Score 2-0 For the Little Guy

This story is a significant victory for the ‘little guy’ in the David vs. Goliath saga the music industry is enduring, when earlier this week Judge Lee R. West sharply spanked Capitol Records for falsely suing Oklahoma resident Deborah Foster for alleged copyright violation via unauthorized downloading.. This case is extremely monumental in the fact that it’s the first time ever an RIAA member has been forced to pay attorney’s fees!

Net Radio "compromise" Hinged on DRM Adoption

• Here's a link to SoundExchange's press release:

...'The music industry is very worried about users recording Internet radio for the purposes of "disaggregating" music, and the message seems to be that if webcasters will scratch the industry's back, then a better deal is possible. Too bad it's a deal that could kill another potential avenue of fair use (recording radio), and limit users' ability to enjoy radio by limiting playback to clients that support DRM."

Same old story....gain an inch, lose a mile.....

Myth #1 - Airplay Leads to More Record Sales

Professor Stan Liebowitz from the University of Texas in Dallas has released a new research paper entitled “Don’t Play it Again Sam: Radio Play,

Record Sales, and Property Rights.”  The 40 page document “undertakes an econometric investigation of the impact of radio play on sales of sound

recordings using a sample of American cities. The results indicate that radio play does not have the positive impact on record sales normally attributed to it and instead appears to have an economically important negative impact, implying that overall radio listening is more of a substitute for the purchase of sound recordings than it is a complement. This finding indicates that creating a set of property rights to allow this market to function properly is different than has been suggested by prior research. New technologies affecting radio broadcasts are likely to make this topic increasingly important in the coming years. This research also exposes a fallacy of composition in applying to an entire market a generally accepted positive relationship that holds for individual units.”

 

 

Tuesday Links

• TiVo hooks up with Amazon to sell movies direct to homes
• Patrón Tequila Adds Viral Marketing With Online Social Community
• RIAA to feds: Make XM-Sirius pay more, restrict listeners' recording
• Web Rankings to Focus on Time Spent at Sites
• Video-Sharing Sites Jockey for Position In U.S.

IFPI: Recording Industry in Numbers

Favorite Koolaid quotes from IFPI’s latest Recording Industry in Numbers report released yesterday…

 

• “More owners of portable players buy music from legal sites (14 percent) than get songs via P2P or free sites (13 percent), and portable owners are more likely to buy music legally than Internet users in general.”
  
  
• “We should be in no doubt that it is in the ISPs’ hands that responsibility for tackling online piracy now lies.”

 

The Fall of the Record Business: What Next?

Here’s the synopsis of a recent Rolling Stone article.

I especially like Theory #6, which is the elephant in the room that no one really speaks of….

Theory 1: Ad-Supported Music
Theory 2: Peer-to-Peer Goes Legit
Theory 3: Endless Access Points for Music
Theory 4: Labels Change Their Stripes

Theory 5: Consumers Become Retailers

Hypothetical Theory 6: Music industry dies?

"The music industry as we know it ceases to exist due to mass piracy, which
effectively prevents the tracking of listening, as well as the collection of
royalties.  The labels in this world have no reliable way to generate
revenue, while simultaneously their ability to influence listeners is
diminished as users move toward algorithmic recommendation engines.
Instead, musicians abandon centralized labels and establish direct business
relationships with their fans through tickets, merchandise, and donations."
(David Barrett)

 

New CEA Research

According to a new study (free to members, Non-members may purchase the study for $599) conducted in April by the Consumer Electronics Association (CEA) called Computer-Sourced Audio Consumption in the Home:

 

• Seventy-two percent of online adults in the U.S. are using their home computers to listen to audio content
• 86 percent of home PC audio users are satisfied with their computer-sourced audio experience
• Only 9 percent of home PC audio users currently connect their PC to their home audio systems
• Seventy-seven percent of home PC audio users listen to music on their PC an average of nine hours per week

 

The complete study is available at http://www.ebrain.org.

Global Game Sales To Outsell Music

According to PricewaterhouseCoopers, “global games spending is set to exceed music spending this year and In-game advertising will be a key spark for U.S. gaming revenue.” Worldwide game spending jumped 14.3% to $31.6 billion in 2006 and should rise 18.5% to $37.5 billion this year, according to the preliminary data. The predictions are all part of the eighth annual edition of PwC's "Global Entertainment and Media Outlook" report released today.

Spam Continues to Plague the Internet

Below are some highlights from the Pew Internet & American Life Project February-March 2007.  Click HERE for the complete report in PDF format.

Among current email users:

• 68% of emailers, say they almost never unintentionally open an email message without realizing it was spam
• 27%, say they do that once in a while
• 5% say they do it often
• 51% email users say they check their spam folders at least once in a while
• 46% say they check it almost never or not at all. In addition
• 23%, say they have clicked on a link within a spam message in order to get more information, down from 33% in 2003
• 4% of email users admitted to ordering a product or service from an unsolicited email. This number was 7% in 2003, 5% in 2004, and 6% in 2005

Some of the highlights of the survey conducted between February 15 and March 7, 2007, include:

 

• 55% of email users say they have lost trust in email because of spam.
• 52% of email users report having received pornographic spam, down from 63% two years ago and 71% three years ago.

Online Video Ads Prove To Be Effective Medium

According to eMarketer's latest research, "Of the 80% of viewers who had watched an online video ad, just over half had taken some sort of action. Nearly a third had checked out a Web site, while 22% had searched for more information, 15% had gone into a store and 12% had actually made a purchase."

European Mobile Data Consumption Snapshot

According to the latest research from Strategy Analytics, “The use of mobile value added services shows strong if not explosive growth in Europe. In the last 3 months, 50% say they have sent a picture message, 30% say they have browsed web sites from their mobile, 17% have accessed email, 8% have downloaded a music track over the air and 4% have used mobile TV.”

NARM Notes...

I attended the NARM show in Chicago last month and thought some of you would like to read my personal notes and photos of the show. Although “The Windy City” wasn’t as humid as last year’s event in Orlando, I must admit, I did miss the theme-park-like experience of the Gaylord Palms hotel. I also discovered some awesome local beer (Gooseneck Island I think) and some delicious Hawaiian deep dish pizza…

Over Half of American Households Now Subscribe to High-speed Internet

http://www.leichtmanresearch.com/press/060707release.html

 

(Thanks to GigaOM for the tip!)

 

According to latest research conducted by Leichtman Research Group (LRG), 53% of all US households now subscribe to a broadband high-speed Internet service. Also, broadband services now account for about 72% of all home Internet subscriptions – compared to 60% last year.

 

Broadband penetration remains strongly correlated with household income with homes earning over 50k per year - almost twice as likely to have the service.  Bruce Leichtman, president and principal analyst for Leichtman Research Group, Inc. stated that “LRG forecasts the total number of broadband subscribers will increase by over 40 million over the next five years.”

 

These findings are based on a telephone survey of 1,600 randomly selected households from throughout the United States and are part of a new LRG study, Broadband Access and Service in the Home 2007.

Real Ups The Ante for Video Fair Use

Looks like Real is getting ready to set a new legal precedent for “fair use” of online video...I like the sound of it and hope they aren't forced to retreat!  

 

For an in-depth look at the new player and more of its capabilities, you can check out the official press release here.  And a beta of the new RealPlayer will reportedly be available for the public in June 2007
via a free download from www.realplayer.com.

  - "By floating a "download this video" button next to video seen on thousands of Web sites, RealPlayer makes it one-click simple."

  - "Time-shifting of recorded or downloaded content is a natural next step in the progression of the online video distribution and consumption"

  - "RealPlayer feeds the appetite consumers have for interesting Web video while maintaining a connection with the content source"

 
http://arstechnica.com/news.ars/post/20070531-new-realplayer-to-rip-youtube-video-streams.html
http://www.techcrunch.com/2007/05/31/the-new-realplayer-ripping-a-youtube-video-near-you/
http://blog.wired.com/business/2007/06/new_realplayer_.html*

Top 11 Reasons NOT to Sign With A Major Record Label

(Thanks to Jerry Del Colliano from INSIDE MUSIC MEDIA for the tip!)

 

“…In a recent letter, Bob Lefsetz did a piece on reasons why not to sign with the major labels.  See if these reasons help you arrive at the conclusion that this business is dead:”

1.     They tell you what to do.
2.     They're only in the disc business.
3.     They don't pay you.
4.     There's no one working there.
5.     They just care SOMETHING hits.
6.     They control physical distribution, not online distribution.
7.     Tour support is a thing of the past.
8.     They only want you once you've proven yourself independently.
9.     MTV is dead.
10.  Terrestrial music radio is dying.
11.   They specialize in saying no.