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The Future of the Music Business
Local News:
February '04
- Silver & Bull Company is in search for qualified talents for their upcoming Philippine-American Festival at the oceanfront. For more information, go to: http://www.SilverandBull.com.
- Blackbird Pond will start shooting on Saturday, Feb 21 between 3-7pm. at the Regent University Library Auditorium for the song, "Brown Bag."
- Ricky Byrum will be auditioning for mtv, vh1, tv and movie folks, labels etc in ORLANDO FL. March 26- 28
- Subject to Change has begun work at Windmark Studios.
- Blackbird Pond is recording a new CD, due out in March.
- Sharif is in the studio, putting the finishing touches on their third album.
- Past Out has recorded and released their first 3-song demo, named "The Two Dollar Demo."
- Art Of Destruction is currently taking a break from the club scene to start concentrating on preparing the next full-length CD release.
- Brad Street Band will be in the studio this month to begin recording an upcoming album. The CD will hopefully be out by the end of March and will be available at shows and on the website. This month the band also welcomes its newest member: guitarist/vocalist Shawn Parker. Shawn teaches guitar at Alpha Music.
World News:
February '04
- World News coming
soon... very busy here....
Music Business: The Future of the
Music Business: General Trends
- -CD prices will drop to $5 (and less)
- -Mechanical Royalties and Performance Royalties will be integrated, and revenue sharing schemes will replace today's fee schedules
- -Record stores will no longer focus on selling music
- -(Traditional) Radio will become irrelevant
- -Music is going back to its roots by becoming a service (again), not a product
- -Music companies will be utilities
- -Performing right organizations (PROs) as we know them will vanish
- -The lifetime of copyright will be decreased to somewhere between 5 and 25 years
- -The global dominance of the 'Western Pop Music Monopoly' will come to an end
- -Niche markets become powerful microcosms and will eventually overtake
the macro markets
1) It's not about 'Online' or 'Offline', and it's not about the Internet. The Net is no longer a big deal in its own right, and new technologies that utilize the Internet (and most of them do) are simply being integrated into the workflow. This happened in the travel business and in the banking industry, and it will happen in the music business. Technology has always created larger, more vibrant markets and the consumer has always benefited from it - partly because of the control migrating from sellers to buyers (does that worry you?) Thus, the debate about the Internet wreaking havoc on the music business is outmoded; rather, we are simply talking about technology running its course, just like when amplification, the piano roll, and radio were invented.
2) It's no longer just a Music Business. The still prevailing concept that music products (and music companies) are created and marketed somewhat separately from visual products will cease to exist within 3-5 years. All products will be multimedia products, most of them will have interactivity features, and all of them will be interconnected, and companies will strive to maximize their earnings by putting their content, their people and their market position to work in multiple business segments. The music industry is not autonomous from other media businesses, and it will be even less so going forward. New technologies allow effortless bundling of audio content with visual, multimedia or interactive products. Music companies will no longer just sell music because powerful synergy's in the marketplace can be explored, and new types of products require new structures.
3) Music is not a product but a SERVICE! Music became a product with the invention of recording (records, tapes and CDs) and the explosive development of an industry that figured out how to sell the bottle that makes more money than just selling the wine. Before music was fixated on some plastic thing, it was simply a service, too, and it will be a service again. Intangible and inseparable from its creator. And once music is more fluid (again) and as ubiquitous as electricity, new revenues will flow. Think of a record label / music publisher as a 'music utility company'.
4) Emotional Currencies are crucial. The value of any product is directly proportional to the depth of the emotional connection that the prospective buyer / user / participant / fan can make with it - this is particularly true for music. A meaningful, direct connection from the artist to the consumer is crucial for his / her commercial success. Thus the artist must cultivate a BRAND that represents his uniqueness and effectively communicates his values to his audience. New technologies will offer unprecedented opportunities in this regard, and if they can indeed achieve a higher level of emotional connectivity, revenues will soar. This is sometimes referred to as the 'dream society' syndrome.
5) Ubiquity: music will be everywhere, and music will be contained in just about everything that used to be 'Images ' Only', from online advertising to interactive slideshows to automobile software to digital cameras to advertising in magazines (!) - audiovisual use of music will soar and B2B licensing income will become a major cash cow.
6) The complete, unobtrusive and effortless integration of digital technologies in people's every day lives is imminent and will be a simple fact in under 10 years. Today's cumbersome devices will be completely intuitive and more reliable than your TV, and will reach a similar market penetration rate in less than 10% of the time. If this sounds somewhat 'Orwellian', keep in mind that only a technology that realizes human desires and respects the human factor will flourish, anything else will die quickly.
7) Some so called 'lesser-developed' nations will leap entire steps in the consumption of media, for example, straight from cassette tapes to DVD's. Consumption of niche media products in countries such as India and China will dwarf anything ever experienced in the U.S. or Europe. This will also result in the end of the Western 'Pop' Music Monopoly in the mass media. Finally, people's listening habits in Prague, Singapore or Mumbai will no longer be determined by a highly paid executive on Madison Avenue.
8) Drastic increases in people's discretionary time, due to the changes in work paradigms, and the rise of lifelong learning, will lead to both a higher output of products from musicians, writers, composers and artists in general, as well as to a higher demand on 'anything-anytime' media; but with a drastic downward trend on prices for products that are not an established brand yet. Niche markets will proliferate and the bandwidth of content offerings will grow exponentially.
9) Because potent technologies are everywhere, people will matter even more. After all, the purpose of good technology is to be a 'slave' to the user, not the reverse. Consumers will attach solid value to having access to people they can identify with; again, emotional experiences are what the consumer will strive and pay for.
10) New revenues streams in the music business will not deplete existing income, but there may be periods of downturns because the 'next thing' is not quite ready yet. Digital instruments will not replace acoustic instruments, 'virtual' media will not replace physical media, online communities will not replace real communities, and distance learning will not replace schools and universities. But: the pie gets larger, faster, and previously disguisable shortcomings (AKA: doing it 'the good old way') are no longer negligible.
Statutory Royalty Rates
For the period January 1, 2004 to December 31, 2005 the statutory mechanical royalty rate is as follows:
8.5 Cents
for songs 5 minutes or less
- or -
1.65 Cents per minute or fraction thereof
for all songs over 5 minutes.*
* For example:
5:01 to 6:00 = $.093 (6 X $.0165 = $0.099)
6:01 to 7:00 = $.1085 (7 X $.0165 = $0.1155)
7:01 to 8:00 = $.124 (8 X $.0165 = $0.132)
For the period January 1, 2002 to December 31, 2003 the statutory mechanical
royalty rate is as follows:
8.00 Cents
for songs 5 minutes or less
- or -
1.55 Cents per minute or fraction thereof
for all songs over 5 minutes.*
* For example:
5:01 to 6:00 = $.093 (6 X $.0155 = $.093)
6:01 to 7:00 = $.1085 (7 X $.0155 = $.1085)
7:01 to 8:00 = $.124 (8 X $.0155 = $.124)
Beginning January 1, 2006:
9.1 cents or 1.75 cents per minute of playing time or fraction thereof,
whichever is greater
* For example:
5:01 to 6:00 = $.093 (6 X $.0175 = $0.105)
6:01 to 7:00 = $.1085 (7 X $.0175 = $0.1225)
7:01 to 8:00 = $.124 (8 X $.0175 = $0.14)
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