EMI & Radiohead: “Sticking It” to The Fans?


Yesterday’s entry was about the news of a majority of fans deciding that the right price for Radiohead’s pay-what-you-want experiment was zero, although now the band is disputing those figures.

So, if zero is sublime for fans, what’s ridiculous? A poster to Wired’s Listening Post music blog the other day got it right: “wow, an idea that comes so very close to being good!”

The reaction was to the announcement by Radiohead’s (ahem, FORMER) label EMI, which, announced in an innovative “digital box set” approach to all six of the English band’s releases on its subsidiary Parlophone: Pablo Honey, The Bends, OK Computer, Kid A, Amnesiac, and Hail To The Thief, plus the live album I Might Be Wrong.

So far, so good. Making a little hay while the sun breaks out over the In Rainbows hoopla. The words of Wired pick it up from here:

Unlike the digital version of In Rainbows, this box set has several high fixed prices depending on which format you choose: downloadable MP3 (320 Kbps, $70), a CD box set ( 7 discs, $80), or a 4GB USB drive (WAV files and artwork, $160). It’s odd that the CD box set costs half as much as the USB version, despite containing the exact same musical data.

“Odd” is putting it mildly. The fans are not amused:

$160 for a USB stick with music on it? Is that some kind of joke? A USB with a band’s entire back-catalogue: awesome idea, step in the right direction. That price is beyond insulting, though.

Yet another reason why the record industry resembles the Gang That Couldn’t Shoot Straight…


Somewhere, At the End of “In Rainbows….”

….didn’t lie a pot of gold for Radiohead’s “pay what you like” strategy. Give them props for trying, but as Digital Music News reported yesterday, 62% of the downloaders of the English progrock band’s seventh album (only available via Radiohead’s website) paid nada for it.

Bubkus.

Zilch.

On the other hand, that means that 38% DID pay something, so the experiment wasn’t a total bust. Average price: (according to ComScore) $6.00. But that’s a little deceptive: Turns out that in the US, the number of purchasers was slightly higher – 40% – and they paid an average of $8.05 for the album download…which means that 36% of the rest of the world paid an average of $4.64!

I think it’s too early to deem this a “success” or “failure” (I pointed out in an earlier post that mainly-classical boutique label Magnatune has been taking this approach for a couple of years now), save for the inescapable truth that the value of a recorded piece of music is being driven ever downward.

AND, I suspect that this is partly psychological, but this situation is exacerbated once the “physical product” is taken away. In other words, when there’s no old-fashined vinyl album, CD, or any other physical manifestation, just what is “it” that you’re holding in your hand?

An iPod or a cell phone, dummy. And they are selling quite handsomely, at a more-than-decent markup. So how do make any money selling music?

Jerry Del Colliano’s Inside Music Media post today puts it this way:

Some 62% of Radiohead’s fans stiffed them at the tip jar.

100% of AT&T’s cell phone customers pay them every time they text message someone.

Is it getting any easier to see the solution?

Music is priced too high. The marketplace is speaking and no one is listening.

Music for the price of a text message — addictive, compulsive and easy to collect.

Now that’s money in the bank.

In my next post: How Radiohead’s former label, EMI, is taking advantage of their Internet buzz….

The Madonna Model or the Radiohead Revolution?


So Madonna has given Warner Brothers the boot in favor of concert promoter Live Nation, while at the same time Radiohead has devised a pay-what-you’d-like scheme for their latest self-produced, self-distributed release, thumbing their noses at long-time label EMI. All in the space of a few days. The blogosphere – and the mainstream media, for that matter, are all a-twitter.

Have we reached, then, the Tipping Point? Is it curtains for certain for the much-lambasted Record Industry?

Frankly, I think the tipping has already happened. And I’m also not persuaded that the record industry’s days are over …. so long as they don’t think of themselves solely as purveyors of recorded, um “product” as Billboard magazine terms it.

One of the things I’ve discovered in plying the classical, jazz, folk, etc. waters over the years is that these minority formats tend to be the canaries-in-the-coal-mine for the bigger genres. Long before it was a gleam in Thom Yorke or Trent Reznor‘s eye, the excellent classically-oriented Magnatune label was offering the pay-what-you-think-its-worth option. And for some serious artists with serious credentials, too, many of whom had recorded for the so-called “major” labels. The Economist introduced me (and, it turns out, a whole of folks) to the Magnatune concept more than two years ago:

From a listener’s point of view, the firm’s website is enticing. You can legally listen, free of charge and with high sound quality, to full albums by any of the 200 or so artists who have signed to the label. (Your correspondent was immediately hooked by a song called Making Me Nervous by a one-man electro-pop band from Ottawa called Brad Sucks.) Music streamed is free, but to download it to your computer or burn CDs, you have to pay. Just how much is a matter of choice—Magnatune allows you to decide what the music is worth, and to pay as little as $5 for an album or as much as $18. Once paid for, the music is not locked up using digital-rights management software, so you are not prevented from making copies.…

Magnatune was born out of the simple reality that is known to any classical musician: You don’t make your money from record sales. There are possibly a half-dozen living classical musicians you have a positive income stream from their recordings: Yo-Yo Ma, James Galway, Renee Fleming, Placido Domingo, Van Cliburn, and… Andrea Bocelli? Go ahead, name another.

Same is true in jazz. I’ll bet the only artists that actually get any meaningful income from records are Dave Brubeck (thanks to the perennial popularity of Time Out, released in 1959) and maybe Diana Krall.

And even in larger the pop-music sea, that’s not and never has been where the money is — for 90% of the artists, that is. Even in the best of times working with a label was a deal-with-the-devil cost-of-doing-business proposition: You signed with a major because of the potential they represented to promote, market, and, if you got lucky, actually to move mass quantities of your physical “product” into the hands of your fans. Can’t do that selling your self-produced record out of the back of your trunk and running handbills off on a mimeo machine in the back room.

Hmmm…but in the iTunes world you suddenly don’t have to worry about having the supply to meet the demand, do you? Thus a big-name well-established act like Radiohead, with a carefully-cultivated image-conscious fan base, doesn’t really have much more use for EMI. No wonder the label’s new prez Terry Hands said it was a “wake up call,” according to a leaked internal e-mail:

The recorded music industry… has for too long been dependent on how many CDs can be sold,” Hands wrote. “Rather than embracing digitalization and the opportunities it brings for promotion of product and distribution through multiple channels, the industry has stuck its head in the sand.”

Hands warned that more artists could follow Radiohead’s lead and take their careers into their own hands. “Why should [superstar acts] subsidize their label’s new talent roster – or for that matter their record company’s excessive expenditures and advances?” asked Hands.

Why indeed? And that’s where the Madonna / Live Nation model is so interesting — it’s part of a larger chess match within the music industry:

Madonna’s deal to abandon Warner Music for concert promoter Live Nation signals more than just a tectonic shift in the music distribution business: It shows how far Live Nation is willing to go to break the hammerlock Barry Diller‘s Ticketmaster has on online concert ticket sales.

The core benefit to Live Nation of the $120 million recording and touring contract with the pop superstar is the opportunity to tap into concert, recording, merchandising and other lucrative revenue streams. But don’t discount the role that lowly ticket fees play.

   

Ticket buyers may be annoyed by the $5 or more in fees tacked on to every ticket ordered online or over the phone, but they’ve proven to be a gold mine for Ticketmaster. Ticketmaster’s revenues jumped 14 percent to $1.1 billion in 2006 and generated almost a 25 percent operating profit margin.

Thus, To these eyes the “three-CD deal” (with up to $50 million in “advance payments”) is really a “signing bonus” for Madonna, in order to cash in on where the REAL money will be made. I think Digital Music News editor Paul Resnikoff gets it right:

“…You can’t download a live concert – at least the real, in-the-flesh experience. Maybe you can hop onto BitTorrent and grab some amazing concert footage. Or even purchase a live performance album release. But what is your girlfriend (or boyfriend, bff, sibling, spouse, child, etc.) going to get more excited about – a video download, or a real ticket to a real show?One can be duplicated, viewed on-demand, and buried within a massive iTunes library. The other is a one-time, once-in-a-lifetime opportunity. Labels are now specialized in producing assets that can be reproduced instantly and infinitely. They are also specialized in an asset that is increasingly generating excitement for other assets they do not control.

Live Nation makes its money off of something that can never be duplicated. And that is why they can afford the elephantine deal terms to lure Madonna.

And even, if they don’t get all of the $120 million back out of Madonna (who will be 60 when the deal ends!), what’s the value to Live Nation if they can break Ticketmaster’s hammerlock on sales??? I’d say……Priceless.

So after reading all this, there IS a next logical step for the much-maligned record companies….what if Ticketmaster, for example, went out and bought EMI, a well-oiled production, distribution, and marketing machine?

Up off the Canvas, PT II: The Classical Comeback?

il Divo: the future of classical music? From Slate comes an article about the surprising sales of Classical Music recordings in the last year. The lede is attention-getting: “Is classical music—a genre that has spent a seeming eternity on the commercial skids—staging a comeback? That’s the buzz on Nielsen SoundScan’s 2006 report card, which listed classical as the year’s fastest-growing musical genre. In an otherwise dreary year, sales of classical albums—a figure that includes CDs, LPs, and downloaded albums—increased by 22.5 percent, or 3.57 million units. That put the genre way ahead of such laggards as jazz (down 8.3 percent), alternative (down 9.2 percent), and rap (down 20.7 percent).” Holy Cow – up 22-plus-percent? What’s going on here? Are those Christopher O’Riley-plays-Radiohead CDs and New York Philharmonic iTunes downloads making that much of a difference? Well, yes, they are…a little bit. Classical musicians and organizations have gotten a lot savvier about the Net. But the vast amount of that growth is coming from a change in what the industry counts as “classical.” For years Billboard has maintained two charts: “Classical” and “Classical Crossover” (often as related as “jazz” is to “smooth jazz”) – and in 2006 Nielsen SoundScan (the back-end data collector of Billboard and a whole bunch of other folks) simply rolled ’em together. So: Yo-Yo Ma, Emanuel Ax, and Pierre Boulez are in the same category as Andrea Bocelli, Il Divo, and Josh Groban. And the latter three, who all released albums in 2006, combined for more than 4.6 million units of sales last year – just about the same margin of overall growth in the genre. Hmmm… But there a couple of nuggets worth paying attention to: Bocelli, Groban et al appeal most especially to women 36-50 years old – and most classical programmers aren’t realing paying attention to them as a demographic group. Two that are are Classic FM in the UK (who just happen to be the most popular classical radio station in the world), and WBKK in Albany, NY – a fascinating attempt at programming a classical public radio station a little differently. Worth a listen. (Full disclosure: WBKK PD Christopher Wienk is a colleague and RoeDeo‘s webmaster – doesn’t change the fact that it’s a fascinating experiment.)

Nugget No. 2 is the Songs from the Labryinth album by Sting …his hyper-produced interpretations of 17th-century lute master John Dowland. Turns out that was the biggest-selling “true” classical recording of 2006 – and tonight you can watch him do his Dowland thing on PBS. Bully for him – and if he does any Dowland during the upcoming Police reunion tour, double bully. But will that actually help fortysomethings (like that aforementioned Il Divo Demo) really discover Dowland? If only the album were better – and Sting sang “Flow My Tears” with the same conviction as he sings “King of Pain.” Yeah, yeah, yeah, I know, the Guardian, the L.A. Times, etc. all loved it. I’m more in tune with Timothy Jarrett at Blogcritics.com:Seriously, there are vocal lines that sound as though they’re sung through dentures. Worse, there’s no variation to the vocal lines: the performances are note-note-note, with little or no vocal inflection and no phrasing. Then there’s the overdubbing. Awkward as the solo lines are, they sound like sheer genius compared to the same voice in two part harmony.