We released two kick-ass albums:
Davy from Coconut Records - a must-listen / must buy
Floating Down A River - debut from Jason Damato
Coconut Records and Illa J are Top 50 on KCRW specialty chart!
The Pharcyde is Jan 26ths Amazon Mp3 Deal of the Day - Bizarre Ride II for just $1.99
And DashGo Lite continues to inch closer for you do it yourselfers out there.
Rock.
Audio Bee and DashGo are all about the internet. We’re all about social discovery, all about promotional placement and all about new ways to discover great music. But we’re not all about building businesses based entirely on other people’s IP and then complaining about the cost of doing business.
The latest (and most frequent) wolf-caller is Pandora. It seems like every few months they “are about to shut down” because of onerous licensing fees by the evil “music industry.” Well, the “industry” being paid here includes performers, songwriters and copyright holders. Sometimes those are the same people, sometimes several people, but they all had a hand in creating the music that makes hitting play on Pandora worthwhile.
Pandora’s claim is that new licensing fees amount to 70% of their revenues. There are plenty of businesses that operate on a 30% margin. Retail chains can manage that. In fact, even digital music stores manage to make it work - iTunes is profitable independent of the iPod. That is, it is NOT a loss leader. And it pays out roughly 70% of it’s revenue directly to rights-holders.
Meanwhile, the Pandora’s of the world claim that discovery leads to more music sales. Perhaps, but it’s also cannibalistic. The more time, and places, that people listen to Pandora, the less time they have to listen to “purchased” music. With availability now on mobile devices (iPhone), in-home equipment (Squeezebox) and virtually any computer, that’s a lot of time and places where users can consume a steady stream of new and / or familiar music. IP is valuable for it’s own sake (Pandora hasn’t made their music genome project open source), and to expect artists to recoup revenue from merchandise doesn’t necessarily compensate songwriters, or copyright owners who invested in the creation of the music.
About those royalty rate: They will rise to $.0019 in 2010. Let’s do some math: Assume average song length is 3 minutes. In 15 minutes then, a listener would hear 5 songs and cost Pandora $0.0095 in music licensing costs. Not even a penny. Now multiply by a 1000 listeners - and Pandora’s cost is $9.50. If they played 2 ads for 15 seconds every 15 minutes at a $10 CPM, then they’d have $10.50 in operating margin. But Pandora will complain - “we can’t get a $10 CPM.” Why not? Is it because they don’t have a strong sales staff? Because that rate would be cheap for terrestrial radio or television. Is it because they can’t prove the value of those ads to advertisers? If so, that is a grave problem - because if people aren’t buying more music (all signs point to that) and people aren’t buying the advertised product, then Pandora’s not good at promoting anything. Except free, professionally produced content. I’m pretty sure Chrysler would be good at promoting free cars, if only those mean steel-manufacturers would stop charging so much for the raw materials.
Meanwhile, as an indie label, we’ve yet to receive a single statement from SoundExchange, who is tasked with collecting these royalties. Why not? Partially because none of the internet radio stations (aside from traditional broadcasters simulcasting, and satellite radio) actually report the individuals songs they play. So indie artists, the presumed beneficiaries aren’t even being accounted for on equal footing with the superstars that get heavy rotation on other formats that do report playlists.
There is a fundamental problem when all assets are presumed to have zero value if there are no physical goods attached. The reality is that we need sensible IP protection, and sensible prosecution for the digital age. We’re not there yet, but certainly it is fair to ask companies making a business of streaming content to pay the content owners and creators for their role. Or let content owners opt-in. I wonder how long a Pandora with only copyright-free music would last. Maybe it would do great.
(editor’s note - this is an expanded version of a comment on Techcrunch’s piece on Amazon powering MySpace Music’s backend).
With rumors swirling around the upcoming (September?) launch of MySpace’s music service, the real question is, will anyone care? As a digital distributor myself, I have yet to see evidence of high-traffic destinations actually generating sales of music downloads. Consumers seem to have a giant wall between their online entertainment and commerce destinations. A brief history:
Circa 2003/04 - PressPlay rebrands under Napster a formerly “free” consumption service. Today, Napster is the most frequently cited takeover target of digital music services.
Circa 2004 - AOL acquires MusicNow to offer download and subscriptions to the massive userbase of 20-25 MM/month music visitors. Today, Musicnow has been shuttered and Rhapsody powers the minimal revenue AOL receives from music.
Circa 2005 - Yahoo launches YMU, promising to turn traffic firehose and $6.99 price point into huge sea change for subscription business. Today, Yang can’t even afford to maintain the servers managing the DRM licenses. Another fun fact - our Yahoo revenue was the most disappointing of all - at about .00025% of iTunes for our clients.
Circa 2005/6 - MTV launches URGE. Crickets.
Today - contrast the above to retail focused sites launching services: Amazon has grown dramatically in first 9 months. Still a fraction of iTunes, but actually growing. Upstarts like AmieStreet demonstrate a real financial trend, and niche sites like Turntable Lab and Beatport servicing specialty markets with retail focus actually do business.
MySpace has yet to say anything about actual experience differentiators. You I can already stream music for free there, provided the browser doesn’t crash, and you remember to turn off the bands 15 other Reverbnation, Musicane, RockYou and NeverStopsFlashingForNoReason widgets.
A long comment, but final thoughts: with social advertising CPMs at rock bottom prices, there is little guarantee that MySpace is even demonstrating advertising value to companies to adequately cover even streaming costs of that much media.
DashGo’s statistics tracking monitors streams for bands on MySpace, Last.FM and YouTube among others. Once a band reaches a certain threshold - say around 1 million total streams, Last.fm and YouTube traffic tends to outpace MySpace, perhaps demonstrating that MySpace isn’t yet a compelling destination to consume music in the long run.
That’s the skeptic in me. But I hope they find a way to really deliver music to their users in a way that works great and is universally embraced. I hope we don’t see the Rhapsody powered MySpace music store in 15 months, as much as I like Rhapsody. Consumers need good options.
Social networking uber-blog Mashable.com was kind enough to highlight DashGo in their start-up review feature today. You can read about it here: http://mashable.com/2008/07/22/dashgo/
We are always looking for great new people to work with and for. Thanks Mashable for shining the spotlight for a few minutes.
I’ve been working on this one a while. Today it launches - The World of Sid & Marty Krofft on MySpace. Enjoy the memories. Make some new ones for the stuff you forgot.
July 10, 2008, 12:00 AM ET
1970s TV titans Sid and Marty Krofft are setting up shop on MySpaceTV.
All of their boob-tube classics, incuding “H.R. Pufnstuf,” “Land of the Lost” and “The Bugaloos,” will make their exclusive global home on the social-networking platform. The license extends to condensed versions of Krofft-produced TV episodes as well as taped messages from the Kroffts themselves.
Josh Brooks, vp of marketing at MySpace, sees the collaboration as an example of how the site will mine pop-culture nostalgia to build audiences.
“It’s another example of how household names are making MySpace their home on the web and taking control and using the community on MySpace for new content options,” he said.
In addition to the condensed “Kwikies,” which run 3-5 minutes, the Kroffts are also making available highlight clips. MySpace subscribers will also make theme music from the shows available.
The Krofft branded channel can be found at MySpace.com/Krofft.
July 10, 2008, 12:00 AM ET
1970s TV titans Sid and Marty Krofft are setting up shop on MySpaceTV.
All of their boob-tube classics, incuding “H.R. Pufnstuf,” “Land of the Lost” and “The Bugaloos,” will make their exclusive global home on the social-networking platform. The license extends to condensed versions of Krofft-produced TV episodes as well as taped messages from the Kroffts themselves.
Josh Brooks, vp of marketing at MySpace, sees the collaboration as an example of how the site will mine pop-culture nostalgia to build audiences.
“It’s another example of how household names are making MySpace their home on the web and taking control and using the community on MySpace for new content options,” he said.
In addition to the condensed “Kwikies,” which run 3-5 minutes, the Kroffts are also making available highlight clips. MySpace subscribers will also make theme music from the shows available.
The Krofft branded channel can be found at MySpace.com/Krofft.
It’s hard times in the biz. Thankfully, I’m employee #1 at DashGo, and am still able to pay for food and rent. (I still steal my music) Hahaha. In case you’re also in the music scene (”business” is barely even applicable anymore), here are some companies NOT sending a pink slip my way:
To be fair, none of these folks are giant DashGo customers, yet. But maybe if they wanted some sweet data on where their fans live online and which sites generate traffic, they would be.
Check out the Sick Puppies lift during DashGo’s “Pitiful” video distribution campaign:
Robert Scoble style, I’m posting another link to media containing DashGo. I was lucky to join the MyAWOL folks yesterday for a quick discussion on mobile music for their podcast. If you’ve got 30 minutes and need to know the future of mobile music from an indie artist and label perspective you can tune in at: http://myawol.podbean.com/2008/06/19/myawol-music-insider-newstalk-episode-4-mobile-media/
For more info visit DashGo.com or send an email to me at benp (at) dashgo.com
My company, DashGo is focused on creating a dashboard (haha clever name) for content owners to use to distribute content to both digital retailers and social media networks (like MySpace, Imeem, YouTube, etc.). Part of what we do is attempt to track the consumption of that data and provide benchmarks for performance. This is helped and hampered by Web 2.0.
Most web 2-oh coverage is consumer focused, and the semantic web stuff about data portability, open social, open id, intuitive programming is all focused on moving around personal data. My company focuses on the pro-sumer, and the options for them are woefully under-served. By numbers they are small, but by reach, huge. It is difficult to get aggregate pictures of media usage from fans, find out who they are and where they are. MySpace rules music. YouTube rules video. iTunes rules sales. But surely big holes exist. And how does one influence the other? What is the traffic cycle. What blogs are really influential? We can find aggregate numbers, but we can’t compare them.
DashGo is slowly tackling each issue. By collecting profile views, comments, streams we seek to identify growth trends, audience concentrations and overlaps. By adding some sales data, we might be able to map spikes in free consumption to spikes in sales. Or not. What we need is better inter-linking data. That is how we will improve our distribution, our marketing and our revenue. This isn’t only for content owner’s benefit. By providing more details, advertising and sponsorship can be optimized. Popular new media networks like MySpace and YouTube can increase CPM if clients and advertisers can provide statistically significant sales increases by better targeting. It’s not just a mass numbers game. Somebody has to sell something.
So what does DashGo need. We need demographic data. Not in specifics, but in bulk. Who are the consumers? Male? Female? Geographic location? Where did they come to the media from? Direct hit? Link? We know who blogged, but who clicked? Do sales follow? Where did users go next? Is there a correlation?
For bands, that helps us plan tours, pick opening (or closing acts). For video owners - are there product placement opportunities? Are there distinct “trends” in viewership and demos that can create meta-buys for ad agencies across media, network and editorial sites?
All problems to be solved. But it’s an exciting place and an exciting time.
Astute readers, both of you, may know that DashGo is the technology engine powering Audio Bee artists, indie labels like Delicious Vinyl and several others. What DashGo does is provide a single point of distribution for artists and labels to publish content across digital music stores and track consumption across social networking sites. We monitor activity on the top spots, and benchmark performance so we can make better marketing, advertising and release decisions.
We are rolling out support to a few more sites over the next two weeks, and are in a fierce internal discussion about the future best bets for growth. Directions we may go…
1) Analytics + Logistics support for labels and content owners:
a) Nielsen rankings for social media consumption
b) Distribution and Publishing of content to social media networks
c) Distribution of media assets to digital stores, subscription services and ad-supported channels
2) Distribution + Marketing Powerhouse
a) Full-scale digital media distribution and publishing to storefronts and social networks
b) Aggressive royalty collection and rates
c) Integrated marketing solutions to tie together online press, publicity, advertising and sales
3) Advertising Strategy
a) Analytics for brands and sponsors to identify artists that appeal to their target demos
b) Integration into artist content campaigns to optimize online ad buys and campaigns
As digital music fans, artists or afficianados, what are you looking for? Comments are open.
It’s a humbling experience to launch a company. Especially if that company is a website. And you don’t code. You have to trust the vision and ability to communicate a respectable set of requirements to capable designers. I hope we’ve done that for artists with DashGo. We’re looking for people to poke some holes into our dream…inquire within: www.dashgo.com
