Battle Heats Up Among Artists, Labels, & Digital Downloading

Musical artists have banded together to create the Featured Artists’ Coalition in order to demand greater control and ownership over music that’s distributed online and, more importantly, for a larger cut of the revenue pie. While it's easier to determine who gets what when a physical CD is sold through a retailer, things become stickier when you’re looking at individual tune downloads sold through various Websites. It’s like déjà vu with the Hollywood Writer’s Strike, which just took place late last year, and which centred around, among other issues, video content distribution online.

The organization is asking, among other things, that artists always retain ownership of their work, that all agreements are conducted in a “fair manner” (you mean this isn’t the case now?), and that artists must always be informed on how their work will be exploited. Recently, for example, artist Jack White wrote a song for the new James Bond flick, which was then reportedly unbeknownst to him released first in a Coca Cola commercial.

Artists are also asking that copyright be by license, not by assignment, and be limited to 35 years. When it comes to performers that don’t write their own work, these guys are asking that they receive the same rights as the authors themselves.

The artists involved in the Coalition already numbers more than 60, and include some really big name musical artists like Radiohead, The Verve, Craig David, Robbie Williams, and the Kaiser Chiefs.

It was only a matter of time. While we have seen a battle ensue within the music industry ever since digital music downloading has taken over, artists have never really taken a major, unified stand. Music labels have fought it out to create favourable deals with digital downloading companies, and have even taken legal action against illegal, peer-to-peer file sharing sites. But have any of these deals really worked in favour of the artists?

It seems that while everyone involved has slowly begun to warm to the reality that is digital music downloading rather than trying to stop it, another issue has been brewing: payment. A song sells for $0.99 on iTunes versus a full, $20 CD in the store. Who gets what out of this deal? Can we really divide profits from a buck 50 ways in a manner that looks out for the interests of all involved versus a full CD?

It sounds like whatever the current situation is, artists aren’t happy. And while the record labels or digital download sites could easily turn up their noses to the artists and say “too bad”, the reality is that these are the guys actually making the music. Back in the day, artists may have been at the mercy of the guys who could get their music sold, and get their name exposed to the public. It wasn’t so easy to record, create, and sell your own CD: what struggling artist had the means to do that? But today, it’s pretty easy to set up your own digital download Website, or to get your music out to millions with just one click (MySpace, anyone?) So it’ll be interesting to see how this drama unfolds.

Would You Like a Digital Tune with Your Latte?

Starbucks has always had an involvement in the music industry, selling CDs at the cash or even, in some locations I've seen (in the U.S.), equipped with digital music download stations where you can make your own custom CDs. Now, the java-fix supplier is teaming up with iTunes to offer a free Pick of the Week digital download to customers.

Visit any of 700 company-operated Starbucks locations in Ontario or Western Canada on a Tuesday, and the barista will hand you a complimentary download card with your purchase, good for 60 days to snag a music track on iTunes. You can't get any track you want, though. Each week, a particular song will be chosen by the Starbucks Entertainment Team and iTunes, and will include both Canadian and international artists. The promotion begins today, and the first Pick of the Week tune is Constant Knot by City and Colour.

Considering that Starbucks is a daily destination for many, this promotion could prove quite fruitful. Think about it: you'll get four free songs every month, and up to 48 a year! This is, of course, assuming that the store isn't "out of stock" by the time you arrive for your morning hot grande mocha java dark half-decaf no whipped latte. It's also great for artists, since customers will, assuming they download the tune, be exposed to new music they might never have otherwise been introduced to. And iTunes benefits since you'll have to download the iTunes software if you don't already have it; and might end up purchasing other tunes while you're there.

On the flip side, though, one could argue that the cost of that free song is already included in the high price you pay for the coffee. Either way, at least now you're getting something for that extra $0.50 you're forking over per drink. I'd be curious to know how many of the free tunes end up actually being downloaded versus forgotten in the back pocket of business men and trendy teens.

Blu-ray Awareness Picking Up

As more and more consumers in the U.S. are jumping on the HDTV bandwagon (especially in wake of the country's transition to digital TV), the familiarity with Blu-ray is also increasing. The NPD Group reports that awareness in the technology has jumped 10% in the past year, from 35% to 45% of HDTV owners. Despite this, only 6% said they would buy a Blu-ray device in the next 6 months (9% for existing HDTV owners).

"With HDTVs now in approximately 40 million U.S. households, that percentage translates to a pool of almost 4 million potential BD player buyers," said Russ Crupnick, Entertainment Industry Analyst for NPD.

The study reiterates what many others have said over the past few months: that customers are still quite happy with their standard-definition DVD players. However, as the life-cycle of these devices come to an end, it's safe to assume that many of those looking for a replacement will invest in a Blu-ray player rather than another standard DVD product. This will rely, of course, on the hope that, by then, the pricing of both Blu-ray hardware and software comes down to a point that the average consumer deems the technology an "acceptable" alternative.

In the meantime, what can retailers and manufacturers do to help ramp up interest in the category? The first recommendation is obvious: demonstrate the benefits of Blu-ray over standard-def fare in your store via a side-by-side comparison. What would make most sense is to do so with an upconverting standard DVD player rather than an old, $50 model: using the latter will only convince the customer that you think he's an idiot. Any consumer that's really interested in getting the best picture quality will need to be convinced that Blu-ray is better than a higher-end upconverting player.

The second recommendation is to offer incentives. People love free stuff, so to include a Blu-ray movie or two with the purchase of a Blu-ray player, or, in the retailer's case, to offer in-store promotions, could help bring attention toward the product category.

Third, make the products easy to use, and tout those features. Consumers that are interested in high-quality video but aren't exactly technophiles, might worry that a Blu-ray player is too complex for them to understand how to use. Show them that this isn't the case.

Finally, carefully outline what is required to fully enjoy a Blu-ray player (i.e. an HDTV and Blu-ray discs; not to mention a favourable audio system) so that your customer doesn't go home disappointed. More important, explain what he can't use one for (e.g. to play old HD DVDs!)

Over time, Blu-ray can make it to become the Compact Disc (or should I say digital download?) of the video world.

Radiohead Shakes Up Music Industry by Offering Digital Album for Free

British band Radiohead has caused a lot of stir in the music industry as of late by offering its new album In Rainbows as a digital download via its Website for a price that the consumer decides. Yes, you read that right: add to cart, and pick your price!

The music industry has really been put through its paces these past few years: music downloading has become increasingly popular, physical CD sales have dropped, and P2P Websites have led to everything from the unauthorized distribution of music, to lawsuits against college students. Radiohead's move is probably the boldest in a series of tactics I've seen over the past few years in an effort to help re-invent the category: from ad-supported digital download sites, to buy-a-player-and-get-a-free-music-download cross-promotions.

This raises a few questions: for one, do music labels even serve a purpose anymore? Radiohead has been without a label for years, and has obviously acquired a large enough group of fans to be able to do so. Reports indicate that over 1.2 million people purchased the digital album since it became available on October 10, some paying as much as 100 Euros for it! True, Radiohead already has an established fanbase, and that is undoubtedly credited to the music label it worked with previously. But with the Internet, sites like YouTube and MySpace, and other, alternative methods of digital music distribution, are music labels becoming defunct? Or perhaps their position just needs to be re-evaluated within the changing digital music landscape.

Second, can music artists still maintain a profitable business by offering their music online for free, or at a minimal cost? Ask me to choose how much I can pay for something, and I'm likely to pay as little as possible! Supposedly Radiohead's album can be downloaded for as little as 45 pence (or $0.99), which simply covers the credit card handling fee.

Still, many online reports are questioning whether this move was just a marketing ploy to generate sales of the physical In Rainbows CD, which is said to be released in 2008. After all, the tracks arrive to purchaser's PCs at the abysmal quality of just 160 kbps, which leads one to believe that they're only meant to be a "preview". Even so, would you rather fans pay $0.99 for a preview of your album, or nil for moderate-quality digital versions of every tune through a P2P site?

Whatever Radiohead's reasons were for doing what they did, they certainly accomplished one thing: making a stand for music, digital distribution, and a consumer's right to obtain tracks in a way that suits him.

[Photo: When you add the digital download of Radiohead's new album In Rainbows to your basket, you'll find a little hyperlink question mark beside the price. Press it once, and the message "It's Up to You" pops up. Press it once more, and the band reassures that you can pay what you like: "No Really. It's Up to You" reads the pop-up.]