Wednesday, August 19, 2009

The Music Industry Is a Bunch of Stressed Rats

The New York Times features an article this week in their Science Times section detailing the effects of stress on the brain. From the article:
chronically stressed rats lost their elastic rat cunning and instead fell back on familiar routines and rote responses, like compulsively pressing a bar for food pellets they had no intention of eating.
Sound familiar? Every few months consumer patterns change in music, and panicky execs with highly leveraged debt loads and parent companies to report to have to react and provide answers. Since sales are declining naturally - maybe from piracy - but also from old-fashioned entertainment dollar and time competition like movies, videogames, iPhone Apps, etc. The music guys have no real answers, so they keep blaming piracy, suing sites and demanding worthless equity stakes in soon-to-be-shuttered music start-ups.

The author of the underlying study continues: “Behaviors become habitual faster in stressed animals than in the controls, and worse, the stressed animals can’t shift back to goal-directed behaviors when that would be the better approach,” Dr. Sousa said. “I call this a vicious circle.”

What better way to summarize the music industry. Freaked out about downloads, piracy, shrinking margins, streams and the boogie man has generated a primitive habitual response from the music industry.

So what's the solution? Good news, the brain is resilient...

But with only four weeks’ vacation in a supportive setting free of bullies and Tasers, the formerly stressed rats looked just like the controls, able to innovate, discriminate and lay off the bar. Atrophied synaptic connections in the decisive regions of the prefrontal cortex resprouted, while the overgrown dendritic vines of the habit-prone sensorimotor striatum retreated.
Here's my suggestion to everyone at the major labels. Take December off. Relax, refresh and come back with a brand new outlook and ability to properly analyze the landscape and find a business - consumer balance that makes sense.

Read the full NYT Story here...

Saturday, May 16, 2009

The A's and E's of Digital Music Marketing

After having this conversation a few times this week with managers and bands, I figured I'd try to distill it into a blog post for the masses. The "As" are accessibility and authenticity; the "Es" are exposure and exploitation.

Digital music marketing is a rabbit hole. So many tunnels lead to dead ends of worthless social profiles, half-updated accounts and empty widgets. And it's easy to be seduced by the snake oil salesmanship. Here's a standard promotional bargain they offer and the t

  • Register your profile on our site using Friend Connect which saves you the step of entering your name!
  • Add this widget to your MySpace page in a space not already used by all the other widgets and videos advertising shows from 4 months ago are
  • Carry a video-enabled cellphone to the bathroom
  • Compose a haiku about each fan that adds you as a friend on MySpace
  • Burn an effigy of Don Passman while forwarding Weezer's Pork and Beans video to 100 friends
  • You'll sell a million tracks on iTunes and keep 10000000% percent of the revenue!!!!!
That feels better. Here's how the "As" and "Es" often get confused in marketing:

  • Accessibility does not equal Authenticity. Authenticity is a legitimate and powerful strategy to connect with fans today, yesterday and tomorrow. If your marketing is authentic to your music and your audience and you - you are on the right track. For some bands this may be a Twitter following contest or constant Facebook posts. But for other bands it can be free live music or acoustic covers or even complete distance from social media.
  • Being Authentic does NOT require constant accessibility. Think about your audience and who you are and what you want to be and communicate accordingly.
  • A lot of web exposure is exploitative. Fully free albums on a random website tends to be exploitative of your music. To wit:
  • Stereogum posting a brand new band's debut single / video = exposure
  • 500 blogs posting Green Day's leaked album = exploitation
Whether you are starting out or releasing your tenth album, consider which actions are authentic, and what offers exposure without being exploitative. Spend your precious time wisely. Be authentic. Get exposure. Watch out for the traps of accessibility and exploitation.

Thursday, April 30, 2009

The Death of Free (The end of free music, movies and text on the internet)

This is the end of free. You might not have noticed it yet, but it is. This is not a post about piracy or copyright law or compensating creators of content. This article is an economic - pure market capitalism, hypothesis about the end of free content. Over the past few years, a lot of real and digital ink has been used to discuss the ever decreasing perceived value of content - be it music, movies, games, journalism, etc. Anything that could be freely copied was, and revenues continue to collapse in media industries, especially music.

That's all about to change. The era of file-sharing is coming to an end. Because it no longer makes economic sense for internet service providers. They do have a very real economic incentive to control bandwidth. Internet subscriber growth in the US is slowing. ISPs are going to have to move from a model of growing subscribers to increasing per-subscriber revenue. Bandwidth caps. Time Warner is not abandoning them, they will be back. And they will make the work for consumers. P2P traffic - file-sharing, bit torrent downloads, make up between 60% - 95% of ALL internet usage now. ISPs will not write that off much longer.

One hurdle remains - how to get consumers on board without surprising them with a $3,000 bandwidth bill? How do ISPs explain what a megabyte or a gigabyte is? Here's how it will happen:

1) ISPs will add a simple bandwidth meter to customer account pages.

2) Like a gas pump, ISPs will throttle down the connection speed as limits approach, to reduce and prevent outrageous overages.

3) Preferred partnerships. This will be the tipping point. ISPs will offer bandwidth-intensive service providers: say iTunes, Netflix, Google, Amazon, Hulu revenue sharing deals in which customer content from included partners is not counted against their bandwidth cap.

This is a market-oriented solution and end-around net neutrality. For a small per download share or cut of advertising, Comcast and Time Warner will say "no iTunes or Hulu purchases or streams will count against your cap. Eat as much as you want." Once these large counter-parties are included in the scheme, there will be no counter-weight to lobby consumers or others against bandwidth caps. In fact, it will be in iTunes and Hulu's interest to support, as they will demand more market-share in sales, streams and content supported advertising revenue.

When consumers have to pay for bandwidth usage to not just download, but host and upload free content files, p2p will dry up. There will certainly be all-you-can eat ISPs catering to the avid file-sharers, but the vast majority of users will be with an ISP that caps bandwidth at some level, thus discouraging them from using for file sharing. Not because file-sharing is illegal or wrong, but because it is expensive and non-profitable for the ISPs. Their economic interest will drive them to ask consumers to share in the cost via bandwidth caps. And consumers will reduce and guard their usage, just like they would if a neighbor asked to tap into their electricity, water or gas connection.

It's coming. The death of free. In future posts I'll explore how DashGo thinks this will reverberate to content owners, to consumers, to internet startups and other players.