Of Streaming and Cars

Rhapsody recently announced that they had made a deal with Ford that allows for integration of their streaming services within certain Ford model cars.  While this may very well be an important deal for Rhapsody, in this article I’ll look at what this type of integration potentially means for artists.

Understanding “De-Tethering”

First, “de-tethering,” as I like to call it, is crucial. By de-tethering, I essentially mean using your device (smart phone/tablet) as a sort of receiver/remote. That is, increasingly, we’ll use our handheld devices to access music in the cloud—be it on servers of companies like Pandora, Spotify, Rhapsody, et al., or on personal cloud-based storage networks, like Apple’s iCloud or Soundcloud or even Dropbox.

We’re doing this now, of course. Where it becomes more interesting is that with technological advances, such as more robust Bluetooth connectivity, and just generally better wifi streaming, people no longer have to stream the music they access from the cloud over the crappy speakers/earphones on their devices.

Instead, they access the content on their hand-held devices, but are increasingly able to easily and reliably de-tether the music (and video) from their devices, and have it playback through another system—a system that tends to have far better audio quality.

The Evolution of “De-Tethering”

Apple’s AirPlay was the early entrant into this space—allowing you to play your music over speakers, but only if the speakers were connected to one of Apple’s Airport Express devices.  This technology showed the promise of de-tethering, but, for a variety of reasons (no multi-zone plays, for example), is far from perfect.

It was Sonos that really liberated music from the device. Their setup is far easier, and it allows for true multi-zone/multi-song playback. The only prohibitive aspect of Sonos is its cost of entry—around $600 to get started (it’s worth it in my opinion).

Others have entered the market. Bose, for instance has several wireless devices.

Importantly, Jawbone (maker of the ubiquitous Bluetooth earpieces that make you look like you’re on Star Trek Deep Space 9 when you’re wearing one) introduced the beautifully designed Jambox, which, rather than using wifi, uses Bluetooth to connect your device to its speakers. This is a revelation, as it not only de-tethers your music from your device, but also de-tethers you from your wifi network. The result is that you can take your little Jambox speaker with you, and anywhere you have 3G (or better) connectivity, pull music down from cloud-based services, and then—via Bluetooth—beam it right to your Jambox. This means, taking a vast library of music to the beach, park, or hotel room is dead simple. And, because of the continued improvements of Bluetooth, the sound quality is actually very good.

How Cars Fit In

Similar technology, of course, already exists in cars. It’s how we make phone calls, and talk/listen through the car’s audio. Car manufacturers, for the most part, however, have not embraced the technology that would enable people to use Bluetooth to beam their music into the car’s audio player. This is frustrating for the consumer, because, as noted via phone calls, the technology clearly exists to allow this to happen. My sense is that car manufacturers prohibit this because of the margin they make on fancy sound systems in the car that would largely be rendered obsolete if people could forego the CD changers (?!), and proprietary (and expensive…I’m looking at you, Mercedes) connectivity kits that do allow you to play music from your phone through your car’s audio.

This assertion on my part also explains why a deal such as the one that Rhapsody recently struck (and, it should be noted, Pandora struck a similar deal some years ago) is even newsworthy.

That is, if not for restrictions imposed by the auto manufacturers, all of us could easily—via Bluetooth—beam Rhapsody or any other service directly through our car’s speakers with the hardware that already exists both in phones and cars.

What Does This Mean for Artists?

In a nutshell, it’s a good thing. A very good thing. Even with the financially-motivated restrictions auto manufacturers put in place, deals with Pandora, Rhapsody, Sirius/XM or any other music streaming services is great for artists.

Here’s why:  People listen to a ton of music in their cars. Each time a song is played on a car radio it generates a public performance royalty. When a song is broadcast over terrestrial radio, the holder of the copyright of the composition of the song (the writer and/or publisher) gets paid via one of the Performance Rights Organizations. In the U.S. there are three: ASCAP, BMI and SESAC. Each issues licenses on behalf of writers/publishers to broadcasters (radio stations, TV networks, clubs, etc.) that give these broadcasters the right to publicly perform any of the songs in the PROs’ catalogs. The PROs then monitor the play, and divide the amount they collected in license fees (less their overhead costs) among the writers/publishers based on the amount of play these writers/publishers got.  In an era of steadily decreasing revenue for artists, this public performance money is a real bright spot.

It gets better when we move from terrestrial radio play (again, in cars or elsewhere) to digital streams. While only the writers/publishers of the songs get paid when their music is publicly performed via terrestrial radio, when it’s publicly performed via a digital transmission in a non-interactive manner, the performers/labels also get paid.

Interactive v. Non-Interactive Streaming

Let me unpack that last sentence. A digital non-interactive transmission is a stream from a service like Pandora, Sirius/XM, or any of the web radio stations. When these streams occur, not only do the writers get paid—in the same way they do when their songs are publicly performed over terrestrial radio; i.e. via ASCAP, BMI, or SESAC—but so too do the performers and labels. Much in the way ASCAP, etc. represents affiliated writers and collects on their behalf, an organization called SoundExchange does so on behalf of performers and labels.

Now, Rhapsody is not a non-interactive service. It, like Spotify, allows customers to pick whatever song they want, and listen to it whenever they want, however many times they want. As such, the copyright holder for the sound recording (the master) must enter into a direct licensing agreement with these interactive streamers. These deals are negotiated, and vary, but for emerging artists there is typically a Most Favored Nations rate (that is, everyone gets the same deal; take it or leave it).

The good news is that even though these interactive streaming rates are not set by statute (as the non-interactive streams are), the rates tend to be more favorable for the copyright holders (this is because interactive streaming is seen as a substitute for purchase, while non-interactive is seen as promotional in the same way traditional radio has always been seen).

More Streaming = More Money

So, whether your music is streamed interactively or non-interactively, you, as writer, performer, and label (and I hope you’re all three) are owed money. These payments, as you can imagine are teeny. The theory goes, however, that enough micro payments will eventually lead to material payout when there is ubiquitous streaming.

It remains to be seen if this is true or not, but certainly the de-tethering of music so that it can be streamed more easily and in more places can only add to the amount of music being streamed, and thus the amount of revenue an artist can generate.

Let the great de-tethering begin!


George Howard is the Executive Vice President of Wolfgang’s Vault. Wolfgang’s Vault is the parent company of Concert Vault, Paste Magazine, and Daytrotter. Mr. Howard is an Associate Professor of Management at Berklee College of Music. Follow George on Twitter.

Tonight on The Tonight Show: Holly Williams Live

Make sure your plans for tonight include tuning in to The Tonight Show with Jay Leno. TuneCore Artist Holly Williams, the granddaughter of Hank Williams, will be performing live on the show.

Her new album, The Highway is available for pre-order now on iTunes.

Check out RollingStone.com’s feature on the album.

 

New Music Tuesday: Jan. 29, 2013

TuneCore Artists are releasing tons of new music every day. We’re featuring a few of those new releases below. Check them out!

CharlieHall
The Death of Death
Charlie Hall Band
Christian/Gospel

HighHighs
Open Season
High Highs
Alternative

AsukaKakitani
Bloom
Asuka Kakitani Jazz Orchestra
Jazz

BrandonGilliam
Bongo Tree Sessions
Brandon Gilliam
Christian & Gospel

Trixie Whitley
Fourth Corner
Trixie Whitley
Alternative

Leagues
You Belong Here
Leagues
Alternative

LazyJ
The Dream EP
Lazy J
Hip Hop/Rap

BearLanguage
Bear Language EP
Bear Language
Alternative

Byron
Show Me the Way – EP
Byron “Mr. Talkbox” Chambers
Christian & Gospel

Pitchfork’s Buzzing About Jacco Gardner’s Upcoming Release

TuneCore Artist Jacco Gardner’s new baroque sixties pop sound is getting high praise from Pitchfork.

homepage_large.a99fa318Check out their review of the Dutch artist’s track “The Ballad of Little Jane,” from his upcoming debut release Cabinet of Curiosities.

Cabinet of Curiosities will be out February 12th via Trouble In Mind Records.

 

3 Tips for a Better Converting Music Website

(Editor’s Note: This guest post is from Shaun Letang of Music Industry How To)

Hey guys, today we’re going to talk about increasing your music website’s conversion rates. By this I mean making on-site changes that will give you more results, even if the same number of people visit your site. We’ll also be looking at an example of how conversion rates work, and why increasing them can mean a much more profitable music career for you.

So without dragging out the intro, let’s get to the good stuff.

Conversion Rates for Musicians – An Example

Let’s say you get 100 visitors to your site per month. For every 100 people, you sell on average one $5 digital EP download. That’s a 1% conversion rate, as that’s the percentage of people that took the action you desired (in this case buying your EP).

To make more money from your music, you have two options:

  1. Get more visitors, or
  2. Make more money from the visitors you have.

While you should aim to do both, doing the second one is a lot easier. If you could get two people buying your music for every 100 visitors to your site, that’s a 100% increase in conversions. You’ve just doubled the average amount of money you make from each visitor, and now have a 2% conversion rate.

But how do you increase the conversion rates on your site? Use the following three tips to get more results from each visitor.

1. Set the Aim of Your Music Website

Before taking steps to increase conversion rates for your site, you first need to define what action it is that you want your visitors to take. Do you want to get more people on your mailing list? Perhaps you want to sell more music?

Once you know what your main aim is, it becomes easier to lay your site out accordingly.

My suggestion is that you make obtaining mailing list subscribers your main aim, and increasing your song and merchandise sales as your secondary aim. While both are important, if you try to sell to potential fans straight away, you’ll often be ‘cold selling’ to them. By this I mean you haven’t given them enough time to grow a bond with you, or have any real connection to your music.

If, however, you get them on your list and email them something interesting, say, once a week (done automatically with your autoresponder), over time they’ll feel more comfortable with you and be more open to buying something you’ve produced.

If, on the other hand, you had sent them straight to your shop page and they didn’t buy anything, chances are you’ll never see that person again.

So, aim for a means to contact these people again in the future (mailing list is best, although Facebook and Twitter are also good as secondary platforms), then sell to them after.

2. Minimize Distractions

When it comes to getting your website found on Google and the other search engines, having a lot of good quality content can help you get a lot more visitors. That said, if you’ve got a load of pages with a load of info about all different aspects of your music career, how are people going to know which are the important bits to take in? Furthermore, how are you going to get people to take the action you want with so many different links to click on?

One option is to ‘minimize the clutter.’ In your sidebar and on your main page for example, you’ll only want to display the most important things. You’ll want your sidebar to include the sign-up form to your mailing list, a link to your shop page and ‘featured single,’ small links to your social sites… And that’s possibly it.

While you can change up what you have in there, if you want, the point is this:

You only want to give visitors a few options that will not only benefit them, but that will benefit you as well. If people click on and take action with any of those things, you’ll either get their contact details or you’ll make a sale. Not bad, right?

Any other links like one to your blog or contact page should go in the top navigation bar so they’re still visible but not as tempting to click on. That’s how you minimize distractions and guide fans to the good stuff!

3. Give Your Fans the Option of How to Buy Your Music

When it comes to buying your music, people will have different preferences. Some will be happy buying directly from your website if the ‘buy now’ button is there, but others may prefer to buy on a platform they know and trust. Giving a choice of buying options will mean you keep more fans happy, and in turn mean you make more sales.

At a very minimum you should get your music on iTunes and Amazon MP3, and present these buying options to fans on your sales page. You can get your music on both of these stores and others using TuneCore’s digital distribution service.

Conclusion

These are just three ideas of changes you can make to your website in order to increase sales and/or the amount of fans you keep in contact with. Both should be big aims for your music website, so put them into practice if you want to make a positive change to your conversion rates.

If you don’t already have your own website, or want to learn how to build one, you should check out my guide on how to make a music website. I also give more advice on the subject in my weekly music business newsletter, so sign up to that for additional info.

If you have any questions—or more advice you can share with other musicians—please leave them in the comments section below. As always, a share or two of this guide on your favorite social networking site would be much appreciated. Until next time.


Shaun Letang
Music Industry How To