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home about/contact 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. Support 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. links music/media/tech: Analog Industries Ars Technica AppleInsider Brad Sucks Blog Broken Record Digital Music News Duke Listens Future of Music Coalition Blog Hypebot LA Times Technology Blog The ListeNerd Medialoper Mediashift MP3 Insider Music Ally Music Machinery Music Think Tank MusicTank The Music Void New Music Strategies Online Fandom Pakman's Blog RAIN Rough Type RoughlyDrafted Swindleeeee TuneTuzer Virtual Economics economics/markets: The Big Picture Core Economics Freakonomics The Long Tail Marginal Revolution The Undercover Economist mp3/music: 17 Dots 3hive Fingertips Shake Your Fist Sounds Like the 80s Unleash the Love archives January 2006 February 2006 March 2006 April 2006 May 2006 June 2006 July 2006 August 2006 September 2006 October 2006 November 2006 December 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 July 2007 August 2007 September 2007 October 2007 November 2007 December 2007 January 2008 February 2008 March 2008 April 2008 May 2008 June 2008 July 2008 August 2008 September 2008 October 2008 November 2008 December 2008 January 2009 February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 January 2010 February 2010 March 2010 April 2010 May 2010 June 2010 July 2010 September 2010 October 2010 November 2010 December 2010 January 2011 February 2011 March 2011 April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 April 2012 May 2012 June 2012 August 2012 October 2012 November 2012 December 2012 January 2013 February 2013 March 2013 June 2013 August 2013 February 2014 March 2014 September 2014 December 2014 March 2015 October 2015 November 2015 December 2015 October 2016 May 2017 |
September 28, 2006 Free Musicby David Harrell Free Music: Indie Labels Are Giving It Away I wrote a post for the Moistworks music blog, inspired by this BBC story about a new report from Jupiter Research. Basically, I wondered if all of the the "iPod owners buy relatively few tracks from iTunes" analyses overlook the total volume of free, label-authorized mp3s files that are now available for new releases. So I took a quick look at a recent CMJ radio airplay chart and found that free, label- or band-authorized mp3s are available for 19 of the top 30 albums (the ones in green):
You can read the full story here. tags: iPod iTunes mp3 link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 22, 2006 Friday Flashback Fun: Kevin Costner Apple Adby David Harrell What was Kevin Costner doing back in 1983? Biking to the office on the weekend (with the family dog), and working all night on an Apple computer: Labels: 1980s, 1983, Apple, Friday Flashback Fun, Kevin Costner link 0 comments e-mail listen to the Layaways on SpotifyFollow @digitalaudio Tweet September 21, 2006 Random Rulesby David Harrell Random Rules Carl Bialik (the Wall Street Journal's "Numbers Guy") on the randomness of the iPod's shuffle setting: The iPod's shuffle feature also has sparked interest from a cadre of random-number experts and enthusiasts such as Mr. Haahr. I spoke to a few of them, including people behind several of the Web's major sources for random numbers, and found no definitive answer -- yet -- about iPod's claim to randomness, though I did learn that any computer algorithm for randomizing information can never be truly random. (An Apple spokesman said the iPod shuffles randomly, but declined to reveal details about its methods.)When on shuffle, my iPod seems to REALLY like Teenage Fanclub, though that's probably explained by the large number of TF tracks on it. More discussion on iPod randomness (or lack of it) in this WSJ Forum. tags: iPod shuffle random numbers link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 20, 2006 A Tough Decisionby David Harrell A Tough Decision As reported by Coolfer and other folks, Yahoo is giving music buyers the choice between mp3 and WMA versions of the new Jesse McCartney album. Yahoo is also providing this handy comparison chart to help you choose the format: I'd love to see how many buyers actually opt for the WMA files... tags: mp3 WMA Jesse McCartney link 1 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet CD Baby Delivers Digital Content To Amazon by David Harrell Just saw in our CD Baby account that our second album was "delivered" on September 19 for digital distribution via Amazon.com. There's no mention of Amazon yet in CD Baby's list of digital distribution partners, but things are obviously moving along with Amazon.com's proposed music subscription service. tags: Amazon.com music subscription link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet Wednesday Odds and Ends by David Harrell Wednesday Odds and Ends Matthew Shaer on music recommendation engines (Last.fm, Pandora, etc.) in Slate: So, let's say a newfangled recommender takes off. What are the implications? First, the large-scale "depackaging" already initiated by the advent of the iPod would be expedited. Bands would spend less time on sequencing since a computer would be combing songs for individual characteristics that have nothing to do with the rest of the record. Musical content would "float" in libraries, waiting to be scooped up by a recommender. Jason Fry writes in the WSJ about another advantage of digital downloads -- anonymity, no one knows what you're buying: Therein lies a rarely discussed part of digital music's appeal. Sure, the Internet has revolutionized the spread of information and all that high-minded stuff, but its combination of reach and anonymity also makes it the greatest enabler of guilty pleasures ever invented. Indulgence is just a click away, and nobody needs to know, except you and some server somewhere. (At least you hope; iTunes and other legal digital-music services promise to guard your privacy.)tags: music recommendation digital downloads link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 19, 2006 More Napsterby David Harrell More Napster Napster shares were up 13% today, trading more than 13X the usual volume. But none of the analysts quoted in this Smart Money piece seem to think much of its prospects. tags: Napster link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet Napster News, Profits from Breakage by David Harrell Napster News, Profits from Breakage Napster is in the news today after announcing it has hired UBS to help evaluate third-party interest and/or strategic alliances. I didn't realize (or maybe I had just forgotten) that Napster (NAPS) is a public company until I did a little research on the firm last week to respond to a comment to this post. Which means that all the details about the firm's finances are available in its public SEC filings. According to its most recent 10K filing, Napster's online subscription service itself generated more than $25 million in gross profits for the fiscal year ending March 31, after royalty payments, bandwidth, hosting, etc. And Napster managed to increase its subscriber base to 606,000 as of March 31, 2006 from 412,000 as of March 31, 2005. But Napster is spending a TON of money to acquire those subscribers ($51.7 million in sales and marketing), and for R&D ($13.1 million) and administrative costs ($20.8 million). All of which adds up to a net loss of nearly $55 million on sales of $94.7 million for the 2006 fiscal year. (Today's press release talks about annual revenues and Napster's strong cash reserves, but doesn't mention how much money the firm is losing each year.) I didn't see any specific stats in the filings regarding subscriber retention/churn. That seems to be a (the?) key factor for any potential profitability for Napster. As long as it has to spend so much to maintain its subscriber base, profitability seems unlikely. There was one very interesting tidbit in the firm's most recent 10Q quarterly filing, though. Those pre-paid cards are turning out to be very profitable because some purchasers never get around to using them: Revenues from prepaid cards and promotions are deferred and then recognized as (i) tracks are downloaded by the end users, (ii) if redeemed for a subscription, over the subscription period or (iii) when Napster has no further obligation to provide services or refund the associated prepayments ("prepaid card breakage"). As of June 30, 2006, we have not had sufficient historical experience to estimate prepaid card breakage rates, so we recognize prepaid card breakage when our obligation to honor the redemption of the prepaid cards or promotions has legally expired. During the first quarter of fiscal 2007, based on the resolution of certain legal restrictions associated with previously sold prepaid cards, we recognized $2.2 million of prepaid card breakage, of which $1.9 million relates to cards that were subject to expiration based on their term prior to 2007 but had other legal restrictions that precluded our recognition of revenue. The remaining $300,000 was related to cards that expired during the first quarter of fiscal 2007.I wonder if such "breakage" might turn out to be a profit center for the other subscription services and online stores. tags: Napster UBS link 1 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 18, 2006 Monday's Wall Street Journalby David Harrell Monday's Wall Street Journal The WSJ on the Rhapsody-specific portable music player: There's no mystery here that what they've done is worth copying and improving on," Eli Harari, chief executive of SanDisk, says of Apple's approach to digital music.And the YouTube revenue-sharing agreement with Warner Music Group: The agreement, to take effect before the end of the year, illustrates YouTube's push to tackle the thorny copyright issues facing it and other sites that allow users to upload video content. YouTube is developing an automated system to digitally identify copyrighted music and video uploaded by its users. It will then give a percentage of revenue from any ads that appear alongside those videos on YouTube's Web site, if their owners have agreements with YouTube and opt for that rather than having the videos removed.tags: Rhapsody SanDisk iPod YouTube link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 15, 2006 What the F**k?by David Harrell What the F**k? The iTunes store is protecting the sensibilities of the masses by listing the new Yo La Tengo album as: "I Am Not Afraid Of You And I Will Beat Your A*s." Yet the Apple folks appear to have no problem with the name of this band. tags: iTunes Yo La Tengo link 3 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet Friday Flashback Fun: 1983 Apple Presentation by David Harrell No, not the one earlier this week. It's 1983 and an unbelievably smug-looking Steve Jobs describes the coming battle between Apple and the evil IBM: Labels: 1980s, 1983, Apple, Friday Flashback Fun, IBM link 0 comments e-mail listen to the Layaways on SpotifyFollow @digitalaudio Tweet September 14, 2006 Long Tail Thursdayby David Harrell Long Tail Thursday Swindleeeee has a good analysis of the Long Tail effect and eMusic (with links to this blog's recent post), along with some thoughts that don't bode well for the idea that peer recommendation is the wave of the future: I suspect that in many respects eMusic is "hit driven" as well, it's just that the "hits" are in the context of particular non-mainstream genres. Certainly from my own perspective I disproportionately download albums from eMusic based on their promotion on the eMusic front page, by the columnists for eMusic Magazine, and in the various "eMusic Dozens" lists. By contrast I rarely use the "so-and-so also likes" recommendations on individual album pages, and have never downloaded anything based on what my supposed "eMusic neighbors" are listening to.And Christopher Carfi recently posted four separate Long Tail pieces at the Social Customer Manifesto. Not specific to online music, but he does include a bit about how he discovered Nina Gordon's cover of Straight Outta Compton: Now, never in a million years would I have gone to Google and done a search on "sultry-voiced chanteuse doing an acoustic cover of an anthem of gangsta rap." Yet, that's exactly what I found...and I love it.related: The Long Tail, the Fat Middle, and Tiny Slices, The Long Tail of eMusic? tags: eMusic The Long Tail digital downloads link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 13, 2006 Wednesday Odds and Endsby David Harrell Wednesday Odds and Ends Just noticed some new "sales" data in our CD Baby account for streaming income from Napster. Some streams are paying out at 0.2 cents a stream (after CD Baby's 9% cut) and others at 2.3 cents. I'm assuming the smaller number is for the lo-fi, ad-supported free streams and the larger payout is for full-bandwidth streams by Napster subscribers. Marc Geelhoed examines the top-selling iTunes classical tracks for Slate: The top 10 best-selling classical "songs" on iTunes show exactly this split between calm and stormy. The list also shows an unhealthy obsession with Andrea Bocelli, the blind Italian tenor whose voice adds entire new dimensions to the word lackluster. While he tried to sing both straight classical and crossover material in the mid-'90s, he now plies a musical river that's lined with lira alone these days. And since he's appeared on American Idol, he's hit the jackpot. Recently, I downloaded all the Bocelli and non-Bocelli tracks and spent an afternoon coming to grips with what really sells.tags: Napster iTunes link 5 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 12, 2006 DRM and File Incompatibility Hit Homeby David Harrell DRM and File Incompatibility Hit Home While I have a professional (and blogging) interest in DRM and file compatibility issues, they really haven't affected me at the personal level. Most of my digital music comes from eMusic in the form of non-DRM mp3 files, the rest from band websites and mp3 blogs. I also rip songs from my own CDs and very occasionally buy a song from iTunes, and all work fine for listening on my iPod. But a large chunk of my iPod listening hours -- generally when I'm walking to and from the train each day -- are devoted to audio books and spoken word tracks. I used to subscribe to Audible.com (which uses iPod-compatible .aa files) and have found some great lectures at WGBH's Forum Network, though I've pretty much made my way through everything I want to hear/read from those sources. So I was thrilled to see a poster last week for the Chicago Public Library, advertising free downloads of audio books from the library's website. After checking out the site, I'm not so excited. Overdrive files are protected Windows Media files and obviously won't play on my iPod. For some books, you're given the right to burn an audio CD of the files, so there is a potential workaround of burning the files to a CD-R and then importing them as mp3s from the disc. The other option is to find software that will break the DRM to allow direct conversion of the Windows files to mp3s. I'm not particularly bothered by any legal or ethical issues here -- I'm simply trying to listen to library files that I'm paying for with my hefty Cook County property taxes on a portable device that I already own. But both options seem somewhat cumbersome and time consuming. My third option is to just buy a player that supports the dreaded Windows format. There are inexpensive models available, which in some ways makes this the most attractive route. I'm just not wild about having to manage and carry another digital device! tags: DRM iPod Windows Media Overdrive link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 11, 2006 The Long Tail of eMusic?by David Harrell The Long Tail of eMusic? We haven't announced anything yet, but my band is considering a -- let's say -- seasonal release before our third album comes out in early 2007. So I spent some last week looking at chart numbers on the eMusic site to try to get a gauge of the popularity of various sub-categories. Specifically, I was trying to determine what percentage of albums are downloaded within the three charting periods. You can use the Browse section to find out how many albums are in the overall catalog (144,896), as well as numbers for each of the 12 main style categories. And the Charts section shows the number of albums in each category that were downloaded during the past day, month, and week. (Based on the sales figures and chart positions of the two albums we have in the eMusic catalog, I'm fairly certain that an individual download from an album counts towards its chart placement.) After half an hour of clicking, I was able to put together the following table (shoot me an e-mail if you'd like a copy of the Excel file): The Long Tail of eMusic -- Percentage of Albums Downloaded
Note: The sum of album numbers for each category exceeds 144,896 because some albums appear in more than one category. Data obtained from emusic.com on Sunday, September 10, 2006, "All of eMusic" numbers are from Monday, September 11, 2006 Overall, more than half of the albums (or at least portions of those albums) in the eMusic catalog were downloaded during the past month. Given the obscurity of many of the artists in the catalog, that's a big percentage. However, it's quite a bit smaller than some of the numbers given in the Long Tail book -- 98% for the Ecast jukebox, 95% for the NetFlix catalog, etc. Those 90+ percentages, however, were generally for a quarter, not a single month. Over a three-month period, I'm assuming the percent-of-catalog numbers for eMusic would be somewhat higher. I don't have the data to assess the slope of the curve for eMusic downloads, but I've often wondered if it's somewhat hit-oriented. That is, high-charting albums might tend to stay that way because they're more prominent in the system. A subscriber looking for something to download is more likely to see the top-ranked albums when looking through the charts or browse pages, resulting a self-perpetuating chart position. Also, I wouldn't read too much into the relative percentage downloads for a particular category. They're not necessarily a good indication of its actual popularity with eMusic subscribers. For example, in the Blues category, tracks from 3,025 albums were downloaded over the past month, resulting in one of the higher percent-of-category numbers (68%). The International category has a much lower percent-of-category number, just 44.49%, but tracks from 11,908 albums were downloaded over the past month, nearly 4X the number of downloaded Blues albums. As for the seasonal project we're considering, the eMusic numbers look good, even considering the above caveat. There are 998 "Holiday" albums in the catalog. Nearly 60% of them have had downloads in the past month. Not bad, given that it's only September. related: The Long Tail, the Fat Middle, and Tiny Slices tags: eMusic The Long Tail digital downloads link 3 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 07, 2006 Variable iTunes Pricingby David Harrell The 99-cent download is still the standard within the US, but as previously noted here, there's a fair amount of variation in the default iTunes price between different countries. Economist Joshua Gans has created his own version of The Economist's Big Mac Index which uses the price of the sandwich in different markets to compare exchange rates and purchasing power. Gans used the price of a single iTunes download to create the following chart, with the Australian dollar as the starting point: In this post, Gans postulates that Apple is engaging in a form of international price discrimination, generally charging more in countries with higher GDP rates, with the major exception of the US. He also writes that "...Apple got its pricing wrong in the US (setting it too low relative to what it would have preferred to do in hindsight)." I disagree. Given that Apple recently held the line against variable per-song pricing -- which would probably result in higher prices for the most-recent hits -- it seems far more likely that Apple is happy to essentially break even on the sales of iTunes downloads. The highly profitable iPod is where the company is making from digital music. It seems that variable international iTunes pricing simply correlates with the variations of the prices of CDs. And, in general, music is cheaper in the US, supposedly because of higher licensing rates and fees in other markets, though that doesn't seem to explain all of the price differences. Regardless, it's a great chart, showing a very wide gap between the cheapest market (Canada) and the most expensive (Japan). related: Varying iTunes Prices for Different Markets, The European Premium for eMusic tags: iTunes iPod digital downloads link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 05, 2006 CD Artwork for Digital Downloads?by David Harrell CD Artwork for Digital Downloads? Saturday's WSJ had a piece on the new Naxos /eMusic/Border's program: On Tuesday, classical label Naxos will unveil a dozen new albums in a line it's calling MPkey. The albums are packaged in CD-sized boxes and will be placed on store shelves at Borders. Inside each box, however, customers will find not a CD but a card with an access code and a booklet of instructions for downloading the album from eMusic, an online music store and Naxos's partner on the series.The article doesn't mention if the boxes will contain liner notes or album artwork, but I'm wondering if this sort of thing might work in reverse: self-released bands and small labels could offer to mail the artwork or CD booklet to anyone who purchased the album in iTunes or eMusic. As a test, I might post the following offer on my band's website and Myspace page: Want the CD booklet to go with your digital downloads? Just forward us your iTunes e-mail receipt or a link to your downloaded albums page in your eMusic profile, along with your mailing address, and we'll send you the complete CD artwork free of charge.This idea, of course, is just a low-tech version of the digital booklets already available for many albums within the iTunes store, as are various premium offers for pre-orders. But those options aren't available to every artist. The above idea could be implemented by just about anyone, to offer printed CD booklets, discounted concert tickets, bonus tracks, links to PDF files of the CD booklet, etc. related: press release for Naxos/eMusic tags: eMusic mp3 digital downloads Naxos link 1 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet September 01, 2006 Viral Frogby David Harrell Viral Frog As my grandpa used to say, "everyone and his brother" had something to say this week about SpiralFrog and its prospects. I thought the Big Picture had the most succinct take on the main issues: There are three questions that come to mind anytime I see a new music site:I don't have much to add to all of this coverage, except to say that having name that rhymes with "viral" is moderately clever. (Though I'm fairly skeptical about the chances of SpiralFrog developing much traction.) tags: SpiralFrog link 0 comments e-mail listen to the Layaways on Spotify Follow @digitalaudio Tweet Friday Flashback Fun: 1983 Musicland Commercial by David Harrell Back in the day, record chains ran TV ads! This YouTube clip is rather low-fi, but still fun -- check out the dancing at the end: Labels: 1980s, 1983, Friday Flashback Fun, record stores link 0 comments e-mail listen to the Layaways on SpotifyFollow @digitalaudio Tweet More Digital Audio Insider: Newer Posts Older Posts |
Subscribe: RSS Feed Add this blog to Del.icio.us, Digg, or Furl. Follow David Harrell on Google+. The Digital Audio Insider Twitter feed: Digital music jobs: Looking to hire? Looking for a job? Check out the digital audio insider job board. Popular Posts A Long Tail Experiment By the Numbers: Using Last.fm Statistics to Quantify Audience Devotion Lala.com Owes Me Sixty Cents An Interview with Jonathan Segel of Camper Van Beethoven Price Elasticity of Demand for McCartney Sony and eMusic: What I Missed The Digital Pricing Conundrum series: Part One Part Two Part Three Part Four THE LAYAWAYS Out Now -- "Maybe Next Year" -- The New Holiday Album: "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. "...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. "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. "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: the layaways website |