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Digital Audio Insider is David Harrell's blog about the economics of music and other digital content. I write from the perspective of a musican who has self-released four albums with the indie rock band the Layaways.

My personal website has links to my LinkedIn and Google+ pages and you can send e-mail to david [at] thelayaways [dot] com.

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If you enjoy this site, please consider downloading a Layaways track or album from iTunes, Amazon MP3, Bandcamp, or eMusic. CDs are available from CD Baby and Amazon.

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March 04, 2014

More Thoughts on iTunes Radio and Music Sales
by David Harrell
After an e-mail discussion with my bandmate Porter about last week's iTunes Radio post, I'm wondering if there are two factors in play here:

1. It's certainly possible that iTunes Radio listeners are buying more music than they would have otherwise purchased.

2. But music purchasers might be a shrinking group. That is, as more people use Spotify and other "on demand" streaming services, the total number of music fans who feel the need to own any specific song is getting smaller.

Hence, iTunes Radio could be increasing music purchases among its listeners, but any such gains aren't enough to offset the overall trend of decreasing download sales. (This is all conjecture on my part, but it reconciles the intuitive idea that iTunes Radio listeners would be more likely to purchase downloads with the continued decline in music download sales since its introduction.)

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February 28, 2014

Does iTunes Radio Increase Music Sales?
by David Harrell
Back in 2009, my band the Layaways released a digital-only holiday album. While we sell some tracks from the album every year, 2013 was, by far, our best season ever for download sales. I was stumped -- we always get some holiday airplay on Internet stations like Soma FM and the occasional spin of a few tracks on terrestrial college radio stations, but there was no evidence of increased airplay in 2013 and we hadn't made any additional promotional efforts for the album.

The mystery was solved when someone tweeted that he had discovered the record via iTunes Radio. Our version of "O Christmas Tree" had been added to the "Rockin' Holiday" station, where it was receiving regular spins:

example playlist from iTunes Radio's Rockin' Holiday station

It seems very likely that the large increase in sales of our song (relative to previous years) was a direct result of the iTunes Radio spins it received. The big question, of course, is does this single anecdotal example represent an overall trend -- is iTunes Radio increasing the sales of music downloads?

It seems intuitive that ease of purchase -- you're already in iTunes and you can click to buy right there, as opposed to being directed from another website or interface to iTunes or Amazon MP3 -- might boost sales. Yet that doesn't appear to be the case. As Glenn Peoples reported in Billboard last year, the introduction of iTunes Radio did nothing to halt a year-long trend of declining download sales in 2013.

In our case, iTunes Radio was a net positive, because more than 100,000 listeners heard a song they probably wouldn't have otherwise known about, and a small percentage of those listeners purchased the track. But as noted in Billboard, a recent study by Music Forecasting makes the case that listeners are using iTunes Radio for a "lean-back" passive listening experience, one that is unlikely to result in large increases in music purchases. (The full PDF of the report is here.)

In addition to the download sales, we also received a payout from Apple for each spin of the song. As reported last year by the Future of Music Coalition and Digital Music News, Apple opted to make a direct payment to artists/labels for digital performance royalties instead of taking the compulsory path and making payments to SoundExchange.

For 103,874 spins of "O Christmas Tree" on iTunes Radio, we received $114.99 (before the deduction for CD Baby's commission). That translates to a little more than 0.11 cents per play. That's slightly less than the "$0.0013 per song plus 15% of net advertising revenue for the first year" spelled out by Apple's contract with indie labels, though I'm uncertain if that rate also includes payments Apple makes to music publishers. After I receive my BMI statement for the quarter, I can calculate the total payment we received for each iTunes Radio play.

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August 26, 2013

Some Advice for Writers...
by David Harrell
...that probably goes for musicians as well:
"Also get a job; eating is a good habit and you will never make enough of a living as a writer to support a family. Be honest with yourself about the size of your gift. Expect no money but be diligent about sending pieces out for publication. All money is gravy."
-- Brian Doyle, via the Dish.

One downside of digital music stores, which provided instant worldwide music distribution to anyone who wanted it, is that they also introduced a new level of expectations for musicians. Before digital music, a local band might sell some tapes or CDs at gigs or a friendly record store, but there was zero expectation that music sales would provide any real income. However, having your music available to the entire world creates the hope that people around the world are going to buy it. Yet the overwhelming majority of self-released musicians (as well as most musicians on major labels!) simply aren't going to sell a lot of music.

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June 17, 2013

I'm In with the In Crowd
by David Harrell
A presentation by Alan B. Krueger, Chairman of the Council of Economic Advisers for the White House, highlights an experiment that confirms something I've long believed to be true -- that listener perceptions of the popularity of a song have a huge influence on its actual/subsequent popularity:
Now let's see what happened when the download counts were flipped, so that the new participants thought the least popular song was actually the most popular. As you can see, the download count for the least popular song grew much more quickly when it was artificially placed at the top of the list. And the download count for the most popular song grew much more slowly when it was artificially placed at the bottom of the list.

In the alternative world that began with the true rankings reversed, the least popular song did surprisingly well, and, in fact, held onto its artificially bestowed top ranking. The most popular song rose in the rankings, so fundamental quality did have some effect. But, overall -- across all 48 songs -- the final ranking from the experiment that began with the reversed popularity ordering bore absolutely no relationship to the final ranking from the experiment that began with the true ordering. This demonstrates that the belief that a song is popular has a profound effect on its popularity, even if it wasn't truly popular to start with.
More good stuff here.

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March 05, 2013

Tuesday Odds and Ends: A YouTube Music Streaming Service
by David Harrell
YouTube is already the largest music-streaming platform, but it looks like it will launch a dedicated Spotify-style streaming service.

Felix Salmon on Amanda Palmer's TED Talk and content economics:
There are basically three ways to go about this. You can put up a paywall; you can ask for donations; or you can sell non-digital things to your digital audience.

On its face, Palmer's talk is about the second strategy, but in fact it's about all three. (And yes, I’m the "financial blogger" referred to in the talk.) For instance, when it comes to online publishing, why are paywalls more common than tip jars, despite the fact that they're much more difficult to implement? Palmer does a great job of walking us through the answer to that question: there's something shameful, there's a whiff of the panhandler, in asking strangers for money.
Nicholas Carr highlights another study showing that students prefer paper textbooks to digital versions, despite the seeming advantages of the latter format (portability, interactivity, etc.):
However, researchers often overlook students' personal beliefs about how they learn and study most effectively. Their resistance to replacing paper textbooks with e-textbooks together with an ongoing desire to be able to print electronic content suggests that paper-based information serves students' needs better in the educational context.
And if you missed it, this Music Ally story from last month rounds up a slew of reports on artist payments from Spotify (including ones from this blog).

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February 11, 2013

Monday Odds and Ends
by David Harrell
Amazon has received a patent for a method of selling "used" digital files. More coverage from Wired and a statement from ReDigi. (The firm had previously indicated that it would roll out a marketplace for pre-owned digital books.)

Is Apple testing an IOS-powered watch?

The Businessweek story on Doug Morris.

And the Gizmodo story on how Monster Cable, the lawsuit-happy purveyor of expensive audio and video cables, fared poorly in its business relationship with Beats Audio.

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February 08, 2013

Friday Flashback Fun: The Cars Perform "Let's Go" in 1979
by David Harrell
The Cars perform one of my all-time favorite songs during a 1979 appearance on the Midnight Special:


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February 06, 2013

Wednesday Odds and Ends
by David Harrell
My Bloody Valentine is selling its new album (its first in TWENTY TWO years) direct to fans. The digital version is album-only, with a fixed price ($16) for your choice of three file format choices:
16bit 44.1 K WAV - This is CD quality with no digital compression. i.e. it's exactly like a CD. This format may not be compatible with some devices.
320kbps MP3 - This format is compatible with most devices.
24bit 96 K WAV - This format may not be compatible with some devices.
Meanwhile Prince is hawking his latest singles for 88 cents a track.

Audiogalaxy (recently acquired by Dropbox) pulled the plug on its music streaming app.

In the WSJ, discovering music via fitness classes -- Vanilla Ice attempts to cash in:
Zumba fans have already helped revive the career of Rob VanWinkle -- better known as the rapper Vanilla Ice. Last year, Mr. VanWinkle rerecorded his 1990s hit "Ice Ice Baby" with a Latin flavor and Zumba-friendly tempo, then starred in a video featuring Zumba choreography. Released last August, the single has sold nearly 17,000 copies.
And the Atlantic has the audio of the oldest playable recording, from 1878. The rhythmic noises at the beginning (the foil was stored folded for more than a century) make it sound vaguely techno.

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    THE LAYAWAYS

    Out Now -- "Maybe Next Year" -- The New Holiday Album:

    <a href="http://thelayaways.bandcamp.com/album/maybe-next-year">Joy To The World by The Layaways</a>

    "This is a sweet treat, deliciously musical without being overbaked for mass media consumption." -- Hyperbolium

    "Perfect listening to accompany whatever holiday preparations you may be making today." -- Bag of Songs


    O Christmas Tree - free mp3 lyrics and song details
    Away In A Manger - free mp3

    Download from eMusic, iTunes, Amazon MP3, or Bandcamp. Listen to free streams at Last.fm.



    album cover art from The Space Between

    <a href="http://thelayaways.bandcamp.com/album/the-space-between">Keep It To Yourself by The Layaways</a>

    "...about as melodic and hooky as indie pop can get." -- Absolute Powerpop

    "Their laid-back, '60s era sounds are absolutely delightening." -- 3hive

    "...melodic, garage-influenced shoegaze." -- RCRD LBL

    Where The Conversation Ends - free mp3
    January - free mp3
    Keep It To Yourself - free mp3

    Download from eMusic, iTunes, Amazon MP3, or CD Baby, stream it at Last.fm or Napster.



    album cover art from We've Been Lost

    <a href="http://thelayaways.bandcamp.com/album/weve-been-lost">Silence by The Layaways</a>

    "The Layaways make fine indie pop. Hushed vocals interweave with understated buzzing guitars. The whole LP is a revelation from the start." -- Lost Music

    "Catchy Guided by Voices-like rockers who lay it on sweetly and sincerely, just like Lionel Richie." -- WRUV Radio

    Silence - free mp3 lyrics and song details
    The Long Night - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.



    album cover art from More Than Happy

    "These are songs that you want to take home with you, curl up with, hold them close -- and pray that they are still with you when you wake up." -- The Big Takeover

    Let Me In - free mp3
    Ocean Blue - free mp3

    Download from eMusic, Amazon MP3, or iTunes, stream it at Last.fm, Napster, or Rhapsody.

    More Layaways downloads:

    download the Layaways at eMusic download the Layaways at iTunes

    the layaways website