March 17, 2008 |
Is it the end of old media as we know it?* R.E.M. has a new album dropping 1 April, but for those of us already using iLike with iTunes or our Facebook or MySpace accounts, we are in luck; 11 tracks from the album will be available for streaming and sharing a week from today (Monday, 24 March), one week before the album's release date.
R.E.M.'s release may be the highest profile use of digital distribution yet, and the surest sign that the music industry is starting to look for legitimate uses of the Internet to get their music out there. Wired writer Eliot Van Buskirk had a fascinating discussion with NPR's Terri Gross on the program Fresh Air last week that spoke to what we are already seeing as well as what the record industry still needs to do to catch up.
According to Van Buskirk, outside the US, companies are rethinking the entire model of the music business. Legal models for distributing music have popped up like RCRD LBL, which looks like a blog. You can download songs from each entry, and the artists are paid per song at a flat rate. This is an ad-supported site, and no royalties are paid, but as Terri Gross noted, problems may arise with this model if an album really takes off.
Van Buskirk also spoke of other methods of digital distribution that can replace the ubiquitous illegal torrents. In addition to vaporware Qtrax, which he describes as a new version of “the old Napster” with ad revenue divided by total play time of each song, he discusses the idea of fan-funded music, which probably won't be seen in America, as it would be deemed gambling and illegal stock market under existing laws.
In the fan-funded music model, fans get together and contribute a pre-determined dollar amount before an album is released (usually around $30,000 or $50,000). When the goal is met, the band goes into studio and records album, and fans get cut of revenues. This model lets albums get financed that labels might not have funded, and so far, U.S. citizens can participate. This model allows fans to also buy and shell shares in the bands.
Labels are watching sites using this model, like The Netherlands' Sellaband, which has had 14 bands reach the $50,000 mark, and the UK's Slicethepie. The labels are realizing that if fans are going to commit that much money, odds are the album will sell, and they may buy out contracts. In one instance, fans made 150% on buy-out.
Of course, even without Van Buskirk's assertions, it's obvious that the recording industry is at a tipping point. There are tons of unsigned acts promoting themselves online using venues like MySpace and CDbaby. You have labels using services like Big Champagne to monitor P2P file sharing, not necessarily for prosecuting offenders, but to get a real-time view of what people are actually listening to and seeking out. People will always want to hear music before they spend money on it. But we also need two things now: a method for artists who are just getting into this new age of digital distribution to catch up with artists who have made their mark using online methods of courting fans, as well as someone or something to help sort through the glut of music online to help us know what we'd like. Many people are already using services like Last.fm and Pandora.
Pre-release album streams really aren't anything new; journalists have been privy to this type of release for a while now, being given early access in order to prepare their reviews, as Van Buskirk noted. And while we've seen some big online releases recently in those of Nine Inch Nails and Radiohead, artists would probably prefer skipping over interfacing with web 2.0 technology; they want to make music and have someone do the rest for them. iLike is putting itself in the position to do just that.
Ali Partovi, CEO of iLike, was kind enough to speak to me last week from SXSW about the upcoming R.E.M. release as well as where iLike sees itself in this new digital space:
1. I'd like to start with the obvious question; how did the R.E.M. deal come about? Did they approach you, or vice versa?
Ali: It was a little bit of both. Since late September 2007, iLike services have been built out to better support artists. iLike reached out to artists and managers to explain and market these services, and we have had a phenomenal response. More than one-half of the top 500 selling artists are now using iLike to provide content to their fans. With R.E.M., we had an ongoing conversaton about how this release could work, and once the band saw what iLike could offer, they agreed that this could fit into their release plans.
2. Trent Reznor of Nine Inch Nails just called the Radiohead pre-CD digital release “insincere” because of the sound quality of the initial release. Will Accelerate be a high-quality stream or somewhat degraded as Radiohead's was (torrent-quality) to encourage later album purchase?
Ali: Definitely not. The stream will obviously be optimized for what's best for connection speeds. iLike and R.E.M. both want as many fans as possible to be able to listen to the album no matter what their connection speed, but It will not be based on getting people to buy the product because the stream was sub-par.
3. Obviously, new and unsigned artists see great value in turning to the Internet for exposure. What do you (and R.E.M.) feel the value is for established artists who already have a large fan base?
Ali: The Intenet is possibly more useful for these giant bands. For example, Fallout Boy came up as the MySpace generation. They already know how to leverage online content distribution. Bands who broke out on traditional media have a harder time leveraging the online audience and building that connection online. The Internet (and iLike) provides a broader platform that reaches beyond the diehard fans to additional fans. It's a channel to reconnect with their fans that happens more organically, like the iTunes integration, which can showcase music right in iTunes, with no effort on the part of the user.
4. Eliot Van Buskirk appeared yesterday on Fresh Air with Terry Gross to talk about the digital distribution model and how it is changing the music industry. In the segment, he mentioned that there are something like 7 million bands on MySpace alone, and something needs to fill the role of sifting through to elevate deserving bands. Do you see iLike moving into that role at all? If so, how?
Ali: The number is probably inflated at 7 million, which probably includes wedding bands, as well as musicians looking for gigs and bands. The Internet has provided a wealth of choice, but a virtual poverty because you don't know what to listen to. There is a need for something scalable that can help the good acts to rise to the top. iLIke is part of that solution, with several different mechanisms that help accomplish that. ILike tracks and charts what songs are spreading the fastest across the different channels… what songs are being added to profiles and iTunes profiles.
iLike also has an indie artist site called GarageBand. On GarageBand, we have a very structured community-based review panel that rates and tags unsigned artists, which in turn feeds into iLike recommendations. This system doesn't just note whether a band is good or bad, but also what it sounds like. It's about identifying a potential audience as well as quality, and the third aspect is simply having the ability for songs to spread virally from friend to friend, because we integrate with social networks. This is a role that has historicaly been played by the DJ or the label promotions, but it's now your friends and their frends, who are recommending music to you. With this method, a band can rapidly reach a mass audience if it's good.
5. Obviously, the deal with R.E.M. is huge for iLike as well as R.E.M. fans. I have several friends who have added iLike Sidebar and the Facebook application since I told them about the pre-release. Have you seen an upsurge in downloads and application adds since the announcement?
We may have, but I'm not sure, since I'm currently at SXSW and not able to track our stats. The reality is that traffic has been growing so rapidly even before this announcement that we've had little time to monitor the growth.
(Further checking reveals that R.E.M.'s fan count on iLike has jumped from 120,000 to over 305,000, and counting, due only to the press coverage of the release and word-of-mouth [ed. like mine!] since iLike on-site promotion of the release hasn't begun yet.)
The album will begin streaming on 24 March. For more information, you can check out R.E.M.'s artist page on iLike.
I really have to give special thanks to Ali Partovi for taking the time to talk to me even with a VERY hoarse voice after shouting over the music at SXSW, and Emily Glassman of iLike, who helped me chase down some additional information.
* Sorry, just couldn't help myself there.