Digital Noise: Music and Tech

A couple weeks ago, I wrote about how Seattle company Melodeo had created an iPhone application for the band Presidents of the United States of America, which delivers the band's music in a direct stream, rather than forcing users to download (and pay for) each song individually.

On Thursday at South by Southwest (SXSW), digital-marketing and distribution specialist The Orchard announced that it's adding iPhone applications to its arsenal of tools.

The Orchard handles songs from more than 14,000 acts, focusing on musicians on independent labels such as Amphetamine Reptile, Ipecac, and Lookout (just to name three with which I'm familiar). Now artists--or, more likely, their labels or management teams--will be able to create a customized iPhone app through The Orchard's standard set of management tools.

The iPhone applications themselves will be developed by design and branding firm Fluidesign.

Artists will be able to offer as many songs as they like as free streams (a link will let users click to download the songs from the iTunes Store), as well as post photos and aggregated news from various sources (such as RSS feeds or Twitter streams, if the band is into such things). Musicians will be able to set their own prices, but The Orchard envisions this as a promotional tool rather than as a revenue generator, so it is encouraging its clients to offer them for free.

The first app available is for The Black Lips, but when you run a search for that band's name in iTunes, the app shows up listed only as Mobile Roadie, the name of the platform for iPhone apps developed by Fluidesign. This link will take you directly to the application in iTunes.

I've been invited by Sonicbids CEO Panos Panay to speak on a panel at SXSW later this month entitled "Artist as Entrepreneur," and as I've been thinking about the subject, my attention was drawn to this recent post on CD Baby's bulletin boards (it was first posted elsewhere). Katie Taylor, the artistic director of Opera Theater Oregon, is worried about the rising perception that art--particularly music--should be available for a very low price or free.

(Credit: CD Baby)

To change this perception, she argues, artists need to convince the general public that there's a fundamental difference between a casual hobby, like a basement-band jam session, and actual art. As she explains, putting on a high quality show for the public is more like planning a wedding. It takes tons of time, talent, and preparation. This kind of art can't continue unless the people putting it on can earn a living wage. And the only way for them to earn a living wage is for consumers to be willing to pay, either through taxes and public funding or directly out of their pocket. If the general public continues to view art as a low-value option that should be available for free, then all art will descend to the level of basement-band jams, and society will be the worse for it.

I've been in both basement bands and "real" bands that are trying to sell recordings and charge for gigs, and there is a hundredfold difference in the amount of effort musicians put into each kind of band. Unfortunately, most listeners are completely unaware of the difference. (It's probably the same for all kinds of art.)

In the case of music, there's a core audience--I'll be generous and say it's around 1%--who understand and care deeply about music, who use their ears more than their other senses, and who couldn't live without it. The other 99% attend shows and buy CDs for other reasons--to fit into a peer group, to stave off the boredom of another evening at home watching TV, to attract a mate, and so on. This isn't conjecture--a Columbia University study I've cited several times strongly suggests that a particular song's popularity is influenced primarily by the opinions of others, and has no relationship to its objective quality (as measured by a control group where listeners voted without being able to see how their peers were voting).

Art's not food. It's a luxury, not a necessity. Which means that the only way for an artist to make money is to draw some of that 99% who feel they don't need it. Somehow, you have to convince them that your art is different, and is worth paying for. And the only way to reach that tipping point is--here's an evil word--marketing.

There are many ways to market your music, including some that seem more organic or "honest" to some artists because they rely primarily on word of mouth. The Internet and the rise of digital music has made it easier than ever to get the word out--MySpace and CD Baby are the bare-bones minimum for starting bands, and there are dozens of other online services that help accomplish specific tasks, from licensing your music for commercial use in film and TV to helping you get gigs.

Or, if you're still too lazy or pure to market yourself, there are plenty of organizations that will help you. Just the other day, I talked to a new company called The Republic Project that will create a digital marketing and distribution plan for semi-established bands in exchange for a cut of pre-release sales. The highlight: they're giving artists handheld digital video cameras so they can create videos of their recording sessions. Then Republic will post these videos online in hopes of building fan anticipation for a new album. It may not work, but making this kind of marketing effort is vital.

My point: the inherent value of art to the creator is very high--I value the experiences I've had playing music more than many other things in my life. But the inherent value of art to the consumer is almost zero. This is jarring to a lot of artists, but must be acknowledged if you expect to make money with your art in this cold commercial world.

If you build it, they won't come. If you build and market it, you have a chance.

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Last week, I blogged about digital distributor RouteNote and did a brief comparison with CD Baby and Tunecore, two better-known services that help independent artists place their songs in online music stores such as iTunes and Amazon MP3.

Now RouteNote has one-upped me on its own blog and run a detailed--and very helpful--mathematical comparison of itself versus CD Baby, Tunecore, The Orchard, and Musicadium.

You can check out a direct comparison of up-front charges and ongoing revenue splits, as well as a chart showing how much money the artist will earn after selling specific numbers of songs.

RouteNote acknowledges when its service might not be the best deal--basically, when you get up to about 5,000 track sales, TuneCore and Musicadium offer more money to the artist, and at 30,000, CD Baby begins to show a slight advantage.

I found this to be a pleasant change from the usual marketingese that populates corporate blogs, in which competitors are rarely acknowledged except to be criticized. Of course, RouteNote can't resist tooting its own horn a little bit, noting that its small size makes it more invested in the success of its artists.

In the interest of fairness, I'd add one caveat: while The Orchard looks like a crummy deal for artists on a straight dollars-to-dollars comparison, it's more like a full digital record label. It handles digital distribution, as well as marketing and licensing (like getting your song on a TV show), and it works with video as well as audio.

Lime Wire LLC (the company) has announced a deal with The Orchard, a large digital distributor for independent artists and small labels. The deal will effectively double the amount of music available in the LimeWire Store to more than 2 million tracks.

I wrote about the store when Lime Wire first announced it a year ago, thinking that it was a possible exit strategy in case the major labels won their lawsuit against Lime Wire and forced the shutdown of its Gnutella-based file-sharing client. But this announcement seems to show that Lime Wire is taking the store seriously as an alternate business.

Here's my question: if you're aware of LimeWire at all, aren't you already using it to grab free music? I suppose if you couldn't find a file for free, it might be convenient to use the same client to buy it, but doesn't that seem a little bit like...giving up? Any LimeWire users out there care to chime in?

Music industry blog Coolfer has an interesting post this week about online tools for do-it-yourself musicians in which he points to a relatively new service called Speakerheart. I checked out the service, and while I agree with his assessment of the interface--it's based on Adobe's Flex (an offshoot of Flash) and is very slick and easy to use--I think that Speakerheart, like most other digital distribution start-ups, is going to have a very hard time.

An example of a Speakerheart shelf on the MySpace page of Nashville band The Bird Ensemble.

(Credit: Speakerheart; The Bird Ensemble)

The process is pretty straightforward: Artists sign up with Speakerheart to sell their songs through a digital storefront on the site. Artists have complete pricing discretion, but Speakerheart takes $0.25 per song. Speakerheart's big differentiator, though, are the widgets (known as "Shelves") that offer streaming samples ("Speakers") and the ability for listeners to bookmark songs that they like ("Hearts"). Musicians and fans can place these Shelves on any site that accepts Flash, including MySpace pages. For artists, the idea is that users will be able to stumble across your music on a wide variety of sites, sample your music, then proceed to your storefront to buy a song or two.

The problem with Speakerheart and other digital distribution start-ups is a lack of critical mass. Artists with labels or a significant fanbase don't need the service--they can sell digital downloads through their own site or the label's site. In either case, they (or their label overlords) will keep a greater percentage of the sales price. That means that Speakerheart will continue to draw relatively obscure acts, which means that few listeners will have any reason to visit the site or place widgets on their personal pages, which will keep the service too obscure to draw any acts with a significant fanbase, and so on--a sort of obscurity death cycle. The only way to break this cycle would be for Speakerheart to get a few name-brand artists to place their songs with the service, but that requires big marketing bucks or a lot of luck (a formerly obscure Speakerheart artist becoming the next U2, for example).

The folks at Speakerheart might say "But look at other services that started with independent artists, like eMusic and CD Baby--if they can do it, why can't we?"

In the case of eMusic, the site had first-mover advantage: it's been around for almost 10 years (!), and has been able to sign up a lot of independent labels with rosters including multiple acts. With 2.8 million songs available, fans of independent music already know to look there, and new labels (or the aggregators that serve them, like The Orchard) strive to get their music placed there. With CD Baby, the service started by fulfilling a difficult role for most artists--online distribution of physical CDs, including packaging, shipping, tracking, payment processing, and so on--and only later expanded into a digital aggregator (placing its artists' music on services like iTunes) and direct digital distributor (selling MP3s on its own artist sites).

My point: if you're a beginning artist, I still think the best recipe for success is to give full downloadable samples away on your home page or MySpace, then sell your music through a service like CDBaby or TuneCore (another aggregator that resells your music through iTunes and other services). You've got to go where the people are.

Last week, Digital Music Group (DMGI) agreed to a merger with The Orchard. Reading through the details--summarized nicely by the New York Times--it appears that this is more of a buyout than a merger, with The Orchard owning 60% of the combined company, which will retain the DMGI name.

I met DMGI founder Mitch Koulouris back in 2004 when he was first raising money for the company, then called Digital Musicworks International (DMI). He and one of his associates (who's since moved on) were very excited about their business plan, which he called the first all-digital record label. Essentially, they would acquire the exclusive digital distribution rights to songs, then distribute these songs through iTunes and other major music stores. Of course, the major labels and most independent labels were already handling digital distribution along with regular distribution (and marketing--probably the label's most important job). So DMGI was going to focus on music that was in digital limbo, mainly back catalogs from artists whose labels had lost interest or dropped them, as well as unsigned artists and small physical labels who didn't want to handle digital distribution themselves.

At the time, I was puzzled. For independent artists, how was DMGI going to be any better than existing services like CDBaby? Well, like any other label, they'd market the heck out of their artists. Yes, but marketing is expensive, which is why most artists can't handle it themselves. So how would a company like DMGI, selling fairly obscure artists through an emerging medium--even three years later, CD sales still make up the vast majority of music sales--ever sell enough songs to cover those marketing costs? Well, like any other label, they'd hope for a breakthrough hit.

That was the end of our conversation, but I've checked the progress of the business from time to time since then. They went through some acquisitions and name changes, employees came and went, their IPO didn't do very well, and it drew its share of skepticism along the way. And somewhere along the way, the idea of marketing the heck out of their artists disappeared from their Web site.

Now, The Orchard emphasizes that it "aggressively" promotes and sells its artists' music--very similar to how DMGI was originally described to me. Now that digital distribution seems to be taking off, the long tail is taking the place of the big hits, and many of the traditional labels are struggling, perhaps this marriage is coming just at the right time.