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Social Media Networks Are Music’s Curse and Salvation | Epicenter | Wired.com
This is an older article, but still has relevant points in today’s Social Music landscape.


Forrester_chart_2
In the golden age of the record album, friends would gather around the hi-fi system to share the latest music, most of them not paying a cent. Today, music fans do pretty much the same thing — online, in social networks. But now, just about none of them pay.

Downloading music is still a big business, and it pays a lot of bills: Artists and labels have already earned around $4 billion from iTunes sales alone. But the dynamic is shifting to the cloud, where tracks are always available and listeners generally don’t have to fork out money.

These networks represent something of a threat to iTunes, the labels and their record-store-style pay-per-download music sales. But a new report says the same social media sites that threaten the old-school, sales-based approach will eventually save whatever’s left of the music business.

"Social music may not generate much revenue now, but monetization’s effectiveness must — and will — improve," writes Mark Mulligan of Forrester Research (free summary; $750 for full PDF). “In doing so, it will become an increasingly important revenue stream that helps fill the gaping hole left by lost CD sales.”

The key: On social media sites, users categorize themselves into useful demographics based on media consumption, so music-oriented sites can offer advertisers more value than the ones where all people do is talk.

Picture advertisers as caterers at an online party. It’s easier for them to choose which drinks to serve if they know Early Man is playing. Music helps advertisers figure out who users are, and what they might like to buy — including, according to Forrester, music downloads.

The debate continues about whether streaming services can replace music ownership.

Forrester admits that “increased adoption of mobile data packages and of connected, dedicated portable media players like the iPod Touch are … giving consumers on-the-go access to previously PC-tethered streaming experiences. In this context, ownership becomes less important if the songs you want are available on demand and on the go.”

However, its report concludes that portable on-demand streaming services will not substitute for music ownership — and cannot do so, if they’re going to get along with the labels.

It’s an interesting conclusion. Certainly, Pandora, whose usage is increasing as others plateau (see Forrester’s chart above), is not substitutional for music ownership. But on-demand mobile services like the potential Spotify iPhone app, which would presumably let you play customized playlists from a huge catalog of music, could replace some peoples’ iTunes collections in the blink of an eye — especially considering that phones apps can cache music to bridge data dropouts.

Many companies are focusing on social media according to the report, having more or less conceded the music download space to iTunes. One example is Yahoo, which just turned Yahoo Music into a social artist directory with hooks into Pandora, YouTube and elsewhere, and plans to launch an open app development platform similar to Facebook’s app platform (first reported here).

But will there be enough money to go around — especially for the labels, which control the music everyone wants to listen to and talk about on these networks? Not even frontrunner Google can keep up with the licensing payments labels have demanded, in some cases.

Forrester concludes that once labels and sites acknowledge that for some users, free is all they’re ever going to get, social media sites will generate significant revenue from ads and subscriptions — just not enough to return it to those high-flying days of the late ’90s, when everyone bought CDs to replace their cassettes and vinyl.

The sweet spot for the fans, advertisers and labels, according to the report, lies in the most popular and rudimentary networks. Apparently, sites with more complicated features only appeal to the most sophisticated 5 percent or so of the population.

The report ranks the key social media networks in the following order (in increasing order of popularity and generally decreasing order of complexity): Last.fm with 20 million users,
Bebo 22 million, Pandora 24 million, imeem 25 million,
MySpace 139 million, Facebook 175 million and YouTube — on top — with 344
million users.

YouTube sits in the middle of the mainstream, appealing to the most internet users regardless of age, and Pandora is growing like wildfire on multiple platforms. Maybe that’s why the labels are so concerned with making sure they get the most bang for their buck from both Pandora and YouTube.

MySpace finally plugs into Facebook - Allows artists to share more from MySpace
(Credit: MySpace)

MySpace has finally made a concession of sorts: that rival Facebook has grown so dominant that not syncing up to its web of social connections would be a mistake. The News Corp.-owned social network, as was rumored late last year, has “synced” its service with Facebook (and Twitter) so that members can cross-post their status updates as well as shared content.

It’s pretty self-explanatory, taking the recently revamped “stream” design of MySpace profiles and plugging in Twitter and Facebook’s application program interfaces (APIs).

The “syncing” applies not only to individual MySpace users, but also bands and celebrities. One of the reasons why this is pretty imperative for MySpace is because it’s in serious danger of losing out entirely to Facebook’s “fan pages.” MySpace gained much of its early traction because it was possible for independent musicians to establish a presence and manage a fan base there, something that lost its luster once Facebook’s open-ended fan pages started to take off even more successfully than many had speculated.

"This is particularly exciting for the millions of musicians on MySpace who can now use this tool as a complement to their MySpace Music presence and share their vast library of content, including full album catalogs, to people who’ve liked their Facebook page," a release from MySpace explained.

Could social networking sites save the music industry?

If a songbird sings in the forest and no one is there to hear it, is it really music? Not if you’re a teenager.

Especially among 15- to 25-year-olds, people seem to need their peers to validate their musical tastes, making the Internet a perfect medium for the intersection of MP3s and mob psychology.

The challenge is to draw young people away from file-sharing networks that don’t bother with legal licenses. So “added value” has become the new hook, or as one industry participant put it at a music industry gathering this week, “a better form of free.”

Imeem and Bebo are two Web sites trading on the idea that music is a social phenomenon, and that the Internet is the place to be to gather around it. Imeem asks, “What’s on your playlist?,” while Bebo calls itself a “social media network.”

Imeem draws 20 million visitors a month by specializing in free streaming music and music-video playlists that you can customize. The offerings are surrounded by information about the artists, rankings, related songs, polls, and profiles of other fans.

It pays the record labels to license the songs and brings in money from advertising, claiming that it can aim its marketing messages very narrowly.

"We can target to hip-hop fans in L.A. who are also into indie films," said Steve Jang, Imeem’s chief marketing officer.

The most successful sites in any category, Jang maintains, are not the ones with the most money or the best technology, but the ones with the best “user experience,” like the simple interface that Google started out with.

The recent wave of social music sites that Imeem is a part of is showing the music industry that a free, open, ad-supported system is better than tying down digital songs with software that limits their playability, Jang said. Just look at radio and MTV, which have been sustained by advertising for years.

But until now, the industry has pursued a philosophy of “scarcity creates value” in digital music, Jang said, by locking down legally acquired songs with hardware or software constraints.

In the past seven months, all of the major labels have consented to loosening their digital rights management systems. Now, “there’s no putting the genie back in the bottle,” Jang said.

Bebo is also building an Internet community around media. Joanna Shields, its international president, believes that music is “very emotive” and young people want a place to share their feelings and thoughts about it.

Like Imeem, Bebo surrounds its offerings with extras: fan groups, artist information, concert dates and charts.

Bebo, which has 40 million registered users and drew 11 million visitors last month from Britain alone, also lets its users bring in music and other media from Web sites like YouTube by using “widgets” that can be dropped on to personal pages.

The company is partnering with media providers like Endemol, the production company that created “Big Brother,” the Ministry of Sound and TVNZ, among others.

Shields acknowledges that teenagers, the age group most attached to socializing around entertainment, do not have the kind of income that many advertisers would like to attract. But they make up for it with loyalty. As a testament to how attached Bebo users are, the average time spent on the site per session is 40 minutes - an eternity by Internet social-networking standards.

As music communities like Imeem and Bebo attract members by being social and free, they could begin to chip away at the file sharers, thus helping the music industry.

But the cause of “free” music took a temporary blow this week, when a company called Qtrax failed to deliver on what it said would be unlimited licensed downloads on the Internet.

Its alleged agreements with record labels were still vaporware when it opened Monday. Ars Technica, the technology news blog, called it “the most jacked-up, disappointing launch in years.”

Is Social Media Saving Music? - Spinner
There’s no doubting the social media explosion of the ’00s had a huge impact on the artist-fan relationship. Short of being a spouse or a roommate, social network sites allowed fans unprecedented access to artists and bands. Conversely, they’ve permitted artists to connect and directly promote themselves, too. But even when it comes to your favorite pop star or rock band, is there such a thing as too much information? For an artist, on the other hand, how much time and energy should be devoted to blogging, Tweeting, loading up your YouTube page and updating Facebook with insightful nuggets?
Neilson: Americans spend nearly a billion hours a month in social networks

Social takes lead:
Social networks accounted for 22.7% of US internet time, or 906 million hours, in June 2010, a significant 43% increase from the 15.8% share of time they commanded in June 2009. Online games came in a distant second with a 10.2% share of internet time in June 2010, or 407 million hours, a 10% year-over-year increase from 9.3%

Email Loses Luster:
As social networking becomes an increasingly popular form of online communication, email is taking a hit While email represented the third-largest use of internet time in June 2010 (8.3%, or 329 million hours), this marked a 28% decline from June 2009, when email accounted for 11.5% of internet time and was the second-largest usage component 1/3 of Online

http://www.marketingcharts.com/direct/social-media-games-email-dominate-web-time-13738/nielsen-internet-sectors-hoursjpg/

Neilson: Americans spend nearly a billion hours a month in social networks

Social takes lead:
Social networks accounted for 22.7% of US internet time, or 906 million hours, in June 2010, a significant 43% increase from the 15.8% share of time they commanded in June 2009. Online games came in a distant second with a 10.2% share of internet time in June 2010, or 407 million hours, a 10% year-over-year increase from 9.3%

Email Loses Luster:
As social networking becomes an increasingly popular form of online communication, email is taking a hit While email represented the third-largest use of internet time in June 2010 (8.3%, or 329 million hours), this marked a 28% decline from June 2009, when email accounted for 11.5% of internet time and was the second-largest usage component 1/3 of Online

http://www.marketingcharts.com/direct/social-media-games-email-dominate-web-time-13738/nielsen-internet-sectors-hoursjpg/

How Facebook Became the Biggest CRM Provider

While the tech world obsessed about when Facebook would turn on location and morph into a “Foursquare killer,” the social network has quietly become something else: the biggest relationship-marketing provider for many brands.


Biggest Facebook Fan Pages
Enlarge

BIGGEST FACEBOOK FAN PAGES: While U.S. web traffic to brand websites rarely exceeds six figures, DBMS can already count 37 branded Facebook pages with at least a million fans just among CPG, retail, pharmaceutical and fast-food marketers.


For many marketers, their Facebook fan bases have become their largest web presence, outstripping brand sites or e-mail programs either because a brand’s traditional web-based “owned media” is atrophying or because more consumers are migrating to social media.

Doom Troopin’ - The European Invasion
Black Label Society, is the brainchild of guitar great Zakk Wylde. Having graced the world’s stages for the last 20 years, both as Ozzy Osborne’s right hand man and fronting BLS, Zakk Wylde has established himself as one of the few remaining guitar heroes. European Invasion captures BLS live on their sold out European tour in 2005 supporting their hit album “Mafia” . It contains the full Paris show as well as extensive bonus features. Originally a 2 disc DVD it is now presented in superb picture and sound quality on a single disc Blu-ray.


Sherri Dupree (of Eisley) — “Two-Headed Boy, Pt. 2 (Neutral Milk Hotel Cover)”
eisleysherri.jpg
Sherri Dupree Bemis
​For whatever reason, we’ve been thinking a lot about Eisley lately—maybe it’s the whole all of them being married thing, dunno. More likely, we’re just getting antsy waiting around for new material, which, hey, this post from family band’s patriarch, Boyd Dupree, says is still coming, and soon.

Says the Tyler-based family band’s father: The band is currently mixing its new, still-owned-by-Warner Bros. songs. And, yes, the band still hopes to release the album this fall, just in time for a new tour the band is currently planning. But, says Boyd, there are “Obstacles. Out of our control. Working on resolving.”

In the meantime, the band’s been working on some other things—like some cover songs, just for kicks.

Maybe you remember Stacy Dupree’s cover of “Silver Springs” from back in February? Well, back in July, her big sis, Sherri, posted another cover “for fun” to the band’s Facebook page. And while our sharing of this cover song may lack some timeliness, it’s gets made up for in indie credibility. After the jump, give Ms. Max Bemis' take on Neutral Milk Hotel's “Two-Headed Boy, Pt. 2” a much-deserved listen.

Bonus mp3: Sherri Dupree (of Eisley) — “Two-Headed Boy, Pt. 2 (Neutral Milk Hotel Cover)”

Not bad, right?

Social Media