Turning Analog Dollars Into Digital Pennies By Khem Na'khi

The Music Fan
The Challenge
Requiem For a Record Store

"As the viability of record stores have dwindled over the years, I can’t help but feel that our importance to the community has dwindled also. We’ve received an enormous amount of love from people since we announced the closing but it’s been often accompanied by a hushed confession that music just doesn’t play as big of a role in their lives anymore. They don’t have the time for it.  It’s sad, really." Rich Menning

With the decline of record sales, the music industry is in dismay. Digital downloads are the preference for today’s generation. Whether legal or illegal, the ease of accessing a ubiquitous stream of music is only a mouse click away. How does this affect music industry? Ask the record labels who scramble to repair the demolished infrastructure that once housed their framework for success. Ask the starving artists who depend heavily on touring and merchandise to make a living. And last, but not least, ask the record stores who are liquidating their inventory and closing their doors. Out of the three sectors, the record stores are affected the most by the paradigm shift in the music industry from analog to digital. From major retail stores such as Virgin Megastores and Tower Records to independent stores, owners aren’t able to compete with the iGeneration’s iTunes, imeem or iLike. As technology advances and consumers demands become more and more self-centered, experiences in the physical world become more and more obsolete. I was speaking with a friend a month ago about this scenario, and I came to the conclusion that any business selling products or providing a service offline need to create an experience for the consumer and engage them to compete with companies online. However, as I mentioned in my post, The Future of the Atlanta Music Industry, music fans are the support factors. Regardless of the deeply rooted narcissism that plagues us digital natives, we should still engage in offline activities. The record store, whether major or independent, should still play an integral part of our lives in how we explore, discover and purchase new music.  


The Opportunity
SlicethePie: Unleash Your Inner Major Label Executive

"Music Fans take on the A&R role, earning money reviewing tracks, spotting new talent and ensuring the best Artists get put forward for financing." – SlicethePie Site

Most services or apps related to music are usually geared towards expanding the platform of the artist or label. What about the music fan? Yes, we have sites such as Last.fm and imeem, but what about the fans who really want to engage and be a part of the creative process? Introducing, SlicethePie - a financing platform for the music industry that enables new and established artists to raise money directly from music fans and investors. This idea covers all spectrums of the music industry from music fans, artists and investors (labels). However, focusing on the music fans, this platform allows them to directly invest in the Artists in return for exclusive Artist access, a copy of the completed album, their name on the album sleeve and a decent share in the financial returns from album and single sales.  The future seems promising for music fans who want to contribute more than just being considered a consumer who purchases an album. If you want to give your two cents about an artist and their career and earn digital pennies in the process, SlicethePie is a start. Support the music!

The Music Artist
The Challenge
Illegal Downloading: An Artist’s Perspective

“Will you let me and my bands come live in your house and feed us meals for free when we can no longer survive because our product no longer has any value?” – Randy Nichols

As we transition into the digital age, the growing pains become more unbearable to some. Illegal downloading has been at the forefront of many debates as the main reason the music industry is in shambles. Even through reports by many researchers such as Felix Oberholzer-Gee and Koleman Strumpf have proven that illegal downloading doesn’t affect CD sales as the music industry claims, many still carry the notion that it does. Is this an excuse being used by many in the industry who cannot accept change and will do anything in their power to prevent it? Organizations such as the RIAA and record execs are quick to put artists at the forefront of the debate, speaking of their misfortunes and gaining much sympathy from the public. I reported at the beginning of 2008, that Amazon.com reported a 119% increase in CD and digital sales due to the acquisition of Last.fm by CBS. This is further proof that the record industry should explore and embrace the digital age instead of complaining solely about how the shift is effecting them. 

The Opportunity
Topspin Upgrades Direct to Fan Platform 

“Topspin is a media technology company dedicated to developing leading-edge marketing software and services that help artists and their partners build businesses and brands. We help artists manage their catalogs, connect with fans, and generate demand for music.” – Topspin Site

One of my expectations for music artist is to build stronger relationships with their fans. There are several platforms that allow you to connect with fans providing tools such as widgets, newsletters and analytics to track your buzz across the web. One such platform is Topspin. There mission is to provide artists the tools they need to build successful businesses.  Mastering the art of online marketing can be a dreadful task. Having the necessary resources and tools to target your niche market and remain connected to them at all times would be a life saver. Topspin provides three channels for marketing: viral, target and direct. Included in the package are customizable widgets that give the artists the ability to publish, update and sell content across the net. If that wasn’t enough, Topspin also provides services that allow artists to bundle content such as pictures, videos, etc, merchandise and has a feature that will allow the artist to pay their fans for marketing. Where do you sign up? Well, Topspin has finally made the transition from beta stage; however, their staff is selective about the artists they work with. If you are one of the lucky artist or manager who is accepted, Topspin has partnered with Berklee, the online continuing education division of Berklee College of Music, to offer online music courses to teach the effective use of the Topspin platform. Enrollment for the course will open in July 2009 and classes will begin in September. 


The Music Label
The Challenge
The Downsides of Streaming Services

“the bottom line is labels need more revenue than less, and pushing consumers toward lower-revenue models may harm the record industry's chances for a soft landing.” - Glen

In part two of this essay, I mentioned Amazon.com reporting a 119% increase in CD and digital sales due to streaming services such as Last.fm. Once again, anti-piracy combatants are placing blame on music fans for the decline of record sales. Looking past Felix Oberholzer-Gee’s and Koleman Strumpf’s research on how illegal downloading doesn’t affect CD sales, let us analyze the film and gaming industry. There’s no discriminating when it comes to illegal downloading and file sharing. Anything from ebooks, audio books, movies, games and computer applications can be downloaded and shared on the internet. With the film and gaming industry, even though they are heavily affected by file sharing their profits are still soaring. Why? First and foremost, they allow the consumers to preview before they purchase. Can you rent music at Blockbuster or Netflix? Secondly, they continue to add value to the experience they are providing. If the film industry followed the same route as the record industry, we would still purchase movies on VHS. If the gaming industry followed the same route as the record industry, we would still purchase Nintendo cartridges. My question to the record industry; what is wrong with allowing the fans to listen before they purchase? Are you afraid that they will realize that the quality of music has declined significantly as you claim sales have? I think they’ve already come to that realization. And I can attest to that as a die hard music fan.

The Opportunity
Why the Labels Love Play Anywhere

“The new service puts personal music and video collections onto the “cloud” and enables subscribers access and play across multiple devices including mobile, PC and in-car regardless of DRM and formats.” – Hypbot Site

As Gerd Leonhard, author and media futurist, would say, “Music Like Water is the new ecosystem”.  Water flows freely any and everywhere. You can turn on your faucet and receive water or you can purchase water from the store. Will music ever be as free as water, with the option of purchasing sound in a concealed package? Well, the question holds true because illegal downloads would be considered free music and sound in a concealed package would be considered a music CD. Gerd has been talking about a subscription based model for music since 2004, where ISP’s (Internet Service Providers) would add a small fee to your internet bill for unlimited access to music. Although this may take some time to bring into fruition, we’re beginning to see the beginning stages of this music utopia. Play Anywhere is a subscription based service, who supply their service to device manufacturers, telecoms companies and ISPs who can then offer it to their user base either as part of their package or as an extra. Their system is setup to where any song you listen to, whether purchased from iTunes, ripped from a CD, or downloaded from an illegal BitTorent site, will be tracked – even if you’re offline. This information will be tracked by their system to determine how much money would be distributed to the right’s holders. The only concern that music fans may have with this model is their privacy.