ON WIDGETS
There are two sides to music widgets. On one hand, a widget enables an artist to sell directly to the consumer from any website in which the simple bit of HTML code can be dropped. The other side is the free widget, like the kinds found at social networking sites and music blogs. Free widgets allow people to compare likes and dislikes, discover new music and trumpet favorites to friends. Some people think widgets are the saviors of the record industry. Sales are going to explode, they say, because these widgets can be placed anywhere.
I doubt it.
Based on my own observations and conversations with people, I doubt widgets are going to drive the types of sales numbers people are expecting. For promotion and generating awareness, widgets will fare much better. Free streaming is a perfect widget function. Tour dates, news and user recommendations are fine widget fare. But actual sales, that kind that requires the buyer to enter credit card information? Don't hold your breath.
People don't go to MySpace pages, for example, to buy things. MySpace is all about free. Social networking pages are all about free. It's going to be tough to get much B2C music commerce there. Exhibit #1 is CD Baby's sales through its partnership with Snocap. Now, on paper the CD Baby-Snocap partnership looked like a gold mine. Independent artists connect with their fans through their MySpace pages. In theory, a widget in a high-traffic location such as a MySpace page is going to result in a good amount of sales. The artist-to-fan connection was immediate and easy. Well, that was theory.
STAY AT HOME MUSICIAN
A reader asked for some suggestions on tools and practices "for someone steadfastly NOT going to do live gigs" who wants to ignore the typical advice to give away MP3s and play lots of gigs. The good thing is there is no shortage of online tools for the stay-at-home musician, and it's something I was planning on writing about.
There is no shortage of new companies that offer services to independent musicians. In fact, the number of options may surprise you. Musicians should keep in mind two things. First, some of these companies may not be around in a few years. Second, the stay-at-home musician will be responsible for the legwork. These sites offer only the tools for online sales and promotion. Artists will need to find listeners and build a following using their own websites and/or social networking pages (MySpace, Facebook). Each company has different payouts (they're pretty similar) and different fine print, so do your homework.
Here are a few of the many companies:
A few weeks ago I took a look at Speakerheart, a new company that is an offshoot of PassAlong Networks. Speakerheart combines digital distribution services with online sales tools and does it all with an elegant, easy-to-understand interface. The 'Shelves' tool is Speakerheart's widget/storefront that can be placed on websites, MySpace pages, etc.
Nimbit offers distribution to major download stores and a customizable widget for your website or social networking page. Indie911 offers the Hooka to artists. Their Hooka is a widget that enables sales as well as hooka-to-hooka online chat. The company also offers digital distribution.
Here are two that lack distribution. Musicane is another that allows users to create a sale page or embed a widget (the company calls it a "viral media store"). INDISTR allows artists to create a page and sell through its site.
For distribution, stay-at-home musicians have TuneCore as the best option get their music to the main online stores and services.
CD Baby brings together physical and digital. The site acts as an online consignment store. Artists send their CDs to CD Baby and a unique artist page is created and hosted by CD Baby. The company also acts as a digital distributor to all the main players (digital tracks are taken from the artist's CD, so this is an option only if an artist wants to get CDs made).
For promotion, Garagaband.com is an option. It is a community-based site for listeners who seek new music. People rate the music they hear and Garageband lists the top-rated songs and artists.
Radio stations and podcasters give top-rated artists a good deal of exposure...though not all genres are going to work here.
AmieStreet is open to independent musicians and differentiates itself by using demand-side dynamic pricing to sell its music. Keep an eye on this one. Some major indies have signed up, and the company counts Amazon.com as one of its investors.
Finally, Snocap is still an option for a sales widget but the company is in a state of flux. It was recently acquired by imeem.com.
MORE EXCERPTS
EXCERPT 1
http://ca.news.yahoo.com/s/capress/080304/entertainment/cdn_music_week
I would hate to be a young band today, battling," says Allen, who admits he measures success by securing arena-selling tours.
"They'll make a living. If that's your goal, to make a living, then good for you. But that ain't my goal. ...
"If somebody had a video camera (at a concert) we used to go out there, take the video camera off him and smash it," he notes.
"Now you can sit there and everybody's got a mobile phone and they're taping the show and this and that and we just let it go now. The biggest thing I think now is content, content, content. It used to be: 'No mystique, big mistake.' I have to try to embrace these carriers and get to a point where I'm not going to freak anymore if the music's out there and I didn't get paid for it. ...
Michael Buble's selling five million records in this era. He probably would have been selling 15 million if it was in the '70s and '80s, in the heyday. My style hasn't changed much but my ability to adjust to the new technology and understand it is difficult and I'm really learning all the time."
Critics say only superstar bands with massive followings have enough resources to go independent. Others say that many people aren't willing to pay up, as had been hoped for.
But with huge industry disruptions like this one, few people can see the ending from here. Perhaps that's why it's scary for the companies and business models that are left behind, and why they'd rather keep the status quo.
Innovators like Nine Inch Nails are paving the way for new media business models that may bypass the middleman while making sure artists and fans are happy.
I have faith that most fans will want to pay for quality content they really love, especially if it supports their favorite artists. I also believe this is just the beginning of the evolution of the media industry, and it will take time to sort itself out.
For investors, the dichotomy of fear and innovation we're seeing is an illustration of Joseph Schumpeter's economic concept of creative destruction. Investors should avoid being on the "fear" side of that equation, and watch for opportunities to be on the "innovation" side because that's the future.
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