MySpace Music: The Music Industry's Saviour?

In my previous blog entry entitled, "Backstage Music: Analog to Digital Television: The End of Concerts and Live Sports Broadcasting?," I brought up the negative repercussions that the analog to digital transition was going to have on not only the music industry but the whole entertainment industry as a whole. This week I explored the blogosphere to discover one the options that the music industry was pursuing to generate more revenue, the partnership between MySpace and the top major labels: Universal, Sony BMG, and Warner, and the smallest major label, EMI. This partnership would create MySpace Music (see right), which would allow users to stream music for free in an ad-supported environment. Although the exact details of this partnership have not been disclosed, some in the music industry do wonder if the revenue generated by ads would be enough to warrant such a partnership were music is in fact given to the end user for no actual cost. MySpace Music also created a partnership with Amazon to offer users the ability to purchase songs directly from within MySpace Music, without ever having to leave the site. The files offered by Amazon (see left below) would be DRM-free and therefore be able to be used across any portable media player. I personally believe that users will not purchase any music from their store because of the fact that they can always listen to music for free online. MySpace Music is not pleasing the music industry as whole, the Indie Labels have felt betrayed by this new partnership with the major labels. Indie labels are accusing MySpace Music of not only leaving them out of this new service, but also going as far as not allowing them to upload original music which they own the copyrights to. I believe that MySpace Music is committing a big mistake by "kicking to the curb" all the independent labels and musicians which helped to create what MySpace is today. Independent labels and musicians do not have the resources as the major labels do, so they depend on word of mouth promotion and social sites such as MySpace to generate their fan base. Not only are the independent musicians being affected, but also the users because not everyone wants to hear generic mainstream pop music; and if only mainstream music is provided then users might feel the need to go elsewhere to listen to their music which in return would be a big hit to MySpace. I found two blogs that dealt with this topic, one being TechCrunch which has been featured on various news programs such as CBS, their blog entry entitled "MySpace Music Puts The Industry On The Right Track," and the other techdirt which specializes in analyzing different industries, their blog entry entitled "Independent Record Labels Missing From MySpace Music." In addition to posting my comments directly on these blogs, I have also posted my comments below.

MySpace Music Puts The Industry On The Right Track
Comment:
Hello Michael,
Thank you for such an informative blog post. I really appreciate the fact that you not only shared your personal experience with the new MySpace Music service abut also mentioned how this service is a good business model for the music industry. You mentioned, "That 40% may be worth as much as $800 million already, on paper at least," where is this value coming? I was also wondering what your view was on the reports that Indie Acts were being left out of this deal and more importantly, were no longer being allowed to upload their music to MySpace. I understand the fact that MySpace is a new medium, which everyone wants to use because of the huge number of users that it has, but do you think that traditional advertisement by the record labels will ever stop? Will artists solely depend on their MySpace page or will there continue to be posters and other advertisement or their new music? You mentioned that all music should be free because anyone can copy a song, but what about the people that still want to physically own their music or for those who want to purchase legal downloads; would these users really be interested in being restricted to only being able to listen to music online on services such as MySpace Music? If the new way to go for music distribution is free, do you believe that record companies will just altogether stop manufacturing actual hard copies and solely distribute on ad-supported services, and if this is the case would they be willing to keep partnerships with Apple and other paid services, when they can just make a bigger profit with ad-supported services and not actually have to give any products to the end-user. If this is the case the music industry will be able to generate more revenue, solely by eliminating the costs that come along with manufacturing, distributing, and promoting physical copies of CD's. Seeing them from the artist's perspective, I do not know whether they would be happy to put in so much hard work into their productions when in fact they would not be able to see their final products in brick and mortar stores. I think that there is some nostalgia that comes along with seeing your final product in stores and therefore musicians would push to keep that distribution channel open. I believe that only time will tell how the music industry overcomes the downfalls that the digital age has brought, and we will just have to see and wait how users will react to MySpace Music.

Independent Record Labels Missing From MySpace Music
Comment:
Thank you for such a concise article about the treatment of Indie Record labels by the new MySpace Music service. I agree with you completely that Indie Artist contributed a lot to the growth and popularization MySpace. MySpace used to be a portal for hundreds if not thousands of Indie Artists who wanted to expose themselves to the masses in order to create new fans, generate buzz, and sell their music. Many musicians did come out of their Indie phase and were shot into the mainstream music industry because of their MySpace pages. One example I can think of is OneRepublic, which had a MySpace artist page, which caught the attention of Timbaland. Now with the new rules that have been put into place, it seems like new Indie Artist cannot create or upload their music which means a lot of artists will not have the opportunity to be exposed to producers and fans, therefore cutting their chances of making it big in the music industry. I know a lot of MySpace users liked the fact that they were able to find new and unsigned bands, because they were able to offer music which was "real" and not part of mainstream. I was wondering if you believed this new music service was going to cause have any negative ramifications for MySpace, such as fans and users leaving their social website and going to another one or Indie Artists coming together and openly endorsing another social website such as Facebook. You mentioned in your post that after posting your article you received a call from MySpace insisting that your story was not true and that they were in fact still allowing the same freedom of their service to Indie Labels. I was wondering why MySpace keeps insisting that this reports of them not allowing Indie Record Labels to be on their service to be untrue, when a lot of independent and prominent news sources are reporting the same facts. Do you believe that the huge amount of interest in this topic has caused MySpace to rethink their agreement with the major music labels and to allow Indie Labels back on their service? Maybe the major labels are afraid of the competition and want to monopolize that service but I do believe that in the coming days if not weeks, Indie labels will again be a huge part of MySpace Music.

Analog to Digital Television: The End of Concerts and Live Sports Broadcasting?

Technology has become such a huge part of our daily lives, that sometimes we cannot even remember how we were able to be productive in the past. During the last couple of years, technology has been evolving at an extremely fast pace, with the introduction of personal media players, smart phones, computer assisted vehicles, and for the most part it has been received with open arms. Not until recently, when the government decided to make the transition from analog to digital television signals mandatory, has a whole industry come together to oppose and express their feelings about a technological advancement and the negative implications that it would bring to millions of people. To the average American television viewer, the transition from analog (see right) to digital televisions is of course a good thing because for now there will be more channels available and they will be in high definition; all of these new upgrades being available free of charge. Of course nothing is ever really free, the government will be spending about $1.5 billion dollars in an informational campaign and incentive program.

Since television broadcasting companies will be ending their analog transmissions, the US Government decided to auction off the soon to be free air space to the highest bidders. This is where the entertainment industry stood up and noticed what was about to happen. Production companies and touring companies realized that the "white space" that they use on a daily basis was about to be licensed for other products, such as wireless Internet and public safety services. These new services and products would operate in the same frequency that is already being used by thousands of professional audio microphones, which are currently not only used by ESPN/NFL, television broadcasters, and other large production events such as concerts, but also by schools, churches, and your average garage band, effectively classifying all these wireless microphone products as illegal. To accommodate the new FCC regulations, wireless microphone makers have had to spend thousands of dollars in R&D to develop new products that operate in different frequencies and to certify their new products with the FCC.

Not only is the entertainment industry complaining to the FCC, but groups that support the use of unlicensed devices on the new white space filed complaints against the major wireless microphone producers and vendors, such as Shure Inc., Nady Systems Inc., Sennheiser Electronic Corp., B&H Foto & Electronics Inc., and Amazon.com to name a few. These groups allege that microphone producers have sold thousands of microphones and purposely marketed to consumers as legal, when in fact they are all operated illegally on certain frequencies. The above mentioned companies have responded by saying that they have asked the FCC to clarify to them on how to instruct their customers on what the proper use of these microphones would be after the digital television transition. So far the FCC has not given an answer because they say that more tests need to be done to.

As previously stated, production companies are among the users that will be affected by the analog to digital transition. In fact they are one of the largest wireless microphone users that not only depend on these devices to be able to produce great entertainment shows but also for their livelihood. Production companies tend to use wireless microphones in almost all live production shows, which include music concerts, live sporting events, theater, and even presidential debates. For example in music concerts, the user of wireless microphones and other equipment allows the performer to have a bigger stage and interact freely with the audience. It allows for the use of much bigger venues, such as arenas and stadiums, which in return give a higher profit for the artist and production company because of the fact that more people can attend these events. Wireless microphones and other equipment such as in-ear monitors also allow the musicians to roam freely around the stage and not be restricted to a specific space on stage. This freedom allows performers to put together more elaborate and entertaining productions for their fans. For example, without the use of wireless microphone, artists would not be able to do such stunts as flying over the crowd while they sing or running around from one side of the stage to the other. Wireless microphones not only allow the performer to do things that years ago were not possible, but it also allows a different environment to be created for the audience in which they are truly submersed into a different reality for the length of the show.

Another example would live sporting events such as football, were wireless microphones are used in abundance. Not only do the announcers and broadcasters (see left) use wireless microphones to conduct interviews, inform the audience of the plays, penalties, and other information throughout the game; offensive player and defensive players make use of wireless devices while they are on the field, which allows them to communicate with the coaching staff throughout the game. Without the use of these wireless devices, the game would not be as fluid as it is today. As a personal user of wireless microphones and other equipment, I can only hope that the FCC makes plans that takes our industry into consideration, not only because we live off such devices but also for the average sports and music fan that has come to enjoy the way concerts and football games are produced today.