Lifetime value of the consumer

 This week there is an interesting Billboard Q&A with Universal’s Head of Digital in the US, Rio Caraeff.  If you can get past the metaphor orgy (e.g. “…put a little skin in the game …behind the curtain …You can’t hit the ball unless you swing the bat. Sometimes you strike out, but if you’re afraid to swing, nobody wants you on their team.”) he makes at least one interesting point …

What I’d like to see in the year ahead is a larger shift away from revenue-per-unit to a revenue-per-user model. This is much bigger than the notion of subscriptions or monthly recurring fees. It’s the general concept of getting paid something for everybody that accesses the network or has a device that’s music-capable. It’s really about driving a scalable and transformative business model for the music industry and away from figuring out how to get more money from the small amount of people that choose to pay for music.

I think he’s absolutely right about the move away from how to get more money from the small amount of people that choose to pay for music.

But in the same way that old school music people think in terms of physical media, he risks seeing the world through digital eyes.

In this interview at least he homes in on payments for network access for music capable devices but for a company like UMG the winning game is in smart plays across all their business holding to deliver on the idea of lifetime value of a customer.

Yes get paid on network access and try (and bring those unruly ISPs in line) but really a digital networked consumer might also be a potential market for the odd well packaged CD, or for merchandise.

UMG, and some of the other majors, are now invested so widely that they need to think of themselves as a Disney – content owner, merchandiser and with a wide spread of demographics not just because of the content itself but because of it’s use (e.g.gifting).

OK so this interview is about Digital and you gotta start with your own business unit, but the real saving of the music industry is in identifying all the touchpoints in the customer lifecycle (i.e. the customer’s life) and creating the concept of lifetime value.

Making sure you have a product available to the cusomter at the moment they need it, therefore anticipating need, yes stoking up their need and using business partners where necesary. It may involve third parties and some third parties, e.g. Amazon, are in a great position to deliver on this.

Song lyrics

OK, I am going to back off piracy today and flag up Jarvis Cocker’s comments on lyrics in The Telegraph. Just yesterday I was having a discussion with someone who contended that in French music lyrics are much more important (hence the chanson, and new chanson) and in Anglo-American music (with a few exceptions) the music/sound/rhythm was more important.

It is interesting that Jarvis, who lives in Paris (or did til recently?), follows the French view. Also the other great British lyric writers he mentions Lennon and Bowie are both song writers who spent time away from these shores (though Lennon later than when he wrote I Am the Walrus).

The moronic Noel Gallagher of course takes the low brow approach of “you could write any old nonsense and it didn’t matter”. Well if you get away with it and get rich and successful of course you can think that.

 

 

MTV anti-piracy ad sucks

Look at this pathetic ad from MTV against downloading illegally. The chasm between what the ad is saying and the worldview of the intended audience make it more or less useless. The comments on the linked page pour the appropriate level of scorn upon it.

 Now there is nothing wrong with MTV speaking out on digitial entertainment piracy. In fact informed debate and education is very much part of the way forward for the content industires. 

However this poor misguided ad makes them look thoroughly out of touch with their target demographic who probably look more like this (thanks Corbis) when listening to their illegally downloaded music……   

 

 

 

 

 

The US piracy Watch List

Apparently Canada has been added to the IAPC watch list (Billboard), joining illustrious piracy havens such as China and Russia. The fact that the US has this list is somewhat a joke since it is itself one of the biggest digital content piracy melting pots. Among the biggest threats to US content are the number of casual pirates in the US itself, and the scale of commercial digital piracy being enabled by numerous sites.

Where do I start?

Google-hosted blogs linking to infringing content – this is now a substantial source of unreleased music content leaking.

Limewire – a case lumbering it’s way to court.

Soulseek – as far as I can see has been left alone.

The huge number of file-lockers hosting infringing content.

Social networks used for large-scale infringement (e.g. Hi5, Bebo and Multiply).

BitTorrent index sites (e.g. TorrentReactor, TorrentPortal and BTmon)

When will this fat-bellied, dinosaur of a country think about getting its own house in order and leading by example before putting other countries on lists? They’ll be handing out detentions next!

 

 

 

 

 

 

Nonsense from Coldplay?

 So lots of people downloaded the free single from Coldplay last week. EMI claimed that the total number of downloads was 4 times the combined sales of the Top 40. Well great. There are always some great stats about how free stuff outperformed paid for content, just ask the IFPI! 

It gets worse. They are offering buy one get on free on the album tracks and Chris Martin has swallowed the no one buys albums anymore line:

“As I said before nobody buys albums any more, certainly no body buys full albums and we’ve made an album that you have to have from start to finish.”

The thing is some music fans do buy albums. Especially if then album is good. NEws travels fast on the internet. Maybe it is even some demographics do. It’s strange but the buy-on-get-one-free approach seems to undermine the value of the music, and this album in particular, much more than either Radiohead’s pay what you like or Nine Inch Nails giveaways or tiered pricing.

Coldplay may have received some great covereage with the single download. With the requirement of an email address in exchange for the track they may also have substantially grown their email database.

These subsequent comments make them look a bit desperate – or is it the label? I remember the unconvincing reports that EMI’s move to DRM-free had been a success. Question is did or will EMI make any money by consequence of this stunt?

Update: It gets worse…

“It doesn’t matter whether the record is good or bad,” he said.

“It matters that it’s colourful. The songs are supposed to be flavours, things we haven’t tasted before.”  

 

 

 

Dandelionhood

http://www.locusmag.com/Features/2008/05/cory-doctorow-think-like-dandelion.html

We tell stories

I mentioned in my last post that Bit Torrent was awash with eBooks among the music and videos. Authors have dabbled with the Web as a medium for their work before – Stephen King famously released a book one chapter at a time and even that was pirated.

We hear repeatedly how the music industry must add value to digital product to make it attractive to buy rather than download. Well enter Penguin with an example of how to add value to books in the form of digital fiction. Experimental maybe, but a bold move nonetheless.

The Penguin experiment, called We Tell Stories, involved six authors writing a work inspired by a classic piece of literature and the work being delivered to the reader via the Web. All six stories were constructed differently and the result was a bold staarting point for these new evolutions for narrative.

The 21 Steps was written as short bursts of text with the action unfolding over a Google map. The writing was not great but the map was a nice idea and I liked the sense of motion it induced. WHen I read it there were a few technical issues like the map not displaying for some areads but you could get a sense of the possiblity or representing environment and movement.

I really enjoyed Slice. It was short, mysterious and very well executed. I was drawn in quickly by the authenticity of the child’s blog. The flickr photos were a nice touch and more spooky cos I live in one of the areas depicted. Simple, short and sweet.

Fairy Tales was a perhaps the weakest idea. It reminded me of then books we had  at school which allowed the reader to choose routes through the story – e.g. If you want to fight the dragon turn to page 30, if you want to run away turn to page 45.

Your place and mine was simple enough in form but with a nice twist at the end. I wish I had read it as it was being written at 6:30 each evening. It would have added a vibrancy to a narrative I found compelling even reading it after the event.

I thought Hard Times was a bit more of a literary joke than anything with it’s endless lists of facts, like those so beloved of the character in the Dickens novel. Strickingly presented but not memorable.

The (former) General was suggestive of potential – again in the form of offering the user the option to do this or that. With more depth it might have convinvced me. The writing was in places evocative and engaging but the narrative didn’t really go anywhere – perhaps I made poor user choices.

Anyway the reason I write about this is because in addition to questions of new narrative form you can also see some of the potential open to publishers/writers to counter the piracy of literature. A worthy experiment and I will be looking out for more.

 

 

 

 

 

 

 

What’s on ?

eDonkey has been on the receiving end of much music industry legal action in recent months. Last September a number of German eDonkey servers were taken offline after a court issued an injunction against them. User numbers halved – temporarily. In January this year the Dutch anti-piracy outfit BREIN won judgement against an eDonkey hashlinksite, Shareconnector.

Would the file-sharing community miss a lot if eDonkey went down? Well some recent research from iPoque gives interesting indications of what people use eDonkey (and Bit Torrent) for.

Across the regions looked at – Germany, Southern Europe and Middle East – patterns of usage vary. the most popuilar BT and eDonkey music downloads are in the form of discographies (i.e. more than one album at once). In ME and Southern Europe over half of the top 75 audio was discogs. Neither the top BT audio nor the top eDonkey audio downloads closely reflected the charts and in Southern Europe much of the top downloads appeared to be local language.

BT video downloads are primarly movies, with some pornography featuring in the Top 75 for Germany. On eDonkey on ther other hand every region is sharing porn. A cursory look at the titles and one can make the generalisations that Southern Europeans like anal, Germans like lesbians and the odd animal, and the Middle East has more specialist and suspect interests like shemales and children.

When it comes to eBooks English is the prevalant language with Sat Nav data being particularly in demand in Southern Europe.

Mp3newswire reports on a new Digital Music News research report which shows continued rapid growth in use of Bit torrent and increased consolidation in P2P client apps so maybe eDonkey will get killed by IFPI/MPAA anyway and users migrate. 

 

Recommendation engines

Music recommendation engines have a long long way to go.

I never liked Pandora – repertoire was too US centric and the academic model for recommendation (e.g. you chose a synth rock song in a minor key with prominent guitars, therefore here’s more synth rock in a minor key) was lamentable.

I have been an occasional user of last.fm for a couple of years but it seems to perform worse with age. The logic of recommendation based on scrobbling what people actually listen to seemed like such a good idea but last.fm now returns such poorly worked out recommendations that I do not believe scrobbling is at the core of it.

It seems to stay in very poorly defined grooves. So if you picked a well known 80s pop band it will feed endless well known 80s pop band even if you are constantly skipping tracks.

Choose an unknown band and it only feeds you unknowns. No one listens to music in this way. That’s why scrobbling was a cool idea. Could it be that it doesn’t work as a way of making good recommendations? Certainly, in comparision, the certainty of a known album or the ‘editorial voice’ of a good radio show or dj mix beats last.fm.

Over 50% of tracks I skip within the first minute. What a waste of time and it makes it impossible to get into the flow of the music.

At this rate I will go back to listening to albums!

But not before I check out TheFilter.

DOES blog, social network buzz correlate to better album sales?

A week or so ago Ars technica published a story about some research looking into how chatter on blogs, number of myspace friends or mainstream reviews correlated with sales.

The story was then picked up by other reporting services/aggregators, like Musically, who reported the story as Blog buzz could drive album sales, research suggests. The Musically take on the story suggests causality between blog posts and album sales and goes on to say that the number of MySpace friends a band has also correlates to sales (which the original research does not say).

In the research paper itself the key phrase buried deep is: “…it is natural to ask whether it is reasonable to conclude that increased blog chatter really causes an increase in sales since it does, after all, precede sales. It is not possible to make such a conclusion based on this study.” In fact later on they explicitly caution against assumptions of causality. They go on to talk about various correlated variables. This study only looks at physical sales anyway, and then only Amazon, and then not actual sales but a guess based on Amazon.com sales ranks. Start to see the holes?Among their ideas for future studies includes taking into account the sentiment of blog posts which I think is when it gets interesting.

Sadly, what I think this story really illustrates is how the pressure to find news makes some editors post half baked stories and before you know it everyone in the industry has only read a wrong, short edit concluding things that are half true at best.