Archive for December, 2007

Data Point on Digital Music Distribution Revenue Splits

Following up on my post pointing to David Byrne’s excellent article about music distribution options for musicians, from the biggest acts to the smallest indies, I thought I’d offer a real world data point. My (very indie) record label, Toothless Monkey Music, distributes CDs through CDBaby, which I have to say is one of the best services around for independent musicians. When you put a CD up for sale on CDBaby, there’s a nominal up front fee ($35) to get a CD listed, and then CDBaby also takes care of digital distribution as well, so your music winds up available on iTunes, Rhapsody, Yahoo Music and many more. Oh, and it is a totally non-exclusive deal with CDBaby as well.

What’s best about CDBaby is their pricing: for physical CDs, they take $4 per CD sold. For digital distribution, the deal is even better, they take a 9% cut and pass the remainder on to the artist. Their full pricing menu is described here. So in the case of the iTunes music store, when my band Soul Patch sells a track (our best-selling track of all time on iTMS is the quirky Arabic Ska), we get $0.637 per $0.99 track sold, CDBaby gets about a nickel, and Apple gets the balance. The vast majority of the revenue in this case goes directly to the artist, with Apple’s cut going primarily towards their hosting costs and bandwidth. From my perspective, 64% of all recorded music revenue going directly to the artist is a pretty good deal.

Bottom line, the world has changed. If you are an independent artist and are able to handle your own marketing and promotion efforts, the economics of digital music sales weigh heavily in your favor, arguably more than ever before. Of course, one can argue that over time even the digital distribution revenue streams may vanish, but that’s a (much longer) discussion for another day.

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Fun With Lasers

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Armed with icicles hanging from my front porch roof, a green and a red laser pointer, a plush-toy velour pumpkin and a Canon EOS 10-D set for 30 second exposure, I set out to experiment with light painting.  I was inspired by my friend Carl Rosendahl’s excellent APAD (A Picture A Day) photoblog, and his great shot of his Gibson Les Paul.  You can find all 47 shots I took during this photo shoot here.

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David Byrne on the State of the Music Industry

Scotsman, musician and polymath David Byrne just penned an excellent article in Wired regarding the current state of affairs for record companies and artists for distribution of CDs and digital music. An authoritative must-read for anyone in the music business.

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Lossless Audio on iTunes

From Slashdot, speculation that iTMS will offer tracks in Apple Lossless format as early as next year. Assuming they also make these tracks free of their evil DRM, I’d be happy to pay a premium over the standard mp3/AAC tracks available. As a recording engineer and studio owner, I definitely can hear and appreciate the difference in quality between the lossy perceptual compression of mp3/AAC and lossless/uncompressed audio.

Call me old-school, but I often still buy CDs when I buy music (unless I’m buying just a single track in which case I will probably buy online). I like the physical artifact of a CD, I like the art and the liner notes, the higher-quality sound and the fact that the media serves as an archive and backup. When I buy a CD, I rip it on to my music server at home in lossless and 192 kbps mp3, I file the cover art, and then I stick the CD onto a spindle in a storage closet. So I’m not using the disc after I rip it, but I still like the security of having the disc itself, having suffered the economic and emotional loss of a hard drive crash in the past.

Making lossless audio available would remove one of my major gripes about purchasing downloaded audio, obviously DRM is another big one, which appears to be slowing going away, but the third thing missing, from my perspective, is a digital format that serves as a replacement for all the art and information that comes packaged with a CD.

As a music nerd, I love reading the lyrics, inside cover-art, thank-yous, performance and songwriting credits in the liner notes of an album. There ought to be a “virtual album art” format that bundles all this data with an album download so I can browse it on my iPod, laptop, etc. while I am listening to music. I realize a lot of this can be found online, but I want it packaged in a single digital file that I can view and explore offline as well. I’ve never understood why CDDB hasn’t built this out, rights issues notwithstanding.

Adding this kind of data to the digital album download would bring back something missing from the digital download experience, and it might help prevent the era of great album art from coming to end, which is clearly the (sad) path we are on now.

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Do All VCs Want to be Rock Stars?

I know I do, and I’ve played guitar in numerous bands for the past 20+ years, I have a recording studio in my house, an angel investment in an indie record label (About Records) as well as my own boutique label (Toothless Monkey Music), and my band Soul Patch (which includes my partner Jason Mendelson on drums) is about to release our second album in January.

My band in college, Where’s Julio? (see the link to the album in my righthand sidebar) included three of the six Excite founders, and we got to play some fun gigs during the bubble era, including one at San Francisco’s legendary Fillmore for a benefit for the Electronic Frontier Foundation, where we got to share the stage with Roger McNamee’s band, The Flying Other Brothers. Roger is probably the highest profile investor who is also a musician and somehow manages to maintain a fairly active gigging schedule with his new band Moonalice. Heck, one of Roger’s partners at Elevation is Bono, so Roger’s rocker cred is pretty unassailable at this point.

Well, there’s a new kid on the block now. I had the pleasure of working with my colleague Heidi Roizen at Mobius VC over the past eight years, and now Heidi’s stepped back into her entrepreneurial shoes (jeans?) as CEO of SkinnySongs. A few years ago, Heidi generously hosted a party for About Records at her home, where she met About’s CEO George Daly, a long time record industry A&R veteran behind acts such as The Cars, The Tubes, Vanessa Carlton and Tool. Heidi penned all the lyrics on this album and teamed up with George Daly and super-producer David Malloy (who has over 40 Billboard #1 hits to his name) to create Skinny Songs, an album full of well-polished, genre-hopping pop tunes aimed at motivating women to lose weight.

Heidi herself is a great endorsement for the product and has slimmed down considerably over the past six months while she put together the album. Read more about the SkinnySongs story in this Forbes article or this article in the Merc. Heidi, best of luck with your new gig, and may SkinnySongs go platinum!

The Facebook Birthday (And Other “Aha” Moments)

I was reading Chris Fralic’s post about LinkedIn vs. Facebook, when he talked about his first Facebook birthday, which he described as a personal “aha” moment with the service after his recent birthday. I had this same same exact “aha” experience on my birthday several weeks (October 29th for those of you keeping score) when I too received more birthday wishes on Facebook than I did through any other medium on any other birthday. Pretty cool.

I’d been using it intermittently ever since they opened it up to all comers, but mainly as a means to keep myself current, but my usage has shot up since then and I am beginning to understand the attraction.

My experience with Twitter was similar — I had been a user for weeks, mainly for “research”, when one night I was having margaritas on the roof deck of the Rio in Boulder and decided to tweet what I was doing. Over the next hour, at least four friends who follow me on twitter who happened to be nearby came upstairs and said hello. Also pretty cool.

Finally, last week at the recent AlwaysOn Venture Summit West conference, I ran into Kevin Surace, CEO of Serious Materials, on Friday morning, and he mentioned he had been expecting to see me since I had noted my attendance via my Facebook status.

The reason these sorts of things are appealing (beyond the obvious fact that we are social animals) has been much discussed, with two of my favorite characterizations of what these apps enable being Lisa Reichelt’s term ambient intimacy and Jaiku’s social peripheral vision.

But there is something else going on here too, which is that the social graph is both virtual and physical and allows the virtual world to reach into the physical world in a more meaningful way than we are used to. Sure, a mouse click can cause a book to arrive at my doorstep a couple days later, but the thrill of that has long since worn off. The fact that a simple SMS message can result in four friends dropping by to say hi while I am out for drinks, or that someone might notice (via Beacon or similar) what movie tickets I bought on Fandango and decide to meet me at the theater is compelling.

Over time our virtual and physical environments are becoming increasingly intertwined (more on this later), but the merging of our virtual and physical social worlds is happening today (perhaps leading the way) and will become increasingly more common (and ultimately pedestrian) over time. To paraphrase Gibson, the future is here now, just unevenly distributed.

There are no doubt many more examples of this melding of the social bitspace and meatspace, and I’d love to hear people’s stories, so please comment.

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Comcast: Hurry up with TiVo Rollout!

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Via Gizmodo:  Upgrading your Comcast Motorola/Scientific DVR to run TiVo software costs an extra $2.95/month and has been rolled out in New England.  More details from Comcast here.  And go sign up here to be notified when it rolls out in your neighborhood.  Comcast, please hurry up and get this rolled out in the Boulder/Denver area! 

I gave up my DirecTiVo box when I moved from CA to CO and have been a victim of the Comcast DVR user interface for the past 16 months, and I have been wistfully remembering my TiVo days.  In fact, I’ve seriously considered leaving Comcast altogether because the interface on their DVR boxes has to be one of the worst UI abominations I’ve ever experienced.  Seriously — it boggles my mind how a UI can be so bad when there exists a great UI like TiVo that can be imitated.  Imitation is the sincerest form of flattery, but Comcast’s attempts to imitate have been a disaster.  So I’m glad they’ve given up and decided to make the best-of-breed TiVo interface available.  Finally.

I cannot wait to get TiVo back.  I can only hope it will happen sometime in the next few months because I’m not sure how long I can hold out.  Can anyone from Comcast chime in here on the rollout schedule?  Can anyone hook me up with early access?

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Goodbye Pay Phones

 PhotoFrom Slashdot:  AT&T is decommissioning their pay phones.  Video killed the radio star, p2p, Skype, and now this?  Probably a somewhat overdue capitulation on AT&T’s part given the ubiquity of the mobile phone.  I commented in a previous blog post about encountering a decommissioned pay phone — clearly they are on their way to becoming an historical curiosity, though perhaps they will live on in small numbers in dense urban areas and/or as a result of public outcry related to public safety and/or accessibility concerns.