Solving the Digital Music Distribution Dilemma

24 09 2009

itunes_logoThe paid-download world of digital music is a tricky beast to tame.   Artists continue to struggle to generate revenue even though they can easily establish a distribution network via iTunes, eMusic, Amazon, CDbaby.com, and so on.   Here lies the problem. Digital distribution is fragmented among only a few big players. Consumers continue to remain loyal to their chosen distribution networks whether it be iTunes or a bitorrent site like Mininova.  When a person hears a new band or song, it is almost instinctual that they Google the name and stumble onto either a MySpace page or an artist website.   Discovery is not the issue.  The issue arises when someone hopes to buy the music, but is forced to search through iTunes, see if the band is available on eMusic, or scour the web for torrent files.   From a user experience perspective, this deters a good amount of the target audience away from seeking out actual copies of the music in exchange for the ability to stream music.   

So what is the solution?  A few companies have been working to develop open API music e-commerce stores which can be easily integrated on any web page.  Imagine visiting an artists website and being able to access an entire discography with the ability to stream and purchase songs, without ever leaving the page. SNOCAP has been at this for a while, creating an easy to integrate open API for an artist’s MySpace page.  The company has been relatively unsuccessful with the idea, mainly because of their exclusive partnership with MySpace. Musicians must realize that MySpace serves mainly as a portal for discovery not commerce. Music fans head to an artists MySpace page to stream tracks and get information rather than buy music. 

Recently, another company, MediaNet Digital, announced it’s own new open API, MN Open.  MN Open hosts a number of web components that can be used by anyone and easily installed onto a website without any coding required. Alan McGlade, CEO of MediaNet, stated: “MediaNet is delivering the next generation of music services. We are changing the paradigm by bringing music to the user rather than forcing them to go to a handful of centralized online destinations to acquire downloads. The MN Open Web Components and API offer for the first time, the ability to engage users in the moment to discover and purchase music, while our customers can keep them on their site longer and maximize revenue.”  The components include: 

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• Media Matcher: Automatically matches MediaNet’s catalog against existing web content
• Media Links: Hyperlinks references to artists, albums and songs within existing content on page
• Relevant Media Search: Integrates into site’s existing search and returns media results alongside regular search results
• Media Explorer: Dynamically displays music-related information with purchasable media
• Media Charts: Charts top selling content to entice music discovery, sampling and purchases
• Media Purchase: Fulfills purchases through an automatically configured and setup component which appears in its dedicated, secure window

What I find very promising about MN Open is its feature functionality and it’s ability to be completely customized, branded, and integrated into any artists page.  Already, a number of music service providers such as MOG have arranged deals with MN Open to become their streaming music service.   The service may help decentralize digital distribution and allow artists e-commerce stores to become fabricated into the basic layout of their web page.  Another cool feature is that even music fans can embed the API on their site.  Imagine a fan blogging about their favorite artist while also helping them sell the music on their own site. While open API’s may not be the revolutionary technology necessary to immediately stimulate revenue from digital music, I believe that it may hold the key to democratizing music e-commerce.   While the web inches its way toward Web 3.0 capabilities, we will begin to see more open API’s integrated into websites.  We are already beginning to see the “life-stream” appear on many web pages via the Twitter open API.  As these technologies continue to proliferate the web, I believe open API commerce platforms may gain substantial traction.  Why would you seek out music on iTunes or a torrent site if you have the ability to get it right then and there on their web page?   

The next challenge is generating demand for your music.  Digital distribution is most definitely not going to create millionaires off of a one-hit-wonder.  Those days are long gone.  What it can do is provide an easy to use access point for fans to seek out and purchase music.  This may only be one hurdle musicians have to face in today’s industry, but as digital sales continue to rise we must question the dominance of iTunes and Amazon as digital distribution outlets.

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Monetizing the Music: The Future of Physical

11 09 2009

I can’t get enough of music!  Whether it be downloading, sharing, streaming, uploading,  re-mixing etc. etc. I find myself in a whirlwind of mass music consumption.  My music library has grown out of proportion to what I couldn’t possibly listen to in a month, a year, 2 years?  As a digital native, a member of Gen Y, and stereotypical music junkie, I can’t get enough of digital content, but of course I want it all for free.  This behavioral pattern seems to be commonplace amongst people my age, always seeking out the next Pirate Bay, or having music swapping parties, anything to satiate our appetites for a cool new band or an awesome song.  Music really is bigger than it ever has been in the past, but our consumption pattern seems to surpass even beyond what our wallet can handle.  If digital music did not exist, the music industry would be suffering just as much as it is today, due to the US economic recession and really, the sheer lack of disposable income by arguably music’s biggest market:  Gen Y.

Vintage Vinyl St. Louis, MO

Vintage Vinyl St. Louis, MO

While thinking about my peers and my consumption patterns I’ve come to realize that a sheer lack of buying power, and lets not forget the ease of access, has in part led to the adoption of downloading bittorent’s, file swapping, P2P networks etc.   If I had even tried to satisfy my want for music 10 years ago, I would have broken the bank instantly with CD’s at cost of around $15 a pop. Now, lets fast-forward 10-15 years from now when Gen Y, music’s biggest consumer ever, retains some disposable income and a tremendous amount of buying power.   We all know that as we grow older we tend to appreciate nicer things, cherish the past, and re-kindle those memories of the summer ’09 through our favorite band that year.   This is where I see a huge opportunity for the return of a physical music product.  Already we can see a resurgence of vinyl that reminds us that people still value a physical product, but it has to have some sort of intrinsic value whether that be nostalgic or just wanting to build a collection.  I already find myself wanting to buy deeper into an artist’s so-called “product line” looking for something tangible that I can take home.  I believe that over the next decade we will see the physical music product decline and then re-emerge in a cyclical fashion.  The CD will always have a soft spot in my heart, due to the hundreds I already own and the  cherished memories of ripping off  a freshly shrink-wrapped disc to discover something beyond this world. Of course, the physical product will have to be a little bit more than a jewel case and an album liner, but the possibilities of creating some exclusive tangible music products may lead to a profitable return of the physical music product.  

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