Month: September

Full Text:

Each week, Apple's iTunes store gives away a free download. This track is typically from a little known artist that caught the fancy of the staff and is looking to get some exposure. But when Jazmine Sullivan's new single was featured on Sept. 2 the main difference was that it's already a prominent fixture on the charts. So why give away a hit single? J Records execs see the promotional value of this exposure as outweighing the loss in sales for the week. They are hoping it will bolster sales of her forthcoming album. The iTunes store Single of the Week has also featured tracks from Duffy and Raheem DeVaughn, two other prominent artists. These artists and others in the past have seen significant increases in their album sales during and after the single has been posted for free download on iTunes. The store provides great visibility for the song and exposure to a much broader and diverse audience.

Month: July

Full Text:

An Access To Music Charge (AMC) paid to rights holders by Internet Service Providers (ISPs) has been proposed as a solution to the problem of illegal downloading over peer-to-peer (P2P) networks. This possible solution comes from a meeting of the Steering Group (SG), an influential international forum composed of ISPs, online music services, independent and major record labels, authors' societies, lawyers, technology experts, and a futurologist. Such a system could provide revenue to the rights holders that are currently at a loss for them. In return, users would have access to the global recorded music repertoire without DRM restrictions and no direct cost to exchange downloaded files. ISPs and music service providers (MSPs) would have the opportunity to generate additional revenues if a significant percentage of P2P sharing was monetized. This comes at a time when ISPs are finding the benefits of creating partnerships with music rights holders, while national governments are preparing or threatening to make legislations in this area. More work still needs to be done on the proposal, including how it will affect current business models of services such as iTunes. The cost of distributing the monies would be very expensive, too. Numbers were projected by a group, Deltica, in the UK that studied ISP user activities. According to them, the ratio of P2P downloads to legal downloads is 20:1. So if the ISPs converted 5% of the P2P downloads into revenue, the gross figure would be something around $326m, something ISP executives say that ISPs would be very interested in. This is projected by Music & Copyright to have increased the pro forma total digital recorded music revenues in 2007 to $4.1bn from 2.9bn.

Month: July

Full Text:

Video games like Guitar Hero and Rock Band have been very popular as of late and are also integrating themselves into key marketing plans for bands. With rock and metal groups in particular, the games provide a platform to introduce new and younger consumers to all sorts of bands, from older groups who were made famous in the '70s and '80s to new groups who are just coming up in the industry. Aerosmith recently had their own version of Guitar Hero released. By the numbers, bands like Aerosmith are seeing a 400+% increase in single sales for older tracks on these video game downloads, as are new groups. All but one song out of the 63 songs on Guitar Hero III jumped more than 100% when it came out. This means video games can also help boost single sales like other online download services. Bands get royalties from every copy of the game that is sold, as well for each single downloaded to the game console. Older groups like the exposure to younger fans, while new bands get a chance to showcase their music to a broad range of people. The video-game industry also gets a chance to market these games to an older crowd that would be interested in listening to bands like Aerosmith, Alice Cooper, etc. So far, it has been a win-win situation for music and video games.

Month: June

Full Text:

As more digital music services outside of Apple are converting their libraries of tunes to DRM-free software, record labels are thinking that variable pricing points will be another way to spark more music sales online. The drop in CD revenue has yet to be made up for by digital sales, but changing prices on individual tracks and albums could be part of the solution to do so. A survey was done that showed of the people who do pay for music, 33% downloaded between 10-50 songs in the past 6 months, while 26% downloaded less than 10. The idea with variable pricing is that raising prices will make more money off the 10-50 song crowd, while lowering other prices will encourage the less than 10 song group to buy more music. Digital service PassAlong, which has its own digital music store, completed a study using the Digonex variable pricing system conducted with Canadian label Nettwerk. Once per week for 16 weeks, the service altered the price on 2,000 tracks participating in the test (singles were 99, 66, and 33 cents while albums were priced more granularly). According to their CEO, prices fell on albums just over a dollar, but revenue from tracks in the program increased an average of 122%, with some up 500%. A key thing was albums were sold they customers would usually buy only two or three tracks from since they were priced lower. The trial did not include singles for sale over 99 cents, so it is unknown whether the elasticity of the system can support more expensive individual tracks. Along with DRM-free music, the industry is hoping this will give competitors more power and the ability to sell higher volumes of music while making a greater profit.

Month: January

Full Text:

Sony BMG Music Entertainment is due to release album-specific, digital download gift cards on January the 15th at retailers like Best Buy and Target. This is seen as one of the new ways for labels to sell music in as many places as possible. At this time, the three other majors are drawing up their gift card concepts, but have not announced their initiatives.