Saturday, November 29, 2014

The Evolution of the Music Commodity

When I launched my business recently, I believed I was at the forefront of music and technology. As an author and composer, I had moved to all-digital recordings of my music. As a publisher, I was convinced that physical CDs were outdated, and I was attempting to convince my clients of that. Yet, they still wanted that tangible CD in their hands – proof that they had actually achieved something.

Consumers, on the other hand, are very different. Very few of them care about the physical CD. They would rather download and enjoy the music immediately than order a CD online and wait for it to arrive or have to go to the store and buy it. Understanding this, the band Of Montreal took a unique step in moving the focus away from the CD and toward another tangible item: merchandise.  In order to purchase the band’s album Skeletal Lamping, the customer purchased a piece of apparel, which came with a link to download the music. (Morris, 2011).

In addition to the lack of interest in a physical CD, the audio music itself has become much less of a commodity with the public. It has very little value. If you want it, there are plenty of tools available to simply pick up your mobile device and steal it, or in the best-case scenario for artists, use a free app to listen to it and reward the artist / publisher with a whopping one-tenth of a penny per listen.

Recently, the enormously popular band U2 made a free copy of its digitally downloadable album Songs of Innocence available to all 500 million Apple iTunes users. For many of those users, the album was downloaded to their devices automatically without their consent. U2 was forced to apologize to many users who are not fans, and who value the storage space on their phone more than U2 music. (Clover, 2014).

With the advent of Napster, and follow up file transfer enabler, Bit Torrent, music continues to digress in value.  While Bit Torrent is technically a legal platform, it is often used for illegal file sharing. (Love, 2012). Moreover, this continued emphasis on illegal file sharing of copyrighted music causes the music files to be viewed as something to be amassed, hoarded, and traded. The following graph depicts the radical decrease in sales revenue due in part to piracy, and it also shows that, for those who are still willing to pay for their music, digital distribution began outpacing the purchase of physical CDs in 2012:

Copyright © 2012, Statista


Clover, J. (2014). U2’s Bono Apologizes For Automatic ‘Songs of Innocence’ Album Download. Retrieved from:

Love, D. (2012). Everything You Need To Know About Bit Torrent, The Legal (And Illegal) Way To Download Anything You Want. Retrieved from:

Morris, J. W. (2011). Sounds In The Cloud: Cloud Computing And The Digital Music Commodity. Retrieved from:


Richter, F. (2012). Streaming Boom Can’t Offset Decline in Physical Music Sales. Retrieved from:

Monday, November 24, 2014

Personal Media Consumption Habits in the Age of Digital Distribution

I remember the days when I would put a Green Day or Limp Biskit CD in my truck and listen to it from start to finish. I don’t do that anymore. I don’t have to. These days, who wants to listen to the same band for forty-five minutes on the commute home? The only CDs that I listen to consistently are those that contain music that I am producing / publishing, because it affords me quiet time to listen with a critical ear. The rest of the time, my phone is plugged in, and I am listening to my random single favorites.

I still prefer a physical book to an e-book. I get headaches reading chapter upon chapter from a computer screen. Our electronic devices are portable, but nothing is as convenient as grabbing a physical book on the go. Then again, you can’t access social media from a book, so the question of priorities comes up.
In the early stages of this program, I was printing all of the online reading material so that I could study in my traditional way, but then it dawned on me that I was incurring the printing costs historically incurred by a publisher. So, I stopped doing that and forced myself to study in electronic format. I don’t like it, but it’s saving me money. Publishers love it, because it is saving them money.
The IRS tax code used to be the primary force in guiding American behavior. Buy a house - get a tax break. Get married - get a tax break. Buy a hybrid car - get a tax break. However, technology is now competing with the IRS for dominance in the human behavioral realm.
We do things nowadays because technology makes it simple, and that is great. However, is there a trade-off between simplicity and quality? I think that my cohorts on the music team would say “yes.” For every advancement in home recording that occurs, there is an equal advancement in professional recording. A “decent” mixing console these days will still cost upwards of $20 thousand.
I foresee an era of “the single.” The American society is impatient. The immediate gratification generation is bleeding over into the youngest among us. “Albums” or “CDs” are outdated, and music consumers are looking for the next big trend. I would guess that within the next few years we will see artists moving to a “one song per month” model. That situation is what I am gearing up for.

Friday, November 14, 2014

Entertainment Business - Law Versus Creativity

This is what has struck me over the last four courses at Full Sail University, and for which I am very thankful to understand: the entertainment business is a very litigious one, probably more than most industries. While I rather knew this going in, I am now rethinking my business strategy. I have no desire to be sued or to sue another party, but that seems to be the norm. I only have time for making money, not spending it on attorneys. My job is to help people create music, not defend it in court.

Where does that leave me? Right where I started. Doing it all myself. And maybe that is the lesson that Dr. Craft is teaching in the second half of EMPD. After listening to her self-promotional path to success, I was motivated for a minute. But she is an attorney, and I am not. From what I understand, one step on the “oops” button could end everything that you have worked for, unless you have a massive legal budget.

As an accountant, I can tell a person or business where every penny is. I can advise them on the most appropriate strategy for depreciating their equipment on both a GAAP and IRS standard. Those things are not arguable. They are fact (or, tongue-in-cheek, “law”).  While that might be helpful in running a business, it does little to protect an entertainment business owner or his clients from lawsuits.

My take-away is this: You can self promote, publish, and distribute your own work or that of your clients. However, if you do not know how or have the resources to protect those works, you are in the wrong business. Yes, you can go through CDBaby or TuneCore or any other number of sites to distribute music. If you have a dispute with one of those companies, however, you might find yourself at the short end of the stick.