Collaborative Consumption describes the rapid explosion in traditional sharing, bartering, lending, trading, renting, gifting, and swapping redefined through technology and peer communities. (collaborativeconsumption.com)

Short on time? Here’s the ultra-hip 2-min version:

Graphic: VirtualMusictv/Flickr

When it comes to music, value is in the ear of the listener.

Value is always decided by the market. It’s a fundamental economics principle that Universal Music Group and the RIAA can’t seem to grasp—at least based on their latest propaganda initiative against music piracy in the US via Facebook, called Music Rights Now.

The lawsuits may have stopped, but that doesn’t mean the music industry and its trade group the RIAA has toned down its crusade against unsanctioned peer-to-peer file-sharing. Negotiations, label and lobbying sources say, have been underway with Internet service providers for more than a year, as the U.S. music industry is pushing ISPs to follow the leads of many European countries in adopting policies that limit or curtail Web access of those who are deemed as infringing users. Today, Universal Music Group Distribution took its fight online, launching a Facebook page in conjunction with the RIAA to promote the issue. (Universal goes social with ISP campaign | LA Times)

You can’t break nature. Beauty is in the eye of the beholder. When it comes to music, value is in the ear of the listener—not any record company. Think about this: would you pay $400 for a Big Mac? Of course not. McDonalds knows this and they’ve based their prices to be competitive in the market.

Do we really want the music industry controlling our ISP’s? The group Music Rights Now would be more appropriately named Denying Reality Now. In time the laws will change because the market demands it. Instead of fighting piracy we should be finding ways to legalize/monetize its behavior.
[see An Infinite Freeway For Music Business?]

Device Dependency

Apple continues to create a major dependence on iTunes through their mobile products—the iPod, iPhone, and iPad—and I don’t think that anything is going to “kill” iTunes without a war. iTunes is the 7-Eleven of media—it’s more convenient and expensive, but it’s closer to home. For many, the iTunes experience is ingrained behavior—a household name—and part of their daily commute so to speak.

Generation Gap

The second huge advantage Apple has is the generation gap. Older people are more likely to have money to spend, and are less likely to adopt something new—especially if it’s less convenient. For Spotify to compete stateside, it will start through today’s youth. I love the Spotify concept, its mobility, and its adaptivity. They are smart to develop/test/improve their service in one location (Europe) before attempting to roll it out in another market (U.S.)—that’s business expansion 101. I hope that Spotify becomes a hit in the U.S. mainly for the sake of the music. Who wants an iTunes monopoly?

Apple Affinity

Apple products have strong affinity, and an army of enthusiasts drinking their Slurpees. Anyone looking to compete with them has to have an equal or greater affinity, and/or introduce something totally disruptive (which Spotify has done to a degree). Spotify has game, but so does Apple, who made a calculated move with last year’s Lala acquisition. One big thing to remember is that music has always been about the experience, and it always has been.

Apple Shuttle

What’s your take on Dan’s analysis? Next, in the graphic below, there’s some bonus information about some fairly recent climate anomalies that may have sparked some extra eco-interest, right? Although not in the graphic, the 2010 earthquakes must also be raising climate awareness, wouldn’t you think?

Tagging (-verb): Applying a word or phrase as a label or means of description.
Tagaholic (-noun): A person who gets more than cheap thrills from tagging.

As a self-professed tag-a-holic I’m pretty stoked about the news, and especially so because I had emailed them suggesting a tagging feature. Bandcamp artists can now list themselves in up to five genres, they can add their location, and they can add specific traits to individual tracks in the form of tags. Adding the genre and location isn’t that groundbreaking on its own (almost all music sites have this to some degree) but this feature is positioning Bandcamp towards an indie music discovery community. When you click on the tags/genres/locations you can see all the other artists or tracks tagged the same way. There’s not a set list of tags that you are confined too either—you can describe your music how you see fit. I’ve written before about how I think Bandcamp is the best way to represent an indie artist’s music online. I’ve already discovered some new artists by just browsing through the tags, and because the presentation is so ace, it just makes you want to press play.

Bandcamp’s Tag Cloud on Day 1. bandcamp.com/tag

Bandcamp seems to grasp the importance of maintaining their already-superb platform but it’s great to see they’re continuing to fine-tune and add new features. I think the addition of more community features on Bandcamp like commenting (or fan reviews) would be welcomed, and in case not, they could leave it up to each artist whether they want to allow commenting on their tracks via having an option in their artist settings. Comments or fan reviews under each track remind me of Amie Street’s Rec’s which IMO in my opinion is that site’s best and most engaging feature. There you have to download (buy) the track to recommend (review) it. Another potential community-driver could be digg-like voting. However it’d be smart for Bandcamp to take things one step at a time and be sure to continue to deliver its core features as a service for bands.

Community Overload?

There is an abundance of online music communities, but there’s not many sites that offer the high-quality DIY service that Bandcamp does, and there’s room for them to keep advancing there too. Last year they added sales of physical goods. I’d like to see them add embeddable mailing list sign-up widgets—they already collect emails with downloads for you so this seems like an easy feature extension that would make them more of an all-in-one service for musicians. Or they could somehow integrate with YouTube or Ustream to have video on the Bandcamp page/storefront/channel/station (or however you want to call it). What’s your take on these ideas? I don’t think I’d go as far as having listeners create profiles—who needs another profile, right? I’d try to find a way to let people interact through a service that lets them login with their existing online profiles. In yesterday’s blog post on the tagging, Bandcamp says they originally had “no desire to create another online music community.”

Because there are so many other music sites, one can see what works, what flops, and and try to understand why. I don’t know if any of you have followed the story about TheSixtyOne’s recent redesign. TheSixtyOne is an indie music community where “new artists make music and listeners decide what’s good.” Think indie radio + voting + discussion + digital store. Last month they did a major redesign of the site with no warning and upset a lot of their users. The new design is what I call euro-style and looks cool but the community features are less prevalent. I give them credit for trying something new but they should have communicated the upcoming changes better with their uses. If they did, they might have realized that their users care more about the community than flashy design.

It’s All About The Data

Bandcamp’s new tagging should go over well. It’s subtle but powerful. I even think everyone would benefit more if Bandcamp takes this one step further by enabling the users (listeners) to tag tracks. We’ve seen that crowdsourced-tagging approach before on other music sites—Last.fm and Amie Street come to mind—and it’s a fun way to create data that engages fans (because they have to think about your music as they tag). Tag. Tag. Tag. I’m a tagging freak. I don’t try to organize, I just tag. I tag in excess because it makes things easier to find later. See, I can’t even help but over-tag my blog posts (you’re supposed to use at most 10 tags). My Delicious bookmarks total 7000+ tags. I’m not alone either. Widely-used social bookmarking apps like Delicious, Xmarks, and Google Bookmarks hold the tag data created by thousands and thousands of users. Combine all that and you’ve got a helluva lot of data to crunch. It’s like using humans to crawl the web instead of search bots. Humans zone in on content and label it in a way that’s effective and meaningful for, well, humans. Delicious is essentially a crowdsourced search engine. They provide a great service but they’ve failed to innovate. They’re owned by Yahoo. They have the data, but they don’t leverage it in their apps.

Back to music—think about how Last.fm powers its similar artists based on listener behavior. Think about combining listener behavior with crowdsourced tagging could make recommendation engines. Multiple tag queries or basic seach operators would be great for filtering by genre and location simultaneously—e.g. electronica + new york—but I wouldn’t stop at genre and location—I’d try to encourage mood tags and sounds-like tags too. If Bandcamp collected tag data from everyone they could better use it analyze trends and could bring their upcoming search that they mention to a whole new level. I hope they attempt to deliver more in the way of music analytics and music intelligence.

Read more posts tagged Bandcamp here.

Human Brain Connections by ethanhein on flickr

With the smartphones coming, and all these apps coming, the music business gets one more kick at the can, and I hope they don’t fight this one, because there’s a huge opportune to grow the business faster than what they’ve ever considered. I think there’s a huge sense of optimism for the first time in about five years that this business can actually grow. –Terry McBride in his 2009 interview with tech reporter Matt Hartley [video above].

Music is becoming more of a service than a product and Terry believes that in these digital times, context trumps content, access trumps ownership, and customer service is as important as ever. P2P filesharing should cease to be an issue as listeners increasingly prefer instant-access streams.

The second interview details the history of the Nettwerk Music Group as a DIY all-in-one company that developed by adapting to meet the needs of musicians and their fans. Towards the end he talks about joint ventures between musicians and non-music brands as being likely in the next five years.

I really think that the paradigm is shifting. I think within the next five years you’re going to have other brands inside the market signing artists. Brands will look at this going, well, we already use music within all of our TV, and radio, and, you know, internet media. Um, why don’t we just sign the artist? –Terry McBride, in his 2008 CMU-Tube interview [video below].

On my previous post, Musicians—Money Is Not Motivation, Dave MacDonald had commented that Terry McBride recently spoke positively about the music industry at TEDxVancouver in November 2009. That video isn’t available yet, but I hope they air it soon on TEDxTalks—I’ll keep you posted.

[homepage thumbnail photo: Flickr/stephen_dyrgas]

Science

In his above TED talk, Daniel Pink makes a strong case relating the science of motivation to creativity and business. The verdict is that money is not a primary motivator for people doing creative work. Sure, it does play a factor today as people need enough money to meet their essential needs. Once those needs are met, money is out of the picture. I look forward to reading his upcoming book, Drive.

Spotify

I felt compelled to deliver the point—money is not an artist’s true motivation—in response to the exorbitant editorial negativity surrounding yesterday’s news of Lady Gaga getting paid $167 for 1+ million Spotify streams. Where I live—in the US—Spotify is not yet available so I have not been able to try the platform. Spotify is a new service and its revenue model is understandably in a shakedown period where they are still determining what works, what data they have, and how they can best leverage that data to generate revenue.

Mr. Ek [Spotify CEO and Founder] revealed how the company has been working on making its advertising as personally tailored to an individual’s tastes as possible. “We have a lot of information about people. We know our users’ age, gender, location and even mood – which figure out by through BPMs [beats per minute],” he explained. Depending on whether a person has listened to lots of fast or slow music, Spotify is trying to make its mood analysis as accurate as possible – so it can serve highly targeted adverts for users to properly engage with—which should in turn, increase the amount it can charge brands to advertise on the platform. Mr. Ek said Spotify was “beginning to figure this stuff out”. (Spotify chief, Daniel Ek, rules out 2009 US launch | Telegraph)

It sounds like Spotify is on track to me. I like the ad-based model and there are many variations to explore. I brainstormed launching an ad-based free music service back in 2007, and I think Spotify is the closest service to what I would have done, but they’ll need to continue to evolve, as do musicians.

Whether it is really relevant to measure the success of Spotify in this way remains to be seen as it is still a service in it’s infancy. Much like Twitter, it is phenomenally successful in terms of usability but is still finding its feet in terms of making money. As it continues to attract users its appeal to advertisers will grow and so too will the financial returns. How this filters down to the individual artist is then probably more of an issue with the labels than with Spotify. (A Ga Ga approach to marketing? | The Naked Pheasant)

Industry

It’s smart business to think years down the road by expanding your fan base even if it doesn’t pay off immediately. I think Lady Gaga and many other artists see that. The long-term benefit of those 1+ million streams is immense, and I think many people are blinded to that fact—such a level of exposure leads to sellout shows and non-music revenue streams. The one thing I dislike about the situation is that the major labels still have major pull and they can afford huge production and marketing investments. But the need for heavy financing is down—thank you, Internet. In today’s connected, music-abundant world why does any one artist get so popular? Is it hard work, affinity, or talent? To me, talent is relative—it’s not what you can build, but rather it’s what you can build with what you have. It’s the Internet Age—indie musicians have the power to take the industry back but they must embrace change and creativity to do it—they must creatively leverage the internet and mobile apps.

The connection from the fan to the band, financially, has been broken. The fan knows that their purchase will hardly help the band, or more precisely that the marginal benefit from their purchase to the band is near zero, so why do it? The cost to the fan is much higher than the marginal benefit to the band, so the fan just torrents the damn song. (Why Music Is Broken – The Artist To Consumer Connection)

P2P rocks—it turned the industry up-side-down letting the label-lords know they had lost control. I see P2P as a massive benefit for musicians. Do they have P2P streaming yet? They will. With all that said, I believe that many music fans are as-motivated-as-ever to pay for music when they know their money is going directly to the artist. Maybe subscription services like Spotify can find a way to work this, or endorsement deals that fans would want to support, into their business model. I think that fans—and people in general—need to feel like they are part of something and they want to feel empowered.

flickr.com/photos/jahdakinebrah/ / CC BY-NC-SA 2.0

The fan artwork you see above is a creative visualization of Pink Floyd’s Money. The image squares depict the story of the song lyrics. What motivates you? What do you think motivates music fans?

Carey is pioneering a new business model for music. She’s cutting deals with the kind of partners musicians have traditionally shunned, pushing herself into new areas such as publishing, tourism and food and drink. … “A lot of big powerful music-industry executives made a giant mistake,” she says. “They gave the music business away on the internet. If they had just sat back and said, ‘Maybe let’s figure this internet thing out, it could be something cool,’ we could have found a way to distribute music online on our own terms, not somebody else’s. … Musicians have long promoted non-music products. The Rolling Stones marketed Windows 95 with Start Me Up. Michael Jackson did endless Pepsi promos. And rappers such as P Diddy and Jay-Z have moved on from name-checking other people’s fashion and luxury-goods brands in their songs to create their own brands, usually in partnership with their record labels, and promote them instead. But Carey is breaking new ground in three areas. Mariah Carey: The gloves are off | Times Online

The internet has leveled the playing field. It has proven that content is king, and that those who work hard at delivering content can build a following. Artists have channels with live streaming video content and direct connection with their fans through mobile applications. The same opportunities exist for everyone, and they’re almost all free. You may think that endorsements and partnerships are only for megastars—but I don’t. I believe that indie musicians with smaller niche fan bases can make the same types of product endorsement deals and partnerships with brands or services that the megastars can. The trick is finding the right brands and companies to match up with. But if you have—for example—a Ustream or YouTube channel that’s getting hundreds of views on a daily basis then I don’t think it would be hard to pitch to a company that relates to your audience. Ideally your audience would be a target market for the endorsed product or service. Think big but also think local.

flickr.com/photos/eyesofrc/ / CC BY-NC-ND 2.0

There is no single exact solution for indie artists, but the best solutions revolve around leveraging social media and video streaming to maximize fan engagement. Visual content is a must. Video content is supreme. YouTube serves well over 1 billion views per day. Live videos are easy to stream with ustream.tv, stickam.com, or justin.tv and a decent webcam. For recording non-live videos I recommend HD pocket cameras like the Zi6 or Zi8, or smartphones that enable mobile uploads like the iPhone. Video is becoming more interactive by the second and mobility is always important. Each musician has their own unique style and identifying that will help you see opportunities. Keep an open mind and be willing to adapt.

It seems that we truly are at the dawn of a new era. Opportunities abound at every corner. Music is more alive than ever, consumers listen to more music in more ways than ever thought possible, artists interact and build connections with fans in new and unique ways, music and other entertainment content can be delivered via multiple platforms for a fraction of the cost of traditional methods, and artists can form business relationships with many different partners—including consumer brands. (Music Branding Gets All Grown Up | Talent Zoo)

A lot of businesses still don’t get the internet, but a lot of them do—these are the ones that you can work with. Realize that a band’s physical merchandise is a product line, and there’s nothing stopping bands from partnering with companies to sell their own non-music products. Smart companies would likely jump at the chance to sponsor bands that have built active communities around the internet and are accessible via mobile phones. They see the meaning in social media—for business.

The types of products that will work for indie musician endorsements will vary greatly and be determined by each musician’s personal style or brand. A middle-man service that helps musicians match up with consumer brands and vice-versa might be viable—don’t you think? It would probably be pretty easy for Google, Facebook, or MySpace to implement such a service. However I’m a fan of DIY and I usually like to cut out middle-men. I think the best approach would be to directly contact companies that you’d like to partner with. Don’t be afraid to fail. You can’t get anywhere without trying things. Remember to focus on the dopeness—see Part 1: Music Dopeness and Bands as Brands.

From early childhood we teach our children what is “right” and what is “wrong.” But we do not typically teach children that these are fluid terms. The lines are blurred, or as The Monkees would say, “Today, there is no black or white, [there are] only shades of gray.” As Wikipedia puts it, “Everything has both yin and yang aspects, which constantly interact, never existing in absolute stasis.” I think that to progress we need to teach ourselves to be more accepting of other people, more in balance, and less judging of right versus wrong.

flickr.com/photos/viciedo/ / CC BY-NC 2.0

There are many interaction-based influencers of moral values. Family, friends, school, religion, television, movies, videogames, music, and the internet all play a part today. Movies and television often emphasize right and wrong as viewers attempt to identify who is the “good guy” and who is the “bad guy.” But a distinction cannot always be made—blurred lines are more realistic, and more human. Think about reality television and its focus on people—does it break this convention? Unconventional twists and moral dilemmas are the reasons that the acclaimed drama series Lost is so popular isn’t it? Lost breaks boundaries by creatively blending black and white into gray. Many videogames also rely strongly on social behavior and moral values. Web-based videogames are even increasingly being used as a virtual platform for education—social education—seen through avatars and virtual worlds. Time no doubt plays a factor in shaping our morals as well. Laws have changed. Murder. Marriage. Slavery. Society continues to evolve, right? Or does little change in the grand scheme? How might social media, social gaming, reality TV, and virtual technology shape our moral values and our social evolution?

Note: This post is part of our new Education series where we look to explore the cyberculture surrounding modern education, videogame-based education, and virtual education technology.

Listeners: There is music that you can download for free—legally or illegally—and there is music that you can stream for free. The trend is towards streaming. I support bands that are giving their tracks away for free. I’ll even admit it—I’m offended when bands expect me to pay for an mp3 download. Am I completely off base here, or do you agree?

Unlike these records, mp3′s can be easily duplicated and shared for free. We are in a new time and we need new rules. Welcome to the digital revolution.

Bands: Giving downloads away for free is an excellent promotional move. It puts out the message that you care about your fans, and that you want them to hear your music. It is a leader into other revenue streams. I recommend collecting fans’ email addresses in exchange for free downloads. This can be achieved nicely by Bandcamp, which, in my opinion is a super-slick service. Bandcamp enables downloads in multiple hi-res formats, and the platform encourages sharing on social networks. They even offer pay-what-you-want pricing options—the only drawback is that PayPal takes a percentage. [Demo: My Bandcamp Page]

I hope paid download services shift their business models to make the music more “free” for listeners. I think services could generate ad revenue that the artists could share in—in such a way that bands could choose the ads on their pages as to match the right advertisements with the music. I recently commented about Amie Street implementing this idea, but imagine if a mega-service like iTunes could work magic like that.

As a club-goer in the game’s easy mode, you would be 21+ or 18+ depending on the country or venue rules. With your politeness and your ID, you would pass through the bouncer and get inside to have more interactions inside the venue or on the dance floor. In the advanced mode, you would be underage, and you would have to try to pass a fake ID, or invent a way in without one—a lie, another entrance, etc. Once inside you would be able to see, hear, move around, and interact just as you would in a real, live venue. You would get to witness an actual, or virtualized, video stream from the venue. The setting choices for the game might be bars, clubs, concerts, festivals, or any other type of music venue. They could be real or fictitious, and who’s to say what’s real? Level 1 could start on the city street outside a dive bar, and in the subsequent levels the player would work up to larger and larger venues.

As a bouncer in the game’s easy mode, you would have to be polite as you worked the door, checked ID’s, spotted fake ones, and greeted incoming club-goers. Bouncers would lose points for being rude, or for mishandling the crowds. In more advanced bouncer modes, you would have to responsibly prevent violent behavior, by pacifying out-of-control partiers without causing them any physical harm. As for the game levels, the bouncers could start out working for a dive bar, and work up to nicer and nicer jobs at different venues. Even job interview interactions could be simulated in the game.

Maybe you could not attend a real-life Radiohead show in London, but in VirtualVenue you could. Music would be featured throughout the game, and licensing would be paid to those real-life musicians whose songs and live appearances were used in the game. The company that produced this game could generate huge revenues by selling advertising to actual venues, and having them featured as game-setting locations with live, 3D, video feeds of the actual performances. With the game connected to the internet, and the touring artists in the game being real, ticketing companies could pay to have their gig listings in the game, which would increase actual ticket sales and further promote the artists and the venues. A third revenue stream for the game company could be selling subscriptions, of the behavioral data findings, to robotics developers, or to security industry professionals who would want to know all the latest security flaws and use that knowledge to tighten real-life security.

There are myriad ways to expand on all of these ideas. The game could work best in a mashup with social networks, and enable you to play with real people from around the globe.

I think that crowdsourcing videogame technology could lead to the training of real, digital bouncers—an idea that I don’t think is too bizarre. The VirtualVenue network could aggregate data about how players reacted in different situations, and help teach computers human-like behavior. The data crowdsourcing model is already widely used. For example the familiar reCaptcha essentially uses humans to teach computers to read our handwriting for the purpose of digitizing books. Crowdsourcing leads to open innovation, and we may not be far from crowdsourced, robot-teaching technology becoming a mainstream reality. This game, and others like it, could include physical and vocal input from the player, making the game feel more realistic, and opening doors to teaching robots our body language, and our spoken languages. It will be key that we maintain ethics and use this technology in smart ways, because we’ve all seen Terminator and can imagine how this sort of technology might explode. How can we ensure that the relationship between humans and computers remains symbiotic? Computers educated by humans…where might this lead?

Upcoming: We aim to look at this issue in reverse—how videogame technology might enrich our learning through virtual education—see virtualmusic.tv/education/