Tag Archives: #SoundCloud

Has digital killed the music industry?

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Or, more specifically, has disintermediation broken the business model?

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Ever since the invention of compact cassettes in the 1960s and the arrival of the Walkman in the 1970s, pundits have been predicting the end of the music business (remember those “Home Taping Is Killing Music” campaign logos of the 1980s?) – a theory that look set to come true in the 1990s with the launch of mp3 players and peer-to-peer file sharing. Yet, rather like Mark Twain, the death of the record industry appears to be greatly exaggerated.

Most debate about the demise of the music industry is predicated on the impact of technology that facilitates music piracy, whereas in reality the business model has been broken as a consequence of digital disintermediation.

For most of its history, the recording industry was a model of vertical integration. The major record labels owned the content, the means of production (recording and manufacture), the publishing and licensing activities, the distribution channels – and in some cases, they even manufactured the hardware, owned the retail stores and promoted live concerts.

The 1970s began a rapid process of horizontal integration, as the major record labels merged with one another at such a rate that by the late 1990s there were really only four global companies – Sony, Warner, Universal and EMI. At various times, each of these companies has also been affiliated to substantial film, electronics and publishing interests – further proof of the vertical and horizontal integration.

The “Big Four” have now been reduced to just three with the sale of EMI to Universal. European Union Competition rules resulted in parts of the EMI group of labels being divested to Warner, and the music publishing division being sold to Sony/ATV Music Publishing.

EMI was probably the epitome of vertical integration – but over the years, it was forced to sell or close assets like its UK manufacturing plant and the HMV retail chain, and came close to selling off London’s Abbey Road Studios (a decision that was reversed following public outcry and reinforced by a heritage listing). Some observers blame poor business decisions and weak digital strategies for EMI’s demise, but I would argue that the highly integrated model has been found wanting, and EMI was a dinosaur that could no longer survive in its current form. For example, despite some errors of judgement (such as putting “Copy Control” software on their CD’s which affected their ability to play on personal computers), in many ways EMI was something of a pioneer in digital music – being one of the first major labels to remove DRM from its downloads, and licensing its content for streaming services.

Despite the rampant corporate contraction, the growth of digital download platforms and the expansion of music streaming services, it’s clear that record labels still have a role to play in developing and distributing new content. Independent labels, distributors and retailers continue to wax and wane according to the fortunes of the wider industry, and technology makes it even easier for artists to self-release their recordings direct to the customer – but record labels provide the financial and marketing support that are critical to commercial success, and other intermediaries (publishers, distributors, licensees, retailers, promoters, etc.) continue to add value to the supply chain.

In fact, just this week, Billboard has been running a poll on whether Universal and Sony should break away from their parent entertainment conglomerates – the theory being that the music labels represent greater value on their own, especially when unencumbered by ailing electronics and movie businesses. Results so far suggest that ownership does not matter so much as having the best strategies for, and access to, the means of content creation and distribution.

At the same time, the music industry is going through another round of vertical and horizontal integration and disintermediation, driven by new technology, new distribution platforms and new business models linked to the way we access and consume content. So, while Apple’s iTunes platform has been accused of anti-competitive practices in its dealings with content owners, it also faces competition from music streaming services like Spotify, Rdio and Pandora, and new content platforms like Twitter’s #music and Vine. And if sales of new CD’s (and even mp3 downloads) are reportedly declining, there is still healthy demand for live music events especially those linked to the marketing of established back catalogue titles, which is where record labels come into their own as curators of re-released and re-packaged content.

In conclusion, here are some random reasons why I think the music industry is actually in good health:

Audiobus – a case study in app collaboration

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An elegant solution for audio app management

Like many leading CEOs and successful business people, I think it’s essential for all of us to have a creative outlet or a hobby, something that is not directly connected to our working lives.

For my part, I like to compose and record music using iOS apps, under an assumed nom de musique. Several of my compositions have been broadcast on national radio, and occasionally listeners are kind enough to purchase and download the music from my artist website.

In exploring this newer form of music-making, I am fortunate enough to gain access to pre-release and beta versions of new apps, which allows me to provide constructive feedback on new designs and recommend suggested features. This activity also provides some insights on best practice for collaborative app development:

  • Listen to your customers and their needs
  • Listen to your customers’ suppliers and their problems
  • Create a common technical standard (not the same as an open standard)
  • Encourage early adoption by making the standard available to key suppliers
  • Embark on an engaging programme of pre-release marketing via social media
  • Underpromise and over-deliver (but always deliver what you promised, and on time)
  • Repeat the process ad infinitum

There is a very active community of iOS musicians. This community is a thriving cottage industry: most practitioners are non-professionals; some are working on the fringes of the music industry; and a few are well-known software developers, producers and commercial recording artists in their own right. It’s a supportive community, and one where it’s easy to find your own level. It also tends to be a highly collaborative environment, with most participants willing to share their knowledge and provide help and advice. There are dedicated micromusic blogs, helpful product review sites and supportive technical forums.

Which brings me to Audiobus, one of the more interesting new apps that is gaining a lot of attention from developers, users and reviewers alike.

Music apps can be divided into 3 broad categories:

The problem is that most of these apps were not designed to “talk” to one another. Initially, it was possible to connect some apps using MIDI tools, but for many amateurs, this is probably a technical stretch. Besides, in the real world, I can plug a guitar and a keyboard into the same amplifier, or connect them to my desktop recording software via a single interface, easily enough.

Unfortunately, real-time audio generated in one app could not be connected to another app. Audio recordings could only be shared across multiple apps using some tedious save/copy/paste functions, or long-winded export and import processes. Audiobus solves this problem with an elegant design solution that works so simply, you have to wonder why Apple didn’t think of it themselves.

Rather than provide a technical overview of Audiobus, I’m more interested in the business model, and the potential case study it offers for future collaboration between app designers and content developers:

1. Audiobus is a collaboration between the developers behind two of the more successful audio apps, SoundPrism and Loopy HD

2. The developers have released an SDK for easier integration of new and existing 3rd party apps

3. There were a reasonable number of existing apps compatible with Audiobus when it launched, and more are being added all the time

4. As one reviewer has commented, buying the Audiobus app actually increases the useability (and therefore the value) of other apps

5. The key to Audiobus is providing a common standard for handling and processing audio recordings created in different apps

At least one app developer abandoned a new design for audio sharing between his own apps when he realised that the Audiobus solution would offer much more flexibility.

When combined with apps like AudioShare (a document management and conversion tool for audio files) and SoundCloud (THE social media platform for audio), Audiobus is really helping to open up and foster a multi-function environment for musicians through content compatibility, integration, sharing, exporting and collaboration.

Frustratingly, I sometimes struggle to figure out which of my iOS apps I need to use to open, edit and share text files, pdf documents, spreadsheets and slides. All too often, files suffer from incompatible formats, fonts, layout and graphics. If only we could have the same level of collaboration for e-books and productivity tools that Audiobus has fostered for music apps!

Outside of a small circle of friends, there’s only connections…

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"A Dance to the Music of Time" is an epic tale of friendships and relationships

How many true friends can a person really have? Friends you would go to the cinema with, and who would walk out with you if you didn’t like the film? Friends whom you would invite to stay at your home for the holidays? Friends who would tell you when you had made a fool of yourself, but not hold it against you? Friends from whom you would borrow money or to whom you would lend money?

Social networking makes it all too easy to connect with people we’ve barely or never met. Instead of investing our time and effort in cultivating meaningful and lasting friendships, social media encourages us to “collect” as many virtual friends as possible, and we spend increasing amounts of time in vicarious “sharing” – but how many of these “connections” can we actually count on as our friends?

The question occurred to me as I read the First Movement of Anthony Powell’s “A Dance to the Music of Time”, a literary tour de force situated somewhere between Marcel Proust’s “À la recherche du temps perdu” and Evelyn Waugh’s sequence of novels from “Decline and Fall” to the “Sword of Honour” trilogy.

At the heart of Powell’s 12-novel saga is a group of four friends – Jenkins, the narrator, and his three contemporaries from school – Templer, Stringham and Widmerpool. As we follow their adventures over a 50-year period, we discover the interweaving relationships and often tangential connections that run through their lives. We also witness the subtle change in relationships between the main characters – especially the ebb and flow of their individual circumstances as they fall out of favour and lose contact with one another for years at a time. The reflective and considered format of the novel allows us to see that as in real life, there are periods when the friends positively dislike each other and are frequently disappointed by their personal shortcomings and irritated by their annoying habits.

Powell’s epic work of fiction reminds us that even among our strongest and most enduring friendships, there can be episodes of absolute dislike, as well as times of empathy, loyalty and support; and of course, being only human, our opinions and views of our friends can change over time. Powell’s perspective also confirms that most of the people we encounter in social and professional situations are mere acquaintances. We must surely recognize that our personal friendships are each valued on their own merits, and we enjoy different friendships for different reasons – we do not simply have a homogenous group of “connections” that are all exactly the same. There is nothing wrong with being part of well-connected and inter-related networks, but we must guard against reducing all these relationships to a single dimension.

Unfortunately, most social networking platforms operate on a binary structure where we are forced to make simplistic choices of either “friend” or “unfriend”, “like” or “unlike”, “follow” or “unfollow”. And there is something rather materialistic and incredibly narcissistic in the way that the number of “likes”, “follows” and “shares” we collect on-line is not only representative of our popularity, but it is somehow an indication of how fabulous a friend we really are.

Unlike the real world, these on-line platforms do not recognize the subtle dynamics of our true friendships, nor do they acknowledge that we value each of our friendships for the different experiences that we draw from them. We also have different friends with whom we enjoy doing different things, and we probably don’t introduce all our friends to one another (and certainly not at the same time).

Of course, younger generations who have grown up with social media may have no qualms about the reductionist nature of social networking, and the inherent opportunity it affords them to “connect” with as many different people as they can. But for someone like myself who is quite happy to count fewer than a score of people as my true friends, I relish the quality of my friendships, not the quantity.

Apologies to Phil Ochs for (mis-)appropriating his song title.

Social Media – finding its own level?

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Social media is accessible to all...

Social Media is accessible to all…

Recently I’ve come to see that as a communication tool Social Media is just like any other resource or commodity – it’s not an end in itself, it’s what you can do with it that makes it valuable.

If I had to make a comparison, I would say that Social Media is most like water – not just because we seem to be swimming (if not drowning) in the stuff; but because like water, it will find its own level. And as Myer CEO Bernie Brookes found out this week, something that sustains us can also be unleashed against us.

As content pours into our Social Media aquifers, it will naturally flow, collect and disperse. The rivers of content being uploaded daily* suggest that unlike other resources, Social Media will not run out any time soon:

  • Twitter: 400 million Tweets posted per day
  • Instagram: 40 million photos uploaded per day
  • YouTube: 72 hours of videos posted every minute
  • Facebook: 2.5 billion content items shared per day
  • LinkedIn: 175,000 new profiles created every day
  • SoundCloud: 10 hours of audio uploaded every minute

These reservoirs of digital content that we are creating could be put to good use (like dams that provide hydro-electricity). Viewed from this perspective, Social Media can be seen as a potential source of energy. Rather like waterwheels that harness the power of rivers, Social Media can be used to drive a range of applications; but left to its own devices, and with nowhere else to go, all this content will simply collect in stagnant pools – sometimes you need to use part of that energy to keep the water flowing downstream.

In just the past week I’ve been exposed to three more Social Media platforms, each of which is at advanced beta stage: @IFTTT – a tool to re-publish selected updates to multiple platforms via a series of automated decision trees; @Poptip – a tool for conducting polls via Twitter; and a personalized viral marketing tool which I probably cannot mention by name because I had to sign an NDA in order to participate in the pre-launch.

Each of these new platforms is trying to harness the potential of Social Media and keep the communication flowing (the waterwheel analogy). Similar to other Social Media platforms, these tools also act like aqueducts carrying water to where it’s needed. It’s as if we are using the content to feed a Social Media irrigation system – the results of which allow us to harvest followers, “likes” and customers.

The question is, who will we look to for inspiration when we come to write Social Media’s epitaph – will it be Smith, Bell, Coleridge or Goethe?** Will we end up drowning in the stuff (but no-one will notice until it’s too late)? Will we wish we had used it more sparingly? Will we be faced with an abundance that we cannot actually make use of? Or will it be a case of “be careful what you wish for”? (Clearly, King Canute is of no assistance, as it’s far too late to turn back the tide….)

* Note: Statistics gathered from a casual internet search of company websites, press releases and industry commentaries. No claims as to accuracy, currency or verification.

** Literary references: Stevie Smith – “Not Waving but Drowning”; William Bell – “You Don’t Miss Your Water (Till Your Well Runs Dry)”; Samuel Taylor Coleridge – “Water, water, everywhere, nor any drop to drink”; Johann Wolfgang von Goethe – “The Sorcerer’s Apprentice”