Future Of Music

Tonight (Wednesday, July 1), join Berkleemusic business instructors Dave Kusek, George Howard, and Mike King, along with Berkleemusic Dean Debbie Cavalier, on Twitter for a conversation about the state and future of the music industry and their online business courses. Dave, George, Mike, and Debbie will be taking your questions from 9:00-10:00 P.M. EST.

To join, just post a tweet with your question or comment and add the tag #bmusic.

Please join us on Twitter by using the hash tag #bmusic to track the conversation. You can follow the conversation live here at hashtags.org

Here is some more info on following hash tag conversations.

All you need is a Twitter account to participate. It’s free and easy to sign up at twitter.com.

I did a radio show yesterday on NPR on the Future of Music along with Jeff Price from Tunecore and Tim Westergren from Pandora. You can listen to the show online here or download an MP3 of the show.

In a 2002 New York Times article, David Bowie said that “music itself is going to become like running water or electricity….it doesn’t matter if you think it’s exciting or not; it’s what is going to happen.” Now, seven years later, the music industry has continued its rapid metamorphosis. Often referred to as an industry in crisis, coming up Where We Live, we’ll be talking with writers and innovators who say the business of making music has never been better. Ignore the closed up Virgin MegaStore in cities across the country—listening to and making music is still big business. David Kusek, author of The Future of Music: Manifestor for the Digital Music Revolution joins us to talk about the new truths that govern the music world. Also, The founders of Pandora and TuneCore chime in and we’ll be joined in-studio by WNPR’s own Anthony Fantano. From the Connecticut Public Broadcasting Network.

Great post from Mashable about how artists are creating upgrades and enhancements to music business models. Earlier Mike King reported in his blog how Amanda Palmer made $19,000 online using Twitter on a Friday night. The important thing is not the fact that she used Twitter, but that she found a way to engage her fans and make money, on top of the traditional approach of trying to sell CDs or tickets.

“Amanda is not producing money out of thin air, or by swindling some people into buying something they do not want. She’s engaging her fans who are glad to be able to buy some merchandise directly from the artist. Secondly, she’s not a professional PR or a marketing professional; she did it by engaging her audience through the simple tools at her disposal.

Which brings me to my most important point: Twitter is just a tool in this case. Her 30,000 Twitter followers aren’t just people who she followed and then they followed her back; they’re not some random mass of people who just happen to be following Amanda Palmer. They’re her fans, which means that any artist who has fans can do the exact same thing. It’s not a one-time thing or a passing fad: true fans will always be interested in buying a t-shirt, attending a secret gig, or getting their record signed.

We’re still at a very early stage in the online music revolution. Soon, artists will have a multitude of tools to help them communicate with their audience, offer them extra value and, last but not least, make money.

Ultimately, we’re not talking only about replacing current business models; we’re talking about upgrading them; finding new, better business models. You think that the music business is fine as it is? It’s not. It scales awfully. It’s great if you’re hugely popular, but if you’re an indie artist, the big record companies don’t care much about you. As Amanda bluntly puts it:

“TOTAL MADE THIS MONTH USING TWITTER = $19,000
TOTAL MADE FROM 30,000 RECORD SALES = ABSOLUTELY NOTHING.“

These new tools, such as Twitter, will help the entire music business scale much, much better. Very popular musicians such as Radiohead will still make a lot of money. But relatively unknown artists, by promoting their work and selling stuff directly to the fans, using free or inexpensive online tools, will be able to make a better living than they do right now. The future might not be very bright for the big record companies, but it is indeed bright for the artists.”

Read more here at Mashable.

In 1973 - $4.99 was then the going rate for a single LP. Then the prices slowly starting climbing over the years, despite Tom Petty’s very public efforts in the early 80s, and vinyl rose bit by bit until it was about $7.99 or $8.99.

When CDs came along in the late 80s, even though they were less expensive to produce, the list prices put them at $14.99 or more. Over the last 10-15 years, the street price has settled at about $11.99 or so, but of course lots of places sell them for more and less than that. Of course now CD prices are dropping in price to compete with digital downloads and they are often costing less than mp3s albums.

After the demise of the original Napster and the rise of iTunes, the $.99 a song model arose and somehow took hold. But in an era where many listen to music free from myspace.com or off of artists’ web sites and others file share, most working musicians are wondering how they will make a living making music when it’s clear you can’t rely on the sale of a physical product any longer.

Enter Amie Street.

Amie Street was started in Providence, Rhode Island on Amie Street on July 4, 2006 by Elliott Breece, Josh Boltuch and Elias Roman while at Brown University. They are now based in Long Island City, just across the river from Manhattan. Roman is the Director of Business Development and Operations, Breece is the Director of Product Development, and Boltuch is the Director Public Relations and Marketing.

The idea is that when a song is added, it starts free up to .98 and will go up in cost as demand rises up to a maximum of .98. Occasionally, shoppers who frequently recommend artists will also get credits from Amie Street, so it’s a bit of a buy back strategy.

The mp3 files are all free of digital rights management, or DRM.

Musicians receive 70% of the revenue from each sale.

Listen to the PodCast here.

“Alongside the explosive growth of online video over the last six years, time spent on social networks surpassed that for e-mail for the first time in February, signaling a paradigm shift in consumer engagement with the Internet.

According to a report released in April by Nielsen, Internet use for “short-tail” sites with large audience reach has evolved since 2003. The change is from portal-oriented sites, like shopping directories and Internet tools like Microsoft Passport, to social networks, YouTube and providers of niche content.

In November 2007, the video audience also exceeded the e-mail audience for the first time, and sites with long-form videos (averaging six to eight minutes) are showing much more growth and user time spent online than those with shorter videos.

Although Charles Buchwalter, senior vice president for research and analytics for Nielsen, said marketers had yet to master advertising on social media, he predicted that “over the next 12 months a model will emerge” that takes into account “the influence factor” of users who wield disproportionate power.”

From the New York Times.

Neil Young’s ‘Archives’ Shows the potential of new formats. New formats have driven the music industry forever. That and new music.

While Blu-ray may not be the “next big thing”, it shows what can be done with more storage and bandwidth. The evolution of music formats will determine the path for the future. MP3 was the last major music format and the industry missed monetizing it entirely.

“Anything is possible in the Blu-ray disc edition of “Neil Young: Archives, Vol. 1 (1963-1972),” the most technologically advanced mega-boxed set in rock ‘n’ roll history, arriving with a hefty thump on store shelves Tuesday.

Young, a militant guardian of the analog waveform (notably, the vinyl LP) who dismissed the CD era as sonic sludge, has found purist’s heaven in a new digital format, Blu-ray, that’s still trying to push the consumer acceptance needle past indifference.

Neil Young’s “Archives” is the latest thing to debut in the Blu-ray format. This first volume, at $299, chronicles Young’s early music career from his school-days band, the Squires. Young waited 15 years for the appropriate format to showcase his life’s work in a multimedia package that combines high-resolution audio, high-resolution graphics and archival video.

The set includes 128 tracks (12 hidden), 20 feature videos, film clips, trailers, interviews, radio spots, photo galleries, biographies, even newspaper clips. Young also promises free updates with music, vintage recording sessions or film using BD-Live, which needs a compatible Blu-ray player and a broadband Internet connection.

The set will be available in CD and DVD, too, but Blu-ray is the marquee package: It could foretell the future of music as multimedia and prolong, even save, the new format’s life.

“I went through hell in the ’80s,” Young told bloggers a year ago at the JavaOne conference in San Francisco, where he announced this project that uses Sun Microsystem’s Java-powered graphics. “Now we’re coming close, climbing the quality wall.” How cool is that - Neil Young at a Java conference?

How big is the climb? Young has used “ice picks” to describe the sound of early CD. Where a vinyl LP is a continuous analog waveform, a CD is a digital approximation. The CD takes 44,100 numerical samples each second, each sample in 16-bit chunks. At 22 kilohertz, the theoretical high-frequency limit of human hearing, that 44.1-kilohertz sampling rate produces as few as two samples. It’s what makes the higher frequencies fatiguing, even grating, to some ears.

In recent years, DVD-Audio pushed recorded digital music to 24 bits and 96,000 samples per second. Now, Blu-ray goes even further with music, like “Archives,” at 24/192,000 or, as it’s more widely known, 24/192. With more digital information comes a more lifelike representation of the original source. An elaborate timeline, a horizontal scroll, lays out Young’s career amid world events and includes access to supplemental music, vintage concert video and future BD-Live downloads.

The music is also cataloged in a virtual file cabinet that stores each song in a folder with album art, recording date, credits and handwritten lyrics. As the music plays, a vintage Dual cassette deck, Ampex reel-to-reel player or KLH turntable might be the video backdrop, a lit cigarette in an ashtray next to a coffee cup the ambience.”

Read more here.

“Why would anyone want to be a musician in this environment?”

I wake up every day fascinated by this question. I think I know but would love to hear more from everybody. I posted this question to twitter tonight and this is what I got the first hour. Keep em coming. I would love to understand this better.
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musicadium@davekusek I would want to be a musician no matter what environment we were in. The desire to create would override, methinks.

andreakremer@davekusek Isn’t that like asking why anyone would want to play tennis? Do people who play tennis give up because they can’t make a profit?

timothyeric@davekusek fascinated that people still want to be musicians or by the environment and its challenges?

kmsolorio@davekusek passion is the only reason I could come up with. btw, very interested in learning more about your tools for musicians.

marjae@davekusek I am a musician because I love music and, more importantly, sharing it with people. This sharing gives a high unlike any other.

marjae@davekusek Great question! It would be great if you could share some of your replies with us. . . the questions certainly made me think!

Lars_Christian@davekusek I think that if “he environment is a factor on whether you become a musician or not, you probably won’t “make it” either way.

tigerpop@davekusek it’s not always about want.

Pattyoboe@davekusek Being a musician is just who I am … no matter the environment. Maybe like I was still a mom when my kids acted up, I guess ..?

gah650@davekusek it’s an inexorable artistic need to create; thank God.

melbahead@davekusek If being a musician is anything like being a visual artist then it doesn’t matter what one wants. It’s a compulsion, a calling

_willthompson@davekusek it’s extremely hard and counterintuitive to hold back from doing something you have natural predisposition for.

kimpwitmanRT @davekusek: why would anyone want to be a musician in this environment? can someone tell me? i wake up every day fascinated by this.

manishamusic@davekusek Being a musician is not particularly easy in any market-based economy. Something deep inside steers the wheels. Is it insanity?

PtbTrees@davekusek perhaps the love of music is enough to make it worth it. at least thats how I feel

atomicdacia@davekusek because its like a drug. Once its in you you just can’t get enough

Kalajdame@davekusek it seems like an easy way to make money i guess..i do it cuz i love to make music and if i could get paid for it ..u kno the rest

Bruce Houghton posted a positive view about the music business at Midemnet that I think paints a realistic picture about our short-term future. Its a good read and uplifting.

More from Gerd Leonhard as he once again attempts to predict the future. While many people scoff at those who try and look ahead and light the paths for the rest of us, Gerd is actually quite good at it. Here is a glimpse into his mind and some trends he suggests for the rest of the decade.

1 — We will soon see the emergence of many different kinds of iPhone-influenced Netbook-like devices; some will be Apple-made but most will not. These devices may be 2-3 times the size of an iPhone and will connect to the Internet in every conceivable way, i.e. 3G/4G, LTE, Wimax, Wifi etc. They will be touchscreen, zoom-interface enabled, cloud-computing, speech-controlled, location-aware, mobile-money equipped, socially hyper-networked, always-everywhere-on, HD-camera equipped and possibly project images and audio or even support basic holography.

In addition to the high-end, fully-loaded and perhaps still rather expensive versions that many of us in the so-called developed countries will gobble up, low cost and more basic editions for the developing markets will be sold in the 100s of millions (think India, China, Indonesia…). These smart gadgets will have very low energy consumption and therefore extremely long battery life, may even sport basic solar-power options, and may ultimately cost less than 30 USD, or even be ‘free’ (why bother to sell the box if you can make a lot more $ with selling services…. Nokia?).

It is these mass-market yet very smart and networked devices, together with cheap or free wireless broadband that will really revolutionize reading, newspapers, books and education; not to mention our music, TV and film consumption habits. Content commerce will be completely redefined as a consequence. As BTO told us a loooong time ago: “You ain’t seen nothin’ yet”

2 — Very cheap or free wireless broadband - at fairly high speeds, i.e. at least 2MB / sec - will be available in most places, particularly in the booming new economies of Asia, India, Russia and South-America, and a bit later, in Africa. Funded by the likes of Google and by the future ‘telemedia’ conglomerates, governments, cities and states, wireless broadband will probably reach 3-4 out of 5 people on the globe within 5-8 years. User-generated & derived content (UGDC for those of you that must have an acronym ;), virtual co-production, mobile editing and instant network sharing will explode by a factor of 1000, making control of distribution a very distant concept of the past. UGC or UGDC may make up to 50% of the global content consumption by 2015. Consumers will be (co)-creators, marketers, sellers and buyers, and come in a hundred variations, from totally passive to totally active. Then, indeed, filtering, culling and curation will be the key to success.

3 — Collective blanket licenses that legalize and unlock legitimate access to basic content services via any digital network will emerge, and are likely to take over as the primary way of content consumption, around the world (but in Asia, first). Just like water or electricity which is readily available when moving into a new home, the basic access to content will be bundled into access to digital networks, i.e. via ISPs, operators, telecoms, portals etc. This shift is starting with music (as already done by TDC in Denmark, and Google in China), and will be quickly followed by films, TV, books and newspapers. Access may often - but in local variations - ‘feel like free’ to the user but will in fact generate 10s of Billions of $$ via blanket licensing fees (yes… those pools of money), next-generation advertising and branding, data-mining & sharing, up-selling, re-packaging and many other new generatives. This topic will, btw, be the gist of my RSA presentation tomorrow - if you can’t be there in person, you may want to listen to the live audio, via this link.

I think that governments around the world will call for and / or support the implementation of collective content licenses that wil finally legalize content usage on the Internet, similar to how governments pushed for the radio and broadcasting licenses approx. 100 years ago. Whether these blanket licenses will be voluntary or compulsory remains to be seen - in any case the only alternative is to perpetuate a severely dysfunctional telemedia ecosystem that criminalizes almost all users and stifles innovation while generating virtually zero new revenues for the creators.

4 — Fuel-cells and other next-generation mobile energy sources are a certainty. A serious increase in mobile device power (and therefore, its use) will be achieved by employing next-generation technologies such as fuel cells that could provide for up to 500x the usage time that we have today. This is likely to become a reality in 3-5 years and will revolutionize how we use - and how much we rely on - our mobile devices, especially in countries where there the fixed-line power infrastructure is much less developed or non-existent.

5 — Completely targeted and personalized advertising, delivered largely on totally customized mobile computing & communication devices, will turn the the $ 1 Trillion USD advertising and marketing services economy upside down. Behavioral targeting and user-controlled advertising will, of course, become an even hotter potato and a much discussed challenge, but the good old deal of ‘I give you attention & personal data and you give me value e.g. content’ will be even more pronounced on the Net. In fact, advertising as we knew it is already more or less outmoded and will, during the next 2-3 years, be completely reinvented. Privacy and Trust are the #1 issues here.

The implication is that if your data (within your specific sets of permissions and opt-ins) is used to bring you perfectly synchronized advertising, than advertising really becomes more like content, too. Watch this play out in the mobile advertising space, starting this year, and quite possible boost the global value of advertising-content by more than 100% by 2015. Google will be the main driver here, plus Facebook, Nokia and yes… Twitter (soon to be = Google).

6 — We will witness the more or less complete decline of most forms of physical media within 7-10 years. The very definition - and thus the core economic business models - of newspapers, magazines, CDs, DVDs and books will be completely re-written, and new forms of content packaging will rapidly emerge. We can already see a preview of how this may work in the current mobile applications boom: content as part of software packages; paying for the packaging, the curation, the bundling, the personalization - not just for the zeros and ones that are ‘the copy’. This trend is important not just because it will reflect the users’ (or better… followers’) new consumption habits but also because because of the increasing need to save energy and material costs - and moving from content products to content services will certainly go a long way in this regard. The total decline of printing in people’s homes, and for personal use, will commence, as well.

7 — Paying for privacy will become a distinct option. Today we pay to go online and connect; in the future we may end up paying for the luxury to go offline, disconnect, enjoy the quiet, and give our brain some rest. Maybe if we don’t want to share our click-trails and usage data, we will be able to make cash payments instead - and the more you pay, the more private you can be..?

8 — Travel 2.0: alternatives to ‘actually going there’ will explode: immersive, 3D video, virtual rooms, holography. This is a key development that will nurture new forms of entrepreneurship, education and group working.

Read more from Gerd Leonhard here.

Kevin Kelly has written extensively on the need to create value around digital copies in order to create the revenue opportunities that are falling away every day for digital media. Here is an excerpt from his great essay “Better Than Free”.

Eight Generatives Better Than Free

Immediacy – Sooner or later you can find a free copy of whatever you want, but getting a copy delivered to your inbox the moment it is released — or even better, produced — by its creators is a generative asset. Many people go to movie theaters to see films on the opening night, where they will pay a hefty price to see a film that later will be available for free, or almost free, via rental or download. Hardcover books command a premium for their immediacy, disguised as a harder cover. First in line often commands an extra price for the same good. As a sellable quality, immediacy has many levels, including access to beta versions. Fans are brought into the generative process itself. Beta versions are often de-valued because they are incomplete, but they also possess generative qualities that can be sold. Immediacy is a relative term, which is why it is generative. It has to fit with the product and the audience. A blog has a different sense of time than a movie, or a car. But immediacy can be found in any media.

Personalization — A generic version of a concert recording may be free, but if you want a copy that has been tweaked to sound perfect in your particular living room — as if it were preformed in your room — you may be willing to pay a lot. The free copy of a book can be custom edited by the publishers to reflect your own previous reading background. A free movie you buy may be cut to reflect the rating you desire (no violence, dirty language okay). Aspirin is free, but aspirin tailored to your DNA is very expensive. As many have noted, personalization requires an ongoing conversation between the creator and consumer, artist and fan, producer and user. It is deeply generative because it is iterative and time consuming. You can’t copy the personalization that a relationship represents. Marketers call that “stickiness” because it means both sides of the relationship are stuck (invested) in this generative asset, and will be reluctant to switch and start over.

Interpretation — As the old joke goes: software, free. The manual, $10,000. But it’s no joke. A couple of high profile companies, like Red Hat, Apache, and others make their living doing exactly that. They provide paid support for free software. The copy of code, being mere bits, is free — and becomes valuable to you only through the support and guidance. I suspect a lot of genetic information will go this route. Right now getting your copy of your DNA is very expensive, but soon it won’t be. In fact, soon pharmaceutical companies will PAY you to get your genes sequence. So the copy of your sequence will be free, but the interpretation of what it means, what you can do about it, and how to use it — the manual for your genes so to speak — will be expensive.

Authenticity — You might be able to grab a key software application for free, but even if you don’t need a manual, you might like to be sure it is bug free, reliable, and warranted. You’ll pay for authenticity. There are nearly an infinite number of variations of the Grateful Dead jams around; buying an authentic version from the band itself will ensure you get the one you wanted. Or that it was indeed actually performed by the Dead. Artists have dealt with this problem for a long time. Graphic reproductions such as photographs and lithographs often come with the artist’s stamp of authenticity — a signature — to raise the price of the copy. Digital watermarks and other signature technology will not work as copy-protection schemes (copies are super-conducting liquids, remember?) but they can serve up the generative quality of authenticity for those who care.

Accessibility — Ownership often sucks. You have to keep your things tidy, up-to-date, and in the case of digital material, backed up. And in this mobile world, you have to carry it along with you. Many people, me included, will be happy to have others tend our “possessions” by subscribing to them. We’ll pay Acme Digital Warehouse to serve us any musical tune in the world, when and where we want it, as well as any movie, photo (ours or other photographers). Ditto for books and blogs. Acme backs everything up, pays the creators, and delivers us our desires. We can sip it from our phones, PDAs, laptops, big screens from where-ever. The fact that most of this material will be available free, if we want to tend it, back it up, keep adding to it, and organize it, will be less and less appealing as time goes on.

Embodiment — At its core the digital copy is without a body. You can take a free copy of a work and throw it on a screen. But perhaps you’d like to see it in hi-res on a huge screen? Maybe in 3D? PDFs are fine, but sometimes it is delicious to have the same words printed on bright white cottony paper, bound in leather. Feels so good. What about dwelling in your favorite (free) game with 35 others in the same room? There is no end to greater embodiment. Sure, the hi-res of today — which may draw ticket holders to a big theater — may migrate to your home theater tomorrow, but there will always be new insanely great display technology that consumers won’t have. Laser projection, holographic display, the holodeck itself! And nothing gets embodied as much as music in a live performance, with real bodies. The music is free; the bodily performance expensive. This formula is quickly becoming a common one for not only musicians, but even authors. The book is free; the bodily talk is expensive.

Patronage — It is my belief that audiences WANT to pay creators. Fans like to reward artists, musicians, authors and the like with the tokens of their appreciation, because it allows them to connect. But they will only pay if it is very easy to do, a reasonable amount, and they feel certain the money will directly benefit the creators. Radiohead’s recent high-profile experiment in letting fans pay them whatever they wished for a free copy is an excellent illustration of the power of patronage. The elusive, intangible connection that flows between appreciative fans and the artist is worth something. In Radiohead’s case it was about $5 per download. There are many other examples of the audience paying simply because it feels good.

Findability — Where as the previous generative qualities reside within creative digital works, findability is an asset that occurs at a higher level in the aggregate of many works. A zero price does not help direct attention to a work, and in fact may sometimes hinder it. But no matter what its price, a work has no value unless it is seen; unfound masterpieces are worthless. When there are millions of books, millions of songs, millions of films, millions of applications, millions of everything requesting our attention — and most of it free — being found is valuable.

The giant aggregators such as Amazon and Netflix make their living in part by helping the audience find works they love. They bring out the good news of the “long tail” phenomenon, which we all know, connects niche audiences with niche productions. But sadly, the long tail is only good news for the giant aggregators, and larger mid-level aggregators such as publishers, studios, and labels. The “long tail” is only lukewarm news to creators themselves. But since findability can really only happen at the systems level, creators need aggregators. This is why publishers, studios, and labels (PSL)will never disappear. They are not needed for distribution of the copies (the internet machine does that). Rather the PSL are needed for the distribution of the users’ attention back to the works. From an ocean of possibilities the PSL find, nurture and refine the work of creators that they believe fans will connect with. Other intermediates such as critics and reviewers also channel attention. Fans rely on this multi-level apparatus of findability to discover the works of worth out of the zillions produced. There is money to be made (indirectly for the creatives) by finding talent. For many years the paper publication TV Guide made more money than all of the 3 major TV networks it “guided” combined. The magazine guided and pointed viewers to the good stuff on the tube that week. Stuff, it is worth noting, that was free to the viewers. There is little doubt that besides the mega-aggregators, in the world of the free many PDLs will make money selling findability — in addition to the other generative qualities.

These eight qualities require a new skill set. Success in the free-copy world is not derived from the skills of distribution since the Great Copy Machine in the Sky takes care of that. Nor are legal skills surrounding Intellectual Property and Copyright very useful anymore. Nor are the skills of hoarding and scarcity. Rather, these new eight generatives demand an understanding of how abundance breeds a sharing mindset, how generosity is a business model, how vital it has become to cultivate and nurture qualities that can’t be replicated with a click of the mouse.

In short, the money in this networked economy does not follow the path of the copies. Rather it follows the path of attention, and attention has its own circuits.

Read more from Kevin Kelly here.