done so I want to move forward to offer artists opportunities that they didn’t already have be it Television or Radio opportunities. We claim PRS now through our partners and we help creating licensing and synch opportunities. If you sign up with Ditto today you get daily updates with synch reports and we’ve had a lot of people getting their music into adverts and that’s something that came about because we were trying to work out new revenue streams. When you have a catalogue of thousands of tracks you want to use them, you don’t want them just sitting there but you want to get some value out of them. For me doing what we do now and spending time speaking about these issues helps me come up with new ideas from an unsigned point of view. The interview we did in Hypebot was great because most of the other people they interviewed were from major labels and five years ago a company like ours would not have been asked to take part. But now we are getting a lot more recognition and that’s great because it means that unsigned artists are getting a lot more recognition as well in the industry.
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And thanks again to Lee for making it onto the show. I’m afraid that’s all for this week but I do hope you enjoyed the show, and this time around there’s even a transcript of the interview on the site so you can forward that on if you like. On www.digitalmusictrends.com you will find all the information you need on the show, if you want to get in touch either complete the Get in Touch form on the site or email digitalmusictrends@gmail.com. You can follow the show on Soundcloud and Mixcloud and remember to follow me on twitter for the latest news on the show on twitter.com/digimusictrends

Have a great week and ’till next time!

Andrea Leonelli

Digital Music Trends – Episode 48

This Week: a report from the Future Music Camp in Mannheim and an interview with one of its organizers. In the news: Wolfgang’s vault and Boxee, Limewire closing shop?, Japanise digital sales and Ofcom regulation over the three strikes UK law.

Digital Music trends – Episode 48 – 31st of May 2009.

Hello everyone and welcome to digital music trends – the main feature of this week’s show is Future Music Camp the music conference/barcamp that took place in Mannheim this week-end. I only just flew back from there and I’ll be talking about the event, the presentations and keynotes that took place starting off with a short interview with one of the organizers, Ryan Rauscher.

Also as usual a few nuggets of digital music news for this week’s show which include Wonfgang’s Vault deal with Boxee, Limewire’s last appeal as it risks being shut down in a week, the decline of digital music sales in Japan in 2009, Ofcom’s release of some details about its forthcoming crackdown on file sharing and finally many of my listeners in the States will be mourning the death of Lala, as today is its last day – will Steve Jobs resurrect it as early as tomorrow by unveiling a new iTunes service? I’m not so sure but what the hell you gotta hope so!

But let’s start with the Future Music Camp and and introduction by one of the organizers, Ryan Rauscher. www.futuremusiccamp.com So here’s the introduction, but what happened exactly during the week-end? Basically as Ryan explained the event was structured as part conference and part barcamp. So there were scheduled presentations and workshops and then sessions that were put forward and organized by the camp’s participants. On Saturday there were many very interesting presentations – the event was kicked off by Nikhil Shah, co-founder of Mixcloud – who ran us through a presentation on how to build a business like Mixcloud and what people need to look out for in the process. He provided some great tips on how to build a successful start-up, his context naturally was music but that could be applied to really any business that is starting out online.  Some of the ideas that he shared with the audience really struck me during the presentation and I’m just going to run through although they made a little bit more sense through the context of the presentation itself. Number one is the concept of shouting from the rooftops about your service and your idea, there’s no point trying to protect it – if you don’t share it and get everyone on board it won’t be successful. Second Nikhil talked about the idea of getting the product out there before it’s 100% complete, if you try and wait until you launch the perfect product you’re going to waste time, whilst if you release a product that is  – even if not completely stable – 80 to 85% complete you may have some problems but those are issues that can be solved very very quickly once you know what they are.  Third Nikhil talked about the idea of building a cool product first and foremost, sorting through the issues and having a great implementation since no matter how much funding you have if the idea or the product have issues they are not going to go away by throwing money at them – those are the first things that need to be sorted out which means that  funding is not as important as having a great idea and a great product. Fourth point Nikhil made was regarding the supply versus demand – one problem that often faces digital music services is that it’s very hard to get the content without listeners and it’s pretty much impossible to get listeners without content. So Nikhil’s suggestion in this case is to try and build a great library of content during the beta phase of a service so that when it goes out of beta the content is already there and the company will be able to draw a lot more listeners. Finally Nikhil talked about implementing a top down and bottom up strategy, meaning that you need both the guy in the bedroom that is doing his own thing for a handful of people and the more high-profile content provider who can guarantee you thousands of listeners with a single tweet about a release, these two approaches combined can grow the user base of a service quickly.

After this presentation was the presentation from Simfy. I had heard the name mentioned before but I couldn’t frankly remember what the company was about. Basically it’s a streaming service that is comparable to the likes of Spotify and We7 – although not without a few differences – the key here is that they are German-based and have licenses to use over six million tracks having deals in place with all the majors and also recently with Merlin. What’s interesting is that collection society Gema is often characterized as giving new digital services a real headache when it comes to negotiating terms for licensing music – so the Simfy story is an interesting one as it has managed to overcome all these problems and create a really large business. Simfy actually started right next to the Popakademie in Mannheim – it relocated recently due to a round of funding that meant they had to move to Colone. The platform already has 1.7 million users and is based on the freemium model – so advertising for the free service and monthly subscriptions to get ad-free content. One interesting difference with the likes of Spotify and We7 is that so far it has been running as a web service and as a  mobile applications but is now about to launch a desktop application as well. So it will have all three – whilst in the UK you have the choice of going web-based with We7 or desktop-based with the Spotify software, both of which have their own mobile app. simfy is aiming at having 80,000 paying subscribers by the end of the year and is certainly a very dynamic new company. The player and many of the features are not at all dissimilar from what we have already seen here in the UK, but i guess that there are only so many ways to slice a pie as the saying goes. In this field the important thing is to obtain the licenses and Simfy certainly beat Spotify to it in the German market.

Music DNA also had a presentation which i was looking forwards to since I was hoping to see a real product over five months after I attended the MIDEM press conference where the format was announced. In case you didn’t hear my Midem coverage from a few months ago Music DNA is a new format that wants to replace the MP3 and offer a better experience to the user. .DNA files will be able to include better metadata, multimedia files like videos and images, links to all the sites that have content from that artist, to their twitter feeds and to tour dates and the idea is that these files will be able to upgrade themselves via the net every time you listen to them. The format was developed by a company called Back technology that is really very ambitious in its plan as many are skeptical that the users will accept moving away from the MP3 without a large amount of resistance.  At the presentation there was a limited showcase of the software that didn’t really give me a clear idea regarding how responsive and complete it is. They plan to penetrate the market by allowing users to upgrade their entire collections with media-rich .DNA files free of charge. They will release their software at the end of July so you and I will be finally able to play with this soon – and personally i can’t wait to give it a go. but if you’re not inclined to change your habits and preferred music platform fear not – during the presentation they announced that they will be launching plug-ins for iTunes, windows media player and other music platforms by the end of October 2010. Finally they are pushing hard on the hardware front and established an office in China to present and push the music DNA SDK to electronics manufacturers – will your mobile handset be DNA-enabled in two years time? we’ll have to wait and see!

Presentation on P2P by Janko Röttgers. Janko Rottogers is a German-born but San Francisco based journalist that has been covering for many years the evolution of P2P technology. Janko’s presentation centered around the question of if and how it’s possible to monetize P2P. Whilst the industry is fighting hard to have P2P disappear from the face of the earth this is not likely to happen anytime soon. So the option is to let P2p networks continue their work outside the law or to try and monetize what they do to bring some revenue to the artists. the problem is that allowing P2P networks to do that would basically be an acceptance of their service so the industry would not be able to sue them and get them to shut down an longer. This is the problem that happened with Limewire for example- the service had developed a FAN artist network a couple of years ago to sell contextual advertising based on the searches and to share the revenue with the rightsholders but it was not possible to reach an agreement and we all know where things stand now… Another product that is currently trying to monetize P2P is a revamped version of Audio Galaxy, that brings back some memories of it being the late 90s and me trying to download an mp3 on a dial-up connection and giving up after two hours… They are now planning to get licenses for the content although there’s nothing concrete in place yet, just like with the Choruss initiative that aimed at legalizing P2P within university campuses for a flat fee of 5 dollars per month per user. Flattr http://flattr.com

The last possible solution is the crowd source donation and here Janko talked about a service that I’d never heard of but that sounds really fantastic. the service is called flattr and was started by Peter Sunde, the face of the pirate bay and it’s all about compensating rightsholder. Currently in a closed beta phase, Flattr is a bit like the .digg button but for donations where people decide to donate right there and then by clicking on the icon. If you register on flatter as a user you can decide to direct between 5 and 10 euros per month to what you find on the net, so you are never going to spend any more than that no matter how many content sources you Flattr, what happens instead is that at the end of the month flatter does a tally and divides the money between the number of clicks you made and distributes it amongst the sites, it’s a very distributive model with low barrier of entry for people to donate. So if you donate 5 euros a month and you click on 20 sites in may, they get 25 cents each, whilst if you click on 10 sites in July they will get 50 cents each, It sounds like an amazing idea and I’m checking it out right now just got my login details for the beta. will let you know more on it soon!

Will Page, chief economist at PRS for Music and Oliver Tuerke, who also works there as international manager, gave a presentation entitled Comforting lies and Unpleasant truths – Copyright 101. They ran the audience through a whirlwind of incredibly interesting facts and figures about copyright, the worldwide music market and collection societies. Unfortunately I didn’t record the event and I really couldn’t keep up with the presentation in terms of taking coherent notes that i could present on the podcast but I think that the guys at the future music camp have filmed all the main keynotes and will be uploading them to the site so I’ll let you know when that happens so you can enjoy this fantastic presentation. I’ll be watching it again too knowing that I can happily pause and finish taking my notes!

And finally I can’t forget to mention the fantastic Reactable instrument developed by Günter Geiger and his team that was on showcase at the camp it’s basically a completely new way to interact with music and create music. You really need to check out the www.Reactable.com website and also google Bjork and Reactable to watch videos of her perform with one of the prototypes a couple of years ago on her last tour. I was there and I have to tell you that when I saw the very same table right in front of me at the Future Music Camp I drooled a little!! A portable version of the Reactable table is now being produced – although in small numbers – so if you can afford it ( i sure as hell can’t unfortunately ) go and treat yourself to one!!

In terms of the barcamp side of things i must admit that unfortunately I didn’t attend a great deal of sessions as they were all run in German and although I can get by on basic things like introductions food and most importantly beer at that level of conversation all I could do was  staring blankly without being able to take much in, but hopefully I’ll manage to get Ryan to tell me more about them once he’s recovered from organizing this event!

Wolfgang’s vault deal with Boxee

http://www.billboard.biz/bbbiz/content_display/industry/e3if3584cb6d538b8e117072537ba085230 http://paidcontent.org/article/419-streaming-music-archive-wolfgangs-vault-expands-to-boxee/ http://www.prweb.com/releases/2010/05/prweb4062444.htm http://www.cultofmac.com/boxee-rocks-tv-world-with-wolfgangs-vault-app/44988

OK for this story first of all a premise – if you have never heard of Wolfgang’s vault – well it’s a site that allows users to live recordings by famous artists – usually recordings of gigs that are not usually available elsewhere and has a catalogue of hundreds of recordings. The site is legal and makes its money primarily by selling concert memorabilia to the visitors. Although the music streaming is mostly a loss-leader for the memorabilia sales it has also developed a premium subscription for intensive users called WVIP. Well this week Wolfgang’s Vault has announced a deal that will allow it to enter the living rooms of Boxee users that will be able to stream up to ten hours of content each month for free. Additional streaming will require them to pay the site’s $48 annual subscription fee. Boxee is gaining traction in the US as the way to bring Internet content on your TV and naturally the more visibility the site has the better.

Limewire may only have a week to live

http://news.cnet.com/8301-31001_3-20006285-261.html http://www.billboard.biz/bbbiz/content_display/industry/e3if3584cb6d538b8e19b75a6b97774071f

So, June the 7th is the day when Limewire’s long and troubled history may come to a screeching halt. the court has established a hearing for that day following on from the recent ruling that established that its business model was in fact was to make money by facilitating the exchange of copyrighted material. The RIAA on June the 7th may well – and there’s no reason why they shouldn’t – seek an injunction against the service which would mean that Limewire would have go offline pretty quickly. Limewire has launched a last ditch attempt to appeal the court’s decision. Billboard reports that Limewire argues that the court made errors in its analysis of liability, including whether the company had the ability to supervise copyright infringement. Limewire also maintains that in the case there was conflicting evidence and they had to be given the benefit of the doubt. Apparently it’s unlikely that this argument is going to have any hold on the court and the company is likely to shut its doors soon. But naturally there’s a hundred of other services that are planning to pick up Limewire’s users should it go down for good!

Japanese digital sales declined in 2009

http://newsblog.thecmuwebsite.com/post/Japanese-digital-sales-down-in-2009.aspx http://www.dmwmedia.com/news/2010/05/26/digital-music-sales-down-3-japan-03909-mobile-dips-4 http://www.musicweek.com/story.asp?sectioncode=1&storycode=1041310&c=1

For the first time in 2009 Japan’s digital music sales slipped by 3%. The mobile market, which represents 90% of digital sales in japan fell by 4% whilst the computer-based song downloads grew by 9%, but given the difference in market share between these two options the 9% growth was not enough to offset the 4% decline. The value of the sales remained flat at 90.6 billion yen. This is a surprising news – everyone expects digital sales to go up year-on-year because it’s large market with many new adopters every month, has the Japanese economy been saturated by digital content or are the price points still wrong?

OfCom reveals some details regarding the forthcoming anti-piracy measures

http://www.broadband-expert.co.uk/blog/bt-broadband/bt-unhappy-with-file-sharing-regulations-from-ofcom/778731 http://news.bbc.co.uk/1/hi/technology/10183820.stm

And finally UK  regulator ofcom released a draft code of practice that contains some important details about the anti-piracy measures to be taken in the UK. Music Labels and Movie Studioes will be able to request details from the lists of individuals who have been infringing and send warning letters that could then escalate if the infringement kept happening. One interesting thing is that an infrtingment will not hang over your head forever as the three strikes only works if you have infringed in the same 12 months period, after that you get a clean slate. Controversially OfCom decided not to apply these measure to ISPs smaller than 400, 000 people which prompted some to say that the pirates will just end up moving to a smaller company. BT was quick to respond saying that the draft is not fair because it singles out the larger companies pushing customer onto smaller ones.

Digital Music Trends – Episode 47

This week: an interview with Fred McIntyre, VP of product at CBS Interactive, focused primarily on Last.fm. In the news: the iTunes store widens its lead as the most popular music retailer in the US, Google is ready to take on Apple on the music front via Android and Simplify, Dancing Dots and Cakewalking a software that allows blind musicians and producers to navigate through complex audio platforms like Sonar, in Spain the revenues from the tax on blank media have outstripped the mechanical revenues made from music sales and finally last week’s debate at Music Tank in London demonstrates that the physical product is not dead

iTunes Store widens its lead as the largest music retailer in the US http://www.billboard.biz/bbbiz/content_display/magazine/upfront/e3i12fe2557a9382597671a522cc1cc901d

Billboard Business reported on the new market share figures for music sales in the US – and the most striking one is that that iTunes is widening its lead and dominates the field. Apple’s music store went from a 21.4% share in 2008 to a 26.7% share in 2009. The trends in the physical market were reversed, with Wal-Mart losing 2.5% and settling with 12.5% – which was probably by all means a calculated risk since the company keeps reducing the shelf space reserved for CDs, and along the same lines the Best Buy share has dipped to 8.7%. The Amazon Mp3 store rose by half a point but is only at 1.3% – a far cry from Amazon’s and the labels’ aspirations and surprising given that often their prices are slightly lower than on iTunes.

Google taking on Apple on the music front as well? http://www.itproportal.com/portal/news/article/2010/5/21/google-acquired-simplify-media-launch-android-music-service

http://techcrunch.com/2010/05/20/google-buys-simplify-media-to-power-music-syncing-for-new-itunes-competitor/

http://techcrunch.com/2010/05/20/um-did-google-just-quietly-launch-a-web-based-itunes-competitor-yep/

ItProPortal and TechCrunch last Friday reported on Google’s latest announcements regarding its Android 2.2 or Froyo mobile operating system. Apparently Google is planning to introduce music in its Marketplace with the next upgrade and the process would be very similar to what happens today on the iPhone: you’d be able to find the music, buy it and download it directly on your device. At the moment there are no details as to which labels will be licensing their music for the service but with overall sales for Android-powered handsets overtaking the iPhone’s in the US it’s certainly a market that I would assume all labels would want to get a piece of. In another even more intriguing note – Google announced that it acquired the start-up Simplify media – a platform that allows you to manage your music and photos across different devices and pieces of software including remote access from the web. Simplify had announced a change in direction and pulled its app from itunes back in March which suggests that the deal with Google took place then, and is planning to release a desktop app that will allow you to access your computer’s drm-free music collection from your handset. If this turns out to be a software that is solid and user-friendly it could be a real blow to Apple – the Cupertino company is apparently working on a music locker system in the cloud but is yet to announce anything officially. Google has never been great at handling Media, although Android 2.1 brought a number of positive changes to the User interface for its media player – whether the implementation is up to scratch to gather a large user base is anyone’s guess!

Digital Technology Allowing blind people to record music http://online.wsj.com/article/SB10001424052748704852004575258444254422092.html?mod=WSJ_ArtsEnt_LifestyleArtEnt_9 www.dancingdots.com

I came across a great article on the Wall Street Journal this week that I really wanted to include in the line-up for the show. It’s about a piece of software called Cake Talking developed by the company Dancing Dots – which basically allows blind musicians to navigate and use music production software. The article is based on the experience of blind musician Raul Midon who although extremely accomplished was unable to use normal production tools because most of them are based on icons and screen prompts – just think at your usual Logic or ProTools window. CakeTalking  now allows him to produce his tracks the way he wants them and tweak with the sounds in a way he didn’t previously thought possible – it directs him on the screen and reads out the different commands, and through a combination of these prompts and keyboard short-cuts Raul is now able to create complex pieces without anyone’s help. I just though this was a really great story on how technology can make a difference for musicians, although the development of these platforms is always hampered by the fact that being very niche products they are hard to monetize and I can imagine that there isn’t a great deal of funding for them… At the moment – by looking at the Dancingdots.com website – the CakeWalking software is available specifically for Sonar but I guess that there’s no reason why it could not be applied to other platforms in the near future.

In Spain revenues from the Blank Media tax overtake mechanical royalties from music sales.

http://www.billboard.biz/bbbiz/content_display/industry/e3i3b8cb13fe213cb83d754397e5db3c4bf

http://www.businessweek.com/news/2010-05-11/spanish-levy-on-cds-dvds-may-breach-eu-law-court-adviser-says.html

Billboard reports that in Spain the amount collected by authors body SGAE through the tax imposed on the sale of blank CD and DVD has overtaken the amount collected through mechanical royalties that derive from music sales. It received 27.7 million euros from the tax but only 20.5 million euros through mechanical royalties. According to the IFPI the value of the Spanish music market declined by 14.3% in 2009 to 177 million euros. On the 11th of May Business Week had run a piece on how the European Union is pondering on whether this tax is acceptable or whether it breaches EU regulations. The case was brought up by Padawan, a Spanish maker of DVDs and CDs who refused to pay and was brought to court by the SGAE. Advocate General Verica Trstenjak of the European Court of Justice said that “A levy in favor of authors, artists and producers may not be applied indiscriminately,” to buyers who have clearly acquired the data media for purposes other than copying others’ work. Now her advice is generally followed by the court so if the ruling was in Padawan’s favor the SGAE could find itself deprived of a very important source of income.

A discussion on the future of physical content.

http://www.billboard.biz/bbbiz/content_display/industry/e3idbde8a913c8837424e12a0d45f78cd6a

And now onto another piece from Billboard Business – they strangely seem to have better coverage of European music business events than most other news organizations based in Europe. This is a report on the Music Tank debate that took place in London last week and focused around the physical formats. the event was called “Never Mind the Box Set: The Album Post-iTunes” and aimed at analyzing the future of the album. During the debate a study by the Future Business Research Group was discussed which is basically the first-ever industry-wide segmentation of the British music-buying public. This study divides the music-buying public into a number of groups to give a few examples the “traditional fanatic” – slightly older tech savvy and obsessed with physical products – the “going digital” that has just moved onto digital and may pirate some content the “digital convert” that is following the totally legal digital route. These groups and the correlation between the groups and the amount of money they spend of music is meant to be a guideline as to where the Music Industry should concentrate its efforts. In regards to the call for innovation at the record-store level to drive digital consumption Gennaro Castaldo head of press at HMV spoke of an upcoming service by the chain which would allow customers to receive a legitimate digital copies of the songs they just bought on CD. Others talked about the importance of vinyl, or merchandise and of box-sets for higher-margin products. What’s certain is that physical is not going anywhere and that although digital is set to increase and has already conquered the singles market album sales are going to happen primarily in the physical world for quite some time.

Soundcloud Congrats http://blog.soundcloud.com/2010/05/18/1000000/

The Soundcloud team announced last Tuesday that the company reached the milestone of one million users! I’ve been hosting the show on Soundcloud as well as on the usual RSS podcast feed for the past six months and I couldn’t be happier with them! Mhh now the only trouble is whether to still call it a start-up or not, what do you think?

And that’s all for this week, i really hope you enjoyed the show. You can find all the links to the stories in the show notes which are both embedded in the Mp3 file and on the blog at www.digitalmusictrends.com. You can also find the podcast on the Music Void at www.themusicvoid.com. Please email me with any comment or feedback – the address is digitalmusictrends@gmail.com. Next week-end I’m going to be at the Future Music Camp in Mannheim which is super-exciting, I will be conducting a workshop on Interactive Music so if you’re planning to be there give me a shout – otherwise I’ll tell you all about it on the next episode of digital music trends. This has been Andrea Leonelli – have a great week and ‘Till Next time!