Tech News December 2012
With the accelerating pace of technological change, the League posts a monthly summary of relevant news and information regarding changes, trends and developments that may affect the electronic media activities that orchestras use to achieve their institutional missions. If you have questions about this material or any other electronic media topic, please contact Michael Bronson at
and Joe Kluger at
1. What Is Going on with the Record Industry?
Andy Doe, former head of classical music at iTunes and COO at Naxos, blogs about the state of the recording industry, triggered by a list of 10 things he wished people said more often. Some of the more provocative on the list include:
- Almost everything you read about the state of the record industry is totally useless.
- It does not matter how the market is doing. Stop asking.
- Every genre’s market is basically the same shape.
- There are many reasons to make a record.
- Your choice of business model depends upon your goals and your resources.
(Source: New Music Box)
Union Square Ventures partner Fred Wilson, the godfather of the New York startup scene and a music lover, has laid out four guiding principles for those wanting to make money from companies that straddle music and technology:
- It’s more expensive than you think, and it takes longer than you want.
- No matter how many users you have, massive valuations are fleeting if you can’t make money – even if you are Spotify and Pandora.
- That said, Pandora has the right idea. Advertising dollars will move increasingly to internet radio, and artists will start to make money from their music.
- Selling virtual goods might be a better business than selling music.
The Supreme Court has agreed to hear a case about whether copyright holders — publishers, filmmakers, musicians and creative artists of all sorts — can sell their copyrighted works abroad at prices different from what they charge in the American market and rely on copyright law to help maintain the separate pricing without having importers profit from the difference. An Op-Ed in the New York Times makes the case that allowing the “first-sale doctrine” (which says that copyright owners cannot control the distribution and pricing of works, like books, after the initial sale) to apply to imported works is inconsistent with the intent of the Copyright Act changes Congress made in 1976 to protect against unauthorized imports of copyrighted works by so-called gray-market sellers. (Source: New York Times)
The Internet Radio Fairness Act, a federal bill supported by Pandora, Clear Channel and others that would change the way online radio royalties are set, has come under new opposition from the N.A.A.C.P., which said in a letter to members of Congress that the bill would “unfairly deprive artists and performers of fair pay for their hard work.” The bill would direct a panel of federal judges to use the same standard in setting royalty rates for Internet radio that they use for satellite and cable radio services, a change that Pandora and others believe would substantially lower their rates. It already has been opposed by music industry groups, as well as by the A.F.L.-C.I.O. But the N.A.A.C.P. letter adds new pressure, portraying the issue not just as a business dispute, but as a civil rights matter. (Source: New York Times)
Big name popular artists, such as Katy Perry, Maroon 5 and Rihanna, are also opposing Pandora's lobbying of Congress to approve the Internet Radio Fairness Act. (Source: Hollywood Reporter)
During the recent annual Future of Music Summit, the conversation about revenue in the digital music industry sounded like a scrum over crumbs, a desperate fight over an increasingly shrinking pie. The post-Napster era is now more than a decade old, and the digital reinvention of the music industry continues with countless new tastemakers and middle men in positions of power and influence while jostling with (or in some cases stepping past) 20th Century gatekeepers: iTunes helped make Tower Records obsolete, Pandora on-line radio elbows in on the listenership once exclusively commanded by terrestrial conglomerates such as Clear Channel, and Pitchfork has surpassed the clout of Rolling Stone. For many musicians, little has changed from an economic perspective. Less money is being made from recorded music, and payments from promising digital streaming services such as Spotify are doled out at a rate of fractions of pennies. The latest hot-button debate in this increasingly contentious arena: The newly crafted Internet Radio Fairness Act. (Source: Chicago Tribune)
7. Making Cents
Damon Krukowski of Galaxie 500 and Damon & Naomi bemoans the meager royalties currently being paid out to bands by streaming services and explains what the music business' headlong quest for capital means for artists today. By his calculation it would take songwriting royalties for roughly 312,000 plays on Pandora to earn the profit of one-- one-- LP sale. (On Spotify, one LP is equivalent to 47,680 plays.) (Source: Pitchfork)
Facebook has begun offering a new tool which will allow online retailers to track purchases by members of the social network who have viewed their ads. The tool is the latest of the new advertising features Facebook is offering to convince marketers that steering advertising dollars to the company will deliver a payoff. The conversion tool is specifically designed for so-called direct response marketers, such as online retailers and travel websites that advertise with the goal of drumming up immediate sales rather than for longer-term brand-building. (Source: Reuters)
Pinterest rolled out business accounts for brands and the best news is that there is a new “Institution/Non-profit” category. The new business accounts do not change the design or functionality of your nonprofit’s Pinterest profile, but it will give you access to new tools and case studies for brands as they become available. It also allows you to stop having to use a personal profile as a brand (i.e., first name Amnesty, last name International). (Source: Nonprofit Tech 2.0)
The Cleveland Orchestra musicians who perform at the Happy Dog Saloon are embarking on a mission to lay down a record. A vinyl record. To keep their enterprise moving forward, they're taking a technological step back, producing a double 12-inch vinyl album tentatively titled "Ensemble HD: Orchestral Manoeuvers Live at the Dog." To fund the project, they're using the more modern service known as Kickstarter. (Source: Cleveland Plain Dealer)
More than 500 musicians, composers and others active in the Hollywood music biz recently heard a panel of experts warn that film, TV and videogame scoring continues to leave L.A. because producers are unwilling to meet union demands. If work continues to dry up at the current rate, they speculated, one or more of the three remaining large scoring stages (Fox, Sony, Warner Bros.) could close "within the next two to five years," leaving London as the new scoring capital of the world and cheaper locations like Prague and Bratislava as second and third choices.
Union officials, who were not present at the meeting, are disputing the version of facts as presented. They say that although work is down, a larger percentage of current film work is actually staying in the U.S. They deemed it "no coincidence" that the meeting was held just as the American Federation of Musicians was negotiating with the AMPTP for a new film and TV scoring contract. (Source: Variety)
CD wallets, bookshelves, DVD towers and even garages may be fading away as a new generation lets technology affect the way it thinks about ownership. Citing the rise of services such as Spotify, ZipCar and Netflix, venture capitalist Mary Meeker of Kleiner Perkins Caufield & Byers is calling attention to what she says is a trend being embraced by the “asset-light” generation. Using these kinds of services frees up time and physical space in users’ lives, Meeker said in her annual Internet Trends report, which she presented at Stanford University recently. Stepping into the shoes of a 25-year-old, Meeker sketched out the life of a consumer who is more focused on services than goods. (Source: Washington Post)
Can the nascent entrepreneurial ideas bouncing around Silicon Valley help reinvent public media? Matter Ventures, a start-up accelerator that will provide four months of financial and logistical support for budding media entrepreneurs, will be unveiled Monday by its partners: KQED, a public television and radio station operator; the John S. and James L. Knight Foundation; and the Public Radio Exchange, known as PRX. KQED, based in San Francisco, and the Knight Foundation are each investing $1.25 million in the initial $2.5 million fund and will have an equity stake in any projects that become viable businesses. PRX, based in Cambridge, Mass., is contributing strategic and management support. (Source: New York Times)
Cinema, the cry goes up on all sides, is the future of opera. This is the technological crutch that can prop up an increasingly frail art-form, the digital panacea that can restore life to a cultural anachronism. Statistically the figures seem to bear this out. The Financial Times recently estimated the Met's annual income from its screenings at $11 million, and last year their worldwide audience numbers reached around 3 million. But as so many operatic heroes learn, riches always come at price.
Opera has been offering this all-encompassing artistic stimulation for more than 400 years, with 3D as standard – no special glasses required. When we take this sprawling, generous art-form and flatten it into the confines of a cinema screen, however, we rob it of its live excitement and emotional impact. In outsourcing opera to cinemas, we leave a demanding art-form at the mercy of second-rate sound-systems and flat acoustics that simply can't carry the weight of singers trained to fill huge halls without amplification.
Opera companies claim their broadcasts will attract a new audience, enticing the young and culturally timid where traditional methods have failed. A 2008 survey by OPERA America however identified just 5 per cent of the audience for Met live broadcasts as those who had never been to live opera. For many regional opera fans, or those in remote areas, the opportunity to see live opera is small, and these broadcasts tap in to an audience for opera that might not otherwise exist. It's a compelling argument, but one whose very strength may be the downfall of opera. What happens when digital audiences routinely outnumber live ones? Surely the temptation will be to start catering to this new format, designing productions around what works best in the new medium, casting according to Hollywood's standards rather than musical ones. (Source: The Independent)
A little over a decade ago, the income streams for a professional songwriter were pretty straightforward. There were basically three of them: sales of records and downloads, radio play and, once in a while, a synch for a movie soundtrack or an ad. Not so with most of the rest of the streaming digital music services. As collection societies, labels and publishers are forced to sign non-disclosure agreements (NDAs) covering the deals they make with services such as YouTube and Spotify, the artists and songwriters they represent are not allowed to know how much, or on what basis, they're supposed to be paid. Their only option is to look at their royalty statements in an attempt to figure out how much each service pays, and trust that they've been paid correctly and fairly. In the case of YouTube, songwriters could only conclude that the rates the company pays are ridiculously low, at about $40 per million streams (if the song was written by a single writer). (Source: The Guardian)