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March 28 2013

13:00

January 18 2012

15:20

OpenCourt Coaxes Out More Data with Cooperative Coverage Day

A version of this post first appeared on the OpenCourt blog.

A man charged with selling drugs inside the courthouse. A woman said to have shoplifted $5 worth of barbeque chicken wings. A man charged with multiple counts of raping a child with force. A longtime Drug Court participant booted from the program for taking a non-narcotic pill (still against the rules). Everyone brought back to court owing fees or victim restitution in previously dismissed cases. A man on psychotropic medication charged with shoplifting a Stop and Shop cart full of meat and pulling a knife when confronted in the parking lot. A naked hiker in the Blue Hills whose defense to lewd behavior is being raised as a naturist. OUIs. Restraining order hearings. A wife sectioning her husband for alcoholism.

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OpenCourt has been streaming public court hearings from the First Session courtroom in the Quincy District Court in Massachusetts since May of 2011. We've received feedback about how our viewers use and value the footage, and we realize it would be useful to show more of the court's daily business -- not just the cross-section that comes through the First Session.

While holding to our goal to carve a plausible model for other courthouses, we've often asked ourselves how we and other journalists around the country could do a better job shedding light on a bigger portion of the iceberg's tip, and not necessarily using as much expensive technology.

In other words, just how much business does all of Quincy District Court do in a single day? How can we more fully capture the breadth of cases heard, day in and day out?

Cooperative Coverage

To help answer these questions, last month we hosted a cooperative coverage event at the court, an open invitation to citizen and traditional journalists alike to help us gather notes about everything that transpires in the building's six public courtrooms.

Our combined notes, which you can read here on our blog -- gathered between myself, our producer Val Wang, two Patriot Ledger reporters, two Harvard Berkman interns, one State House News reporter, and three citizen journalists -- are inevitably incomplete. But we hope this coming together shows more fully the wide array of hearings before the court, the sheer volume of cases, and the fact that this is all happening every day, outside of normal public view.

We realized it's easier than you might think for loosely affiliated citizens to collaborate on a one-off project (read: Twitter + Google Docs).

There were unsurprisingly a wide variety of cases. Some rough tallies: Assault & Battery (15, of which 3 were labeled as domestic violence), disorderly conduct (4), trespassing (3), resisting arrest (1), uninsured and/or unlicensed motor vehicle operation (5), speeding (3), shoplifting (5), larceny over $250 (1), receiving stolen property (2), distribution of an illegal substance (3), section 35 (1), sealed record request (3), interpreter needed (1).

This day was exceptional not by any standard of caseload or substance, only that more of us were there to see it and relay stories. For me and Val, the longer we're in court streaming, the clearer it is that we're sitting on a relatively unchecked sociological goldmine.

Opening Court Data

These notes from last month's experiment are, at the least, a compelling glance at the river of data flowing through our local courts every single day.

At best they offer a new angle on approaching larger questions: How do we get to a place where public court data is more accessible? Why aren't the stats being tracked more extensively and automatically in the name of scientifically diagnosing societal ills?

The Boston Globe recently published an extensive three-part series on Massachusetts drunken driving prosecutions, which undoubtedly required massive reporting energy. While that energy will always be required for strong narrative journalism, shouldn't reporters and the public at large alike have easier access to court proceedings to begin with? Wouldn't the state be better off if tracking the operation of its courts didn't require the Herculean effort of a crack, paid investigative team?

Thanks again to everyone who helped make this possible. Our aim at this point, as always, is to provide a window into the everyday landscape of our legal system. Beyond that, we hope efforts like this lead to smarter methods to inform and awaken the public -- to be a better radar for a community's prevalent crimes.

What do you think? What do you see? What should we do differently if we host another event like this?

September 03 2011

20:12

Dish said to plan blockbuster rival to Netflix

Bloomberg :: Dish Network Corp., the second largest U.S. satellite-TV provider, will introduce a blockbuster streaming-movie service to compete with Netflix Inc. next month, according to a person with direct knowledge of the plans. The timing is designed to coincide with price increases being implemented by Netflix.

Continue to read Alex Sherman, www.bloomberg.com

16:07

Online video finally chipping away at broadcast TV

GigaOM :: A quarter of people in countries with access to high-speed broadband are streaming video to their TV, although more than 80 percent still watch broadcast television as well. But that’s slowly beginning to change: According to survey data from Ericsson, there’s been a slight decrease from 2010 to 2011 in the percentage of folks watching broadcast TV, while Internet-enabled options, such as long-form streaming sites like Netflix, short-form videos aggregators like YouTube and downloaded content are all on the rise.

Continue to read Stacey Higginbotham, gigaom.com

July 29 2011

07:07

In transition from physical to digital product: can news publishers learn anything from Netflix?

GigaOM :: Users of Netflix’s digital movie-rental service have been up in arms about a sudden change to the company’s pricing plans, which appears to be aimed at reducing demand for its DVD-by-mail service by jacking up prices. In other words, Netflix is trying to manage the transition of users away from the physical product and toward digital streaming.

Are there any lessons newspapers and other media companies can learn as they try to move away from the physical print product and toward a digital-only future? "Yes and no," says Mathew Ingram.

Continue to read Mathew Ingram, gigaom.com

July 28 2011

09:16

How and what Netflix and Hulu users are watching?

nielsen wire :: Streaming video online is on the rise in the U.S., and how consumers tune in differs greatly across services. According to a recent Nielsen survey, the majority of Netflix users report watching on a TV screen. In fact, half of all Netflix users connect via a game console (Wii, PS3 or Xbox Live).

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Source: nielsen, March 2011 - Nielsen completed more than 12,000 online interviews in March 2011, focusing on usage and attitudes for over-the-top video, particularly Netflix and Hulu.

Continue to read blog.nielsen.com

May 25 2011

19:42

YouTube in its 6th year: 48 hours video per minute and 3 billion a day

AllThingsD :: YouTube users are now uploading 48 hours video per minute. That’s up +37% in the last six months, and 100 percent in the last year. YouTube users are now watching more than 3 billion videos a day. That’s up +50% from the last year, which is also a huge leap, though the growth rate has declined a bit.

Continue to read Peter Kafka, allthingsd.com

February 04 2011

12:26

January 18 2011

19:21

6 Predictions For the Music Industry in 2011

The music industry had a wild ride in 2010. Companies came and went, layoffs hit every sector, rapid growth delivered opportunity, and Spotify still didn't launch in the U.S. This year, 2011, should be no different.

Here are some predictions and thoughts about what 2011 may hold for the music industry.

1. A Major Label Shakeup

Screen shot 2011-01-17 at 10.33.20 AM.pngDespite all the talk about the major label system collapsing at any moment, it doesn't seem likely. However, 2011 may finally see a restructuring of assets and brands. EMI has no shortage of financial issues, and the current discussion points to Terra Firma handing them over to Citigroup in the near future. The big assumption is that EMI will be broken up and sold in pieces to the other three majors (Universal, Sony and Warner Bros). Of particular value is EMI's publishing division, and if the piecemeal sale does happen, there may be a fight for this asset. Of course, the other three majors aren't having the smoothest time with cash-flow either, so it remains unclear exactly who can buy what. At minimum, EMI will not look the same at the end of 2011 as it does now.

2. Indie Label Opportunity Grows

All music companies will be focused on streamlining their efforts in 2011. This involves smarter processes, innovative policies, and keeping overhead low. Independent labels typically have had to function with these elements in place from day one; their ability to stay nimble will allow for continued growth opportunity. As business partnerships continue to solidify between content owners and brands, smaller labels will be able to adapt quickly and profit at lower revenue thresholds. This creates a strategic advantage that, if managed properly, will see upward trends on indie label balance sheets.

3. Streaming Services Reach Critical Mass

spotifylogo.pngIn 2011, someone will become the Apple of streaming -- perhaps Apple itself. Consumers are getting closer and closer to accepting renting over owning content. Companies such as MOG, Rdio, Spotify, and Rhapsody are poised to capitalize on this. With good timing, savvy marketing, and clear messaging that succinctly communicates the benefits, a streaming music provider can easily take the leading role in this race. The safe money seems to be on Apple (in part thanks to the Lala acquisition), but the other contenders are quite serious and finding the level of funding necessary to compete. This sector is also making major moves into mobile and car audio; these additional distribution avenues only strengthen the push toward widespread adoption.

4. Free Continues Moving Upwards

"Free" has been a highly debated concept. One side states that the awareness and data capture free provides can be converted to sales over time. The opposition feels that free devalues content and sets the wrong precedent. The truth may lie somewhere in the middle, but it is clear that with the volume of free content (legal and otherwise) one has to be giving something away simply to stay competitive. This line of thinking is nothing new, but it has finally permeated the companies and artists at the top. The majors and superstars have relaxed their policies on free (especially when paired with data capture) and that trend will continue. This will happen in parallel with efforts to find techniques to convert free to paying -- a critical element to make this model work.

5. The Essential Toolkit Solidifies

Screen shot 2011-01-17 at 10.35.31 AM.pngDigital marketers have an almost endless supply of new technology and techniques to try. However, over the past 18 months, many have faded away or a best-of-breed front-runner has emerged. In 2011 we will see this continue as it becomes more clear which technologies and techniques provide real value. In 2010, it became easy (and essential) to track true performance metrics; marketers now have multiple tools to evaluate effectiveness based on conversion, data capture, sentiment, and engagement. This analysis is helping define where to focus efforts -- and that is helping digital music marketing become a more precise practice.

Companies with momentum in the digital marketing toolkit space include Topspin, Bandcamp, Nimbit, Rockdex, NextBigSound, Rootmusic, SoundCloud, Buzzdeck, Artistdata, Mozes, and the ever-essential Google Analytics. Let's also not forget the mainstays -- Twitter, Facebook, and email-marketing platforms such as ExactTarget, Mailchimp and Constant Contact.

6. The Net Neutrality Debate Continues

The positions and arguments haven't changed much, but the Net neutrality discussion (particularly at the government level) has accelerated. In late December, the FCC approved rules that enable mobile carriers to regulate application use. Many members of Congress have already stated they will fight this by creating a new law. This debate is still far from over; expect heated discussion all year long.

In many ways 2011 won't look much different than 2010. The music industry is still suffering from steep declines and is still building strategies and systems to counteract this. The key words moving forward are innovation and experimentation; most people have accepted the fact that we cannot force consumers to behave as they did in the past. Instead, we must seek to better understand our audience, foster stronger communication, and be willing to take leaps of faith on a regular basis.

*****

What predictions do you have for the music industry in 2011? Please share them in the comments.

Jason Feinberg is vice president, direct to consumer marketing for Concord Music Group. He is responsible for digital and physical direct-to-fan solutions for CMG's frontline and catalog including the Rounder, Fantasy and Stax labels. Recent campaigns include Paul Simon, Allison Krauss, Paul McCartney, Elvis Costello, Carole King/James Taylor, and Crowded House. Follow Jason on Twitter @otmg

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February 23 2010

22:05

Courts Still Wary About Webcasts, Live-Blogs, Tweets at Trials

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One of the most watched television events in U.S. history was the announcement of the verdict in the O.J. Simpson murder trial in October 1995. By the time that trial was televised, the public had become accustomed to watching footage of both civil and criminal proceedings in state courts, and such proceedings continue to be broadcast today.

But shortly after the O.J. verdict, the United States Judicial Conference, the administrative body that oversees the operations of federal courts, formally approved a recommendation against broadcasting federal court proceedings. As a result of that policy and the various court rules adopted in response, with a handful of exceptions, cameras have been kept out of federal courtrooms.

The emergence of new channels of communication via the Internet has prompted some recent efforts to use new technologies to expand access to proceedings in federal courts. In two civil cases involving controversial subjects of great public interest, federal District Court judges approved plans to stream the proceeding via the Internet. But both plans were successfully challenged on appeal in opinions that cited the 1996 Judicial Conference policy, calling into question the potential for new technologies to bring federal court proceedings into greater public view.

The Prop. 8 Trial

In the most recent failed effort to stream a federal court civil proceeding, the U.S. Supreme Court on January 13 halted plans to provide live streaming of audio and video of the controversial "Prop. 8" trial in California.

The Prop. 8 lawsuit, Perry v. Schwarznegger, is just one chapter in the ongoing political and legal struggle over same-sex marriage. The plaintiffs are proponents of same-sex marriage who are seeking to establish that the repeal of California's same-sex marriage law by the Proposition 8 ballot measure violates the federal constitutional rights of same-sex couples. Because the named defendants in the case refused to defend Prop. 8 (including state officials such as Governor Arnold Schwarznegger), defense of Prop. 8 is being undertaken by a group of defendant-intervenors that includes the organization that campaigned successfully for its adoption.

Due to the enormous public interest in the case, District Court Judge Vaughn R. Walker approved a plan to stream live video and audio of the non-jury trial to an overflow courtroom in the same courthouse, as well as to several other federal courthouses throughout the country. The broadcast plan was fashioned as part of a pilot program approved by the Chief Judge of the Ninth Circuit Court of Appeals.

The defendant-intervenors objected, arguing that broadcast of the proceedings would violate their due process rights to a fair trial, because all of their witnesses declared that they would refuse to testify if the proceedings were broadcast. The intervenors cited the 1996 Judicial Conference policy, which was based upon a study recommendation against allowing such broadcasting on the basis that "the intimidating effect of cameras on some witnesses and jurors [is] cause for concern."

Hollingsworth v. Perry

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The defendant-intervenors ultimately went to the U.S. Supreme Court to stop the broadcasting plan, where the witness intimidation argument was well-received. In Hollingsworth v. Perry, No. 09A640 (U.S. Jan. 13, 2010), the Court ruled that the process that led to the approval of the broadcast experiment was flawed, and that the defendant-intervenors had established that irreparable harm would result if it was allowed to take place. In an unsigned ("per curiam") ruling, the Supreme Court delved into the minute details of the rules and policies governing federal courts. The Court concluded that under those dictates there was insufficient notice and opportunity for public comment before the court rules were changed to allow the pilot program under which the plan was approved.

But the Court didn't stop at disapproval of the procedure by which the broadcast plan was put in place.

Even if the relevant court rules had properly been amended, the Court commented, "questions would still remain" about the District Court's exercise of its discretion to allow broadcasting in a trial in which witnesses had "stated concerns for their own security." That the case was a "high-profile" one was a reason not to allow the broadcasting on an experimental basis, the Court found, because no studies had been conducted to analyze "the effect of broadcasting in high-profile, divisive cases."

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The Court's decision was not unanimous, and revealed a split on the issue of courtroom broadcasting along partisan lines that are familiar in other contexts. A dissent authored by Associate Justice Steven Breyer vigorously challenged the legal basis for countermanding the District Court's decision. On the question of potential harm to the witnesses, he pointed out that the witnesses were not anonymous, that each of them had already been "publicly identified" with the Prop. 8 cause by appearing on television and Internet broadcasts, touring California to support its adoption, or because they had "already engaged in extensive public commentary far more likely to make them well known than a closed-circuit broadcast to another courtroom."

Justice Breyer also pointed to the extensive public coverage of the impending trial, which had drawn the attention of "literally hundreds of national and international newspapers." Associate Justices Stevens, Ginsburg and Sotomayor joined in the dissent.

The Tenenbaum Trial

Preceding the Supreme Court ruling in Hollingsworth v. Perry, a similar controversy arose over plans to allow Internet streaming of a hearing in a high-profile, peer-to-peer file-sharing case in federal court in Massachusetts. In January 2009, District Court Judge Nancy Gertner approved a plan proposed by the defendant to "narrowcast" the hearing to a single location in Boston, where it would then be made publicly available via a further webcast.

Although existing Court of Appeals and local District Court rules prohibited broadcasting, Judge Gertner concluded that she nevertheless had the discretion to approve broadcasting in individual cases. She rejected the arguments of the record company plaintiffs that the potential jury pool for the impending trial on the merits would be prejudiced by the broadcasting plan. On the contrary, Judge Gertner concluded, "the public benefit of offering a more complete view of these proceedings is plain, especially via a medium so carefully attuned to the Internet Generation captivated by these file sharing lawsuits."

The recording companies appealed, and in a ruling that presaged the Supreme Court in Hollingsworth v. Perry, the First Circuit Court of Appeals disapproved the plan. In this case, the appeals court concluded that Judge Gertner had misinterpreted the District Court's local rule, and that there was no "discretionary catch-all" exception to the general prohibition against broadcasting civil proceedings. The appeals court also rejected the defendant's argument that the blanket prohibition in the local rule violated his right to a public trial.

With a nod to the emergence of new technologies for providing access to trials, the court commented: "While the new technology characteristic of the Information Age may call for the [change] of some boundaries, the venerable right of members of the public to attend federal court proceedings is far removed from an imagined entitlement to view court proceedings remotely on a computer screen."

Circuit Judge Lipez dissented, echoing Judge Gertner's conclusion that there were "no sound policy reasons" not to allow the broadcasting plan. He emphasized that the proceeding that would be broadcast was not a trial on the merits, only the oral arguments of the attorneys. He, too, referenced the impact of new technologies on access to the court, but drew a different conclusion from the majority opinion.

"Since [the adoption of the District Court rule], dramatic advances in communications technology have had a profound effect on our society," Lipez wrote. "These new technological capabilities provide an unprecedented opportunity to increase public access to the judicial system in appropriate circumstances. They have also created expectations that judges will respond sensibly to these opportunities." Accordingly, Judge Lipez called for an immediate re-examination of the blanket prohibition in the local rule.

Live Blogging and Tweeting

Are the federal courts closed to all new reporting technologies? Not completely. Although the broadcasting plan in the Prop. 8 trial had to be scuttled, the District Court did allow live blogging, apparently without much comment or disagreement on the part of the parties to the litigation. See, for example, the Prop. 8 live-blog archives at firedoglake.com, and the San Jose Mercury News.

But there is disagreement on the issue of whether live blogging is a form of "broadcasting" that must be evaluated under the same standards as a live video or audio feed. The issue was addressed in United States v. Shelnutt, a criminal case in the Middle District of Georgia, in which the District Court based its decision on Federal Rule of Criminal Procedure 53. While broadcasting may be allowed under some local federal rules in civil cases, under the federal rule the prohibition against "broadcasting" in criminal cases apples to all federal district courts nationwide.

In Shelnutt, a reporter for the Columbus Ledger-Enquirer newspaper who was covering the trial, made an application to the court to be permitted to use a handheld device to live blog the trial via the newspaper's Twitter account. In declining the reporter's request, the District Court relied upon a 2002 amendment to the federal rule that replaced the prohibition against the "taking of photographs" and "radio broadcasting" with the more general term "broadcasting," for the express purpose of covering "modern technology capabilities."

The District Court in Shelnutt ruled that "the contemporaneous transmission of electronic messages from the courtroom describing the trial proceedings, and the dissemination of those messages in a manner such that they are widely and instantaneously accessible to the general public" fell within the definition of "broadcasting" in Fed. R. Civ. P. 53. Thus, no live blogging was permitted.


Reporters in other jurisdictions around the country have met with mixed results on their requests to live blog court proceedings. For example, reporters were permitted to live blog from the Scooter Libby criminal trial in 2007, although they did so from an overflow courtroom to which the proceedings were broadcast by live television feed.

The Citizen Media Law Project guidelines on Live-Blogging and Tweeting from Court cite a number of other state and federal courts that have allowed live blogging in the past. They wisely suggest that such reporting not be attempted without advance court permission, and provide helpful tips on how to make an appropriate request.

The Future of New Media in the Courtroom

While some lower federal courts have shown flexibility in allowing new communications channels access to their courtrooms, they are doing so against the grain of long-standing negative views in the federal judiciary on the issue of live reporting. These negative views have deep roots in U.S. Supreme Court rulings such as Sheppard v. Maxwell, in which the Court found that intrusive press presence in the courtroom in the sensational murder trial of Dr. Sam Sheppard was a factor in depriving him of his right to a fair trial.

The ruling in Hollingsworth v. Perry is also a reminder of the Supreme Court's historic, arms-length relationship with both the press and the larger public. The Court has famously refused to allow either live or delayed television broadcasting of its own proceedings, and although audio tapes of the arguments are made, they are not released to the public until the end of each term. The Court began making exceptions to this policy on a case-by-case basis in the litigation following the 2000 presidential elections, to allow same-day release of audio tapes. But television broadcasting remains completely off-limits, and some justices, most notably Justice Antonin Scalia, have publicly expressed their strong opposition to any change in that policy.

With the departure of Justice David Souter, who declared in 1996 that cameras would roll in the U.S. Supreme Court "over my dead body," it was thought that the Court might warm up on the subject. Souter's replacement, Associate Justice Sotomayor, expressed her positive experience with cameras in the courtroom during her nomination hearings. But the ruling in Hollingsworth v. Perry seems a likely signal against change at the Supreme Court level.

Without a change in the prevailing attitude at the U.S. Supreme Court or a widespread move on the part of federal appeals courts and local district courts to modify their rules, live reporting via new media channels is likely to be limited to the courtrooms of individual judges with more liberal attitudes toward access to the courts, and to cases in which none of the parties is motivated to challenge a court's decision allowing it.

Jeffrey D. Neuburger is a partner in the New York office of Proskauer Rose LLP, and co-chair of the Technology, Media and Communications Practice Group. His practice focuses on technology and media-related business transactions and counseling of clients in the utilization of new media. He is an adjunct professor at Fordham University School of Law teaching E-Commerce Law and the co-author of two books, "Doing Business on the Internet" and "Emerging Technologies and the Law." He also co-writes the New Media & Technology Law Blog.

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February 05 2010

18:00

Rent vs. Own: The Streaming Music Debate Continues

The exponential growth of Internet bandwidth combined with the ability to significantly compress digital audio has impacted the music industry in numerous ways, for better and worse. Just as file trading created a massive network of pirated music, the ability to stream audio in real-time has allowed for a number of innovative content distribution and promotion methods.

napsterlogo.gifDigital music streaming services have been around for over a decade. Companies such as Rhapsody, Napster, MOG, and We7 have experimented with various business models and user experiences, with mixed results. The traditional streaming model was based on an all-you-can consume subscription offering, occasionally supplemented with a very limited amount of downloads. Adoption has rarely met expectations, and long-term sustainable profit has been elusive for most companies.

Now, a new wave of streaming services such as Spotify are emerging. Can they succeed where others have failed?

Changing Consumer Behavior

The lack of adoption of music steaming services has been attributed to a number of factors. First, a culture of ownership based on decades of purchasing physical media has locked many fans into a set way of thinking about music consumption. There are millions of music fans that correlate paying to owning, not just listening.

Then there is the illegal downloads issue. Convincing someone to pay to listen is difficult when they can freely own all the digital files they can find. Recent IFPI numbers estimate that 95 percent of all digital downloads are still illegal.

In addition to having to change consumer habits, logistics have also been an obstacle to user adoption of streaming services. For the majority of the past decade, most services were only available via a computer, thus limiting the number of settings and situations in which a subscriber could use the service. Most streaming platforms have now begun releasing iPhone and Blackberry apps, which adds portability into the equation. Until recently, devices were not able to capitalize on the functionality that these services offer, but thanks to 3G and WiFi networks, the bandwidth finally exists to take streaming music almost anywhere.

imeem.jpgSubscriptions are not the only business model being used to monetize streaming. A number of ad-supported platforms have come and gone, such as imeem, which was purchased by MySpace late 2009. Imeem and similar sites (including MySpace itself) attempted to use the traditional media advertising model: Provide content for free, but surround it with marketing messages. Typically, this took the form of banners, sponsored promotions, and in-stream audio advertising. This model has also proved difficult to sustain long-term, due to the fact that royalties and bandwidth costs often exceed advertising revenue.

The New Wave of Streaming Services

Currently leading the charge in ad-supported streaming is Spotify. It has combined peer-to-peer streaming technology with in-stream audio advertising. Advertisements also appear on the user interface, raising the likelihood of user engagement. For users who wish to use the streaming service without advertising, and to have the option for higher quality audio, Spotify offers subscriptions in various configurations.

Due to licensing issues, Spotify is only available in a handful of European countries. Founder Daniel Ek previously expressed a desire to open in the U.S. by the end of 2009, but did not succeed. As discussed in a recent article on paidContent.org, the barrier to expansion seems to be licensing concerns, one of which is that U.S.-based labels are no longer satisfied with ad-supported free services and are only looking at subscription models. The most recent numbers show Spotify has 250,000 paying subscribers, compared to a free user base of six million.

The Path to Profitability

Content is key to the success of a streaming site, but adoption is still the ultimate issue. If consumers are focused on owning content, be it physical or digital, paid or illegal, streaming services will continue to have a major uphill battle.

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In a recent Bob Lefsetz article, he addressed this issue, providing a detailed look at the obstacles standing in the way of mass consumer adoption. He also looked at how other industries have used bundling and focused marketing efforts to influence consumer viewpoints on renting content versus owning. Lefsetz states in his opening sentence that, "The recorded music business must switch to subscription, it's its [sic] only hope of economic survival."

His rationale for this belief is that iTunes and other a la carte purchase options are a losing battle regarding long-term revenue. Selling music track-by-track may be better than illegal downloads -- but it's still a poor economic model. By removing value from the album format (and losing its higher price point), the music industry has allowed customers to spend very little money. This means the business requires a much higher number of transactions to be profitable.

Lefsetz argues that by requiring users to pay one amount for massive amounts of music -- essentially bundling content the way the cable companies do -- the music industry is able to charge a much larger amount of people a higher amount of money. In exchange, these customers get all the music they can consume, across any device they want to use. Instead of paying $10 for storing 10 tracks, they can pay the same amount and have access to millions of tracks.

The continually dropping cost of bandwidth and massive connectivity available has set the stage for a profitable model in subscription-based services. The biggest challenge is to now convince consumers this is the best method for experiencing music. This job falls to the streaming companies and to the labels and artists that license the music. It also requires that the technology continue to offer more and more choice and convenience. In addition, a massive number of free users must be shown the value of converting to paying for listening, through higher quality audio and an ad-free experience.

As with almost everything in the music industry, the optimal streaming business model is still being figured out, but the emerging success of companies such as Spotify is showing a growing level of consumer adoption.

Jason Feinberg is the president and founder of On Target Media Group, a music industry online marketing and promotion company. He is responsible for business development, formulation and management of online marketing campaigns, and media relations with over 1,000 websites and media outlets. The company has served clients including Warner Bros. Records, Universal Music Enterprises, EMI, Concord Music Group, Roadrunner Records, and others with an artist roster that includes Har Mar Superstar, Flipper, George Thorogood, Steve Vai, Robben Ford, Chick Corea, and many more. You can follow Jason on Twitter @otmg

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December 16 2009

22:30

The Year in Digital Music and Predictions for 2010

As 2009 comes to a close, and the music industry shifts focus to 2010, it's worth looking back at some of the noteworthy events of the past 12 months. This is also the right time to look ahead and predict what will happen next year.

For some in the business, this year brought trouble after trouble; for others, 2009 was a time for growing revenue, relevance and positioning. Whichever end of the spectrum you are on, there have been few dull moments for digital music this year. And next year promises even more change and growth.

Innovation and Acquisitions Abound

A number of high-profile acquisitions in recent months have shifted the digital music landscape.

Apple's recent purchase of streaming/download service Lala has sparked much speculation. Articles from the New York Times, PC World, and Apple Insider have discussed possible reasons for the purchase, and most tend to focus on the creation of an Apple-powered music streaming platform.
Lala

Unlike iTunes, Lala allows users to stream music they own from the web, effectively creating an anything/anywhere platform. It would give users the ability to listen to music via the web and mobile phones without having to download the content to different devices. There's still a scramble for a sustainable streaming model, and Apple wants in.

This is interesting on its own, as it adds a dimension to music consumption that is basically the opposite of how iTunes was built from day one. But this is only one part of why industry players are talking; everyone loves drama, and this story has plenty.

Just one month prior to Apple's acquisition, Lala made headlines as one of the key partners in the new Google Music service. Lala, along with a number of other partners, now powers streaming music search results through Google. When a user searches for music on the search engine, the option to stream the song (as well as purchase, get lyrics, and find tour dates) appears at the top of the results. With Apple's buyout of the company, people are left to wonder what may come of this service.

MySpace was also busy on the acquisition front, recently absorbing two music streaming services, iLike and imeem. Each of these companies had built a solid user base, but had not found the profitability investors expected. A buyout wasn't a surprise. Speculation abounds here as well: Both of these companies offer enhancements to what MySpace currently provides, but they do not bring anything particularly new or unique to the table.

iLike

That said, these deals are not without their own drama. iLike has powered Facebook's most popular music service for years, so this acquisition creates an interesting relationship between MySpace and Facebook. There are many other music applications on Facebook, so this development probably won't be significantly disruptive.

The same can't be said for imeem. It built its massive user base by allowing fans to create streaming playlists and embed them across the web. Bloggers and others relied on these players, as did web technologies such as twt.fm, which allowed users to easily tweet a link to an imeem-powered streaming track.

These services immediately broke last week when, without warning, MySpace completely pulled the plug on the imeem service. All traffic to the imeem.com domain now points to MySpace Music, and all backend access to the site (via its APIs) is turned off. This has created unhappy fans, bloggers, and developers.

Is innovation flourishing, or is the herd thinning out? These were only some of the more high-profile acquisitions this year. Expect to see more in 2010.

Direct-To-Consumer Continues Ascent

Another important trend this year was the continued emergence of a hyper-charged direct-to-consumer business model. Companies such as Topspin, Audiolife, Nimbit, and Reverb Nation are enabling artists to interact with -- and sell to -- their audiences in many new ways. I wrote about this topic in a MediaShift article earlier in the year.

The idea of direct-to-fan goes back decades. Massive value can be created when an artist engages their audience directly. This has been demonstrated for years at concert merchandise booths, and online in the form of things such as newsletters and e-commerce using PayPal.

Nimbit The difference, and the reason this topic is on people's minds, is that technology has quickly propelled the D2C marketplace both downward and forward. Direct-to-fan has always worked well for large bands, or for artists with momentum. Now, small artists -- if, and only if, they are creative and good -- have the tools to recreate this revenue stream at their level. It doesn't mean every garage band can quit their day jobs, but it does mean more artists have new opportunities to make a living.

Forecasting, marketing, commerce, distribution, customer service, analytics, and deep fan engagement are all now available to artists at any stage of their career. This year saw some highly innovative and often successful campaigns run by emerging artists. In 2010, more artists will embrace this model, which means a lot of noise and competition. It will be more of a challenge for the brilliant acts to shine through.

What Else is Next

A few more thoughts about the year ahead:

  • 2010 will be the year of analytics. Digital marketing and sales departments have been cobbling together metrics for years. Many things are trackable, but it's often impossible to access the data or find the means to implement structured analysis. Platforms such as Next Big Sound, RockDex and BandMetrics are looking to fill this need. As APIs and data sources continue to open up, these services will get better and better.
  • The conversation about an ISP tax for unlimited downloads will continue. The big players working to combat piracy will continue to focus on this.
  • Spotify is still gearing up for a U.S. launch, but in light of imeem's troubles, the ad-supported streaming model is under further scrutiny. There are fundamental differences in their ad structures, but ad-supported is ad-supported.
  • I am curious to see where advertising on Twitter. The Huffington Post has one idea, trying to sell ads into feeds.

There are many more things on the horizon. I'd love to hear your thoughts on the state of the digital music industry, and what's next.

Jason Feinberg is the president and founder of On Target Media Group, a music industry online marketing and promotion company. He is responsible for business development, formulation and management of online marketing campaigns, and media relations with over 1,000 websites and media outlets. The company has served clients including Warner Bros. Records, Universal Music Enterprises, EMI, Concord Music Group, Roadrunner Records, and others with an artist roster that includes Har Mar Superstar, Flipper, George Thorogood, Steve Vai, Robben Ford, Chick Corea, and many more. You can follow Jason on Twitter @otmg

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