Interviewing... SellABand

I talked about [1] SellABand [2] in the past, but I never covered it as I wanted to on this blog. So, I decided to interview Pim Betist from SellABand and leave you with the result...

For those who do not know, SellABand is a one-year-old web music service that can be considered a "Record Label 2.0". Read the begining of the interview to know more about it. Oh, and they are looking to Ruby coders so if you might be interested you should read this until the end!

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Hi there, and thanks for letting me interview you... SellABand is already one year old, but lot's of out readers probably don't know about you, so what about starting by explaining what is SellABand?

SellABand is an online music platform where artist and fans can make music and money together. Artists make a profile for free by loading up their best three songs, their bio and some pictures. Music fans view the profile and listen to the music. When they believe in the artist they can become a "Believer" by buying parts. Each part costs $10. Once 5000 parts have been sold we have $50,000. We use this full budget to record an album with renowned producers in top studios. Once the album is done all believers receive a limited version of the album. All income generated from the album and the advertising on SellABand is divided equally between the artist, the believers and SellABand.

How did the idea of creating SellABand appear?

SellaBand comes from a love for music and a frustration about the fact that the same artists are being heard over and over on the radio. I would see a lot of live performances and notice how much talented artists are being unnoticed by the traditional music industry. I decided to give up my job and approach the right people to execute the business plan. I found Johan Vosmeijer and Dagmar Heijmans. Both experienced in the music industry. When they heard about my plans they gave up their jobs to launch this business and follow our dream: Bands and Fans in business together!

What do you think of the actual state of the music industry? What do you think SellABand can do to help it moving to the right direction?

The majors have been treating the web as a threat as opposed to capturing its opportunities. When Napster was founded the labels had a choice; embrace this development and create new business models or sue the new initiatives. I don't have to tell you for which one they choose. This approach cost them a lot of money. Music companies were focusing on numbers and laws in stead of on finding new talent. Additionally, the traditional business model is completely outdated and far too risky. Each new artist that is signed by a label requires a large investment before any money is made. Sales have been dropping with around 25% world wide. With less money being made, logically labels are betting on "safe horses" like Madonna and Justin Timberlake of whom we have heard so much already. RIAA (Record Industry Association America) figures have pointed out that music listeners are interested in new music. They are fed up with highly marketed super stars. My guess is that with this risk averse policy music sales will be dropping more in the future. Since labels aren't picking up new talent, there is a lot of unsigned artists out there. SellaBand makes it possible for music fans to discover these artists and help them make take their career to the next level. We like to see SellaBand as a trampoline. Artists choose themselves
how high they want to jump. After (and before) recording their album with us they are free to sign with a label. We have recently signed distribution deals with Rough trade in the Benelux and Proper in the UK so all SellaBand
albums will be sold in stores across the UK and the Benelux. Additionally sellaband artists are being invited for live performances all over the world. Nemesea for example (the first band 50K) has recently confirmed a tour in the UK. This way the more passive music lover can also enjoy the amazing new music that is being discovered on SellaBand.

How do you measure the SAB success so far?

5400 bands signed up. 1.3 million dollars has been invested. 9 artists have reached the 50K. 3 albums have been released. We have only been live for a little over a year. We (the management and the community) are very proud of these results.

We're seeing a lot more of this "Web 2.0" world that is more and more centered in user generated content and grabbing users' attention. SAB completely relies on User Generated Content and even "user contributed money". Aren't you afraid this is a bubble soon to burst?

I agree with you that are a lot of initiatives out there. In some of them I have a lot of trust. Fabchannel.com is a good example of web 2.0 initiative that I think will continue to grow in size and popularity. Other initiatives
I just don't get. 2nd life for example is an initiative that I have less faith in. Time will tell which initiatives will continue to prosper in the future. When it comes to SellaBand I am very confident that it is a
sustainable business model. The relationship of the artist with his or her fans is a unique one that is very difficult to break. Imagine seeing 50,000 dollars roll in on your account. Imagine realizing your dream because
thousands of music fans believe in you. Imagine seeing an artist you supported on MTV. All of this magic is happening and will happen a lot more for a very long time.

As an user of SAB almost since day one, first as an artist and then as a believer, I've been seeing the development of a very strong community, and lot's of things running around SAB. For instance, before SAB having an official forum, we already had forums for SAB... How did you made it happen? How do you see that?

When we started sellaband we had no idea that we would be surrounded by such an amazing group of music lovers. All "community initiatives" were literally initiated by the community. All we did was listen and try to serve the community in the best way possible. When it comes to offline initiatives I think we've done a great job. This summer we sold out legendary live venue paradiso in Amsterdam. Believers from over 22 countries flew in to Amsterdam to see the show. When it comes to online initiatives I think we can make a lot of improvements. One of our Believers "Rey Gamba" is an experienced programmer. He has been envolved behind the scenes for a while now. First he created club SellaBand which was a sandbox environment where we tested what extra features we could add to the site to make it more fun and sticky. We loved what he did so much that we asked him to join our team, which he did! We are very happy with the added value Rey Gamba will bring to our company.

With all the interaction you have with the SAB community, both artist and believers tend to flood you with new ideas. How do you face them? It seems to me that there's a kind of "sense" from the community that you're somewhat obliged to at least consider those suggestions...

I fully agree with you. We are a very transparent company and therefore get a lot of feedback from the community. We have used this input when we made our business plan for 2008. We published the complete plan in the tribune, our weekly news section. We are very conscious of the fact that it is the community of artists and believers who will take this company to the next level. Keeping that in mind we have to protect "the pillars" of our concept and realize that we cannot please everyone at all times.

We never heard again of "SellABand Presents..." CD's... Was it something you did to start launching 50K artists, or is it something we'll seen again?

SellaBand Part 1 and 2 were both a major success. I think the time is right for a part 3 soon.

Since this is a blog that usually talks not only about music but also about technological issues, can you give us some tech details about SAB?

We have chosen for the language Ruby. We are looking for programmers who can program in Ruby because we are building our own team.

Any final words you want to leave to our readers?

We've been nominated for the nima marketing award. This is Hollands most prestigious marketing prize. Tom Tom and Gsus won the year before us. Don't forget to vote for us here! http://www.nima.nl/marketing_jaarprijs

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[1] - http://mindboosternoori.blogspot.com/2007/02/social-web-of-music.html
[2] - http://sellaband.com

SellABand goes bankrupt

I've written about SellABand in the past:

2006/09:

[...]SellABand, a German startup that tries to act like a record label for registered artists. I also intend to do a full review on this later, and to sign Merankorii there, but I have to confess that I don't believe it's business model will make this service survive. Anyway, the fact that startups like this are starting to appear just show that there's a need to do something into the new music market reality, and Web 2.0 might be a key tag on that future. I also think I'll talk more about that in my presentation on BarCamp Portugal.

2006/09:

When I talked about the actual music industry scenario with the technological advances we're seeing on BarCamp Portugal, I said that new stuff was needed, and that some webapps are walking towards the solutions needed (like Amie St. or SellABand) but we weren't there yet. Well, yesterday I knew about Treemo, the next step towards what we need.
[...]
While new features are surely going to appear, their model business will hardly change - but will, perheaps, evolve. Yet, and under the actual stance that, I don't see them as being a viable way for artists to earn money with their art, but it's a good step towards it.

2007/02:

SellABand - I promised a full review of it that I never did (shame on me). To give you an example... I have a musical project and I've used the internet to promote it - and even to get the label that released my last album. Of all those music services my music can be heard, SellABand is the one where I probably have less people listening to it - but in the other hand is the one that possibly granted me more fans. Also, Last.fm and SellABand were direct creators of revenue: I sold at least one CD thanks to each of them. What's SellABand? What makes it so different? No better than this page to explain it, but basicly bands, for free, create their profiles there, with (at their choice) free-to-listen music. "Believers" (the name for listeners) may "believe" in an artist by buying one "part" of the band ($10 per part). Then, "Together Believers have to raise $50,000 to get their Artist of choice in the studio. At any point before your Artist has reached the Goal of $50,000, you can withdraw your Parts and pick a different Artist. You can even get your money back. It's your music. It's your choice." If one band reaches $50,000 (in four months two already did), a CD is released, you get a copy, 50% of the profits go to the band, and the other 50% are distributed to their believers.

2007/05:

SellABand also keeps going on, and are, at least, a very successful case of an indie label - after all in less than an year they've managed to launch several bands albums and compilations, besides organizing events - for instance. Here listeners pay to give the bands a chance to release an album, and after they can make money out of it.

2007/09:

But the big question here remains: what's the really good way of doing this? How to create the "Record Label 2.0"? Every one of the three concepts for music have problems (SellABand, Launch A Label and the $100 label), and while ideas can and should be taken from stuff like Open Source or examples like Swarm of Angels, there's still no idea of how to create the "killer record label", that which is fair to everyone (from the artist to the public). I wrote my ideas of how to create the perfect record label [6] in the past, even if it was just a collection of loose thoughts in a way that seemed to make sense. There's no answer yet, but it's definitively something interesting enough to make me think.

In 2007/10 I actually interviewed SellABand. All of it is relevant, but let me highlight this part - more interesting when we think about it's state of bankrupcy:

When it comes to SellaBand I am very confident that it is a sustainable business model. The relationship of the artist with his or her fans is a unique one that is very difficult to break. Imagine seeing 50,000 dollars roll in on your account. Imagine realizing your dream because thousands of music fans believe in you. Imagine seeing an artist you supported on MTV. All of this magic is happening and will happen a lot more for a very long time.

In 2008/07 I interviewed Equal Dreams, a SAB competitor. This is what they had to said regarding SAB:

Compared to the other services Equal Share provides the artists with more flexibility in defining what he or she is actually selling to the audience and for what price; first of all, there are no pre-set target goals, but the artists can define their own funding needs; after all the quality of the produced music does not necessarily correlate with the amount of money spend in the project. Nowadays this is true more than ever as the prices of digital recording equipment have come down so drastically. Artist could also use Equal Share together with a record label/producer to gather a partial funding for the production. Secondly, the co-funding, which works with a pre-order concept, can be flexibly assigned to even just one song, and the pre-order price can be set as low as 0.50 EUR. We think this is more attractive from the customer’s point of view than being prescribed to invest tens of euros. Fans can be updated about the progress of the production project using the internal messaging system in the Service.

In 2008/11, I wrote:

They're changing for better, but they're still too far from where they should. Let's see how this goes...

In 2009/06, I questioned some bands decisions regarding their editions, based on SAB figures, and questions that should also apply to SAB themselves.

...

Today SellABand's website gives us this message:

On Friday February 19th, SellaBand AG requested provisional suspension of payments (moratorium). This was granted by the Court in Amsterdam on the same day. Yesterday, Monday February 22nd, this moratorium was changed into bankruptcy, with appointment of, Mr Paul Schaink, an amsterdam lawyer, as trustee. The trustee wishes to inform the 'Sellaband community' that, apart from a few technicalities, the completion of a transaction with a potential buyer of the business, is to be expected soon, in order to make a fresh start, safeguarding both the rights of Believers and Artists. More news will follow shortly.

I don't know what "shortly" is, but I'm sure I want to know about it. In the meanwhile...

• artists and believers are talking about it on SAB's "Get Satisfaction"
• an old SAB forum (before there was an official one as reactivated and old users are talking there
• An artist from SAB decided to create a site dedicated to SAB's bankrupcy

There's one thing I know for sure - this bankrupcy is not SAB's business model fault, it is their management fault - just ask anyone from its community.

LaunchALabel, $100 Label, Open Source and A Swarm of Angels

So, I've heard about LauchALabel [1], a web community somewhat simmilar to SellABand [2] that intends to coordinate people to create a label, instead of coordinate people to fund an album. The thing is, those 50.000 people that will pay $25 to create the label (against the 5.000 $10 parts needed to launch a bands' record on SellABand) will have a little few to have with the label itself: there's no plan of ROI for those "shareholders", those people can only decide five bands to release (heck, with that money you release 25 albums via SellABand), and they don't really have a stake on the labels management. The core idea was good, but with half the money it would be really easy to do a lot more...

Virgil from IndieHQ had a Simmilar idea some time ago [3]: create a record label with 1,000 investors (and equal participants), where each investor had to put $100 in. This idea (raising the money that could release two CD's on SellABand) is quite better, specially if you take into consideration that every "shareholder" would have an equal vote to someone else, and so it would really be an "Open Label". There are several issues to be considered tho, and if you read the comments made on his idea (same link) you'll see that there are a lot of concerns on how to please everyone, how to do the voting scheme, how to rely on other's works (and how to distribute work) and so on...

...which reminded me Open Source and how things just work in the Open Source world. As a matter of fact, this didn't came to me as "this reminds me of Open Source" but in a radical point of view: "this would only work in an Open Source like model".
Let me explain, giving the example of Debian. First of all, Debian does not have a fixed number of "contributors" or "staff" - it's a hive mind, a colective management, where you don't really have to rely on anyone specificly but in the community as a whole. See, you can be an excellent hacker and give lot's of coding hours to developing Debian, and yet do not care (or not have the profile) to do management stuff, deal with conflicts, take resolutions or doing every other thing needed to make things happen. Thus, Debian has an organizatinal structure [4], elected, that simply lets people contribute as much as they want to, in the issues they prefer to.

And yet another thing: in Debian you don't need a fixed number of people, like in Virgil's idea. You can explore more this issue if you compare this idea to one other project, but this time to make a movie. A Swarm of Angels [5] is a project to make a movie release happen. A director, several "business angels" and several phases will be used to create a movie from scratch, where those "angels" will make a part of all the process: from writting and choosing the plot or the wardrobe, to choosing (or creating) its soundtrack, everything is decided by the community. You didn't need a fixed number of people to start: as a matter of fact you have a limit number of people who can participate: taking core decisions with lots of people was avoided this way. The first phase was open for 100 people (£2,500), and the second for 1000 people (£25,000). When the tasks are complete for this phase, and since more money will be needed, the next phase starts and "buying a stake" is again possible, until there are 5000 people.

But the big question here remains: what's the really good way of doing this? How to create the "Record Label 2.0"? Every one of the three concepts for music have problems (SellABand, Launch A Label and the $100 label), and while ideas can and should be taken from stuff like Open Source or examples like Swarm of Angels, there's still no idea of how to create the "killer record label", that which is fair to everyone (from the artist to the public). I wrote my ideas of how to create the perfect record label [6] in the past, even if it was just a collection of loose thoughts in a way that seemed to make sense. There's no answer yet, but it's definitively something interesting enough to make me think.

[1] - http://www.launchalabel.com/
[2] - http://www.sellaband.com
[3] - http://tinyurl.com/yvhzvs
[4] - http://www.us.debian.org/intro/organization
[5] - http://aswarmofangels.com/
[6] - http://tinyurl.com/38a28v

The Social Web of Music

For those who read this blog for a while now, you've probably noticed that I write a lot about music and technology, sometimes both. A pair of posts I did on the issue may be already somewhat outdated: one about finding music on the web, and other about the web for music artists and lovers.

While there's some discussion around the web on wether Web 2.0 is better or worse than P2P for this kind of stuff, an issue I would love to talk about in a future post, today I'm going to talk about "The Social Web of Music", impelled by the fact that Techcrunch made a Social Music Review that, IMHO, doesn't really reflect the great web apps out there in the field.

They chose eight products: FineTune, Pandora, Last.fm, Mog, Radio.Blog.Club, MyStrands, iLike and iJigg.

My first comment about the chosen applications is that FineTune, Pandora, Last.fm, Mog, and Radio.Blog.Club aim exactly for the same, so they're concurrents themselves.

FineTune lets you create playlists of music you want to hear, which is great if you want to be listening to some music instead of knowing new music.

On the other hand Pandora (here are some posts where I talked about it) has the easiest user interface of all, and has the best algorithm of finding out music that you'll probably like. On the other hand, it has two major problems: it almost only has mainstream music (almost everything comes out from the major labels) and it's only legal to use it in USA (so, no Pandora for us European guys).

My favourite of the bunch is Last.fm (my cover here): while it wasn't until some time ago, the social features it has are preety good. I'm intending to do a full cover of Last.fm and the way I use it, but for now I'll only say that it has an impressive social component that lets you (only if you want, and that's good) tag, rate, talk, know new stuff, get free tracks, and a lot lot more. It has something that beats those others: it lets bands or labels to create their pages there and promote their music. That makes it preety cool for bands and for those wanting to listen music, mainstream or not. The social component there is strong enough to make a band, by publicising themselves there (upload a music free for stream or even download, and it will surely be heard) to get fans or even sell your music in a much success rate than any other webapp I know of.

Mog also lets artists upload their music, but... well, it quite sucks. It's confusing, it has bad design, and the real use for which I can imaging Mog being the app you're looking for is only if you want to blog about music. And, for that, Last.fm would also be fine...

Radio.Blog.Club was a big surprise: I can't imagine it being relevant in a discussion about the "social web of music". I guess that the only reason why it was referred is that the author thinks that "the interface is good". Sorry, but I do not agree. Call me stupid, but while the website says that artists can upload their music, and while, by the file names, users are obviously submitting (copyrighted stuff, BTW), I walked around for 10 minutes or so and didn't find out how to do it. I don't intend to come back there.

MyStrands might be "social music", but isn't web: it's a desktop application you have to download, and there are only versions for Windows or Mac OS. Since I'm a Linux user, this isn't for me.

iLike is even worse: it's an iTunes plugin. No, I don't use iTunes.

Finaly, iJigg: the music digg. I don't really like digg, so I might be biased on this, but iJigg is just... well, if you want to discover music and you want "anything" (forget finding stuff similar of what you already know and like), or if you want copyrighted stuff that others post there (lot's of it, there), then you might find it interesting. But I doubt that it will be "the music web app you'll get used to use".

So, if these are my oppinions about the choices, what would be mine?

For me, only five stand out:

Pandora - I've talked about it up there, so go back and read it :-) If you're resident in USA and what you want is to get at your job in the morning, open a browser tab and make it play music you like until it's time to go home, this is for you. Easy, fast learning, great interface, preety cool. If you like something enough, you can buy the track or album in iTunes (please, don't - those tracks have DRM) or Amazon.

Last.fm - The music experience and interaction. Put your music player to feed Last,fm, use it to listen what other people recommend you, bands similar to the one you're listening now, other bands from the same music label, leave a comment, take a peek on what other Last.fm users that listen to it like to hear, know new bands, get some free, legal, DRM-free music.

SellABand - I promised a full review of it that I never did (shame on me). To give you an example... I have a musical project and I've used the internet to promote it - and even to get the label that released my last album. Of all those music services my music can be heard, SellABand is the one where I probably have less people listening to it - but in the other hand is the one that possibly granted me more fans. Also, Last.fm and SellABand were direct creators of revenue: I sold at least one CD thanks to each of them. What's SellABand? What makes it so different? No better than this page to explain it, but basicly bands, for free, create their profiles there, with (at their choice) free-to-listen music. "Believers" (the name for listeners) may "believe" in an artist by buying one "part" of the band ($10 per part). Then, "Together Believers have to raise $50,000 to get their Artist of choice in the studio. At any point before your Artist has reached the Goal of $50,000, you can withdraw your Parts and pick a different Artist. You can even get your money back. It's your music. It's your choice." If one band reaches $50,000 (in four months two already did), a CD is released, you get a copy, 50% of the profits go to the band, and the other 50% are distributed to their believers.

Amie.st - I talked about this before, and Mike from Techcrunch is a big fan of this, so my surprise was huge when I noticed that this wasn't on their list. Basicly they consider that every track has a value, but music lovers are the ones who should decide whats its value. So, When a band uploads one music there, it starts costing "0 credits", and if people say that the song should cost more than that, it starts costing something, and more, and more. It's the free market aplied to music - a way better way of knowing and buying digital music - you're basicly paying it's "real value".

MySpace Music - This had to be here. I don't like MySpace (nobody does, right?) but it's the biggest website on the Internet, and that means something. If you ignore all the kiddy social crap and take a look to in only taking into consideration the music aspects, you'll see that this is the most used "music webapp". You have from really big and well-known bands like Björk there, and you have that until the "I don't have or want a band, but I once did this track" stuff. You have music for every kind of tastes, some you can only stream and some you can download. You can see, specialy from the "top friends", what other somewhat simmilar bands you'll possible like, and discover lots of music.

And you? What music web applications do you use?

SellABand changes hands... and business model

As I told you in the lastest blog post, SellABand went bankrupt.

Soon after, aquisition rumours started. Then, it was official. And a couple of minutes ago, the website was back online.

Business as usual, right? Wrong.

Users trying to log in SAB again are greeted with a notice of some new Terms of Service - which you agree or you have to cancel your account. The new Terms of Service have a funny clause, one that radically changes SAB business model. In 4.5, they state that a believer can't take back his money if it's on SAB for more than 15 days. OUCH!, this is more than a change, this is not acknowledging the real SAB problems, while failing because they take out the incentive to actually be a believer... What an huge #FAIL: this new SAB is, automatically, a lot worse than what it was.

When canceling (because I don't accept the new TOS) my accounts,  they said to me:

Dear Merankorii,

We would really like to hear the reason why you do not want to accept the new Terms and Conditions and stop participating on SellaBand.

Here's my reply:

The new 4.5 clause makes believers being forced to loose their money, even if the band they wanted to succeed abandons the project or otherwise doesn't reach its goal. With the new terms, believers stop having the ability to be "believers of some specific artist(s)", and are thus forced to be "believers on SAB". While that might work to some believers and bands, that radical change of concept doesn't work for me both as an artist and a believer. Thus, unless/until you change the TOS again, I want to withdraw my money on SAB and quit both my artist and believer accounts. I don't count on coming back to SAB as an artist until this 4.5 changes to something I feel more fair for me, as a band, to purpose to my fans, and I count to get back to being a believer *only*if* I find a band that I like so much that I'm willing to bet with my money in, taking into account that I might never see that money again -- which doesn't happen with any SAB artist at the moment.

SellABand messes up with Flash... again

Since yesterday, when visiting an artist profile on SellABand, I get this message:

The problem is that:

• this didn't happen before
• According to Adobe the latest Flash version is 9,0,31,0 and that's the one I have installed
• Any other "Flash 9 only" website I go has no problems with my plugin

What's going on? Anyone having this problem besides me? My guess is that this is has something to do with me being using Linux's version of the plugin...

Crowdsourcing

The Vienna University of Economics and Business administration is making a study on Crowdsourcing (see my first post on the issue here). The study, to which I contributed, still isn't available, but you can read a summary of the research in this PDF. Eight crowdsourcing communities were analyzed, including SellABand (my thoughts on SellABand here). This summary doesn't give much juice about the matter, specially if you're into the concept of Crowdsouring, but yet it seems a good resource, specially for those thinking about being in the crowdsourcing market. Most of all, the summary promises that the research, when available, is a must read.

Palco Principal: the Portuguese Reverbnation?

They told us before that they would be the Portuguese SellABand [1], and, while waiting, they now announce they'll be the Portuguese Reverbnation [2].

Let's hope this future is soon...

[1] - http://mindboosternoori.blogspot.com/2007/04/takeoff-review.html
[2] - http://www.palcoprincipal.com/blog/2008/01/17/optimus-patrocina-players-do-palco-principal/

Web Music Services for bands - revisited

I've talked about this before, but the social web is developing fast and well, so there are news on the field... So let me revisit the topic, and talk a little about the "new web music services for bands".

I'm going to list five services that can help bands promote themselves, and fans to easily access to their favourite bands and even help them. Here they are:

ReverbNation is a newcomer on this blog. Basicly, ReverbNation started last October as yet another music social network, in the vein of services like PureVolume. The thing is that since they started they didn't stop adding new features, some of them really cool for artists. But what makes them start this list is a feature that they don't yet have but will do in July: an ad revenue sharing program for their artists, called “Fair Share”. With this, fans are giving to their artists money each time they visit the artist webpage and specially when clicking in the ads presented there. Alternative sources of incoming are allways cool, right?

Then, another newcomer. Poptopus isn't a music social network, or something that lets bands have pages. Instead, they make widgets with songs submited by artists, and that widgets contain ads. That means that a blogger, for instance, can have a music player with songs of his choice in its website, and the revenue from the ads in there are splited between the blogger, the artist of the tracks presented there, and Poptopus, of course. Once again, yet another source of incoming. Their closed beta is going to start soon.

Then, we're back to those I've already talked about. GrooveShark is getting bigger and better day by day, even if still in Alpha. I'm still swapping e-mails with them and plan to have a new blog post about it soon enough, but the concept is good: a legal p2p music network where you're paid to share and artists whose tracks are shared too.

SellABand also keeps going on, and are, at least, a very successful case of an indie label - after all in less than an year they've managed to launch several bands albums and compilations, besides organizing events - for instance. Here listeners pay to give the bands a chance to release an album, and after they can make money out of it.

Last.fm continues to be awsome, a great way for a band to expose themselves if well exploited. They're experiencing a boom of users now that Pandora is enforcing their users to be located in the United States, yet there are rumours of Viacom wanting to buy them which are no good news.

Also, I'm curious about two new services that might be quite interesting: We7 and Playable. When more info on those are announced, I'll surely let you know...

The music market is falling: who's to blame?

It's known for regular readers that I don't believe that illegal file-sharing has an noteworthy impact in the rise or fall of music market profits: it's more an excuse than anything else. This article tries to find out what's causing this fall.

Even if I read some stuff about market dynamics over the years, I'm surely no expert on the matter. Also, this all issue is way to chaotic to find simple and obvious causes for this fall. So, I decided instead to point four points that surely have some major impact on music market. This doesn't mean that these are the most important issues - they probably aren't, but at least they are some real measurable causes.

The digital era

The music market never made an effort to understand the digital era. The most flagrant example of this is the well-worn Napster case. Yes, people were doing downloads of copyright material, and yes, the copyright owners weren't getting nothing from it. That's beyond the point. The point is that the music industry instead of trying to understand what was happening, decided to just sue them and shut it down. With that act, they also gave a statement: they don't care about the digital era, if it hurts them they'll fight to take it down. The problem here is that you can't take down the digital era, because that's no company, no infrastructure nor even a technology: the digital era is a mind set. People share files because they feel there's no wrong with it. Some people download digital music for free arguing that the real cost of a digital file is zero. It's this kind of social mind set that makes the digital era define the music market's future, and if the music industry keeps against it, or at least doesn't bother trying to comprehend it, then they're fighting against the future of the market they are, thus fighting themselves. Of course that some people got it, and used the digital era to make profit: Apple, for instance, created the iPod and iTunes, making huge profits in an empty market. But the profits are not only for retailers: I've seen musicians, labels and every other piece of chain in the music business benefit from the digital era, they just decided to understand it first. The best Portuguese music I got in 2007 came from a Portuguese label created this year, some other music labels I know are in frank expansion, some music stores too. We've seen new business models rising, from fans-funded recordings like what you can find on SellABand, or even bands making money by giving their music for free in sites like ReverbNation.

The purchasing power

There are also less music related issues that have an huge impact in the music business, and ignoring them is like forcing ourselves not to see the elephant in the room. One of them is the actual purchasing power for these kinds of goods in the so-called developed countries. I've done several parallels in the past: for instance in the 2006 Portuguese BarCamp I compared the music business with the coffee machines business. The fact is that businesses - each one of them - have to adapt to the overall market. If people start to consider some stuff as "luxury items", then maybe those items should be sold as such. If
people start thinking that some item is more valuable than other item - in a case where typically they'll choose upon one of the two - then the second one has naturally to be less expensive than the first one. Market laws apply to any market, but the music industry fails to understand that the music market follows the same rules than any other market.

The physical price

So, the digital era appeared and with it digital music, that feels like free. On the other hand, the purchasing power for the class of goods music is inserted in is being reduced in the last few years. The natural thing to have would be the price of CD's, more than any other physical format for music sales, to follow these two indicators and have their price falling. Plus, even if that wasn't case, people were already expecting the CD price to fall anyway: one of the things that were being said in the first times of the Compact Disc is that the high price they cost would soon fall with new technology arriving, and the consumers kept that in mind. The manufacturing cost sure fell, as we managed to see, for instance, in the price of blank CD-R's. Yet, the price of a music CD kept rising. Doing the math, what's expect to happen to music sales other then a fall?

How to measure quality?

One of the causes, at least in Europe and in the United States for the rise of the physical price is the way big retailers entered in the music market. Big stores had everything in one place, wanting to be your one-stop-choice. They managed (by quantity and scale) to practice such lower prices that they practically killed an huge amount of small music stores, or forced them to practice even bigger prices to deal with the dropping unit sales. When they were already controlling some markets like the music market, they were then free to practice the prices of their choice. Speaking of choice...

It would be stupid trying to measure music quality. But we measure related factors, like choice and diversity. Let me explain: if music quality is hard to define because each person have different musical tastes, then it's pretty obvious that if you have few choice and diversity, then few people would be interested in the music being released and available to the public, and fewer articles for their tastes. To aggravate this, if market diversity isn't accomplished than if you satisfy someone's tastes, that person only has the choice to buy way-too-similar music (which will lead him to buy less music) or not to buy it at all.

With the fall of investment on music from the music industry, and with the fact that the market reaches its physical public mainly via big retailers, came the standardisation of music. Only a few pre-determined music styles, known to be well consumed, have place in the market. The long tail of music was being completely ignored (and majorly found their place on a less controlled environment like the Internet, embracing the digital era).

I risk to assume that if we consider the overall quality of the music available on music stores dependent of their diversity, by attracting each listener segment, then the overall quality of music has decreased in the last few years, which can then be related with the decrease of music sales.

Conclusion

If you still want to say that file-sharing is guilty of the decrease of music sales and overall profit on the music market, go ahead, I won't stop you, even if I don't buy it. But considering all the other factors that might affect its market, including those that surely are, please avoid making the same mistakes as Liebowitz is going to state in his upcoming paper, where he not only states that piracy is guilty of the decreasing of music sales, but that "file-sharing* appears to have caused the entire decline in the record sales and appears to have vitiated what otherwise would have been growth in the industry".

* - funilly, he measures "file-sharing" by measuring Internet penetration

Stuff I've been doing lately

Well... Since I didn't post for a while, here's a quickie:

Friday I met two nice restaurants and two good wines. With the company, it was joyful. Arrived late at home, so Saturday I only took the train to Coimbra after dinner. On the train I almost prepared the presentation about the Music Industry and DRM for next saturday in Moita - Portugal. I have to cut it off a lot since I have only one hour (Q/A included) and almost 60 slides.

One thing that bothers me a lot is that stupid thing so many people started to innocently claim after Steve Jobs saying it, and one example (the latest I read) can be seen here: the claim that (physical) CD's aren't infected with DRM. Unfortunately, that's untrue.

Yesterday I finally tried to use my cellphone as a modem, via bluetooth. I wasn't really into it since everyone claimed it was a pain in the ass. Well... It wasn't. I just did

sudo /etc/init.d/bluetooth start
sudo modemlink

chose, "bluetooth", and activated bluetooth on my cellphone (Motorola E1, for the record). It found the cellphone, and asked if that's what I wanted as my modem. Clicked yes. After that

sudo gprsconnect

It asked what my cellphone operator was, but it is none of those listed. So, I chose "other", clicked "connect"... Et voilá! It couldn't be easier.

One bad thing in the talkers world is that all the talker bases there are aren't being developed anymore. Sometimes some vapourware appears, but the smoke soon dissolves. The exception for that is Mamnuts and PyTalker, unfortunately both maintained by me. Which also means that if I stop working on that... Well, not anymore. A new effort as arised, and I hope it won't be vapourware. Tints purposes a talker standard and a protocol. Around the protocol itself an implementation of it in C will appear, and python bindings for it. Then, a server, a talker (notice the separation, compare with a webserver and a website) and a client. The first client is not going to be a telnet interface, but you can virtually create any kind of client, from an interface to telnet, telnet-ssl, an webite, a XMPP plugin, an interface to Second Life... Well, you name it. The concept is really good, and if it doesn't die, I'm almost surely to be an early adopter.

Finaly... SellABand appears to be down. Anyone knows something about it? Update: Finaly, it replies. 500 Internal Server Error. Update 2: Hmm, seems that it just suffered an update.

The "We're not Evil" Music Label

Being as interested in music as you might have noticed by now, I've thought inumerous times about what kind of music label the world needs. Heck, I've even thought several times in creating one... So here's a sum-up of how that music label should be:

01. Rights are exclusively from bands - the copyright should belong to bands, and they should be the ones to decide whatever to do with their songs;

02. CD releases - The less evil labels I know of are exclusively netlabels, or do CD-R releases. But bands deserve the choice of having their art in propper Audio CD's, without having to go with a not so un-evil label;

03. MP3's for free - All tracks released should be also available for free as mp3's (and possibly in other formats, as ogg), DRM-free (of course), so listeners could do the usual try-before-buy legally and without restrictions;

04. When the CD's are sold out, digital sells continue - Maintaining a release is impossible: even the major labels go out of stock for a long period of time (I'm talking about years) before they do a re-release. To a smaller label the problem gets worse, so it is common to see some bands whose first works are already out of market: and the only way for you to get them is by downloading them (legally or not). So, in this scenario, I think that, for those wanting those previous releases and actually buy them, sold-out albums should start being sold in non-evil music stores (like, for instance, Amie Street), at a reasonable price for everyone involved;

05. CD's at reasonable prices - I don't really know (yet) the praticability of this (the cheaper the album is, more is the profit share that must go to the label), but I was aiming here for something like 5€ per album;

06. Label profit only to cover the business itself - We can't have a scenario where all the money goes to the artists, since doing this costs money. So, the idea is to give a share to the label good enough to cover the expenses in the release, running the label itself, and to invest in new releases. I was aiming for nothing less than 50% for the artists, but, as I said in 05, the biggest the artist share, biggest the unit price, so I think that, as a test, 5€ per album and 50% for the artist is a good combination, suitable to enhancements;

07. The "usual" promotion - The label must do the "usual" promotion of the band. Unfortunately I think that the "usual" part is not that usual, and that's bad - for both artists, the label itself and the (potencial) listeners. And easier too. When I mean promotion I'm talking about several things, from making the band have an online presence to making their album available in as many music stores as possible;

08. The "unusual" promotion - AKA "getting better deals for the band". Of course the concept of "better" isn't a well-defined thing, and should be developed with the artists (project by project): for instance, I don't think I would want another record deal other than this one if I have such a label, but with "unusual promotion" I mean stuff like "getting you a bigger label, if that's what you want". Of course that I also mean many other things, such as promoting the band on things like SellABand;

09. Consider musicians as artists and music as art - self explainable, yet most of the times ignored;

10. Items from 02. to 08. negotiable - and the others not. This is perheaps the most important of these items: setting what must be, and talking about what by default would be, unless the artists (the real important piece in the music industry) think otherwise.

What are your thoughts on this? And do you know any label that does something similar to this?

Welcome to Equal Dreams, the fair music market

Equal Dreams is a platform which enables direct sales of digital music from right holders to consumers as well as easy communication and co-operation between artists and audience. Sales proceeds can be automatically distributed to right holders (musicians, composers, producers, record labels) using the royalty administration system built into the service. By using Equal Share feature an artist may seek funding for a music production project. In this case artist sells limited economic rights of the pre-ordered music to the audience meaning that a customer making Equal Share pre-order earns royalty from the sales of the music. In Equal Dreams artists and their audience may also join their forces for a good cause - Equal Aid.

After their press release, and after trying the beta version myself, I decided to contact them and make a couple of questions. Here are them, along with the answers they kindly provided.

Last year you decided to create Equal Dreams, and now you're launching it. What's the background? What made you create this company, and what are your goals?

Few years ago I got interested in following the development in music business. It was really interesting to read and learn about different services, opinions and visions. I built Equal Dreams concept together with musicians Heidi Kärkkäinen (my sister) and Anders Uddeskog in the beginning of 2007 from the scattered ideas I had created in my free time. We were also fortunate to find great business partners who got excited about our idea, and have helped to bring Equal Dreams from concept to reality.

Our goal is to provide musicians the best music service in the World. We wish to offer musicians and their audience new and equal opportunities to create and enjoy music together.

EqualDreams offers three different (yet integrated) services: Equal Dreams online store, Equal Share, and Equal Aid. I find it curious, since it's the first music 2.0 service I see that tries to bundle three different things: one "fair" music store, one way of letting artists have their albums crowdfunded, and one way of helping charity organizations. What made you try to achieve this three goals in one strike? Aren't you afraid that your service might turn-down those artists looking for just one or two of the three services you provide?

There are certainly many good services that are specialized on one topic. However, I believe that there is also a need for a service that can combine fluently, simply and reliably the most important features from the artist point of view. As you pointed out, we see our services not as separate, but integrated, and mutually supportive; our underlying “key word”, fairness, encompasses all these three areas. All artists, whether they are starting out and have just written their first song, or are old timers with ten albums, are welcome to open their own store and price their music. Equal Share enables especially beginning artists to start their careers, and hopefully create closer relationship with their fans. With Equal Aid the artists can support charitable causes together with their fans.

We hope that we can provide artists with the set of tools that really makes their life easier when there are lot of changes taking place in the music business. Artists can use these tools in ways that fit their particular situation.

Equal Share (that, I must confess, is the most attractive of your three services) competes with other services in the crowdfunding music world, like SellABand or SliceThePie. Why should an artist go for Equal Share and not those other services?

Compared to the other services Equal Share provides the artists with more flexibility in defining what he or she is actually selling to the audience and for what price; first of all, there are no pre-set target goals, but the artists can define their own funding needs; after all the quality of the produced music does not necessarily correlate with the amount of money spend in the project. Nowadays this is true more than ever as the prices of digital recording equipment have come down so drastically. Artist could also use Equal Share together with a record label/producer to gather a partial funding for the production. Secondly, the co-funding, which works with a pre-order concept, can be flexibly assigned to even just one song, and the pre-order price can be set as low as 0.50 EUR. We think this is more attractive from the customer’s point of view than being prescribed to invest tens of euros. Fans can be updated about the progress of the production project using the internal messaging system in the Service.

Why do you believe that crowdfunding can work regarding to music?

I think being able to participate in production of music, especially if it is together with artists one likes, is very appealing – this represents a new way of being a fan; instead of admiring afar people are now able to play a part in making new music. Equal Share is about experience and co-operation - being closer to the artist.

What other things people might expect from you? Are your plans consolidating the business you're launching now, or keep investing on new ideas and business models?

Our vision is to offer the best possible services for artists, and we intend to work hard to meet that goal. So, customers certainly can expect new ideas to be implemented. Of course we welcome feedback from our customers in order to keep us on right track.

All your business models have the base of having people paying for music. In a scenario where we have more and more people wanting to experience music, but giving less value to recorded music, specially digital, aren't you afraid that people simply don't pay for music, and choose to spend their time downloading free stuff instead of being your costumers?

Piracy has been treated as a major threat towards music industry. However, we see this is a question of values and attitudes, and believe there is a strong tendency to pay for music instead of acquiring it without charge if this supports the artist.

People are ready to pay for good experiences and we believe that artists can offer good and new experiences to their customers by using our service. Equal Dreams will be able to offer consumers an access to music by new artists that may not be available anywhere else.

In our business model our success is dependent on the artists’ success. I think it is a healthy starting point for our service business, and it gives us a humble attitude towards our customers.

Where do you think the music industry is heading too? Some people think we're in the verge of living a process of creative destruction, some think that the music industry is doomed, while others think that things were never better than today. What are your thoughts?

I think Internet as a new technology has brought great new possibilities for music business as any other business. Eventually people will find and learn new ways to organize their work by using new technology. I don't believe in a process of creative destruction at all. An artist will always want to create art - business models or copyright laws has little to do with that fact.

Any final words for our readers, artists or music lovers?

I hope you will find our service fun and exciting. We wish to hear about you and get your feedback on how to make Equal Dreams even better.

Takeoff - review

So, today was the day of take off, a portuguese event on innovation on IT. Before I go to sleep, here's a small review:

The organization was good, and the event went well. It was awsome to see that many people, some presentations (like the one from Gonçalo Quadros) were so full that there were nowhere to seat, not even on the stairs. Wow. I hope that take off happens again next year, in an wider space.

The morning presentations were about "Palco Principal" (a Portuguese "version" of PureVolume that aims to be much more than that), Francisco Pereira's investigation on geolocalization (with Ejaki and YouTrack) and finaly Pedro Sousa giving us the talk about "how to start up", with references to the Portuguese scenario. His presentations are getting better everytime :-) A good review on those (in Portuguese) can be found here.

In the afternoon there was a terrible presentation from Microsoft (hey, you should learn about not calling your public liars, specially not doing it several times, and specially when your public is computer-powered people with wireless connection and evidences are online). I can't just stress out how this presentation sucked - you should listen to the podcast at the moment it gets available to check for yourself... The presentation was followed by a presentation about Linux, the same that subv3rsion did on Tecnonov. Another prespective of these two presentations can be found here.

That presentation was followed by Critical's Gonçalo Quadros, and I didn't manage to hear it since I was talking with several people outside, but from the comments I've heard, it was preety good. I'll check it out as soon as the mp3's are available.

After another coffee break, the last set of presentations: Fred from WeBreakStuff did his usual talk (that's getting better by the time) and also gave some highlights on how goPlan is commercialy going, and where is WeBreakStuff heading. Then, Pedro Custódio, one of shift creators, gave an awsome presentation about co-creativity: one I wasn't expecting and that found great. Finaly, Armando Alves did a presentation about the new was of doing publicity on the web. The presentation was good (but man, you should stop using that whatever-broken-thingie you used to create the presentation, it was not good, and the embeded videos were not working properly), and I was thinking it was about something different (and more useful for a personal project of mine)... But good, indeed.

Goodies

Yet, there were some things that I've heard in take off that can't go on un-blogged.

Palco Principal is going to have a "mini-stores system" next week

Palco Principal is also aiming to do something I'm really looking forward: a Portuguese "version" of SellABand!

And this unfortunate quote from WeBreakStuff's Fred:

"Já há muito tempo que não vejo os projectos que as pessoas andam a criar no goplan"

Man, did you ust admited you used to check out what content did people feed in on goplan? Am I the only one that thinks that this is just unbelievable? Have you ever considered that your clients don't want you to spy on their projects? Shame on you. Seriously.

Why I prefer ReverbNation over Jamendo

In the comments of a post in one of the best Portuguese-written blogs, Remixtures, I explained why I use (and recommend), as an artist, Reverbnation. The big issue here is simple: we're living in a world of music like water, where the real value of music in digital format is approaching zero, where artists can - or should I say have? - reinvent themselves, adhere to the whole "Music 2.0" concept. Having a record label nowadays makes no sense. Selling digital music and consider that a business (or at least revenue) model is like waiting for the shit to hit the fan. Physical sales are a revenue source if you do your stuff well: if there's added value in the physical package: jewel case is worthless, but what you can do with it can be priceless. But to record and sell physical albums (like, for instance, CD's) you need money. To do it while cutting the middle man you need more money (even if it will give you a lot more money too, so you end winning). Where are artists getting that money?

Well... you have merchandise, ringtones, gigs, subscription stuff, whatever you can remember. If you're a small band and want to grab some ideas, you can, for instance, take a look on SellABand and see what are bands offering there to grab more believers. Or... you can make money from digital music.

Yes, I know I said that music is like water, that the real value of music in digital format is zero. But that doesn't mean - at all - that the community you can make around those tracks are worthless. As a matter of fact, in this kind of Music 2.0 models you can have a lot of potential value, since communities tend to be created. One of the first, basic, ways to explore that whole potential is - that's right - publicity. If I give you two band profiles on MySpace, I bet you can easily see who is the most succesful. It's not the one with more tracks, or videos, or with the most pimped profile. But it is probably the one with most friends and comments. In other words, with more pageviews: if a community exists, people keep coming there to see what's up. Now, if your fans can give you all that power, and if you can give all that power over to someone who knows and can, better then yourself, turn that power into money, you have a win-win scenario. And there were those who knew how to do it.

ReverbNation and Jamendo are two simple and easy "music social networks" where a band can register and put their songs there, letting everyone download the tracks. What makes these two so interesting to bands is that they share their profits, 50/50, with the bands. Now bands have a reason to be there, and with bands come fans, and the social network just have to wait and collect their share. Everyone's happy. This is something I hope (and think I will) to see more used, with more bands adhering with this model.

ReverbNation and Jamendo, each one has things better and worse than the other. But, for me, there are two crucial differences:

• Jamendo only accepts Creative Commons or Arte Libre tracks. While this fits (almost) well to me, it's something that will push away lot's of other bands. In my case, by chance, it also pushes me away, since one of my tracks (Interlude) is in Public Domain.


• Jamendo lets you download via P2P, ReverbNation via HTTP. While the perfect scenario would be having both options available, having to choose from one or another isn't difficult. I trust that if I give the link to my ReverbNation profile to one of my sisters, they'll manage to download some tracks. I doubt I would be able to say the same if those tracks were on Jamendo.

All in all, there's still an huge space to fill in here. Both services have only a pretty small variety of music and genres, and both have an huge space for improvement. Still, if you're an artist you have no reason to whine about piracy et al.. Want to stop piracy? Earn money by giving your music for free.

Treemo: walking on the right path

When I talked about the actual music industry scenario with the technological advances we're seeing on BarCamp Portugal, I said that new stuff was needed, and that some webapps are walking towards the solutions needed (like Amie St. or SellABand) but we weren't there yet. Well, yesterday I knew about Treemo, the next step towards what we need.

Joining the likes of Flickr and YouTube and a fairly busy marketplace, Treemo is trying to change the status quo in two noticeable ways.

The first is that they’re paying strong attention to the mobile device market on both the contribution and the consumption side.

The other twist is that the company seems to be very interested in growing a socially conscious community and have set up affiliations with a number of different organizations in an effort to keep its users involved in some things besides just sharing video clips from last night’s adventure at the bar.

Here's some cover on Treevo, TechCrunch's is outdated so discard it. Specially regarding to the issue that made me look to Treemo at first:

When you sign up for a pro account, you can enroll in our upcoming revenue sharing program. Treemo will share back revenue to users for the content they create.

That's right, while consumers of your content don't have to pay nothing to get your content, you still might be able to get some money for it. Too bad it will only happen to pro accounts:

Treemo is free with 200 MB of storage per month (1 GB total limit) and most of the functionality. We will be rolling out a 'pro' service -- that costs $2.99/month -- soon. The 'pro' service will have essentially no storage limit and several new, exclusive features.

Paying three dollars per month to get 50% of revenue out of advertising? It seems that you won't have money to win here (probably to loose) unless your content is really highly requested...

While new features are surely going to appear, their model business will hardly change - but will, perheaps, evolve. Yet, and under the actual stance that, I don't see them as being a viable way for artists to earn money with their art, but it's a good step towards it.