If you’re a musician, a studio geek or a music fan, you’ve probably been hearing a lot of information — and misinformation — about Spotify, royalty rates, streaming services and the modern musical economy. Input Output hosts Geoff and Eli filter out all the noise in this new three-part series on the compensation and creative rights of musicians and producers. Whether you’re angry at “the man” or just wondering what the big deal is, it’s our humble opinion that the following interview may be among the most edifying and grounded conversations you’ll hear on the subject.
This week’s guest, Jeremy deVine, started the indie label Temporary Residence Records while working at a hardware store in Baltimore. He even went without heat in the dead of one winter just to help scrape together the funds for the first Explosions in the Sky album — a release that would put them, and his new label on the map.
Since then, deVine and Temporary Residence have signed countless popular niche bands like Pinback, Mono and Maserati, and have put out new tracks from Low, Mogwai and Will Oldham. Recently, distressed by his labels’ returns from Spotify (about $30,000 for around 18 million plays) deVine sent a well-considered letter to the bands on his roster, asking for their permission to remove the label’s entire catalog from Spotify. His goal: to compare a year’s returns with Spotify, to one without.
Although deVine is optimistic that on-demand streaming could someday become a valuable resource, he’s unconvinced that time is now. Impressed by deVine’s scientific and unemotional approach to the issues, Geoff and Eli ask Jeremy about his experience with Spotify, and about what the service would have to do to help attract and sustain smaller-scale releases in the future.
Plenty of people have opinions about the business of music, but not many are willing to put their money where their mouths are. Jeremy deVine is one of the few, and his edifying take on the issue comes grounded in real-world numbers. We hope you find this interview as insightful and eye-opening as we did.
In this episode of Input\Output, Geoff and Eli talk to David Lowery, the former frontman for Cracker and Camper Van Beethoven, who is now an economics professor at the University of Georgia.
Last summer, Lowrey wrote an open letter to Emily White, an NPR intern who claimed to have had almost 12,000 songs in her personal library, but to only have paid for just over a dozen albums. This letter generated a firestorm of attention, drawing upwards of a half million visits a day to Lowrey’s artists’-rights blog The Trichordist.
As a label-owner, econ professor, a former “quant” for the financial sector, and a platinum-selling musician with indie cred and a cult following, Lowery brings a singular perspective to the business of music.
In this podcast — the first in a 3-part series where Geoff and Eli talk to experts about copyright and intellectual property in the 21st century — Lowery offers some compelling ideas about how we got where we are, and where the industry is headed next.
Listen to the podcast below, or right click here to download.
ONErpm, a global digital music distribution company and social commerce platform with offices in Brooklyn, has announced the addition of 60 new digital stores to their service, while lowering its one-time distribution fee to $1.99 per store.
The stores ONErpm reaches include Rdio, iTunes, eMusic, iHeartRadio, Google Music, Amazon, and Spotify (view the full list at https://onerpm.com/#/home/stores. With this expansion, ONErpm is positioned to provide an extremely comprehensive DIY distribution platform in the industry at the lowest price.
Artists who sign up with ONErpm can access a variety of download and streaming services such as the aforementioned iTunes, Spotify, and Rdio for $1.99 each, as well as specialized DJ, electronic, and mobile services, and expand their reach geographically in emerging markets such as Russia, China, and Brazil. ONErpm already has an established market presence in Brazil (it’s home country) and Latin America, and claims to be the only DIY service currently offering distribution to these growth markets.
Targeted promotional services/support are also part of the ONErpm package, which uses a shared revenue model to partner with its artists.
EAST VILLAGE, MANHATTAN: What would you do if you were given the magical power to hear any song you could think of, at any moment?
While the economic implications of Spotify to artists are a topic certainly worth of debate, I have to say that the goblin-green platform has given me – and all of us – just such alchemic capabilities. As music professionals, Spotify may or may not be a threat, but as music lovers – which all of us started out as – it’s a blessing undisguised.
In light of my starry-eyed affectation, I recently devised a new game called “Stump the Spotify!” and invited a couple of sonically-inclined friends to take part. The objective: sit down in front of a computer, free associate the song each of us want to hear next, then talk it over as the sweet sounds radiate from the speakers.
The rules for song selection? Look into your soul, let a song appear — and forget about what anyone else thinks! Bonus points for naming a song not yet in Spotify’s catalog, followed by a shot of scotch (optional) to dull the disappointing pain.
Not surprisingly, the entrancing NYC singer-songwriter Will Knox accepted the challenge, hot on the heels of his imaginatively-crafted EP release, Lexicon. So did FLUX Studios’ Account Manager Chris Sipes, who arranged for the inspiring Fabulous production/writing room to serve as our host venue for 60 minutes of Stump the Spotify!
Listening to a plethora of songs though Focal monitors in a beautiful mixing/mastering suite, the environment was an incubator for musical insights of all kinds. Here’s what went down (and feel free to pull up these songs yourself and listen along!):
Song 1: David Weiss selects… “Blackest Eyes” by Porcupine Tree, from the 2002 album In Absentia
David: I really like the power of this song. This is one of those songs that I wish I had written.
Will: I haven’t heard this in a while.
David: The drummer is so good in this song, and it has an interesting song structure. The two choruses happen so fast, they’re so satisfying. Then they’re gone and the chorus doesn’t come back again.
Will: My roommate in college used to rock out to this all the time. He had long hair, and he used to be really into metal. He would just crank it and rock out to it. It’s such a strange song, because it starts out so hard. It could be Pantera. But when this soft vocal comes in, there’s a bit of a balance to it. It almost sounds like the guitarist came up with a riff, and the singer also had a song. They said, “We don’t know what to do with this, let’s put it together!” But it works.
Chris: I never heard this song before. I love it.
Song 2: Chris Sipes selects… “How Do You Want It” by 2pac, from the 1996 album All Eyes on Me
Chris: I like this song, because this is why I started listening to Tupac. I was in a hotel room as a child in Orlando, FL, and saw this video.
Will: I love this, I love Tupac. I’m a big fan of ‘90’s rap, don’t ask me why. It’s the opposite of what I write, so I can get some release from something that’s completely off the spectrum. This is what I listen to on the road. Absolutely, it’s stress release – it allows you to relax.
David: The deep funk and gospel groove of this song is crushing. I never heard it before! I really like it.
Will: Good choice, Chris!
Song 3: Will Knox selects… “Pink Moon” by Nick Drake, from the 1972 album Pink Moon
Will: Nick Drake is from England. He died in the ‘70’s, this was his last record, released in 1972. He only released three records, and this was his last solo album.
Chris: He sounds like Bob Dylan…
Will: He was a different case – a tragic case really. He never saw success when he was alive, and he died of an overdose of sorts, passing away when he was very, very young – way before his time.
He’s a phenomenal writer that’s only been heard on the scale he deserves in the last 10 years or so. A song of his was used for a TV commercial, and people said, “Wow, who is this guy?” He still does have a cult following, like Elliot Smith. He’s wonderful. He’s probably my biggest influence.
David: Hey, I was born in 1972! This is from my year.
Will: The tape machine I bought the other night was made in 1972. A TEAC 1230 reel-to-reel, and the most amazing thing about it is that it still works. It came with a couple of reels of ¼” tape. It sounds beautiful, just so warm – just so not like Pro Tools, if that makes sense. It takes away something harsh, and makes everything sound sweeter.
Song 4: David Weiss selects… “Don’t Stop ‘Till You Get Enough” by Michael Jackson, from the 1979 album Off the Wall
STUMPED! The song is not in Spotify.
Will: It’s not there? How can you have a party without it?!
Song 5: David Weiss selects… “Road to Somewhere” by Goldfrapp, from the 2008 album Seventh Three
Chris: I’ve never heard this. It’s very emotional music. I’m usually less on the introspective side of music – I wouldn’t have heard this if you hadn’t pulled it up, but I like it.
Will: I never listened to Goldfrapp, but I got really into this song. You’ve got to be in the right mood for it. And right now, chilling out with nothing else on my mind but listening to music on a great sound system, drinking whiskey, this works absolutely perfectly. I suppose you listen to music for specific occasions, and right now, that’s exactly what I wanted to hear.
But it’s definitely one of those things that, if you heard it in the wrong environment, you might not pay as much attention and give enough appreciation to it as you should. But that’s the same as with any music, isn’t it?
Song 6: Chris Sipes selects… “Come as you Are” by Nirvana, from the 1991 album Nevermind
Will: I think I remember buying this on my 12th birthday…
Chris: I never liked the Foo Fighters, but I like Nirvana. This reminds me of “Where Did You Sleep Last Night?” off of the (1994) MTV Unplugged album, which is about him burning his ex-girlfriend and burying her. It’s a murderous song. You can hear he’s on the heroin in that song.
Song 7: Will Knox selects… “Get In Line” by Ron Sexsmith, from the 2011 album Long Player Late Bloomer
Will: Do you guys know Ron Sexsmith? He’s one of the great songwriters of our generation.
David: I don’t know anything about Ron Sexsmith.
Will: No one knows anything about Ron Sexsmith! Which is the phenomenal thing about him. He works with some very famous songwriters, like Feist’s song “Brandy Alexander” (on her 2007 album The Reminder).
As a lyricist and melody writer, I just think he’s so solid. All of his songs are very catchy, and so well-crafted. His lyrics are so tasteful, so clever. I think he’s one of those writers that doesn’t get enough credit for what he does.
He’s got quite a cult following. If you say you’re a Ron Sexsmith fan, people will come out of the woodwork and say, “Oh, you like him too?” Hopefully he’ll get the recognition he deserves.
Song 8: David Weiss selects… “Synchronicity 1” by The Police, from the 1983 album Synchronicity
David: The Police were a band, that’s what I love about them.
Chris: That’s one of those amped-up songs – you put that in and it changes the room.
Will: You think, how would they produce that song now? Without that keyboard sound, for example – what would you replace? And would the Police be able to get listened to now?
David: Will, what do you think of the Police as songwriters?
Will: Well, I don’t know if you can really fault Sting for much that he’s done in his songwriting career. He’s a very solid songwriter. Even if you don’t like the Police, something’s gotta be said about the hits that they’ve written.
And Sting has had a lot of hits for a lot of reasons. His voice is so distinctive as well – he’s a high tenor, I guess? He wasn’t afraid to be experimental, which was interesting, because a lot of his songs are quite simple at heart. Lyrically and melodically, they’re basic themes.
Song 9: Chris Sipes selects… “Born to Roll” by Masta Ace Incorporated, from the 1993 album SlaughtaHouse
Chris: I had this one tape-recorded off of a radio station. This is a unique song. Its got some classy beats – “Low Rider”-hypnotic and slamming! With really cool lyrics. Very Snoop-sounding.
Will: Its ‘90′s rap. You can’t go wrong!
Song 10: Will Knox selects… “The Day We Caught the Train” by Ocean Colour Scene, from the 1996 album Moseley Shoals
Will: I was excited to see if some of my favorite Britpop ‘90’s bands were here…Oh yeah, they’ve got it!
David: There’s a very “Day in the Life” feel to this song, at least at the start: A two-songs-in-one setup. Hey, it’s got real drums! Real jamming! Real emotion! And I like the fadeout.
Will: They put me in a time and a place that I remember being very happy. They’re one of those bands that comes from such a specific time in your life – Ocean Colour Scene was the soundtrack to everyone’s life in 1996.
Chris: It’s a nostalgic experience.
Will: Don’t you think that a lot of music is just nostalgia? I listen to a lot of songs now that I listened to at that time.
Song 11: David Weiss selects… “Iris Art” by Echobelly, from the 1993 album Lustra
STUMPED! The song is not in Spotify.
David: I’m bummed. I think that’s a powerful rock song, but also very beautiful at the same time.
Song 12: David Weiss selects… “Babelonia” by School of Seven Bells, from the 2010 album Disconnect from Desire
Will: I like it, but there’s so much space in this song without lyrics. This is beautiful music — it’s blasting, I’m dancing, this is great – but I’m a little lost without lyrics. It’s a time-and-place thing again: I wouldn’t want to put my head in the headphones and listen to this. I’d want to dance to this.
Chris: I would watch this band perform. I’ll bet it would be very interesting – the value is in the performance.
David: I saw them live at Le Poisson Rouge.
Will: That’s the thing: So much music sounds better live, and when you buy the CD, the music transports you to that experience. If you hear a recording you wouldn’t understand it, but you see them live, and you want to convince your friends how good they are live.
Chris: Like you had to be there. But this is cool – it makes me want to go dancing with the people in the band.
Song 12: Chris Sipes selects… “MotownPhilly” by Boyz II Men, from the 1991 album Cooleyhighharmony
Chris: I needed to mix it up! When I got a Sony CD/tape player, this was one of five CDs I got at the same time. It was this, Genesis, Tanya Tucker, the Boomerang soundtrack, and I don’t remember what the other one was…Oh! Def Leppard — Adrenaline.
Will: I had Def Leppard’s (1996 album) Slang.
David: And I bought (1983’s) Pyromania!
Will: Isn’t it funny that between us we spent $30 on Def Leppard, but in this new streaming society with Spotify its free, or its $10 a month for Rdio? So for that, all three of us can listen to all the music we want.
Times have changed. If Silicon Valley explodes tomorrow, the next generation is in trouble. They won’t have access to a whole ton of music.
Chris: Yeah, not to mention the CD covers you hung on your wall.
Will: Can we talk about this album cover? Look at their coats! But I almost don’t have an opinion of this song. It just is what it is! (laughs) It’s so dated, that it just sounds like one of those songs you can have a good time to.
Will: I haven’t stumped Spotify, but I think I can: I have a vinyl collection with this live record by Jimi Hendrix, with Jim Morrison on it. The song is “Woke Up This Morning and Found Myself Dead”. If Spotify has this, I won’t say anything else bad about it. I’ll tip my hat.
The Hendrix original is not there, but Spotify delivers a cover by the band The Bollocks Brothers, from their 1986 album 4 Horsemen of the Apocalypse:
Will: What a name for a band! And this sounds just like “You Can’t Touch This”. They must have sampled it. In the original, Jim Morrison is so high, he’s screaming profanities throughout the entire thing. Not just regular curse words – he goes above and beyond.
This actually makes me feel better, that Spotify didn’t have the Hendrix version. Because it’s on vinyl, and its not on Spotify: It means you can collect vinyl, and you’ll have stuff that Spotify won’t.
– David Weiss
LOWER EAST SIDE, MANHATTAN: People parked in front of their TV’s at 1:00 AM, EST on Saturday, July 30th either got a blast from the past or an exciting new music jolt, depending on their carbon date. The spark? None other than “MTV2’s 120 Minutes with Matt Pinfield.”
Now a monthly series, the show marks the return of NJ-home slice Matt Pinfield to a format that connected an entire generation of listeners to the new music that they craved. Originally airing on MTV from 1986-2000 (and on MTV2 from 2001-2003), “120 Minutes” began as an alternative music lifeline, serving as pre-Internet sound discovery for the likes of Jesus & Mary Chain, New Order, Kate Bush, the Smashing Pumpkins, Bad Religion, and scores more. Nirvana’s debut of the “Smells Like Teen Sprit” video there was just one of the revelations for the millions who made it a point to tune in.
A prince of all media himself, Pinfield is now back in the saddle taping the new “120 Minutes” from Arlene’s Grocery on the LES – just as the plug got pulled on his popular radio morning slot with Leslie Fram on WRXP due to the station’s sale in June. Whatever the format, Pinfield’s exhaustive knowledge of rock music never ceases to entertain and educate, delivered at it is in his ultra-high energy style.
Pinfield connected with SonicScoop to give the lowdown on his return to the screen, the ups and downs of radio, and the buzz behind NYC.
Your debut episode is going to feature some pretty diverse interview subjects: Dave Grohl, Lupe Fiasco, PJ Harvey, Sleigh Bells, Das Racist, Dangermouse, to name a few. That’s a pretty wide spread – what’s the common thread between these artists?
Dave Grohl is one of the humblest men in rock and roll. The guy was a DIY guy — the first album Foo Fighters did was on a cassette. Dave started in Scream, going around the country in a station wagon with promoters threatening to shoot him.
The reality is that it doesn’t just have to be new and unknown, up-and-coming artists. I want people there with a history from “120 Minutes,” or who are plugged into the aesthetic or ethos of “120 Minutes.” The Lupe thing relates to the fact that people listen to music now so much differently than they did when the show was originally airing – checking out dubstep on their iPod. Lupe has a punk band, and he picked my favorite Radiohead video to play on the show.
In the next episode, Big Boi from Outkast will be talking about producing the Modest Mouse record. The rapper Theophilus London talks about Morrissey! It all comes back around. There’s so much going on in there.
I thought Arlene’s Grocery was an interesting choice as the host venue for the new “120 Minutes.”
Arlene’s Grocery had a great look to it. The color and look of the background had a similar aesthetic to the original “120 Minutes.” You had a starkness, and it was focused on the music. I like Arlene’s for that reason, and you can’t deny that The Strokes and a ton of other bands did their residency at Arlene’s.
I think Arlene’s represents the Lower East Side. I’ve hung out in every bar on the LES, but we were sold on Arlene’s when we were scouting places. Although we might change it up sometime in the future — there’s always that possibility.
How did you acquire your encyclopeadic knowledge of music? What’s the trick to maintaining and adding to all that knowledge?
I guess my enthusiasm is very child-like. I’ve never lost that youthful thing. From the time I was three years old, I was fixated on the family turntable. I was sitting in front of a record player rocking to the Four Tops, the Beatles, the Rolling Stones – this was something I was focused on.
I retained the musical information because it’s the thing I’m the most excited about. People would laugh when we were taping “120 Minutes” and say, “He’s been talking for a while. How did he get so much information on that cue card?” But all that would be there was the title of the song! I always wanted to know the lyrics, and the inspiration behind them. I cared about stories, and as I met my inspirations, young and old, they told me things that were amazing. I read books and newspapers — the floor of my bathroom has books, magazines, Mojo Uncut. Or I’m online. I’m always reading about music.
There’s people like you and me that have a passion about exposing people to music. But I’m a music enthusiast, not a music idealist. I don’t want to keep my knowledge of music in my back pocket – I want to share that experience I have when music takes me into a passionate place, elevates my mood, makes me feel OK because I’m lonely that day, or makes me feel like I’m in love. That’s how I look at music. I just enjoy it and I’m moved by it.
Have you been using Spotify?
I think Spotify is cool. There’s so many great Websites out there right now. If you have a passion like we have, then any tool you can use to become more aware of the artist you love, or go a little deeper – that’s one of the beautiful things about the Internet.
You talked comprehensively about the June sale of WRXP by Emmis Communications to Randy Michaels and GTCR in a recent “Hollywood Reporter” article. Why, specifically, do you think NYC has a problem keeping a rock radio station going? Isn’t this like LA not having an NFL franchise?
I’ll say this only once: The problem had nothing to do with the format or the music. It had to do with financial issues at the top of the company (Emmis).
There’s an incredible misconception that rock can’t work in NYC. That’s complete bullshit. We sold out five Christmas shows, bringing bands like Spoon, Arcade Fire, Kings of Leon onstage. We were doing a lot of great things and our fans were really receptive. It had nothing to do with what rock could do in NYC. NYC radio at the moment is really lacking, and I think it would be ridiculous for someone to not pick up the torch and run with it.
But there’s so many politics about how people own stations, and how they look at their market share. Rock’s surely not down for the count, but the situation of the radio station being sold was all above our heads. There was nothing that we could have done as a staff for ratings, or whatever, that could have stopped that sale.
I had a great three year run with Emmis. I loved the opportunity, and that they believed in me and the brand of me. But when a company gets acquired, it doesn’t matter what the business is – it could be a shovel-making company – it’s going to change the dynamic.
Finally, where do you sees the NYC music industry headed as a whole. Is this still the place to be involved in music?
NYC is still the greatest city in the world. It always will be. It doesn’t matter the genre, beyond NYC and into the tri-state area, it’s still the place to be. People move here for a reason: There’s an energy about being a band in NYC that’s unmatched anywhere.
Even as things get gentrified or change, you’ll still find more excitement in an NYC area show than anywhere on the planet. And I know that because I’ve hung out everywhere. Artist for artist, venue for venue, it’s stronger here, and there’s a business to support it. It’s a great, proactive area. It’s the city of artists.
New episodes of “MTV2’s 120 Minutes with Matt Pinfield” will air the last Saturday of every month at 1 AM ET/ 10pm PT and will be available online at 120.MTV2.com.
– David Weiss
NYC-based The Harry Fox Agency, Inc. (HFA) has entered into a publishing licensing, administration and management agreement with the digital music service Spotify.
Under the agreement, HFA will clear mechanical publishing rights for Spotify, licensing certain rights in millions of musical works from thousands of publishers. Spotify will utilize HFA’s end-to-end publishing licensing, reporting, and royalty services to support their launch in the U.S.
HFA currently has more than 46,000 affiliated publishers.
Spotify, the streaming music service that’s been hugely popular in Europe, has finally launched stateside, today.
Free access is right now by invitation only — though I signed up via Klout — but Spotify Premium and Unlimited subscriptions are available starting at $4.99/month.
For some broad intel on the service, its U.S. competition and implications to artists and labels, read Ben Sisario’s piece today in the New York Times. Spotify’s main U.S. headquarters are right here in NYC.
Grooveshark‘s been my go-to for streaming, though I’m still very much an iTunes listener. Excited to dig into Spotify!
DUMBO, BROOKLYN: We are programmed to receive – and do it digitally. But before we can get all receptive, understanding digital music distribution is a must for pros of every stripe.
Originally founded in San Francisco in 2003 by Matt Laszuk and Bryn Boughton before the pair relocated to NYC in 2006, IRIS Distribution has a grasp on hitting the gap. Launching at roughly the same time as the Apple iTunes Store, IRIS was in the right place at the right time. Today, IRIS distributes to around 400 storefronts that operate online (iTunes, Amazon MP3, Emusic, Spotify) or via mobile (Verizon, Orange, Telus), servicing these retailers with about 250,000 songs worldwide to these retailers.
That’s good, because today digital distribution of music covers every internet-connected country in the world, either by web, mobile, or both. IRIS’ slice is part of a global digital music market worth $4.6 billion dollars in 2010, drawn from a pool of over 13 million songs.
A DJ, Brown University-certified mathematician, and constant combinator of music and technology, Laszuk’s big ideas for distribution came together while he was at Encirq, then a start-up company focused on bringing demographically targeted advertising to web applications. He met Boughton during a stint as a label manager, and IRIS was born. The rest, as they say, is mystery, but Laszuk, President of IRIS, does his best here to demystify the crucial world of digital music distribution.
Why is it important for today’s artists/producers/engineers/music pros to understand the digital distribution end of the business? What do you think are the common misperceptions they have about it, and how could they help their careers by understanding it better?
Music is hard work, and most of what an artist, producer, or engineer does is hands-on. Selling music, however, can happen 24/7 without constant attention. Once your marketing, publicity, and tour strategy is in place and the music is in distribution you can begin pulling income even when you’re not in the studio.
Good point. So how did you first get interested in digital music distribution?
I was swept up with the techno/rave movement on the East Coast in the early ’90s when I first started college. I loved the music and the spectacle, but also was taken by the DIY attitude and the feeling that I was witnessing the genesis of a new music scene.
I spent free time at college DJing and promoting techno around New England. After college I started my career in software development, working on web application projects moving data from point A to point B and then back again.
Once dotcom 1.0 popped I took a long look at the recording industry and saw that much of what I’d learned from software on the web wasn’t present in music retail or distribution. After that it was just a matter of applying that DIY ethic to digital music distribution to help create a forward-looking music market that independent labels could participate in.
You make it sound so easy. What would you say the digital music distribution landscape was like in 2003 when you and Bryn Boughton founded IRIS?
Prior to 2003 there was a handful of digital retailers, and for various reasons none was compelling enough to be a real market-maker. iPod was still very new, bandwidth was slow, and the biggest news in music was how important big box retailers had become to music sales.
Then, in April 2003 the iTunes Music Store launched, and for the first time everyone cared about the digital music market.
Yes, that qualified as mega! Now, in 2011, what core components of that landscape remain in place? Just as importantly, how has that landscape changed/shfted/evolved?
Distribution is more important than ever. There are more than 400 digital music retailers worldwide, and even more “storefronts” that consumers see online and through mobile and other devices. It’s still very much an ecosystem of artist, label, distributor, retailer, and consumer, in that order. But we’re seeing momentum behind artists who want to disconnect from labels to manage their careers and everything around themselves differently, including distribution.
Can you explain the “signal path” whereby a digital distributor moves its product? Where do you get your content, and from there how do you move it on physically/digitally to retailers?
90% of our deals are with record labels, with about 10% direct with artists. Once we’re setup with the label or artist we bring in their audio, artwork, and metadata, load it into our systems, process to the different retail specifications, and then push out via the Internet or hard disk. Once it’s been pushed we start sending emails and pick up the phone to let the music editors at each retailer know what’s coming and why it’s important.
In addition to music we also have a growing catalog of spoken word content, audio books, comedy, and sound effects. That stuff is fun to work with because it’s merchandised and marketed in a very different way than music; and in many cases the copyright issues are much smaller, allowing us to be more flexible with how we sell content.
On the biz tip, can you briefly explain how a distributor like IRIS earns revenue? Are there many different various revenue streams for a digital distributor, and how do you actually get paid for moving inventory?
Our distribution business works on a percentage of gross revenue earned from retail – when the music we’re distributing sells, everyone makes money.
Four years ago we launched BlinkerActive, our marketing and special projects business, to allow ourselves to work with technology that was too young or too different to funnel into the distribution business. Podcasts are a perfect example of a technology that has a lot of consumer and label interest but doesn’t necessarily have a central system or monetizable transaction like traditional retail. BlinkerActive can extract the value of the medium by using podcasts to market an artist or album outside the digital retail network.
That sounds like a good tool to have at your disposal. Of everything we just talked about, what have been the biggest areas of growth, and in contrast which seem to be on the decline?
Our distribution business is still the core of the company — it’s the infrastructure that so many labels and artists depend on for their digital sales income. Last year we saw around 20% growth in our distribution business.
That said, the digital distribution market looks to be plateauing in the US. That concerns us because it’s still a relatively small market, and, most importantly, digital revenue is not replacing the lost revenue from the global decline in CD sales.
Technology got us here, and I fully expect technology will provide the opportunity to grow the music industry another order of magnitude. It’s very likely, though, that we’ll see a permanent fragmentation of revenue sources and business models that make up that future music market.
You have competition, so what separates one digital distributor from another? How does IRIS gain an advantage in the marketplace?
A lot of distribution is commoditized: The retail contracts, the distribution technology, and the retail reporting are all necessary components for any digital distributor. What we’ve been good at doing over the last eight years has been marketing the hell out of the music we distribute. We’ve got a team of creative and dynamic thinkers who understand music and technology and aren’t afraid to blend the two in new ways to make music pop.
You said to me in an earlier conversation that with distribution, and digital retail in general, the biggest issue is “what’s next”. Can you expand on what you mean by that?
That sounds dire, and I didn’t mean it that way. By “what’s next” I mean we’re all anxiously waiting for another opportunity to get music in front of a music lover. Activity in the mobile space, from new mobile music retailers and from mobile music applications, has been an exciting development for the industry. Home networks and the various devices in the home like Internet-connected TVs and Internet-connected gaming systems are another opportunity for the music industry. And on top of all the new technology is a number of yet-to-be seen business models and consumption models. It’s all very exciting stuff!
Show us how this all comes together — what’s a specific project IRIS has worked on lately that shows the challenges and rewards of what a distributor can accomplish?
A good example of a typical record release with IRIS is the reissue of Arab Strap’s first two albums. We created buzz around the reissues by promoting custom podcasts and videos on social networks and in online communities ahead of the releases at digital retail.
I guess it sounds really simple, and maybe it is. Like so many great things it’s about distilling an idea down to the basic components and then running with it.
Some shining day I’ll be able to do just that. Are there other music business innovators that are providing you with inspiration right now?
I’m still the boy who likes to take the thing apart to see how it works. I’m a technologist and love to play with things, regardless of whether or not I’ll be able to put them back together! Music is similar – I love experimentation and wonkiness. But then I like rhythm on top of that, and, if I’m lucky, I’ll get a good bit of bass too.
As for innovators, there are so many, but the truth is that most of the innovation in music business is coming from outside music these days. It’s really a testament to the power of music itself – people who aren’t musicians keep trying to work in music because they’ve always wanted to be part of the sound, the scene, and give back to those who make the music they love. I’m exactly that way. I guess the underlying theme is experimentation?
The HQ of this company is a California-to-NYC transplant. Why work out of Gotham when you could have stayed in the sunshine?
We started the business in San Francisco at a time that it could really only be started in that part of the world. From San Francisco to San Jose you have an unparalleled market of inventors — with dotcom 1.0 and everything surrounding it it’s no surprise that the digital music market was made there. But the Bay Area isn’t known for its media dominance. If you want that you go to New York.
For us that media is no longer just music. Its advertising, blogging, social networking, magazines, web sites, online video, and every other media that can be or will be digital. 10 years ago New York wasn’t the center of technological invention, but it’s always been the center of media exploitation. It’s no surprise either. Media is about reaching people with information, and New York has a long history as the biggest market. It’s scrappy and you can bet there’s a person here who knows how to turn just about anything into a living.
In 2011 you have a very different technology scene in New York. Many of the people who cut their teeth in the Bay Area last decade moved away from the Bay, and New York always attracts driven people. So today the technology scene here is significant, the funding is here, and New York is innovating on the edge.
– David Weiss
IRIS Distribution (NYC) Chosen by Fox Mobile Group to Distribute Hit Tracks for Mad Moley, Anna Blue
The deal includes Mad Moley’s “Holy Crap, I Love You” and Anna Blue’s “So Alone,” which have already been hits in several international markets. IRIS will make the tracks available in retail channels including iTunes, Amazon, eMusic, Rhapsody, Spotify, and Rdio.
Anna Blue and Mad Moley are original characters created from the Fox Mobile Group studios.
IRIS Distribution was founded in 2003, is based in NYC and San Francisco, and is a leading independent digital distribution company which delivers a select roster of quality independent music to digital outlets around the world. The company distributes music from 700 prominent independent labels and content providers including BYO Records, Chemikal Underground, CMH, Duckdown, Environ, Fox Mobile, kranky, k records, Metropolis, Minus, Moodgadget , Palmetto, and Projekt Records to 400+ online retailers including major outlets such as Amazon, eMusic, Google, iTunes, Microsoft Zune, Napster, Rdio, Rhapsody, Spotify, and Sprint Mobile.
In addition, IRIS Distribution also operates a wholly-owned branded entertainment and music marketing agency, BlinkerActive, specializing in music and brand integration. BlinkerActive clients have included BYO Records, Chandon Winery, Chemikal Underground, Electrolux, EMI, Mint Records, Ninja Tune, Scion A/V, Surfdog Records, and more.
BATTERY PARK CITY, MANHATTAN – Last week, hundreds of music industry executives and entrepreneurs braved the snow and converged on the Museum of Jewish Heritage for the 10th annual Digital Music Forum: East.
The conference began with a research presentation by Russ Crupnick of The NPD Group. Crupnick started the conference with a bang, delivering the headline-driving statistic that online radio services such as Pandora boost digital download sales by 41 percent, while unlimited streaming services such as Spotify actually drive down sales by 13 percent.
The statistic was seen as bad news for the many who see Spotify as the industry’s golden boy, yet others responded that unlimited streaming services, by their nature, are not meant to drive record sales – that the advertising and subscription revenues replace record sales.
The State of the Digital Union panel only furthered Crupnick’s wariness of unlimited streaming services, with Kevin Bacon of AWAL (Artists Without a Label) saying that for his artists, Spotify is “nothing at all,” seeing little revenue boost from the unlimited streaming site and others like it.
Barry Massarsky of Massarsky Consulting delivered more bleak statistics on the second day of the conference, sharing his findings that the price point for commercial radio licenses fell 20 percent in 2009, and predicting a 5 percent decrease in licensing revenue for 2010. On a more optimistic note, he predicted a 7 percent increase in licensing revenue for 2011 with the economy expected to turn around at that time.
The Digital Copyright Debate was one of the most anticipated panels of the conference, featuring LimeWire CEO George Searle and A2IM (American Association of Independent Music) President Rich Bengloff. Tensions were high between the two, as before the conference began Bengloff had issued a letter to A2IM’s members letting them know that he would not be attending the post-conference reception hosted by LimeWire “as it could appear to be seen as an endorsement of LimeWire by A2IM.”
After much frenetic back and forth between the panelists on the topic of illegal file sharing, moderator Jon Potter had the final word, saying that file sharing services such as LimeWire “offer users a Swiss army knife – some people are using it to cut steak and others are stabbing creators.”
Other topics discussed included lack of compensation for master rights holders on terrestrial radio, which Bengloff called “a tragedy,” as well as what the government’s role should be in illegal file sharing – Searle said that attempting to legislate against file sharers is less of a cat and mouse game and more of a “turtle and mouse game,” that technology evolves too fast for legislation to be passed regulating its use.
The afternoon saw such panels as Global Music Marketing, Music in the Cloud, Social Networks & Music among others, as well as a keynote address from Rio Caraeff of Vevo. Caraeff used his keynote address to announce Vevo’s plans to stream live events through the Vevo platform.
One theme that emerged from the afternoon’s panels was the need to not only use social media, but to be conscious of how they should be properly used. A common consensus was that artists need to be personally involved with the fans through these new technologies; Jenna LoMonaco of Glassnote went so far as to say that they will not sign an artist unless they are personally connecting with their fans through social networks.
On deciding which social media to use, Mark Ghuneim, CEO of Wiredset advised “If it doesn’t make money, save money, or build your band, then don’t do it.”