TROUBADOURS, PIRATES AND THE DIGITAL POLICE:
Songwriting, publishing, production and distribution in Y2K
by Jerry Flattum
Part III - INTERNET MUSIC AND COMMERCE:
In 1993 the Independent Underground Music Archive (IUMA) started introducing unsigned artists on the web. In 1995 Warner Bros. And Geffen (MCA) joined the bandwagon featuring artists and music clips that took forever to download. Eventually music fans started developing their own websites often times far superior to the major labels. They offered bootleg recordings, lyrics, chord charts and other artist info. SonicNet was one of the most successful bulletin boards springing up at the time along with dozens of fanzines and ezines like Addicted to Noize. Major publications like Rolling Stone and Spin followed the trail in 1996. Now, in 1998, it would be rare not to find a music company, organization, artist or any other music related entity without presence on the web.
Labels are developing a strong presence on the web, with the web offering new avenues for exposure. Entire websites are based on specific genres and labels are discovering new ways to promote their artists. New artists have the opportunity to find new audiences and new music is available across the globe.
New Media/New Choices
The Internet is the new radio, TV, movie and book all rolled into a single medium, offering an even wider array of musical choices in varying formats with worldwide access in ways traditional media never could. The distribution of music is no longer limited by radio bandwaves or shipping logistics (CD and cassette). The listener is also free to pick any cut from any compilation and assemble a personalized album. The listener is not limited to the 10 or 12 cuts normally available on a CD/cassette. This increases choice and allows for greater variety. On a personalized album, a Russian orchestral piece can follow a hard rock tune.
Capacity and Speed
It isn’t just that online music commerce exists--that’s a given. What’s really significant is how fast it’s growing. The number of websites now available is in the millions, with 100s of 1000s being added every day. Hopefully, when all 6 plus billion inhabitants of this planet have their own websites, everyone will finally be able to take a breath...did I say 6 billion websites? Yahoo’s Music Directory offers 1000s of music sites. The IFPI estimates 15% of global sales will be via Internet by 2002. If all the digital hoopla about copyright protection, digital security systems, and international copyright agreements pans out as the industry hopes, then 15% will be a conservative estimate. Companies like Tower Records and Camelot Music and record clubs like Columbia House have collectively found themselves a new market.
Way, way back in the days of 1996, a reported 450,000 copies of David Bowie’s single, "Telling Lies," were downloaded to an estimated 87 countries in just one week. At that time, it took most downloaders 45 minutes to complete the transfer. Now, techno gurus are touting the tech capability of auto-downloads of new releases while offline. A user turns the computer on, and new samples are immediately available to pick and choose. Unquestionably, the entire computer industry is run by serious speed freaks, and combined with the consumer demand of "I want it and I want it now," availability of online music and the accompanying download time will be almost instantaneous.
Download time for music clips is significantly reduced via plug-ins like RealAudio and others with the soundfiles themselves at near CD-quality. Music becomes a part of a multi-media show with Liquid Audio, NetCast, MediaCast, VDOne and others offering simultaneous audio and video streaming over the web. Live concert and club broadcasts are now available and the musical experience will only continue to get better with developments like 3-D interfaces.
Digital Music Delivery Systems
With new digital music delivery systems using proprietary CODEC technology, such as Silicon Valley’s Liquid Audio Group, London-based Cerberus with its Virtual Pressing Plant, France’s Eurodat, and Lucent Technology’s newly announced Perceptual Audio Coder (PAC), sales are expected to increase fast and the music industry has itself a whole new market. The digital music delivery system business is made up of professionals who come from engineering and design backgrounds, and the mix with the music industry will have a tremendous influence on shaping the future of music.
The web can support an unlimited number of broadcast facilities from all over the world. Esoteric music genres will have as much presence as pop genres. National boundaries won’t interfere on the Net, with music preference limited only by marketing and perhaps language barriers. Streaming software has record keeping information built into the overall design, allowing performance rights organizations to survey and track distribution without added expense. New machines will be capable of capturing streamed signals of the highest quality audio with rapid retrieval, storage and superior playback. This new form of audio/visual entertainment has market penetration levels rivaling CD players today.
Most consumers with 28.8k modems attached to standard telephone lines are at relative ease with downloading a 3.5 meg song file in 20 to 30 minutes. But speed and power is an addictive thing. Today many college students and professionals working in Internet rich environments have ISDN connections available providing speeds at least 4 times as fast as ordinary modems. This means the ability to download a song in real time or even faster if the file is compressed. Other consumers are not far behind. Home subscribers to Hughes small dish digital satellite network, known in many countries as Direct TV or DTV, were offered the new "Direct PC" service which allows 400 kbps home download connections at costs similar to subscription television. It typically takes only 20 seconds to download a megabyte of data which would transfer a compressed song file in a little over a minute.
When combined with Push technology, which essentially allows the consumer to use computer downtime to capture digital product, purchases of digitally delivered music will not only be faster, but also convenient. A teenager can subscribe to new releases by his or her favorite artist and have them automatically downloaded overnight. The songs can be sampled in the morning with an option to buy and a discount if the purchase is made within 24 hours.
Both Sony and Atlantic have launched music video channels and Capitol Records started a music channel jointly with Broadcast.com. Broadcast.com’s stock went public recently and has created quite a stir in traditional broadcast markets. BMG is selling music from all record labels through genre-based sites like Bug Juice, Peeps, and Twang.
Liquid Audio and other digital music delivery systems are generally independent of any music content provider, which allows for greater competitive use of its services without favoring a particular market or content provider. This will allow smaller companies the same access to marketing as the majors. Liquid Audio, RealPlayer and other digital music delivery systems are available for free download, and are often pre-packed with any number of browsers. (See further discussion of Liquid Audio under the Piracy subheading).
Online music retailing is growing steadily. CDnow recently merged with N2K, Amazon.com started selling music in 1998 and Borders Group Inc., Columbia House-backed Total E and Tower Online are just a few of the top retailers capitalizing on the digital market.
With a new twist on the "video killed the radio star," retailers are afraid consumers will be able to download music directly from labels. Meanwhile, labels are afraid consumers will be able to download music directly from the artist. The National Association of Recording Merchandisers (NARM) will be addressing these issues and more during seminars through 1999. NARM President Pamela Horovitz says that with the new wave in digital transfer, retailers, labels and artists will be scrambling for control and that the Net is seriously upsetting the balance of power. Other issues will include MP3, copyright, digital importing/exporting, and the use of online playback similar to how retailers currently play music in-store to enhance the sales experience. The sale of music is no longer limited to a physical carrier and this will dramatically alter the way the industry does business.
Terrestrial Radio Takes Orbit
A long, long time ago, teenagers used to turn on their AM radios in their new ‘57 Chevy’s, listen to Elvis sing like a black person and then go have a malt at Ralph’s Malt Shop. Well, Samsung just announced Satellite Radio. And according to certain Arbitron surveys--the folks who survey radio listeners--the market for radio is dwindling and has been since the new found freedom of cassettes and CDs. Arbitron also says something like 87 percent of commuters listen to radio when they drive. Well, duh. What else are you supposed to do? Anyway, radio on land has a limited radius. Satellite radio has no limits, probably including Mars, should you happen to travel there in the near future.
There are two other companies--CD Radio and XM Satellite Radio--shaking up Wall Street. Both companies plan to offer basically the same service, which is 50 channels of music and 50 channels of news, talk and other entertainment fare, all for $9.95 a month. "One-quarter to one-third of all listening tastes in this country are not able to be served economically on a local basis by local radio stations," says David Margolese, Chairman and CEO of CD Radio in a recent Gavin article at the Gavin website. This will be commercial-free radio, and if you want it, you got it as far as tastes go.
Two or three satellites strategically placed will beam back a signal through various land "repeaters" situated in various markets throughout the country (and world eventually). The beams are then sent to mini-satellite dishes small enough to fit in your hand. Consumers slip a "radio card" into a cassette or CD player and can then choose channel, format, title and artist. The radio card will cost under $200 and specially designed radios are currently in the drawing stages. Mainstay media providers like C-SPAN, USA Today, Asia One, Sports Byline USA, Hispanic Radio Network, and others are ready to cut deals as well as Alpine and Pioneer. Car-makers are gearing up for new player installations. Land radio will most likely become more local in focus.
Publishers are offering their entire catalogs online, and we’re talking 100s of 1000s of titles. When websites like Amazon.com or CDnow and N2K’s Music Boulevard provide access to more than one publisher’s catalog, then the number of available titles available to the consumer from one location increases exponentially. Not only are the titles available, but with Real Audio, the listener can sample music before buying. Music users can request quotes for synchronization licensing fees as well.
Professional music users and consumers alike have access to the same information, from graphics, video clips and bios to sound samples, license fees and writer/publisher info. Everything will be coded and secured. Passwords and digital keys will restrict access.
Music Publishers will continue to perform traditional duties on behalf of writers and artists. Until inde artists develop such high traffic personal websites and make all the arrangements for copyrighting and licensing, as well as marketing their own material, they will still need the industry to develop, market and distribute their catalogs. Publishers and rec companies are able to generate sales based on the strength of their catalogs and rosters, something an individual artist can’t do. But then, if an artist can offer music direct to the consumer, with the same high quality of sound and ease of transfer, then who needs the middleman/woman.
Peermusic and Goodnoise
A solid example of the move by music publishers into the digital age is the exclusive publishing rights agreement between Peermusic--one of the largest music publishers in the world--and Goodnoise, the first record company with a sole focus on the Internet. Goodnoise is kicking up dirt in the faces of majors with an alternative rock-based catalog using the MP3 standard. Goodnoise was pioneered by individuals from both the technology and music industries, clearly demonstrating the importance of the ongoing love affair between technology and music. "Clearly the future of the music business is profoundly affected by the Internet," said Ralph Peer, II, chairman and CEO of Peermusic in a recent Goodnoise website news article. "As a new company, GoodNoise is thrilled to partner with one of the most respected individuals and companies in the industry," said Bob Kohn, founder and chairman of GoodNoise. "With this relationship, our artists will benefit from the strategic guidance of Ralph Peer as part of our board of directors."
The Role of Societies
Artists are not equipped to monitor their copyrights and collect royalties and usage fees on a worldwide basis. It’s even more impossible for an artist or writer to lobby Congress on legislative matters, while producing DVD quality music and setting up digital transfer and security websites, all at the same time. The role of performing rights societies becomes increasingly important in a world driven by digital streaming, downloading and digital over-the-air broadcasting. Conventional distribution methods will not disappear, and the bridge from traditional licensing to digital licensing will be a challenging one to cross, especially with digital commerce on a global basis. How the industry handles these new digital global markets will have significant effects on pricing of product and the division of royalties.
The All-In-One Songster
Developing a master to the level of a commercially released CD or cassette is technology still not fully available to the sole writer/artist, but it’s getting there. With hard disk recording and CD-RW duplication capabilities, an independent writer/artist can run off a few thousand near-perfect copies with self-designed J-Cards with a relatively small investment. If the music is salable, and the website manages to generate high enough traffic, the new millennium songster has the opportunity to truly become an all-in-one single operation, creating, producing, distributing and marketing his/her/their music, right from their own personal desktop computer. My God, to think they can do all of this in their underwear on top of it! Well, they still have to get out and put on a show--something many still do in their underwear--thanks Madonna and Marilyn.
Read on for Part IV - PIRACY
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For a short bio, along with an intro to his columnist section, see : http://www.musesmuse.com/col-jerryflattum.html.