The Music Industry Crawls Towards The Web

20 08 2008

Courtesy of polyvore.com

Courtesy of polyvore.com

An article in a recent SocalTech (Benjamin Kuo’s long running group devoted to the technology sector here in Southern California) noted that music web site ArtistDirect, which has for a few years been a growing site about the major music industry, is starting a section this fall that will post lyrics to popular songs.

According to ARTISTdirect, it will provide lyrics to popular songs from EMI Music Publishing and Universal Music Publishing Group, which will allow the firm to add a new lyrics section to its site. Financial details of the licenses were not disclosed. The deal with EMI gives ARTISTdirect access to more than one million lyrics for EMI songs; extent of the deal with Universal Music was not given.

Leaving aside the question of just what those “undisclosed financial details” are, this is still an interesting development for the business. [Huge Disclaimer Here: For a number of years, the Internet development company I own did consulting and development for Universal Music Publishing. I actually found everyone there pretty cool and it gave me a great insight into the workings of major company thinking.] For years they have stood by as sites like Lyrics.com, songlyrics.com, and Elyrics, have amassed large quantities of song lyrics in their databases and have become the de facto place where anyone — fan, researcher, business professional — can find lyrics to most any major pop song.  Since these music publishing companies’ job is to maximize profit for their stockholders, and to earn some money for their songwriters along the way, they’ve been trying to figure out for years how to earn money off of these lyrics.

When I was at UMPG they started doing things like marketing greeting cards with their lyrics as catch phrases, as well as imprinted tee shirts and coffee mugs. Billy The Bass, the singing fish, was also among the ancillary money-making uses of their songs.

But notice that every single one of these ideas was a brick-and-mortar concept.  No one ever quite knew how to sell music or their other intellectual property on the web, other than licensing songs or downloading recordings.

The surprise with this deal with ArtistDirect is that it took them so long to figure out how to do it, when they had several examples of a business model right in front of their web-directed eyes.

Here’s how UMPG announced the deal in a press release:

The licensing partnership opens the vaults of the publisher powerhouse to give ARTISTdirect fans for the first time easy access to legal, accurate song lyrics from top music acts past and present from current chart toppers to beloved classics.

“Universal Music Publishing Group has an amazing catalog of award-winning music and we are privileged to be able to provide the words to songs that have so profoundly impacted our culture,” said Dimitri Villard, Interim CEO of ARTISTdirect. “This partnership helps create one of the largest repositories for official lyrics as written by the songwriters.”

“Our search for new revenue opportunities for our songwriters and artists continues and this deal marks another positive step in monetizing the legal use of lyrics online,” said David Renzer, Chairman & CEO, Universal Music Publishing Group. “We are happy to partner with ARTISTdirect for this new service.”

Now I’ve never noticed any glaring inaccuracies on those web sites and I’ve used them a ton of times for research, so I’m not sure that I buy this reasoning from the companies.  However, it is true that this will be more legal, now that the companies have decided that the lyrics are intellectual property that has value on the web.

The good news for the music industry in this is not that they’ll be able to monetize another peice of IP. No, the real news is that they’ve figured out a way to do it. The music industry has historically been slow to see where the value of the net is, even down to the ludicrous RIAA lawsuits. They’ve held onto old business models long after they’ve made no sense.  I’ve long said that the big music companies should get out of the business of developing artists — they’re not really great at that. However what they are good at is distribution. With their international reach and their huge capitalization, they can raise the consumers’ awareness of a particular artist better than the smaller independents can. The recent deals, such as the one between Madonna and Live Nation, point the way towards a better use of major company resources. If you can package an artist across his or her entire output (concerts, physical or digital product, ancillary, etc.) than you can promote and market it better.

The problem, of course, is that this works a lot better with artists who have already established a marketable name. But, even with that issue to overcome (and it will be overcome, trust me on this), there is no doubt that, once again, when the music industry stops stumbling, it will point a way towards a viable model for the film and television industry.

Someday we’ll see the majors, who will (of course) still retain their prominence in the film world because of their sheer size, figure out how to distribute someone else’s content ubiquitously. And when they do that, that will be a great world for content creators.



Jury Duty, iPhones and Personal TV Programming

10 08 2008


My new book, The Lean Forward Moment


It’s been quite a while since I’ve been on the blog, an absence caused primarily by an upcoming deadline on my December book THE LEAN FORWARD MOMENT, editing a documentary called RIVERS, and posting on another blog, Film Industry Bloggers. But two recent events, as well as a comment on the podcast Slate’s Political Gabfest, have combined to prod me into some thoughts about where we’re moving towards as media makers and consumers.

I recently sat on a preliminary panel for jury duty selection at my local courthouse in Los Angeles (a courthouse that was so satellite, so small, that it didn’t have a place to eat, if you didn’t count the hallway by the vending machine).

I never got onto a jury — they just didn’t need anyone that day — but I noticed something interesting in the waiting room. Lined up along one wall were a series of computers which were, we were told, put there so we could “play on the web” while we passed the time waiting to not be called onto a jury.  Now, that’s interesting in and of itself, since I remember when they could not have cared less if you were bored to tears.  (“Bring a book or a newspaper and read ferchrissakes!”). So, we can chalk one up for government advancement into the 21st century.

Of importance to this story was that fact that each and every one of the computers was broken. Every one (there were three or four) had a sign on its monitor explaining that the computer wasn’t working and “We apologize for any inconvenience.” So we can erase the chalk mark that I gave government for its 21st century advancement.

But what was really interesting to me is that not a single one of the 40 or so people in the room cared one bit about not being able to get onto the computers. Not one person complained.

You can ascribe that to several reasons. First, there were two people there who had brought their own laptops and were typing away the entire day. But that’s only two people. Second, you could say that most people aren’t Internet savvy enough to care, and they were perfectly happy to read their books or papers.

However, when I looked around the room, it became obvious to me that the largest reason why people didn’t care if the computers worked or not was that they were connecting online anyway. They were just doing it on their cell phones.

Nearly every single person in the room was texting, or surfing or listening to their iPods. Ironically, I was one of the few people actually reading a book (I didn’t bring my laptop for various reasons and my Treo was just a completely painful experience for surfing online).

No one cared about the broken computers because they already had all the computer they needed in a tiny little package in their purses or their pockets.

Then, a few weeks later, when my Treo 650 stopped being able to email anyone, I finally caved in and joined the second week line at the local Apple Store and got myself an iPhone 3G. Now, I live in Los Angeles where there is a lot of 3G service available (except, ironically, in a number of rooms in my house) so my experience might differ from yours. But this phone has drastically transformed the way I connect online. It is now as easy to go onto a webpage on my phone (though somewhat slower) as it is when I’m sitting in front of my computer.

The repercussions of this are huge. In the first few weeks of owning my iPhone, I’ve used it for maps, movie times, restaurant recommendations, playing Sudoku, reading the New York Times, getting weather and sports scores, and much more — all without going into the Safari browser that comes built into the phone. With Apple’s App Store for the iPhone selling and giving away a ton of separate appplications for the “Jesus Phone”, it has not only gotten possible to surf the web easily on your phone, but to do it with separate apps, something that doesn’t exist as ubiquitously on your very own computer where most applications are built to run inside your web browser (Firefox, Opera, Safari or — gasp — Internet Explorer).

This isn’t a small paradigm shift for us here in the United States. In much of the rest of the world, in places that aren’t hamstrung by conflicting cell phone standards, consumers are already using the web on their portable devices (usually cel phones) and are using it for more things as each month goes on. It’s great for the users and a bonanza for those smart and well-connected enough to provide the content.

John Dickerson, on Slates Political Gabest this week talked about the Olympics and the web.

John Dickerson, on Slate's Political Gabest this week, talked about the Olympics and the web.

Then, there was an interesting comment on this week’s Slate’s Political Gabfest, Slate Magazine’s always interesting three-person podcast examining political issues of the week.  John Dickerson, asked for  comments about the start of the Beijing Olympics, made the statement that with the 302 events being run this year, he felt that this event was ideally suited for the web. His implication was that it was no longer necessary for him to watch endless hours of television to get to the three or four events that he was interested in.

True that.

For all of you who aren’t as interested in archery as you are in kayaking, this is a godsend. (By the way, the kayak competitions start on August 11th and run through the 17th, but NBC won’t tell you just when that sport is on — it’s jumbled together with the rest of its coverage on its website) It is now possible to hone in on just what interests you in the events, and to surf around the rest of them if you want to discover other fun things.

Dickerson, however, missed the larger implications of his statement because he is a political analyst and not a techie hack like me. The brilliance of this thought process comes when NBC starts to deliver the content that you want directly to you (not at this Olympics, sadly). If you like kayaking, you’ll click on that select box and get news, audio and video of those events sent to you in discrete packages. And get charged a small amount for it.

This is the kind of programming that companies like U-Verse (the AT&T computer Video on Demand service), and set top boxes like the Apple TV, are just poised to deliver.

I’ve often said that services like Tivo have blown away the concept of television networks. Most people who have services like these can program their boxes to find the content they like and play it back for them whenever they want without every knowing where and when it originally “aired”. Except for the station ID bug down in the bottom right of the screen and the few commercials for other network programming that we don’t skip over, most of us have no idea what network the show was originally broadcast on and even less sense of when it ran. This is breaking down the concept of network loyalty.

The concept of personal delivery of sports (and other) events takes it one step further. Not only will you not care where and when the event originally ran, but you won’t give a rat’s behind about any of the surrounding events unless you want to care. You’ll get more complete coverage of the events that matter to you, rather than smaller bites of all of the events.

The idea of smorgasboard programming, where cable users can select just what channels they want rather than buy into packages, scares the hell out of most cable operators and small channel providers. They correctly assume that, in this model, many of the smaller stations would lose most of their perceived viewers and shrivel up and die. I don’t disagree with this except to note that this is going to happen anyway. Cable networks can already determine which channels you are watching and which you aren’t. Services like U-Verse are only exacerbating that. How long will it be before those networks that don’t attract many viewers are faced with the same fate, as programmers realize that they’re carrying a network that attracts only six model airplane builders?

But, I’d gladly pay for channels that come with the programming that I want. And, to take this back to its starting point, I’d gladly pay for that to come to me on my iPhone. I already receive sports score on my phone now — Sportacular is a great application. If developer Jeff Hamilton isn’t already working on business partnerships that will enable the user to connect that to video playback of the events, then he’s dumber than a brick. It is a completely directed, niche, market.

Total Personal Programming. That’s where you should invest your venture capital money everyone, okay?