When the gods dance...

Friday, May 31, 2013


Soaring Tablet Shipments Great News For Digital Music Companies

iPad Music Technology market research firm IDC this week upgraded its tablet forecast for 2013 to 229 million units, a 59% increase over 2012, while total tablet shipments are projected to exceed those of portable PCs this year and the entire PC market by 2015. As reported by Billboard, this is good news for some of the biggest players in digital music, especially Apple, which had a 40% "device" share in the first quarter of this year, while Google's Android operating system powered the most tablets overall. As more and more consumers purchase these portable devices, they increasingly are being used both to download and listen to music. "Tablets surpassing portables in 2013, and total PCs in 2015, marks a significant change in consumer attitudes about computer devices and the applications and ecosystems that power them," Ryan Reith, Program Manager for IDC's Mobility Trackers, said in a statement. "IDC continues to believe  PCs will have an important role in this new era of computing, especially among business users. But for many consumers, a tablet is a simple and elegant solution for core use cases that were previously addressed by the PC." [Full story: Billboard]
Digital Music: The Audience Is Listening, But Firms Still Lose Money

Internet Radio The number of users and the amount of revenue in the industry are on the rise, and the competition among companies to capitalize on the digital music streaming industry is far from over. That's the assessment of the New York Post, which this week reported that music-industry source IFPI announced that global revenue from digital music for record labels totaled $5.6 billion in 2012, up from $5.1 billion a year earlier. The challenge for streaming companies, the Post says, is monetizing this audience, since consumers are accustomed to listening to music for free, thanks to so-called "freemium" models offered by such companies as Pandora. These models might just be working, however, as Pandora last week reported its  year-over-year first-quarter 2013 revenue rose 58%, to $128 million, thanks to largely to mobile advertising. The company's closest competitor, Spotify, counts 20 million active users and has a healthy advantage in the marketplace, thanks to its relationship with Facebook. "Spotify is clearly gaining market share from Pandora and others," says Sam Hamadeh, founder and CEO of financial research firm PrivCo. "Although Spotify continues to lose vast sums of money annually, its investments in growing both free and paying users are clearly paying off. And since Spotify has raised $286 million in venture capital funding, the company can continue to lose money to gain market share - at least until the supply of new capital dries up." However things shake out for individual companies, one thing is certain: the audience is listening. As consumer research firm Ipsos Media says, 62% of internet users have used a licensed digital music service in the past six months, a figure that rises to 81% among consumers ages 16-to-24. [Full story: New York Post]
Human Or Algorithm: Who's The Programmer In The Digital Age?

Cloud Computing Virtually every digital music company today touts a massive library filled with millions of tracks, but size of the collection actually may not matter when listeners try to sort through it to find what they actually want to hear. According to a study conducted by Latitude Research and OpenMind Strategy, 80% of music fans still discover new songs through terrestrial radio, which traditionally maintains very tight playlists, and 94% of 13- to 17-year-olds say they tune in weekly. Of course, many radio companies have largely turned this process over to computers that generate a playlist, but in most cases a music director, programmer, and/or consultant is involved.

This is a challenge for such services as Pandora and Spotify, whose playlists largely are determined by mathematics and algorithms that eliminate human touch and emotion. Jimmy Iovine - chairman of Interscope Geffen A&M Records and co-founder of Beats Electronics - says he hopes to address this issue by blending "math with emotion" in his new streaming service code-named Daisy. "There's an ocean of music out there, and there's absolutely no curation for it," he said at a recent music conference, explaining that Daisy will employ a team of "experts" who he believes can program a music service more effectively than a computer.

"What fans want is actually not every song in the world in their pocket; what they want is something awesome to listen to," adds Daisy CEO Ian Rogers, who emphasizes what radio programmers have been saying for years: it takes a human ear and human emotions to choose what songs to play.

Another variable in the "human vs. algorithm" equation also may be found in the accessibility of the music itself. In other words, terrestrial radio has served as the curator of the music most listeners have grown up with, and this human "filter" may ultimately determine the success or failure of a digital music company. [Full story: Hollywood Reporter]

Shift To Digital Music Lessens Importance Of Album Artwork

Sgt. Pepper Most music fans over 40 have no difficulty naming their five favorite album covers, but many Millennials and Gen Xers who came of age during the digital era might be hard-pressed to even know what album art is. Okay, that might be a bit of an exaggeration, but when music increasingly is purchased via the iTunes Store or listened to on Pandora, record artwork - and its importance in contemporary culture - is at risk of being left behind. As Tone Deaf's Adeshola Ore writes, "Compare the iconic sleeve to The Beatles' 'Sgt. Peppers Lonely Hearts Club Band,' with its numerous famous faces - designed to be viewed on the large scale canvas of a vinyl sleeve - to a tiny square on your mp3 player's screen. The loss of detail is not insignificant." She points out that there has been a tendency for such contemporary artists as Justin Timberlake or Daft Punk to focus on a portrait for their cover image, designed to better suit the standard CD-sized but which still translates reasonably well to a smaller, digital size." Additionally, "with the migration to online streaming services like Spotify and Deezer, which are becoming more and more popular by the day, we're seeing a shift towards people accessing music as opposed to owning it, creating a further detachment to the music's artistic presentation," Ore continues. "Spotify's 20 million worldwide users generally see the album art as just another image on the Spotify app page, squished into the corner amongst advertising, text, and search bars. With these changes to presentation naturally comes the loss of the importance of album artwork. Cover art provides a way for the artist to visually represent their message or theme in the music. They add that extra dimension, making it richer and the message stronger." [Full story: Tone Deaf]
Mixcloud Relaunches iPhone Mix Tape App To Compete With Spotify

Mixcloud Online streaming company Mixcloud this week announced the launch of Mixcloud for iOS 2.0 as it looks to further expand into the mobile streaming market. The redesigned app, which replaces (naturally) the 1.0 version, is designed to compete directly with Spotify and Rdio (also naturally) with a focus on creating mix tapes. The service has signed up some of the U.K.'s most popular DJs, including Paul Oakenfold and Fatboy Slim, who use the service as a platform for sharing their mixes. Mixcloud users, who the company says now totals 10 million, can use the app to follow their favorite DJs, be alerted when new music is uploaded, browse by genre, find new music via a "discovery" tab, and share mix tapes via Facebook and Twitter. "We've built a dedicated platform for DJs and radio presenters, and we're really excited about launching the ability for people to listen in the gym, on the bus, or anywhere on the go." said Mixcloud co-founder Mat Clayton. Mixcloud for iOS 2.0 is available to download now, and the firm is working on a new Android app and potentially will develop a version for Blackberry 10, as well. No app for Windows Phone is in the works. [Full story: The Inquirer]

Al Bell Set To Make Major Recording Industry Announcement
Al Bell
Almost all the "i"s have been dotted and the "t"s are all but crossed on Al Bell's new industry-shaking venture mentioned here last week, but the attorneys say he can't reveal anything until all the signatures are in place. In fact, he's already heard from many artists, producers, and executives who are waiting to get going in this newly re-charged recorded music industry, and as soon as the lawyers give him the "thumbs-up" to discuss what he's doing, he can reveal everything. Meanwhile, Mr. Bell is moving forward rapidly with the details of his new venture, and he asks everyone who has contacted him to be patient. Please check back here next week for the full announcement....if the lawyers are willing, that is!

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