The music industry has a math problem

Posted by Mike McCready | April 12th, 2015 | 4 Responses – 

The standard music superstar critique of services like Pandora and Spotify (there have been a lot of them lately) goes something like this:

My song was played millions of times on [insert service here] and all I got was a lousy few dollars.

For specific examples see: Pharrell Williams, Aloe Blacc (the singer on Aviici’s “Wake Me Up,” the most streamed song on Spotify) and um, Bette Midler.

Taylor Swift didn’t get into this level of detail when she criticized (and then withdrew her back catalog from) Spotify last year. Neither did Jay Z when he launched his competitor to Spotify last month. But their concerns about streaming are broadly similar, and have fed into the narrative that digital music services are shortchanging artists by paying minuscule amounts in royalties for huge numbers of track spins.

These royalties often are contrasted with bigger payouts from old-fashioned broadcast radio. The problem is that this is a completely misleading comparison. And here is why:

A single stream of a song on Pandora or Spotify typically reaches an audience of one person. A single spin of a song on radio reaches an audience many times bigger than that, depending on the actual size of the station’s listenership.

This matters because the US government officials are currently considering sweeping changes to the system for music licensing in the US and, perhaps influenced by the rhetoric, they are expected to rule in favor of publishing companies and songwriters by changing arrangements that have been in place since the 1940s.

The fuzzy math was on display at a Senate hearing (video) in March, when the songwriter Lee Thomas Miller contrasted the payouts for a song that gets played 1 million times on radio (which he said was the “threshold” for a hit) with the smaller payout on songs streamed many multiple times of that online. Pandora’s vice president of business affairs, Christopher Harrison countered: “To reach a million people on, for example, Z100, the largest radio station in New York City, you would only have to play that song 16 times.”

David Oxenford, an copyright lawyer based in Washington, also wrote about the confusion in a blog post this week.

[E]quating a million spins on over-the-air radio to a million spins on an Internet-based digital music service is a meaningless comparison. To be equivalent, that million spins on over-the-air radio, when spread across stations around the country may mean that a billion impressions were made on people who heard the song played – the equivalent to a billion spins on a digital music service – a much rarer feat.

It’s a bit like what Steve Albini, the famous record producer, told Quartz last year: “I think there is incorrect calculus being done by the people who are upset” over streaming music services.


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Spotify nearing deal to raise $400M in round valuing the music-streaming service at $8.4B

Posted by Mike McCready | April 11th, 2015 | No responses

techmeme.comTop News

Technical findings on China’s Great Cannon and its similarities to the Great Firewall — China’s Great Cannon — This post describes our analysis of China’s “Great Cannon,” our term for an attack tool that we identify as separate from, but co-located with, the Great Firewall of China.

Mike Kerns, senior vice president of the Yahoo homepage, has resigned — One of the first execs Marissa Mayer really trusted at Yahoo just quit the company — Mike Kerns, the Yahoo senior vice president in charge of Yahoo’s homepage and other destinations, just quit the company, a source close to Kerns just told us.

— Spotify Nears Deal to Raise $400 Million at $8.4 Billion Valuation — Goldman Sachs and Abu Dhabi’s Sovereign Wealth Fund Have Invested — Spotify AB has headed back to the funding well for a seventh time …


Bono Reportedly Adds Special Advisor Role at New Venture Firm, May Sunset Elevation Partners

Posted by Mike McCready | April 11th, 2015 | 1 Response – 

As U2 gears up for the band’s upcoming arena tour, frontman Bono is said to be busy firming up his status as a venture capitalist. The New York Post is reporting the 54-year-old singer has become a special advisor to a new growth fund from mega-investment firm TPG Capital.

The new mystery fund from the company’s TPG Growth arm is currently near its target goal of raising $3 billion from investors, Post sources say. Previously, Bono invested a reported $3 million in TPG Growth’s car-pooling service Ride, and he sits on the board of Growth-owned Fender Musical Instruments. It also helps that Bono is friends with William E. McGlashan, Jr., TPG Growth’s founder and manager partner.

The Post also reports that there is now a “strong working relationship” between TPG and Sound Ventures, a new investment firm from actor Ashton Kutcher and U2 manager Guy Oseary.

Bono is co-founder and managing director of the San Francisco-based venture capital outfit Elevation Partners, which has a portfolio that includes Facebook, Forbes and Yelp, and previously sunk money into former mobile giant Palm. This new play is taken as a sign of the wind-down of Elevation Partners.


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6 Lessons Indie Labels & Musicians Have Learned About Streaming Music

Posted by Mike McCready | April 10th, 2015 | No responses – 

With tighter budgets and thinner margins, the loss of revenue as music consumption shifts online is particularly concerning for independent artists and labels. But they’re quickly learning to adapt.

Organized by UK music trade organization AIM, the recent Music Connected conference brought together record labels, distributors and music marketers. Here are some key takeaways, as reported by Stuart Dredge in The Guardian:

1. Indies are worried streaming revenue, but making the best of it.

“Technology is what’s moved people away from owning and into as easy access to music as possible. You can’t fight technology, we just have to find as many ways of getting people onto that boat as possible.” – Nicolas Rizzi of The Orchard.

2. Indies can beat the Majors online

“As indies we over-index on streaming, and within streaming we over-index on premium, because the type of music we’re releasing will appeal to early adopters. – Gerald Youna of Beggars Group.

3. There’s concern about Soundcloud

“If you’re a brand new band with no fans yet, and you start promoting on SoundCloud it’s going to be very hard to migrate those fans over to Spotify and the other licensed services.” – Gerald Youna of Beggars Group

4. Despite low payouts YouTube still gets a thumbs up

“It’s more of a help than any kind of hindrance. We’re exposed to far more audience than we would be on any other platform. It’s the largest streaming music service in the world, so it’s obviously a help.” – Leon Grant Bussinger of Warp Records

5. Beware of Playlist Payola

“We’ve been asked for money. They seem to think that they can make money from it. It seems clear to me that someone’s been paying them money, otherwise they wouldn’t be so confident that they can charge… It’s not a surprise. Clearly payola worked well in American radio, so why wouldn’t it work well on Spotify?” – Will Cooper of PIAS

6. Email lists matter

“Every time we work with clients who have large email lists, you can see that they drive a hell of a lot of sales,” – Darren Hemmings of Motive Unknown.


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Executive Turntable: Shakeups at Big Machine, Matador Gets New Publicity Head and More Industry Moves

Posted by Mike McCready | April 10th, 2015 | No responses – 

Moves at ASCAP, Big Machine Label Group, the Windish Agency, and more…

A list of moves and shakes across the music business, including ASCAP, Big Machine Label Group, the Windish Agency, Rdio, BAM, and more.

— eOne Music promoted Phil Thornton to vp and general manager of urban inspirational, rising from his role as vp of marketing & brand management.

— Page Jeter joined the brand communications team at PMK*BNC, arriving from Rogers & Cowan, where she served as group manager.

— ASCAP appointed Alice Kim executive vp, chief strategy and development officer. Previously, Kim served as founder and principal of DigiConsult and senior vp of Qualcomm startup division MediaFlo, as well as senior vp of distribution and partnerships for Viacom Media Networks.

— Former UTA music head Rob Prinz, who established the company’s music department in 2001, joined ICM as a partner. Veteran concerts agent Nikki Wheeler also made the jump from UTA to ICM, with the duo set to bring a roster that includes Celine Dion, Hall & Oates, John Hiatt, Bob Seger & the Silver Bullet Band, Jerry Seinfeld, Rick Springfield and more.

— Rdio appointed Iain Morris vp of global music publishing, joining their recently expanded team in London. Prior to joining Rdio, Morris served as head of digital, EMEA at Warner/Chappell Music Publishing.

— Big Machine Label Group elevated Jake Basden to vp of publicity and corporate communications.

— Big Machine Label Group vp finance Brad Kash exited the company to form 7th Wave Entertainment Group. The new firm will focus on business management, royalty processing, audit support and consulting services.

— Rajat Kakar was elevated to managing director of Sony DADC India. Kakar previously served as the business head for its licensee business.

— Brandon R. Frankel was promoted to vp marketing, branding & partnerships at the Windish Agency.

— Cumulus Media, Inc. appointed longtime Albuquerque country radio morning show host Tony Lynn to Cumulus’ 96.3 NASH Icon for afternoons.

— The Brooklyn Academy of Music named Katy Clark president, succeeding Karen Brooks Hopkins, who will step down at the end of June. Clark comes to BAM from New York’s Orchestra of St. Luke’s, where she has served as president and executive director since 2010.

— Shira Knishkowy, formerly of Partisan Records, was named director of publicity at Matador Records.

— Verge Campus Media acquired GoodMusicAllDay, LLC, with plans to operate as a standalone platform with GoodMusicAllDay’s Tim Weber continuing to lead the company as CEO and Verge Campus Media co-founder/president Maxwell Zotz to serve as GoodMusicAllDay’s president.

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Darius Rucker Eyeing Rap Collab…And a Hootie Reunion

Posted by Mike McCready | April 8th, 2015 | No responses

billboard.comThe Hootie & the Blowfish frontman-turned-country singer says he’s hoping to jump on a song with a rapper. “I don’t have much left on my bucket list. One of the things that I’m dying to do is to sing the hook on a big rap song,” Rucker said in a recent interview. “No one’s ever called me to do that.”

Rucker said he wants to collaborate with hip-hop heavyweights like Jay Z, Eminem and Snoop Dogg.

“Somebody that’s had a career; I get where they’re coming from, they get where I’m coming from,” said Rucker, 48.



Industry Vets James Diener and Howard Lipson Launch Alignment Artists Capital, Backed By BlackRock

Posted by Mike McCready | April 7th, 2015 | No responses

billboard.comCourtesy of Alignment Artist Capital

Alignment Artist Capital, a newly launched company created by music industry veterans and backed by the Alternative Investors arm of blue chip firm BlackRock, has announced its launch. The new concern aims to provide artists and songwriters with an alternative option for significant career financing.

James Diener, founder of Octone Records, and Howard Lipson — who helped him finance that label and remained involved right up to the label’s sale to Universal Music Group — have launched AAC, which plans to make available funding of $5 million to 20 million for to artists and songwriters seeking sources of money apart from the typical advances provided by record labels, publishers or merchandising companies — or loans from banks. In exchange, Alignment Artist Capital will be paid back a percentage of the artist’s income streams.

Diener and Lipson say they are sensitive to the fact that artists and songwriters have a rapidly growing interest in owning their publishing and recorded masters. In response, Diener and Lipson looked to create a vehicle that would not use artists’ assets as a semi-perpetual collateral which can be seized if the funds provided to the artist are not paid back in time and in full. To that end, Alignment Artist Capital will come in the form a structured investment vehicle that has some characteristics of a loan, however if the lender is not meeting the payback schedule, the length of the loan is protracted, rather than any assets being seized.

As mentioned, Alignment Artist Capital has secured backing from BlackRock Alternative Investors, a firm with $120 billion in assets which looks seeks to invest in properties which behave differently — such as wind farms and solar energy, hedge funds, derivative contracts, oil and gas royalties, private equity, precious metals — than the stock and bond markets, something that Alignment Artist Capital appears to offer the blue chip firm. This is the first entertainment move that the Alternative Investors arm of BlackRock has taken.

“With Alignment, we wanted to reduce the friction in the process and provide financing that takes a holistic view of an artist’s career and the overall music business,” Lipson said in a statement. “We’ll be investing in artists we believe in within a time horizon that provides a good runway for the creative process and a philosophy that will reap solid returns.”

In addition to his involvement in Octone, Lipson was also a partner and member of the investment committee at Blackstone, served as managing director at the Pilot Group, a media-oriented private equity firm started by iHeartMedia chairman and CEO Bob Pittman, and helped advise and raise financing for the Sony-led consortium that acquired EMI Music Publishing for $2.2 billion. In addition, Katherine Chen has joined Alignment Artist Capital as Chief Investment Officer from The Pilot Group, with previous positions at Moelis & Company and Bank of America Merrill Lynch. Diener and former Octone executive vp Ben Berkman also recently started Freesolo, a hybrid label, publishing and management company.

Looking ahead to its first two years, Alignment Artist Capital will aim to make an initial outlay of $80 million to $100 million in financing to artists, according to sources. The two principals say they expect to be able to handle three to four deals a quarter. The Alignment Artists Capital principles say they have designed their vehicle, so it will have a quick turnaround for artists seeking funding.

A key concern that artist managers and business managers will have with these arrangements is at what price the funding will be provided; in today’s low-interest environment, bank loans may provide a lower long-term cost, but those also come with a collateral kicker, meaning artists can potentially lose their assets if their loans don’t perform. Since Alignment Artist Capital funding won’t be collateralized, it will come with pricing expected to carry percentage interest payments of 10-15 percent, say executives familiar with the offering.

One prominent artist manager says that the funding Alignment Artist Capital will provide could be attractive to artists and songwriters, with a caveat that the cost could a deciding factor on whether to do a deal. Alignment Artist Capital will use stringent underwriting measures to determine whether an artist can pay back the money the company would loan. What the artist chooses to use the funding for is entirely up to them.

“The funding can be used to finance a new business they may choose to invest in, or artists could use it to fund their own lifestyle needs,” Lipson tells Billboard. “Even artists get hit with surprises or extraordinary circumstances where this type of funding could prove handy.”

Alignment Artist Capital imposes no conditions on the funding. “There is no obligation to tour or issue records,” Lipson says. “Eventually the artist will do what’s in their own best interest — which will be in our best interests.”

Diener says he foresees three categories of artist who may want to apply for funding from Alignment Artist Capital. It could be an artist that suddenly connects big, like Lorde; an established artist with a strong handful of albums under their belt and a successful touring business; or heritage and legacy artists.

“If an heir [of a legacy artist] wants to run the estate but the other wants to sell and leave, this is a way for both to get what they want,” Diener says; AAC could provide a means for one heir to buy out the stake of another.

If an artist decides that being with a label is no longer the way to go, Alignment Artist Capital can provide funding for the artist to strike out on their own. Conversely, if artists want to stay with their labels, but want be unentangled in label required deal add-ons when seeking an advance, Alignment Artist Capital is also an option to consider.

“This type of financing could be useful for artists looking to do things on their own or considering branching out into other areas,” say Ken Levitan, the founder and co-president of Vector Management, which manages artists like Kings Of Leon and T-Bone Burnett. “It can also be attractive to artists signed to labels. As labels have gotten tighter with their spending, you may want to tap into outside recourses to build and diversify your brand.”

Ultimately, “this financing product is designed for the artist and songwriter and is meant to democratize and emancipate the artist,” Diener says.

Top Reasons Our Public Schools Should Emphasize Music Education

Posted by Mike McCready | April 6th, 2015 | No responses

hypebot.comMusic education in public schools is on its way out. The benefits of having a strong musical foundation are proven. It’s time we join the fight to keep the programs in jeopardy alive.

Music education has been on the steady decline in public schools, and unfortunately, the future looks bleak. When it comes to public budget, the first thing that seems to go are programs that are seen as “extras.” However, the problem is that the programs that seem like extras often provide benefits that go further than a textbook.



A First Look at Jay Z’s Tidal: Definitely Young, Probably Promising

Posted by Mike McCready | April 1st, 2015 | 2 Responses – 

Overall, Tidal has the starting framework of what could be an interesting and engaging artist-led and backed company. With the product as-is, Spotify or Apple launching a lossless quality tier could make Tidal irrelevant– but for one major thing: superstar exclusives.

Right now, Jay Z’s very newly acquired Tidal (which launched in the U.S. in October) is essentially a barebones version of existing streaming services, plus a few interesting features that differentiate the service (and some newly added and exclusive content from its star-studded equity partners).

For $19.99/month, users get “lossless high-fidelity sound quality, high definition music videos and expertly curated editorial.” For half the price, $9.99, users can stream the same content in it’s standard, compressed form.

The service comes with most of the bells and whistles we now expect from an on-demand subscription services: artist and track based radio, cached downloads for offline listening, music segmented by genre, a section for new music, themed playlists, and a way to favorite tracks, albums and artists. It’s easy enough to navigate and has a dark theme that at times looks strikingly similar to Spotify:

Here are some of the things that set Tidal apart:

Credits: Hidden away in a sub-menu that appears to only exist on the mobile app is one really awesome thing about Tidal: song credits. By selecting “Track Info,” songs reveal producer, lyricist, composer and engineer credits, where available, something missing from its competitors. For example, the credits for Sam Smith’s “Stay With Me” accurately reflect the addition of Tom Petty as a composer and lyricist.

Audio recognition: Tidal sports a Shazam-like function directly within the app, similar to a feature Genius introduced. Once a track is identified, the “audio search” brings users directly to a stream of the full track.

Audio Quality: The service’s lossless audio does sound noticeably different. How important that fact is to consumers is yet to be seen. The only other streaming service with the same level of sound quality available is Deezer Elite, which currently is only compatible with Sonos speakers.

Ad-Free Music Videos: Tidal streams high definition video as well as music. But the service doesn’t really do anything to highlight the videos beyond placement on the “What’s New” page. Videos appear as a separate vertical when looking at an artist’s page, but aren’t linked to within tracks, i.e. if I stream “Only One” the video does not automatically appear as an option to watch– it’s on a separate page.

Editorial: Earlier today, Tidal displayed original editorial content in buckets at the top of the main vertical, featuring buzzy artists like Courtney Barnett and Natalie Prass and a playlist made by Screaming Females’ Marissa Paternoster. The home page now features custom content by the new equity partners like Beyonce’s “Festival Favorites” and a video of Jack and Meg White’s first recorded performance.

And some of what the service needs:

Social: Tidal is designed for the solitary listener: there is no social layer (i.e. a “what my friends are listening to” stream or a in-app messaging system).

Desktop App: Tidal only comes in the form of iOS and Android apps and a browser version, there is no desktop application. The link between the browser version and mobile app is weak: users can’t sync to mobile from the browser version, only directly on mobile. Also, a user’s play cue doesn’t sync between mobile and desktop (ie. If i’m listening to a Rihanna song on my computer and I pause to open the app on my phone, it displays the last song I was listening to on mobile, NOT the Rihanna song).

No Extras: Tidal is missing a few nifty integrations Spotfiy has added, like links to tour dates, artists merchandise and song lyrics.

Sorting: For a service that appears to be catered to music fanatics, it is puzzling Tidal does not let users sort albums and songs by release date and does not let users search by label.

Discovery: Tidal is not an easy button like a radio dial. Tidal is a lean forward experience designed for people who already know what they want to listen to. It is not heavy on recommendations.

As announced yesterday, Beyonce, Rihanna, Kanye West, Jack White, Arcade Fire, Usher, Nicki Minaj, Coldplay, Alicia Keys, Calvin Harris, Daft Punk, deadmau5, Jason Aldean, J. Cole and Madonna are all equity partners in the service and will likely contribute windowed and/or exclusive content from all.

The bottom line: A rising #Tide lifts all boats: as more users and artists embrace paid streaming, the overall pie will grow. Competition between services should hopefully breed better products for both fans and artists. If Dr. Dre succeeded in selling $14 headphones to consumers for 200 bucks, perhaps Jay Z can sell a lossless catalog of 25 million songs and growing for $240/year with the same #FOMO marketing and “trust me, this is better” seal of artist approval.

But with Dre’s headphones, I can listen to any music I want to, from any source I want to. As artist exclusives become the standard and catalog is fragmented between services, I may only be able to listen to new music from some, but not all, of music’s “one percent” through Jay Z’s Tidal.

‘The X-Files’ Star David Duchovny Announces Debut Album

Posted by Mike McCready | April 1st, 2015 | No responses

billboard.comPaul Archuleta/FilmMagic




X Files stars David Duchovny and Gillian Anderson saw a considerable amount of musician fanfare back in the show’s heyday. There was Bree Sharp’s “David Duchovny,” Silent Meow’s “Gillian Anderson,” Human Hamster Hybrids’ “Scully” and, of course, “Mulder And Scully” by Catatonia, to name a few (or possibly all). But now the show’s leading man is trying his own hand at a musical release, with a new folk-rock album called Hell or Highwater.

The release comes at a pretty good time for Duchovny’s profile.