Tag Archive for 'CBS'

Ad-Funded Music: trueAnthem, WE7

“Brought to you by Fruit of the Loom.”

How would you feel about your music being preceded by a brief recorded message from the underwear maker? Are fans just as willing to listen to audio advertising at the start of songs as they are willing to put up with seeing ads? If it means they get the song for free, apparently the answer is yes.

We’ve talked about bands and brands partnering up (like Throw Me The Statue in an Urban Outfitters commercial) and the trend is clearly not slowing down. In this new frontier, it’s becoming imperative to think outside the box and explore new media. Even CBS is doing it: OMG Boobies: Victoria’s Secret on Your Mobile. One of the most prevalent examples of band/brand partnerships that we’re seeing as of late is the ad-supported music model.

trueAnthem, which we first stumbled across because of their early work with Ultraviolet Sound, has been forging ahead and signing more and more bands. Led by Brad Barnes, they are pioneering a “new way for independent and undiscovered artists and bands to get paid while sharing their music with their fans for free – and without having to sign away their lives to a major music label”. Check out their widget (which you can grab and post wherever) – you can download the artists’ album for free. Free, as long as you don’t mind hearing and ad at the start of each song.

Personally, I don’t mind at all. The folks at trueAnthem (probably largely thanks to Emaleigh) have done a great job of pairing the right brand with each band and presenting the sponsor’s messaging in an appropriate way. If you browse through the various bands, you notice brands like Guitar Center, Steve Madden, and Baby Phat… and when you hear that band’s music you can’t help but nod and go “yep… that’s a fit”.

Another interesting example is the recently launched digital music service WE7, which has “all four majors and hundreds of independent labels via The Orchard on board.” Compensation is derived from ad revenues.

What seemed like a distant pipedream not too long ago is certainly becoming the new reality. The music industry simply must accept that the new generation of music consumers – you know, the ones who grew up with the internet and can’t imagine a world without it – expect to get their music for free (one way or another). And they want to consume it in their own way, on their own time, and in their preferred way. So, we might as well make that possible and find ways to still pay the artists. And that is exactly what WE7 has done.

A key ingredient in this equation is obviously appropriate pairing of bands and brands. The sites and services who do this best will likely come out on top. The advertisers need to reach their target demographics. And the music capturing that particular audience might be just the vehicle to get them there.

Is Last.fm the Profit Mechanism DIY Musicians are Looking for?

The $18 billion music industry includes a relative handful of famous acts and tens of millions of independent and semi-professional artists who have very limited opportunities to profit from their art. Because of the Digital Audio Workstation (music software) revolution, more people are recording music than ever before. And through the use of music discovery sites, more people are distributing music than ever before. But, what we haven’t seen from the music discovery model is a way for DIY and unsigned artists to profit from their art online. Last.fm hopes to change that, apparently.

Starting July 1, Last.FM (or rather, CBS, I should say) will have an Artist Royalty Program, where artists get paid whenever their music is streamed from the site. The most important thing is that this program is intended for and marketed to unsigned/DIY artists, as Last.fm already pays royalties to signed acts via SoundExchange. According to Last.Fm: “This is a big day for DIY artists. We’re leveling the playing field by offering them the same opportunities as established bands to make money from their music. The young musician making music in a bedroom studio has the same chance as the latest major label signing to use Last.fm to build an audience and get rewarded.”

Here’s how royalties will be paid:

  • If your track is played on their free radio service you will accrue a 10% of the share of Last.fm’s net revenue from the free radio service.
  • If your track is played on their personalized premium radio service, you will accrue the greater of either 10% of the Share of Last.fm’s Net Revenue from the personalized radio service, or US $0.0005 for each complete transmission on the personalized radio service.
  • If your track is played on their free on-demand service, you will accrue 30% of the Share of Last.fm’s Net Revenue from the on-demand radio service.
  • If your track is played on their premium on-demand service, you will accrue the greater of either 30% of the Share of Last.fm’s Net Revenue from the premium on-demand service, or US $0.005 for each complete transmission on the prepaid or subscription on-demand service.

While the royalties to be paid aren’t much, they’re a good start, demonstrating the larger issue of finding ways for DIYers to profit form their works. Since most people have their music on several (if not all) music discovery sites, hopefully other sites will follow suit (myspace, are you listening?). Imeem implemented a rev share program last year, but it has failed to produce any real revenue for unsigned musicians. With these moves, however, Last.fm has elevated itself past the clutter of music discovery sites, to become a premiere destination for on-demand music discovery. While I personally prefer music recommendation sites like Pandora, after I discover an artist on Pandora, I want to hear more tracks, see more content, and learn more about the artist. That’s where sites like myspace, last.fm, and ilike come in. And while music recommendation sites would be crippled by paying royalties, sites like myspace and last.fm should do so.

Unfortunately, neither Last.Fm nor Imeem is the answer. Rather, they are both part of a solution that will require DIY musicians to aggregate many sources of revenue in order to make some money. But, there are not many of these sources currently available. A lot of DIY musicians have been distributing under Creative Commons (“CC”) for the last 7 years, but nobody has figured out exactly how to monetize CC works. You would think that the collective strength of CC music could be leveraged to make some money for the artists, but this hasn’t happened. The only caveat to this is Magnatune. For this reason, CC has proven to be a valuable alternative to copyright law for reference and informational works, but not for works of art.

So what other profit mechanisms are there for unsigned musicians? There are a ton of iTunes style sites where people can purchase MP3s, but lets face it, most people aren’t buying tracks from us DIY guys. Certainly sites like PumpAudio, YouLicense, and AudioMicro have helped, but the go-to-profit mechanism has yet to be unveiled. Stay tuned!