Wednesday, August 23, 2006
The foundational paper examines the relationship between copyright law and education. In particular, exploring whether innovative educational uses of digital technology are hampered by the restrictions of copyright. They found that provisions of copyright law concerning the educational use of copyrighted material, as well as the business and institutional structures shaped by that law, are among the most important obstacles to realizing the potential of digital technology in education. The paper builds on four detailed case studies of initiatives that have encountered such obstacles. Each of these initiatives is moving forward, but only by fighting against a copyright-related system that instead should be helping educators accomplish their goals...
While the primary task of the paper was to identify these obstacles, the paper concludes with some discussion of paths toward reform that might improve the situation. It suggests that certain types of legal reform, technological improvements in the rights clearance process, educator agreement on best practices, and increased use of open access distribution would help overcome the obstacles identified.
It's available in HTML and PDF. You can also listen to an interview with McGeveran about the paper at AudioBerkman.
Saturday, August 19, 2006
The "Indie Show" panel was sponsored by San Diego-based Royaltyshare, who officially announced at NARM a new digital royalty infrastructure solution and service for record labels and music distributors to track mechanical and artist royalties for sound recordings. RoyaltyShare will provide indies Web-based services (with no upfront or set-up fees) to clients, who are then billed 1.5% of all royalty revenues from sales of content on services like iTunes, Rhapsody and eMusic. Called Digital Advantage, the management system allows labels and distributors to easily aggregate, monitor and interpret a broad array of digital sales receipts.
Monday, August 14, 2006
- The industry just experienced a sharp decline - 2nd lowest week since 1994 - with only 8.9 million sales. (2006 has had 36,866 new album releases with 13,210 being digital only.)
- Although CD album sales were down almost 8%, overall music purchases (which includes albums, singles and digital tracks) exceeded 1 billion for the first time ever! In other words, even though CD's aren't flying off the shelves, there was a 23% increase in overall paid music consumption - which is great news for the industry.
- Mass merchant channels (i.e., Best Buy, Target) continue to grow, hitting a 40% marketshare for the very first time.
- Internet album sales were up 11% over 2004 and digital album sales had 200% growth in 2005. (2006's digital album sales are up 123% over last year.)
- For you trivia lovers, the Black Eyed Peas have sold the most digital tracks of all time of any band at 6.3 million. (Eminem is 2nd at 5.8 mil and Green Day is third at 5.5. mil)
Friday, August 11, 2006
- There are just over 150 million music shoppers in the U.S. and the average revenue per person over age 13 is $8.85. (19% of music buyers walk in into the store and only buy 1 item, but the existence of bundles do help purchasing decisions.)
- Music consumption is up 12% as physical sales slide 8%. (Apple held 76% of the market in June 2006 for downoads)
- Consumers are not becoming less loyal - the problem is that there's too many choices and they're being overstimlated. The result is that there's a lot of competition for their time and money and the channels for music buying are becoming blurry.
- For the lighter browsing segments new demand has to be created while they sit on the couch and awareness levels have to be built before they even get into the car.
- Consumers spend nearly a day per week listening to music (89% of music buyers are on the web and spend 21 hours a week online)
- People are actually consuming more music than ever. Physical sales are off but music consumption is up 12% - mostly through unpaid means of acquisition. Some good news from the research (which I personally find hard to believe) indicates that consumers believe that music is every bit as good a value as DVD's.
- One new trend is that people are getting conditioned to do one-stop-shopping (i.e., Super Walmart, Super Target) and tend to get all their errands done at less stores.
- Nearly 9 out of 10 physical music buyers are unaware of kiosks, which could be better utilized to offer deeper and out-of-print catalogue choices.
- Consumers are willing to pay for more actual content (i.e. DVD) but the expectation is more value for same price. The avg. DVD price is $15.98.
Sunday, August 06, 2006
Last week's sales numbers were not pretty. According to Nielsen SoundScan figures, physical album sales were the lowest they've been since January 1994. Although physical CD sales continue to decline when compared to last year's numbers, the simple fact is: America's passion for music remains. With the plethora of entertainment choices brought on by new technology, this basic passion has evolved though and retailers need to continually adapt or get out of the game. [Too many choices = situational shopping.] Any business that's going to be successful needs to have parallel paths.
One of the main challenges the industry faces is how to get the consumer 'off of the couch' with so many entertainment choices. To effectively meet this challenge, retailers need a much more sophisticated understanding of their shopper base. In addition, NARM's members need to
work tirelessly with the distribution companies to raise awareness of new product releases, especially for new media formats.
Another industry-wide problem is that the configuration of certain CD/DVD sales data may be misleading when you actually sit down and try to analyze certain data trends. For example, are CD's that are included with DVD box sets counted as CD sales or a DVD sale, etc...? With all the numbers flying around this year's conference, it's interesting to note that ringbacks, subscriptions, kiosks and streaming sales are not normally factored into the music industry's overall sales figures. This is due to the fact that Soundscan only reports on album sales and digital song downloads. However, from a macro level when these additional sources are factored in, there are many new types of revenue streams that help paint a much brighter picture for the health of the industry.
The "State of Music Retail Discussion" consisted of several big box retailers including Gary Arnold, Sr. VP of Entertainment from Best Buy Enterprise and Darrell Tucker, VP Merchandising, from Target Stores. The general mood was positive - although Arnold thinks that the overall retail industry is "choppy", especially when considering the fact that Best Buy made more money last year selling MP3 players than CD's. John Marmaduke, CEO of Hastings Entertainment, stated that "CD burning and increased competition from video games are the driving forces behind the lagging sales and digital by itself - is not a bad thing...We've got to figure out how to make a living selling the long tail artists....Formulaic promotions may help (i.e., focusing on the 80's slice of the catalogue)."
During the same panel it was also mentioned that reversing the multi-year downward sales trend can possibly be achieved through the practice and execution of flawless category management and product mix modifications. In other words, if the retail experience is designed and delivered effectively - consumers will still patronize retail stores. Case in point: people don't necessarily go to Starbucks just for the coffee...it's for the EXPERIENCE. However, changing the retail experience requires a lot of effort - which will no doubt result in some heavy experimentation and failures. During this transitional phase, one of the keys to success will be to stay flexible.
According to Target's Tucker, "the digital format was chosen by the consumer in a non-retail friendly way, so we're going through a cultural shift as a result and we're now only at the tip of the iceberg." Digital IS the revolution and no one company or entity will own the music business in totality.
Today's youth are hungry for content and knowledge about it. The fact is, kids aren't hanging out anymore at listening stations in the stores. With hundreds of new releases every year, how is the consumer to know or choose what to buy? Any customer assistance in this area would be helpful and welcomed. Thanks to p2p and the internet though, the average consumer now knows more than most music store clerks. Best Buy is aware of this problem and has over 7,000 employees tasked specifically to media. Basically, they're trying to create a community inside the company where these media employees can share and inspire one another.
According to Maramaduke, "The music industry needs to figure out that you can't continue to do business the old way and wait to release all of your best titles in the 4th quarter. Music can't effectively compete with video and video game sales because they own this part of the fiscal year because they spend over a billion dollars in advertising...Unfortunately, the music industry isn't based on research - It's based on habit."
The morning session ended with a keynote by Chris Sacca, Google's Head of Special Initiatives. Sacca said that "the big opportunity in digital music is in developing the ecosystem: one that allows consumers to move content from the home to the car and between devices with ease." I couldn't agree more. Google appears to have reconsidered rumours of it's desire to make a retail play in music and is putting the brakes on music and other areas of digital entertainment, which I'm sure was a sigh of relief for NARM members.
The a2im's acting presdient Don Rose hosted the "Indie Show" skit in the afternoon which was tailored after David Letterman's show. Licensing opportunities in new arenas were discussed amd the humorous approach was quite refreshing. Attendees heard from Bob French, Mix & Burn, Adam Sexton, Groove Mobile and Amaechi Uzoigwe, from World's Fair.
To end the day in style, the Sony/BGM cocktail party was held on a massive 60 foot sailboat moored in the Gaylord's salt water lagoon and was as tropical as you could get without the humidity. (The entire resort is housed under a gigantic glass dome resulting in a theme-park- like atrium atmosphere with no insects and cool air conditioning everywhere you go).
Also noteworthy for NARM's history book, Sprint was onsite mobile-casting some of the nightly performances directly onto its Power Vision network. Loyal fans who couldn't make the show could tune in to a channel on Sprint TV and watch the performance stream live on their cell phones, which is an interesting new broadcast channel and delivery method...
Click HERE to see them on Flickr. I'm still working on summarizing my notes and editing some video footage. Check back soon as I will post more info and media from Days 2-4...
Wednesday, August 02, 2006
If you're not familiar with what some insiders call "the event of the year", InSights & Sounds 06 is a 4-day conference where the industry comes to do business and prepare for the fourth quarter. Jim Donio, NARM president, states "Its mission is to help you meet the future armed with new business partners, critical analysis, fresh ideas and the camaraderie of a shared passion for music." Through multiple panel discussions, presentations and keynotes, valuable insights from the entertainment industry's top leaders are shared with members and attendees. All of this information is designed to give you an overview of where the industry is now, where it's going and where it could be. In addition, there's an eclectic line-up of established and undiscovered world class performing artists. Tonight's performances start at 9:30pm:
- Paolo Nutini, Atlantic Records
- PF Sloan, Hightone Records/Rhino
- Lupe Fiasco, 1st & 15th / Atlantic Records
- Tego Calderon, Jiggiri / Atlantic Records
Today's afternoon action started with a morphed version of Speed Dating from 2-5pm, where one-on-one meeting opportunities were arranged in advance to easily help you discover and develop important business contacts. This year, NARM has extended these unique meetings to last 3 days and participants can use this focused time to get to know potential new trading partners.
One innovative new product I learned about was from Marware. The company has invented a retractable cord wrap and stand for the video iPod called the Sidewinder.Very cool! Also, the well stuffed conference goodie bag had 10 Cd's, 1 cassette, a live double DVD set from Jimmy Buffet, a t-shirt and more...