MySpace Backlash

LA Music biz pundit Bob Lefsetz came out swingin' the other day with this huge rant against MySpace and how it's not changing the world for the better and actually sucks. However, the comments that it spawned were also quite revealing.

His key points were:

• MySpace is slow and buggy (agreed)
  
• MySpace does not filter it's content (yep)
  
• MySpace is centered around streaming not downloading (nope)
  
• MySpace is not loyal to music (yep)
  
• You cannot "break" a band on MySpace. (depends- see below)
  
• "To improve and drive the music sphere we need people who really understand how the word is spread, how people USE music, how to TURN PEOPLE ON to music." (kinda)
  

Some of the comments furthered his feelings while others took issue. Readers in agreement added several other ideas:

• MySpace is kiddieland for the "gymnasium and punch" set. (yes)
  
• MySpace is more about T&A than really a music community. (yes)
  

The ones that took issue were also pretty interesting:

• Bob's too old to figure MySpace out and plenty of discovery of new talent goes on. (no comment)
  
• MySpace does allow downloading, it's the bands (and labels) who make the decision. (right)
  
• MySpace isn't supposed to be the second coming, but is effective at allowing joe schmoe band to network with fans they would never ever have reached otherwise. (true)
  
• The kids love it and use it like mad, and seem to find what they want. (uh huh)
  
• The direct two way connection of bands to fans is priceless. (si!)
  
• "The problem is, people don't USE music. Music nerds USE music. Everyone else just dances and fucks to it." (affirmative)
  

My reflection on the whole thing goes back to my days as a teenage bald kid looking for hardcore bands when the vast majority of kids in in my area were doing their best to look like an extra from an episode of Miami Vice or dancer in a Pat Benatar video.

The CroMags, Breakdown, Sick Of It All, Raw Deal, Absolution (among many many others) built a pretty strong followings on a demo tape. Most of these cassette only releases were really 2 track live in studio performances, mixed through a board. The bands (or their girlfriends) spent many hours dubbing cassette after cassette on their home machines, usually one or two at a time and selling them for $3 a pop at shows and at stores ike Bleeker Bob's, Some Records, and Venus. Each of the bands sold thousands of these cheaply produced demos, and the recirculation of those demos provided the backbone to the scene- completely under the radar of the "real" music business.

Today, MySpace (and to a lesser extent bulletin boards) are virtual extensions of the same DIY mindset. Like the demo of years gone by, it's a great way for a young alt/punk/core band to find fans. But like any tool- it is what you make of it. Going out and randomly adding friends (i.e. spamming) isn't going to do much to promote your band. But posting your music and letting your fanbase grow naturally is. Both Blackout! bands Grace Gale and The Fire Still Burns have had some pretty solid success on MySpace- because they follow a sensible methodology and really use it as a hub for band to fan contact.

I get what Lefsetz is saying about how (on a pop level) MySpace is not the Panacea for the ailments of the music business. Trying to market a pop record on a social network is counterintuitive to what pop(ular music) is. But from down here in the punk rock trenches, the social networks have been pretty good to us simply becuase it's a natural extention of what we've always been doing.

There's really one distinct difference between then and now that the internet cannot address. The "social network" of the 80's was an actual living, breathing thing- CBGB every Sunday (sometimes Saturday), maybe a Rock Hotel show at the old Ritz. To participate, you had to show up, not just "click in". You had to be brave enough to walk down the streets that your mom always told you to be careful of. You had to meet people and get yourself out of (or into) situations that were often pretty dangerous. That's the visceral part of it that chatroom superstars and snipers do not get.

The Pricing War Continues...

Labels are still transfixed by the idea that they need to figure out another way to rape the public instead of creating a price (and a product) that consumers will be happy to pay for.

To have a meaningful discussion, let's actually talk about the revenue breakdown of a CD.

On a 10 song CD that has a suggested retail list price of $13.98, the cost is broken down as follows:

• the retail store buys the CD for about $8.00 from the distributor
  
• the distributor buys the CD for about $6.00 from the label
  
• $1.00 for manufacturing and printing (cost of goods sold)
  
• $1.25 for performer royalties (based on a 12% of SRLP with standard deductions)
• $.80 for songwriter (mechanical) royalties.
• the gross profit on each release (before recording and promo expenses) is about $3.oo
• the gross profit per song is about .30

Now let's compare that to a vendor like an iTunes, who sells individual tracks for .99 and albums for $9.99

• iTunes pays labels .65 per song or about $6.50 for an album
  
• there is no packaging cost
• performer royalties are .11 per song or $1.19 for an album without any deductions**
• mechanical royalties are still .08 per song or $.80 for the album.
• the gross profit on a full album is about $4.51
  
• the gross profit per song download is about $.46

* some labels who go through an aggregator may pay 10% admin fee.
**higher profile artists may get a better deal on digital music
***most labels only pay mechanicals on up to 10 songs on an album for songs written by the artist (controlled compositions.)


So can someone please explain to me what all the bitching is about? What about an overall reduction in price that will bring down the SRLP of legimate downloads- yet retain the current margins? If you look at my label, Blackout! passes along the savings of packaging to the consumer and iTunes prices are only $7.98 for most full album titles. We take the hit because we want people to take the chance on music, and if the album is cheaper- they may buy the whole thing instead of just a track if they like it.

Please feel free to ridicule me if my math is off in any significant way.

Remember, No One Expects the Inquisition

I'm glad to see our friends in government are taking cues from the geniuses at the majors when it comes to advancements in technology. In addition to the Republicans wanting to roll back the culture to pre-Scopes trial intellectual standards, destroy privacy and civil rights, and generally bending over for anyone with a big checkbook, the idiocracy are once again looking to pass The Broadcast Flag.

According to the Electronic Frontier Foundation, this genius piece of legislation has a serious impact on the future of digital music:

You say you want the power to time-shift and space-shift TV and radio? You say you want tomorrow's innovators to invent new TV and radio gizmos you haven't thought of yet, the same way the pioneers behind the VCR, TiVo, and the iPod did? Well, that's not what the entertainment industry has in mind. According to them, here's all tomorrow's innovators should be allowed to offer you:

"customary historic use of broadcast content by consumers to the extent such use is consistent with applicable law." Had that been the law in 1970, there would never have been a VCR. Had it been the law in 1990, no TiVo. In 2000, no iPod. Fair use has always been a forward-looking doctrine. It was meant to leave room for new uses, not merely "customary historic uses."

Sony was entitled to build the VCR first, and resolve the fair use questions in court later. This arrangement has worked well for all involved -- consumers, media moguls, and high technology companies.

But that's not all! This legislation will also put satellite radio under the control of the FCC, where it will be subject to the same rules as traditional radio. (Watch out all you Stern fans!)

Besides extending the hand of government deeper into free speech, this new exercise in legislative hooey does about as much good to prevent piracy as those levys the Army Corps of Engineers did to defend New Orleans from the relentless onrush of Katrina.

more posts soon...

Been a little hectic around here last week or so.

Apple and The NSA, Two Of A Kind?

Unauthorized, (illegal, and warrantless) wiretapping of Americans has been rearing it's ugly head all over the media recently. But instead of the NSA, the culprit du Jour is Apple. As first revealed at BoingBoing, it seems that the new version of iTunes has a new mini-store feature that actually checks out what you're listening to from your library and then suggests other music from it.

I have mixed feelings about this. I purposely downloaded audioscrobbler and happily use last.fm which really provide similar functionality. But that download and installation was my choice. Sliding that feature in, unannounced was a dirty trick and I don't appreciate it. At the very least they should have set the default to disable the feature, and only allowed transmission of data if the user opted-in to take advantage of it. I really cannot believe they did this, especially in the wake of the Sony DRM nonsense.

Does this shatter my faith in Apple and do I think they share more sinister motives with my nemesis in DC? Nope. I really think that they thought this was part of their user-friendly attitude to create an immersive music tool for their customers. For me it's a trivial sin as I enjoy participating in the whole collaborative filtering process.

This new wave of major label "digital labels" reeks of the same stench of failure and weakness as their attempts in the mid-90's to create "hip" fake indie labels to build cool street-cred. I recently had a conversation with my co-worker from my day gig at Haystack about how they're missing the boat.

We came up with one conclusion- to be cool and legitimate you can't go into it thinking that your format is secondary. Fer chrissakes the copy on the Cordless fron page screams "these bands aren't really good enough to have a REAL CD but we're doing this so we look like we're cutting edge." How about launching with EP's from heavier weight bands, do some real promo around it, and make a real stand and say that this is the future of music. Want to make a difference? Release the next Linkin Park EP through Cordless: that will command attention and show that you've truly entered the digital realm, might actually be cool, instead of making transparent attempts at being so.

Cool is not defined by what you buy, but what you create. It's also defined by either how easy it comes to you (not really thinking about it) or by working very close (or past) your personal breaking point to realize your vision. In my perspective, Richard Hell was exponentially cooler than Malcom McLaren because Hell didn't fabricate the image (later stolen by McLaren to outfit his Sex Pistols.) If you're in costume, it doesn't work as well. This also applies to all the Deathcab For Cutie yindies and Hot Topic punks. Sorry kids. If it comes easy, it ain't cool.

How's that Jordan?

Things Are Not What They Seem?

Interesting Blog post about Myspace. An essential read for all users of the site.

Fast Company On Pandora

Today the Fast Company Blog profiled Pandora. They observed a key to why Pandora (and Last.fm) are so revolutionary- they're timesavers that allow busy people to find music. The article quotes founder Tim Westgren on the pitfalls of staying in touch with a hectic real life schedule, "People don't lose their love of music,they lose their ability to connect with it."

I'm one of these "adult" creatures, but I differ from my peers because my label is still active with young bands. I'm still a part of "the scene", but I still use last.fm and Pandora as part of my discovery process.

That's the ball game isn't it? Convenience. With smaller, buyer-friendly record stores going out of business or eliminating deeper catalog in favor of "lifestyle" items, and the big box stores only picking up sure sell faceless product- the adult music lover with a non-pop taste has nowhere to go. So these busy users abandon music for other, more easily acquired entertainment. These services step up and take the place of the Jack Black character in High Fidelity for finding new tunes.

FC continues the profile with an opt-in poll (take it below!) on how their readers find out about new music. It's too early to tell as I write this, but I imagine the results will be interesting. Although the non-random nature of the participants will not be accurate in a statistical sense, it'll be a good qualitative study of tech-savvy bizfolk.

How do I listen and buy? I discover new bands through a short daily troll of myspace, purevolume, webzines, bulletin boards, while listening to various podcasts, Pandora, Last.fm, or Rhapsody. If I'm excited enough about the band, my digital purchases are made primarily from Emusic & iTunes, though I still get odd CD at my local indie record shop. But in general, my consumption of music is about 90% digital.

Where are you?

Do you buy more CDs or MP3s?

• I still buy music CDs


• I buy MP3s online