Bob Lefsetz's views...

You might not be aware of it, but there's this act Chamillionaire that's got
a huge hit record, "Ridin'". I'm sure Doug Morris and the rest of the execs
at Universal are thrilled, since all their marketing efforts have paid off.
Airplay on MTV and radio have generated sales of 939,316 CDs to date. And
that newfangled iTunes, and its low market share brethren? Wow, the track's
burning up the chart there too. Last week it sold a whopping 48,903
downloads! Sure, a six percent drop from the previous week, but all
together a total of 569,749 legal downloads have been sold. Wow, isn't this
newfangled Internet great? We're replacing our physical sales with files,
the transition is going smoothly, finally, we've got things under control.



Until you look at the BigChampagne TopSwaps chart. Last week, 3,449,536
people had "Ridin'" on their hard drives. To quote agents and managers,
shit, look at all that money left on the table!



But Chamillionaire ain't even at the top of the swaps chart. That place is
held by Bubba Sparxx, with "Ms. New Booty". Let's see, Virgin has sold
191,507 Sparxx albums to date. Well, the CD was only released in April, but
still, that number is not too good. You ain't gonna buy a new Aston Martin
with those sales. And "Ms. New Booty" is falling down the digital tracks
chart... It's off eleven percent, with 17,155 downloads this week, with a
whopping cume of 56,737. Wait, there's also another version, that's got a
cume of 28,477. Shit, this record's kind of a stiff. But, now get this,
5,517,560 people had "Ms. New Booty" on their hard drives last week (well
the week ending 5/29/06 anyway).



What the fuck is going on here. Edgar Bronfman, Jr. says digital sales are
ramping up, the problem is solved. Mitch Bainwol just announced that P2P
has been contained. Yet, there appear to be ten illegal downloads for every
legal one. Is the issue really Apple's DRM or is it monetizing P2P, where
the action is?



Number 2 at BigChampagne is Dem Franchize Boyz, with "Lean Wit It, Rock Wit
It". That record's just about over on the digital tracks chart. There are
two versions, with a whopping combined total sales of 410,969. But
4,573,365 people had the song on their hard drives! Hell, they didn't take
it because they didn't want it! Shouldn't they pay something for this
privilege?



Let's go down all the way to number 10 on the BigChampagne chart. Which is
"So What", by the Field Mob, featuring Ciara. It's slipping on the legal
downloads chart. A grand total of 56,917 tracks have been sold. But
2,344,420 people have got the track on their hard drives. Now if you're
really paying attention, you know that the Field Mob record doesn't even
come out til next week. Isn't this just like the movie studios protecting
their distribution windows? For what reason are the labels holding sales
back when people want it immediately upon hearing it, or of it! The story
isn't about digital tracks' cannibalization of album sales, it's about a
vast ignoring and possibly ignorance of the real marketplace, P2P.



What the BigChampagne chart (available to the hoi polloi on page 20 of the
"Listen To This" supplement of the 6/16/06 issue of "Entertainment Weekly")
demonstrates is incredible demand for recorded music. A vast overwhelming
demand. Which instead of trying to fill, the RIAA is futilely trying to
stop! We've heard for years that sales are going down, giving the
impression that nobody wants this stuff, yet people are clamoring for it!
Is the answer to try and decimate this demand?



Sure, maybe people don't want to pay a buck a track, but they certainly want
these songs. And since reproduction costs are nil, shouldn't a price point
be established where they can acquire them? What if everybody had a music
subscription they paid a few bucks a month for? Imagine the quantity of
material that would be consumed. Sure, each track wouldn't generate much,
but if that scares you, I guess you think that BMG Songs should go for a
song. Whereas the few pennies business we know as music publishing is
booming.



Actually, we have this system in place today. It's just that no one is
paying for these subscriptions. And the number trading is artificially low,
because a great number who would partake have been scared off by the RIAA,
fearful of being arrested, or afraid of being unable to sleep at night for
committing a moral violation.



Well, it's clear that labels are committing a moral violation. In the name
of saving their businesses, they're preventing artists signed to them from
being heard by the most people possible, and garnering live and ancillary
revenue. The labels are limiting the marketplace for reasons I still can't
fathom.



Don't listen to the mainstream press b.s. These are the same people who
lined up behind Bush and his fabricated reasons for invading Iraq. It's
clear that the RIAA position is inane and insane. Unfortunately, nobody in
the mainstream media will ask the tough questions and then flog the true
answers. It's just all b.s. all the time. You wonder why the public still
shares music? Because the brethren of the fat cats oil profiteering are
spewing rationales that don't make sense. And if you aren't willing to
disobey a law that you believe is outrageous and wrong, you're not an
American. As for changing that law via the system...yeah, right. The same
system that enacted a heinous bankruptcy law and is looking to eviscerate
net neutrality. People don't believe their representatives work for them,
they're convinced they work for the corporations. Hell, isn't it funny that
the California congresspeople are always the first to stand up for the
content industries, slapping their constituents down, since Disney, et al,
fund their campaigns?



You can't argue with facts. The acquisition of music has changed forever.
iTunes is a sideshow. How about dealing with what's really happening and
getting more music to more people at a lower aliquot price.



--

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Bob has got it totally wrong.
The reason millions have tracks on their hard drives is because they are free.

Most P2P are simply given ten seconds (if that) and then stored in the library.

99% would never dream of actually buying these tracks - let alone listening to them.

We're not losing sales; we are gaining potential exposure.

That's how the internet should be regarded and utilised.

As a promotional tool.

His point are not lost sales (of CDs or downloads at ITMS-prices).

He argues against the believe of the majors that they will get the "problem" of p2p under control.

Instead of charging cd-like prices for downloads, the way forward is a flat-flee for p2p-users.

JK2006 wrote:
Bob has got it totally wrong.
The reason millions have tracks on their hard drives is because they are free.

Most P2P are simply given ten seconds (if that) and then stored in the library.

99% would never dream of actually buying these tracks - let alone listening to them.

We're not losing sales; we are gaining potential exposure.

That's how the internet should be regarded and utilised.

As a promotional tool.
A train of thought maintains that P2P is just an asynchronous radio. I'd say we are losing sales, but certainly nothing like the figures being bandied about. However, the P2P networks are already heavily infiltrated by the majors, using thme to pump interest and send traffic to their sites.

Just as a few people used to tape radio and not buy singles through the 60's and 70's (Home Taping Is Killing Music - bollocks then; bollocks now) so I think the dinosaurs have got it all wrong again.
P2P is not a problem; it's an asset.
If utilised right, it can help you sell music.

DJones wrote:
His point are not lost sales (of CDs or downloads at ITMS-prices).

He argues against the believe of the majors that they will get the "problem" of p2p under control.

Instead of charging cd-like prices for downloads, the way forward is a flat-flee for p2p-users.
Trouble is, the CD-like prices are not really enough to keep the business running sufficiently, as far as I can see.

I would resist going below the current prices, as you are sapping all perceived value out of the music. As I often say, how much is a packet of crisps these days? And how many packets of crisps have changed your life, been the soundtrack of your first kiss, first baby or whatever?

Now having said that, I signed up recently to eMusic and like it a lot. Apart from the actual choice of music, they have very good editorial staff that make cool selections. And when the risk factor is taken out, I can see that I'm exploring more music. So although the price-per-download is lowered, the punter (me) is constantly being reminded of the value of music as an experience. The UK's Wippit also has a subscription service, by the way.

How many packets of crisps have changed your life, been the soundtrack of your first kiss, first baby or whatever?

Actually the girl who I first kissed held me so tight she popped the crisps in my jacket pocket and the terrible advice about crisp packets being as effective as condoms led to my first child... but hey, I know where you're coming from!

Music has become disposable, why, I'm not sure. Possibly the constant plugging of throw away pop songs, all those "here today gone tommorrow" artists? Possibly that we get bored easily, who knows. But when you look at it as disposable does the price bracket fit?

It's not about losing sales people it's about losing money and when you think about it P2P is a global market that exists outside the territorial maps of legal downloads and the rather silly licensing red tape that some labels have created.

For my 2 pennys i have to say that if i owned any of the majors i would order a complete rethink as far as p2p is concerned.

You can make money from p2p.

I repeat you can MAKE money from p2p and free music.

Subscription is NOT the answer though as it is a seperate licensing channel.

Suing all and sundry is definitely not the answer.

p2p is a licensing channel similar to radio and if the industry had any common sense they would look at ways to monetize it.

FFS, it didnt take me too long to work out a way to do this and it won't affect sales ? Because the people that do buy music actually enjoy buying music and a percentage of the free loaders go on to buy music.

p2p is an early adopter market, they fuel the hype and eventually lead to sales.

As a matter of fact i don't care anymore what happens to the dinosaurs content. I would never invest in their companies and they are failing their artists big time. Tick tock, tick tock before they become extinct.

How do you monetise p2p. It is so simple and that's why the dinosaurs cannot see it.

For those who are interested here are a few of suggestions:

1. Release a p2p/net version FIRST. Before pluggigng it to radio, before anything else. Put the track on your artist website, then encourage people to download it. Nothing new here BUT there is a difference. see point 2

2. Release it in a format that will automatically link back or open a special page on the artist website. Using flash this is easy, either:

Use a very good streaming server and stream it, (not my recommended way) or

create a flash soundtrack version with automatic links to your website.

This cannot be done with mp3 so mp3 is a NO NO. With WMA format it is possibel and you should issue a licence that opens up artist website each time the track is played. www.vidlock.com can do this for you for FREE.

3. On artist website generate some CPM adverts as well as sell back catalogue, hard copies, books, posters gosh any hard goods you can think of.
Simple.

4. p2p releases with DRM can be shared because each play will open up your artist website (NOTE - ARTIST website) but cannot be burned on CD, for that get the Itunes versions which should have a higher bitrate as well.

Most p2p filesharers are YOU and ME. They buy music as well as 'pirate' it for free. Why ? Because it's a chicken and egg. You only buy what you connect with emotionally. You only connect with it emotionally when you constantly play it YOURSELF. We will all put up with minor inconveniences if we know the artist is benefitting from our file sharing activities and the vast majority will not go out of their way to get an mp3 version for the sake of circumventing the artist website link.

Now the old guard will disagree with me here but i will say this. There is far too much power and emphasis given to radio. We seem to believe that only radio breaks hits. NOT SO. I'm old enough to remember that when there were alternative outlets such as clubs, there were chart hits before radio hits. Now we have a marketing channel content creators can be in charge of. It's called the internet. Connect direct with fans, build up demand, forget the charts for the moment, that can come later if you really need a chart hit. But monetise the whole process so that you generate revenue for your artists at all levels.

No such thing as a free lunch.

You MUST MONETISE YOUR MARKETING.

If you are an artist interested in this whole proces then email me and we can discuss this further. Seriously if you have a great record and follow this system not only will you get lots of fans quickly. You will make money quickly and recoup your recording costs. Now once you have a p2p hit, you can licence the single to the dinosaurs for the full mtv treatment, so that you both can make money from the CD:UK market i.e the physical and mainstream and oh dont forget, you ensure that your legal p2p version stays in your control.