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The Roman Affair

Thoughts on tech, business, economics, and life

The Artists Are Now Hurting The Music Industry

A recent Bloomberg Businessweek article gives some fascinating clues of what some of the music industry’s biggest names think of Spotify. 

Adele, Coldplay, The Black Keys, Tom Waits and others, are playing hard-to-get with the subscription services and not streaming their latest albums. Why? They’re worried that they will loose money on digital downloads. This ironic twist shows just how badly the industry is still scrambling to figure out their business model. 2011 saw digital downloads finally overtake physical album sales, and consequently the artist’s amnesia has caused them to forget that little over a year ago they were still vilifying downloads. It appears that the enemy is whatever technology forces them to change, which now seems to be streaming. 

Alas, such short-sightedness is typical in the entertainment industry. The studios, networks, record labels and now the artists would rather hang on to whatever forms of media distribution are currently making a buck, rather than embrace innovative models as the new profit drivers. Just as the studios are playing tough-guy with Netflix to save the last few cents coming out of their precious DVD / Blu-ray sales (Honestly now! You’re still focusing on physical media?!), the artists are now withholding their latest wares from the streaming services to protect digital downloads. 

Come on artists. Can’t you see the seismic shifts happening across the media industry? And don’t you realize that perhaps the cause of the malaise in the music business is perhaps your unwillingness to swiftly adjust to new forms of consumption? Your audience is starting to move away from sales to subscription. It might take a couple of years for the numbers to show it, but unless you adjust your sails now we’ll soon hear you whining about how desperately you’re trying to save streaming from whatever new model is in vogue. Have some courage because the more content you all make available to stream, the bigger your audience will be, and the more zeros you’ll see on your paycheck. 

End of sermon. 


Investors Drawn to Digital Music

Since it emerged in the 1990s, digital music has been hugely popular with fans, but for online music companies and their investors it has almost never been profitable. 

And yet the money has again started pouring in.

Pandora, the popular Internet radio service, filed for an initial public offering in February that would raise $100 million. Spotify, a highly lauded European service, is reportedly raising $100 million from private equity firms to help it come to the United States.

And those are just the big fish. Since the end of last year, at least $57 million in venture capital has gone to digital music start-ups, ending a recent financing drought and setting up an array of young companies like RdioSoundCloud and RootMusic in an already crowded marketplace.

Continue here.

"The future is not digital sales, it’s streaming. And if the labels were smart, which they are not, they’d go with Spotify immediately, before Apple or Google allows customers to keep their purchases stored in the cloud, obviating a need for subscription services."
- Bob Lefsetz cautioning the labels to get everything into a paid model in the cloud, before either tech juggernaut does it first for free. 

(Source: cnnmoneytech)