Sadly, Pandora Is Still Going Bankrupt(michaelrobertson.com)
michaelrobertson.com
Sadly, Pandora Is Still Going Bankrupt
http://www.michaelrobertson.com/archive.php?minute_id=298
3 comments
If promotion isn't sufficiently less valuable than the pay-for product, then the promotion isn't actually promotion. It's just free shit. You can hate the labels and the RIAA all you want, but at every single step along the way, they've made rational economic decisions.
Yes, but what is rational can be dependent on the environment which you operate in, especially when dealing with economics which is not yet a science.
I'll give you an analogy of a research sample I got from a book.
Bee's by their nature or intelligence you may call it are trained to believe that light at the end of a tunnel is the escape. A rational and even sound analysis in nature. Now if you put a dozen bees in a glass bottle, and point the closed end towards the window where light is shining, all the bees instinctively fly towards that direction of the light and eventually die of exhaustion.
In the case of the bees what was rational in one environment was render completely useless in another.
I'll give you an analogy of a research sample I got from a book.
Bee's by their nature or intelligence you may call it are trained to believe that light at the end of a tunnel is the escape. A rational and even sound analysis in nature. Now if you put a dozen bees in a glass bottle, and point the closed end towards the window where light is shining, all the bees instinctively fly towards that direction of the light and eventually die of exhaustion.
In the case of the bees what was rational in one environment was render completely useless in another.
Let me get this straight: you think the terms under which I'm willing to provide a service for are egregious, and I'm unwilling to negotiate, so you're simply going to take what you want.
Your critique of the industry would be more trenchant if it wasn't tipped with rationalization. Books are pretty expensive too. Authors --- publishers, even --- make virtually no money on most titles. And yet! They won't make them available for free download! Let's take the books, too!
Your critique of the industry would be more trenchant if it wasn't tipped with rationalization. Books are pretty expensive too. Authors --- publishers, even --- make virtually no money on most titles. And yet! They won't make them available for free download! Let's take the books, too!
The music industry can stand on "principle" (that's what they call their sclerotic conception of their own self-interest) all they want. It couldn't be clearer that reality is speaking otherwise. They seem to me like an angry guy standing on a rock, shaking his fist at the tide rising around him. Pretty soon they'll be washed away. It reminds me of what Martin Amis said to Salman Rushdie after the fatwa: "It could have happened to a nicer guy."
The spectacle of the music industry portraying itself as "good" and music fans as "evil" is a great comic irony of our time.
The spectacle of the music industry portraying itself as "good" and music fans as "evil" is a great comic irony of our time.
I agree with you. But I can agree with what you're saying and still be repelled by the logic of stealing nonessential goods that are being sold on what we think are unreasonable terms.
The real losers of the battle are the artists, not the labels (they still make plenty) or the freeloaders.
That this is obviously true has, I'm sure you can see, no bearing on the original argument.
The artists are losing, just as they have always done. However now at least cracks are appearing in the production/marketing/distribution oligopoly, with the potential a new model, fairer to the artists, will arise in their place.
The long term loser of this war will be the labels, and good riddance.
The long term loser of this war will be the labels, and good riddance.
I agree about the rationalization (dressed up as morality) on both sides of this. Still, the conclusion that seems inevitable is: if enough people do it, it isn't stealing.
Not to be a complete relativist, but it's naive to believe that the way we formulate moral rules (e.g. how we define stealing) isn't historically conditioned. This is a moment when that's visible because conditions are changing faster than our rules. The rules will have to change. As with all such changes, some entrenched interests will lose. That the record industry turns out to be the loser this time is, for anyone who knows how they've comported themselves in the past, a feature not a bug. (Yeah I know I'm repeating myself and that the latter bit is irrelevant to your point, but on this subject I can't help it: the karmic comeuppance is just too tasty.)
Not to be a complete relativist, but it's naive to believe that the way we formulate moral rules (e.g. how we define stealing) isn't historically conditioned. This is a moment when that's visible because conditions are changing faster than our rules. The rules will have to change. As with all such changes, some entrenched interests will lose. That the record industry turns out to be the loser this time is, for anyone who knows how they've comported themselves in the past, a feature not a bug. (Yeah I know I'm repeating myself and that the latter bit is irrelevant to your point, but on this subject I can't help it: the karmic comeuppance is just too tasty.)
Well, cable TV used to be "piracy" when it rebroadcast over-the-air stations. Then they got a compulsory license written into law (17 USC 111). Doesn't seem to have destroyed the networks.
And, once upon a time, record labels paid radio stations to get songs on the air. That was outlawed, but it does show that what's considered "normal" now wasn't always, and might not be in the future.
And, once upon a time, record labels paid radio stations to get songs on the air. That was outlawed, but it does show that what's considered "normal" now wasn't always, and might not be in the future.
And, once upon a time, record labels paid radio stations to get songs on the air. That was outlawed...
Maybe this needs to be reversed. I'm sure there are some smaller labels who would be more than happy to pay the stations to get some of their tunes on the air.
Frankly, I think it's preposterous that it was outlawed to begin with, and the ramifications are clear: the only songs that get playtime are the songs that are "known" and the only songs that are "known" are the songs big enough to have a big label behind them. And since smaller players can't pay the stations to play their unknown artists, the big labels are able to make unreasonable demands on the stations because the alternative[1] is outlawed.
Note: the entirety of this comment is hinged around the assumption of validity of the quoted comment, I've not verified if this is true or not, I simply took the claim as true and ran with it.
[1] That is, the alternative method that would generate a profit, specifically, taking money from labels wishing to promote their artists, in exchange for the possible loss of listeners. When less listeners = less advertising dollars, the loss of revenue needs to be subsidized elsewhere, and accepting money from smaller labels (or even the artists themselves), is an obvious way to subsidize that.
Maybe this needs to be reversed. I'm sure there are some smaller labels who would be more than happy to pay the stations to get some of their tunes on the air.
Frankly, I think it's preposterous that it was outlawed to begin with, and the ramifications are clear: the only songs that get playtime are the songs that are "known" and the only songs that are "known" are the songs big enough to have a big label behind them. And since smaller players can't pay the stations to play their unknown artists, the big labels are able to make unreasonable demands on the stations because the alternative[1] is outlawed.
Note: the entirety of this comment is hinged around the assumption of validity of the quoted comment, I've not verified if this is true or not, I simply took the claim as true and ran with it.
[1] That is, the alternative method that would generate a profit, specifically, taking money from labels wishing to promote their artists, in exchange for the possible loss of listeners. When less listeners = less advertising dollars, the loss of revenue needs to be subsidized elsewhere, and accepting money from smaller labels (or even the artists themselves), is an obvious way to subsidize that.
> Maybe this needs to be reversed. I'm sure there are some smaller labels who would be more than happy to pay the stations to get some of their tunes on the air.
You're assuming an interesting relationship between the "current resources" and the "should play" curves.
Each radio station has a fairly fixed amount of "play time" and there aren't that many radio stations. I think that it's reasonably likely that "big music" would buy up all the time worth buying at prices that the little guy couldn't match.
Note - I'm not saying such restrictions are a good thing, I'm just saying that it's not a choice between happy unicorns and ugly trolls.
Of course, "big music" already does use various forms of "not money" to "promote" their folk. Play the game, and you get phone interviews, early release, special versions with local flavor, and some free tix to a concert that is going to be sold out no matter what your radio station does. That can't be matched by a smaller label, let alone some genius in a garage.
You're assuming an interesting relationship between the "current resources" and the "should play" curves.
Each radio station has a fairly fixed amount of "play time" and there aren't that many radio stations. I think that it's reasonably likely that "big music" would buy up all the time worth buying at prices that the little guy couldn't match.
Note - I'm not saying such restrictions are a good thing, I'm just saying that it's not a choice between happy unicorns and ugly trolls.
Of course, "big music" already does use various forms of "not money" to "promote" their folk. Play the game, and you get phone interviews, early release, special versions with local flavor, and some free tix to a concert that is going to be sold out no matter what your radio station does. That can't be matched by a smaller label, let alone some genius in a garage.
I think that it's reasonably likely that "big music" would buy up all the time worth buying at prices that the little guy couldn't match.
And that would immediately solve this problem of the stations having to pay the label. That would introduce competition where competition is currently outlawed.
And that would immediately solve this problem of the stations having to pay the label. That would introduce competition where competition is currently outlawed.
Not necessarily.
A radio station needs to play some "hits". If the price of the hits is "you don't play anything indie" AND money....
A radio station needs to play some "hits". If the price of the hits is "you don't play anything indie" AND money....
>They won't make them available for free download!
Yea they do check out the public library system.
Also if you like scifi check out Baen free library. There are also a few articles on the results of them giving away many of their books for free.
Yea they do check out the public library system.
Also if you like scifi check out Baen free library. There are also a few articles on the results of them giving away many of their books for free.
To be fair, the libraries also stock music and movies (at least in Germany they do).
You vastly overate the value of promotion.
At some point, the owner would much rather have actual money in the pocket than "awareness", whatever that means.
After all, who cares if you get 100000000 views on YouTube if you never make a dime from it?
It's just like Hulu and the TV studios: they don't care if they lose out on the "promotion" of their product to the millions of viewers around the world by limiting viewership to the US, b/c they have no way to monetize foreign viewers.
After all, who cares if you get 100000000 views on YouTube if you never make a dime from it?
It's just like Hulu and the TV studios: they don't care if they lose out on the "promotion" of their product to the millions of viewers around the world by limiting viewership to the US, b/c they have no way to monetize foreign viewers.
Soulja Boy
Soulja Boy has monetized extremely well - he sold a _lot_ of ringtones, has had 3 number 1 singles now, and has said that he has over 25 million dollars in the bank. He turned a viral video into a career, and it's amazing. And remember, he's only 18.
exaggerating about how much money you have is part of the corporate hiphop shtick.
One example. Which actually fits what I said; the free views online did very little to help his career. It was only after signing with a record company that commercial promotion pushed the music into public awareness: a studio-funded website, studio-funded placement into Entourage, and studio-funded placement into the queues of radio stations.
I am surprised that none of you brought up Marie Digby or Katy Perry. But then again, their careers mirrored that of Souljah Boy: free promotion did little to help their sales until the traditional studio machine kicked in.
I am surprised that none of you brought up Marie Digby or Katy Perry. But then again, their careers mirrored that of Souljah Boy: free promotion did little to help their sales until the traditional studio machine kicked in.
I'm not sure how you say the free views online did very little to help his career. Soulja Boy would not have a career if there weren't so many people interested in crankin' dat Soulja Boy via Youtube.
The Arctic Monkeys may not have made money from their free promotion, but the free promotion got them the contracts that finally got them money.
It may be true that once established, free promotion will only do so much for sales. So then what?
Stop whaling and start catching tuna. Instead of signing artists that established their own fan bases, sign more, newer artists and don't spend so much money overengineering all the audio into flat loudness. Then, offer access to the catalog on a sliding scale - the more new, unestablished artist impressions, the cheaper the licensing fee for the time period. So you get paid a reasonable fee for a site that enables 24/7 Michael Jackson, or you drum up cheap awareness of new artists as sites like Pandora seek to institute thesixtyone-like rewards and incentives for listening to new music.
The Arctic Monkeys may not have made money from their free promotion, but the free promotion got them the contracts that finally got them money.
It may be true that once established, free promotion will only do so much for sales. So then what?
Stop whaling and start catching tuna. Instead of signing artists that established their own fan bases, sign more, newer artists and don't spend so much money overengineering all the audio into flat loudness. Then, offer access to the catalog on a sliding scale - the more new, unestablished artist impressions, the cheaper the licensing fee for the time period. So you get paid a reasonable fee for a site that enables 24/7 Michael Jackson, or you drum up cheap awareness of new artists as sites like Pandora seek to institute thesixtyone-like rewards and incentives for listening to new music.
Studios already do that with smaller artists. You just don't hear too much about them...b/c the money scales directly with perceived commercial value.
Studios chase whales because in a hit-driven industry, one successful whale will pay for his own marketing, and all costs associated with several tons of tuna (good or bad).
Think of it like the App Store: a few successes drive the system.
Studios chase whales because in a hit-driven industry, one successful whale will pay for his own marketing, and all costs associated with several tons of tuna (good or bad).
Think of it like the App Store: a few successes drive the system.
Well, that's what happens when you pin your business model on content you don't own.
It sucks, because labels and consequently artists will be missing out on the revenue and promotion that might come from wider web broadcasting.
It sucks, because labels and consequently artists will be missing out on the revenue and promotion that might come from wider web broadcasting.
Good observation. I was listening to Chris Anderson's Free on the commute home, and an interesting case he mentions is how, back in the XIX century, radios created their own label, BMI, so they didn't have to pay royalties that would render their business model completely inviable.
I think that whoever succeeds in this area will do something very similar, working with indie artists from the very beginning, maybe even producing their albums.
I think that whoever succeeds in this area will do something very similar, working with indie artists from the very beginning, maybe even producing their albums.
Lawrence Lessig also talks about that case in this great TED talk:
http://www.ted.com/talks/larry_lessig_says_the_law_is_strang...
traditional radio has been in business for decades, with a similar business model. they pay the record labels nothing.
Not true. Traditional radio stations do pay royalties.
"For years, stations have paid royalties to composers and publishers when they played their songs. But they enjoy a federal exemption when paying the performers and record labels because, they argue, the airplay sells music."
http://articles.latimes.com/2007/may/21/business/fi-radio21
http://articles.latimes.com/2007/may/21/business/fi-radio21
Well, that's interesting to know. That's certainly not how it works in Australia, which coloured my perception of things.
They pay royalties to song-writers but not performers.
Pandora is charging $0.99 for premium accounts that let you listen to over 40 hours/month. That's $.025 per hour (less if you listen more). People pay $3 for a 10 second ring tone.
Charge more!!!!! People love and highly value your service. There are many, many people who would rather pay $5, $10, $20 or more per month to ensure that Pandora stays alive. How about limiting the number of songs you can listen to on the free iPhone client and selling a premium client for $9.99? They have 200K iPhone users.
I love Pandora, but they're not trying very hard to monetize.
Charge more!!!!! People love and highly value your service. There are many, many people who would rather pay $5, $10, $20 or more per month to ensure that Pandora stays alive. How about limiting the number of songs you can listen to on the free iPhone client and selling a premium client for $9.99? They have 200K iPhone users.
I love Pandora, but they're not trying very hard to monetize.
They wonder why we pirate songs and they're losing money.